Business Objects Reports Fourth Quarter & Fiscal Year 2007 Results.Annual Revenue Exceeds $1.5 Billion, Up 20 Percent Year-Over-Year for the Quarter and the Year PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. & SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif. -- Business Objects (Nasdaq: BOBJ BOBJ Business Objects SA ) (Euronext Paris Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the London Stock Exchange. ISIN Isin (ĭs`ĭn), capital of an ancient Semitic kingdom of N Babylonia. The city became important after the third dynasty of Ur fell to the Elamites and the Amorites (c.2025 B.C.). The phase from c.2025–c.1763 B.C. code FR0004026250 - BOB), the world's leading provider of business intelligence (BI) solutions, today announced results for the fourth quarter and fiscal year ended December 31, 2007. On January 21, 2008, Business Objects became a majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. of SAP AG (company) SAP AG - (Systeme, Anwendungen, Produkte in der Datenverarbeitung - German for "Systems, Applications and Products in Data Processing") A company from Germany that sells the leading suite of client-server business software. The US branch is called SAP America. (NYSE NYSE See: New York Stock Exchange : SAP). For the fourth quarter of fiscal year 2007: * Total revenues were $444 million, up 20 percent year-over-year. * License revenues were $199 million, up 11 percent year-over-year. * Maintenance revenues were $177 million, up 29 percent year-over-year. * Services and other revenues, including consulting and training, were $68 million, up 26 percent year-over-year. * US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). 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 were $0.14, versus $0.37 in the fourth quarter of 2006. * Non-GAAP diluted earnings per share were $0.41, versus $0.60 in the fourth quarter of 2006. * The year-over-year decrease in US GAAP and 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. is primarily due to increases in tax reserves. For fiscal year 2007: * Total revenues were $1.510 billion, up 20 percent year-over-year. * License revenues were $624 million, up 11 percent year-over-year. * Maintenance revenues were $636 million, up 28 percent year-over-year. * Services and other revenues, including consulting and training, were $250 million, up 28 percent year-over-year. * US GAAP diluted earnings per share were $0.55, versus $0.79 in fiscal year 2006. * Non-GAAP diluted earnings per share were $1.69, versus $1.64 in fiscal year 2006. "We had another very solid year in 2007, with revenues exceeding the $1.5 billion milestone and double-digit year-over-year growth in all geographies," said John Schwarz —John F. Schwarz is the name of:
All figures referred to herein are stated in US dollars unless otherwise indicated. On a constant currencies basis for the fourth quarter of fiscal year 2007, total revenues were up 12 percent year-over-year, license revenues were up 3 percent year-over-year, maintenance revenues were up 22 percent year-over-year, and services and other revenues were up 18 percent year-over-year. On a constant currencies basis for fiscal year 2007, total revenues were up 15 percent year-over-year, license revenues were up 6 percent year-over-year, maintenance revenues were up 22 percent year-over-year, and services and other revenues were up 22 percent year-over-year. On a US GAAP basis, the tax rates for the fourth quarter and fiscal year 2007 were 74 percent and 57 percent, respectively, as compared to our expected tax rate of 43 percent. On a non-GAAP basis, the tax rates for the fourth quarter and fiscal year 2007 were 58 percent and 41 percent, respectively, as compared to our expected tax rate of 33 percent. The increases in the fourth quarter and fiscal year 2007 tax rates are due to increased tax reserves resulting from recent developments associated with ongoing tax audits. The non-GAAP results for the fourth quarter and fiscal year ended December 31, 2007, as defined below in the section "Use of Non-GAAP Financial Measures", differ from results measured under US GAAP as they exclude amortization of 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. , write-off of in-process R&D from acquisitions, stock-based compensation expense, restructuring costs and other non-recurring or 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. . A reconciliation of US GAAP to non-GAAP results is included at the end of this press release. Fourth Quarter and Fiscal Year 2007 Highlights Double-Digit Year-Over-Year Total Revenue Growth in All Geographies in Fiscal Year 2007; Record Number of License Transactions Over $1 Million in the Fourth Quarter * For fiscal year 2007, total revenues in the Americas were $770 million, up 12 percent year-over-year. Total revenues in the Americas for the fourth quarter of fiscal 2007 were $211 million, up 7 percent year-over-year. The Americas closed 8 transactions over $1 million in license revenues in the fourth quarter. * For fiscal year 2007, total revenues in Europe, Middle-East and Africa (or EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ) were $632 million, up 32 percent year-over-year (up 21 percent in constant currencies). Total revenues in EMEA for the fourth quarter of fiscal 2007 were $203 million, up 38 percent year-over-year (up 23 percent in constant currencies). EMEA closed 9 transactions over $1 million in license revenues in the fourth quarter. EMEA benefited more than the other regions from the Cartesis acquisition in the second half of 2007. * For fiscal year 2007, total revenues in Asia-Pacific and Japan (or APJ APJ Astrophysical Journal APJ Asia Pacific Japan APJ Aerospace Power Journal (USAF Air University) APJ Administrative Patent Judge APJ Australian Police Journal APJ Assistant Presiding Judge ) were $108 million, up 24 percent year-over-year. Total revenues in APJ for the fourth quarter of fiscal 2007 were $30 million, up 19 percent year-over-year. APJ closed 1 transaction over $1 million in license revenues in the fourth quarter. * In the fourth quarter of fiscal 2007, Business Objects closed a total 18 transactions over $1 million in license revenues. This significant accomplishment is a new record in large deals closed in a single quarter. * During the quarter, the company added approximately 1,400 new customers worldwide, bringing the total to more than 5,000 new customers added during fiscal year 2007. The company also continued to expand its market-leading OnDemand platform, finishing 2007 with more than 93,000 subscribers. 