Pervasive Going Strong

Pervasive Software Inc. (PVSW - Snapshot Report) recently reported revenues of $11.1 million for the fourth quarter of fiscal 2009, down 1% year over year but in line with management's guidance. GAAP EPS came in at $0.06. Non-GAAP EPS came in at $0.07, a penny better than the consensus estimate.

Database products generated two-thirds of total revenue while integration products accounted for the rest. Management stated that the Version 10 of Pervasive PSQLT database continues to be well received by its installed base of customers.

The company provides data management and integration software products to small- and mid-sized enterprises (SMEs) through a well-developed channel of independent software vendors (ISVs), value-added resellers (VARs) and system integrators (SI). Its solutions enable customers to manage, integrate, analyze and secure their data.

For fiscal 2009, the company generated revenues of $47.2 million, up 11% from last year. GAAP EPS came in at $0.29 while non - GAAP EPS came in at $0.34.

The company also announced an agreement to acquire assets of Greenville, South Carolina-based ChanneLinx Inc., a privately held business-to-business web-based data interchange (WebDI) technology company. The deal valued at about $2.6 million in cash is expected to close in the September quarter. The ChanneLinx assets which are being acquired generated approximately $2.0 million in revenue over the past twelve months.

Going forward, PVSW expects revenues between $10.5 million and $11.5 million for the September quarter. GAAP EPS is forecasted between $0.03 and $0.06 while non-GAAP is projected between $0.04 and $0.07.

Management stated that this guidance reflects the potential for a sequential decrease as September quarter is typically a challenging quarter due to the seasonality associated with summer months.

Achieving and maintaining consistent profitability in trying times has been the underlying theme in the PVSW story and the company has succeeded in achieving growth in both top and bottom lines. This allows PVSW to focus on growth drivers, including accretive M&A opportunities.

The company has roughly $43 million on cash in its balance sheet and no debt. It has generated $0.6 million in free cash-flow during Q4. We maintain our HOLD on the stock.