Kana to lose heads

Extremely sad and disappointing news over at KANA Software, Inc., as company CEO Michael Fields announced that the company will be laying off “some workers and contractors” (or rather, to coin a company PR-employed euphemism, a reduction in “employee headcount”), although no specific figures on this matter were forthcoming.

The news came as a result of poor fourth-quarter results turned in by the company, with total revenues for the second quarter of 2007 expected to be between $13.3 million and $13.5 million. Approximately $3.6 million to $3.8 million is expected to be recognized as second quarter license revenue.

Fields, trying to put a positive spin on the underwhelming business, stated that “We are encouraged by the momentum of the core business and we remain committed to the goal we set at the beginning of the year to grow profitably…”

To this end, Fields and Kana reported upward trends such as an increase of medium- sized deals (license or OnDemand transactions of $100,000 to $800,000) and that the number of transactions above $1 million in the pipeline grew year-over-year.

Of course, the pipeline is the pipeline and Fields attempted to defend future business – what is that they say about past performance and future results? – with “While it is a challenge to manage the timing of these $1 million-plus deals, we remain confident in our ability to close several of them, since many of these transactions are with existing KANA customers.”

In short, a net debt of $600,000 as of June 30 means $6 million will be trimmed from KANA operations.

The conference call webcast on the second-quarter results can be accessed at Kana.com, or call 617.801.6888 with code number 2188.7173.