EX-99.1 2 f13833exv99w1.htm EXHIBIT 99.1 exv99w1
 

Business Objects Reports Third Quarter 2005 Results
Page 1
Exhibit 99.1
BUSINESS OBJECTS REPORTS
THIRD QUARTER 2005 RESULTS
Total Revenues Up 19 Percent Year over Year
Non-GAAP Operating Income up 62 Percent; US GAAP Operating Income up 81 percent
Full Year Guidance Raised
San Jose, California; Paris, France – October 27, 2005 – Business Objects (Nasdaq: BOBJ; Euronext Paris ISIN code FR0004026250 — BOB), the world’s leading provider of business intelligence (BI) solutions, today announced results for the third quarter ended September 30, 2005.
For the third quarter of 2005, the company reported total US GAAP revenues of $261.4 million, an increase of 19 percent year over year. US GAAP diluted earnings per share were $0.21 and non-GAAP diluted earnings per share were $0.30 in the third quarter of 2005. The US GAAP and non-GAAP diluted earnings per share were in line with or above the high end of the company’s guidance range for the quarter. The company’s guidance range was US GAAP $0.19 to $0.22 per share and non-GAAP $0.25 to $0.28 per share, respectively.
Operating income improved significantly on both a US GAAP and non–GAAP basis during the third quarter of 2005. On a US GAAP basis, income from operations was $30.1 million or 12 percent of total revenues, up 81 percent year over year. On a non-GAAP basis, income from operations was $41.9 million or 16 percent of total revenues, up 62 percent from the third quarter of 2004.
All figures referred to herein are stated in US dollars unless otherwise indicated. Third quarter of 2005 non-GAAP results as defined in the section “Use of Non-GAAP Financial Measures” below differ from results measured under US GAAP as they exclude $2.4 million of in-process research and development costs, $7.8 million of amortization of intangible assets and $1.6 million of stock-based compensation expense. Reconciliations of US GAAP to non-GAAP results are included at the end of this press release.
“Business Objects is now over $1 billion in trailing four quarter revenues, marking an important breakthrough in the history of the company and the Business Intelligence industry,” said Bernard Liautaud, chairman of the board. “I am really pleased to have John Schwarz succeed me at the post of chief executive officer. I am looking forward to having John lead the company through its next phase of expansion and partnering with him in my new role.”
“In Q3 we continued to generate strong customer demand, execute well in our sales channels, and improve our new product adoption as well as maintenance renewals, all of which contributed to significant market share gains and to our strengthening financial results,” said John Schwarz, president and chief executive officer. “This is the third sequential quarter of accelerating license growth which reflects the rapid adoption of BusinessObjects XI, the most advanced version of our flagship product, and the industry’s leading Business Intelligence solution. In addition to license growth we had very strong growth in our services businesses as Business Objects continued to assume an increasing role as a strategic business intelligence solution provider.”

 

 

Business Objects Reports Third Quarter 2005 Results
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Business Objects Gained Momentum and Market Share in the Quarter
  •   Since the launch of BusinessObjects XI in January 2005, license growth accelerated to 14 percent year over year, increasing from 1 percent in the first quarter of 2005 and 7 percent in the second quarter of 2005.
 
  •   This growth rate is more than double that of the second and third place BI providers in the most recent quarter.
Broader Customer Adoption Reflected in the Increase in Large Deals and Customer Wins
  •   There were 10 transactions over $1 million in license revenues in the third quarter of 2005, up from 4 transactions over $1 million in the third quarter of 2004.
 
  •   Notable customer wins included Auchan, Grupo Santander, Kohl’s Department Stores, and T-Mobile, many of which were driven by BusinessObjects XI.
The Americas and EMEA Reported Accelerating Growth
  •   Revenues in the Americas reached $137.6 million in the third quarter of 2005, up 21 percent year over year, accelerating from 19 percent in the second quarter of 2005. The region closed 4 transactions over $1 million in license revenues.
 
  •   Revenues in EMEA (Europe, Middle East, and Africa) totaled $104.9 million, up 20 percent year over year (up 19 percent at 85.8 million in euros), accelerating from 17 percent in the second quarter of 2005. EMEA closed 6 transactions over $1 million in license revenues.
 
  •   Revenues in Asia Pacific, including Japan, totaled $18.9 million, up 4 percent year over year.
Strong Demand Across Software and Services Due to New Products
  •   Software license revenues totaled $120.3 million in the third quarter of 2005, with growth in each major product area.
 
  •   Sales of core business intelligence products including query, reporting and analysis resulted in $104.9 million in license revenues, up 9 percent year over year.
 
  •   Enterprise performance management applications led license growth, reaching $7.9 million in license revenues, up 110 percent year over year.
 
  •   Data integration products reached $7.6 million in license revenues, up 35 percent year over year.
 
  •   Services revenues totaled $141.1 million in the third quarter, up 24 percent year over year with strong growth in both consulting and maintenance.
Profits Continued to Grow; Earnings per Share Up Year over Year
  •   On a US GAAP basis, operating income was $30.1 million in the third quarter of 2005, up 81 percent year over year, representing a US GAAP operating margin of 12 percent. In the third quarter of 2005, US GAAP net income was $19.6 million and US GAAP diluted earnings per share were $0.21 per share.
 
  •   On a non-GAAP basis, operating income was $41.9 million in the third quarter of 2005, up 62 percent year over year, representing a non-GAAP operating margin of 16 percent. In the third quarter of 2005, non-GAAP net income was $27.8 million and non-GAAP diluted earnings per share were $0.30 per share.
Balance Sheet Remains Strong
  •   Total cash and investments (cash, cash equivalents, restricted cash and short-term investments) were $369 million at September 30, 2005, up 19 percent year to date. This $58 million year to

 

 

Business Objects Reports Third Quarter 2005 Results
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      date net increase in cash reflects approximately $178 million of cash inflows, less acquisitions and other capital investment outflows of approximately $120 million.
 
  •   Deferred and long-term deferred revenues totaled $196.1 million at September 30, 2005, up 16 percent year over year.
 
  •   Days sales outstanding (DSOs) were 69 days as of September 30, 2005, within the company’s target range of 60 to 75 days.
BusinessObjects XI Momentum Remains Strong
  •   BusinessObjects XI license revenues totaled more than $65 million in the third quarter of 2005, up 21 percent versus the previous quarter.
 
  •   Customer acceptance of BusinessObjects XI continued to ramp with over $136 million in license revenues in its first three quarters since availability.
Business Outlook
Business Objects has raised guidance for the fourth quarter and fiscal year 2005 to reflect the performance in Q3, the benefit from the strategic acquisitions made this year, and overall strength in the underlying business.
Business Objects offers the following guidance for the quarter ending December 31, 2005:
  •   Total revenues are expected to range from $287 million to $292 million.
 
  •   US GAAP diluted earnings per share are expected to range from $0.30 to $0.33.
 
  •   Non-GAAP diluted earnings per share are expected to range from $0.37 to $0.40.
 
  •   This guidance does not include the impact of the proposed Infommersion, Inc. acquisition which is expected to close in the fourth quarter of 2005.
The non-GAAP diluted earnings per share guidance for the quarter ending December 31, 2005 excludes amortization of intangible assets and stock-based compensation expense of approximately $10.7 million, which accounts for the difference of approximately $0.07 per share. Assumptions for the fourth quarter guidance assume a US GAAP and non-GAAP tax rate of 38 percent and a US dollar to euro exchange rate of $1.22 per €1.00.
Business Objects offers the following updated guidance for the year ending December 31, 2005:
  •   Total revenues are expected to range from $1.060 billion to $1.065 billion.
 
  •   US GAAP diluted earnings per share are expected to range from $0.93 to $0.97.
 
  •   Non-GAAP diluted earnings per share are expected to range from $1.24 to $1.27.
 
  •   This guidance does not include the impact of the proposed Infommersion, Inc. acquisition which is expected to close in the fourth quarter of 2005.
The non-GAAP diluted earnings per share guidance for the year ending December 31, 2005 excludes a write off of in-process research and development (IPR&D) of $2.4 million, and amortization of intangible assets and stock-based compensation expense of approximately $39.0 million, which represents an impact of approximately $0.30 per share. The outlook for the full year 2005 assumes a US dollar to euro exchange rate of $1.22 per €1.00 and an effective US GAAP tax rate of 40 percent, and a non-GAAP tax rate of 38 percent for the full year 2005.
The above information concerning our forecast for the fourth quarter and full year 2005 represents our outlook only as of the date hereof, and we undertake no obligation to update or revise any financial forecast or other forward looking statements, as a result of new developments or otherwise.

 

 

Business Objects Reports Third Quarter 2005 Results
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Conference Call
Business Objects will hold a conference call to discuss its financial results for the third quarter of 2005 on October 27, 2005. The call will begin at 2:00 p.m. PT (5:00 p.m. New York, 11:00 p.m. Paris, 10:00 p.m., London). The call-in numbers are 800-399-7988 for North America and 706-634-5428 for Europe and Asia with ID #1158554. The conference call also will be webcast live, and can be accessed on the company’s website – www.businessobjects.com. A replay of the webcast will be available on the site approximately two hours after the end of the live call.
Accounting Principles
Business Objects prepares its financial statements in accordance with US GAAP. Because the company is listed on both the Eurolist by Euronext TM in France and the Nasdaq National Market in the United States, it is required to separately report consolidated financial statements prepared in accordance with US GAAP and International Financial Reporting Standards (“IFRS”). The most significant identified differences between the two reporting standards for Business Objects relate to the treatment of stock-based compensation expense and the accounting for treasury shares related to a prior acquisition.
In accordance with French regulations and IFRS, Business Objects will report its consolidated financial statements for the first half of 2005 on October 28, 2005. In addition, Business Objects expects to report its consolidated financial statements for the full year 2005 in April 2006. Business Objects filed with the Autorité des Marchés Financiers in France its 2004 Document de Référence which included the opening balance sheet of the Company as of January 1, 2004 prepared in accordance with IFRS. In addition, the Company has published net sales for its second quarter in accordance with IFRS in the Bulletin des Annonces Légales Obligatoires in France on August 12, 2005.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures such as operating income, net income and earnings per share information for the third quarters of 2005 and 2004 included in this press release are different from those otherwise presented under US GAAP as these non-GAAP measures exclude certain charges. These charges include a write-off of in-process research and development, amortization of intangible assets, stock-based compensation expense and restructuring charges. Business Objects has provided these measures in addition to US GAAP financial results because management believes these non-GAAP measures provide a consistent basis for comparison between quarters and of growth rates year-over-year that are not influenced by certain non-cash charges or impacts of prior period acquisitions, and therefore are helpful in understanding Business Objects’ underlying operating results. In addition, this press release also includes non-GAAP measures that use a constant currency to separate the impact of conversion from other foreign currencies to US dollars from other changes in our business. These non-GAAP measures are some of the primary measures Business Objects’ management uses for planning and forecasting. These measures are not in accordance with, or an alternative to US GAAP and these non-GAAP measures may not be comparable to information provided by other companies. Reconciliations of US GAAP to non-GAAP results are presented at the end of this press release.
About Business Objects
Business Objects is the world’s leading business intelligence (BI) software company. With more than 30,000 customers worldwide, including over 80 percent of the Fortune 500, Business Objects helps organizations gain better insight into their business, improve decision making, and optimize enterprise performance. The company’s business intelligence platform, BusinessObjects™ XI, offers the BI industry’s most advanced and complete platform for performance management, planning, reporting, query and analysis, and data integration. BusinessObjects XI includes Crystal Reports®, the industry standard for enterprise reporting. Business Objects has built the industry’s strongest and most diverse

 

 

Business Objects Reports Third Quarter 2005 Results
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partner community, and also offers consulting and education services to help customers effectively deploy their business intelligence projects.
Business Objects has headquarters in both San Jose, Calif., and Paris, France. The company’s stock is traded on both the Nasdaq (BOBJ) and Euronext Paris (ISIN: FR0004026250 — BOB) stock exchanges. More information about Business Objects can be found at www.businessobjects.com.
Forward-Looking Statements
This document contains forward-looking statements that involve risks and uncertainties concerning the company, including the company’s expected financial performance for the fourth quarter and full year 2005, the company’s core strategy and the company’s expectations regarding its planned acquisition of Infommersion, Inc. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others, fluctuations in the company’s quarterly operating results; the company’s ability to sustain or increase its profitability; the company’s ability to attract and retain customers for BusinessObjects XI; the company’s ability to issue new releases of BusinessObjects XI on other platforms; changes to current accounting policies which may have a significant, adverse impact upon the company’s financial results; risks related to the company’s purchase and integration of SRC Software, Inc. and Infommersion, Inc.; the introduction of new products by competitors or the entry of new competitors into the markets for Business Objects’ products; the impact of the pricing of competing technologies; the company’s ability to preserve its key strategic relationships; the company’s reliance upon selling products only in the Business Intelligence software market; and economic and political conditions in the US and abroad. More information about potential factors that could affect Business Objects’ business and financial results is included in Business Objects’ Form 10-K for the year ended December 31, 2004 and Business Objects’ Form 10-Q for the quarter ended June 30, 2005, each of which are on file with the SEC and available at the SEC’s website at www.sec.gov. Business Objects is not obligated to undertake any obligation to update these forward-looking statements to reflect events or circumstances after the date of this document.
Business Objects and the Business Objects logo, BusinessObjects, WebIntelligence, Crystal Reports, Intelligent Question, and Desktop Intelligence are trademarks or registered trademarks of Business Objects S.A. or its affiliated companies in the United States and/or other countries. All other names mentioned herein may be trademarks of their respective owners.

 

 

Business Objects Reports Third Quarter 2005 Results
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CONTACTS:
Krista Bessinger
Business Objects
Director, Investor Relations
+1 408 953 6349
krista.bessinger@businessobjects.com
Anne Guimard
Business Objects
European Investor Relations
+33 1 41 25 39 19
anne.guimard@businessobjects.com
Catherine Peterson
Business Objects
Vice President, Investor Relations
+1 408 953 6064
catherine.peterson@businessobjects.com

 

 

Business Objects Reports Third Quarter 2005 Results
Page 7
BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per ordinary share and ADS data)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2005     2004     2005     2004  
Revenues:   (unaudited)     (unaudited)  
Net license fees
   $ 120,308     $ 105,705     $ 360,317     $ 337,380  
Services
     141,073       113,765       412,248       321,563  
 
                        
Total revenues
     261,381       219,470       772,565       658,943  
Cost of revenues:
                                
Net license fees
     7,169       7,117       21,586       20,770  
Services
     54,854       42,470       159,016       125,544  
 
                        
Total cost of revenues
     62,023       49,587       180,602       146,314  
 
                        
Gross margin
     199,358       169,883       591,963       512,629  
Operating expenses:
                                
Sales and marketing
     103,622       96,543       312,131       292,995  
Research and development
     42,849       35,339       123,550       111,583  
General and administrative
     22,799       21,366       69,830       62,312  
Restructuring costs
     —       —       —       1,492  
 
                        
Total operating expenses
     169,270       153,248       505,511       468,382  
 
                        
Income from operations
     30,088       16,635       86,452       44,247  
Interest and other income (expense), net
     2,895       1,137       10,473       (2,670 )
 
                        
Income before provision for income taxes
     32,983       17,772       96,925       41,577  
Provision for income taxes
     (13,416 )     (6,743 )     (39,213 )     (15,800 )
 
                        
Net income
   $ 19,567     $ 11,029     $ 57,712     $ 25,777  
 
                        
 
                                
Basic net income per ordinary share and ADS
   $ 0.22     $ 0.12     $ 0.64     $ 0.29  
 
                        
 
                                
Diluted net income per ordinary share and ADS
   $ 0.21     $ 0.12     $ 0.63     $ 0.28  
 
                        
 
                                
Ordinary shares and ADSs used in computing basic net income per ordinary share and ADS
     90,552       88,495       90,005       88,745  
 
                        
 
                                
Ordinary shares and ADSs and equivalents used in computing diluted net income per ordinary share and ADS
     93,455       89,792       92,286       91,210  
 
                        

 

 

Business Objects Reports Third Quarter 2005 Results
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BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except nominal value per ordinary share)
                 
    September 30, 2005     December 31, 2004  
    (unaudited)          
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 332,464     $ 293,485  
Restricted cash
     32,044       14,043  
Short-term investments
     4,801       3,831  
Accounts receivable, net
     200,929       248,957  
Deferred tax assets
     3,840       8,328  
Prepaid and other current assets
     58,935       46,575  
 
            
 
                
Total current assets
     633,013       615,219  
 
                
Goodwill
     1,139,014       1,067,694  
Other intangible assets, net
     114,566       124,599  
Property and equipment, net
     63,144       64,053  
Deposits and other assets
     37,782       49,296  
Long-term deferred tax assets
     2,067       2,067  
 
            
 
                
Total assets
   $ 1,989,586     $ 1,922,928  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 40,709     $ 40,939  
Accrued payroll and related expenses
     68,215       84,918  
Income taxes payable
     77,823       85,000  
Deferred revenues
     190,707       194,366  
Other current liabilities
     71,461       83,544  
Escrows payable
     24,657       6,654  
 
            
 
                
Total current liabilities
     473,572       495,421  
 
                
Other long-term liabilities
     7,157       6,448  
Long-term deferred revenues
     5,401       6,316  
Long-term deferred tax liabilities
     5,881       7,599  
 
            
Total liabilities
     492,011       515,784  
 
                
Shareholders’ equity
                
Ordinary shares, Euro 0.10 nominal value
     10,535       10,312  
Additional paid-in capital
     1,200,662       1,167,336  
Treasury and Business Objects Option LLC shares
     (53,335 )     (53,335 )
Retained earnings
     307,432       249,720  
Unearned compensation
     (4,720 )     (8,079 )
Accumulated other comprehensive income
     37,001       41,190  
 
            
Total shareholders’ equity
     1,497,575       1,407,144  
 
            
 
                
Total liabilities and shareholders’ equity
   $ 1,989,586     $ 1,922,928  
 
            

 

 

Business Objects Reports Third Quarter 2005 Results
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BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    Nine Months Ended  
    September 30,  
    2005     2004  
    (unaudited)  
Operating activities:
                
Net income
   $ 57,712     $ 25,777  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization of property and equipment
     24,016       25,224  
Amortization of other intangible assets
     23,865       23,085  
Stock-based compensation expense
     3,922       5,309  
Acquired in-process research and development
     2,384       —  
Deferred income taxes
     4,030       (17,456 )
Tax benefit from employee stock plans
     —       2,517  
Changes in operating assets and liabilities:
                
Accounts receivable, net
     40,331       3,549  
Prepaid and other current assets
     (12,935 )     (6,755 )
Deposits and other assets
     11,379       (16,873 )
Accounts payable
     1,616       (11,411 )
Accrued payroll and related expenses
     (15,645 )     (21,444 )
Income taxes payable
     (1,270 )     3,925  
Deferred revenues
     3,237       32,671  
Other liabilities
     (13,111 )     (7,672 )
Short-term investments classified as trading
     (970 )     (290 )
 
            
Net cash provided by operating activities
     128,561       40,156  
 
            
 
                
Investing activities:
                
Purchases of property and equipment
     (20,692 )     (24,161 )
Business acquisitions, net of acquired cash
     (95,858 )     —  
 
            
Net cash used in investing activities
     (116,550 )     (24,161 )
 
            
 
                
Financing activities:
                
Issuance of shares
     30,095       28,191  
Purchase of treasury shares
     —       (40,231 )
Transfer of cash (to) from restricted cash accounts
     2       (17,861 )
Payments on escrows payable
     —       (3,083 )
 
            
Net cash provided by (used in) financing activities
     30,097       (32,984 )
 
            
 
                
Effect of foreign exchange rate changes on cash and cash equivalents
     (3,129 )     4,225  
 
            
Net increase (decrease) in cash and cash equivalents
     38,979       (12,764 )
Cash and cash equivalents, beginning of the period
     293,485       235,380  
 
            
 
                
Cash and cash equivalents, end of the period
   $ 332,464     $ 222,616  
 
            

 

 

Business Objects Reports Third Quarter 2005 Results
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BUSINESS OBJECTS S.A.
STATEMENT OF INCOME — Reconciliation of US GAAP to Non-GAAP Results
Three Months Ended September 30, 2005
(in millions, except per ordinary share and ADS data)
(Unaudited)
                                 
            Add back:              
            Amortization     Add back:        
            of intangible     Stock-based     Non-GAAP  
    US GAAP     assets     compensation     Results  
Revenues:
                                
Net license fees
   $ 120.3                     $ 120.3  
Services
     141.1                       141.1  
 
                        
Total revenues
     261.4       —       —       261.4  
Cost of revenues:
                                
Net license fees
     7.2       (5.2 )             2.0  
Services
     54.8       (2.3 )     (0.2 )     52.3  
 
                        
Total cost of revenues
     62.0       (7.5 )     (0.2 )     54.3  
 
                        
Gross margin
     199.4       7.5       0.2       207.1  
 
                                
Gross margin %
     76 %                     79 %
 
                                
Operating expenses:
                                
Sales and marketing
     103.6       (0.3 )     (0.5 )     102.8  
Research and development(1)
     42.9       (2.4 )     (0.3 )     40.2  
General and administrative
     22.8               (0.6 )     22.2  
 
                        
Total operating expenses
     169.3       (2.7 )     (1.4 )     165.2  
 
                        
Income from operations
     30.1       10.2       1.6       41.9  
Interest and other income (expense), net
     2.9                       2.9  
 
                        
Income before provision for income taxes
     33.0       10.2       1.6       44.8  
Provision for income taxes
     (13.4 )                     (17.0 )
 
                            
Net income
   $ 19.6                     $ 27.8  
 
                            
 
                                
Basic net income per ordinary share and ADS
   $ 0.22                     $ 0.31  
 
                            
 
                                
Diluted net income per ordinary share and ADS
   $ 0.21                     $ 0.30  
 
                            
 
(1)   includes acquired in-process research and development for SRC and Medience

 

 

Business Objects Reports Third Quarter 2005 Results
Page 11
BUSINESS OBJECTS S.A.
STATEMENT OF INCOME — Reconciliation of US GAAP to Non-GAAP Results
Nine Months Ended September 30, 2005
(in millions, except per ordinary share and ADS data)
(Unaudited)
                                 
            Add back:              
            Amortization              
            of intangible              
            assets and     Add back:        
            restructuring     Stock-based     Non-GAAP  
    US GAAP     costs     compensation     Results  
Revenues:
                                
Net license fees
   $ 360.3                     $ 360.3  
Services
     412.3                       412.3  
 
                        
Total revenues
     772.6       —       —       772.6  
Cost of revenues:
                                
Net license fees
     21.6       (15.9 )     —       5.7  
Services
     159.0       (7.0 )     (0.6 )     151.4  
 
                        
Total cost of revenues
     180.6       (22.9 )     (0.6 )     157.1  
 
                        
Gross margin
     592.0       22.9       0.6       615.5  
 
                                
Gross margin %
     77 %                     80 %
 
                                
Operating expenses:
                                
Sales and marketing
     312.1       (0.3 )     (1.4 )     310.4  
Research and development (1)
     123.6       (2.4 )     (1.0 )     120.2  
General and administrative
     69.9       (0.7 )     (0.9 )     68.3  
Restructuring costs
     (0.1 )     0.1       —       —  
 
                        
Total operating expenses
     505.5       (3.3 )     (3.3 )     498.9  
 
                        
Income from operations
     86.5       26.2       3.9       116.6  
Interest and other income (expense), net
     10.4                       10.4  
 
                        
Income before provision for income taxes
     96.9       26.2       3.9       127.0  
Provision for income taxes
     (39.2 )                     (47.3 )
 
                            
Net income
   $ 57.7                     $ 79.7  
 
                            
 
                                
Basic net income per ordinary share and ADS
   $ 0.64                     $ 0.89  
 
                            
 
                                
Diluted net income per ordinary share and ADS
   $ 0.63                     $ 0.86  
 
                            
 
(1)   includes acquired in-process research and development for SRC and Medience

 

 

Business Objects Reports Third Quarter 2005 Results
Page 12
BUSINESS OBJECTS S.A.
Q3 FISCAL 2005 SUPPLEMENTAL INFORMATION
(in millions, except per ordinary share and ADS data)
(Unaudited)
                                                                 
    Fiscal 2004     Fiscal 2005  
    Q1     Q2     Q3     Q4     Total     Q1     Q2     Q3  
 
SUPPLEMENTAL INCOME STATEMENT INFORMATION
                                                                
 
                                                                
Revenues
                                                                
Net license fees
   $ 114.5     $ 117.2     $ 105.7     $ 136.0     $ 473.4     $ 115.2     $ 124.9     $ 120.3  
Maintenance
     73.8       75.6       84.4       97.0       330.8       100.1       100.7       103.5  
Consulting and training
     28.9       29.4       29.4       33.7       121.4       33.5       36.8       37.6  
         
Total revenues
     217.2       222.2       219.5       266.7       925.6       248.8       262.4       261.4  
         
 
                                                                
Total expenses
                                                                
Cost of net license fees
     2.5       1.0       2.1       2.4       8.0       1.7       1.9       2.0  
Cost of services revenues
     39.0       38.8       39.9       44.1       161.8       48.9       50.3       52.3  
Sales and marketing
     96.5       98.6       95.9       113.2       404.2       103.2       104.3       102.8  
Research and development
     39.1       36.1       34.9       38.7       148.8       40.0       40.1       40.2  
General and administrative
     20.9       18.6       20.9       21.1       81.5       24.4       21.9       22.2  
Amortization of intangible assets
     7.8       7.6       7.6       7.7       30.7       8.1       7.9       10.2  
Stock-based compensation (1)
     2.1       1.7       1.5       1.4       6.7       1.2       1.1       1.6  
Restructuring costs
     —       1.5       —       0.7       2.2       (0.1 )     —       —  
         
Total expenses
     207.9       203.9       202.8       229.3       843.9       227.4       227.5       231.3  
         
Income from operations
     9.3       18.3       16.7       37.4       81.7       21.4       34.9       30.1  
         
Interest and other income (expense), net
     (4.0 )     0.3       1.1       (1.6 )     (4.2 )     4.4       3.2       2.9  
Income before provision for income taxes
     5.3       18.6       17.8       35.8       77.5       25.8       38.1       33.0  
Provision for income taxes
     (2.0 )     (7.1 )     (6.8 )     (14.5 )     (30.4 )     (10.8 )     (15.0 )     (13.4 )
Effective tax rate
     38 %     38 %     38 %     41 %     39 %     42 %     39 %     41 %
         
Net income
     3.3       11.5       11.0       21.3       47.1       15.0       23.1       19.6  
         
Net income per ordinary share and ADS
                                                                
Basic
     0.04       0.13       0.12       0.24       0.53       0.17       0.26       0.22  
Diluted
     0.04       0.13       0.12       0.24       0.52       0.16       0.25       0.21  
Ordinary shares and ADSs used in computing net income per share (000’s)
                                                                
Basic
     88,632       89,095       88,495       88,769       88,748       89,424       90,030       90,552  
Diluted
     92,305       91,061       89,792       90,390       91,077       91,184       92,089       93,455  
Amortization of intangible assets
                                                                
Cost of net license fees
     5.2       5.0       5.0       5.1       20.3       5.5       5.3       5.2  
Cost of services revenues
     2.3       2.3       2.3       2.3       9.2       2.3       2.3       2.3  
Sales and marketing
     —       —       —       —       —       —       —       0.3  
Research and development
     —       —       —       —       —       —       —       2.4  
General and administrative
     0.3       0.3       0.3       0.3       1.2       0.3       0.3       —  
         
Total
     7.8       7.6       7.6       7.7       30.7       8.1       7.9       10.2  
         
Stock-based compensation (1)
                                                                
Cost of services revenues
     0.3       0.3       0.3       0.2       1.1       0.2       0.2       0.2  
Sales and marketing
     0.7       0.7       0.6       0.6       2.6       0.5       0.5       0.5  
Research and development
     0.6       0.4       0.4       0.4       1.8       0.3       0.3       0.3  
General and administrative
     0.5       0.3       0.2       0.2       1.2       0.2       0.1       0.6  
         
Total
     2.1       1.7       1.5       1.4       6.7       1.2       1.1       1.6  
         
Non-GAAP income from operations (2)
     19.2       29.1       25.8       47.2       121.3       30.6       43.9       41.9  
         
% of total revenues
     9 %     13 %     12 %     18 %     13 %     12 %     17 %     16 %
 
                                                                
Interest and other income (expense), net
     (4.0 )     0.3       1.1       (1.6 )     (4.2 )     4.4       3.2       2.9  
Income before provision for income taxes
     15.2       29.4       26.9       45.6       117.1       35.0       47.1       44.8  
Provision for income taxes
     (5.8 )     (11.2 )     (10.2 )     (18.3 )     (45.5 )     (12.9 )     (17.4 )     (17.0 )
Effective tax rate
     38 %     38 %     38 %     40 %     39 %     37 %     37 %     38 %
         
Non-GAAP net income
     9.4       18.2       16.7       27.3       71.6       22.1       29.7       27.8  
         
% of total revenues
     4 %     8 %     8 %     10 %     8 %     9 %     11 %     11 %
 
                                                                
Non-GAAP net income per ordinary share and ADS
                                                                
Basic
     0.11       0.20       0.19       0.31       0.81       0.25       0.33       0.31  
Diluted
     0.10       0.20       0.19       0.30       0.79       0.24       0.32       0.30  
 
(1)   Represents stock-based compensation expense primarily relating to the assumption of unvested options in Crystal Decisions acquisition.
 
(2)   Non-GAAP measures are reconciled from U.S. GAAP figures. Non-GAAP measures exclude in-process research and development, amortization of intangible assets, non-cash stock-based compensation expense, and restructuring costs.

 

 

Business Objects Reports Third Quarter 2005 Results
Page 13
BUSINESS OBJECTS S.A.
Q3 FISCAL 2005 SUPPLEMENTAL INFORMATION
(in millions, except for number of transactions, DSO and headcount information)
(Unaudited)
                                                                 
    Fiscal 2004     Fiscal 2005  
    Q1     Q2     Q3     Q4     Total     Q1     Q2     Q3  
 
REVENUE ANALYSIS
                                                                
 
                                                                
Total revenues by geography
                                                                
 
                                                                
Americas
   $ 104.1     $ 104.3     $ 113.8     $ 131.0     $ 453.3     $ 118.1     $ 123.6     $ 137.6  
EMEA
     96.4       99.6       87.6       114.2       397.7       111.2       116.5       104.9  
Asia Pacific, including Japan
     16.7       18.3       18.1       21.5       74.6       19.5       22.3       18.9  
         
Total
   $ 217.2     $ 222.2     $ 219.5     $ 266.7     $ 925.6     $ 248.8     $ 262.4     $ 261.4  
 
                                                                
Analysis of currency impact (year-over-year) (3)
                                                                
 
                                                                
Reported revenue growth rate
     13 %     7 %     4 %     13 %     9 %     15 %     18 %     19 %
Constant currency growth rate
     5 %     3 %     -1 %     7 %     4 %     11 %     15 %     18 %
         
Impact of foreign currency on growth rate
     9 %     4 %     4 %     6 %     6 %     3 %     3 %     1 %
                                                                 
    Fiscal 2004     Fiscal 2005  
    Q1     Q2     Q3     Q4     Total     Q1     Q2     Q3  
 
LICENSE REVENUE ANALYSIS
                                                                
 
                                                                
License revenues by channel
                                                                
 
                                                                
Direct
     53 %     55 %     49 %     50 %     52 %     47 %     49 %     48 %
Indirect
     47 %     45 %     51 %     50 %     48 %     53 %     51 %     52 %
         
Total
     100 %     100 %     100 %     100 %     100 %     100 %     100 %     100 %
 
                                                                
Number of transactions by size
                                                                
 
                                                                
Over $1 million
     7       8       4       14       33       9       13       10  
Over $200 thousand
     104       91       78       103       376       101       96       121  
                                                                 
    Fiscal 2004             Fiscal 2005  
    Q1     Q2     Q3     Q4           Q1     Q2     Q3  
 
SELECTED BALANCE SHEET ITEMS
                                                                
 
                                                                
Cash and cash equivalents, restricted cash, and short-term investments
   $ 269     $ 256     $ 263     $ 311             $ 392     $ 384     $ 369  
DSO (Days sales outstanding)
     75       81       75       84               66       72       69  
 
                                                                
HEADCOUNT
                                                                
 
                                                                
Total headcount
     3,756       3,707       3,815       3,834               3,944       4,039       4,320  
 
(3)   For 2004, reported revenue growth rates are calculated on a Non-GAAP basis including the impact of inclusion of Crystal Decisions’ operations for fiscal 2003. Certain information on constant currency to separate out the impact of conversion from other foreign currencies to US dollars from other changes in our business is also presented. The impact of foreign currency on growth rate is calculated from absolute amounts and thus this presentation in full percentages does not always add.