Business Objects Reports Record Second Quarter Results; Total Revenues Increase 10 Percent.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.--(BUSINESS WIRE)--July 24, 2002 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 second quarter and six months ended June 30, 2002. Second quarter revenues were $111.2 million, an increase of 10 percent over revenues of $101.5 million for the quarter ended June 30, 2001. Net income for the second quarter was $11.9 million, compared to net income of $11.0 million for the same period last year, an increase of 8 percent. 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 share and per ADS for the second quarter was $0.18, compared to $0.17 in the second quarter of last year. Excluding a gain from the net Cognos patent 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. settlement, and charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc employee reductions in Europe, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma diluted net income per share and per ADS in the second quarter was $0.17. "We are pleased with our continued revenue and profitability growth, as we once again clearly stand out from the field in business intelligence and analytics," 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. "In light of the especially slow IT spending environment, our performance in the Americas, where revenue increased by 40 percent over last year, was particularly outstanding. However, this performance was partly offset by a continued weak economy in Europe." Large Contracts Reflect Priority of Business Intelligence The company reported that 457 new customers were added in the quarter. "We had a significant number of large contracts in the quarter, including 5 over $1 million, and 65 between $200,000 and $1 million," said Liautaud. Major customers in the quarter included Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , Cingular Wireless, Voicestream, Banque de France Banque de France National bank of France, created in 1800 to restore confidence in the French banking system after the financial upheavals of the revolutionary period. Napoleon was one of its founding shareholders. , CNAM (Calling NAMe) An IN (Intelligent Network) service that displays the caller's name on the calling party's digital readout. This is similar to caller ID except that the calling party's name is displayed along with the calling number or instead of the calling number. See caller ID. (French Social Security), Kraft Foods Kraft Foods Inc. (NYSE: KFT) is the largest food and beverage company headquartered in North America and the second largest in the world after Nestlé SA. The Philip Morris Company (now known as Altria Group), a company that produces tobacco products, acquired Kraft for , AEP AEP - Application Environment Profile , Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. and Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. .The company also reported that indirect channels contributed 48 percent of license revenue. "We continue to strengthen our relationships with major system integrators See systems integrator. , providing us with access to large projects, while at the same time our network of value added resellers See VAR. (company) value added reseller - (VAR, or "value added retailer") A company which sells something (e.g. computers) made by another company (an OEM) with extra components added (e.g. specialist software). gives us an unparalleled reach into small and mid-size accounts," said Liautaud. Continued Strength in Americas Region For the second quarter, revenue distribution by region was as follows: the Americas 52 percent, Europe 42 percent, and rest of world 6 percent. "Business Objects continued to gain market share in the Americas, as total revenue in that region grew by 40 percent over the same period in the prior year," said Liautaud. 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. : Rapid Revenue Growth and New Products License revenue in analytic applications reached $4.5 million, up 128 percent from the second quarter of last year, with purchases by 34 customers, including Aventis, MasterCard, National Australia Bank The National Australia Bank or NAB (ASX: NAB, LSE: NAB, NYSE: NAB, TYO: 8637 ) is part of the NAB Group. It is the largest bank in Australia by assets, and 28th largest in the world. , US Cellular, and the U.S. Department of Navy. "The growth of our analytic applications business signals that our unique 'build or buy' strategy is the right one for this segment," said Liautaud. "Customers can use Business Objects Application Foundation to build their own specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. analytics, or employ modules from our suite of pre-built applications. During the quarter, we introduced Business Objects Application Foundation 3.0, which includes two new 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. engines -- predictive analysis capability and statistical process control. We also expanded Business Objects Supply Chain Intelligence, adding three new modules." Extranet Business Adds 68 New Customers The extranet group added 68 new customers during the quarter, bringing total extranet customers to 851. More than 100 extranet transactions were signed in the quarter. License and service revenues from extranet products were $19.6 million in the second quarter, a decrease of 10 percent from the same period in the prior year. "Our extranet results reflect the current IT spending environment, particularly in Europe, in which many companies are reluctant to initiate new projects," said Liautaud. "However, we remain very confident in the value of extranets to a wide range of organizations, as customer deployments continue to move forward successfully." Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Results Revenues for the six months ended June 30, 2002 were $218.7 million, compared with revenues in the same period of the prior year of $199.8 million. Net income for the six months ended June 30, 2002 was $22.9 million, or $0.35 per diluted share and ADS, compared with net income for the same period of the prior year of $21.5 million, or $0.33 per diluted share and ADS. Balance Sheet As of June 30, 2002, the company had $332.9 million in cash, restricted cash and cash equivalents. Total assets were $499.8 million, compared with $421.5 million at December 31, 2001. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). as of June 30, 2002 were 65 days. Business Outlook Management offers the following guidance for the quarter ending September 30, 2002: Revenue is expected to be in the range of $108 to $110 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 $0.02 to $0.04. This includes a projected impact of a negative $0.11 income per share resulting from the expected purchase of Acta Technology. Management offers the following guidance for the full fiscal year ending December 31, 2002: Revenue is expected to be in the range of $450 million to $460 million. Diluted earnings per share and per ADS are expected to be in the range of $0.55 to $0.59. This includes a projected impact of a negative $0.14 income per share resulting from the expected purchase of Acta Technology. Business Objects will hold a conference call today, hosted by management, at 8:30 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT (5:30 p.m. in Paris), to discuss its Q2 results and outlook for Q3 and the full year 2002. Investors can call 800/399-7988 (from U.S. and Canada) or 706/634-5428 (from Europe). A replay will be available for 48 hours after the call at 800/642-1687 (from U.S. and Canada), or 706/645-9291 (from Europe), both with access code 4718146. 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. Business intelligence helps organizations improve operational efficiency, build profitable customer relationships, and develop differentiated product offerings. The company's products include BusinessObjects 2000, the industry's leading integrated business intelligence toolset and platform, and BusinessObjects Analytics, an integrated suite of enterprise analytic applications. Business Objects pioneered the modern BI industry in 1990 by inventing a patented "semantic layer Semantic Layer The semantic layer is a business representation of corporate data that helps end users access data autonomously using common business terms. Developed and patented by Business Objects, it maps complex data into familiar business terms such as product, " that insulates users from the complexity of databases. In 1995, the company was first to focus on enterprise-scale BI deployments and today supports customers with more than 20,000 users. The company moved aggressively to the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the in 1997 by pioneering the market for BI extranets, a market that it continues to lead today. In 2000, the company delivered the industry's first interactive wireless BI solution. Today, Business Objects continues to innovate in·no·vate v. in·no·vat·ed, in·no·vat·ing, in·no·vates v.tr. To begin or introduce (something new) for or as if for the first time. v.intr. To begin or introduce something new. , creating and delivering a unique vision for enterprise analytic applications. Business Objects has more than 16,000 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: code Euroclear France 12074, and 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. This press release contains forward looking statements, including statements regarding the company's revenue, operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , and earnings expectations for the quarter ending September 30, 2002 and the year ending December 31, 2002, the company's competitive advantage and its ability to manage effectively in a difficult economic environment, and the company's relationship with resellers and integrators, the benefit to the company of such relationships, the value of extranets to organizations, and the effectiveness of the company's analytic applications strategy. These 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. 