Actuate Reports Second Quarter 2005 Financial Results; Revenues of $25.8 Million; GAAP EPS of $0.06; $2.0 Million in Cash Flow from Operations; Record Non-GAAP Operating Margin of 16.2%.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. -- Actuate Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :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 ), the world leader in 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. Applications, today announced financial results for the quarter ended June June: see month. 30, 2005. Total revenues for the second quarter of 2005 were $25.8 million, a sequential increase compared with $24.6 million in the first quarter of 2005. License revenues for the quarter were $8.8 million, compared with $8.9 million in the first quarter of 2005. Services revenues totaled $17.0 million for the second quarter of 2005, an increase of $1.3 million compared with the $15.7 million reported in the first quarter of 2005. Second quarter 2005 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income was $3.6 million, or $0.06 per 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. share, compared with GAAP net income of $245,000 or $0.00 per diluted share in the first quarter of 2005. Non-GAAP operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the second quarter of 2005 was 16.2% compared with a non-GAAP operating margin of 6.0% for the first quarter of 2005. On a non-GAAP basis, net income in the second quarter of 2005 was $2.9 million, or $0.05 per diluted share, compared with non-GAAP net income of $1.2 million, or $0.02 per diluted share in the first quarter of 2005. These non-GAAP financial measures exclude the amortization of intangibles and purchased technology, asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. , amortization of deferred compensation, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs, certain legal fees and an adjustment to the tax provision. All of these expenses are included in Actuate's GAAP results. In the second quarter of 2005, Actuate's actual tax rate was 2.4% compared to the historical non-GAAP tax rate of 37.5%, resulting in non-GAAP net income that is lower than net income calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. 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 as of June 30, 2005 totaled $49.3 million, a decrease of $337,000 compared with March 31, 2005. Deferred revenue at June 30, 2005 was $27.8 million, a 6% increase compared with $26.2 million at March 31, 2005. "In the second quarter, we continued to solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our financial infrastructure and make tangible progress toward our growth initiatives -- successful performance that positions us squarely square·ly adv. 1. Mathematics At right angles: sawed the beam squarely. 2. In a square shape. 3. on track to achieve the goals we set for ourselves last October October: see month. ," said Pete Cittadini, Actuate's president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We have posted year-over-year earnings growth in each of the last three quarters, and have generated 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 of $4.8 million year to date." "Actuate had another strong quarter of orders from the Global 9000 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. sector particularly with Financial Performance Management and Customer Self-Service Enterprise Reporting Applications that support key business processes in highly adoptable fashion," continued Cittadini. "In addition, our Open Source initiative continues to fire on all cylinders, with the on-time June launch of the BIRT project The Business Intelligence and Reporting Tools (BIRT) Project is an open source software project that provides reporting and business intelligence capabilities for rich client and web applications, especially those based on Java and J2EE. by the Eclipse Foundation The Eclipse Foundation leads the development of Eclipse, the open-source Java application platform and IDE. History In 2003–2004 the Eclipse Consortium, an unofficial consortium of software industry vendors led by IBM, founded The Eclipse Foundation, a and the simultaneous release of our commercial Actuate BIRT offering." Second Quarter Financial Highlights --Total revenues of $25.8 million increased 5% compared with the first quarter of 2005; --Non-GAAP EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. increased 150% from the first quarter of 2005; --Repurchased 1.3 million shares at a total cost of $2.7 million; --Non-GAAP 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. increased 185% compared with the first quarter of 2005 and increased 55% compared with the second quarter of 2004; --Non-GAAP operating margin was 16.2% compared with 6.0% in the first quarter of 2005 and 9.7% in the second quarter of 2004; --Cash flow from operations for the first six months of 2005 totaled $4.8 million. Second Quarter Customer Highlights During second quarter 2005, Actuate received significant new and repeat business