FOR IMMEDIATE RELEASE
Tel: (020) 8762 9292
HYPERION REPORTS FISCAL FIRST QUARTER RESULTS
Revenue Growth, Expense Management Drive Margin Expansion
SUNNYVALE, Calif., October 25, 2004 – Hyperion Solutions (Nasdaq: HYSL), the leading provider of Business Performance Management software, has announced financial results for its fiscal first quarter ended September 30, 2004.
Total revenues for the quarter increased 29% to $159.5 million, compared to $123.6 million for the same period a year ago. Software license revenue increased 33% to $57.4 million, compared to $43.0 million for the same period a year ago, while maintenance and services revenue grew 27% to $102.1 million, compared to $80.5 million in the year-ago period.
The company's first-quarter net income, as reported in accordance with U.S. generally accepted accounting principles (GAAP), increased 20% to $11.6 million, or $0.29 per diluted share, compared to net income of $9.7 million, or $0.26 per diluted share, for the first quarter of fiscal 2004.
First quarter non-GAAP pro forma net income increased 58% year-over-year to $15.7 million, or $0.39 per diluted share, excluding the impact of charges, net of related tax, for deferred revenue write-downs, the amortization of purchased intangible assets, the amortization of deferred stock-based compensation, and restructuring costs. These results compare to non-GAAP pro forma net income of $9.9 million, or $0.27 per diluted share, for the first quarter of fiscal 2004.
Hyperion’s balance sheet reflects cash and short-term investments totaling $362.6 million at September 30, 2004. This compares to $368.2 million in cash and short-term investments at June 30, 2004. Cash flow from operations for the quarter was $30.3 million. The company used cash of $35.2 million to repurchase stock during the quarter, as part of a $75 million stock repurchase program announced in May 2004. Days sales outstanding (DSO) improved five days sequentially to 63 days.
“I’m pleased with our team’s overall execution,” said Godfrey R. Sullivan, Hyperion’s president and chief executive officer. “All three of our geographic regions grew license revenue 30% or more year-over-year, reflecting strong demand for our solutions. Our financial applications enjoyed another exceptional quarter, highlighted by double-digit growth for both Hyperion Planning and Financial Management. Additionally, we closed the largest Hyperion Strategic Finance transaction ever and signed a Performance Suite transaction that ranked in our top 10 wins for the quarter. New customer growth more than doubled from a year ago as Performance Suite and Essbase continued to lead us in winning new customer accounts.”
“Through diligent management of our expenses, we expanded year-over-year pro forma operating margins by two percentage points to 14% while extending our leadership of the Business Performance Management market,” continued Mr. Sullivan. “Our successes clearly demonstrate that our leadership and product innovation are delivering unparalleled value to customers and partners.”
Non-GAAP Financial Measures
In analyzing its financial results, Hyperion has used non-GAAP pro forma financial measures (excluding adjustments, such as those relating to purchase accounting and restructuring costs) because they provide meaningful information regarding the company’s operational performance that excludes certain non-cash and non-recurring expenses. They also facilitate management’s internal comparisons to the company’s historical operating results and to competitors’ operating results. Wherever non-GAAP disclosures have been included in this press release, the company has reconciled them to the appropriate GAAP disclosures.
The non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP results should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Reconciliation of GAAP to Pro Forma Q1 FY05 and Q1 FY04 Diluted Earnings Per Share
Q4 FY05 Q4 FY04
GAAP Diluted Earnings Per Share $0.29 $0.26
Amortization of purchased intangible assets 0.05 0.01
Amortization of deferred stock-based compensation 0.02 0.01
Restructuring costs 0.08 --
Less: Income tax effect of pro forma adjustments (0.05) (0.01)
Non-GAAP Pro Forma Diluted Earnings Per Share $0.39 $0.27
Hyperion also reported today its outlook for the second quarter of fiscal 2005. On a GAAP basis, the company currently expects total revenues in the range of $166 million to $170 million and diluted earnings per share in the range of $0.24 to $0.29. This outlook assumes an effective tax rate of 35% and diluted shares outstanding of 40.5 million.
