2014

Concur's Fourth Quarter and Fiscal 2009 Results Exceed Expectations 15% top line growth and 33% Non-GAAP EPS growth in fiscal 2009 driven by robust client demand

REDMOND, Wash., Nov. 17 /PRNewswire-FirstCall/ -- Concur (Nasdaq: CNQR), the world's leading provider of on-demand Employee Spend Management services, today reported financial results for its fourth quarter ended September 30, 2009.

Concur reported total revenue for the fourth quarter of fiscal 2009 of $64.8 million, driven by subscription revenue which was up 13% from the year-ago quarter. Total revenue for the quarter was also up 13% from the year-ago quarter. Fiscal 2009 fourth quarter net income was $5.9 million, or $0.11 per share, exceeding company expectations. This compares to net income of $5.6 million, or $0.11 per share, in the year-ago quarter.

"We are very pleased with fiscal fourth quarter performance as we exceeded expectations for revenue, earnings and free cash flow. For the year as a whole, we grew revenue 15% and non-GAAP EPS 33%, even as unemployment nearly doubled and travel budgets saw unprecedented declines," said Steve Singh, chairman and CEO of Concur. "Throughout the year, new customer growth remained strong and we finished the fiscal year with the strongest quarter for new customer growth in our history."

Singh continued, "Against the backdrop of an economic environment that is continuing to stabilize, we expect year-over-year revenue growth rates to modestly trend up in the first half of fiscal 2010 and more substantially trend up in the second half of fiscal 2010. Given the large-scale opportunity in front of us, we are accelerating investments across the business to execute on our core objectives of expanding distribution, driving innovation in our industry, and setting the bar for service excellence."

Financial Highlights

  • Total revenue was $64.8 million for the fourth quarter of fiscal 2009, up 13% compared to the year-ago quarter, and up 4% sequentially. Total subscription revenue was $62.9 million for the fourth quarter of fiscal 2009, up 13% compared to the year-ago quarter, and up 3% sequentially.
  • Total revenue was $247.6 million for fiscal 2009, up 15% year-over-year. Total subscription revenue was $239.2 million for fiscal 2009, up 16% year-over-year.
  • Net income was $5.9 million, or $0.11 per share, for the fourth quarter of fiscal 2009, compared to $5.6 million, or $0.11 per share, for the year-ago quarter.
  • Net income was $25.7 million, or $0.50 per share, for fiscal 2009, compared to $17.2 million, or $0.35 per share, for fiscal 2008.
  • Non-GAAP pretax income was $15.0 million, or $0.29 per share, for the fourth quarter of fiscal 2009, compared to $12.3 million, or $0.24 per share, for the year-ago quarter. Please refer to "About Concur's Non-GAAP Financial Measures" below for an explanation of our non-GAAP financial measures used in this press release.
  • Non-GAAP pretax income was $58.9 million, or $1.14 per share, for fiscal 2009, compared to $41.7 million, or $0.86 per share, for fiscal 2008.
  • Non-GAAP operating margin was 23% for the fourth quarter of fiscal 2009, up from 20% the year-ago quarter.
  • Non-GAAP operating margin was 23% for fiscal 2009, up from 19% in fiscal 2008.
  • Cash flows from operations were $20.4 million for the fourth quarter of fiscal 2009, down 10% from the year-ago quarter.
  • Cash flows from operations were $66.0 million for fiscal 2009, up 3% year-over-year.

Recent Business Highlights

  • Concur announced that it signed a unique content agreement with Southwest Airlines, which gives Concur® Travel & Expense clients unrivaled direct access to Southwest Airlines fares and schedules.
  • Concur released Concur® Mobile for iPhone on the Apple App Store. Also available for BlackBerry and Windows Mobile devices, this powerful extension of Concur Travel & Expense lets mobile workers change flights; book taxis, hotels or dining; capture expenses; and approve expense reports - all from their hand-held device - within policy while on the road.
  • Concur announced that Concur Travel & Expense clients can now enjoy the convenience, security and accuracy of detailed Starwood hotel folio data delivered directly into the employee's expense report.
  • Concur announced strong growth in EMEA, with headcount growing 75% across sales, marketing, R&D and operations during the fiscal year, fueled by new customer growth, a solid demand environment for Concur's services, and the acquisition of Etap-On-Line, a leading European provider of business travel and expense management solutions based in Paris, France.
  • Concur showcased powerful new travel management capabilities available exclusively to Concur Travel & Expense clients - including configurable message board, enhanced fare views, full TSA compliance and more - at the NBTA Convention in San Diego.
  • Concur ranked 57th on Forbes Magazine's list of 2009's 200 Best Small Companies.
  • Concur® Cliqbook Travel leads the U.S. corporate online booking tool market with 35% share, according to the U.S. Corporate Travel Distribution report published by industry research firm PhoCusWright.

Business Outlook

The following statements are based on our current expectations and we do not undertake any duty to update them. These statements are forward-looking and inherently uncertain. Actual results may differ materially as a result of the factors identified below, the factors identified in our public filings made with the Securities and Exchange Commission, or other factors. Please also refer to "About Concur's Non-GAAP Financial Measures" below for an explanation of our non-GAAP financial measures and a reconciliation of those measures to GAAP equivalents.

  • Concur expects earnings per share for the first quarter of fiscal 2010 to be $0.11, assuming an estimated effective tax rate of 36.5%, and non-GAAP pre-tax earnings per share to be $0.27.
  • Concur expects earnings per share for fiscal 2010 to be $0.52, assuming an estimated effective tax rate of 36.5%, and non-GAAP pre-tax earnings per share to be $1.27.
  • Concur expects the fiscal 2010 non-GAAP operating margin to be 23% or more for the year as a whole.
  • Concur expects cash flows from operations in fiscal 2010 to be between $71 million and $74 million, and capital expenditures of approximately $16 million.

About Concur

Concur is the world's leading provider of on-demand Employee Spend Management services. Trusted by thousands of organizations to reach millions of employees, Concur's award-winning solutions streamline business travel and expense reporting, and improve invoice processing - delivering rapid ROI by helping companies increase efficiency, control employee spend and drive down operational costs. Learn more at www.concur.com.

All company or product names are trademarks and/or registered trademarks of their respective owners.

This press release contains forward-looking statements that are inherently uncertain. These forward-looking statements, such as the statements made by Mr. Singh, are based on Concur's current expectations and involve many risks and uncertainties that could cause actual results to differ materially from current expectations. Factors that could cause or contribute to actual results differing from current expectations include, but are not limited to: adverse economic or market conditions, such as the current economic downturn, which may cause customers and prospects to delay or reduce purchases of our products and services, cause customers to reduce business travel and correspondingly reduce the use of our products and services, reduce the ability of customers, channel partners, vendors and suppliers to fulfill their obligations to us, increase volatility of our stock price and foreign exchange rates, and otherwise adversely affect our operations and financial performance; potential difficulties associated with our realization of the benefits related to our acquisition of Etap-On-Line; potential difficulties associated with our realization of the benefits related to our business relationship with American Express; potential delays in market adoption and penetration of our subscription service offerings; potential difficulties associated with our deployment and support of our products and services; our ability to manage expected growth of our subscription service offerings; the scalability of the hosting infrastructure for our subscription service offerings; potential increases in the rate of attrition of customers of our subscription service offerings; the level of investment in information technology by our customers; the level of business travel that may reduce the use of our products and services or inhibit new sales of our products and services; potential difficulties associated with strategic relationships and with development of new products and services; risks associated with expansion into new geographic markets; the lengthy sales cycle for our products and services; and uncertain market acceptance of recently-introduced or future products and services.

Please refer to the company's public filings made with the Securities and Exchange Commission at www.sec.gov for additional and more detailed information on risk factors that could cause actual results to differ materially from current expectations. Concur assumes no obligation to update the forward-looking information contained in this press release.

                          Concur Technologies, Inc.
                              Income Statements
                    (In thousands, except per share data)
                                 (Unaudited)

                                       Three Months
                                           Ended           Year Ended
                                       September 30,      September 30,
                                       -------------      -------------
                                       2009     2008      2009      2008
                                       ----     ----      ----      ----

    Revenues:
      Subscription                  $62,895  $55,689  $239,189  $206,304
      Consulting and other            1,920    1,858     8,407     9,187
                                      -----    -----     -----     -----
    Total revenues                   64,815   57,547   247,596   215,491

    Expenses (1):
      Cost of operations             19,683   17,392    75,625    68,378
      Sales and marketing            20,129   17,369    73,459    59,912
      Systems development and
       programming                    7,094    5,812    25,295    22,974
      General and administrative      6,783    8,330    27,603    31,371
      Amortization of intangible
       assets                         1,772    1,541     6,396     6,196
                                      -----    -----     -----     -----
    Total expenses                   55,461   50,444   208,378   188,831
                                     ------   ------   -------   -------

    Operating income                  9,354    7,103    39,218    26,660

    Other income (expense):
      Interest income                   309    1,136     2,149     1,720
      Interest expense                 (108)    (215)     (481)   (1,417)
      Other, net                       (206)    (315)     (598)     (486)
                                       ----     ----      ----      ----
    Total other (expense) income         (5)     606     1,070      (183)
                                         --      ---     -----      ----

    Income before income tax          9,349    7,709    40,288    26,477

    Income tax expense                3,473    2,067    14,611     9,293

                                     ------   ------   -------   -------
    Net income                       $5,876   $5,642   $25,677   $17,184
                                     ======   ======   =======   =======

    Net income per share available
     to common stockholders:
      Basic                           $0.12    $0.12     $0.53     $0.39
      Diluted                          0.11     0.11      0.50      0.35

    Weighted average shares used in
     computing net income per share:
      Basic                          48,787   47,742    48,652    44,607
      Diluted                        52,247   51,601    51,740    48,459

    ------------------------

    (1) Includes share-based
     compensation as follows:
      Cost of operations               $568     $517    $1,829    $1,688
      Sales and marketing             1,908    1,064     5,517     3,404
      Systems development and
       programming                      528      392     1,815     1,149
      General and administrative        906    1,045     3,011     2,738
                                        ---    -----     -----     -----
        Total share-based
         compensation                $3,910   $3,018   $12,172    $8,979
                                     ======   ======   =======    ======



                            Concur Technologies, Inc.
                                  Balance Sheets
                     (In thousands, except per share amounts)
                                   (Unaudited)

                                                              September 30,
                                                              -------------
                                                              2009      2008
                                                              ----      ----

    Assets

    Current assets:
      Cash and cash equivalents                           $119,185  $267,725
      Short-term investments                               143,549         -
      Restricted cash                                        3,599     3,055
      Accounts receivable, net of allowance of $3,680
       and $5,543                                           45,801    38,479
      Prepaid expenses                                       3,963     3,160
      Deferred tax assets                                   24,570    14,289
      Deferred costs and other assets                       15,016    14,104
                                                            ------    ------
        Total current assets                               355,683   340,812
    Non-current assets:
      Property and equipment, net                           33,999    32,304
      Investments                                            4,045         -
      Deferred costs and other assets                       19,964    16,067
      Intangible assets, net                                44,383    39,108
      Deferred tax assets                                   23,904    47,257
      Goodwill                                             188,907   165,471
                                                           -------   -------
    Total assets                                          $670,885  $641,019
                                                          ========  ========

    Liabilities and stockholders' equity

    Current liabilities:
      Accounts payable                                      $3,638    $4,198
      Customer funding liabilities                          56,424    22,470
      Accrued compensation                                  17,508    18,308
      Acquisition-related liabilities                          902     2,036
      Other accrued expenses and liabilities                10,539     8,442
      Short-term debt                                        1,129     1,505
      Deferred revenues                                     34,955    29,572
                                                            ------    ------
        Total current liabilities                          125,095    86,531
    Non-current liabilities:
      Long-term debt                                           199     1,328
      Deferred rent                                          1,601     2,126
      Deferred revenues                                     14,083    12,511
      Tax liabilities                                        8,577     3,985
                                                             -----     -----
    Total liabilities                                      149,555   106,481
                                                           -------   -------

    Commitments and contingencies

    Stockholders' equity:
      Convertible preferred stock, par value $0.001 per
       share                                                     -         -
        Authorized shares: 5,000; No shares issued or
         outstanding
      Common stock, $0.001 par value per share                  49        50
        Authorized shares: 195,000
        Shares issued and outstanding: 48,988 and 50,286
      Additional paid-in capital                           640,911   679,526
      Accumulated deficit                                 (119,151) (144,828)
      Accumulated other comprehensive loss                    (479)     (210)
                                                              ----      ----
    Total stockholders' equity                             521,330   534,538
                                                           -------   -------
    Total liabilities and stockholders' equity            $670,885  $641,019
                                                          ========  ========



                            Concur Technologies, Inc.
                              Cash Flow Statements
                                 (In thousands)
                                   (Unaudited)

                                      Three Months Ended      Year Ended
                                         September 30,       September 30,
                                      ------------------     -------------
                                         2009      2008      2009      2008
                                         ----      ----      ----      ----

