Embarcadero Technologies Announces Record Total Revenue for the Fourth Quarter 2005; Company Drives Higher Growth with License Revenue Increasing 9% Sequentially.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- Embarcadero em·bar·ca·de·ron. pl. embarcade·ros California A pier, wharf, or landing place, especially on a river or inland waterway. Technologies, Inc. (Nasdaq:EMBT EMBT Emergency Main Ballast Tank EMBT European Mountain Bicycling Trails EMBT Explosive Minefield Breacher Trainer ), a leading provider of strategic data management solutions, today announced results for its fourth quarter and year ended December December: see month. 31, 2005. Total revenues for the fourth quarter of 2005 were $15.6 million, a 7.5% increase as compared to the prior year's fourth quarter results of $14.5 million. License revenue increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 9% to $7.8 million in the fourth quarter 2005 compared to $7.1 million in the third quarter 2005. Net income and 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 under Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) were $1.2 million and $0.04, respectively, for the fourth quarter of 2005, as compared to GAAP net income and diluted net income per share of $0.3 million and $0.01, respectively, for the fourth quarter ended December 31, 2004. For the 2005 fiscal year, revenues were $57.6 million as compared to $56.3 million for 2004. GAAP net income and 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 year were $4.3 million and $0.16, respectively. This compares to GAAP net income and diluted earnings per share of $2.0 million and $0.07, respectively, for the year ended December 31, 2004. "We're we're Contraction of we are. we're we are pleased with the progress and financial results achieved by the company during the fourth quarter as we delivered higher revenue growth while sustaining strong profitability and operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. ," said Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and Wong n. 1. A field. , chairman and chief executive officer of Embarcadero Technologies. "As we enter 2006, the company is focused on driving higher license revenue growth and further strengthening its position as the leading provider of strategic data management solutions. Furthermore, the acquisition of Ambeo accelerates our plans to become the leader in data security, which is an essential component of strategic data management." Non-GAAP net income and diluted net income per share were $2.2 million and $0.08, respectively, for the fourth quarter of 2005, as compared to non-GAAP net income and diluted net income per share of $0.8 million and $0.03, respectively, for the fourth quarter of 2004. Non-GAAP measurements are tax adjusted and exclude amortization of non-cash stock-based compensation, amortization of acquired technology and in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. developed technologies (for the comparable period in 2004). For the year ended December 31, 2005 and 2004, non-GAAP net income was $6.8 million, or $0.25 per diluted share, and $6.6 million, or $0.23 per diluted share, respectively. A detailed reconciliation of GAAP to non-GAAP net income is provided in the attached financial statements. Cash flows from operations were $1.5 million for the three months ended December 31, 2005. Cash, cash equivalents, 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 $60.0 million at December 31, 2005. Total deferred revenues were $16.0 million at December 31, 2005, as compared to $14.7 million at December 31, 2004. Non-GAAP Financial Measurements The non-GAAP measurements of operating and net income and net income per share exclude $390,000 of amortization of non-cash stock-based compensation, $132,000 of amortization of acquired technology of which $122,000 is related to Ambeo's core technology, $88,000 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. acquired from Ambeo, $473,000 write down of internally developed software as a result of discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: product, and $440,000 of charges related to write down of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. acquired from Ambeo in the fourth quarter of 2005. In the fourth quarter 2004, non-GAAP net income excluded $438,000 in amortization of acquired technology, $882,000 of amortization of non-cash stock-based compensation, and $36,000 related to restructuring charge 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. reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its . The non-GAAP results in the fourth quarter 2005 assume approximately a 27% tax provision rate. Embarcadero has previously provided these non-GAAP measurements in press releases reporting operating and net income and earnings per share because we believe these measurements provide a consistent basis for the comparison of data between quarters and are not influenced by changes in certain non-cash or non-recurring charges and are therefore useful to investors. The non-GAAP measurements should not be considered as an alternative to GAAP, and as such, they may not be comparable to information provided by other companies. Conference Call Information Embarcadero will discuss its fourth quarter 2005 results, as well as provide business outlook for the first quarter of 2006, on a conference call and simultaneous Web-cast to be held today, February February: see month. 7, 2006, at 2:00 PM Pacific Time. Those interested in participating may call (913) 981-5559. The Web-cast of this conference call, which will be available live as well as archived, can be accessed by all interested parties at the Embarcadero Technologies Web site, www.embarcadero.com, in the events calendar under "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." About Embarcadero Technologies Embarcadero Technologies, Inc. (Nasdaq:EMBT) is a leading provider of strategic data management solutions that help companies to improve the availability, integrity, accessibility, and security of corporate data. Nearly 12,000 customers, including 97 of the Fortune 100, rely on Embarcadero Technologies solutions to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. their return on corporate data assets and to meet the challenges of explosive explosive, substance that undergoes decomposition or combustion with great rapidity, evolving much heat and producing a large volume of gas. The reaction products fill a much greater volume than that occupied by the original material and exert an enormous pressure, data growth, escalating data security requirements, and complex, multi-platform data environments. Embarcadero Technologies is headquartered in San Francisco, CA. For more information, call 415/834-3131 or visit www.embarcadero.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. The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties, including risks associated with fluctuations in quarterly results and other risks identified in the Company's periodic filings with the Securities and Exchange Commission including, but not limited to, those appearing under the caption "Risk Factors" in the Company's most recent Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. and Annual Report on Form 10-K/A. Actual results, events, and performance may differ materially. Readers are cautioned not to place undue relevance on these forward-looking statements, which speak 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" . The Company undertakes no obligation to release publicly the result of any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to these forward-looking statements that may be made 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 hereof or to reflect the occurrence of anticipated events. Embarcadero, the Embarcadero Technologies logos and all other Embarcadero Technologies product or service names are trademarks of Embarcadero Technologies, Inc. All other trademarks are property of their respective owners.
