Applix Reports 45% Increase in Quarterly License and Total Revenue; License Revenue Rises 54% for Full Year.Company provides outlook for 2007: continued segment leading revenue growth WESTBOROUGH, Mass. -- Applix, Inc. (Nasdaq: APLX), a global leader in performance management applications, today reported that revenue for the quarter ended December 31, 2006 was $16.04 million, a 45 percent increase over revenue of $11.08 million in the fourth quarter of 2005. License revenue for the fourth quarter of 2006 was $9.63 million, a 45 percent increase compared to $6.64 million for the same period a year ago. Net income for the fourth quarter of 2006, as reported in accordance with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), was $5.97 million, or $0.34 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 a net income of $2.48 million, or $0.15 per diluted share, for the year ago period. Fourth quarter 2006 net income included a tax benefit of $4.18 million, or $0.24 per diluted share, from the reversal of a valuation allowance on domestic net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. . Fourth quarter 2006 non-GAAP net income was $2.96 million, or $0.17 per diluted share, reflecting the exclusion of the tax benefit from the valuation allowance reversal, approximately $631,000 of stock-based compensation charges primarily associated with the Company's adoption on January 1, 2006 of Statement of Financial Accounting Standard No. 123(R), "Share-Based Payment," approximately $255,000 of amortization charges primarily associated with the Company's acquisition of Temtec International B.V. in June 2006, approximately $358,000 of legal expenses related to the Securities and Exchange Commission (SEC) investigation and the related income tax benefit of $76,000 on these non-GAAP operating adjustments. In the fourth quarter of 2005, non-GAAP net income was $2.71 million, or $0.16 per diluted share, reflecting the exclusion of stock-based compensation, amortization charges and SEC investigation-related legal expenses of approximately $170,000, $62,000 and $19,000, respectively, and the related income tax benefit of $19,000 on these non-GAAP operating adjustments. The SEC investigation was settled with respect to Applix in January 2006, with no monetary penalty assessed. David C. Mahoney, President and Chief Executive Officer of Applix, said, "This strong fourth quarter performance capped off an outstanding year for Applix. As we entered 2006, we saw a distinct opportunity to extend our leadership position in the mid-market with our highly differentiated product offerings and we aggressively pursued and invested in that goal throughout the year. Our success in the fourth quarter and for 2006 is proof that this unique combination of market dynamics and technology leadership has placed Applix in a strong position heading into 2007. "Our solid execution in 2006 has also led to a number of firsts and major accomplishments for Applix and our customers. Included among these are a record number of six figure deals, our successful acquisition and integration of Temtec, the accolades our products continue to win from industry analysts and customers alike, as well as several strategic management team additions. Together, these achievements signify sig·ni·fy v. sig·ni·fied, sig·ni·fy·ing, sig·ni·fies v.tr. 1. To denote; mean. 2. To make known, as with a sign or word: signify one's intent. that as an organization, we are approaching a pivotal point in our history. We are eager to build upon this position and to focus on taking advantage of the rapidly growing market opportunity we have ahead of us." He added, "Next week we will announce the first of several planned major product cycles for Applix TM1, our core technology. Each of these releases represent key advances that will enable our global customers to maximize the applications against which Applix can be deployed and increase the number of users who can leverage the power of the industry's most agile business analytics software. Consistent with our intention to sustain our industry leading growth, we also anticipate launching a new marketing campaign to further raise our visibility and to communicate our strong value proposition within the broad mid-market where the Applix platform is by far the best solution, and where our competitors have been largely absent. On this basis, we are today sharing expectations for another year of high growth for Applix in 2007 - growth levels generally associated with far newer and younger companies and certainly well above those of our competitors. We intend to pursue our aggressive mission with discipline and tenacity." Fourth Quarter Business Highlights * Applix expanded its customer base dramatically in the fourth quarter by adding more than 100 new customers, and nearly 300 for the full year, excluding those gained from the Temtec acquisition. New customers include Patterson Companies, Arbitron, General Dynamics General Dynamics Corporation (NYSE: GD) is a defense conglomerate formed by mergers and divestitures, and as of 2006 it is the sixth largest defense contractor in the world[1]. The company has changed markedly in the post-Cold War era of defense consolidation. , T-Systems, N. Brown Group and Intel. * Applix added new solution partners T4G T4G Together for the Gospel Limited, JCB JCB Noun trademark, Brit a large machine used in building, that has a shovel on the front and a digger arm on the back [initials of Joseph Cyril Bamford, its manufacturer] JCB® n abbr Partners and ARCS Solutions in the U.S., along with Alpha Life in the Ukraine. * Applix announced that TM1 was positioned in the "Visionaries" quadrant quadrant, in analytic geometry quadrant. 