SPSS Delivers Strong First Quarter 2006 Results; License Growth Drives 85% Earnings Increase.CHICAGO Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. -- SPSS A statistical package from SPSS, Inc., Chicago (www.spss.com) that runs on PCs, most mainframes and minis and is used extensively in marketing research. It provides over 50 statistical processes, including regression analysis, correlation and analysis of variance. 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 :SPSS), a worldwide provider of predictive analytics Predictive analytics encompasses a variety of techniques from statistics and data mining that process current and historical data in order to make “predictions” about future events. software, today announced results for the quarter ended March 31, 2006. The Company reported net revenues of $62.2 million, an increase of 8 percent from $57.5 million in the first quarter of 2005. New license revenues were $29.9 million, up 15 percent from $26.0 million in the 2005 first quarter. 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 (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) were $0.24, an increase of 85 percent from $0.13 for the same period last year. 2006 first quarter EPS includes a $0.03 charge for the expensing of share-based compensation. 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. for the first quarter of 2006 increased to $7.0 million or 11 percent of total revenues, from $4.0 million or 7 percent of total revenues in the same quarter last year. Cash totaled $100.4 million as of March 31, 2006, up from $84.4 million as of December December: see month. 31, 2005. "We started the year on a strong note by maintaining the sales momentum built during 2005," said Jack Noonan The term Noonan might refer to: People
See America. , 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). and the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. ."
SPSS Gains More Industry Analyst Recognition The Company's market leadership continued to receive recognition from leading industry analysts. In January January: see month. , Gartner (Gartner, Inc., Stamford, CT, www.gartner.com) The largest information technology consulting firm that specializes in research and analysis. Founded in 1979 by Gideon Gartner, it has grown through acquisitions, including Dataquest in 1995 and Techrepublic in 2000. , Inc. announced that it had positioned SPSS in its leaders' quadrant quadrant, in analytic geometry quadrant. 1 In analytic geometry, one of the four regions of the plane determined by two lines, the x-axis and the y-axis. for customer data mining, as part of Gartner's first quarter 2006 customer data mining "Magic Quadrant The Gartner Magic Quadrant is a proprietary research tool developed by Gartner Inc., a US based research and advisory firm. It is designed to provide an unbiased qualitative analysis of a “markets’ direction, maturity, and participants. " report (http://www.spss.com/pdfs/spss_magicquadrant.pdf). In April, Nucleus nucleus, in physics nucleus, in physics, the extremely dense central core of an atom. The Nature of the Nucleus Composition Research (www.NucleusResearch.com) released an ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). case study, "SPSS PredictiveMarketing - FBTO FBTO Future Business Teachers Organization (Manila, Philippines) ," assessing the SPSS PredictiveMarketing solution at FBTO, a European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. insurance company. The report found that with SPSS PredictiveMarketing, this customer increased their direct marketing conversion rates by 200 percent, increased the productivity of their marketing staff, and achieved a return on investment of 448 percent. Outlook and Guidance "We were pleased with the revenue growth and margin improvements compared with the prior year quarter, particularly in the face of less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency exchange rates," said Raymond Raymond, town, Canada Raymond, town (1991 pop. 3,130), S Alta., Canada, SE of Lethbridge, in a sugar beet area. Sugar is refined and honey is produced there. A provincial agricultural college is in the town. Panza, SPSS executive vice president and CFO See Chief Financial Officer. . "We believe these financial successes reflect a culture of progress marked by consistent execution, cost-efficiency and increasing productivity. The strength of our balance sheet provides greater flexibility and a solid foundation for on-going financial improvement." Panza further stated, "2006 second quarter revenues are expected to be between $61 and $63 million with EPS in the range of $0.20 to $0.26. EPS for the 2006 second quarter includes an estimated expense of $0.04 for share-based compensation. We are reiterating previous guidance for the 2006 fiscal year, with revenues expected to total between $248 and $254 million and EPS ranging from $0.98 to $1.09. EPS guidance for this annual period includes estimated expense of $0.16 to $0.20 for share-based compensation. Share-based compensation expense includes the effect of Statement of Financial Accounting Standards 123R as well as the company's increased use of restricted stock units Restricted stock units Similar to restricted stock. However, the unit represents a promise that employees will receive stock in the future. The units do not pay dividends until the stock is vested. ." Conference Call The company will host a conference call at 5:00 p.m. CT on May 2, 2006, to discuss its financial results. The live call will be broadcast online at www.spss.com/invest. Those interested in participating in the live call should dial 800.706.7745 in 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. and 617.614.3472 internationally. The live call pass-code is 36132717. A replay will be available via phone for one week after the call. To access it, participants should dial 888-286-8010 in the United States or 617-801-6888 internationally. Access code 24739711 is required for the replay. An archived version of the call will also be made available online at www.spss.com/invest approximately two hours after the live call. About SPSS Inc. SPSS Inc. (NASDAQ:SPSS) is a leading worldwide provider of predictive analytics software and solutions. The company's offerings connect data to effective action by drawing reliable conclusions about current conditions and future events. More than 250,000 public sector, academic, and commercial customers, including 95 percent of the Fortune 1000 companies, rely on SPSS software to increase revenues, reduce costs, improve critical business processes, and detect and prevent fraud. Founded in 1968, SPSS is headquartered in Chicago, Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. . For additional information, please visit www.spss.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This press release contains forward-looking information made pursuant to the safe harbor provisions 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. Forward looking statements can be identified by phrases such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "could," "designed," "should be" and other similar expressions which denote de·note tr.v. de·not·ed, de·not·ing, de·notes 1. To mark; indicate: a frown that denoted increasing impatience. 2. expectations of future events rather than statements of fact. 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. involve factors that are subject to risks and uncertainties. These risks and uncertainties, which may not be currently ascertainable as·cer·tain tr.v. as·cer·tained, as·cer·tain·ing, as·cer·tains 1. To discover with certainty, as through examination or experimentation. See Synonyms at discover. 2. and many of which are beyond the Company's control, may cause the Company's actual results, performance or achievements to be materially different than the results, performance or achievements expressed in or implied by the forward-looking statements. These risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission ("SEC"). Copies of these filings are available either on the SEC's website at www.sec.gov or from the Company's investor relations Investor relations The process by which the corporation communicates with its investors. department. In light of these risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that any future results, performance or achievements will be attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. . These forward-looking statements speak only as of the date on which they are made. The Company assumes no obligation to update the forward-looking statements contained in this press release.
SPSS Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share)
(unaudited)
Three Months Ended % of Total
March 31, Revenue
------------------------ -------------
Yr/Yr
2006 2005 % Chg. 2006 2005
-------- -------- ------ ------ ------
Net revenues:
License fees $29,873 $25,997 15% 48% 45%
Maintenance 26,063 25,312 3% 42% 44%
Services 6,290 6,147 2% 10% 11%
-------- -------- ------ ------
Net revenues 62,226 57,456 8% 100% 100%
-------- -------- ------ ------
Operating expenses:
Cost of license and
maintenance revenues 4,150 3,701 12% 7% 6%
Cost of license and
maintenance revenues --
software write-off 1,283 - NM 2%
Sales, marketing and services 30,396 30,278 --% 49% 53%
Research and development 12,829 11,404 12% 20% 20%
General and administrative 6,616 8,091 -18% 11% 14%
-------- -------- ------ ------
Operating expenses 55,274 53,474 3% 89% 93%
-------- -------- ------ ------
Operating income 6,952 3,982 75% 11% 7%
-------- -------- ------ ------
Other income (expense):
Net interest income (expense) 346 (21) NM 1% -
Other 150 (453) NM - -1%
-------- -------- ------ ------
Other income (expense) 496 (474) NM 1% -1%
-------- -------- ------ ------
Income before income taxes 7,448 3,508 112% 12% 6%
Income tax expense 2,607 1,088 140% 4% 2%
-------- -------- ------ ------
Net income $4,841 $2,420 100% 8% 4%
======== ======== ====== ======
Basic net income per common
share $0.25 $0.14 79%
Diluted net income per common
share $0.24 $0.13 85%
Share data:
Shares used in basic per share
computation 19,294 17,760 9%
Shares used in diluted per
share computation 20,266 18,002 13%
SPSS Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, December 31,
2006 2005
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $100,431 $84,408
Accounts receivable, net 40,245 42,488
Inventories, net 587 879
Deferred income taxes 5,711 5,624
Prepaid income taxes 4,104 5,067
Other current assets 5,268 5,233
------------ ------------
Total current assets 156,346 143,699
Net property, equipment and leasehold
improvements 18,660 20,441
Capitalized software development costs, net 27,469 28,522
Goodwill 41,365 41,207
Intangibles, net 3,577 3,627
Deferred income taxes 34,395 32,938
Other noncurrent assets 1,416 1,463
------------ ------------
Total assets $283,228 $271,897
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ - $2,500
Accounts payable 6,947 9,678
Income and value added taxes payable 7,026 9,024
Deferred revenues 64,217 63,980
Other accrued liabilities 20,824 21,102
------------ ------------
Total current liabilities 99,014 106,284
Noncurrent deferred income taxes 318 449
Noncurrent notes payable - 872
Other noncurrent liabilities 587 546
Stockholders' equity
Common Stock 193 187
Additional paid-in capital 187,921 174,188
Deferred compensation (812) (1,069)
Accumulated other comprehensive loss (8,694) (9,420)
Retained earnings (Accumulated deficit) 4,701 (140)
------------ ------------
Total stockholders' equity 183,309 163,746
------------ ------------
Total liabilities and stockholders'
equity $283,228 $271,897
============ ============
SPSS Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
March 31, 2006
-------------------------
2006 2005
------------ ------------
Cash flows from operating activities:
Net income $4,841 $2,420
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,175 3,564
Deferred income taxes (1,675) 759
Amortization of share-based compensation 931 37
Write-off of software 1,283 -
Changes in assets and liabilities:
Accounts receivable 2,655 8,009
Inventories 294 99
Prepaid and other assets (18) 449
Accounts payable (2,763) (190)
Accrued expenses (381) (281)
Income taxes (1,065) (3,364)
Deferred revenue (291) 1,130
Other, net 152 858
------------ ------------
Net cash provided by operating activities 8,138 13,490
------------ ------------
Cash flows from investing activities:
Capital expenditures (1,140) (1,238)
Capitalized software development costs (1,339) (2,283)
------------ ------------
Net cash used in investing activities (2,479) (3,521)
------------ ------------
Cash flows from financing activities:
Net repayments under line-of-credit
agreements (3,372) (614)
Proceeds from stock option exercises and
employee stock purchase plan 10,698 1,391
Tax benefit from stock option exercises 2,397 57
------------ ------------
Net cash provided by financing activities 9,723 834
------------ ------------
Effect of exchange rates on cash 641 (773)
------------ ------------
Net change in cash and cash equivalents 16,023 10,030
Cash and cash equivalents at beginning of
period 84,408 37,107
------------ ------------
Cash and cash equivalents at end of period $100,431 $47,137
============ ============
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