Business Objects Reports Q1 2006 Results; Revenues Grew 12 Percent; 17 Percent in Constant Currencies; Americas Revenue Growth up 25 Percent Year-over-Year; Profitability Improvements Continue.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. & 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. -- 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 first quarter ended March 31, 2006. Total revenues for the first quarter of 2006 were $278 million, up 12 percent year-over-year (up 17 percent in constant currencies). License revenues for the first quarter of 2006 were $126 million, up 9 percent year-over-year (up 15 percent in constant currencies). Services revenues for the first quarter of 2006 were $152 million, up 14 percent year-over-year (up 19 percent in constant currencies). Income from operations on a US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis for the first quarter of 2006 was $18 million, or 6 percent of total revenues. This includes stock-based compensation expense from FAS 123(R) for the first time this quarter. Income from operations on a non-GAAP basis for the first quarter of 2006 (excluding stock-based compensation expense and 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. ) was $40 million, or 14 percent of total revenues. US GAAP 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. net income per ordinary share and ADS for the first quarter of 2006 was $0.13 and non-GAAP diluted net income per ordinary share and ADS was $0.33. All figures referred to herein are stated in US dollars unless otherwise indicated. First quarter and full year 2006 non-GAAP results, as defined below in the section "Use of non-GAAP Financial Measures" differ from results measured under US GAAP as they exclude $8.9 million of amortization of intangible assets and $13.4 million of stock-based compensation expense. A reconciliation of US GAAP to non-GAAP results is included at the end of this press release. "Our solid revenue growth was driven by the sustained traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. of BusinessObjects A query, reporting and analysis suite of tools from Business Objects that runs under all versions of Windows and various Unix clients. It is the leading decision support tool in the business intelligence market, providing access to a wide variety of databases, including Oracle, INFORMIX XI," said John Schwarz —John F. Schwarz is the name of:
First Quarter 2006 Business Highlights BusinessObjects XI Drives Continued Market Share Gains --Supported by the strong adoption of BusinessObjects XI, total revenue growth of 12 percent (up 17 percent in constant currencies) continues to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, the growth of the overall business intelligence market and most competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. . --License revenues from BusinessObjects XI were $83 million for the first quarter of 2006 and represented two-thirds of total license revenues. --License revenues for BusinessObjects XI Release 2 have exceeded the first two quarters of the initial release of BusinessObjects XI. Broad Customer Adoption Reflected in Key Wins --There were 9 license revenue transactions over $1 million in the first quarter of 2006, including 5 in the Americas A·mer·i·cas , the See America. and 4 in 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. (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). , Middle East and Africa).--Notable customer wins in the first quarter of 2006 included: Allina Health System, British Nuclear Group British Nuclear Group (BNG) is a subsidiary of BNFL. One of it main aims is to manage the decommissioning of many of the UK's nuclear assets under contract to the Nuclear Decommissioning Authority, a government body set up specifically to deal with the nuclear legacy under the Limited, Fondiaria-Sai SpA, Genentech Genentech Inc. (NYSE: DNA), a composite of Genetic Engineering Technology, Inc., is a leading biotechnology corporation, which was founded in 1976 by venture capitalist Robert A. Swanson and biochemist Dr. Herbert W. Boyer. , Inc., Getronics Getronics N.V. (Euronext: GTN) is a largely Dutch-based Information and Communication Technology (ICT) Company whose stated focus is on creating value for business through Workspace Management Services and Application Services. N.V., LG Electronics, Inc., Northrop Grumman Northrop Grumman Corporation (NYSE: NOC) is an aerospace and defense conglomerate that is the result of the 1994 purchase of Grumman by Northrop. The company is the third largest defense contractor for the U.S. Corporation, NS Home Shopping Home Shopping commonly refers to the electronic retailing / home shopping channels industry, which includes such billion dollar companies as HSN, QVC, eBay, ShopNBC, Buy.com, and Amazon.com. , POSCO POSCO Pohang Iron & Steel Co, Ltd , Shaw Industries Shaw Industries is a flooring manufacturer headquartered in Dalton, Georgia. It agreed to be acquired by Berkshire Hathaway in 2000. As of 2006, it employed 32,000 people in the USA and Canada. It is considered the largest broadloom carpet maker in the world. Group, Inc., SourceMedia SourceMedia is a mid-sized business-to-business publishing company owned by Investcorp. Formerly the Thomson Media division of The Thomson Corporation, SourceMedia was sold by its parent company in 2004. , Inc., TMB TMB Tetramethylbenzidine TMB Technical Management Board TMB Twisted Metal: Black (video game) TMB Third Millennium Bible TMB Touch My Body (song) TMB Text Me Back TMB Too Many Birthdays Bank PCL (Printer Command Language) The page description language for HP LaserJet printers. It has become a de facto standard used in many printers and typesetters. PCL Level 5, introduced with the LaserJet III in 1990, also supports Compugraphic's Intellifont scalable fonts. , Unisys Corporation (company) Unisys Corporation - The company formed in 1984-5 when Burroughs Corporation merged with Sperry Corporation. This was when the phrase "dinosaurs mating" was coined. , U.S. Air Force, U.S. Army Contracting Agency (ACA ACA - Application Control Architecture ), Xcel Energy, Yorkshire Building Society The Yorkshire Building Society is the fourth largest building society in the UK, with its headquarters in Bradford, England. Assets now exceed £16.3 billion. In 1864, the Huddersfield Equitable Permanent Benefit Building Society was founded in Huddersfield, and expansion through a , Vodafone Vodafone Group Plc is a mobile network operator headquartered in Newbury, Berkshire, England, UK. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about £84.7 billion (July 2007). N.V., and Zions Bancorporation Zions Bancorporation (NASDAQ: ZION) is a member of the S&P 500, a bank holding company headquartered Salt Lake City, Utah. Its star subsidiary is NSB Public Finance. . Revenue Growth Led by the Americas Region --Total revenues in the Americas for the first quarter of 2006 were $147 million, up 25 percent year-over-year. --Total revenues in EMEA for the first quarter of 2006 were $112 million, up 1 percent year-over-year (up 12 percent in constant currencies). --Total revenues in Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). and Japan for the first quarter of 2006 were $19 million, down 2 percent year-over-year. With the recent additions of executive leadership, the company expects to see an improvement in growth and profitability in this important emerging market. Solid Growth in all Business Lines --License revenues for core business intelligence applications were $105 million in the first quarter of 2006, up 4 percent year-over-year. --License revenues for enterprise performance management applications, including planning, budgeting, and executive dashboard (1) See Mac Dashboard. (2) A software-based control panel for one or more applications, network devices or industrial machines. Dashboards display simulated gauges and dials that look somewhat like an automobile dashboard. solutions, were $14 million in the first quarter of 2006, up 72 percent year-over-year. --License revenues for enterprise information management solutions (EIM EIM Enterprise Incentive Management EIM Enterprise Information Management EIM Enterprise Identity Mapping (IBM) EIM Enterprise Instant Messaging EIM Employee Internet Management EIM European Institute for the Media ) were $7 million in the first quarter of 2006, up 14 percent year-over-year. --Maintenance revenues were $109 million in the first quarter of 2006, up 8 percent year-over-year. Maintenance renewals continue to demonstrate strong customer loyalty. --Global professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. revenues, including consulting and training, were $44 million in the first quarter of 2006, up 31 percent year-over-year. Other Highlights --The OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and business grew 24 percent year-over-year in the first quarter of 2006, with 38 new OEM partners added this quarter. The company's large network of partners provides unmatched reach in the industry and enables the delivery of highly targeted solutions for specific industries. --In April 2006, the company announced the availability of crystalreports.com, its new software as a service offering. With the launch of crystalreports.com and the company's partnership with Salesforce.com Salesforce.com (NYSE: CRM) is an on-demand Customer Relationship Management (CRM) solution vendor. History Origins Salesforce.com was founded in 1999 by former Oracle executive Marc Benioff. to provide Crystal Reports in a hosted environment via AppExchange, Business Objects has established an early leadership position in on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front BI. These offerings are part of an on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" commitment to develop innovative solutions for mid-market customers. --Our performance management business continues to be a source of growth for the company. As further commitment to growing this market, BusinessObjects(TM) Incentive Compensation Management (ICM ICM Intercom ICM Integrated Crop Management ICM