Actuate Announces Fourth Quarter and Fiscal Year 2002 Financial Results; Revenues Up 7% Sequentially; 12% Pro Forma Operating Margin.Business Editors/High-Tech Writers SOUTH SAN FRANCISCO South San Francisco, city (1990 pop. 54,312), San Mateo co., W Calif.; inc. 1908. South San Francisco has several industrial parks; its manufactures include medical supplies and equipment, foods, paint, paper products, consumer goods, and clothing. , Calif.--(BUSINESS WIRE)--Jan. 30, 2003 Actuate(R) Corporation (Nasdaq:ACTU ACTU Australian Council of Trade Unions ACTU AIDS Clinical Trials Unit (Washington University Medical Center, St. Louis, Missouri) ACTU Association of Catholic Trade Unionists ACTU Australian Capital Territory Union ), provider of the leading Information Application Platform, today announced its financial results for the fourth quarter and fiscal year ended December December: see month. 31, 2002. Revenues for the fourth quarter of 2002 totaled $27.3 million, an increase of $1.7 million (7%) compared with the third quarter of 2002. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income per share was $0.01 for the fourth quarter of 2002 compared with a diluted net loss per share of $0.06 for the fourth quarter of 2001. Excluding the amortization of goodwill and other intangibles, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and legal costs related to the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with MicroStrategy MicroStrategy is a business intelligence, Enterprise Reporting, and OLAP software vendor. MicroStrategy's software allows reporting and analysis of data stored in a relational database and other sources. Incorporated and an SEC investigation, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income in the fourth quarter of 2002 was $2.2 million or $0.04 per share compared with pro forma net income of $0.7 million or $0.01 per share in the fourth quarter of 2001. For fiscal year 2002, total revenues were $109.2 million compared with $125.0 million during fiscal year 2001. For fiscal year 2002, diluted net loss per share was $0.42 compared with a diluted net loss per share of $0.11 for fiscal year 2001. Pro forma diluted net income per share for fiscal year 2002, excluding amortization of goodwill and other intangibles, idle facility and restructuring charges and legal costs related to the litigation with MicroStrategy Incorporated and an SEC investigation, was $0.10 compared with $0.12 reported during fiscal year 2001. "We are pleased with the sequential increases in license revenues, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses we saw in the fourth quarter," said Pete Cittadini, Actuate's president and chief executive officer. "Furthermore, in 2002 we weathered another tough economic year while continuing to add a significant number of new customers, improve profit margins and increase our cash balance. We continue to provide the same high level of service, support and product innovation that our customers have come to expect while generating value for our shareholders. "Our products are achieving impressive traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in the marketplace, driving significant competitive wins at a number of Global 9000 companies in the fourth quarter alone," continued Cittadini. "Our platform's superiority of scale, performance and reliability enables our customers to develop mission-critical Information Applications. For example, Sabre Holdings Sabre Holdings or Sabre, Inc. is an American travel technology company, encompassing several brands in three global travel distribution channels: travel agency, airline, and direct to consumer. These areas are serviced by TSG's three main business groups. selected Actuate 6 because it was the only solution to meet the performance, scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it and reliability requirements needed to serve 70 hosted airlines and more than 60,000 travel agents in 100 countries. "Furthermore, the CitiDirect Online Banking application from Citibank CITIBANK First National City Bank , built on the Actuate platform supporting over 30,000 active users around the globe, was named Best of Web by Forbes Forbes , B(ertie) C(harles) 1880-1954. American publisher and businessman who founded and edited (1916-1954) Forbes magazine. His son Malcolm Stevenson Forbes .com and recently won the award for Best Cash Management Web site by Euromoney.com. We look forward to bringing additional value to Global 9000 companies as we further enhance our Information Application platform with the planned release of Actuate 7 in the spring of 2003." Significant Q4 accomplishments for Actuate included the following: -- Added over 100 new customers, 22 of which