from, among others, Citigroup Citigroup U.S. holding company formed in 1998 from the merger of Citicorp (itself a holding company incorporated in 1967) and Travelers Group, Inc. The $70 billion merger included one of the largest U.S. investment banks, Salomon Smith Barney Inc. , HSBC Bank USA HSBC Bank USA, N.A., the United States subsidiary of the HSBC Holdings plc, is a bank with its head office in New York City. History The Hongkong and Shanghai Banking Corporation acquired a 51% shareholding in Marine Midland Bank of New York State, headquartered in , Visa International, Deka Bank, US Department of Homeland Security Noun 1. Department of Homeland Security - the federal department that administers all matters relating to homeland security Homeland Security executive department - a federal department in the executive branch of the government of the United States , Kyushu Kyushu (ky  `sh), island (1990 pop. 13,064,955), c.13,760 sq mi (35,640 sq km), S Japan. Electric Power Company, Niku, Deltek Deltek® enables people to win, plan and manage projects that drive outstanding business results. Deltek is the leading provider of enterprise applications software designed specifically for project-focused businesses. Systems and ePlus Technology.Second Quarter Business Highlights --Actuate Corporation named top vendor in Enterprise Reporting by Gartner/Meta; --Eclipse Business Intelligence and Reporting Tool project version 1.0 made generally available on Eclipse.org See .org. (networking) org - The top-level domain for organisations or individuals that don't fit any other top-level domain (national, com, edu, or gov). Though many have .org domains, it was never intended to be limited to non-profit organisations. RFC 1591. allowing Java developers to easily integrate business intelligence and reporting capability into enterprise Java applications A Java program that is run stand alone. The Java Virtual Machine in the client or server is interpreting the instructions. Contrast with Java applet. See servlet. and commercial products; --Launched Actuate BIRT, adding value to the Eclipse BIRT project with features such as comprehensive live support, indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from , professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. and maintenance on an annual subscription basis; --Announced Enterprise Reporting Application Design Services that leverage Actuate e.Services libraries, best practices, and experience to ensure the highest quality reports and most effective use of Actuate technology to meet business objectives; --Actuate BIRT received "Ready for IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Rational Software" validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. providing developers using IBM Rational Software Architect IBM Rational Software Architect, (RSA) made by IBM's Rational Software division, is a comprehensive modeling and development environment that leverages the Unified Modeling Language (UML) for creating architected C++ and Java 2 Enterprise Edition (J2EE) applications and web , IBM Rational Application Developer This article is about the IBM Rational IDE, formerly IBM WebSphere Studio Application Developer (WSAD). For the gaming keyboard configuration, see WASD IBM Rational Application Developer for WebSphere Software and IBM Rational Web Developer with an open source driven option for their Business Intelligence and reporting. Use of Non-GAAP Financial Measures The non-GAAP financial measures discussed in the text of this press release and accompanying non-GAAP supplemental information represent financial measures used by Actuate's management to evaluate the operating performance of the Company and to conduct its business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Non-GAAP financial measures discussed in this press release exclude the amortization of intangibles and purchased technology, asset impairment, amortization of deferred compensation, restructuring costs, certain legal fees and an adjustment to the tax provision. It is management's belief that these items are not indicative of ongoing operations and as a result, non-GAAP financial measures that exclude such items provide additional insight for investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures are not intended to be an alternative to financial measures prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between the Company's GAAP and non-GAAP financial results is provided in this press release and investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company's SEC filings. Additionally, the non-GAAP reconciliation will be available in the investor relations Investor relations The process by which the corporation communicates with its investors. section of Actuate's website at www.actuate.com. Conference Call Information Actuate will be holding a conference call at 2:00 p.m. Pacific Time, today, July July: see month. 