Business Objects Reports Record Fourth Quarter Revenue.Business Editors/High-Tech Writers 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--(BUSINESS WIRE)--Jan. 29, 2003 Total fourth quarter revenue up 8% over prior year; License revenue increases 23% sequentially from third quarter 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. Euroclear Euroclear One of two principal clearing houses for securities traded in the Euromarkets. Notes: The other principal clearing house is Clearstream, formerly the Centrale de Livraison de Valuers Mobilieres (CEDEL). code 12074), the world's leading provider of business intelligence (BI) solutions, today announced results for the fourth quarter and year ended December December: see month. 31, 2002. Fourth quarter revenues were $126.2 million, an increase of 8 percent over revenues of $116.8 million for the quarter ended December 31, 2001, and a sequential increase of 15 percent over the third quarter. Net income for the fourth quarter was $12.8 million, or $0.20 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share and ADS, compared to net income of $14.1 million, or $0.22 per diluted share and ADS, in the fourth quarter of last year. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the quarter was 13 percent, compared with operating margin of 17 percent in the fourth quarter of the prior year, and 4 percent in the third quarter. Operating margin reflects the company's increased investment in research and development to support new product launches in 2003. "Business Objects' fourth quarter results reflect success across all product lines, particularly analytic applications Analytic Applications are a type of business application software, used to measure and improve the performance of business operations. More specifically, Analytic Applications are a type of Business Intelligence solution. , powering strong sequential license revenue growth. We also achieved significant improvement in 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). , where sequential revenues grew 21 percent,"
said Bernard Liautaud Bernard Liautaud is chairman and chief strategy officer of Business Objects.Liautaud cofounded Business Objects in 1990 and was chief executive officer until September 2005. , chairman and chief executive officer. "Business intelligence tools and analytics remain a high priority for enterprises because they provide a rapid, significant return on investment. In a recent IDC study, the median return for business intelligence deployments was 112 percent, with a payback Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money. time of one year." License revenues in the quarter were $66.1 million, a decline of 9 percent from the same period in the prior year, although a sequential increase of 23 percent compared with the third quarter. Service revenues reached $60.1 million, an increase of 36 percent over the same period a year ago, and a 7 percent sequential increase from the third quarter. The growth in service revenue is predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. related to a higher percentage of customers renewing maintenance contracts. The company's spending on research and development reached 16 percent of total revenue in 2002, compared with 13 percent of revenue in the prior year. "We continue to invest in product development to meet the market demand for solutions that can be widely deployed and even more tightly integrated with existing infrastructure," said Liautaud. "We believe our investment in new products will help Business Objects extend its leadership position throughout 2003 and beyond." Geographic Region Results For the fourth quarter, revenue distribution by region was as follows: the Americas A·mer·i·cas , the See America. 44 percent, Europe 50 percent, and rest of world 6 percent. Products: Analytic Applications Exceed Targets License revenues in analytic applications reached $9.1 million, up 287 percent from the fourth quarter of last year. During the quarter, 56 customers purchased analytic applications, including AT&T, Ford Motor Company, Ingram Micro Ingram Micro, Inc. NYSE: IM a Fortune 100 company founded in 1979 and based in Santa Ana, California. It is the world’s largest technology distributor and a leading technology sales, marketing and logistics company. , NBC News NBC News (along with NBC News + HD) is the news division of American television network NBC, a part of NBC Universal, which is majority-owned by General Electric. Its current president is Steve Capus. It is the top-rated broadcast news division and has been for a decade. , T-Mobile USA, and Vivendi Environment Vivendi Environmental is a France-based property of Vivendi Universal. The company controls water operations for more than 8,000 water systems in over 130 countries, including some in the United States. . For the year, applications license revenues were $20.9 million, an increase of 160 percent compared with $8 million in the prior year. The license revenue reported for analytic applications includes only that revenue from the analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. Psychoanalytic. products, and does not include data integration or business intelligence tools revenue that may be linked to the same contracts. "Our momentum in analytic applications signals our market leadership position and the clear advantage of our combined build or buy strategy," said Liautaud. In the quarter, approximately $4.4 million of Business Objects Data Integration products and services were sold, bringing the contribution from former Acta acta (ăk`tə), official texts of ancient Rome, written or carved on stone or metal. Usually acta were texts made public, although publication was sometimes restricted. Acta were first posted or carved for general reading c.131 B.C. Technology products since the closing of the acquisition in August to $6.2 million, exceeding the initial guidance of $5 million. Data Integration added 35 new customers in the fourth quarter, including Petroplus Petroplus is a Swiss oil company. It is the largest independent oil refining company in Western Europe. History The company started out as Petroplus International N.V. being based in the Netherlands. In 1997, it acquired the Antwerp N.V. Refinery from the Daewoo Group. and Hitachi Hitachi (hētä`chē), city (1990 pop. 202,141), Ibaraki prefecture, E central Honshu, Japan, on the Kashima Sea. The city is a leading producer of Japan's electrical equipment. . Earlier this month, the company introduced Data Integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. 6, the industry's first product that makes direct, real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. links from underlying data to business intelligence tools and analytic applications. Customer and Contract Highlights The company also reported the following key data for the fourth quarter: -- 497 new customers were added; total customer count now exceeds 17,000; -- 5 contracts over $1 million, and 68 between $200,000 and $1 million; the 73 deals over $200,000 is a record, compared to 64 deals over $200,000 in the same quarter a year ago; -- Major customers included Astra Zeneca, British Gas Trading, Canadian Pacific Railway, Decision First Technologies, Fannie Mae, Gedas Deutschland, Lever Faberge, and Nextel Communications; -- Indirect channels contributed 40 percent of license revenue; -- At the close of the quarter, the number of quota-carrying sales representatives was 323. Full Year 2002 Results Revenues for the full year ended December 31, 2002 were $454.8 million, compared with revenues in the prior year of $415.8 million, an increase of 9.4 percent. Net income for the year was $40.6 million, or $0.63 per diluted share and ADS, compared with net income in 2001 of $44.9 million, or $0.70 per diluted share and ADS. Balance Sheet As of December 31, 2002, the company had $289.3 million in cash, current restricted cash and cash equivalents. Total assets were $551.8 million, compared with $421.5 million at December 31, 2001. During the fourth quarter, Business Objects repurchased 250,000 Ordinary shares of its common stock at an average price of 16.34 euros per share. Business Outlook Management offers the following guidance for the quarter ending March 31, 2003: Revenue is expected to be in the range of $112 to $118 million. 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 and per ADS are expected to be in the range of $0.10 to $0.15. While the company is not providing detailed 2003 full year revenue or earnings guidance at this time, management plans are to continue to grow overall revenue by approximately 10 percent, with a greater than 10 percent growth in earnings per share. This press release contains 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. , including statements regarding the company's revenue and earnings expectations for the quarter ending March 31, 2003, and the year ending December 31, 2003, the company's ability to expand relationships with customers as a result of a broader product suite, the overall market demand for business intelligence products including the priority enterprises give to business intelligence and analytics, the expected results of R&D investments and of the introduction of new products that will improve the company's competitive position, and the effectiveness and continued momentum of the company's analytic applications strategy. The forward-looking statements are based on the company's current expectations, and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. The factors that could cause actual results to differ materially include, but are not limited to, the level of demand for the company's business intelligence solutions, changes in customer order patterns, the importance of business intelligence in the business intelligence tools, data integration, and analytic applications markets, unexpected expenses, continued success in technological advances and the ability of the company to adapt to technological changes, the ability of the company to gain acceptance of its products, the company's reliance on partners and other third party distribution channels to market and distribute its products, the impact of events outside 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. such as fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. currency rates, in particular fluctuations of the euro and yen, worldwide economic and political conditions, the ability of the company to protect its intellectual property, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. involving intellectual property and other issues, and increased competition. For a more complete discussion of these factors and additional risk factors that could materially affect the company's current and future operating results, see the discussions in the company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2002, and 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 fiscal year ended December 31, 2001 filed with the Securities and Exchange Commission. The company undertakes no obligation to update these forward-looking statements at any time or for any reason. Business Objects will hold a conference call today, hosted by management, at 1:30 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT (10:30 p.m. in Paris), to discuss its Q4 2002 results, and the outlook for Q1 and the full year 2003. Investors can call 800.399.7988 (from U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) or 706.634.5428 (from Europe). A replay will be available through February 1 at 800.642.1687 (from U.S. and Canada), or 706.645.9291 (from Europe), both with access code 7306478. Also, a live Webcast and replay can be accessed for 5 days after the call at the "Investor" section of the Business Objects web site, www.businessobjects.com. About Business Objects Business Objects is the world's leading provider of business intelligence (BI) solutions. Business intelligence lets organizations access, analyze, and share information internally with employees and externally with customers, suppliers, and partners. It helps organizations improve operational efficiency, build profitable customer relationships, and develop differentiated product offerings. The company's products include data integration tools, the industry's leading integrated business intelligence platform, and a suite of enterprise analytic applications. Business Objects is the first to offer a complete BI solution that is composed of best-of-breed components, giving organizations the means to deploy end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. BI to the enterprise, from data extraction Data extraction is the act or process of retrieving (binary) data out of (usually unstructured or badly structured) data sources for further data processing or data storage (data migration). to analytic applications. Business Objects has more than 17,000 customers in over 80 countries. The company's stock is publicly traded under the ticker symbols Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors NASDAQ: BOBJ and Euronext Paris (Euroclear code 12074). It is included in the SBF SBF Studium Biblicum Franciscanum (Franciscan School of Biblical Investigations; Jerusalem, Israel) SBF Small Block Ford (automotive engine) SBF Single Black Female SBF Société des Bourses Francaises 120 and IT CAC See Consumer Advisory Council. 50 French stock market indexes. Business Objects can be reached at 408-953-6000 and www.businessobjects.com. BusinessObjects is a trademark of Business Objects S.A. Other company and product names may be trademarks of the respective companies with which they are associated. A full-text copy of this announcement may be downloaded from the web; access http://www.businesswire.com/cnn and search on "Business Objects." Business Objects product inquiries should contact 800-527-0580.
BUSINESS OBJECTS S.A.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US dollars, except per ADS and per share data)
Three Months Ended Year Ended
December 31 December 31
2002 2001 2002 2001
-------- --------- --------- ---------
Revenues: (unaudited)
License fees $66,129 $72,688 $243,955 $249,594
Services 60,054 44,123 210,844 166,200
-------- --------- --------- ---------
Total revenues 126,183 116,811 454,799 415,794
Cost of revenues:
License fees 1,298 557 3,102 2,155
Services 18,766 16,629 71,489 63,497
-------- --------- --------- ---------
Total cost of
revenues 20,064 17,186 74,591 65,652
-------- --------- --------- ---------
Gross margin 106,119 99,625 380,208 350,142
Operating expenses:
Sales and marketing 59,346 56,759 222,243 203,655
Research and development 21,736 15,232 74,991 55,246
General and administrative 7,898 6,357 29,387 24,256
Acquired in-process
technology - - 2,000 -
Restructuring 115 - 3,871 -
Goodwill - 1,123 - 4,492
-------- --------- --------- ---------
Total operating
expenses 89,095 79,471 332,492 287,649
-------- --------- --------- ---------
Income from operations 17,024 20,154 47,716 62,493
Interest and other income, net 3,641 2,574 18,959 10,460
-------- --------- --------- ---------
Income before provision for
income taxes 20,665 22,728 66,675 72,953
Provision for income taxes (7,852) (8,637) (26,095) (28,075)
-------- --------- --------- ---------
Net income $12,813 $14,091 $40,580 $44,878
======== ========= ========= =========
Net income per ADS and share-
basic $0.21 $0.23 $0.66 $0.74
======== ========= ========= =========
ADS and shares used in
computing net income per ADS
& per share- basic 62,456 60,942 61,888 60,879
-------- --------- --------- ---------
Net income per ADS and share-
diluted $0.20 $0.22 $0.63 $0.70
======== ========= ========= =========
ADS and shares and common share
equivalents used in computing
net income per ADS & per
share- diluted 63,743 63,988 63,933 64,361
BUSINESS OBJECTS S.A.
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars)
December 31, December 31,
2002 2001
---------- ---------
ASSETS
Current assets:
Cash, restricted cash and cash
equivalents $289,273 $248,524
Accounts receivable, net 98,623 87,523
Deferred taxes 12,920 9,900
Other current assets 14,131 12,832
---------- ---------
Total current assets 414,947 358,779
Goodwill 75,416 13,648
Other intangible assets, net 10,810 6,973
Property and equipment, net 37,341 36,046
Restricted cash- long term 10,254 1,149
Deposits and other assets 3,040 4,874
---------- ---------
Total assets $551,808 $421,469
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $20,105 $19,972
Accrued payroll and related expenses 48,537 37,417
Deferred revenue 75,490 59,741
Income taxes payable 7,187 15,035
Other current liabilities 36,398 30,808
Notes payable- current portion 1,717 2,656
---------- ---------
Total current liabilities 189,434 165,629
Notes and escrow payable 9,728 1,717
Long-term deferred rent 7,713 1,457
---------- ---------
Total long term liabilities 17,441 3,174
Total shareholders' equity 344,933 252,666
---------- ---------
Total liabilities and shareholders'
equity $551,808 $421,469
========== =========
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