Ultimate Reports Q1 2009 Financial Results.
Recurring Revenues Up by 20%; Total Revenues Up by 12%; Annualized annualized
Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. Customer Retention Rate Remains at 97%
WESTON, Fla. -- Ultimate Software (Nasdaq:ULTI ULTI Ukraine Land Titling Initiative
ULTI Ultra Low Temperature Installation
ULTI Ubiquitous Learning Technology Initiative ), a leading provider of end-to-end strategic human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , payroll, and talent management solutions, announced today its financial results for the first quarter of 2009. For the first quarter ended March 31, 2009, Ultimate reported total revenues of $48.8 million, an increase of 12%, and recurring revenues of $30.9 million, a 20% increase, both compared with 2008's first quarter. GAAP GAAP
See: Generally Accepted Accounting Principles
See generally accepted accounting principles (GAAP). net loss for the first quarter of 2009 was $0.4 million, or $0.02 per diluted share, versus GAAP net income of $0.3 million, or $0.01 per diluted share, for the first quarter of 2008.
Non-GAAP net income for the first quarter of 2009, which excludes stock-based compensation and amortization of acquired intangibles, was $1.7 million, or $0.07 per diluted share, compared with non-GAAP net income of $3.1 million, or $0.12 per diluted share, for the first quarter of 2008, which also excluded stock-based compensation and amortization of acquired intangibles.
"Our 2009 first quarter recurring revenues were in line with our expectations, and our annualized customer retention rate remained strong at 97%. We finished the quarter with 931 associates and were able to exceed our projected operating margin Operating Margin
A ratio used to measure a company's pricing strategy and operating efficiency.
Calculated by: goal by 50%," said Scott Scherr, 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. , president, and founder of Ultimate.
Ultimate's financial results teleconference will be held today, April 28, 2009, at 5:00 p.m. Eastern Time, through Vcall at http://www.investorcalendar.com/IC/CEPage.asp?ID=143278. The call will be available for replay at the same address beginning at 9:00 p.m. Eastern Time the same day. Windows Media Player Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. or Real Player software is required to listen to the call and can be downloaded from the site. Forward-looking information about future company performance will be discussed during the teleconference call.
* Recurring revenues - consisting of maintenance revenues, Intersourcing revenues from our software-as-a-service offering of UltiPro and subscription revenues from per-employee-per-month fees generated by business service providers - grew by 20% for the first quarter of 2009 versus the first quarter of 2008. Intersourcing revenues and, to a lesser extent, maintenance revenues, were the principal factors in the growth of recurring revenues. Excluding the subscription revenues generated from Ultimate's agreement with Ceridian Corporation which ended in March 2008 and is, therefore, not included in the recurring revenues for the first quarter of 2009, recurring revenues grew by 27.4% as compared to the same period of the prior year.
* The operating margin (on a non-GAAP basis) for the first quarter of 2009 was $2.9 million, or 5.9%.
* Ultimate's annualized retention rate remained at 97% for its existing recurring revenue customer base.
* The combination of cash, cash equivalents, and marketable securities Marketable Securities
Very liquid securities that can be converted into cash quickly at a reasonable price.
Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has was $24.5 million as of March 31, 2009. For the quarter ended March 31, 2009, the Company generated $3.5 million in cash from operations. There was no activity under the Company's previously announced stock repurchase plan stock repurchase plan
1. See buyback.
2. See self-tender. .
* 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). were 60 days at March 31, 2009, representing a reduction of 11 days compared with days sales outstanding at December 31, 2008.
Ultimate Software has decided to discontinue providing guidance with respect to annual recurring revenues, (or "ARR ARR
See: Average rate of return "), based on the Company's belief that, over time, this metric has become less meaningful as a forecasting tool primarily as a result of the addition of the Company's Workplace offering and various new products having different deployment cycles and pricing.
Instead, the Company will provide quarterly financial guidance for key financial metrics related to its financial statements such as recurring revenues, total revenues and operating margins. The practice of providing quarterly financial guidance was first adopted by Ultimate for its fourth quarter of 2008.
2009 Financial Guidance:
Ultimate provides the following financial guidance for the second quarter ending June 30, 2009 and full year 2009:
For the second quarter of 2009:
* Recurring revenues to range between $32 million and $33 million, representing a 26% to 30% increase over the same period in the prior year;
* Total revenues to range between $47 million and $48 million, representing a 13% to 16% increase over the same period in the prior year; and
* Operating margins, on a non-GAAP basis (discussed below), of approximately 3%.
For the year 2009:
* Recurring revenues to increase by 27% to 30% in 2009 compared with 2008;
* Total revenues to increase by 13% to 15% compared with 2008; and
* Operating margins, on a non-GAAP basis (discussed below), of between 6% and 7%.
Operating margins expectations are based on the same methodologies as those identified in the accompanying disclosure located in the "Unaudited Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures."
Non-cash equity-based compensation expense for 2009 is expected to be approximately $13.5 million. Beginning in 2009, the Company revised its equity compensation plan for its employees whereby all grants for equity compensation will be in the form 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. in lieu of non-qualified stock options Non-qualified stock options are stock options which do not qualify for the special treatment accorded to incentive stock options.
Incentive stock options are only available for employees and other restrictions apply for them. .
Certain statements in this press release are, and certain statements on the teleconference call may be, forward-looking statements within the meaning provided under 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. Such forward-looking statements are made only as of the date hereof. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results to differ materially from those stated or implied by such forward-looking statements, including risks and uncertainties associated with fluctuations in the Company's quarterly operating results, concentration of the Company's product offerings, development risks involved with new products and technologies, competition, contract renewals with business partners, compliance by our customers with the terms of their contracts with us, and other factors disclosed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
About Ultimate Software
A leading provider of end-to-end strategic human resources, payroll, and talent management solutions, Ultimate markets its award-winning UltiPro products as on-demand services through software-as-a-service (SaaS) and as on-premise software On-premise software refers to the use of an executable computer program (software) installed on the premises (in the building) of the person or organisation using such software. . Based in Weston, FL, the Company employs more than 900 professionals who are focused on developing the highest quality products and services. In 2008, Ultimate was the first HR/payroll SaaS provider to be audited and awarded the ISO/IEC ISO/IEC International Organization for Standardization/International Electrotechnical Commission (ITU-T M 3000) 27001:2005 Certification for security management, was named the #1 "Best Product Development Team" in the nation by the American Business Awards, and was ranked the #1 best medium-size company to work for in America by the Great Place to Work[R] Institute. Ultimate has more than 1,700 customers representing diverse industries, including such organizations as The Container Store, Elizabeth Arden Elizabeth Arden (December 31, 1878 - October 19, 1966) was a Canadian businesswoman who built a cosmetics empire in the United States.
Arden was born Florence Nightingale Graham in Woodbridge, Ontario, where she lived until she was twenty-four years old. , Major League Baseball "MLB" and "Major Leagues" redirect here. For other uses, see MLB (disambiguation) and Major Leagues (disambiguation).
Major League Baseball (MLB) is the highest level of play in North American professional baseball. , The New York Yankees Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. Baseball Team, Nintendo of America, Ruth's Chris Steak House Ruth's Chris Steak House (NASDAQ: RUTH) is a chain of 106 steakhouses across the United States and in several international locations. The restaurant is regarded as an upscale fine dining establishment, marking a gradual elevation in its status since its founding , and Sony Music Entertainment Sony Music Entertainment is a major global record label controlled by the Sony Corporation. In 1988, Sony Corporation acquired CBS Records, Inc. for $2 billion. CBS Inc., now CBS Corporation, retained the rights to the CBS name, and Sony renamed the label . More information on Ultimate's products and services can be found at www.ultimatesoftware.com.
UltiPro and Intersourcing are registered trademarks of The Ultimate Software Group, Inc. All other trademarks referenced are the property of their respective owners.
The following table sets forth the stock-based compensation expense (excluding the income tax effect, or "gross") resulting from share-based arrangements and the amortization of acquired intangibles that are recorded in the Company's unaudited condensed con·dense
v. con·densed, con·dens·ing, con·dens·es
1. To reduce the volume or compass of.
2. To make more concise; abridge or shorten.
a. consolidated statements of operations for the periods indicated (in thousands):
[TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED]
Use of Non-GAAP Financial Information
This press release contains non-GAAP financial measures. Ultimate believes that non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's financial condition and results of operations. Management of the Company uses these non-GAAP results to compare the Company's performance to that of prior periods for trend analyses, for purposes of determining executive incentive compensation, and for budget and planning purposes. These measures are used in monthly financial reports prepared for management and in quarterly financial reports presented to the Company's Board of Directors. These measures may be different from non-GAAP financial measures used by other companies.
These non-GAAP measures should not be considered in isolation or as an alternative to such measures determined in accordance with 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 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. (GAAP). The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses are excluded from the non-GAAP financial measures.
To compensate for these limitations, the Company presents its non-GAAP financial measures in connection with its GAAP results. Ultimate strongly urges investors and potential investors in the Company's securities to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release (under the caption "Unaudited Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures") and not to rely on any single financial measure to evaluate its business.
Ultimate presents the following non-GAAP financial measures in this press release: non-GAAP operating income Operating Income
The profit realized from a business' own operations.
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , non-GAAP net income and non-GAAP net income per diluted share. We exclude the following items from these non-GAAP financial measures as appropriate:
Stock-based compensation. The Company's non-GAAP financial measures exclude stock-based compensation, which consists of expenses for stock options and stock awards recorded in accordance with SFAS SFAS Statement of Financial Accounting Standards
SFAS Special Forces Assessment and Selection
SFAS Student Financial Aid Services
SFAS Sport Fishing Association of Singapore
SFAS Safety Features Actuation System
SFAS Statewide Fixed Assets System 123(R). For the three months ended March 31, 2009, stock-based compensation was $3.3 million on a pre-tax basis. For the three months ended March 31, 2008, stock-based compensation was $4.6 million on a pre-tax basis. Stock-based compensation expenses are excluded from the non-GAAP financial measures because they are non-cash expenses that the Company does not consider part of ongoing operations when assessing its financial performance. The Company believes that such exclusion provides meaningful supplemental information regarding the Company's operating results because these non-GAAP financial measures facilitate the comparison of results of ongoing operations for current and future periods with such results from past periods. The dilutive effect Dilutive effect
Result of a transaction that decreases earnings per common share (EPS). of all outstanding options is included in the calculation of pre-tax income and net income per diluted share on both a GAAP and a non-GAAP basis.
Amortization of acquired intangible assets. In accordance with GAAP, 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. include amortization of acquired intangible assets over the estimated useful lives of such assets. For the three months ended March 31, 2009, the amortization of acquired intangible assets was $46 thousand. For the three months ended March 31, 2008, the amortization of acquired intangible assets was $46 thousand. Amortization of acquired intangible assets is excluded from the Company's non-GAAP financial measures because it is a non-cash expense that the Company does not consider part of ongoing operations when assessing its financial performance. The Company believes that such exclusion facilitates comparisons to its historical operating results and to the results of other companies in the same industry, which have their own unique acquisition histories.