EX-99.1 2 f08064exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1

ASPECT COMMUNICATIONS REPORTS FIRST QUARTER 2005
FINANCIAL RESULTS

SAN JOSE, Calif., April 19, 2005 — Aspect Communications Corporation (Nasdaq: ASPT), a leading provider of enterprise customer contact solutions, today reported financial results for the first quarter ended March 31, 2005.

FIRST QUARTER FINANCIAL RESULTS:

Revenues for the first quarter of 2005 totaled $90.6 million compared to $96.8 million for the fourth quarter of 2004 and $91.5 million for the first quarter last year. Product revenue in the first quarter of 2005 was $30.9 million compared to $33.7 million for the fourth quarter of 2004 and $28.1 million for the first quarter of 2004. Services revenue totaled $59.7 million in the first quarter compared to $63.0 million for the fourth quarter of 2004 and $63.4 million for the first quarter of 2004.

Net income attributable to common shareholders for the first quarter was $10.8 million or a profit of $0.13 per share on a basic and fully diluted basis. This compares with a net income attributable to common shareholders of $15.5 million or a profit of $0.19 per share for the fourth quarter of 2004 and a net income attributable to common shareholders of $13.4 million or a profit of $0.17 per share for the first quarter of 2004.

“In addition to seeing improved stability in our support revenue stream, we are encouraged by our year-over-year growth in product revenue,” said Gary Barnett, Aspect President and CEO. “We saw strong growth in our workforce productivity product line and our core ACD business, which is testimony to both our innovation and execution strength. We continue to build on our solid financial position, through effective cost management, helping to ensure Aspect’s long-term success and leadership in the contact center sector.”

For the first quarter of 2005, gross margins were 60%. This compares to 60% for the fourth quarter of 2004 and 61% for the first quarter of 2004. Operating expenses were $40.3 million for the first quarter of 2005 compared to $39.0 million for the fourth quarter of 2004 and $37.9 million in the first quarter of 2004.

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Aspect Communications Announces Financial Results for the Quarter ended March 31, 2005, page 2

Cash, cash equivalents, and short-term investments totaled $219.2 million as of March 31, 2005. This compares to $202.6 million as of December 31, 2004. The company generated $18.3 million in cash from operations during the first quarter. Accounts receivable at quarter-end totaled $48.0 million and days sales outstanding were 39 days compared to 38 days at December 31, 2004.

FIRST QUARTER OPERATIONAL HIGHLIGHTS:

Aspect received revenue from customers across a variety of industry segments. Some of these customers included: British Telecom for Royal Mail Group, DHL, Danversbank, Fairfax County, Healthfirst, Puget Sound Energy, Response Insurance and StarTek.

BUSINESS OUTLOOK:

The following statements are forward-looking, and actual results may differ materially:

The company is planning for second quarter total revenue to be in a range of $90 million to $92 million.

The company expects to complete consolidation of its San Jose facilities in the second quarter of 2005. Acceleration of the lease obligation on the vacated facilities will result in a second quarter restructuring charge of approximately $4 million and will impact second quarter earnings per share by approximately $0.04 per share.

Second quarter operating income, including the impact of the restructuring charge discussed above, is expected to be in a range of $10 million to $11 million.

Earnings per share for the second quarter, including the impact of the restructuring charge discussed above, is expected to be in a range of $0.08 per share to $0.10 per share.

 


 

Aspect Communications Announces Financial Results for the Quarter ended March 31, 2005, page 3

The company will host a conference call and web-cast today at 2:00 pm Pacific Time to discuss first quarter 2005 results. A replay of the conference call will be available from April 19, 2005 at 5:00 pm Pacific Time through April 26, 2005 at 8:59 pm Pacific Time by calling 800-388-9064 or 402-220-1116. The web-cast and replay of the conference call may be accessed from the company’s home page at www.aspect.com.

About Aspect Communications

Aspect Communications Corporation is a leading provider of contact center solutions and services that enable businesses to manage and optimize customer communications. Aspect’s global customer base includes more than two-thirds of the Fortune 50 and leading corporations in a range of industries, including transportation, financial services, insurance, telecommunications, retail and outsourcing, as well as large government agencies. The company’s leadership is based on two decades of expertise. Aspect is headquartered in San Jose, Calif., with offices in countries around the world.

Notes on financial presentation: Actual financial results are prepared in accordance with U.S. generally accepted accounting principles.

Certain statements contained in this press release, including but not limited to, statements relating to expected second quarter total revenue, operating income and earnings per share are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and are made under its safe-harbor provisions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Specific factors that may cause actual revenue, operating income and earnings per share results to differ include: the significant percentage of Aspect’s quarterly sales consummated in the last few days of the quarter and the potential for delays in closing of sales or product deliveries make financial predictions especially difficult and raise a substantial risk of variance in actual results; changes in the overall mix and volume of product line revenues can have a significant impact on gross margin and profitability; the loss of support customers or if one or more support contracts is delayed, reduced or cancelled; fluctuations in our North American and International business levels and/or economic conditions, the hiring and retention of key employees, insufficient, excess or obsolete inventory and variations in valuation, and foreign exchange rate fluctuations can all cause revenues and income to fall significantly short of anticipated levels. The economic, political and other uncertainties caused in the United States and throughout other regions of the world add to these challenges. Additional risks that could cause actual results to differ materially from those

 


 

Aspect Communications Announces Financial Results for the Quarter ended March 31, 2005, page 4

projected are discussed in Aspect’s Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. Aspect undertakes no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Aspect, the Aspect logo and the phrases and marks relating to other Aspect products and services discussed in this press release constitute one or both of the following: (1) registered trademarks and/or service marks of Aspect Communications Corporation in the United States and/or other countries or (2) intellectual property subject to protection under common law principles. All other names and marks mentioned in this document are properties of their respective owners.

Carrie Kovac
Director, Investor Relations
Aspect Communications
(408) 325-2437
carrie.kovac@aspect.com

 


 

ASPECT COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts — unaudited)

                         
    Three months ended  
    March 31,     December 31,     March 31,  
    2005     2004     2004  
Net revenues:
                       
Software license
  $ 19,127     $ 20,743     $ 16,605  
Hardware
    11,737       12,999       11,530  
Services:
                       
Software license updates and product support
    51,555       51,995       54,257  
Professional services and education
    8,184       11,015       9,095  
 
                 
Services
    59,739       63,010       63,352  
 
                 
 
                       
Total net revenues
    90,603       96,752       91,487  
 
                 
 
                       
Cost of revenues:
                       
Cost of software license revenues
    2,768       2,672       1,555  
Cost of hardware revenues
    7,133       8,308       8,331  
Cost of services revenues
    25,561       27,377       25,239  
Amortization of intangible assets
    724       724       725  
 
                 
 
                       
Total cost of revenues
    36,186       39,081       35,850  
 
                 
 
                       
Gross margin
    54,417       57,671       55,637  
 
                       
Operating expenses:
                       
Research and development
    11,400       10,624       11,343  
Sales and marketing
    19,011       19,632       19,599  
General and administrative
    8,965       6,499       6,940  
Restructuring charges
    411              
Amortization of intangible assets and stock-based compensation
    507       2,261       17  
 
                 
 
                       
Total operating expenses
    40,294       39,016       37,899  
 
                 
 
                       
Income from operations
    14,123       18,655       17,738  
 
                       
Interest and other income (expense), net
    758       743       (54 )
 
                       
Income before income taxes
    14,881       19,398       17,684  
Provision for income taxes
    1,786       1,627       2,110  
 
                 
 
                       
Net income
    13,095       17,771       15,574  
 
                       
Less preferred stock dividend, accretion, and amortization
    (2,314 )     (2,269 )     (2,136 )
 
                 
 
                       
Net income attributable to common shareholders
  $ 10,781     $ 15,502     $ 13,438  
 
                 
 
                       
Basic earnings per share (1)
  $ 0.13     $ 0.19     $ 0.17  
 
                       
Basic weighted average shares outstanding
    60,757       59,973       57,740  
 
                       
Diluted earnings per share
  $ 0.13     $ 0.19     $ 0.17  
 
                       
Diluted weighted average shares outstanding
    86,047       85,882       86,181  


(1)   Pursuant to GAAP, the Company is required to present earnings per share “as if” all earnings were distributed to Common and Preferred Shareholders. Under this “two class” method, earnings are allocated to Common and Preferred Shareholders in proportion to their respective ownership interests. This calculation for the three months ended March 31, 2005 would allocate approximately 73% of the current earnings to Common Shareholders and yield $0.13 earnings per share per Common Shareholder, as shown above. However, the Company has not in the past, and does not currently intend to, declare a distribution of earnings. Absent this “as if” apportionment earnings per Common share would be $0.15 for the three months ended March 31, 2005.

 


 

ASPECT COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands - unaudited)

                         
    March 31,     December 31,     March 31,  
    2005     2004     2004  
Assets
                       
Current assets:
                       
Cash, cash equivalents and short-term investments
  $ 219,168     $ 202,631     $ 194,999  
Accounts receivable, net
    48,012       49,163       39,062  
Inventories
    3,745       3,340       5,607  
Other current assets
    17,058       13,138       20,663  
 
                 
Total current assets
    287,983       268,272       260,331  
 
                       
Property and equipment, net
    62,277       62,494       66,225  
Intangible assets, net
    4,292       5,015       7,187  
Other assets
    4,273       4,723       5,528  
 
                 
Total assets
  $ 358,825     $ 340,504     $ 339,271  
 
                 
 
                       
Liabilities, redeemable convertible preferred stock, and shareholders’ equity
                       
Current liabilities:
                       
Short-term borrowings
  $ 124     $ 150     $ 143  
Accounts payable
    5,403       7,491       6,590  
Accrued compensation and related benefits
    19,357       19,252       19,518  
Other accrued liabilities
    58,562       61,954       56,568  
Deferred revenues
    55,670       48,003       63,407  
 
                 
Total current liabilities
    139,116       136,850       146,226  
 
                       
Long term borrowings
    138       155       40,013  
Other long-term liabilities
    4,523       5,793       9,219  
 
                 
Total liabilities
    143,777       142,798       195,458  
 
                       
Redeemable convertible preferred stock
    44,804       42,490       35,817  
 
                       
Shareholders’ equity
    170,244       155,216       107,996  
 
                 
Total liabilities, redeemable convertible preferred stock, and shareholders’ equity
  $ 358,825     $ 340,504     $ 339,271  
 
                 

 


 

ASPECT COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands - unaudited)

                         
    Three months ended  
    March 31, 2005     December 31, 2004     March 31, 2004  
Cash flows from operating activities:
                       
Net income
  $ 13,095     $ 17,771     $ 15,574  
Reconciliation of net income to cash provided by operating activities:
                       
Depreciation
    4,011       5,807       6,105  
Amortization of intangible assets
    724       724       743  
Non-cash compensation and services expenses
    507       2,261        
Loss on disposal of property
    2       10       9  
Loss on short-term investment, net
    399       371       267  
Changes in operating assets and liabilities:
                       
Accounts receivable, net
    317       (6,215 )     206  
Inventories
    (457 )     769       507  
Other current assets and other assets
    (3,589 )     2,394       (732 )
Accounts payable
    (2,068 )     147       1,658  
Accrued compensation and related benefits
    228       (1,794 )     1,741  
Other accrued liabilities
    (2,867 )     (2,509 )     (10,177 )
Deferred revenues
    7,973       (1,072 )     13,078  
 
                 
Cash provided by operating activities
    18,275       18,664       28,979  
 
                       
Cash flows from investing activities:
                       
Purchase of investments
    (29,394 )     (36,777 )     (61,054 )
Proceeds from sales and maturities of investments
    27,967       39,580       33,317  
Property and equipment purchases
    (3,903 )     (2,783 )     (3,827 )
 
                 
Cash provided by (used in) investing activities
    (5,330 )     20       (31,564 )
 
                       
Cash flows from financing activities:
                       
Proceeds from issuance of common stock, net
    3,649       2,358       7,642  
Payments on capital lease obligations
    (43 )     (56 )     (33 )
Proceeds from borrowings
                40,000  
Payments on borrowings
                (40,979 )
Payments on financing costs
          (32 )     (1,053 )
 
                 
Cash provided by financing activities
    3,606       2,270       5,577  
 
                       
Effect of exchange rate changes on cash and cash equivalents
    (421 )     1,941       273  
 
                 
 
                       
Net increase in cash and cash equivalents
    16,130       22,895       3,265  
Cash and cash equivalents:
                       
Beginning of period
    89,250       66,355       75,653  
 
                 
End of period
    105,380       89,250       78,918  
 
                       
Short-term investments at the end of period
    113,788       113,381       116,081  
 
                       
 
                 
Cash, cash equivalents and short-term investments
  $ 219,168     $ 202,631     $ 194,999  
 
                 
 
                       
Supplemental disclosure of cash flow information:
                       
Cash paid for interest
  $ 171     $ 142     $ 643  
Cash paid for income taxes
  $ 1,324     $ 1,660     $ 2,967  
Supplemental schedule of noncash investing and financing activities:
                       
Accrued preferred stock dividend and amortization of redemption premium
  $ 1,939     $ 1,898     $ 1,779  
Amortization of beneficial conversion feature
  $ 375     $ 371     $ 357