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. and EPS Impacted by SAP Transaction and Acquisitions * Income from operations on a US GAAP basis for the fourth quarter of fiscal 2007 was $45 million, or 10 percent of total revenues, as compared to $57 million, or 15 percent of total revenues, for the fourth quarter of fiscal 2006. For fiscal year 2007, income from operations on a US GAAP basis was $104 million (despite a net $22 million legal contingency reserve in connection with previously disclosed litigations and approximately $12 million for expenses related to the acquisition by SAP and other extraordinary items), or 7 percent of total revenues, as compared to $118 million, or 9 percent of total revenues for fiscal year 2006. * Income from operations on a non-GAAP basis for the fourth quarter of fiscal 2007 was $87 million or 19% of total revenues, as compared to $84 million, or 23 percent of total revenues for the fourth quarter of fiscal year 2006. For fiscal year 2007, income from operations on a Non-GAAP basis was $261 million, or 17 percent of total revenues, as compared to $216 million, or 17% of total revenues, for fiscal year 2006. * The acquisitions of Cartesis and Inxight negatively impacted operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: by approximately 2 percentage points for the fourth quarter of fiscal year 2007. New Products and Alliances Continue to Foster Competitive Lead * Crystal Reports 2008, an interactive reporting solution, delivers the industry's first built-in, dynamic what-if scenario modeling and enhanced visualization. * BusinessObjects Edge Series Premium edition offers small and medium sized businesses the ability to manage their business performance proactively. * BusinessObjects Polestar Polestar: see Polaris. , a dramatically enhanced search feature for BusinessObjects XI, brings together the simplicity and speed of search with the trust and analytical power of business intelligence. * Through an agreement with SPSS A statistical package from SPSS, Inc., Chicago (www.spss.com) that runs on PCs, most mainframes and minis and is used extensively in marketing research. It provides over 50 statistical processes, including regression analysis, correlation and analysis of variance. , Business Objects offers its customers the ability to use SPSS predictive analytics Predictive analytics encompasses a variety of techniques from statistics and data mining that process current and historical data in order to make “predictions” about future events. data mining technology as part of the market-leading BusinessObjects[TM] XI platform. Strong Balance Sheet and Cash Flow * Total cash, cash equivalents and short-term investments (excluding restricted cash) were $1.1 billion at December 31, 2007, up $549 million from December 31, 2006. * Total deferred revenues were $374 million at December 31, 2007, up $80 million from December 31, 2006. * Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , on a days-sales-outstanding basis, were 84 days for the fourth quarter of fiscal year 2007, as compared to 81 days for the fourth quarter of fiscal year 2006 and 82 days in the third quarter of fiscal year 2007. The increase in days-sales-outstanding was primarily due to strong license sales in Europe near the close of the fourth quarter of fiscal year 2007. * Net cash provided by operating activities for fiscal year ended December 31, 2007 was $268 million. Successful Tender Offer by SAP On January 15, 2008, SAP and Business Objects jointly announced that SAP France's all-cash tender offers for Business Objects securities were successful. As a result of the offer in France, which closed on January 10, 2008, and the offer in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , which closed on January 15, 2008, SAP France held 87.18% of the share capital and total voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. of Business Objects, or 82.08% on a fully diluted basis taking into account all outstanding ORNANEs, warrants and stock options. This result satisfied the offers' minimum tender condition of 50.01% of the total voting rights of Business Objects on a fully diluted basis. On settlement of the first tender offers on January 21, 2008, Business Objects became a majority-owned subsidiary of SAP. Future financial reporting by Business Objects As a majority-owned subsidiary of SAP, Business Objects will not provide separate financial guidance; however, as long as we remain a public company we will continue to report regular results via press releases and regulatory filings. Accounting Principles Business Objects prepares its financial statements in accordance with US GAAP. Because Business Objects is listed on both the Eurolist by Euronext[TM] in France and the Nasdaq Global Select Market in the United States, it is required to separately report consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge prepared in accordance with both US GAAP and International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). ("IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System "). The most significant differences between the two reporting standards for Business Objects relate to the treatment of stock-based compensation expense, the accounting for deferred