1 In analytic geometry, one of the four regions of the plane determined by two lines, the x-axis and the y-axis. of the Gartner Magic Quadrant The Gartner Magic Quadrant is a proprietary research tool developed by Gartner Inc., a US based research and advisory firm. It is designed to provide an unbiased qualitative analysis of a “markets’ direction, maturity, and participants. for CPM (1) (Critical Path Method) A project management planning and control technique implemented on computers. The critical path is the series of activities and tasks in the project that have no built-in slack time. Suites. * Applix announced that its stock now trades on the Nasdaq Global Select Market, the premier listing, as of December 11, 2006. * Applix announced that TM1 was supporting 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) Information Server, allowing users to view, analyze and plan with real-time data Real-time data denotes information that is delivered immediately after collection. There is no delay in the timeliness of the information provided. Some uses of this term confuse it with the term dynamic data. in complex models across the enterprise. Following the close of the quarter, Applix announced the promotion of Michael Morrison to Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. from Senior Vice President of Sales and Marketing and expanded its senior management team with the appointments of Ben Plummer as Senior Vice President of Worldwide Marketing and Strategic Alliances and Mary Murphy Mary Murphy may refer to:
Fourth Quarter Financial Highlights * Cash and short-term investments totaled $27.21 million at 12/31/06, up from $24.94 million at 12/31/05. * Gross margin for the fourth quarter of 2006 was 89.4%, compared to 90.9% in the fourth quarter of 2005. * Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). was 75 days at 12/31/06, compared to 67 days at 9/30/06 and 65 days at 12/31/05, primarily reflecting higher license sales and calendar year maintenance renewals in December 2006. * A record 24 customers purchased more than $100,000 in software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. in the fourth quarter of 2006, up from 18 in the third quarter of 2006 and 15 in the fourth quarter of 2005. For the full year 2006, the number of customers who purchased more than $100,000 in software licenses more than doubled to 67 from 33 in 2005. * Average license deal size for transactions over $20,000 was between $65,000 - $70,000 in the fourth quarter of 2006, down from between $80,000 - $85,000 in the third quarter of 2006, but consistent with the fourth quarter of 2005, and the number of deals of this size increased nearly 50% compared to both earlier periods. For the full year 2006, the average license deal size for transactions over $20,000 was between $70,000 - $75,000, up from $55,000 - $60,000 in 2005. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the fourth quarter of 2006 were $12.78 million, compared to $7.14 million in the year ago quarter, and $11.04 million in the third quarter of 2006, reflecting higher sales compensation costs associated with stronger revenue growth, planned higher sales and marketing program expenses, significantly higher stock-based compensation charges, amortization of acquisition-related 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 increased operating expenses associated with the company's acquisition of Temtec. Also included in the fourth quarter 2006 expenses was approximately $358,000 in legal expenses, including 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 costs, related to the SEC investigation. In the fourth quarter of 2005, these expenses were approximately $19,000. For the full year 2006, SEC investigation-related legal and consulting expenses were approximately $996,000, compared to approximately $119,000 in 2005. Milt Alpern, Senior Vice President and CFO See Chief Financial Officer. of Applix, commented, "We are very pleased with the strong results we posted for the fourth quarter and year in 2006, even as we increased our investments in sales and marketing significantly to drive top-line growth. With these investments, we do expect that in 2007, we will increase their leveragability and that, as a result, these costs as a percentage of total revenue will begin to decline, enabling operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: to expand. Other important achievements in 2006 include consistently strong gross margins, at 89.6% for the full year, and positive net cash flow for the fourth quarter and year resulting in a nine percent annual increase in our cash and short-term investments balances, despite net cash outlays Outlays Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons. in 2006 of approximately $6.4 million associated with our acquisition of Temtec in June. This continued progress provides the basis for our forecast for continued strong growth in 2007." Full Year 2006 Results Total revenue for 2006 was $52.17 million, a 41 percent increase over $36.98 million for 2005, and above the company's most recent forecast for total revenues of between $49 - $51 million. License revenue was $30.11 million for 2006, a 54 percent increase over $19.49 million in 2005, and again, higher than the company's most recent forecast for license revenues of between $28 - $29 million. On a GAAP basis, net income for 2006 was $9.54 million, or $0.56 per diluted share, including the tax benefit from the reversal of the valuation allowance on domestic net operating losses, compared to $6.74 million, or $0.41 per diluted share, in 2005, including a $320,000 or $0.02 per diluted share benefit from the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. settlement of a UK tax matter. Non-GAAP net income for 2006 was $9.10 million, or $0.54 per diluted share, excluding stock-based compensation charges of approximately $2.27 million, or $0.13 per diluted share, amortization charges of approximately $667,000, or $0.04 per diluted share, SEC investigation-related expenses of approximately $996,000, or $0.06 per diluted share, and the related income tax benefit of $198,000, or $0.01 per diluted share, on these non-GAAP operating adjustments, as well as the tax benefit from the reversal of the valuation allowance