Intergraph Reports First Quarter 2006 Financial Results.HUNTSVILLE, Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- First Quarter 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. Exceeds Financial Guidance Intergraph Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : INGR), a leading global provider of spatial information management (SIM) software, today announced financial results for its first quarter ended March 31, 2006. Revenue for the quarter was $139.0 million, an increase of 1.9% from the $136.5 million reported in the first quarter of 2005. Operating income for the quarter was $6.2 million, or 4.5% of revenue, compared to $5.9 million, or 4.3% of revenue, reported in the first quarter of 2005. The Company reported a 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. of $4.7 million in the first quarter of 2006, compared to $1.7 million in the first quarter of 2005. Operating income before restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). (a non-GAAP measure) for the quarter was $10.9 million, or 7.9% of revenue, compared to $7.6 million, or 5.6% of revenue, reported in the first quarter of 2005. Net income for the quarter was $14.0 million, or $0.44 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, compared to $81.9 million, or $2.40 per diluted share, reported in the first quarter of 2005. Net income includes approximately $8.5 million and $81.0 million of after-tax intellectual property income, net of all fees and expenses, in the first quarter of 2006 and 2005, respectively. "We are pleased with our continued improvements in operating performance as first quarter operating income and operating income before restructuring exceeded our financial guidance," said R. Halsey Wise, Intergraph President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We also made significant progress during the quarter with our organizational realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. and remain committed to completing these efforts and all associated restructuring charges by the end of the second quarter of 2006. As part of our restructuring actions in the first quarter and in an effort to increase operational focus, we divested our Teranetix Europe operations, a legacy hardware repair business that we previously identified as a non-core asset. We view such steps as evidence of our continued efforts to enhance operational focus and build shareholder value."
(dollars in
millions)
Quarterly Results Financial Guidance (a)
----------------------- ------------------------------
Q1 2006 Q4 2005 Q1 2005 Q2 2006 2006
------- ------- ------- -------------- ---------------
Revenue $139.0 $145.1 $136.5 $145 - $147 $600 - $610 (b)
Year-over-year
growth 1.9% (0.7%) 3.2%
Operating income
- before
restructuring
(c) $10.9 $12.5 $7.6 $10.5 - $11.5 $53.0 - $57.0
Operating margin
- before
restructuring
(c) 7.9% 8.6% 5.6%
Restructuring
charges $4.7 $2.7 $1.7 $4.5 - $5.5 $9.2 - $10.2
Operating income $6.2 $9.8 $5.9 $5.0 - $7.0 $42.8 - $47.8
Operating margin 4.5% 6.8% 4.3%
Net income $14.0 $11.2 $81.9
Earnings per
share (diluted) $0.44 $0.35 $2.40
----------------
(a)Forward-looking statements. See "Cautionary Note Regarding
Forward-Looking Statements."
(b)2006 Revenue Guidance reflects the sale of Intergraph's Teranetix
Europe operations in the first quarter of 2006, which generated
approximately $5 million in annual revenue.
(c)See "Non-GAAP Financial Measures."