    Operating activities:
    Net income                         $5,876    $5,642   $25,677   $17,184
    Adjustments to reconcile net
     income to net cash provided by
     operating activities:
      Amortization of intangible
       assets                           1,772     1,541     6,396     6,196
      Depreciation                      4,065     3,889    16,348    15,080
      Allowance for uncollectible
       accounts receivable               (486)     (367)   (1,862)    1,473
      Share-based compensation expense  3,910     3,018    12,172     8,979
      Deferred income taxes             3,956     2,469    13,485     9,108
      Changes in operating assets and
       liabilities, net of effects from
       acquisition:
        Accounts receivable            (1,258)      381       403     1,347
        Prepaid expenses and other
         assets                        (3,652)   (2,856)   (7,880)   (5,511)
        Accounts payable                 (170)      945    (1,021)     (272)
        Accrued liabilities             5,473     6,900    (2,375)    1,224
        Deferred revenues                 915     1,113     4,629     9,013
                                          ---     -----     -----     -----
    Net cash provided by operating
     activities                        20,401    22,675    65,972    63,821
                                       ------    ------    ------    ------
    Investing activities:
      Purchases of investments        (39,832)        -  (167,414)        -
      Maturities of investments        24,000         -    24,000         -
      Increase (decrease) in
       customer funding liabilities,
       net of changes in
       restricted cash                 12,528      (478)   33,383       987
      Investment in unconsolidated
       affiliate                            -         -    (4,045)        -
      Purchases of property and
       equipment                       (2,903)   (3,309)  (17,251)  (13,040)
      Payments for acquisition, net
       of cash acquired               (24,731)      (36)  (26,595) (163,178)
                                      -------       ---   -------  --------
    Net cash used in investing
     activities                       (30,938)   (3,823) (157,922) (175,231)
                                      -------    ------  --------  --------
    Financing activities:
      Proceeds (payments) for
       issuance of common stock, net        -   249,590    (2,829)  249,590
      Net proceeds from share-based
       award activity                     367     5,546     2,556    11,155
      Proceeds from employee stock
       purchase plan activity             286       329     1,175     1,175
      Payments on repurchase of
       common stock                         -         -   (54,773)  (43,763)
      Net payments under revolving
       credit facility                      -   (24,559)        -    (5,370)
      Repayments of debt and
       capital leases                    (265)     (424)   (1,366)   (1,671)
                                         ----      ----    ------    ------
    Net cash provided by (used in)
     financing activities                 388   230,482   (55,237)  211,116
                                          ---   -------   -------   -------
      Effect of foreign currency
       exchange rate changes on cash
       and cash equivalents               379    (1,515)   (1,353)     (816)
                                          ---    ------    ------      ----
    Net (decrease) increase in cash
     and cash equivalents              (9,770)  247,819  (148,540)   98,890
    Cash and cash equivalents at
     beginning of period              128,955    19,906   267,725   168,835
                                      -------    ------   -------   -------
    Cash and cash equivalents at
     end of period                   $119,185  $267,725  $119,185  $267,725
                                     ========  ========  ========  ========



              Reconciliation of GAAP to Non-GAAP Financial Measures
                 (In thousands, except per share and margin data)
                                    (Unaudited)

                                              Three Months
                                                  Ended          Year Ended
                                              September 30,     September 30,
                                              -------------     -------------
                                              2009     2008     2009     2008
                                              ----     ----     ----     ----

    Operating income:
      Operating income                      $9,354   $7,103  $39,218  $26,660
      Income from operations as a % of
       total revenue (Operating Margin)         14%      12%      16%      12%
      Add back:
        Share-based compensation expense     3,910    3,018   12,172    8,979
        Amortization of intangible assets    1,772    1,541    6,396    6,196
                                             -----    -----    -----    -----
      Non-GAAP operating income            $15,036  $11,662  $57,786  $41,835
                                           =======  =======  =======  =======
        Non-GAAP operating income as a %
         of total revenue (Non-GAAP
         Operating Margin)                      23%      20%      23%      19%

    Net income:
      Net income                            $5,876   $5,642  $25,677  $17,184
      Add back:
        Share-based compensation expense     3,910    3,018   12,172    8,979
        Amortization of intangible assets    1,772    1,541    6,396    6,196
        Income tax expense                   3,473    2,067   14,611    9,293
                                             -----    -----   ------    -----
      Non-GAAP pre-tax income              $15,031  $12,268  $58,856  $41,652
                                           =======  =======  =======  =======

    Diluted net income per share:
      Diluted net income per share           $0.11    $0.11    $0.50    $0.35
      Add back:
        Share-based compensation expense      0.08     0.06     0.24     0.19
        Amortization of intangible assets     0.03     0.03     0.12     0.13
        Income tax expense                    0.07     0.04     0.28     0.19
                                              ----     ----     ----     ----
      Non-GAAP pre-tax diluted income per
       share                                 $0.29    $0.24    $1.14    $0.86
                                             =====    =====    =====    =====

    Shares used in calculation of diluted
     non-GAAP income per share:             52,247   51,601   51,740   48,459



CONCUR TECHNOLOGIES, INC.

