Amdocs Limited Second Quarter Revenue Grows 22.3% to $455.3 Million, Pro Forma EPS Reaches $0.37; Stock Repurchase Plan Expanded to 20 Million Shares by Board of Directors.Business Editors ST. LOUIS--(BUSINESS WIRE)--April 23, 2002 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 ) today reported that for the second quarter ended March 31, 2002, revenue reached $455.3 million, an increase of 22.3% over last year's second quarter. Excluding acquisition-related costs, net income increased 22.5% to $82.9 million, while earnings per share increased 23.3% to $0.37 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 $67.6 million, or $0.30 per diluted share, in the second quarter of fiscal 2001. The Company's as-reported net income, which includes acquisition-related charges for amortization of goodwill and 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. and related tax effects, was $26.4 million, or $0.12 per diluted share, compared to a net income of $15.4 million, or $0.07 per diluted share, in the second quarter of fiscal 2001. Avi Naor, Chief Executive Officer of Amdocs Management Limited, said, "This quarter, we continued to meet revenue and profitability targets and our ability to generate cash remains very high. In light of the current economy, I am very satisfied with the results. We expanded our customer base and had a very strong presence with wireline customers. We leveraged our outstanding set of offerings, including billing for next generation services and 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. services. We saw particular momentum in the CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. area with several new customer wins reflecting our unique ability to offer both full integration with our customer care and billing product and standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. offerings. Notably, our pipeline of new prospects continues to grow reflecting our ability to offer customers the products that meet changing market needs." "Carriers are being very careful about committing to new capital expenditures. During the second quarter, we encountered further delays in customers finalizing their buying decisions, even for mission critical software. We see more decisions being made in a phased approach, with some customers committing only to project elements that are immediately essential. This reflects a more prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. and deeper market deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. than had been originally anticipated," Naor noted. Amdocs expects that revenue for fiscal year ending September September: see month. 30, 2002, will be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.73 billion, with pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per share for the fiscal year expected to be approximately $1.40, excluding acquisition-related costs and nonrecurring charge Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". . Naor concluded, "Many procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. decisions for new systems are currently postponed but the demand is still there, resulting in an expanding pipeline for Amdocs. We believe that these mission critical systems remain a top priority for carriers and will be the first projects to benefit from a recovery in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. . Carriers recognize the growing need for the market differentiation differentiation, in biology, series of changes that occur in cells and tissues during development, resulting in their specialization. This, in turn, permits a greater variety of organisms. offered by Amdocs systems. Leveraging our strong offering and broad, high-quality customer base, we are poised for accelerated growth as the industry emerges from the current transition period. Due to our market leadership position and proven business model, we are very confident of our long term business prospects." The Company also announced that its Board of Directors has expanded the existing stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. to authorize To empower another with the legal right to perform an action. The Constitution authorizes Congress to regulate interstate commerce. authorize v. to officially empower someone to act. (See: authority) the purchase of up to 20 million shares, or approximately 9% of the Company's outstanding common stock. This represents an increase from the 11 million shares originally authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: when the plan was instituted in November November: see month. 2001. These purchases may be made on the open market, or in privately negotiated transactions, at times and prices considered appropriate by the Company, which intends to fund the repurchases with available funds. Amdocs is the world's leading provider of CRM, billing and order management systems for 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. . Amdocs has an unparalleled success record in project delivery of its mission-critical products. With 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. of over 9,100 information systems professionals, Amdocs supports a global customer base. For more information visit our Web site at www.amdocs.com. Amdocs will host a conference call on April 23, 2002 at 5 p.m. Eastern Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time to discuss the Company's second 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. 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 (1) To make visible; to draw. The term comes from the graphics world where a rendering is an artist's drawing of what a new structure would look like. In computer-aided design (CAD), a rendering is a particular view of a 3D model that has been converted into a realistic image. 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 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. 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 December: see month. 27, 2001 and our Form 6-K filed on January January: see month. 30, 2002.
AMDOCS LIMITED
Pro forma Consolidated Statements of Income (Unaudited)
Excluding Purchased In-Process Research and Development,
Amortization of Goodwill and Purchased Intangible Assets,
Nonrecurring Charge and Related Tax Effects
(in thousands, except per share data)
Three months ended Six months ended
March 31, March 31,
------------------- ------------------
2002 (1) 2001 (1) 2002 (2) 2001 (2)
-------- -------- -------- --------
Revenue:
License $ 45,528 $ 43,290 $ 87,818 $ 81,366
Service 409,741 328,999 790,092 633,090
-------- -------- -------- --------
455,269 372,289 877,910 714,456
Operating expenses:
Cost of license 1,433 1,295 2,413 2,953
Cost of service 249,204 206,154 479,807 397,942
Research and development 30,902 25,152 59,459 48,731
Selling, general and
administrative 61,023 48,168 114,802 91,618
-------- -------- -------- --------
342,562 280,769 656,481 541,244
-------- -------- -------- --------
Operating income 112,707 91,520 221,429 173,212
Interest income and
other, net 2,383 5,096 5,710 10,658
-------- -------- -------- --------
Income before income taxes 115,090 96,616 227,139 183,870
Income taxes 32,225 28,985 63,599 55,161
-------- -------- -------- --------
Net income $ 82,865 $ 67,631 $163,540 $128,709
======== ======== ======== ========
Diluted earnings per share $ 0.37 $ 0.30 $ 0.73 $ 0.57
======== ======== ======== ========
Diluted weighted average
number of shares
outstanding 225,488 227,213 225,275 226,994
======== ======== ======== ========
(1) Excludes $61,894 and $54,164 of amortization of goodwill and
purchased intangible assets, and tax effects related to the above
of $5,470 and $1,946 for the three months ended March 31, 2002
and 2001, respectively. Including the above items, income before
income taxes was $53,196 and $42,452 and diluted earnings per
share were $0.12 and $0.07 for the three months ended March 31,
2002 and 2001, respectively.
(2) Excludes $118,676 and $108,324 for amortization of goodwill and
purchased intangible assets, $17,400 and $0 for write-off of
purchased in-process research and development related to the
Clarify acquisition, $13,311 and $0 of a nonrecurring charge
related to the consolidation of data centers and the resulting
closure of our Stamford, Connecticut facility, and tax effects
related to the above of $16,622 and $7,604 for the six months
ended March 31, 2002 and 2001, respectively. Including the above
items, income before income taxes was $77,752 and $75,546, and
diluted earnings per share were $0.14 and $0.12 for the six
months ended March 31, 2002 and 2001, respectively.
AMDOCS LIMITED
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Three months ended Six months ended
March 31, March 31,
------------------- ------------------
2002 2001 2002 2001
-------- -------- -------- --------
Revenue:
License $ 45,528 $ 43,290 $ 87,818 $ 81,366
Service 409,741 328,999 790,092 633,090
-------- -------- -------- --------
455,269 372,289 877,910 714,456
Operating expenses:
Cost of license 1,433 1,295 2,413 2,953
Cost of service 249,204 206,154 479,807 397,942
Research and development 30,902 25,152 59,459 48,731
Selling, general and
administrative 61,023 48,168 114,802 91,618
Amortization of goodwill
and purchased intangible
assets 61,894 54,164 118,676 108,324
In-process research and
development and
nonrecurring charge - - 30,711 -
-------- -------- -------- --------
404,456 334,933 805,868 649,568
-------- -------- -------- --------
Operating income 50,813 37,356 72,042 64,888
Interest income and
other, net 2,383 5,096 5,710 10,658
-------- -------- -------- --------
Income before income taxes 53,196 42,452 77,752 75,546
Income taxes 26,755 27,039 46,977 47,557
-------- -------- -------- --------
Net income $ 26,441 $ 15,413 $ 30,775 $ 27,989
======== ======== ======== ========
Basic earnings per share $ 0.12 $ 0.07 $ 0.14 $ 0.13
======== ======== ======== ========
Diluted earnings per share $ 0.12 $ 0.07 $ 0.14 $ 0.12
======== ======== ======== ========
Basic weighted average
number of shares
outstanding 222,995 221,884 222,844 221,546
======== ======== ======== ========
Diluted weighted average
number of shares
outstanding 225,488 227,213 225,275 226,994
======== ======== ======== ========
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(in thousands)
As of
March 31, September 30,
2002 2001
----------- -----------
(Unaudited)
ASSETS
Current assets
Cash, cash equivalents and
short-term interest-bearing
investments $ 1,040,940 $ 1,110,067
Accounts receivable, including
unbilled of $26,762
and $23,272, respectively 406,588 384,851
Deferred income taxes and
taxes receivable 54,868 38,916
Prepaid expenses and other
current assets 54,968 38,045
----------- -----------
Total current assets 1,557,364 1,571,879
Equipment, vehicles and leasehold
improvements, net 171,496 173,695
Goodwill and other intangible
assets, net 874,200 788,187
Other noncurrent assets 122,816 90,675
----------- -----------
Total assets $ 2,725,876 $ 2,624,436
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accruals $ 340,888 $ 270,517
Short-term portion of capital
lease obligations 10,286 10,400
Deferred revenue 136,140 140,033
Deferred income taxes and income
taxes payable 104,635 91,026
----------- -----------
Total current liabilities 591,949 511,976
Convertible notes and other
noncurrent liabilities 608,333 600,369
Shareholders' equity 1,525,594 1,512,091
----------- -----------
Total liabilities and
shareholders' equity $ 2,725,876 $ 2,624,436
=========== ===========
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