on net operating losses. For 2005, non-GAAP net income was $6.93 million, or $0.42 per diluted share, excluding stock-based compensation, amortization charges and SEC investigation-related expenses of approximately $215,000, $250,000 and $119,000, respectively, and the related income tax benefit of $75,000 on these non-GAAP operating adjustments. Non-GAAP net income for 2005 also excludes the tax benefit from the settlement of the UK tax matter of $320,000. Financial Outlook for 2007 Applix is today providing its financial outlook for the Company for 2007. The Company is targeting total revenue of $67 - $70 million and license revenue of $38.5 - $40.5 million. Applix is targeting diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for 2007 on a GAAP basis between $0.31 - $0.38, based upon an assumed weighted average number of diluted shares of 18,000,000 and an estimated effective tax rate of 40%. The increase in the effective tax rate to 40% is primarily due to the reversal of the valuation allowance on domestic net operating losses. On a non-GAAP basis, excluding the expected annual impact of stock-based compensation charges of $3.0 million, or $0.17 per diluted share, amortization costs of $863,000, or $0.05 per diluted share, SEC investigation-related expenses of $400,000, or $0.02 per diluted share, and the related income tax benefit of $1.7 million, or $0.09 per diluted share, on these non-GAAP operating adjustments, the company's forecast for annual earnings is between $0.46 - $0.53 per diluted share. Neither forecast reflects the impact of foreign exchange, which cannot be predicted. Investor Conference Call and Webcast The senior management of Applix will host a conference call and Webcast to discuss the fourth quarter results tomorrow morning, Friday, February 9, 2007 at 8:30 am ET. To access the call, please dial 1-800-299-9630, using the confirmation code 98729410. Internationally, the call may be accessed by dialing 1-617-786-2904, using the same confirmation code. To listen via live audio Webcast, please visit the Company's website, www.applix.com at least ten minutes prior to the start of the call. The Webcast will be available as a replay starting one hour after the call is completed at the same location. Use of Non-GAAP Financial Measures The non-GAAP financial measures included in this press release are different from those presented under U.S. GAAP as these non-GAAP measures exclude certain non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , such as amortization of intangible assets and stock-based compensation expense, and other non-recurring items. Applix has provided these measures in addition to U.S. GAAP financial results because management believes that these non-GAAP measures provide a consistent basis for comparisons between quarters and of growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. year-over-year that are not influenced by certain non-cash charges, impacts of prior period acquisitions or other non-recurring items, and therefore are helpful in understanding the company's underlying operating results. Reconciliations of U.S. GAAP to non-GAAP results are presented at the end of this press release. About Applix Applix, Inc. (Nasdaq: APLX) is a global leader in performance management applications that enable continuous strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. , management and monitoring of performance across the financial, operational, sales and marketing, and human resources functions within the enterprise. Applix is a founder of the BPM Standards Group (http://www.bpmstandardsgroup.org) and has been recognized by numerous industry analyst groups for its technical leadership and vision in the marketplace. Applix and its global network of partners help nearly 3,000 customers worldwide manage their business performance and respond to the marketplace in real time. Headquartered in Westborough, MA, Applix maintains offices 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. , Europe and the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. . For more information about Applix, please visit www.applix.com. Any statements in this press release about future financial performance and future expectations, plans and prospects for the Company, including any statements containing the words "believes," "anticipates," "plans," "expects," and similar expressions, constitute 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. . Forward-looking statements necessarily involve risks and uncertainties, and actual results could differ materially from those indicated by such forward-looking statements as a result of various important factors. Factors that could cause or contribute to such differences include without limitation, competitive pressures, changes in customer demands, adverse economic conditions, loss of key personnel, 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. , potential fluctuations in quarterly results, lengthy sales cycles, market acceptance of new or enhanced products and services, factors affecting spending by customers, the Company's ability to successfully integrate Temtec and other risks, uncertainties and factors including those described in the Company's most recent Form 10-Q Form 10-Q See 10-Q. under the heading "Risk Factors." In addition, the forward-looking statements provided by the Company in this press release represent the Company's views as of the date of this release. The Company anticipates that subsequent events and developments may cause the Company's views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, and these forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this release. [c]2007 Applix, Inc. All rights reserved. Applix and TM1 are registered trademarks of Applix, Inc. All other trademarks and company names mentioned are the property of their respective owners. Financial Tables Follow (including Reg G reconciliations of U.S. GAAP to Non-GAAP) [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion