Ultimate Reports Q4 and Year-End 2008 Financial Results.Record $12 Million in New Annual Recurring re·cur
intr.v. re·curred, re·cur·ring, re·curs
1. To happen, come up, or show up again or repeatedly.
2. To return to one's attention or memory.
3. To return in thought or discourse. Revenues for Quarter, Record Total Revenue and Recurring Revenue Results for Quarter and Year
WESTON, Fla. -- The Ultimate Software Group, Inc. (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 fourth quarter and year ended December 31, 2008. For the fourth quarter of 2008, Ultimate reported total revenues of $49.7 million, an increase of 18%, and recurring revenues of $28.9 million, a 19% increase, both compared with 2007's fourth quarter. GAAP GAAP
See: Generally Accepted Accounting Principles
See generally accepted accounting principles (GAAP). net income for the fourth quarter of 2008 was $0.6 million, or $0.02 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, versus $23.1 million, or $0.86 per diluted share, for the fourth quarter of 2007. Included in GAAP net income for the fourth quarter of 2007 was the release of the valuation allowance against deferred tax assets, which contributed $19.9 million to net income during the fourth quarter, or $0.74 per diluted share ("Valuation Release Income Tax Benefit").
Non-GAAP net income for the fourth quarter of 2008, which excludes stock-based compensation and amortization of acquired intangibles, was $2.7 million, or $0.11 per diluted share, compared with non-GAAP net income of $6.2 million, or $0.23 per diluted share for the fourth quarter of 2007, which excluded stock-based compensation, amortization of acquired intangibles and the Valuation Release Income Tax Benefit. See "Use of Non-GAAP Financial Information" below.
For 2008, recurring revenues increased 23% to $106.7 million and total revenues increased 18% to $178.6 million, both as compared to the prior year. For 2008, GAAP net loss was $2.9 million, or $0.12 per diluted share, as compared with GAAP net income of $33.1 million, or $1.24 per diluted share, for 2007, which included the Valuation Release Income Tax Benefit. Excluding stock-based compensation and amortization of acquired intangible assets Intangible Asset
An asset that is not physical in nature.
Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. for both 2008 and 2007 (and, in the case of 2007, also excluding the Valuation Release Income Tax Benefit), non-GAAP net income for 2008 was $7.1 million, or $0.27 per diluted share, compared with non-GAAP net income of $23.6 million, or $0.88 per diluted share for 2007.
New annual recurring revenues (ARR ARR
See: Average rate of return ) attributable to sales during the fourth quarter of 2008 were $12.0 million, compared with $11.0 million for the fourth quarter of 2007. New ARR for the 2008 year were $41.3 million compared with $31.1 million for 2007, representing a 33% increase. (See "Financial Highlights" below for the definition of new ARR.)
"With new ARR the best indicator of success in our business, we are pleased with the record $12 million in new ARR for the 2008 fourth quarter. Our Workplace offering contributed 23% of that amount. Our software-as-a-service delivery model Intersourcing, which includes our Workplace offering, continued to be the solution-of-choice for our new customers, accounting for 97% of new ARR in the quarter," 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.
"For the 2008 year, our new ARR increased by 33% and recurring revenues increased by 23%, both over those in 2007. We are especially proud that our all-important customer retention rate remained strong at 97%."
Ultimate's financial results teleconference will be held today, February 5, 2009, at 5:00 p.m. Eastern Time, through Vcall at http://www.investorcalendar.com/IC/CEPage.asp?ID=139715. 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.
* New ARR attributable to sales during the fourth quarter of 2008 were $12.0 million. New ARR attributable to sales for the year 2008 were $41.3 million, or 33% higher than those in 2007. New ARR represent the expected one-year value from (i) new sales of the Company's software-as-a-service offering, Intersourcing (including prorated one-time charges); (ii) maintenance revenues related to new license sales; and (iii) recurring revenues from additional sales to Ultimate's existing client base.
* 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 19% for the fourth quarter of 2008 and by 23% for the 2008 year, both versus comparable 2007 periods. Intersourcing revenues and, to a lesser extent, maintenance revenues, were the principal factors in the growth of recurring revenues.
* 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 $23.0 million as of December 31, 2008. For the quarter ended December 31, 2008, the Company generated $7.3 million in cash from operations and repurchased 358,100 shares of the Company's issued and outstanding $0.01 par value common stock ("Common Stock") for $5.0 million, under its previously announced stock repurchase plan stock repurchase plan
1. See buyback.
2. See self-tender. ("Stock Buyback Stock buyback
A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share.
See buyback. Plan"). For the twelve months ended December 31, 2008, the Company generated $25.8 million in cash from operations and repurchased 1,081,200 shares of the Company's Common Stock for $26.7 million under its Stock Buyback Plan.
* 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 71 days at December 31, 2008, representing a reduction of 5 days compared to days sales outstanding at December 31, 2007.
Business Highlights for 2008
* Ultimate was ranked the #1 best medium-size company to work for in America by The Great Place to Work[R] Institute, the same research and management consultancy that produces FORTUNE's "100 Best Companies to Work for" list for large companies.
* Ultimate's Development team was named the #1 "Best Product Development Team" in the nation by the American Business Awards in its Stevie Award competition.
* Ultimate was the only HR Management System provider in the U.S. Midmarket view to be named a "Leader" in Forrester's October 2008 report, The Forrester Wave[TM]: Human Resource Management Systems, Q4 2008. In the U.S. Midmarket evaluation, Ultimate received the highest score in Product Strategy and Vision; Cost and Value; and overall Current Offering. In the Multinational Enterprise Wave for HR Management Systems, Ultimate was also named a "Leader" and received the top score for Strategy.
* Ultimate was the first HR/payroll software-as-a-service provider in the industry 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.
* Ultimate's support center was awarded its tenth consecutive certification under the Service Capability & Performance (SCP (1) (Service Control Point) A node in an SS7 telephone network that provides an interface to databases, which may reside within the SCP computer or in other computers. ) Standards, representing best practices in the industry and based upon a stringent set of performance benchmarks.
2009 Financial Guidance:
Ultimate provides the following financial guidance for 2009 (which differs from the guidance provided on October 28, 2008):
For the first quarter of 2009:
* Recurring revenues to range between $30 million and $31 million;
* License revenues of $2 million;
* Total revenues to range between $48 million and $50 million; and
* Operating margins Operating Margin
A ratio used to measure a company's pricing strategy and operating efficiency.
Calculated by: , on a non-GAAP basis (discussed below), of approximately 4%.
For the year 2009:
* New ARR generated in 2009 to grow by 30% over 2008;
* Recurring revenues to increase by 27% to 30% in 2009 compared with 2008;
* License revenues of $2 million for the first quarter of 2009 and zero for the balance of the year. On April 1, 2009, the Company will cease selling its on-site UltiPro solutions on a perpetual PERPETUAL. That which is to last without limitation as to time; as, a perpetual statute, which is one without limit as to time, although not expressed to be so. license basis, although the Company will continue to sell on-site UltiPro solutions on a subscription basis (or on a per-employee-per-month, or recurring revenue, basis);
* 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 do not include the impact of non-cash equity-based compensation expense recognized under Statement of Financial Accounting Standards No. 123(R), "Accounting for Share-Based Payment," or the impact of the non-cash amortization of the intangible assets resulting from the acquisition of the Company's United Kingdom subsidiary in 2006, which the Company includes in its GAAP financial results.
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 Instead of; in place of; in substitution of. It does not mean in addition to. 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. .
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.
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 here·of
Formal or law of or concerning this
Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . 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.
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 its software-as-a-service (SaaS) offering, Intersourcing, and as licensed 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 27001:2005 Certification for security management, and its development team was named the #1 "Best Product Development Team" in the nation by the American Business Awards. Ultimate's internal technology team won a first place award for its management of Intersourcing from the American Business Awards in 2007. Ultimate was ranked the #1 best medium-sized company to work for in America by the Great Place to Work[R] Institute in June 2008. 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 BMG Sony BMG Music Entertainment, Inc. is the result of a 50/50 joint venture between Sony Music Entertainment (part of Sony) and BMG Entertainment (part of Bertelsmann) completed on August 5, 2004. Entertainment. 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.
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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 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 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 and twelve months ended December 31, 2008, stock-based compensation was $3.5 million and $15.5 million, respectively, on a pre-tax basis, and $2.1 million and $9.8 million, respectively, on an after-tax basis After-tax basis
The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. . For the three and twelve months ended December 31, 2007, stock-based compensation was $2.9 million and $10.2 million, respectively, on a pre-tax basis, and $2.9 million and $10.1 million, respectively, on an after-tax basis. Stock-based compensation expenses are excluded from the non-GAAP financial measures because they are non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash
disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) 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 and twelve months ended December 31, 2008, the amortization of acquired intangible assets was $46 thousand and $185 thousand, respectively (net of income taxes for the twelve month period ended December 31, 2008). For the three and twelve months ended December 31, 2007, the amortization of acquired intangible assets was $46 thousand and $208 thousand, respectively, net of income taxes. 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.
Release of the valuation allowance against deferred tax assets. During the three months ended December 31, 2007, in accordance with GAAP, the Company released the valuation allowance against its deferred tax assets and recognized a corresponding income tax benefit. The Company excluded this benefit from its non-GAAP financial measures because it is a non-cash benefit that the Company does not consider part of ongoing operating results when assessing the performance of its business. The Company believes that such exclusion of this benefit facilitates the comparison of results for the three and twelve months ended December 31, 2007 and the business outlook for future periods with results for prior periods, which did not include the release of the valuation allowance against deferred tax assets.