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Hyperion Reports Fiscal Third Quarter Results; Management Reporting and Planning Solutions Continue Strong Growth
SANTA CLARA, Calif.-- April 21, 2005--Hyperion Solutions (Nasdaq: HYSL), the leading provider of Business Performance Management (BPM) software, today announced financial results for its fiscal third quarter ended March 31, 2005 that were in line with preliminary financial results announced on April 11, 2005.
Total revenues for the quarter increased 7% to a record $177.1 million, compared to $166.1 million for the same period a year ago. Software license revenue increased 5% to $68.7 million, compared to $65.1 million for the same period a year ago, while maintenance and services revenue grew 7% to $108.4 million, compared to $101.0 million in the year-ago period.
The company's third quarter net income, as reported in accordance with U.S. generally accepted accounting principles (GAAP), increased 48% to $18.8 million, or $0.45 per diluted share. This compares to net income of $12.7 million, or $0.32 per diluted share, for the third quarter of fiscal 2004. The fiscal 2005 third quarter results include a restructuring credit of $1.8 million that resulted from Hyperion's sub-lease of the former Brio headquarters in Santa Clara, Calif., and the company's buy-out of the lease on its former headquarters in Sunnyvale, Calif.
Third quarter non-GAAP pro forma net income increased 31% year-over-year to $19.5 million, or $0.47 per diluted share, excluding the impact of charges, net of related tax, for the amortization of purchased intangible assets, the amortization of deferred stock-based compensation, and restructuring credits. These results compare to non-GAAP pro forma net income of $14.9 million, or $0.37 per diluted share, for the third quarter of fiscal 2004.
Hyperion's balance sheet reflects cash and short-term investments totaling $426.7 million at March 31, 2005. This compares to $405.0 million in cash and short-term investments at December 31, 2004. Cash flow from operations for the quarter was $29.3 million. The company used cash of $15.1 million to repurchase stock during the quarter, as part of its $75 million stock repurchase program announced in May 2004. Days sales outstanding (DSO) was 73 days.
"We're pleased with our results and consistent execution," said Godfrey R. Sullivan, Hyperion's president and chief executive officer. "Demand for our market-leading planning and budgeting applications continues to be very strong. Our BI Platform is gaining further momentum in the marketplace, led by record revenues of Hyperion Performance Suite and sequential revenue growth of Hyperion Essbase. Additionally, we're very encouraged by the initial customer interest in Hyperion MDM Server, the product we recently acquired from Razza Solutions. Looking forward, we believe our strategic advantages will help us extend our market leadership and our BPM vision positions us for long-term success."
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.
Hyperion also reported today its outlook for the fourth quarter of fiscal 2005. On a GAAP basis, the company currently expects total revenues in the range of $183 million to $188 million and diluted earnings per share in the range of $0.42 to $0.47. This outlook assumes an effective tax rate of 35% and diluted shares outstanding of 42.0 million.
Excluding the impact of the amortization of purchased intangible assets and the amortization of deferred stock-based compensation, the company expects diluted earnings per share on a non-GAAP pro forma basis for the fourth quarter in the range of $0.47 to $0.52.
Other Recent Developments
Other recent company developments include:
-- Won major customer contracts at AB Nynas Petroleum (Sweden), Activision Publishing, Inc., Cabelas Inc., DaimlerChrysler (Germany), El Paso Corporation, Helzberg Diamond Shops, ING Groep N.V. (Netherlands), Mary Kay Inc., Mittal Steel Company NV (Netherlands), Northrop Grumman Corporation, Radian Group Inc., Symantec Corporation, The University of Texas Medical Branch at Galveston, and Thomas Jefferson University Hospitals, Inc.
-- Named as one of North America's top information technology (IT) vendors with a Five Star rating by CMP Media's VARBusiness magazine. The magazine also recognized Mercedes Ellison, Hyperion's vice president of global partner sales, as one of North America's "Top 75 Executives" in its "who's who" list of the women and men driving IT distribution channels.
-- Appointed Dean Drougas as vice president and chief information officer.
Hyperion Solutions Corporation is the global leader in Business Performance Management software. More than 10,000 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 Santa Clara, 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, www.hyperion.com/contactus or call 800 286 8000 (U.S. only).
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. 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 fall off 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 report on Form 10-K filed on September 13, 2004, and the report on Form 10-Q filed on February 9, 2005. The company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.
"Hyperion," the Hyperion "H" logo and Hyperion's product names are trademarks of Hyperion. References to other companies and their products use trademarks owned by the respective companies and are for reference purpose only.
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