Embarcadero Technologies, Inc.
GAAP Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three months ended Twelve months ended
December 31 December 31
------------------- -------------------
2005 2004 2005 2004
-------- --------- --------- --------
Revenues:
License $7,776 $7,644 $27,513 $28,208
Maintenance 7,846 6,894 30,039 28,086
-------- --------- --------- --------
Total revenues 15,622 14,538 57,552 56,294
-------- --------- --------- --------
Cost of revenues:
License 692 294 1,388 999
Amortization of acquired
technology 132 438 841 2,105
Maintenance 585 548 2,173 2,362
-------- --------- --------- --------
Total cost of revenues 1,409 1,280 4,402 5,466
-------- --------- --------- --------
Gross profit 14,213 13,258 53,150 50,828
-------- --------- --------- --------
Operating expenses:
Research and development 4,528 4,042 16,178 15,637
Sales and marketing 6,471 5,666 22,950 21,077
General and administrative 2,046 3,761 8,596 8,777
Restructuring and impairment
charges -- (36) -- 4,032
Litigation settlement
charge, net -- -- 573 --
-------- --------- --------- --------
Total operating expenses 13,045 13,433 48,297 49,523
-------- --------- --------- --------
Income (loss) from operations 1,168 (175) 4,853 1,305
Other income, net 316 233 1,239 791
-------- --------- --------- --------
Income before provision for
income taxes 1,484 58 6,092 2,096
Benefit from (provision for)
income taxes (264) 243 (1,755) (108)
-------- --------- --------- --------
Net income $1,220 $ 301 $ 4,337 $ 1,988
-------- --------- --------- --------
Net income per share:
Basic $ 0.05 $ 0.01 $ 0.17 $ 0.07
-------- --------- --------- --------
Diluted $ 0.04 $ 0.01 $ 0.16 $ 0.07
-------- --------- --------- --------
Shares used in per share
calculation:
Basic 25,768 25,955 25,866 26,788
-------- --------- --------- --------
Diluted 27,307 27,610 27,294 28,502
-------- --------- --------- --------
The following table summarizes the non-GAAP measures discussed in this
press release and provides a reconciliation between GAAP and non-GAAP
measures:
Embarcadero Technologies,Inc.
Non-GAAP Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
The following table reconciles non-GAAP net income to GAAP net income:
Three months ended Twelve months ended
December 31 December 31
------------------- -------------------
2005 2004 2005 2004
--------- --------- -------- ---------
GAAP net income and diluted
earnings per share $1,220 $ 301 $4,337 $1,988
Amortization of acquired
technology 132 438 706 2,105
Amortization of acquired
intangibles 88 -- 88 --
Non-cash stock-based
compensation 390 882 1,614 2,318
Write-down of acquired
intangible and internally
developed software 913 -- 913 --
Restructuring and
impairment charges -- (36) -- 4,032
Litigation settlement
charge, net -- -- 573 --
Non-GAAP tax adjustments (559) (738) (1,388) (3,795)
--------- --------- -------- ---------
Non-GAAP net income $2,184 $ 847 $6,843 $6,648
========= ========= ======== =========
Net income per share:
Basic $ 0.08 $0.03 $ 0.26 $ 0.25
--------- --------- -------- ---------
Diluted $ 0.08 $0.03 $ 0.25 $ 0.23
--------- --------- -------- ---------
Shares used in per share
calculation:
Basic 25,768 25,955 25,866 26,788
--------- --------- -------- ---------
Diluted 27,307 27,610 27,294 28,502
--------- --------- -------- ---------
Embarcadero Technologies, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
December 31, December 31,
2005 2004
(unaudited) (1)
------------ ------------
ASSETS
Current Assets:
Cash, cash equivalents and short-term
investments $59,969 $59,907
Trade accounts receivable, net 9,407 8,339
Prepaid expenses and other current
assets 1,863 1,634
Deferred income taxes 377 732
------------ ------------
Total current assets 71,616 70,612
Property and equipment, net 2,059 2,922
Goodwill 13,920 10,950
Deferred income taxes 2,500 3,967
Other assets, net 3,061 1,672
------------ ------------
Total assets $93,156 $90,123
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 817 $ 1,004
Accrued liabilities 5,291 5,167
Capital lease obligation 161 171
Deferred revenue 15,802 14,503
------------ ------------
Total current liabilities 22,071 20,845
Long-term deferred revenue 180 199
Long-term capital lease obligation 87 238
Long-term restructuring and impairment
accrual 1,061 1,747
------------ ------------
Total liabilities 23,399 23,029
Stockholders' Equity 69,757 67,094
------------ ------------
Total liabilities and
stockholders' equity $93,156 $90,123
------------ ------------
(1) The balance sheet as of December 31, 2004 has been derived from
the audited consolidated financial statements at that date.
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