International Congress of Mathematicians ICM Information Classification and Management ICM Intelligent Contact Management (Cisco) ICM International Creative Management ) for 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. customers was made available on April 24, 2006. This new planning solution will enable financial services organizations to seamlessly link strategic plans to individual incentive compensation. Addition of Firstlogic, Inc. Strengthens Enterprise Information Management Offering --On April 1, 2006, the company completed its acquisition of privately-held Firstlogic, Inc., a global provider of enterprise data quality software and services. By adding a best-of-breed The best product of its type. Organizations often purchase software from different vendors in order to obtain the best-of-breed for each application area; for example, a human resources package from one vendor and an accounting package from another. data quality solution to its portfolio, Business Objects is providing customers with a complete enterprise information management (EIM) solution to form the trusted basis for enterprise BI and performance management deployments. --The acquisition was an all-cash transaction of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $69 million and will be accounted for under the purchase method of accounting. First Quarter 2006 Financial Highlights Company Continues to Benefit from Productivity Improvements --Income from operations on a US GAAP basis for the first quarter of 2006 was $18 million, or 6 percent of total revenue. On a US GAAP basis, income from operations includes stock-based compensation expense, which is required by FAS 123(R) for the first time this quarter. --Income from operations on a non-GAAP basis for the first quarter of 2006 (excluding stock-based compensation expense and amortization of intangible assets), was $40 million, or 14 percent of total revenues. Non-GAAP income from operations grew by 31 percent year-over-year, and non-GAAP operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: is up two percentage points from 12 percent in the first quarter of fiscal 2005. --On a US GAAP basis, the effective tax rate for the first quarter of 2006 was 41%, as compared to 42% for the first quarter of 2005. On a non-GAAP basis, the effective tax rate was 28% for the first quarter of 2006, as compared to 37% for the first quarter of 2005. --US GAAP net income for the first quarter of 2006 was $12 million, or $0.13 per diluted ordinary share and ADS, as compared to $15 million, or $0.16 per diluted ordinary share, and ADS for the first quarter of 2005. The decrease in the first quarter of 2006 was down primarily due to the inclusion of stock-based compensation expense from FAS 123(R). --Non-GAAP net income for the first quarter of 2006 was $31 million, or $0.33 per diluted ordinary share and ADS, as compared to $22 million, or $0.24 per diluted ordinary share, and ADS for the first quarter of 2005. Balance Sheet Strengthened --Total cash and investments (cash and cash equivalents, restricted cash, 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) were $474 million at March 31, 2006. The $93 million net increase in cash this quarter reflects approximately $88 million of cash provided from operations. --Deferred and 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. deferred revenues totaled $256 million at March 31, 2006, up 22 percent year-over-year and 23 percent from December December: see month. 31, 2005. Business Outlook Business Objects offers the following guidance for the quarter ending June June: see month. 30, 2006: --Total revenues are expected to range from $295 million to $300 million. --US 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 are expected to range from $0.10 to $0.13. --Non-GAAP diluted earnings per share are expected to range from $0.30 to $0.33. This second quarter US GAAP and non-GAAP guidance includes the dilutive impact of approximately ($0.03 to $0.04) per share due to including the operations of Firstlogic, acquired on April 1, 2006. The US GAAP numbers also include approximately ($0.02) of one time write off of in-process R&D and ($0.01) of amortization of intangible assets from this acquisition. Non-GAAP diluted earnings per share for the quarter ending June 30, 2006, are expected to add back approximately $10 million of amortization of intangible assets, the $2 million of write off of in-process R&D, and approximately $11 million of stock based compensation expense, which is an increase of approximately $0.20 per share, after tax effect. Business Objects offers the following guidance for the year ending December 31, 2006: --Total revenues are expected to range from $1.225 billion to $1.245 billion. --US GAAP diluted earnings per share are expected to range from $0.82 to $0.92. --Non-GAAP diluted earnings per share are expected to range from $1.55 to $1.65. This full year 2006 US GAAP and non-GAAP guidance includes the nine month impact of approximately $20 million of revenue and ($0.00) per share, or break-even operations, due to the inclusion of Firstlogic, acquired on April 1, 2006. The US GAAP numbers also include approximately ($0.02) of one time write off of in-process R&D and ($0.03) of amortization of intangible assets from this acquisition. Non-GAAP diluted earnings per share for the year ending December 31, 2006, are expected to add back approximately $38 million of amortization of intangible assets, $2 million of write off of in-process R&D, and $50 million of stock based compensation expense, which is an increase of approximately $0.73 per share, after tax effect. The above guidance includes stock based compensation expense from the application of FAS 123(R). This stock based compensation expense of approximately $11 million in the quarter ended June 30, 2006, and $50 million for the full year 2006, includes the impact of options assumed in prior acquisitions, as well as prior employee grants, and estimated employee grants for the current year. These expenses are based on estimates, including future stock price, employee turnover, growth in new employees, grants to current and new employees, stock volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , and future interest rates. The outlook for the quarter ending June 30, 2006 and full year 2006 assumes a US dollar to euro exchange rate of $1.22 per EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1.00, a US dollar to Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents exchange rate of $0.88 per CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $1.00 and an effective US GAAP tax rate of 40 percent, and a non-GAAP tax rate of 30 percent. The above information concerning our forecast for the second quarter and full year 2006 represents our outlook only 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 we undertake no obligation to update or revise any financial forecast or other forward looking statements, as a result of new developments or otherwise. Conference Call Business Objects will hold a conference call to discuss its financial results for the first quarter of 2006 on April 26, 2006. The call will begin at 2:00 p.m. PT (5:00 p.m. New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , 11:00 p.m. Paris, 10:00 p.m., London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. ). The call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. numbers are (800) 399-7988 for 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. and (706) 634-5428 for Europe and Asia with ID #7608819. The conference call also will be webcast live, and can be accessed on the company's IR website at www.businessobjects.com. A replay of the webcast will be available on the site approximately two hours after the end of the live call. Accounting Principles Business Objects prepares its financial statements 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 US GAAP. Because the company is listed on both the Eurolist by Euronext  Euronext N.V. is a pan-European stock exchange based in Paris[1] (TM) in France and the Nasdaq National Market 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. , it is required to separately report consolidated financial
statements Consolidated Financial StatementsThe 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 identified 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. and the accounting for business combinations. In accordance with French regulations and IFRS, Business Objects filed with the Autorite des Marches Financiers in France its Document de Reference 2005 on April 24, 2006 under the registration number R.06-038, which included its consolidated financial statements for the year ended on December 31, 2005. The Document de Reference 2005 includes the consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: information that Business Objects expects to publish on April 26, 2006 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, the Company expects to publish the revenues for its first quarter 2006 in accordance with IFRS in the BALO in France in May 2006. 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 first quarter and full year 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 a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of in-process research and development, amortization of intangible assets, stock-based compensation expense, and 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. . 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 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. or impacts of prior period acquisitions, and therefore are helpful in understanding Business Objects' underlying operating results. In addition, this press release also includes non-GAAP measures that use a constant currency to separate the impact of conversion from other foreign currencies to US dollars from other changes in our business. 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. About Business Objects Business Objects is the world's leading business intelligence (BI) software company. With more than 35,000 customers worldwide, including over 80 percent of the Fortune 500, Business Objects helps organizations gain better insight into their business, improve decision making, and optimize optimize - optimisation enterprise performance. The company's business intelligence platform, BusinessObjects(TM) XI, offers the BI industry's most advanced and complete platform for performance management, planning, reporting, query To interrogate a collection of data such as records in a database. The term may also be used to search a single file or collection of files such as HTML files on the Web. However, in addition to obtaining lists of records that match the search criteria, queries to a database allow for and analysis, and data integration. BusinessObjects XI includes Crystal Reports(R), the industry standard for 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. . Business Objects has built the industry's strongest and most diverse partner community, and also offers consulting and education services to help customers effectively deploy their business intelligence projects. 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. 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. This document contains forward-looking statements that involve risks and uncertainties concerning the company's expected growth and profitability in Asia-Pacific and Japan, the company's licensing and adoption of its BusinessObjects XI products, the integration of recent acquisitions, the market adoption of CrystalReports.com, the company's expected financial performance for the second quarter and full year 2006 and the company's product and business strategies. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others, fluctuations in the company's quarterly and yearly operating results; the company's ability to sustain or increase its profitability; the company's ability to attract and retain customers for BusinessObjects XI; the enterprise performance management products and CrystalReports.com; the company's ability to issue new releases of its products, including those acquired from Firstlogic, Inc.; the company's ability to successfully integrate Firstlogic, Inc. and its other recent acquisitions; changes to current accounting policies which may have a significant, adverse impact upon the company's financial results; risks related to the company's integration of past and future acquisitions; the introduction of new products by competitors or the entry of new competitors into the markets for Business Objects' products; the impact of the pricing of competing technologies; the company's ability to preserve its key strategic relationships; the company's reliance upon selling products only in the Business Intelligence software market; and economic and political conditions in the US and abroad. More information about potential factors that could affect Business Objects' business and financial results is included in Business Objects' 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, 2005 which is on file with the SEC and available at the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . 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 undertake any obligation to update these forward-looking statements to reflect events or 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 after the date of this document. Business Objects and the Business Objects logo, BusinessObjects, WebIntelligence, Crystal Reports, Intelligent Question, and Desktop Intelligence are trademarks or registered trademarks of Business Objects S.A. or its affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. in the United States and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. other countries. All other names mentioned herein may be trademarks of their respective owners.
BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per ordinary share and ADS data)
Three Months Ended
March 31,
2006 2005
---------- ----------
(unaudited)
Revenues:
Net license fees $ 125,894 $ 115,151
Services 152,377 133,624
---------- ----------
Total revenues 278,271 248,775
Cost of revenues:
Net license fees 7,976 7,168
Services 60,767 51,381
---------- ----------
Total cost of revenues 68,743 58,549
---------- ----------
Gross profit 209,528 190,226
Operating expenses:
Sales and marketing 117,500 103,722
Research and development 43,737 40,274
General and administrative 30,363 24,813
---------- ----------
Total operating expenses 191,600 168,809
---------- ----------
Income from operations 17,928 21,417
Interest and other income (expense), net 2,855 4,400
---------- ----------
Income before provision for income taxes 20,783 25,817
Provision for income taxes (8,446) (10,811)
---------- ----------
Net income $ 12,337 $ 15,006
========== ==========
Basic net income per ordinary share and ADS $ 0.13 $ 0.17
========== ==========
Diluted net income per ordinary share and ADS $ 0.13 $ 0.16
========== ==========
Ordinary shares and ADSs used in computing
basic net income per ordinary share and ADS 92,552 89,424
========== ==========
Ordinary shares and ADSs and equivalents
used in computing diluted net income per
ordinary share and ADS 95,333 91,184
========== ==========
BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except nominal value per ordinary share)
March 31, Dec. 31,
2006 2005
---------- ----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 425,749 $ 332,777
Restricted cash 22,174 22,157
Short-term investments 4,954 4,651
Accounts receivable, net 247,462 265,672
Deferred tax assets 13,559 13,605
Prepaid and other current assets 67,266 60,880
---------- ----------
Total current assets 781,164 699,742
Goodwill 1,166,400 1,166,043
Other intangible assets, net 102,836 110,512
Property and equipment, net 76,486 74,116
Deposits and other assets 32,449 34,945
Long-term restricted cash 21,033 20,858
Long-term deferred tax assets 19,481 17,142
---------- ----------
Total assets $2,199,849 $2,123,358
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 48,550 $ 45,777
Accrued payroll and related expenses 66,686 83,332
Income taxes payable 83,759 79,820
Deferred revenues 248,337 201,788
Other current liabilities 70,565 72,098
Escrows payable 21,742 21,728
---------- ----------
Total current liabilities 539,639 504,543
Long-term escrows payable 11,079 10,902
Other long-term liabilities 8,133 8,871
Long-term deferred tax liabilities 2,493 2,853
Long-term deferred revenues 8,118 6,734
---------- ----------
Total liabilities 569,462 533,903
Shareholders' equity
Ordinary shares, Euro 0.10 nominal value 10,440 10,359
Additional paid-in capital 1,232,473 1,217,473
Treasury and Business Objects Option LLC
shares (4,214) (3,223)
Retained earnings 354,682 342,345
Unearned compensation - (12,243)
Accumulated other comprehensive income 37,006 34,744
----------- -----------
Total shareholders' equity 1,630,387 1,589,455
----------- -----------
Total liabilities and shareholders' equity $2,199,849 $2,123,358
========== ==========
BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
----------------------
2006 2005
----------- ----------
(unaudited)
Operating activities:
Net income $ 12,337 $ 15,006
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property
and equipment 7,881 8,830
Amortization of other intangible assets 8,869 8,133
Stock-based compensation expense 13,410 1,217
Excess tax benefits from stock-based
compensation (2,422) -
Loss on retirements of property and
equipment 64 -
Deferred income taxes (2,835) 10
Changes in operating assets and liabilities:
Accounts receivable, net 20,800 61,048
Prepaid and other current assets (5,826) (3,286)
Deposits and other assets 2,516 3,736
Accounts payable 2,391 4,583
Accrued payroll and related expenses (17,607) (20,560)
Income taxes payable 6,163 (6,140)
Deferred revenues 46,416 12,513
Other liabilities (3,888) (9,777)
Short-term investments classified as
trading (302) 66
----------- ----------
Net cash provided by operating
activities 87,967 75,379
----------- ----------
Investing activities:
Purchases of property and equipment (10,018) (7,480)
Other activities - 27
----------- ----------
Net cash used in investing activities (10,018) (7,453)
----------- ----------
Financing activities:
Issuance of shares 11,820 12,277
Excess tax benefits from stock-based
compensation 2,422 -
----------- ----------
Net cash provided by financing
activities 14,242 12,277
----------- ----------
Effect of foreign exchange rate changes on
cash and cash equivalents 781 842
----------- ----------
Net increase in cash and cash
equivalents 92,972 81,045
Cash and cash equivalents, beginning of the
period 332,777 293,485
----------- ----------
Cash and cash equivalents, end of the period $ 425,749 $ 374,530
=========== ==========
BUSINESS OBJECTS S.A.
STATEMENT OF INCOME -- Reconciliation of US GAAP to Non-GAAP Results
Three Months Ended March 31, 2006
(in millions, except per ordinary share and ADS data)
(Unaudited)
Add back: Add back:
Amorti- Stock-
zation of based
intangible compen- Non-GAAP
US GAAP assets sation Results
---------- --------- -------- ---------
Revenues:
Net license fees $ 125.9 $ 125.9
Services 152.4 152.4
---------- --------- -------- ---------
Total revenues 278.3 - - 278.3
Cost of revenues:
Net license fees 8.0 (6.0) 2.0
Services 60.8 (2.5) (1.4) 56.9
---------- --------- -------- ---------
Total cost of revenues 68.8 (8.5) (1.4) 58.9
---------- --------- -------- ---------
Gross margin 209.5 8.5 1.4 219.4
Gross margin % 75% 79%
Operating expenses:
Sales and marketing 117.5 (0.4) (3.5) 113.6
Research and development 43.7 (1.8) 41.9
General and administrative 30.4 (6.7) 23.7
---------- --------- -------- ---------
Total operating expenses 191.6 (0.4) (12.0) 179.2
---------- --------- -------- ---------
Income from operations 17.9 8.9 13.4 40.2
Interest and other income
(expense), net 2.9 2.9
---------- --------- -------- ---------
Income before provision for
income taxes 20.8 8.9 13.4 43.1
Provision for income taxes (8.5) (12.0)
---------- ---------
Net income $ 12.3 $ 31.1
========== =========
Basic net income per ordinary
share and ADS $ 0.13 $ 0.34
========== =========
Diluted net income per ordinary
share and ADS $ 0.13 $ 0.33
========== =========
BUSINESS OBJECTS S.A.
Q1 FISCAL 2006 SUPPLEMENTAL INFORMATION
(in millions, except per ordinary share and ADS data)
(Unaudited)
-------------------- ----------------------------------------- -------
Fiscal
Fiscal 2005 2006
---------------------------------------- -------
Q1 Q2 Q3 Q4 Total Q1
-------------------- ----------------------------------------- -------
SUPPLEMENTAL INCOME
STATEMENT INFORMATION
Revenues
Net license fees $ 115.2 $ 124.9 $ 120.3 $ 155.3 $ 515.7 $ 125.9
Maintenance 100.1 100.7 103.5 107.8 412.1 108.6
Consulting and
training 33.5 36.8 37.6 41.5 149.4 43.8
---------------------------------------- -------
Total revenues 248.8 262.4 261.4 304.6 1,077.2 278.3
---------------------------------------- -------
Total expenses
Cost of net license
fees 1.7 1.9 2.0 2.0 7.6 2.0
Cost of services
revenues 48.9 50.3 52.3 55.0 206.5 56.9
Sales and marketing 103.2 104.3 102.8 121.6 431.9 113.6
Research and
development 40.0 40.1 40.2 41.1 161.4 41.9
General and
administrative 24.4 21.9 22.2 25.7 94.2 23.7
Amortization of
intangible assets 8.1 7.9 10.2 10.1 36.3 8.9
Stock-based
compensation (1) 1.2 1.1 1.6 3.1 7.0 13.4
Restructuring costs (0.1) - - 0.3 0.2 -
---------------------------------------- -------
Total expenses 227.4 227.5 231.3 258.9 945.1 260.4
---------------------------------------- -------
Income from
operations 21.4 34.9 30.1 45.7 132.1 17.9
---------------------------------------- -------
Interest and other
income (expense),
net 4.4 3.2 2.9 3.9 14.4 2.9
Income before
provision for
income taxes 25.8 38.1 33.0 49.6 146.5 20.8
Provision for
income taxes (10.8) (15.0) (13.4) (14.7) (53.9) (8.5)
Effective tax rate 42% 39% 41% 30% 37% 41%
---------------------------------------- -------
Net income 15.0 23.1 19.6 34.9 92.6 12.3
========================================= =======
Net income per
ordinary
share and ADS
Basic 0.17 0.26 0.22 0.38 1.02 0.13
Diluted 0.16 0.25 0.21 0.37 1.00 0.13
Ordinary shares and
ADSs used in
computing net
income per share
(000's)
Basic 89,424 90,030 90,552 91,588 90,405 92,552
Diluted 91,184 92,089 93,455 95,086 93,036 95,333
-------------------- ----------------------------------------- -------
Amortization of
intangible assets
Cost of net license
fees 5.5 5.3 5.2 6.1 22.1 6.0
Cost of services
revenues 2.3 2.3 2.3 2.5 9.4 2.5
Sales and marketing - - 0.3 0.3 0.6 0.4
Research and
development - - 2.4 1.2 3.6 -
General and
administrative 0.3 0.3 - - 0.6 -
---------------------------------------- -------
Total 8.1 7.9 10.2 10.1 36.3 8.9
========================================= =======
Stock-based
compensation (1)
Cost of services
revenues 0.2 0.2 0.2 0.2 0.8 1.4
Sales and marketing 0.5 0.5 0.5 0.4 1.9 3.5
Research and
development 0.3 0.3 0.3 0.3 1.2 1.8
General and
administrative 0.2 0.1 0.6 2.2 3.1 6.7
---------------------------------------- -------
Total 1.2 1.1 1.6 3.1 7.0 13.4
========================================= =======
-------------------- ----------------------------------------- -------
Non-GAAP income from
operations (2) 30.6 43.9 41.9 59.2 175.6 40.2
---------------------------------------- -------
% of total revenues 12% 17% 16% 19% 16% 14%
Interest and other
income (expense),
net 4.4 3.2 2.9 3.9 14.4 2.9
Income before
provision
for income taxes 35.0 47.1 44.8 63.1 190.0 43.1
Provision for
income taxes (12.9) (17.4) (17.0) (22.7) (70.0) (12.0)