27, 2005 to further discuss these results. The dial-in number for the call is 973-528-0008. The conference call will be simultaneously broadcast live in the Investor Relations section of Actuate's web site at http://phx.corporate-ir.net/phoenix.zhtml?c=64401&p=irol-irhome and will be available as an archived replay at the same location until approximately August 10, 2005. About Actuate Corporation Actuate Corporation is the world leader in Enterprise Reporting Applications that ensure 100% adoption by users. Actuate's Enterprise Reporting Application Platform is the foundation on which Global 9000 organizations (companies with annual revenues greater than $1 billion) and packaged application software vendors develop intuitive, Web portal-like reporting and analytic applications Analytic Applications are a type of business application software, used to measure and improve the performance of business operations. More specifically, Analytic Applications are a type of Business Intelligence solution. that 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 users with decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from information. These applications are deployed inside and outside the firewall to improve corporate performance across a range of business functions including financial management, sales, human resource management, and customer self-service. When tested against other business intelligence products, Actuate's Enterprise Reporting Application Platform has been proven to offer industry-leading 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 the lowest Total Cost of Ownership. Actuate has over 3,000 customers globally in a range of industries including financial services, pharmaceuticals, insurance, and distribution services, as well as the government sector. Founded in 1993, Actuate has headquarters in South San Francisco, Calif., and has offices worldwide. Actuate is listed on the NASDAQ exchange under the symbol ACTU. For more information on Actuate, visit the company's Web site at www.actuate.com. Cautionary Note Regarding Forward Looking Statements: The statements contained in this release that are not purely historical are forward looking statements 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 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. 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 disclaims any obligation to update or revise any such forward-looking statements based on changes in expectations or the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or conditions on which such expectations may be based. 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 general spending environment for information technology products and services in general and Enterprise Reporting Application software in particular, quarterly fluctuations in our revenues and other operating results, our ability to expand our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , our ability to successfully compete against current and future competitors, the impact of future acquisitions on the company's financial and/or operating condition, the ability to increase revenues through our indirect channels, general economic and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. uncertainties and other risk factors that are discussed in Actuate's Securities and Exchange Commission filings, specifically Actuate's 2004 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 16, 2005 and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. filed on May 10, 2005. Copyright(C) 2005 Actuate Corporation. All rights reserved. Actuate and the Actuate logo are registered trademarks of Actuate Corporation and/or its affiliates in the U.S. and certain other countries. All other brands, names or trademarks mentioned may be trademarks of their respective owners.
ACTUATE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
June 30, December 31,
2005 2004
-----------------------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 49,336 $ 47,273
Accounts receivable, net 21,597 24,776
Other current assets 1,960 2,498
-----------------------
Total current assets 72,893 74,547
Property and equipment, net 5,204 6,158
Goodwill and other intangibles, net 22,203 23,883
Other assets 621 867
-----------------------
$100,921 $105,455
=======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,430 $ 2,414
Current portion of restructuring liabilities 2,974 3,669
Accrued compensation 3,752 5,244
Other accrued liabilities 3,564 4,996
Income taxes payable 694 539
Deferred revenue 26,856 28,153
-----------------------
Total current liabilities 40,270 45,015
-----------------------
Long term liabilities
Deferred rent 262 320
Deferred revenue 972 610
Restructuring liabilities and other 11,748 12,565
-----------------------
12,982 13,495
-----------------------
Stockholders' equity 47,669 46,945
-----------------------
$100,921 $105,455
=======================
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Six Months
Ended Ended
June 30 June 30
----------------- -----------------
2005 2004 2005 2004
------- ------- ------- -------
Revenues:
License fees $ 8,805 $12,296 $17,753 $23,773
