Amdocs Limited Reports First Quarter Revenue and Proforma EPS In Line With Guidance.Business Editors ST. LOUIS--(BUSINESS WIRE)--Jan. 22, 2003 Amdocs AMDOCS American Directories Operations & Computerized Systems (corporate care & billing software company) Limited (NYSE NYSE See: New York Stock Exchange : DOX DOX Design of Experiments DOX Direct Operational Exchange ): Key highlights: - Revenue of $339.4 million, a decrease of 19.7% from prior year - Proforma EPS of $0.20 - Free cash flow of $68 million in quarter - Cash balance increased to $1.128 billion at end of quarter - Second quarter fiscal 2003 guidance: revenue of $333-$340 million and proforma EPS of $0.18-$0.20 Amdocs Limited (NYSE: DOX) today reported that for the first quarter ended December December: see month. 31, 2002, revenue was $339.4 million, slightly ahead of expectations although a decrease of 19.7% from last year's first quarter. Excluding acquisition-related costs, 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 related tax effects, net income decreased 46.0% to $43.5 million, or $0.20 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 to net income of $80.7 million, or $0.36 per diluted share, in the first quarter of fiscal 2002. The Company's as-reported net income, which includes acquisition-related charges for amortization of purchased intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , restructuring charges related to cost reduction measures and related tax effects and, for the first quarter of fiscal 2002 only, the acquisition-related charges for in-process research and development and amortization of goodwill, was $32.2 million, or $0.15 per diluted share, compared to net income of $4.3 million, or $0.02 per diluted share, in the first quarter of fiscal 2002. Effective October October: see month. 1, 2002, Amdocs adopted Statement of Financial Accounting Standards No. 142 and therefore no longer amortizes goodwill resulting from acquisitions. Adjusting prior year's as-reported results to eliminate the effects of $50.5 million of goodwill amortization and related tax recorded in the first quarter of fiscal 2002 would have resulted in 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. , net income and earnings per diluted share of $72.4 million, $54.8 million and $0.24, respectively. Dov Baharav, Chief Executive Officer of Amdocs Management Limited, said, "We are very focused on maintaining sales momentum while reducing costs to ensure continued profitability. This focus on sales resulted in our recently announced outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. agreement for SBC's directory operations. This project reaffirms our position as a major provider of outsourcing services and validates our business model, which is based on long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. customer relationships with the industry's leading operators." Baharav continued, "Communications service providers A Communications Service Provider or CSP is a company that transports information electronically. The term encompasses public and private companies in the wireline, wireless, Internet, cable, satellite, and managed services businesses. remain hesitant hes·i·tant adj. Inclined or tending to hesitate. hes  i·tant·ly adv. about finalizing system investment decisions. As expected, this
translated into lower sequential revenues in the first quarter. However,
we expect to see our revenue decline easing in the second quarter. We
are also developing new products that are meeting with market
acceptance, particularly Amdocs ClarifyCRM and Amdocs Mobile. Despite
the challenging environment, we have the financial and business
stability that enables us to focus on our near-term near-termadj. Of, for, or involving a short period of time in the near future. results, while continuing our strong investment in R&D. This ongoing investment ensures we are well positioned for the future, in anticipation of recovery and renewed growth in the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. ." Sales Highlights During the first quarter, Amdocs won five new projects: - An outsourcing agreement with SBC's directory publishing subsidiary, including modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, and consolidation of systems across the company, as well as comprehensive support for IT operations. - For one of our Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of customers, we are implementing Amdocs Mobile, our new end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. billing system to provide convergent support for voice, data, content and commerce services. - A new project based on Amdocs ClarifyCRM to support workforce management for a leading carrier in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .
- For a major carrier, we are expanding our relationship by providing a system to consolidate billing for multiple operations, supporting specific customer segments and services. - For one of our mobile customers in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , we have been selected to implement our commerce payments management module, enhanced by our online charging module, to support commerce, content and data services. Operating And Financial Highlights During the first quarter: - Tess, a mobile carrier in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. , went live with Amdocs end-to-end billing system. - We announced that Belgacom The Belgacom Group, composed of Belgacom NV/SA and its subsidiaries, is the leading telecommunications company in Belgium. Group structure The Group is divided into three main fields of activity:
Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , and Eircom eircom Group plc is the largest telecommunications operator in the Republic of Ireland. As Bord Telecom Éireann plc, the company was (until 1999) a state monopoly; as a private company it continues to dominate many telecommunications areas, its main competitors being ntl: , Ireland's premier communications provider, went live with Amdocs Order Management. - Samart, a leading technology provider in Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. , went live with Amdocs ClarifyCRM for its outsourced call center services to Thai Mobile. - We implemented Amdocs ClarifyCRM at Telekom Austria Telekom Austria is a provider of a range of fixed line, mobile, data, and Internet communications services. In addition to its operations in Austria, Telekom Austria also has a wireline segment represented in the Czech Republic with Czech On Line, a leading Internet service . - The Company announced additional cost reduction measures including the reduction of approximately 400 positions. - Free cash flow, defined as 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 less capital expenditures and payments on capital leases, was $68 million in the quarter. Financial Outlook The Company believes that past market conditions will be reflected in softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. revenues throughout the first half of fiscal 2003, although the level of decline is expected to diminish in the second quarter. As a result, Amdocs expects that revenue for the second quarter ending March 31, 2003, will be approximately $333-$340 million. Proforma Proforma A financial projection based on assumptions. earnings per share for the quarter are expected to be approximately $0.18-$0.20, excluding acquisition-related costs. Amdocs will host a conference call on January 22, 2003 at 5 p.m. Eastern Standard Time to discuss the Company's first quarter results. The call will be carried live on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via www.vcall.com and the Amdocs website, www.amdocs.com. About Amdocs Amdocs is the world's leading provider of billing and CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. . With a 20-year track record of delivery excellence, our products empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems major communications operators around the globe. We enable rapid time-to-market for next generation voice, content, commerce and application services See ASP and Web services. , while enhancing subscriber loyalty and lowering total cost of ownership. We offer our customers flexible modes of delivery -- products, solutions and outsourcing. For more information, visit our web site at www.amdocs.com This press release may contain 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. as defined under the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , including statements about Amdocs' growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs' ability to grow in the mobile, wireline and IP business segments, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. , potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. These and other risks are discussed at greater length in the Company's filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F filed December 27, 2001 and our Form 6-K filed on December 27, 2002.
AMDOCS LIMITED
Pro forma Consolidated Statements of Income (Unaudited)
Excluding Restructuring Charges, Purchased In-Process Research and
Development, Amortization of Goodwill and Purchased Intangible Assets
and Related Tax Effects
(in thousands, except per share data)
Three months ended
December 31,
---------------------
2002 (1) 2001 (1)
---------- ----------
Revenue:
License $ 20,526 $ 42,290
Service 318,860 380,351
---------- ----------
339,386 422,641
Operating expenses:
Cost of license 971 980
Cost of service 204,151 230,603
Research and development 29,619 28,557
Selling, general and administrative 51,580 53,779
---------- ----------
286,321 313,919
---------- ----------
Operating income 53,065 108,722
Interest income and other, net 4,977 3,327
---------- ----------
Income before income taxes 58,042 112,049
Income taxes 14,510 31,374
---------- ----------
Net income $ 43,532 $ 80,675
========== ==========
Diluted earnings per share $ 0.20 $ 0.36
========== ==========
Diluted weighted average number of shares
outstanding 217,139 225,090
========== ==========
(1) Excludes $0 and $51,137 for amortization of goodwill, $5,154
and $5,645 for amortization of purchased intangible assets, $0
and $17,400 for write-off of purchased in-process research and
development related to the Clarify acquisition, $9,956 and
$13,311 of nonrecurring charges related to the cost reduction
measures and the consolidation of data centers and the
resulting closure of our Stamford, Connecticut facility,
respectively, and tax effects related to the above of $(3,777)
and $(11,152) for the three months ended December 31, 2002 and
2001, respectively. Including the above items, income before
income taxes was $42,932 and $24,556, and diluted earnings per
share were $0.15 and $0.02 for the three months ended December
31, 2002 and 2001, respectively.
AMDOCS LIMITED
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Three months ended
December 31,
---------------------
2002 2001 (1)
---------- ----------
Revenue:
License $ 20,526 $ 42,290
Service 318,860 380,351
---------- ----------
339,386 422,641
Operating expenses:
Cost of license 971 980
Cost of service 204,151 230,603
Research and development 29,619 28,557
Selling, general and administrative 51,580 53,779
Amortization of goodwill and purchased
intangible assets 5,154 56,782
Restructuring charges and in-process research
and development 9,956 30,711
---------- ----------
301,431 401,412
---------- ----------
Operating income 37,955 21,229
Interest income and other, net 4,977 3,327
---------- ----------
Income before income taxes 42,932 24,556
Income taxes 10,733 20,222
---------- ----------
Net income $ 32,199 $ 4,334
========== ==========
Basic earnings per share $ 0.15 $ 0.02
========== ==========
Diluted earnings per share $ 0.15 $ 0.02
========== ==========
Basic weighted average number of shares
outstanding 215,626 222,696
========== ==========
Diluted weighted average number of shares
outstanding 217,139 225,090
========== ==========
(1) Includes $51,137 of goodwill amortization and $(679) related
tax effects for the three months ended December 31, 2001. Net
income and diluted earnings per share excluding these items
(as if Statement of Financial Accounting Standards No. 142 had
been implemented) for the three months ended December 31, 2001
would have been $54,792 and $0.24.
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(in thousands)
As of
---------------------
December September
31, 30,
2002 2002
---------- ----------
(Unaudited)
ASSETS
Current assets
Cash, cash equivalents and short-term
interest-bearing investments $1,127,609 $1,047,819
Accounts receivable, net, including unbilled
of $24,422 and $24,144, respectively 257,105 312,732
Deferred income taxes and taxes receivable 50,819 48,154
Prepaid expenses and other current assets 93,879 72,196
---------- ----------
Total current assets 1,529,412 1,480,901
Equipment, vehicles and leasehold
improvements, net 152,645 160,902
Goodwill and other intangible assets, net 731,032 750,530
Other noncurrent assets 152,875 147,761
---------- ----------
Total assets $2,565,964 $2,540,094
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accruals $ 259,972 $ 279,071
Short-term portion of capital lease
obligations 9,379 10,347
Deferred revenue 149,844 149,590
Deferred income taxes and taxes payable 108,589 103,315
---------- ----------
Total current liabilities 527,784 542,323
Convertible notes and other noncurrent
liabilities 583,711 581,496
Shareholders' equity 1,454,469 1,416,275
---------- ----------
Total liabilities and shareholders' equity $2,565,964 $2,540,094
========== ==========
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