Effective tax rate 37% 37% 38% 36% 37% 28%
---------------------------------------- -------
Non-GAAP net income 22.1 29.7 27.8 40.4 120.0 31.1
========================================= =======
% of total revenues 9% 11% 11% 13% 11% 11%
Non-GAAP net income
per ordinary share
and ADS
Basic 0.25 0.33 0.31 0.44 1.33 0.34
Diluted 0.24 0.32 0.30 0.42 1.29 0.33
-------------------- ----------------------------------------- -------
(1) In fiscal 2005, represents stock-based compensation expense
recorded in accordance with APB 25. In fiscal 2006, represents
stock-based compensation expense recorded in accordance with FAS
123R.
(2) Non-GAAP measures are reconciled from US GAAP figures. Non-GAAP
measures exclude in-process research and development, amortization
of intangible assets, non-cash stock-based compensation expense,
and restructuring costs.
BUSINESS OBJECTS S.A.
Q1 FISCAL 2006 SUPPLEMENTAL INFORMATION
(in millions, except for number of transactions, DSO and
headcount information)
(Unaudited)
----------------------------------------------------------------------
Fiscal
Fiscal 2005 2006
---------------------------------------- --------
Q1 Q2 Q3 Q4 Total Q1
---------------------------------------- --------
REVENUE ANALYSIS
Total revenues by
geography
Americas $ 118.1 $ 123.6 $ 137.6 $ 166.7 546.0 $ 147.2
EMEA 111.2 116.5 104.9 117.7 450.3 $ 112.0
Asia Pacific,
including Japan 19.5 22.3 18.9 20.2 80.9 $ 19.1
---------------------------------------- --------
Total $ 248.8 $ 262.4 $ 261.4 $ 304.6 $1,077.2 $ 278.3
----------------------------------------------------------------------
Analysis of currency
impact (year-over-
year)
Reported revenue
growth rate 15% 18% 19% 14% 16% 12%
Constant currency
growth rate 11% 15% 18% 19% 16% 17%
---------------------------------------- --------
Impact of foreign
currency on growth
rate 3% 3% 1% -5% 1% -5%
----------------------------------------------------------------------
----------------------------------------------------------------------
Fiscal
Fiscal 2005 2006
---------------------------------------- --------
Q1 Q2 Q3 Q4 Total Q1
----------------------------------------------------------------------
LICENSE REVENUE ANALYSIS
License revenues by
channel
Direct 47% 49% 48% 59% 51% 54%
Indirect 53% 51% 52% 41% 49% 46%
---------------------------------------- --------
Total 100% 100% 100% 100% 100% 100%
----------------------------------------------------------------------
Number of
transactions
by size
Over $1 million 9 13 10 14 46 9
$200 thousand to $999
thousand 101 96 121 147 465 104
----------------------------------------------------------------------
----------------------------------------------------------------------
Fiscal
Fiscal 2005 2006
--------------------------------- --------
Q1 Q2 Q3 Q4 Q1
----------------------------------------------------------------------
SELECTED BALANCE
SHEET ITEMS
Cash and cash
equivalents,
restricted
cash, and short-term
investments $ 392 $ 384 $ 369 $ 380 $ 474
DSO (Days sales
outstanding) 66 72 69 79 80
----------------------------------------------------------------------
HEADCOUNT
Total headcount 3,944 4,039 4,320 4,418 4,484
----------------------------------------------------------------------
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