Forte Software has reported losses of $2.2 million for its first 1998 quarter, well down on a profit of $293,000 for the same period last year.
The development tools maker's total revenue increased 26 per cent in the first quarter to $14.7 million, compared with $11.7 million last year. Revenue from licence fees totaled $8 million, or 54 per cent of the total, while maintenance and services contributed $6.7 million. International revenues increased to $6.2 million, an 84 per cent increase over last year.
Marty Sprinzen, Forte's chief executive officer, admitted that the results were disappointing. "Our first quarter financial performance was less than external expectations," he said. "US revenues were up only slightly from the comparable quarter in fiscal 1997 primarily due to the time required to train and assimilate new sales reps and managers and ramp to desired productivity levels."
Sprinzen warned three months ago, when announcing the company's full year results, that high turnover in sales staff and rapid market expansion were likely to impact on short term results. But this week he said there was some good news. "We continued to significantly invest in our sales capacity by adding 15 sales reps, primarily in the US, bringing our worldwide sales rep headcount to 66 at 30 June 30," he said.
The first quarter loss is likely to fuel Silicon Valley rumours that Oracle chief executive Larry Ellison wants to buy Forte to replace its homegrown Sedona tools project, now on indefinite hold. Sprinzen denies any knowledge, but Valley sources suggest that Ellison has already had two offers rejected.
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