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 intranet, extranet, and analytic applications markets, the closing of the acquisition of Acta Technology, the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of charges and costs relating to the acquisition of Acta Technology, unexpected expenses, the 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 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 10Q for the quarter ended March 31, 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. Note to Editors: 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 Six Months Ended
June 30 June 30
2002 2001 2002 2001
----- ----- ------ ------
Revenues: (unaudited)
License fees $ 60,939 $ 61,012 $124,090 $121,613
Services 50,257 40,493 94,644 78,170
-------- -------- -------- --------
Total revenues 111,196 101,505 218,734 199,783
Cost of revenues:
License fees 519 464 1,062 1,066
Services 17,632 15,728 34,687 31,156
--------- --------- --------- --------
Total cost of
revenues 18,151 16,192 35,749 32,222
-------- -------- -------- --------
Gross margin 93,045 85,313 182,985 167,561
Operating expenses:
Sales and marketing 54,658 48,490 106,841 96,477
Research and
development 16,934 13,574 32,433 26,567
General and
administrative 7,183 7,053 13,345 12,826
Restructuring 3,756 -- 3,756 --
Intangible asset
amortization 228 -- 560 --
Goodwill -- 1,115 -- 2,247
-------- -------- -------- --------
Total operating
expenses 82,759 70,232 156,935 138,117
-------- -------- -------- --------
Income from operations 10,286 15,081 26,050 29,444
Interest and other
income, net 8,871 2,950 10,883 5,793
-------- -------- -------- --------
Income before provision
for income taxes 19,157 18,031 36,933 35,237
Provision for income
taxes (7,279) (7,032) (14,034) (13,742)
-------- -------- -------- --------
Net income $ 11,878 $ 10,999 $ 22,899 $ 21,495
======== ======== ======== ========
Net income per ADS and
share - basic $ 0.19 $ 0.18 $ 0.37 $ 0.35
======== ======== ======== ========
ADS and shares used in
computing net income
per ADS & per share
- basic 62,168 61,216 61,707 60,984
-------- -------- -------- --------
Net income per ADS and
share - diluted $ 0.18 $ 0.17 $ 0.35 $ 0.33
======== ======== ======== ========
ADS and shares and
common share
equivalents used in
computing net income
per ADS & per share
- diluted 64,605 64,686 64,686 64,802
Reconciliation of pro forma earnings per share
Income before provision
for income taxes $ 19,157 $ 18,031 $ 36,933 $ 35,237
Less: net Cognos patent
litigation settlement,
(included in Interest
and other income, net) (6,921) -- (6,921) --
Add: Restructuring 3,756 -- 3,756 --
Add: European severance
(included in Operating
expenses) 1,810 -- 1,810 --
-------- -------- -------- --------
Pro forma income before
provision for income
taxes 17,802 18,031 35,578 35,237
Pro forma provision for
income taxes (6,765) (7,032) (13,520) (13,742)
-------- -------- -------- --------
Pro forma net income $ 11,037 $ 10,999 $ 22,058 $ 21,495
======== ======== ======== ========
Pro forma net income
per ADS and share
- diluted $ 0.17 $ 0.17 $ 0.34 $ 0.33
======== ======== ======== ========
ADS and shares and
common share
equivalents used in
computing pro forma
net income per ADS
& per share - diluted 64,605 64,686 64,686 64,802
BUSINESS OBJECTS S.A.
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars)
June 30, 2002 December 31, 2001
-------------- ------------------
(unaudited)
ASSETS
Current assets:
Cash, restricted cash
and cash equivalents $332,948 $248,524
Accounts receivable, net 79,997 87,523
Deferred taxes 9,981 9,900
Other current assets 14,017 12,832
-------- --------
Total current assets 436,943 358,779
Goodwill and other intangible
assets, net 19,604 20,621
Property and equipment, net 37,548 36,046
Restricted cash - long term 315 1,149
Deposits and other assets 5,400 4,874
-------- --------
Total assets $499,810 $421,469
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $18,450 $19,972
Accrued payroll and related
expenses 34,431 37,417
Deferred revenue 73,798 59,741
Other current liabilities 55,697 48,499
-------- --------
Total current liabilities 182,376 165,629
Long-term liabilities 2,913 3,174
Total shareholders' equity 314,521 252,666
-------- --------
Total liabilities and
shareholders' equity $499,810 $421,469
======== ========
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