About Concur's Non-GAAP Financial Measures

This release contains non-GAAP financial measures. The tables above reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with accounting principles generally accepted in the United States ("GAAP").

Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Concur's non-GAAP financial measures do not reflect a comprehensive system of accounting, and they differ from GAAP measures with similar names and from non-GAAP financial measures with the same or similar names that are used by other companies. We strongly urge investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release, and our consolidated financial statements, including the notes thereto, and the other financial information contained in our periodic filings with the Securities and Exchange Commission and not to rely on any single financial measure to evaluate our business.

Concur's management believes that its non-GAAP financial measures provide useful information to investors because it allows investors to view the business through the eyes of management. Further, Concur believes that its non-GAAP financial measures provide meaningful supplemental information regarding Concur's operating results because they exclude amounts that Concur excludes as part of its monitoring of operating results and assessing the performance of the business. In addition, Concur believes that its non-GAAP financial measures facilitate the comparison of results for current periods and the business outlook for future periods with results of past periods because the measures provide a special focus on the underlying operating performance of the business relative to expectations.

Concur presents the following non-GAAP financial measures in this release: non-GAAP operating income; non-GAAP operating margin; non-GAAP pre-tax income and non-GAAP pre-tax diluted income per share. Concur excludes the following items as noted from these non-GAAP financial measures:

  • Share-based compensation. Concur's non-GAAP financial measures exclude share-based compensation, which consist of expenses for stock options and restricted stock units ("RSU") that it records under the provisions of Statement of Financial Accounting Standard No. 123(R). Concur excludes these expenses from its non-GAAP financial measures primarily because they are non-cash expenses that it does not consider part of ongoing operating results when assessing the performance of our business, and the exclusion of these expenses facilitates the comparison of results and business outlook for future periods with results for prior periods.
  • Amortization of intangible assets. In accordance with GAAP, operating expenses include amortization of software and other technology assets, other purchased intangible assets such as customer lists and covenants not to compete. Concur excludes these items from its non-GAAP financial measures because they are non-cash expenses that Concur does not consider part of ongoing operating results when assessing the performance of our business, and Concur believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry, which have their own unique acquisition histories.
  • Income tax expense. Concur excludes this expense from its non-GAAP financial measures primarily because it is largely a non-cash expense that Concur does not consider a meaningful component of our operating results when assessing the performance of our business, and the exclusion of this expense facilitates the comparison of our business outlook for future periods with results for prior periods, which did not include income tax expense.

Except as noted below, Concur believes that all of the following considerations apply equally to each of the non-GAAP financial measures that we present:

  • Concur's management uses non-GAAP operating income (including the derived non-GAAP operating margin), non-GAAP pre-tax income, and non-GAAP pre-tax diluted income per share in internal reports used by management in monitoring and making decisions regarding Concur's business. For example, these measures are used in monthly financial reports prepared for management, and in quarterly reports to Concur's Board of Directors. Concur also uses non-GAAP pre-tax diluted income per share as a measure to determine executive cash incentive compensation, along with GAAP measures, such as revenue.
  • Because share-based compensation, amortization of intangible assets and income tax expense are largely non-cash in nature, Concur believes that non-GAAP operating income, non-GAAP pre-tax income and non-GAAP pre-tax diluted income per share provide a more focused view of the operations of its business. In particular, share-based compensation expense amounts are difficult to forecast, because the magnitude of the charges depends upon the volume and timing of stock option and RSU grants - which are unpredictable and can vary dramatically from period to period - and external factors such as interest rates and the trading price and volatility of Concur's common stock. Excluding these amounts improves comparability of the performance of the business across periods.
  • The principal limitation of Concur's non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded. In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures.
  • To mitigate this limitation, Concur presents its non-GAAP financial measures in connection with its GAAP results, and recommends that investors do not give undue weight to its non-GAAP financial measures. Concur notes that the dilutive effect of outstanding stock options is reflected in fully-diluted shares outstanding used in calculating both GAAP net income per share and our non-GAAP pre-tax diluted income per share.

SOURCE Concur



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