have annual revenues greater than $1 billion; -- Received a record 70 repeat orders greater than $100,000; -- Received two orders greater than $1 million; -- Increased pro forma operating income $1.0 million sequentially, to $3.3 million; -- Increased cash, cash equivalents and short-term investments by $2.2 million during Q4; -- Increased deferred revenue by $1.7 million compared with Q3; -- Increased services gross margin to 58% from 53% in Q3; -- Increased the percentage of new customer license bookings to 40% from 32% in Q3; -- Held days sales outstanding at 81 days, same as at the end of Q3. In fiscal year 2002, Actuate's achievements included the following: -- Recorded total revenues of $109.2 million; -- Added approximately 450 new customers during the year; -- Closed 203 deals greater than $100,000, including 5 transactions greater than $1 million; -- Increased cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments by $5.1 million; -- Realized a pro forma operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 8.1%. During the fourth quarter, Actuate closed over 100 new customers within its sales channels, continuing an expansion of the company's installed base across a wide variety of industry segments, particularly financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , manufacturing, utilities, pharmaceuticals, high-tech, retail and health care. New direct customers added in the fourth quarter included 3M, Baxter International Baxter International Inc. (NYSE: BAX), is a global healthcare company with 48,000 employees and 2006 sales of US$10.4 billion. Its headquarters is in Deerfield, Illinois. , The College Board, Educational Testing Service The Educational Testing Service (or ETS) is the world's largest private educational testing and measurement organization, operating on an annual budget of approximately $1.1 billion on a proforma basis in 2007. , Gillette, ING Aetna Financial, Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). Power and Light, Lincoln Lincoln, city and district, England Lincoln, city (1991 pop. 79,980) and district, Lincolnshire, E England, in the Parts of Kesteven, on the Witham River. Financial Group, MassMutual Financial Group, Mercer mer·cer n. Chiefly British A dealer in textiles, especially silks. [Middle English, from Old French mercier, trader, from merz, merchandise, from Latin merx Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. Consulting, Sabre Holdings, Tower Automotive Tower Automotive Pink Sheets: TWRAQ is a manufacturer of automobile frames based in Novi, Michigan. The company is currently the world's largest manufacturer of vehicle frames. , University of Pennsylvania (body, education) University of Pennsylvania - The home of ENIAC and Machiavelli. http://upenn.edu/. Address: Philadelphia, PA, USA. , and Vivendi Universal, among other companies. In the fourth quarter, Actuate received repeat orders from, among others, Allmerica Financial, Ameren, Bayer Diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler , EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. Canada, GE Real Estate, Johnson & Johnson, Lear Corporation, Marriott Corporation, Merck, MetLife, New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , Nordstrom, Paymentech Network, PG&E, Prudential Prudential is the name of two different companies and buildings named after them: Companies:
Conference Call Information Actuate will be holding a conference call at 2 p.m. Pacific Time, today, January 30, 2003 to discuss fourth quarter and fiscal year 2002 results. The dial-in number for the call is 973-528-0008. The conference call will be simultaneously broadcast live on the Investor Relations Investor relations The process by which the corporation communicates with its investors. portion of Actuate's web site at www.actuate.com and will be available as an archived replay at the same location until approximately February 13, 2003. About Actuate Corporation Actuate Corporation provides the leading Information Application Platform upon which Global 9000 organizations and packaged software See software package. vendors create mission-critical Information Applications. These applications include Business Performance Management (BPM (Business Process Management) A structured approach that models an enterprise's human and machine tasks and the interactions between them as processes. BPM software provides users with a dashboard interface that offers a high-level view of the operation that typically ) dashboards, Information Portals as well as business analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. Psychoanalytic. , enterprise reporting With the dramatic expansion of information technology, and the desire for increased