Services 16,965 15,553 32,642 29,744
------- ------- ------- -------
Total revenues 25,770 27,849 50,395 53,517
------- ------- ------- -------
Costs and expenses:
Cost of license fees 578 831 1,315 1,931
Cost of services 5,735 6,580 11,569 12,669
Sales and marketing 8,640 10,706 17,058 21,000
Research and development 4,131 5,224 8,359 10,415
General and administrative 2,802 2,373 7,311 5,046
Amortization of other intangibles 194 276 470 558
Restructuring charges 178 - 747 586
Asset impairment 284 - 284 -
------- ------- ------- -------
Total costs and expenses 22,542 25,990 47,113 52,205
------- ------- ------- -------
Income from operations 3,228 1,859 3,282 1,312
Interest and other income, net 433 214 817 384
------- ------- ------- -------
Income before income taxes 3,661 2,073 4,099 1,696
Provision for income taxes 89 778 282 778
------- ------- ------- -------
Net income 3,572 1,295 3,817 918
======= ======= ======= =======
Basic net income per share $ 0.06 $ 0.02 $ 0.06 $ 0.01
======= ======= ======= =======
Shares used in basic per share
calculation 61,467 61,488 61,778 61,423
======= ======= ======= =======
Diluted net income per share $ 0.06 $ 0.02 $ 0.06 $ 0.01
======= ======= ======= =======
Shares used in diluted per share
calculation 63,027 65,623 63,806 65,366
======= ======= ======= =======
ACTUATE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004
------------------------- ---------------------------
Adjust- Adjust-
GAAP ments Non-GAAP GAAP ments Non-GAAP
-------- ------ -------- -------- ------ ---------
Revenues:
License fees $ 8,805 $ 8,805 $12,296 $12,296
Services 16,965 16,965 15,553 15,553
------- ------- ------- -------
Total revenues 25,770 25,770 27,849 27,849
------- ------- ------- -------
Costs and
expenses:
Cost of license
fees 578 (301)(a) 277 831 (383)(a) 448
Cost of
services 5,735 5,735 6,580 6,580
Sales and
marketing 8,640 8,640 10,706 10,706
Research and
development 4,131 4,131 5,224 (41)(b) 5,183
General and
administrative 2,802 2,802 2,373 (145)(c) 2,228
Amortization of
other
intangibles 194 (194) - 276 (276) -
Restructuring
charges 178 (178) - - -
Asset
impairment 284 (284) - - -
------- ------- ------- --------
Total costs and
expenses 22,542 21,585 25,990 25,145
------- ------- ------- -------
Income from
operations 3,228 4,185 1,859 2,704
Interest and
other income,
net 433 433 214 214
------- ------- ------- -------
Income before
income taxes 3,661 4,618 2,073 2,918
Provision for
income taxes 89 1,643 (d) 1,732 778 316 (d) 1,094
------- ------- ------- -------
Net income 3,572 2,886 1,295 1,824
======= ======= ======= =======
Basic net income
per share $ 0.06 $ 0.05 $ 0.02 $ 0.03
======= ======= ======= =======
Shares used in
basic per share
calculation 61,467 61,467 61,488 61,488
======= ======= ======= =======
Diluted net
income per
share $ 0.06 $ 0.05 $ 0.02 $ 0.03
======= ======= ======= =======
Shares used in
diluted per
share
calculation 63,027 63,027 65,623 65,623
======= ======= ======= =======
(a) Amortization of purchased technology.
(b) Amortization of deferred compensation.
(c) Legal costs related to the litigation with MicroStrategy,
Incorporated.
(d) The provision for income taxes used in arriving at the non-GAAP
net income for all of the periods presented was computed using an
income tax rate of 37.5%. The amount of provision for income taxes
used in arriving at the non-GAAP net income does not reflect the
actual or future expected provision for income taxes.
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
June 30
2005 2004
--------------------
Operating activities
Net Income $ 3,817 $ 918
Adjustments to reconcile net loss to net
cash from operating activities:
Amortization of other intangibles 1,680 1,324
Depreciation 831 1,225
Changes in operating assets and liabilities:
Accounts receivable 3,179 763
Other current assets 538 89
Accounts payable 16 752
Accrued compensation (1,492) (263)
Other accrued liabilities (1,432) 313
Income taxes payable 155 723
Deferred rent liabilities (58) -
Restructuring liabilities (1,512) (782)
Deferred revenue (935) 959
--------------------
Net cash provided by operating activities 4,787 6,021
--------------------
Investing activities
Purchases of property and equipment 123 (1,658)
Proceeds from maturity of short-term
investments 48,659 35,388
Purchases of short-term investments (50,012) (24,999)
Net change in other assets 246 358
--------------------
Net cash (used) provided by investing
activities (984) 9,089
--------------------
Financing activities
Proceeds from issuance of common stock 1,161 1,334
Stock repurchases (4,216) (1,179)
--------------------
Net cash (used) provided in financing
activities (3,055) 155
--------------------
Net increase in cash and cash equivalents 748 15,265
Effect of exchange rate on cash (33) 88
Cash and cash equivalents at the beginning of
the period 7,341 8,950
--------------------
Cash and cash equivalents at the end of
the period $ 8,056 $ 24,303
====================
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion