Micromuse Revenues Slip; Layoffs Loom

With Q4 revenues less than projected, company plans to cut 18 percent of its work force.

Micromuse Inc. saw quarterly revenues slip as the network management software maker continued to be hurt by the telecom slide. The company is planning layoffs as a result.

The San Francisco vendor Tuesday reported revenues of $25 million for its fourth quarter, slightly less than projected, and a net loss of $56.5 million.

"The September quarter posed many significant challenges. Top-line performance didnt match initial expectations, but we managed a significant reduction in ongoing operating expenses," said Greg Brown, chairman and CEO, in the earnings call.

Total revenue for the year was $139.1 million.

Micromuse officials also announced plans to cut 18 percent of its 660 employees to keep costs in line with the sustained spending downturn in the telecommunications sector.

Micromuse during the quarter worked to further reduce its reliance on telco customers, and it saw a sequential increase from the third quarter in enterprise revenues of 25 percent. Enterprise customer revenue represented 35 percent of the total.

During the quarter, Micromuse closed its acquisition of Riversoft Inc. and achieved technical integration of the Riversoft technology into its NetCool/Omnibus suite. At the same time, Micromuse reduced headcount of the combined companies by 155 employees.

Also during the quarter, Micromuse increased its cash and long-term investments to $187.6 million from $175.6 million in the same quarter one year earlier, despite costs associated with several acquisitions during the fiscal year.

For its first fiscal quarter of 2003, Micromuse expects to post revenues of between $23 million and $25 million and a net loss of six to eight cents a share.