competitiveness in corporations, there has been an increase in the use of computing power to produce unified reports which join different views of the enterprise in one place. and spreadsheet spreadsheet Computer software that allows the user to enter columns and rows of numbers in a ledgerlike format. Any cell of the ledger may contain either data or a formula that describes the value that should be inserted therein based on the values in other cells. reporting applications. Information Applications built with Actuate empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems 100% of an organization's user community inside and outside the firewall, and thereby allow companies to increase their business agility, improve customer and partner relationships, adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. policies, and increase revenues while leveraging existing technology assets. When tested against other alternatives, Actuate's Information Application Platform has been proven to offer the best performance, highest scale and lowest Total Cost of Ownership. Actuate has over 2,000 direct customers and 300 OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and partners in the financial services, pharmaceutical, insurance, logistics and government industries among other sectors. The company is headquartered in South San Francisco, California South San Francisco is a city in San Mateo County, California, United States, located on the San Francisco Peninsula in the San Francisco Bay Area. The population was 60,552 at the 2000 census. with operations around the globe. Actuate is a registered trademark of Actuate Corporation. e.Reporting and e.Spreadsheet are registered trademarks of Actuate Corporation. All other products and corporate names referenced are trademarks of their respective companies. (c) 2003, Actuate Corporation The statements contained in this release that are not purely historical are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934, including statements regarding Actuate's expectations, beliefs, hopes, intentions or strategies regarding the future. All forward-looking statements in this release are based upon information available to Actuate as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and Actuate assumes no obligation to update any such forward-looking statements. Actual results could differ materially from Actuate's current expectations. Factors that could cause or contribute to such differences include, but are not limited to, the Risk Factors discussed in Actuate's Securities and Exchange Commission filings, specifically Actuate's 2001 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed on March 19, 2002 and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. filed on November 14, 2002.
ACTUATE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Dec. 31, Dec. 31,
2002 2001
-------- --------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 44,867 $ 39,807
Accounts receivable, net 23,979 28,870
Other current assets 3,659 4,251
-------- --------
Total current assets 72,505 72,928
Property and equipment, net 6,204 12,387
Goodwill and other intangibles 26,146 30,488
Deferred income taxes 2,140 --
Other assets 1,441 1,588
-------- --------
$108,436 $117,391
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,071 $ 3,621
Current portion of restructuring
liabilities 3,481 --
Accrued compensation 4,947 5,976
Other accrued liabilities 6,909 11,146
Income taxes payable 950 64
Deferred revenue 23,273 23,978
-------- --------
Total current liabilities 42,631 44,785
-------- --------
Restructuring liabilities, net of current
portion 17,382 --
Other long-term liabilities -- 1,529
Stockholders' equity 48,423 71,077
-------- --------
$108,436 $117,391
======== ========
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- ----------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Revenues:
License fees $ 14,217 $ 17,646 $ 58,280 $ 79,106
Services 13,079 11,133 50,884 45,922
--------- --------- --------- ---------
Total revenues 27,296 28,779 109,164 125,028
--------- --------- --------- ---------
Costs and expenses:
Cost of license
fees 450 582 1,921 2,305
Cost of services 5,503 6,150 23,936 27,524
Sales and marketing 11,085 13,710 46,550 58,859
Research and
development 4,433 5,076 18,576 19,011
General and
administrative 3,853 3,190 12,724 10,853
Amortization of
goodwill and
other intangibles 996 3,117 3,985 10,704
Restructuring
charges 913 -- 27,136 859
--------- --------- --------- ---------
Total costs and
expenses 27,233 31,825 134,828 130,115
--------- --------- --------- ---------
Income (loss) from
operations 63 (3,046) (25,664) (5,087)
Interest and other
income, net 193 186 769 1,148
--------- --------- --------- ---------
Income (loss) before
income taxes 256 (2,860) (24,895) (3,939)
Benefit (provision)
for income taxes 456 (445) (576) (2,478)
--------- --------- --------- ---------
Net income (loss) $ 712 $ (3,305) $ (25,471) $ (6,417)
========= ========= ========= =========
Basic net income
(loss) per share $ 0.01 $ (0.06) $ (0.42) $ (0.11)
========= ========= ========= =========
Shares used in basic
per share
calculation 59,683 60,002 60,141 59,299
========= ========= ========= =========
Diluted net income
(loss) per share $ 0.01 $ (0.06) $ (0.42) $ (0.11)
========= ========= ========= =========
Shares used in
diluted per share
calculation 60,092 60,002 60,141 59,299
========= ========= ========= =========
ACTUATE CORPORATION
PRO FORMA SUPPLEMENTAL INFORMATION
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2002 2001 2002 2001
-------- -------- -------- --------
Supplemental information:
Net income (loss) $ 712 $ (3,305) $(25,471) $ (6,417)
Add back charges:
Certain legal costs(1) 1,351 -- 1,665 --
Idle facility expense -- 932 1,760 2,290
Amortization of
goodwill and other
intangibles 996 3,117 3,985 10,704
Restructuring charges 913 -- 27,136 859
-------- -------- -------- --------
Total add back charges 3,260 4,049 34,546 13,853
-------- -------- -------- --------
Provision for income
taxes(2) (1,775) -- (3,043) --
-------- -------- -------- --------
Pro forma net income $ 2,197 $ 744 $ 6,032 $ 7,436
======== ======== ======== ========
Pro forma basic net
income per share $ 0.04 $ 0.01 $ 0.10 $ 0.13
======== ======== ======== ========
Shares used in basic
per share calculation 59,683 60,002 60,141 59,299
======== ======== ======== ========
Pro forma diluted net
income per share $ 0.04 $ 0.01 $ 0.10 $ 0.12
======== ======== ======== ========
Shares used in diluted
per share calculation 60,092 62,381 61,924 62,884
======== ======== ======== ========
(1) Legal costs related to the litigation with MicroStrategy,
Incorporated and an SEC investigation.
(2) The provision for income taxes used in arriving at the pro forma
net income for the three and twelve months ended December 31, 2002,
was computed using an income tax rate of 37.5%. The provision for
income taxes used in arriving at the pro forma net income for the
three and twelve months ended December 31, 2001, was the actual tax
expense used in calculating the net income (loss). The computation of
the provision for income taxes used in arriving at the pro forma net
income for each period in 2002 has taken into account the effect of
these add back charges described above. The amount of provision for
income taxes used in arriving at the pro forma net income does not
reflect the actual or future expected provision for income taxes.
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Year Ended December 31,
----------------------
2002 2001
-------- --------
Operating activities
Net loss $(25,471) (6,417)
Adjustments to reconcile net loss
to net cash from operating activities:
Amortization of deferred compensation 158 56
Amortization of goodwill (in 2001) and
other intangibles 3,985 10,704
Depreciation 4,348 4,114
Restructuring charges 3,382 --
Tax benefit from exercise of stock
options 2,265 2,565
Issuance of common stock related to
charitable donation -- 36
Changes in operating assets and liabilities,
net of effects of acquisition:
Accounts receivable 4,891 4,584
Other current assets 592 (1,601)
Deferred income taxes (2,140) --
Accounts payable (550) (2,470)
Accrued compensation (1,029) (82)
Other accrued liabilities (2,204) 115
Income taxes payable 1,175 (361)
Deferred tax liabilities (1,461) (260)
Restructuring liabilities 20,863 --
Deferred revenue (705) 1,870
-------- --------
Net cash provided by operating activities 8,099 12,853
-------- --------
Investing activities
Purchases of property and equipment (1,547) (6,311)
Proceeds from maturity of short-term
investments 24,886 3,042
Purchases of short-term investments (40,995) (8,189)
Final purchase price payment of OST
acquisition (2,033) --
Acquisition of Tidestone
Technologies, Inc. -- (164)
Net change in other assets 147 (198)
-------- --------
Net cash used in investing activities (19,542) (11,820)
-------- --------
Financing activities
Proceeds from issuance of common stock 4,541 9,649
Stock repurchases (4,161) (1,805)
Repayment of bank loan -- (700)
-------- --------
Net cash provided by financing activities 380 7,144
-------- --------
Net increase (decrease) in cash and
equivalents (11,063) 8,177
Effect of exchange rate on cash (2) (445)
Cash and cash equivalents at the beginning
of the period 34,660 26,928
-------- --------
Cash and cash equivalents at the end of
the period $ 23,595 $ 34,660
======== ========
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