FOR IMMEDIATE RELEASE
Investors contact: Media contact:
Linda Snyder Phyllis Davidson
HYPERION REPORTS STRONG SECOND QUARTER RESULTS
System 9 Momentum Drives 9% License Revenue Growth
SANTA CLARA, Calif., January 19, 2006 – Hyperion Solutions (Nasdaq: HYSL), the global leader in Business Performance Management software, today announced financial results for its fiscal second quarter ended December 31, 2005.
Total revenues for the quarter increased 5% to $185.5 million, compared to $177.0 million for the same period a year ago. Software license revenue increased 9% to $74.4 million, compared to $68.5 million for the same period a year ago, while maintenance and services revenue grew 2% to $111.0 million, compared to $108.5 million in the year-ago period.
The company's second quarter net income, as reported in accordance with U.S. generally
accepted accounting principles (GAAP), was $15.5 million, or $0.25 per diluted share, compared to net income of $15.6 million, or $0.25 per diluted share, for the second quarter of fiscal 2005. Fiscal 2006 results reflect the impact of equity-based compensation as required by SFAS 123R; fiscal 2005 results do not.
Second quarter non-GAAP net income increased 9% year-over-year to $22.3 million, or $0.37 per diluted share, excluding the impact of charges, net of related tax, for the amortization of purchased intangible assets, restructuring charges and equity-based compensation as required by SFAS 123R. These results compare to non-GAAP net income of $20.4 million, or $0.33 per diluted share, for the second quarter of fiscal 2005.
Hyperion’s balance sheet reflects cash and short-term investments totaling $425.4 million at December 31, 2005. This compares to $436.5 million in cash and short-term investments at
September 30, 2005. Cash flow from operations for the quarter was $5.4 million. The company used cash of $34.2 million to repurchase stock during the quarter, as part of a $125 million stock repurchase program announced in May 2005. Days sales outstanding (DSO) was 70 days, reflecting normal fiscal second quarter seasonality.
“Hyperion System 9 is a clear winner in the marketplace,” said Godfrey R. Sullivan, Hyperion’s president and chief executive officer. “License revenue growth was driven by the success and momentum of System 9, which generated more than 50% of our license revenue and accounted for the majority of our large transactions. We’re very pleased to report another quarter of strong execution during our exciting product launch.
“We recorded growth in all major geographies,” Sullivan continued, “and saw particular strength in Asia/Pacific. Demand was strong across all products and we closed a record 21 transactions greater than $500,000, as customers increasingly rely on Hyperion as their strategic vendor for Business Performance Management.”
Hyperion also reported today its outlook for the third quarter of fiscal year 2006. 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 $0.21 to $0.25. This outlook assumes an effective ax rate of 37% and diluted shares outstanding of 61.4 million.
Excluding the impact of the amortization of purchased intangible assets and equity-based compensation expense, the company expects diluted earnings per share on a non-GAAP basis for the third quarter in the range of $0.32 to $0.36, and a non-GAAP effective tax rate of 34%.
Reconciliation of GAAP to Non-GAAP Diluted Earnings per Share for Business Outlook
Projected Q3 FY06 GAAP Diluted Earnings per Share $0.21 – $0.25
Amortization of purchased intangible assets 0.04
Equity-based compensation expense 0.13
Less: Income tax effect of non-GAAP adjustments (0.06)
Projected Q3 FY06 Non-GAAP Diluted Earnings per Share $0.32 – $0.36
A reconciliation of our historical non-GAAP information as well as a discussion of information investors should consider when reviewing our non-GAAP information follows the attached financial statements.
Other Recent Developments
Other recent company developments include:
• Won major customer contracts at Agilent Technologies (Semiconductor Test Solutions), Alcan (France), Cadbury Schweppes plc (UK), Citrix Systems, Department of Justice, Halifax Bank of Scotland (UK), Metavante Corp., National Australia Bank (Australia), NCR, Nycomed (Denmark), Petrobras (Brazil), Posten Norge (Norway), Scholastic Corporation, Shell Canada, Symantec, TBC Corporation, Telefonica Moviles (Spain), and Verizon.
• Named to the Leaders Quadrant in the Magic Quadrant for Corporate Performance Management Suites by Gartner, a leading industry analyst firm. Hyperion was the top ranked company based upon "completeness of vision" and "ability to execute." Gartner also named Hyperion to the Visionary Quadrant in the Magic Quadrant for BI Platforms.
• Showcased Hyperion System 9 in user conferences in Sydney and Barcelona, which attracted more than 1,500 attendees.
• Kicked off the Hyperion Performance Visibility 2006 World Tour in conjunction with more than 30 partners. The 66-city world tour throughout 31 countries is educating IT, finance, and business decision makers about Hyperion System 9.
• Added Nanci Caldwell and Maynard Webb to its board of directors. Caldwell, most recently chief marketing officer of PeopleSoft, also served in executive roles for Hewlett-Packard. Webb is currently chief operating officer of eBay and previously served as chief information officer for Gateway and Bay Networks.
• Appointed Robin L. Washington as chief financial officer, replacing David Odell, whose planned retirement was announced in September 2005. Washington brings more than 21 years of financial management experience to Hyperion and was most recently senior vice president of finance and corporate controller for PeopleSoft.
Hyperion Solutions Corporation is the global leader in Business Performance Management software. More than 11,000 customers rely on Hyperion software to provide visibility into how their businesses are performing and to help them plan and model to improve that performance. Using Hyperion software, customers collect data, organize and analyze it, then communicate it across the enterprise. Hyperion offers the industry's only Business Performance Management solution that integrates financial management applications with a business intelligence platform into a single system. Named one of the FORTUNE 100 Best Companies to Work For (2004), Hyperion serves global customers in 45 countries. A network of more than 600 partners provides the company’s innovative and specialized
solutions and services. Hyperion generated revenues of $703 million for the fiscal year that ended June 30, 2005 and is traded under the Nasdaq symbol HYSL. For more information, please visit www.hyperion.com.
Statements in this press release relating to the future, including those related to our “Business Outlook,” are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by terminology such as, “may,” “will,” “should,” “potential,” “estimated,” “projects,” “anticipate,” “plans,” “expects,” “believes” and similar expressions. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from
those in the forward-looking statements. These factors include, without limitation, our 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, lower than expected customer adoption rates for System 9, 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 reports on Forms 10-K and 10-Q filed on August
31, 2005, and November 9, 2005, respectively. The company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.
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