Business Objects Reports Q3 2006 Results.Total Revenues Grew 19 Percent Year-Over-Year Revenues and 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. Exceeded Company's Guidance 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 third quarter ended September 30, 2006. Total revenues for the third quarter of 2006 were $310 million, up 19 percent year-over-year. License revenues for the third quarter of 2006 were $132 million, up 9 percent year-over-year. Services revenues, including maintenance and global professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. , for the third quarter of 2006 were $179 million, up 27 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 for the third quarter of 2006 were $0.21, flat year-over-year after including approximately $11 million of additional stock-based compensation expense under FAS 123R in the third quarter of 2006. Non-GAAP diluted earnings per share for the third quarter of 2006 were $0.41, up 37 percent year-over-year. Total revenues and diluted earnings per share exceeded the high-end of the company's guidance range for the quarter. All figures referred to herein are stated in US dollars unless otherwise indicated. The three months and nine months ended September 30, 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 amortization of intangible assets, write-off of in-process R&D, and stock-based compensation expense. US GAAP numbers for the three months and nine months ended September 30, 2005 do not include stock-based compensation expense under FAS 123R. A reconciliation of US GAAP to non-GAAP results is included at the end of this press release. "Our revenues grew 19 percent year-over-year and 5 percent sequentially in a typically weaker quarter on the continued strength of the Americas and significantly improved contribution from Asia-Pacific and Japan," said John Schwarz —John F. Schwarz is the name of:
Third Quarter 2006 Business Highlights Revenue Growth in All Geographies * Total revenues in the Americas for the third quarter of 2006 were $175 million, up 27 percent year-over-year. The Americas closed 6 transactions over $1 million in license revenues. * 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. ) for the third quarter of 2006 were $113 million, up 7 percent year-over-year (up 3 percent in constant currencies). EMEA closed 2 transactions over $1 million in license revenues, including 1 in excess of $5 million. * 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 ) for the third quarter of 2006 were $23 million, up 19 percent year-over-year. APJ closed 1 transaction over $1 million in license revenues. New Products Drive Growth in License Revenues * License revenues for enterprise performance management (EPM EPM equine protozoal myeloencephalitis. ) solutions, including planning, budgeting, and dashboard applications, were $19 million for the third quarter of 2006, up 138 percent year-over-year. * License revenues for enterprise information management (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 ) solutions, including data quality and data integration, were $13 million for the third quarter of 2006, up 74 percent year-over-year. * License revenues for core business intelligence solutions were $100 million for the third quarter of 2006, down 5 percent year-over-year, but up 4% from the second quarter of 2006. As customers complete migrations and older versions of our products are displaced by BusinessObjects XI, we expect this segment to return to growth. * Included in the above categories, license revenues for BusinessObjects XI were $96 million for the third quarter of 2006, up 47 percent year-over-year. Maintenance and Consulting Drive Growth in Services Revenues * Maintenance revenues for the third quarter of 2006 were $129 million, up 24 percent year-over-year. * Global services revenues for the third quarter of 2006 were $50 million, up 34 percent year-over-year. Company Continues to Improve Margins * Income from operations on a US GAAP basis for the third quarter of 2006 was $29 million, or 10 percent of total revenues, as compared to $30 million, or 12 percent of total revenues, for the third quarter of 2005. However, the third quarter of 2006 included approximately $11 million of additional stock-based compensation expense under FAS 123R. * Income from operations on a non-GAAP basis for the third quarter of 2006 was $53 million, or an increase to 17 percent of total revenues, as compared to $42 million, or 16 percent of total revenues, for the third quarter of 2005. * The effective tax rate on a US GAAP basis for the third quarter of 2006 was 43 percent, as compared to 41 percent for the third quarter of 2005. The effective tax rate on a non-GAAP basis for the third quarter of 2006 was 33 percent, as compared to 38 percent for the third quarter of 2005. * Net income on a US GAAP basis for the third quarter of 2006 was $20 million, flat year-over-year, after the inclusion of additional stock-based compensation expense from FAS 123R. * Net income on a non-GAAP basis for the third quarter of 2006 was $39 million, up 39% year-over-year. Strong Balance Sheet and Cash Flow * Total cash, cash equivalents and short-term investments were $504 million at September 30, 2006, up $167 million from December 31, 2005. * Total deferred and long-term deferred revenues were $262 million at September 30, 2006, up $53 million from December 31, 2005. * Net cash flow from operating activities was $220 million for the nine months ended September 30, 2006. Other Business Highlights * Notable customer wins in the third quarter of 2006 included: Australia Post
Australia Post is trading name of the Australian Postal Corporation, the postal service with a monopoly in small letter mail Australia. , Banner Health Banner Health is a non profit health system based in Phoenix, Arizona. The health system is one of the largest employer’s in the state - employing over 27,000 employees. , BMC (BMC Software, Inc., Houston, TX, www.bmc.com) A leading supplier of software that supports and improves the availability, performance, and recovery of applications in complex computing environments. , British Vita Unlimited, Defense Logistics Agency Noun 1. Defense Logistics Agency - a logistics combat support agency in the Department of Defense; provides worldwide support for military missions Defense Department, Department of Defense, DoD, United States Department of Defense, Defense - the federal department , Europcar, Groupe Sodexho Alliance, Italferr S.p.A. Gruppo Ferrovie dello Stato The Ferrovie dello Stato (Italian: State Railways) or FS is the operator of the Italian railway network. A public concern, it is a railway company of Italian state and its capital is held by the Italian state. , Johnson Controls Johnson Controls, Inc. (NYSE: JCI) is a United States company, based in Milwaukee, Wisconsin, specializing in the design, manufacturing, and installation of automotive systems, automotive batteries (Optima[1] based in Denver, Colorado) and climate control systems. , Land and Agricultural Bank of South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , Kaiser Permanente Kaiser Permanente is an integrated managed care organization, based in Oakland, California, founded in 1945 by industrialist Henry J. Kaiser and physician Sidney R. Garfield. , Kyobo Life Kyobo Life Insurance Co, Ltd. (hangul:교보생명) is a South Korean insurance company. headquartered in Seoul, Korea, formerly known as Daehan Education Insurance (hangul:대한교육보험) in 1990. Insurance, MinistE re de l'Agriculture et de la PE[logical not]che, Northamptonshire County Council, Siemens Business Services, US Social Security Administration, Tribune Company The Tribune Company (NYSE: TRB) is a large American multimedia corporation based in Chicago, Illinois. It is the nation's second-largest newspaper publisher, responsible for the Chicago Tribune, Los Angeles Times, Newsday, Hartford Courant , US Army, US Navy, USTRANSCOM USTRANSCOM United States Transportation Command , and Zions Bancorporation. * In October, Business Objects was again named the business intelligence (BI) market share leader, according to the 2005 BI platform market share report issued by Gartner. In September, IDC issued the report "Western European Business Intelligence Tools, 2005 Vendor Shares" (IDC #LT07N, August 2006), which stated that Business Objects has strengthened its position as the leading BI vendor in Western Europe. In August, Crystal Vision Server XI was named a Midmarket Product of the Year by CMP CMP (cytidine monophosphate): see cytosine. (1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information Media's VARBusiness magazine. * The company launched BusinessObjects Data Quality XI, a suite of products that advances the data quality solutions integrated from the acquisition of Firstlogic, Inc. * The company released its integrated planning, budgeting, forecasting, and consolidation solutions on the BusinessObjects XI platform. * Business Objects and Salesforce.com expanded their partnership to deliver Business Objects reporting and dashboard capabilities on AppExchange for Salesforce.com customers. * Business Objects announced the availability of Crystal Reports[R] for Eclipse, a report design and deployment environment for Java application developers. * In the third quarter of 2006, Business Objects added over 20 new OEMs and over 100 new VARs to the company's community of partners. Addition of ALG ALG antilymphocyte globulin. ALG antilymphocyte globulin. ALG Antilymphocyte globulin, see there Software Strengthens Enterprise Performance Management Offering * On October 2, 2006, the company completed its acquisition of privately-held Armstrong Laing Limited, or "ALG Software," a leading provider of profitability management and activity based costing solutions. ALG Software's profitability management and activity based costing solutions represent a fast-growing segment of the EPM market and complement the existing Business Objects EPM solutions. * The acquisition was an all-cash transaction of approximately u30 million GBP GBP In currencies, this is the abbreviation for the British Pound. 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. (approximately $56 million USD USD In currencies, this is the abbreviation for the U.S. Dollar. 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. at then current exchange rates) and will be accounted for under the purchase method of accounting. Business Outlook Business Objects offers the following guidance for the quarter ending December 31, 2006. Total revenues for the fourth quarter are expected to be up on a sequential basis due to both a seasonally stronger fourth quarter and the impact of revenues from the ALG Software acquisition. * Total revenues have been increased to an expected range of $348 million to $356 million. * US GAAP diluted earnings per share are expected to range from $0.29 to $0.34. * Non-GAAP diluted earnings per share are expected to range from $0.53 to $0.58. Non-GAAP diluted earnings per share for the quarter ending December 31, 2006 are expected to add back approximately $12 million of amortization of intangible assets, approximately $12 million of stock based compensation expense, and approximately $3 million of in-process R&D, which would impact EPS by approximately $0.24, after tax effect. Business Objects updates the following guidance for the fiscal year ending December 31, 2006. For the full year, the company has revised its revenues and non-GAAP earnings guidance upward from the previous guidance due to the higher than previously forecast third quarter results as well as the impact of revenues from the ALG Software acquisition. The company has decreased its US GAAP diluted EPS guidance due to the purchase accounting expenses of the ALG Software acquisition. * Total revenues have been increased to an expected range of $1.231 billion to $1.239 billion. * US GAAP diluted earnings per share are expected to range from $0.71 to $0.76. * Non-GAAP diluted earnings per share are expected to range from $1.57 to $1.62. Non-GAAP diluted earnings per share for the year ending December 31, 2006 are expected to add back approximately $48 million of amortization of intangible assets and the write-off of in-process R&D and $44 million of stock based compensation expense, which would impact EPS by approximately $0.86 per share, after tax effect. The US GAAP guidance includes stock based compensation expense from the application of FAS 123R. This anticipated stock based compensation expense of approximately $12 million in the quarter ending December 31, 2006, and $44 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 expected expenses are based on estimates, including future stock price, employee turnover, growth in new employees, grants to current and new employees, stock volatility, and future interest rates. The outlook for the quarter ending December 31, 2006 assumes a US dollar to euro exchange rate of $1.26 per e1/41.00, a US dollar to Canadian dollar exchange rate of $0.89 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 43 percent, and a non-GAAP tax rate of 33 percent. 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. Fully diluted shares outstanding are expected to be 96.2 million for the fourth quarter and 95.5 million for the full year of 2006. The above information concerning our forecast for the fourth quarter and full year 2006 represents our outlook only as of the date hereof, 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 third quarter of 2006 on October 25, 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). The dial-in numbers are (800) 399-7988 for North America and (706) 634-5428 for Europe and Asia with ID # 8056901. The conference call also will be webcast live, and can be accessed on the company's investor relations Investor relations The process by which the corporation communicates with its investors. 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 with US GAAP. Because the company 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 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 and the accounting for business combinations. In accordance with French regulations and IFRS, Business Objects filed with the AutoritE[umlaut umlaut (  m`lout) [Ger.,=transformed sound], in inflection, variation of vowels of the type of English man to men. ] des MarchE[umlaut]s Financiers in France
its Document de RE[umlaut]fE[umlaut]rence 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 RE[umlaut]fE[umlaut]rence 2005 includes the consolidated
information that Business Objects published on April 26, 2006 to the
Bulletin des Annonces LE[umlaut]gales 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 published its mid-year financial statements for the first half of 2006 in accordance with IFRS in the BALO in France on October 20, 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 third 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 the write-off of in-process research and development, amortization of intangible assets, and stock-based compensation expense. 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 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 39,000 customers worldwide, including over 80 percent of the Fortune 500. Business Objects helps organizations of all sizes create a trusted foundation for decision making, gain better insight into their business, and optimize performance. The company's innovative business intelligence suite, BusinessObjects[TM] XI, offers the BI industry's most advanced and complete solution for performance management, planning, reporting, query and analysis, and enterprise information management. BusinessObjects XI includes the award-winning Crystal line of reporting and data visualization software. Business Objects has also built the industry's strongest and most diverse partner community, and 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 This document contains forward-looking statements that involve risks and uncertainties concerning the company's expected growth and profitability; the company's licensing and adoption of its BusinessObjects XI products; the integration of recent acquisitions; the migration from existing and Crystal Decisions products to BusinessObjects XI; the adoption of the company's new EPM offerings. The company's expected financial performance for the fourth 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 estimate and sustain or increase its profitability; the company's ability to attract, migrate and retain customers for BusinessObjects XI; the enterprise performance management products and products acquired Armstrong Laing Limited; the company's ability to issue new releases of its products, including those obtained through acquired businesses; the company's ability to integrate acquired businesses successfully; changes to current accounting policies which may have a significant, adverse impact upon the company's financial results, including FAS 123R; 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; the company's ability to manage large scale deployments; the company's mid-market strategy; 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 and Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2006, each of 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 undertake any obligation to update these forward-looking statements to reflect events or circumstances after the date of this document. Business Objects and the Business Objects logo, BusinessObjects, WebIntelligence, Crystal Reports, Intelligent Question, Xcelsius, 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 other countries. All other names mentioned herein may be trademarks of their respective owners. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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