Excluding the impact of the amortization of purchased intangible assets, amortization of deferred stock-based compensation, and restructuring costs, the company expects diluted earnings per share on a non-GAAP pro forma basis for the second quarter in the range of $0.37 to $0.42.
Reconciliation of GAAP to Pro Forma Diluted Earnings Per Share for Business Outlook
Projected Q2 FY05 GAAP Diluted Earnings Per Share $0.24– $0.29
Amortization of purchased intangible assets 0.05
Amortization of deferred stock-based compensation 0.01
Restructuring costs 0.14
Less: Income tax effect of pro forma adjustments (0.07)
Projected Q2 FY05 Non-GAAP Pro Forma Diluted Earnings Per Share $0.37 – $0.42
Other Recent Developments
Other recent company developments include:
* Won major customer contracts at ABB (Switzerland), AstraZeneca UK Limited (UK), De Lage Landen International (Netherlands), District of Columbia, Fiat S.p.A. (Italy), GlaxoSmithKline, Group Health Cooperative, ITOCHU International, Inc., OMV AG (Austria), Serco Group Plc (UK), Stork NV (Netherlands), and The Regents of the University of California, Los Angeles Campus (UCLA).
* Announced that IDC ranked Hyperion as the 2003 worldwide market share leader for financial and Business Performance Management analytic applications. Hyperion commanded a 20.4% share of the worldwide market based on 2003 software license and maintenance revenues. The second ranked company had a 6.6% market share.
* Named again to the visionary quadrant for Corporate Performance Management by Gartner, Inc., a leading industry analyst firm. Hyperion was evaluated on “completeness of vision” and “ability to execute.”
* Kicked-off the marketing launch of Hyperion Essbase 7X, the most innovative release since the product’s inception. Its speed and performance are setting new industry standards for enterprise analytics, helping to drive Hyperion beyond finance into operational domains and enlarging the product’s addressable market.
* Held a successful European-wide Solutions users conference in Paris, which attracted more than 1,100 attendees including customers from as far away as Australia and South Africa and 40 partners.
* Completed the acquisition of privately held QIQ Solutions, a software solutions provider based in Sydney, Australia. The acquisition helps Hyperion extend its lead in Business Performance Management by enabling customers to deploy dashboards faster and to better manage larger enterprise-wide Hyperion Performance Suite implementations
Hyperion is the global leader in Business Performance Management software. More than 9,000 customers – including 91 of the Fortune 100 – rely on Hyperion software to translate strategies into plans, monitor execution and provide insight to improve financial and operational performance. Hyperion combines the most complete set of interoperable applications with the leading Business Intelligence platform to support and create Business Performance Management solutions. A network of more than 600 partners provides the company’s innovative and specialized solutions and services.
Named one of the FORTUNE 100 Best Companies to Work For 2004, Hyperion employs approximately 2,500 people in 20 countries. Distributors represent Hyperion in an additional 25 countries. Headquartered in Sunnyvale, California, Hyperion generated annual revenues of $622 million for the 12 months that ended June 30, 2004. Hyperion is traded under the Nasdaq symbol HYSL. For more information, please visit www.hyperion.com/uk, e-mail firstname.lastname@example.org or call 01784 228015.
Statements in this press release other than statements of historical fact are forward-looking statements, including, but not limited to, statements concerning expected future financial results, the potential success of anticipated product offerings, and the potential market opportunities for business performance management software. Such statements constitute anticipated outcomes and do not assure results. Actual results may differ materially from those anticipated by the forward-looking statements due to a variety of factors, including, but not limited to the company’s failure to successfully drive increases in software license revenue (by both increasing sales of newer products, and limiting falloff of older product revenue), significant product quality problems, failure to successfully drive partner revenue, failure to continue the successful integration of the Brio business, significant strengthening of the dollar against key European currencies, the impact of competitive products and pricing, a decline in customer demand, and technological shifts. For a more detailed discussion of factors that could affect the company's performance and cause actual results to differ materially from those anticipated in the forward-looking statements, interested parties should review the company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K filed on September 13, 2004. The company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.
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