"Our recent customer wins and operating results illustrate Intergraph's continued progress as we execute on our Strategic Plan," Mr. Wise said. "We are committed to further enhancing our operational efficiency and investing in various growth initiatives for the future. While our first quarter revenue was lower than we expected, we are pleased that our orders and backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. trends remain strong. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our forward prospects because we believe our business transformation actions will help us to highlight our differentiated capabilities and to pursue our attractive market opportunities." Fluctuations in the value of the U.S. dollar in international markets can have a significant impact on the Company's financial results. The Company estimates for the quarter that the strengthening of the U.S. dollar in its international markets, primarily in Europe, negatively impacted revenue by 3.0%, reduced operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by 2.9%, and decreased its quarterly net income by approximately $0.02 per diluted share in comparison to the first quarter of 2005. The Company estimates that the weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of the U.S. dollar in the first quarter of
2006 as compared with the fourth quarter of 2005 positively impacted
revenue by 0.4%, increased operating expenses by 0.4%, and increased its
quarterly net income by approximately $0.01 per diluted share.Recent Business Highlights --Security, Government & Infrastructure (SG&I) generated first quarter orders of $79.5 million, compared to $68.4 million in the first quarter of 2005. SG&I ending backlog was $203.2 million, an increase of 25.0% from the $162.6 million at the end of the first quarter of 2005. The increase in backlog has been primarily driven by global demand for Intergraph's public safety and transportation security solutions. --SG&I was selected by Corpus Christi Corpus Christi, in Christianity Corpus Christi [Lat.,=body of Christ], feast of the Western Church, observed on the Thursday after Trinity Sunday (or on the following Sunday). , TX to provide its incident response and management system. The contract is valued at approximately $4.2 million and includes computer-aided dispatch A dispatch or dispatches can refer to:
(Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. ), mobile computing Using a computing device while in transit. Mobile computing implies wireless transmission, but wireless transmission does not necessarily imply mobile computing. Fixed wireless applications use satellites, radio systems and lasers to transmit between permanent objects such as buildings , and reporting & analysis software. Additional notable recent public safety wins include Elk Grove Elk Grove can refer to:
--SG&I announced that it has significantly expanded the Company's long-standing relationship with the National Geospatial-Intelligence Agency Noun 1. National Geospatial-Intelligence Agency - a combat support agency that provides geographic intelligence in support of national security NGA (NGA Noun 1. NGA - a combat support agency that provides geographic intelligence in support of national security National Geospatial-Intelligence Agency ) by signing a new three-year Enterprise Site License Agreement. Intergraph's software will assist the agency in providing timely, relevant and accurate geospatial Geospatial is a term widely used to describe the combination of spatial software and analytical methods with terrestrial or geographic datasets. The term is often used in conjunction with geographic information systems and geomatics. intelligence in support of national security objectives. --SG&I announced that its software was used in support of the security operations at the President's State of the Union Address “State of the Union” redirects here. For other uses, see State of the Union (disambiguation). The State of the Union is an annual address in which the President of the United States reports on the status of the country, normally to a joint session of Congress (the in Washington, D.C. SG&I software enabled 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. tracking of resources throughout the course of the event and provided a map-based command and control interface allowing visibility and management of deployed mobile resources. --SG&I announced that its software was utilized by Istituto Geografico Militare Italiano (IGMI) to aid in the security operations at the 2006 Olympic Winter Games
tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. and integrating mapping data to create valuable location-specific information for use by security personnel in the prevention and response to critical incidents. --SG&I software was selected by The Gas Company, Hawaii, to manage its geofacilities data network. Intergraph's software will manage The Gas Company's planning, design, construction, operation and maintenance functions. This selection means that the entire state of Hawaii will use Intergraph's software for all utilities including electric (Hawaiian Electric Company); communications (Hawaiian Telcom Hawaiian Telcom is the incumbent local exchange carrier (ILEC) or dominant local telephone company, serving the state of Hawaii. It was formed in 2005 by The Carlyle Group, following its purchase of the Hawaii assets of Verizon Communications, which was known as ); and gas service (The Gas Company). --Process, Power & Marine (PP&M) generated year-over-year revenue growth of 20.9% and achieved operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 22.4% in the first quarter of 2006. PP&M produced revenue growth across a wide range of products and geographies, particularly in the Asia-Pacific region. --PP&M announced that Rosneft, Russia's leading provider in the fuel and energy sector, has signed a multi-year software license agreement to standardize stan·dard·ize v. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. on Intergraph's SmartPlant Enterprise portfolio in its subsidiaries across the Russian Federation Russian Federation: see Russia. . SmartPlant Enterprise will allow Rosneft to integrate numerous applications used to create, capture and maintain information and institutional knowledge throughout the plant's lifecycle, regardless of changes in the plants and staff. --PP&M announced that Bateman Engineering N.V. will standardize on Intergraph's SmartPlant Enterprise to replace its existing AVEVA PDMS (Product Data Management System) See PDM. design tool. The SmartPlant Enterprise portfolio will form the foundation for a more data-centric and integrated plant design modeling environment. --PP&M's SmartPlant Enterprise was selected by Chematur Engineering AB (CEAB CEAB Canadian Engineering Accreditation Board CEAB Connecticut Energy Advisory Board CEAB Cold Engine Air Bleed CEAB Command Element Advisory Board CEAB C4I Executive Advisory Board ), a group of chemical engineering companies in Sweden, 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. , Germany, Finland and India. CEAB will implement SmartPlant Enterprise across its worldwide operations to help streamline schedules, boost productivity and increase engineering quality across its global engineering enterprise. --PP&M announced SmartPlant Foundation, the Company's data and document management system and integration hub, has now been selected by more than 100 clients worldwide. SmartPlant Foundation provides critical integration capabilities for asset creation, maintenance and operations-related work processes that address the engineering information requirements The information needed to support a business or other activity. Systems analysts turn information requirements (the what and when) into functional specifications (the how) of an information system. of a facility throughout the entire plant lifecycle. --PP&M acquired Alias (1) An alternate name used for identification, such as for naming a field or a file. See CNAME record. (2) In the Mac, an alias is an icon that points to a program or data file. Ltd., a leading global provider of piping design automation software, based outside of Manchester, England. Alias provides automatic piping isometric isometric /iso·met·ric/ (-met´rik) maintaining, or pertaining to, the same measure of length; of equal dimensions. i·so·met·ric adj. 1. drawing generation capability to the majority of 3D plant design and shipbuilding software users worldwide. --Intergraph recently announced that General Colin Powell Noun 1. Colin Powell - United States general who was the first African American to serve as chief of staff; later served as Secretary of State under President George W. Bush (born 1937) Colin luther Powell, Powell , USA (Ret.), will serve as the featured keynote keynote /key·note/ (ke´not) in homeopathy, the characteristic property of a drug that indicates its use in treating a similar symptom of disease. speaker for Intergraph 2006, the Company's flagship international users' conference to be held June 12-15, 2006 in Lake Buena Vista, Florida Lake Buena Vista is a city in Orange County, Florida, United States. It is mostly known for being home to the Walt Disney World Resort. The population was 16 at the 2000 census. As of 2004, the population recorded by the U.S. Census Bureau is 15. , at Disney's Coronado Springs Resort Disney's Coronado Springs Resort is a resort hotel at the Walt Disney World Resort that opened on August 1, 1997. This resort reveals its Southwestern U.S.-Mexican theme in such as a tiled stucco lobby and a pyramid with water tumbling down it that appears to have created the Mayan . --Intergraph sold the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations of its Teranetix division on March 25, 2006, marking the second and final divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of this non-core asset. Teranetix provides legacy hardware maintenance and repair services and was identified as a non-core asset by the Company as part of its Strategic Plan. Teranetix generated approximately $5 million in annual revenue with little to no 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. . The sale of Teranetix did not result in a material gain or loss. Organizational Realignment In April 2005, the Company announced, as part of its business transformation efforts, the realignment of its organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. and streamlining of its global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. from four to two divisions - Security, Government & Infrastructure (SG&I) and Process, Power & Marine (PP&M). The organizational realignment is intended to: (1) improve the customer focus and responsiveness of the Company; (2) facilitate revenue growth by better leveraging the Company's full range of technology and services; (3) enhance the Company's development capabilities and ability to deliver innovative solutions to its target markets; and (4) reduce the overall cost structure of the Company. The Company expects that the organizational realignment will be completed by the end of the second quarter of 2006. The Company has identified process improvements and expense savings opportunities related to the organizational realignment efforts. The Company believes the majority of these efficiency improvements and expense savings will be generated by streamlining internal processes around the world and eliminating redundant positions as part of consolidating divisions and functions. The Company eliminated approximately 100 positions during the first quarter of 2006 and reported a restructuring charge of $4.7 million as part of the organizational realignment efforts. In total, the Company has eliminated approximately 315 positions and reported restructuring charges of $14.7 million during the second quarter of 2005 through the first quarter of 2006. The Company estimates that total restructuring charges for the remainder of the organizational realignment (second quarter of 2006) will be $4.5 - $5.5 million. The Company estimates that the entire organizational realignment will generate total gross expense savings on an annual basis in the range of $26 - $29 million. As part of the Company's transformation efforts and consistent with its Strategic Plan, Intergraph plans to invest a portion of the expense savings generated by the organizational realignment into R&D for core product upgrades, IT and system improvements, expansion of sales channels, and targeted growth opportunities where the Company believes it has differentiated capabilities. Division Performance The Company believes that providing the operating performance of its two divisions is useful to investors. The following tables and explanations summarize sum·ma·rize intr. & tr.v. sum·ma·rized, sum·ma·riz·ing, sum·ma·riz·es To make a summary or make a summary of. sum the results of the two divisions for the first quarter ended March 31, 2006.
Security, Government & Infrastructure (SG&I):
(dollars in millions)
Quarterly Results Ending
-----------------------
Q1 2006 Q4 2005 Q1 2005 Backlog
------- ------- ------- -------
Revenue $92.3 $98.2 $97.7 $203.2
Year-over-year growth (5.5%) (3.8%) (0.3%)
Operating income - before restructuring $6.3 $6.4 $6.8
Operating margin - before restructuring 6.8% 6.5% 7.0%
Restructuring charges $2.6 $2.6 $1.0
Operating income $3.7 $3.8 $5.8
Operating margin 4.0% 3.8% 5.9%
SG&I revenue for the quarter was $92.3 million, a decrease of 5.5% from the first quarter of 2005 and a sequential decrease of 6.0% from the fourth quarter of 2005. The revenue decrease from both periods was partially driven by the timing of delivery related to Digital Mapping Digitizing geographic information for a geographic information system (GIS). Cameras. The year-over-year comparison also reflects a decline in certain U.S. Federal Government contracts. Operating income for the quarter was $3.7 million, or 4.0% of revenue, compared to $5.8 million in the first quarter of 2005 and $3.8 million in the fourth quarter of 2005. SG&I reported a restructuring charge of $2.6 million in the first quarter of 2006 due to the organizational realignment announced in April 2005. Operating income before restructuring (a non-GAAP measure) for the quarter was $6.3 million, or 6.8% of revenue, compared to $6.8 million in the first quarter of 2005 and $6.4 million in the fourth quarter of 2005. The year-over-year decline in operating income was driven by lower revenue and higher restructuring charges, partially offset by lower operating expenses. The slight sequential decline in operating income from the fourth quarter of 2005 reflects lower revenue, offset by improved gross margins and lower operating expenses. SG&I generated first quarter orders of $79.5 million, compared to $68.4 million in the first quarter of 2005 and $70.3 million in the fourth quarter of 2005. SG&I ending backlog was $203.2 million, representing a 25.0% increase from the $162.6 million at the end of the first quarter of 2005 and a 5.1% increase from the $193.3 million at the end of the fourth quarter of 2005.
Process, Power & Marine (PP&M):
(dollars in millions)
Quarterly Results
-------------------------------
Q1 2006 Q4 2005 Q1 2005
--------- --------- ---------
Revenue $46.8 $47.2 $38.7
Year-over-year growth 20.9% 8.3% 17.2%
Operating income $10.5 $11.4 $6.3
Operating margin 22.4% 24.2% 16.4%
PP&M revenue for the quarter was $46.8 million, an increase of 20.9% from the first quarter of 2005 and a sequential decrease of 0.8% from the fourth quarter of 2005. The year-over-year revenue increase was primarily due to growth in our core plant design software, the adoption of our new SmartPlant Enterprise technology, increases in our 3D design software lease base, and increases in maintenance and services revenue generated by these products. Operating income for the quarter was $10.5 million, or 22.4% of revenue, compared to $6.3 million in the first quarter of 2005 and $11.4 million in the fourth quarter of 2005. The year-over-year growth in operating income was primarily due to increases in revenue and gross margins, partially offset by higher operating expenses primarily in sales and marketing functions to support the growth in the business. Accelerated Stock Buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. (ASB ASB Asbestos ASB Arbeiter Samariter Bund (German medical help organisation) ASB Anti-Social Behaviour ASB Accounting Standards Board (UK FRC) ASB Aarhus School of Business ) On March 22, 2005, the Company repurchased 5.4 million shares from a financial intermediary Financial Intermediary An institution that acts as the middleman between investors and firms raising funds. Often referred to as financial institutions. Notes: This can include chartered banks, insurance companies, investment dealers, mutual funds, and pension funds. in a private transaction in connection with an Accelerated Stock Buyback (ASB). The shares were repurchased for an upfront payment of approximately $150 million, or $27.74 per share, and were subject to a market price adjustment provision based on the volume weighted average market trading price Trading price The price at which a security is currently selling. of $41.06 per share over the period from May 2, 2005 to March 21, 2006. The total amount of this market price adjustment provision was approximately $72 million and was settled by the Company in cash on March 24, 2006. Intellectual Property The Company possesses an intellectual property (IP) portfolio, which it protects through licensing and 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. . All income and expenses associated with the IP portfolio, including legal expenses, are classified and reported in the Other Income (Expense), net section of the income statement. For the quarter ended March 31, 2006, Intergraph reported $13.5 million of pre-tax intellectual property income, net of all fees and expenses. On March 31, 2006, Intergraph entered into a patent license agreement with Sony Corporation of Japan. The terms of the agreement require Sony to make a one-time, up-front royalty payment of $15.0 million for a paid-up Paid-Up The state of a settlement when all payment obligations for a security have been completed in a customer account. When an individual has paid up, he or she has paid for the security in full. worldwide license to Intergraph's patent portfolio. Intergraph recorded after-tax intellectual property income from this agreement of approximately $8.6 million, net of all fees and expenses, in the first quarter of 2006. On April 24, 2006, Intergraph announced a patent license agreement with Acer Acer trees of the family Aceraceae. Acer rubrum ingestion of wilted or dries leaves of this tree causes acute hemolytic anemia characterized by red urine, jaundice, anemia and methemoglobinemia in horses. Incorporated. Under the terms of the agreement, Acer will make a one-time, fully paid-up royalty payment of $7.5 million based on a 1% royalty on applicable product revenue. Intergraph expects to record after-tax intellectual property income from this agreement of approximately $4.3 million, net of all fees and expenses, in the second quarter of 2006. Non-GAAP Financial Measures To supplement its financial statements, which are prepared on a 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). ) basis, Intergraph reports operating income before restructuring charges and operating margin before restructuring charges. The Company believes these non-GAAP financial measures provide investors and management with additional information to evaluate the Company's past financial results and ongoing operational performance. The Company believes these non-GAAP financial measures facilitate making period-to-period comparisons and are indications of its operating performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for any measure prepared 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 GAAP. In addition, these non-GAAP financial measures may not necessarily be comparable to those of other companies. Conference Call and Webcast Intergraph will provide an online, real-time Webcast and rebroadcast of its first quarter conference call to be held on Thursday, April 27, 2006 at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The live broadcast will be available online at www.intergraph.com/investors. Listeners will be asked to pre-register and should plan to visit the Website a few minutes before the broadcast begins. The replay will be available shortly after the conference call ends and will remain available online until April 27, 2007. In addition, the replay can be heard by telephone any time before the close of business on May 27, 2006 by calling 1-800-337-5619. About Intergraph Intergraph Corporation (NASDAQ: INGR) is a leading global provider of spatial information management (SIM) software. Security organizations, businesses and governments in more than 60 countries rely on the Company's spatial technology and services to make better and faster operational decisions. Intergraph's customers organize vast amounts of complex data into understandable visual representations, creating intelligent maps, managing assets, building and operating better plants and ships, and protecting critical infrastructure and millions of people around the world. For more information, visit www.intergraph.com. Cautionary Note Regarding 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 news release contains forward-looking statements (all statements other than those made solely with respect to historical fact) within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 including, but not limited to, any projections or expectations regarding future results, including revenue, operating income levels, margins, and cash flows; expectations regarding future market conditions; and the Company's organizational realignment and cost reduction efforts, and their anticipated impact on the Company and its divisions and business units; information regarding the development, timing of introduction, exportability, and performance of new products; the Company's ability to win new orders and any statements of the plans, strategies, expectations, and objectives of management for future operations. Forward-looking statements are subject to known and unknown risks and uncertainties (some of which are beyond the Company's control) that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, potential adverse outcomes in our efforts to improve our operating performance (including uncertainties