Amdocs Limited Reports Quarterly Revenue of $711 Million
Key highlights:
- Second quarter revenue of
- Second quarter non-GAAP operating income of
- Second quarter diluted non-GAAP EPS of
- Diluted GAAP EPS of
- Free cash flow of
- 12-month backlog of
- Third quarter fiscal 2009 guidance: Expected revenue of approximately
"In the second quarter of fiscal 2009 difficult economic conditions continued to impact our customers' buying decisions. Sales cycles remained extended, particularly for larger, transformational projects, and certain customers delayed commitments for new projects. We had anticipated operating in a difficult environment during the quarter and are pleased with our execution in sales, cost control and cash collections. Our second quarter revenue of
Baharav continued, "For the third quarter of fiscal 2009, Amdocs expects that revenue will be approximately
Baharav concluded, "While these are difficult times for our industry and for Amdocs, we signed a number of important deals in the second quarter which position us well with some key customers. We are managing expenses to protect profitability and cash flow and we are investing in our future, including in R&D, so that we can continue to provide the best products and services to our industry. We believe we are well-positioned for growth when economic conditions improve."
In the second quarter Amdocs won new business with existing customers and new logos. These wins include new business in each of Amdocs' four focus areas for growth: cable/satellite, managed services, emerging markets and OSS, including the examples below.
Cable/satellite
- Amdocs signed a transformational BSS project based on the CES 7.5 portfolio with a major satellite provider in
Asia-Pacific spanning billing, ordering, CRM, self-service and partner relationship management.
Managed Services
- Clearwire selected Amdocs for a multi-year agreement for the license and implementation of Amdocs CES 7.5 products and managed services to support Clearwire's retail and wholesale business.
Emerging markets and OSS
- Instituto Costarricense de Electricidad (ICE),
Costa Rica's national service provider of telecommunications, will implement Amdocs OSS 7.5 to support ICE's OSS needs, including planning, inventory and discovery, provisioning and activation, trouble ticketing, service fulfillment and service impact analysis. - A mobile operator in
Asia-Pacific selected Amdocs OSS to support its GSM network. - Amdocs signed a new wireless customer in
Africa for a pre-paid billing solution.
Additionally, in
Free cash flow was
Twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was
Financial Outlook
Amdocs expects that revenue for the third quarter of fiscal 2009 will be approximately
Amdocs will host a conference call on
Non-GAAP Financial Measures
This release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP income taxes and non-GAAP net income. These non-GAAP measures exclude the following items:
- amortization of purchased intangible assets;
- in-process research and development write-off;
- restructuring charges;
- equity-based compensation expense; and
- tax effects related to the above.
These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs' results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs' results of operations in conjunction with the corresponding GAAP measures.
Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP income taxes and non-GAAP net income, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations, as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.
For its internal budgeting process and in monitoring the results of the business, Amdocs' management uses financial statements that do not include amortization of purchased intangible assets, in-process research and development write-off, restructuring charges, equity-based compensation expense, and related tax effects. Amdocs' management also uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these non-cash expenses in reviewing its results and those of its competitors, because the amounts of the expenses between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the expenses.
Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of service, research and development, selling, general and administrative, operating income, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments.
Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.
About Amdocs
Amdocs is the market leader in customer experience systems innovation, enabling world-leading service providers to deliver an integrated, innovative and the intentional customer experience(TM) - at every point of service. Amdocs provides solutions that deliver customer experience excellence, combining the software, service and expertise to help its customers execute their strategies and achieve service, operational and financial excellence. A global company with revenue of
This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs ability to grow in the business markets that it serves, Amdocs ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, the Company specifically disclaims any obligation to do so. These and other risks are discussed at greater length in the Company's filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended
AMDOCS LIMITED
Consolidated Statements of Income
(in thousands, except per share data)
Three months ended Six months ended
March 31, March 31,
------------------------------------------
2009 2008 2009 2008
-------- -------- ---------- ----------
Revenue:
License $ 37,203 $ 32,109 $ 81,804 $ 58,326
Service 673,881 742,172 1,383,119 1,458,205
-------- -------- ---------- ----------
711,084 774,281 1,464,923 1,516,531
Operating expenses:
Cost of license 569 938 1,560 1,712
Cost of service 455,997 493,956 940,048 964,697
Research and
development 52,750 56,088 108,979 112,103
Selling, general and
administrative 84,308 98,666 174,573 196,331
Amortization of
purchased
intangible assets 21,501 21,753 41,755 43,506
Restructuring charges
and in-process
research and
development (1) - - 20,780 -
-------- -------- ---------- ----------
615,125 671,401 1,287,695 1,318,349
-------- -------- ---------- ----------
Operating income 95,959 102,880 177,228 198,182
Interest (expense)
income and other, net (5,763) 8,822 (3,528) 17,638
-------- -------- ---------- ----------
Income before
income taxes 90,196 111,702 173,700 215,820
Income taxes 9,566 11,843 18,823 20,297
-------- -------- ---------- ----------
Net income $ 80,630 $ 99,859 $ 154,877 $ 195,523
======== ======== ========== ==========
Basic earnings per share $ 0.40 $ 0.48 $ 0.76 $ 0.94
======== ======== ========== ==========
Diluted earnings
per share(2) $ 0.39 $ 0.46 $ 0.74 $ 0.89
======== ======== ========== ==========
Basic weighted average
number of shares
outstanding 202,671 206,759 202,561 207,437
======== ======== ========== ==========
Diluted weighted average
number of shares
outstanding 209,755 219,786 211,013 220,912
======== ======== ========== ==========
(1) Restructuring charges and in-process research and development for the
six months ended March 31, 2009 includes restructuring charges of
$15,140, and in-process research and development of $5,640.
(2) To reflect the impact of assumed conversion of the convertible notes,
$622 and $1,486 representing interest expense and amortization of
issuance costs, were added back to net income for the three and six
months ended March 31, 2009, respectively, and $985 and $1,970 were
added back to net income for the three and six months ended March 31,
2008, respectively, for the purpose of computing diluted earnings per
share.
AMDOCS LIMITED
Selected Financial Metrics
(in thousands, except per share data)
Three months ended Six months ended
March 31, March 31,
------------------ ----------------------
2009 2008 2009 2008
-------- -------- ---------- ----------
Revenue $711,084 $774,281 $1,464,923 $1,516,531
Non-GAAP operating income 127,977 138,046 263,697 269,317
Non-GAAP net income 104,875 126,647 221,125 249,937
Non-GAAP diluted
earnings per share (1) $ 0.50 $ 0.58 $ 1.05 $ 1.14
Diluted weighted average
number of shares outstanding 209,755 219,786 211,013 220,912
(1) To reflect the impact of assumed conversion of the convertible notes,
$622 and $1,486 representing interest expense and amortization of
issuance costs, were added back to net income for the three and six
months ended March 31, 2009, respectively, and $985 and $1,970 were
added back to net income for the three and six months ended March 31,
2008, respectively, for the purpose of computing diluted earnings per
share.
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(in thousands)
Three months ended
March 31, 2009
-------------------------------------------------------
Reconciliation items
----------------------------------
Amortization
of purchased Equity based
intangible compensation Tax
GAAP assets expense effect Non-GAAP
------------------------------------------------------
Operating expenses:
Cost of license $ 569 $ - $ - $ - $ 569
Cost of service 455,997 - (4,950) - 451,047
Research and
development 52,750 - (977) - 51,773
Selling, general
and
administrative 84,308 - (4,590) - 79,718
Amortization of
purchased
intangible
assets 21,501 (21,501) - - -
------------------------------------------------------
Total operating
expenses 615,125 (21,501) (10,517) - 583,107
------------------------------------------------------
Operating income 95,959 21,501 10,517 - 127,977
------------------------------------------------------
Income taxes 9,566 - - 7,773 17,339
------------------------------------------------------
Net income $ 80,630 $21,501 $10,517 $(7,773) $104,875
------------------------------------------------------
Three months ended
March 31, 2008
-------------------------------------------------------
Reconciliation items
-----------------------------------
Amortization
of purchased Equity based
intangible compensation Tax
GAAP assets expense effect Non-GAAP
-------------------------------------------------------
Operating expenses:
Cost of license $ 938 $ - $ - $ - $ 938
Cost of service 493,956 - (5,431) - 488,525
Research and
development 56,088 - (1,146) - 54,942
Selling, general
and
administrative 98,666 - (6,836) - 91,830
Amortization of
purchased
intangible
assets 21,753 (21,753) - - -
-------------------------------------------------------
Total operating
expenses 671,401 (21,753) (13,413) - 636,235
-------------------------------------------------------
Operating income 102,880 21,753 13,413 - 138,046
-------------------------------------------------------
Income taxes 11,843 - - 8,378 20,221
-------------------------------------------------------
Net income $ 99,859 $21,753 $13,413 $ (8,378) $126,647
-------------------------------------------------------
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(in thousands)
Six months ended
March 31, 2009
----------------------------------------------------------
Reconciliation items
---------------------------------------
Amortization Restructuring
of charges and
purchased in-process Equity based
intangible research and compensation Tax Non-
GAAP assets development expense effect GAAP
----------------------------------------------------------
Operating expenses:
Cost of
license $ 1,560 $ - $ - $ - $ - $ 1,560
Cost of
service 940,048 - - (10,661) - 929,387
Research
and
development 108,979 - - (2,039) - 106,940
Selling,
general
and
administrative 174,573 - - (11,234) - 163,339
Amortization
of
purchased
intangible
assets 41,755 (41,755) - - - -
Restructuring
charges and
in-process
research and
development 20,780 - (20,780) - - -
----------------------------------------------------------
Total operating
expenses 1,287,695 (41,755) (20,780) (23,934) - 1,201,226
----------------------------------------------------------
Operating
income 177,228 41,755 20,780 23,934 - 263,697
----------------------------------------------------------
Income taxes 18,823 - - - 20,221 39,044
----------------------------------------------------------
Net income $154,877 $41,755 $20,780 $23,934 $(20,221) $221,125
----------------------------------------------------------
Six months ended
March 31, 2008
-------------------------------------------------------
Reconciliation items
-----------------------------------
Amortization
of purchased Equity based
intangible compensation Tax
GAAP assets expense effect Non-GAAP
--------------------------------------------------------
Operating
expenses:
Cost of
license $ 1,712 $ - $ - $ - $ 1,712
Cost of
service 964,697 - (11,713) - 952,984
Research and
development 112,103 - (2,522) - 109,581
Selling,
general
and
administrative 196,331 - (13,394) - 182,937
Amortization of
purchased
intangible
assets 43,506 (43,506) - - -
--------------------------------------------------------
Total operating
expenses 1,318,349 (43,506) (27,629) - 1,247,214
--------------------------------------------------------
Operating income 198,182 43,506 27,629 - 269,317
--------------------------------------------------------
Income taxes 20,297 - - 16,721 37,018
--------------------------------------------------------
Net income $ 195,523 $43,506 $27,629 $(16,721) $ 249,937
--------------------------------------------------------
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(in thousands)
As of
-------------------------
March 31, September 30,
2009 2008
---------- ------------
ASSETS
Current assets
Cash, cash equivalents and short-term
interest-bearing investments $1,334,856 $1,244,378
Accounts receivable, net, including unbilled
of $42,323 and $48,264 respectively 506,685 573,764
Deferred income taxes and taxes receivable 98,843 84,515
Prepaid expenses and other current assets 96,371 102,930
---------- ----------
Total current assets 2,036,755 2,005,587
Equipment and leasehold improvements, net 292,261 317,081
Goodwill and other intangible assets, net 1,809,335 1,796,922
Other noncurrent assets 426,361 459,473
---------- ----------
Total assets $4,564,712 $4,579,063
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accruals $ 525,917 $ 600,285
Short-term portion of financing arrangements 3,660 1,660
Deferred revenue 155,553 197,851
Deferred income taxes and taxes payable 31,265 30,228
---------- ----------
Total current liabilities 716,395 830,024
0.50% Convertible notes 1,020 450,000
Long-term loan 450,000 -
Noncurrent liabilities and other 439,651 493,848
Shareholders' equity 2,957,646 2,805,191
---------- ----------
Total liabilities and shareholders' equity $4,564,712 $4,579,063
========== ==========
AMDOCS LIMITED
Consolidated Statements of Cash Flows
(in thousands)
Six months ended March 31,
-------------------------
2009 2008
-------- --------
Cash Flow from Operating Activities:
Net income $154,877 $195,523
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 98,491 94,202
In-process research and development 5,640 -
Loss on sale of equipment - 65
Equity-based compensation expense 23,934 27,629
Deferred income taxes 11,258 (4,255)
Gain on repurchase of convertible notes (2,185) -
Excess tax benefit from equity-based
compensation (2) (87)
Loss from short-term interest-bearing
investments 4,991 1,755
Net changes in operating assets and
liabilities, net of amounts acquired:
Accounts receivable 67,244 (125,634)
Prepaid expenses and other current assets 5,905 (4,624)
Other noncurrent assets 21,725 (24,963)
Accounts payable, accrued expenses and
accrued personnel (61,315) (11,079)
Deferred revenue (49,005) 30,817
Income taxes payable (15,932) (4,694)
Noncurrent liabilities and other (44,027) 15,790
-------- --------
Net cash provided by operating activities 221,599 190,445
-------- --------
Cash Flow from Investing Activities:
Proceeds from sale of equipment and
leasehold improvements 340 673
Payments for purchase of equipment and
leasehold improvements (47,818) (69,126)
Proceeds from sale of short-term
interest-bearing investments 323,234 360,297
Purchase of short-term interest-bearing
investments (376,579) (301,260)
Net cash paid for acquisition (61,855) (9,242)
-------- --------
Net cash used in investing activities (162,678) (18,658)
-------- --------
Cash Flow from Financing Activities:
Borrowing under long-term financing
arrangements 450,000 -
Redemption of convertible notes (330,780) -
Repurchase of convertible notes (116,015) -
Repurchase of shares (20,014) (122,441)
Proceeds from employee stock options
exercised 1,797 15,736
Borrowing under short-term financing
arrangements 540 -
Payments under capital lease financing
arrangements (950) -
Excess tax benefit from equity-based
compensation 2 87
-------- --------
Net cash used in financing activities (15,420) (106,618)
-------- --------
Net increase in cash and cash equivalents 43,501 65,169
Cash and cash equivalents at beginning of
period 718,850 615,501
-------- --------
Cash and cash equivalents at end of period $762,351 $680,670
======== ========
AMDOCS LIMITED
Supplementary Information
(in millions)
-------------------------------------------------------
Three months ended
-------------------------------------------------------
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
--------- ------------ ------------- -------- ---------
North America $539.8 $561.6 $558.7 $570.5 $541.5
Europe 105.0 111.4 150.9 133.0 135.8
Rest of World 66.3 80.8 115.7 116.8 97.0
--------- ------------ ------------- -------- ---------
Total Revenue $711.1 $753.8 $825.3 $820.3 $774.3
========= ============ ============= ======== =========
-------------------------------------------------------
Three months ended
-------------------------------------------------------
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
--------- ------------ ------------- -------- ---------
Customer
Experience
Systems $668.0 $701.0 $756.5 $756.9 $708.2
Directory 43.1 52.8 68.8 63.4 66.1
--------- ------------ ------------- -------- ---------
Total Revenue $711.1 $753.8 $825.3 $820.3 $774.3
========= ============ ============= ======== =========
-------------------------------------------------------
As of
-------------------------------------------------------
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
--------- ------------ ------------- -------- ---------
12-Month Backlog $2,370 $2,400 $2,420 $2,420 $2,360
--------- ------------ ------------- -------- ---------
SOURCE Amdocs Limited
RELATED LINKS
http://www.amdocs.com
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