tax assets on certain intercompany transactions Intercompany transaction Transaction carried out between two units of the same corporation. , the accounting for business combinations and the accounting for the convertible bonds that the company issued in May 2007. In accordance with French regulations and IFRS, Business Objects filed with the AMF AMF ACE (Allied Command, Europe) Mobile Force AMF Autorité des Marchés Financiers (French) AMF Action Message Format AMF Arab Monetary Fund AMF Asian Monetary Fund AMF Autocrine Motility Factor in France its Document de Reference 2006 on April 6, 2007 under the registration number D.07-0285, which included its consolidated financial statements for the year ended on December 31, 2006, presented in accordance with International Financial Reporting Standards. The Document de Reference 2006 includes the consolidated information that Business Objects published on April 18, 2007 to the Bulletin des Annonces Legales Obligatoires ("BALO BALO Bulletin des Annonces Légales et Obligatoires (French) BALO Bdellovibrio and Like Organisms BALO Brigade Air Liaison Officer ") in France. In addition, we published our condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated financial statements for the first half of 2007 under IFRS in the BALO in France on October 31, 2007. Use of Non-GAAP Financial Measures The non-GAAP financial measures such as 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 share information for the fourth quarter and fiscal year 2007 included in this press release are different from those otherwise presented under US GAAP as these non-GAAP measures exclude certain charges. These charges include the write-off of in-process research and development, amortization of intangible assets, stock-based compensation expense, restructuring costs and other non-recurring or non-cash charges. The non-GAAP tax rate differs from the US GAAP tax rate due to the elimination of the tax rate effect of the US GAAP expenses that are being eliminated to arrive at the non-GAAP expenses. Business Objects has provided these measures in addition to US GAAP financial results because management believes these non-GAAP measures provide a consistent basis for comparison 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 or impacts of non-recurring or acquisition-related charges, and therefore are helpful in understanding Business Objects' underlying operating results. These non-GAAP measures are some of the primary measures Business Objects' management uses for planning and forecasting. These measures are not in accordance with, or an alternative to, US GAAP and these non-GAAP measures may not be comparable to information provided by other companies. Reconciliations of US GAAP to non-GAAP results are presented at the end of this press release. Forward-Looking Statements This release contains forward-looking statements that involve risks and uncertainties, including statements regarding improved access to CIOs, CFOs and other line-of-business executives as a result of the SAP acquisition. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties. These potential risks and uncertainties include, among others, the impact of the SAP acquisition on our financial results, our ability to retain key employees, customer and partner uncertainty regarding the anticipated benefits of the transaction, the failure of SAP and Business Objects to achieve the anticipated synergies of the transaction, including improved access by us to CIOs, CFOs and other line-of-business executives, Business Objects' ability to attract and retain customers for its end-to-end BI solutions, market acceptance of new products, and other risks detailed in Business Objects' SEC filings, including its 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. for the year ended December 31, 2006 and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2007, which are on file with the SEC and available at the SEC's website at www.sec.gov. Business Objects is not obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to update these forward-looking statements to reflect events or circumstances after the date of this document. About Business Objects Business Objects has been a pioneer in business intelligence (BI) since the dawn of the category. Today, as the world's leading BI software company, Business Objects transforms the way the world works through intelligent information. The company helps illuminate understanding and decision-making at more than 46,000 organizations around the globe. Through a combination of innovative technology, global consulting and education services, and the industry's strongest and most diverse partner network, Business Objects enables companies of all sizes to make transformative business decisions based on intelligent, accurate, and timely information. Business Objects has dual headquarters in San Jose, Calif., and Paris, France. The company's stock is traded on both the Nasdaq (BOBJ) and Euronext Paris (ISIN: FR0004026250 - BOB) stock exchanges. More information about Business Objects can be found at www.businessobjects.com. Business Objects and the Business Objects logo, BusinessObjects and Crystal Reports are trademarks or registered trademarks of Business Objects in the United States and/or other countries. All other names mentioned herein may be trademarks of their respective owners. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] (1) Includes acquired in-process research and development related to acquisitions (2) Represents stock-based compensation expense recorded in accordance with FAS 123R. (3) Non-GAAP measures are reconciled from US GAAP figures. Non-GAAP measures exclude in-process research and development, amortization of intangible assets, stock-based compensation expense, acquisition costs, restructuring, and legal contingency reserve. [TABLE OMITTED] |
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