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SilverStream to cut staff

[FEBRUARY 18, 2001] -- In the midst of a dramatic repositioning as a Web services vendor, application server pioneer SilverStream Software announced poor financial results for Q4/01. Software license revenue was $5.5 million vs. $12.3 million in Q4/OO. The company also announced layoffs of more than 100 people.

"Quarter four was a disappointing quarter in terms of financial results," said David Litwack, president and CEO of SilverStream, but, he noted "it was a positive quarter in terms of execution of our new Web services-based strategy."

SilverStream's Craig Dynes, VP and CFO, said the largest component of the company's Q4 net loss of $51.5 million resulted from a $35 million special non-cash charge to record a reduction in the value of "goodwill." Dynes said SilverStream was reducing headcount by about 20%. The company employs about 600 people.

Litwack indicated in a conference call that the company's focus on building infrastructure for emerging Web services centered on integration of application "stovepipes." He said this part of the Web services business would develop more quickly than consumer Web service applications. He added that the company was reducing its services business dramatically.

Both Litwack and Dynes pointed to a strong cash position for SilverStream.

Cash and cash equivalents were set at $87.9 million on Dec. 31, 2001.

About the Author

Jack Vaughan is former Editor-at-Large at Application Development Trends magazine.

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