with respect to the timing and magnitude of any expected improvements); potential adverse outcomes or consequences associated with the Company's organizational realignment; material changes with respect to our business, litigation, or the securities markets; risks associated with doing business internationally (including foreign currency fluctuations and export controls); worldwide political and economic conditions and changes; increased competition; rapid technological change; unanticipated changes in customer requirements, including reductions in funding or spending for, or scope of, government projects; ability to identify suitable sources of growth and to identify and execute upon suitable acquisition targets at reasonable prices; ability to improve margins; adverse trends in energy demand and prices; ability to attract or retain key personnel; the ability to access or deliver the technology necessary to compete in the markets served; potential obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. or exhaustion Exhaustion Situation in which a majority of participants trading in the same asset are either long or short, leaving few investors to take the other side of the transaction when participants wish to close their positions. of the Company's intellectual property rights, and changes in the market value of licensed products; the ability, timing, and costs to enforce and protect the Company's intellectual property rights; risks associated with various ongoing litigation proceedings and other disputes; and other risks detailed in our press releases or in our annual, quarterly, or other filings with the Securities and Exchange Commission. The Company undertakes no obligation to make any revision to any forward-looking statement or to update any such statement 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 occurring after the date thereof. Accordingly, the reader is cautioned not to unduly rely on such forward-looking statements. Intergraph and the Intergraph logo are registered trademarks of Intergraph Corporation. Other brands and product names are trademarks of their respective owners.
Intergraph Corporation
Consolidated Balance Sheets (Unaudited)
(amounts in thousands)
March 31, December 31,
2006 2005
------------ ------------
Assets:
Cash and short-term investments $214,686 $307,177
Accounts receivable, net 165,399 158,295
Inventories, net 26,460 23,467
Other current assets 51,379 39,829
------------ ------------
Total Current Assets 457,924 528,768
Investments in affiliates 9,309 9,375
Capitalized software development costs, net 23,143 23,482
Other assets, net 20,649 9,890
Property, plant and equipment, net 49,413 49,079
------------ ------------
Total Assets $560,438 $620,594
============ ============
Liabilities and Shareholders' Equity:
Trade accounts payable $19,135 $17,172
Accrued compensation 31,314 38,518
Other accrued expenses 42,120 41,290
Billings in excess of sales 58,699 58,489
Income taxes payable 38,479 38,104
Current portion of long-term debt 456 453
------------ ------------
Total Current Liabilities 190,203 194,026
Long-term debt 201 318
Deferred income taxes and other noncurrent
liabilities 7,359 7,388
Total Shareholders' Equity 362,675 418,862
------------ ------------
Total Liabilities and Shareholders'
Equity $560,438 $620,594
============ ============
Intergraph Corporation
Consolidated Statements of Operations (Unaudited)
(amounts in thousands, except per share data)
Quarter Ended March 31,
-----------------------
2006 2005
----------- -----------
Revenue:
Systems $71,789 $69,010
Maintenance 36,979 36,500
Services 30,258 30,978
----------- -----------
Total Revenue 139,026 136,488
Cost of Revenue:
Systems 33,497 33,071
Maintenance 10,655 10,962
Services 21,308 22,803
----------- -----------
Total Cost of Revenue 65,460 66,836
Gross Profit 73,566 69,652
Operating Expenses:
Product development 16,007 14,999
Sales and marketing 30,262 30,376
General and administrative 16,375 16,686
Restructuring charges 4,674 1,694
----------- -----------
Total Operating Expenses 67,318 63,755
Operating Income 6,248 5,897
Other Income (Expense):
Intellectual property income (expense), net 13,456 127,840
Interest income 2,247 1,973
Other income (expense), net 796 (200)
----------- -----------
Total Other Income (Expense) 16,499 129,613
Income Before Income Taxes 22,747 135,510
Income Tax Benefit (Expense) (8,700) (53,580)
----------- -----------
Net Income $14,047 $81,930
=========== ===========
Earnings Per Share:
Basic $0.48 $2.50
Diluted $0.44 $2.40
Weighted Average Shares Outstanding:
Basic 29,213 32,807
Diluted 31,585 34,202
Orders:
Systems orders $82,700 $69,900
Services orders 38,400 34,400
----------- -----------
Total Systems and Services Orders $121,100 $104,300
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