OPNET Announces Results for Second Quarter of Fiscal 2006; Record Revenue of $18.3 Million; Earnings Per Share of $0.02.BETHESDA Bethesda, city, United States Bethesda, uninc. city (1990 pop. 62,936), Montgomery co., W central Md., an affluent residential and commercial suburb of Washington, D.C. The area was settled in the late 17th cent. , Md. -- OPNET OPNET Operations Network OPNET Olympic Peninsula Narcotics Enforcement Team OPNET Operational New Equipment Training OPNET Optimized Network Evaluation Tool OPNET SMDPS Phase III Operational Network Technologies, Inc. (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 :OPNT), a leading provider of management software for networks and applications, today announced that quarterly revenues for the second fiscal quarter, ended September September: see month. 30, 2005, were a record $18.3 million, compared to $14.2 million for the same quarter in the prior fiscal year. Earnings per share for the second quarter of fiscal 2006 were $0.02 on a 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. basis, compared to $0.02 for the same quarter in the prior fiscal year. Marc A. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , OPNET's Chairman and 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. , stated, "We are very pleased to report record quarterly revenue for Q2 of 2006. Our record quarterly revenue resulted from a 14.5% sequential One after the other in some consecutive order such as by name or number. increase in license revenue, record revenue from software license updates and technical support and record revenue from professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . In Q2, our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved by $1.2 million from the quarter ending June June: see month. 30, 2005. Our improved operating margin during Q2 was primarily due to an increase in new license revenue of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $960 thousand and an increase in gross margins on professional services of approximately $760 thousand, which were partially offset by $1.1 million in legal expenses related to the lawsuit lawsuit: see procedure; tort. filed by Compuware Corporation (company) Compuware Corporation - A software and service company with over 11,000 employees worldwide, including more than 7,000 in its professional services organisation. Since 1973, Compuware has focused on optimising business software development, testing, and operation. in September of 2004. While achieving record quarterly revenue, we maintained stable revenue visibility with our deferred revenue of $15.3 million as of September 30, 2005." Financial Highlights for the Second Quarter of Fiscal Year 2006 --Grew revenue year over year 28.5% to a record $18.3 million from $14.2 million for the same quarter of fiscal 2005. Revenue for the quarter grew sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen 10.8% from $16.5 million for the first quarter of fiscal 2006. --Grew license revenue year over year 32.1% to $7.6 million from $5.7 million for the same quarter of fiscal 2005. License revenue for the quarter grew sequentially 14.5% from $6.6 million for the first quarter of fiscal 2006. --Improved our gross margin sequentially to 76.9% during the second quarter of fiscal 2006 from 74.1% --Improved our operating margin sequentially to $21 thousand during the second quarter of fiscal 2006 from negative $1.2 million Third Quarter Fiscal Year 2006 Financial Outlook OPNET currently expects fiscal third quarter revenue to be between $17.7 and $18.7 million and earnings per share to be between negative $0.02 and positive $0.01. These estimates represent management's current expectations about the Company's future financial performance, based on information available at this time. OPNET will also hold an investor conference call on Monday Monday: see week. , October October: see month. 31, 2005 at 5:00pm ET to discuss the overall results of Q2. To listen to the OPNET investor conference call: --Call 877-407-9205 in the U.S. or 201-689-8054 for international callers, or --Use the webcast at www.opnet.com, or at www.vcall.com (click on OPNT under "Today's VCalls"). Investors are advised to go to the web site at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. To listen to the archived call: --Call the replay phone number at 877-660-6853 or 201-612-7415 for international callers. For replay, enter account # 286, conference ID # 172565. The replay will be available from 7:00 pm Eastern Time October 31st through 11:59 pm Eastern Time November November: see month. 7th. --The webcast will be available at www.opnet.com or at www.vcall.com, archived for seven days. About OPNET Technologies, Inc. Founded in 1986, OPNET Technologies, Inc. (NASDAQ:OPNT) is a leading provider of management software for networks and applications. For more information about OPNET and its products, visit www.opnet.com. OPNET and OPNET Technologies, Inc. are trademarks of OPNET Technologies, Inc. All other trademarks are the property of their respective owners. Statements in this press release that are not purely historical facts may constitute 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. as defined in 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. OPNET Technologies, Inc. ("OPNET") assumes no obligation to update statements. Forward-looking statements are predictions based upon information available to OPNET as of the date of this press release and involve risks and uncertainties; therefore, actual events or results may differ materially. For a discussion of risk factors, see OPNET's reports, including its most recent 10-Q and 10-K, filed with the Securities & Exchange Commission. Note to editors: The word OPNET is spelled with all upper-case upper-case Adjective denoting capital letters as used in printed or typed matter letters.
OPNET TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Revenues:
New software licenses $ 7,584 $ 5,739 $14,210 $13,785
Software license updates and
technical support 5,951 4,963 11,724 9,619
Professional services 4,729 3,512 8,807 7,597
--------- -------- -------- --------
Total revenues 18,264 14,214 34,741 31,001
--------- -------- -------- --------
Cost of revenues:
New software licenses 182 182 362 376
Software license updates and
technical support 673 586 1,293 1,137
Professional services 3,170 2,255 6,444 4,761
Amortization of acquired
technology 192 134 383 268
--------- -------- -------- --------
Total cost of revenues 4,217 3,157 8,482 6,542
--------- -------- -------- --------
Gross profit 14,047 11,057 26,259 24,459
--------- -------- -------- --------
Operating expenses:
Research and development 4,677 3,661 9,188 7,056
Sales and marketing 6,258 5,251 12,176 10,701
General and administrative 3,091 1,687 6,041 3,390
--------- -------- -------- --------
Total operating expenses 14,026 10,599 27,405 21,147
--------- -------- -------- --------
Income (loss) from operations 21 458 (1,146) 3,312
Interest and other income, net 614 265 1,127 461
--------- -------- -------- --------
Income (loss) before provision
for income taxes 635 723 (19) 3,773
(Benefit) Provision for income
taxes 195 229 (5) 1,239
--------- -------- -------- --------
Net income (loss) $ 440 $ 494 $ (14) $ 2,534
========= ======== ======== ========
Basic net income per common share $ 0.02 $ 0.02 $ 0.00 $ 0.13
========= ======== ======== ========
Diluted net income per common
share $ 0.02 $ 0.02 $ 0.00 $ 0.12
========= ======== ======== ========
Basic weighted average common
shares outstanding 20,311 20,135 20,336 20,019
========= ======== ======== ========
Diluted weighted average common
shares outstanding 20,552 20,639 20,336 20,745
========= ======== ======== ========
OPNET TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
September 30, March 31,
2005 2005
------------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 59,412 $ 38,171
Marketable securities 20,373 44,014
Accounts receivable, net 13,377 13,480
Unbilled accounts receivable 3,019 2,341
Deferred income taxes, prepaid expenses and
other current assets 3,133 3,729
------------- ---------
Total current assets 99,314 101,735
Property and equipment, net 6,060 6,227
Intangible assets, net 896 1,279
Goodwill 14,639 14,639
Deferred income taxes and other assets 1,263 1,306
------------- ---------
Total assets $ 122,172 $125,186
============= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 154 $ 828
Accrued liabilities 6,344 6,874
Deferred and accrued income taxes 171 380
Deferred revenue 14,452 14,824
------------- ---------
Total current liabilities 21,121 22,906
Notes payable 150 150
Deferred rent 1,129 1,107
Deferred revenue 805 1,058
------------- ---------
Total liabilities 23,205 25,221
------------- ---------
Commitments and contingencies (Note 8)
Stockholders' equity:
Common stock 26 26
Additional paid-in capital 79,715 79,421
Deferred compensation (1) (15)
Retained earnings 24,699 24,713
Accumulated other comprehensive loss (278) (80)
Treasury stock, at cost (5,194) (4,100)
------------- ---------
Total stockholders' equity 98,967 99,965
------------- ---------
Total liabilities and stockholders' equity $ 122,172 $125,186
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