CAMBRIDGE, England, October 23 /PRNewswire-FirstCall/ --
- Autonomy's third quarter conference call will be available live at http://www.autonomy.com on October 23, 2007 , at 9:30 a.m. BST / 4:30 a.m. EST / 1:30 a.m. PST .
Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software, today reported financial results for the third quarter and nine months ended September 30, 2007 .
Financial Highlights Three Months Ended Nine months Ended (unaudited) (unaudited) Sept.30, Sept.30, Sept. 30, Sept. 30, 2007 2006 2007 2006 Results in US$ ($'000s except per $'000 $'000 $'000 $'000 share) Revenues 89,569 60,234 228,299 177,330 Gross profit (adjusted)* 76,449 54,532 203,473 160,589 Gross profit margin (adjusted)* 85% 91% 89% 91% Profit from operations (adjusted)* 23,765 15,672 67,675 43,580 Profit before tax (adjusted)* 24,942 15,918 71,913 43,869 Net profit (adjusted)* 16,639 10,697 48,795 29,527 Gross profit (IFRS) 72,761 52,629 196,049 154,546 Gross profit margin (IFRS) 81% 87% 86% 87% Profit from operations (IFRS) 17,518 12,956 55,521 34,239 Profit before tax (IFRS) 18,282 13,202 58,541 34,528 Net profit (IFRS) 12,196 8,872 39,722 23,231 EPS - basic (adjusted)* $0.08 $0.06 $0.25 $0.16 - diluted (adjusted)* $0.08 $0.06 $0.24 $0.16 - basic (IFRS) $0.06 $0.05 $0.20 $0.13 - diluted (IFRS) $0.06 $0.05 $0.20 $0.12* Adjusted results exclude the share of loss of associates, post-acquisition restructuring costs and non-cash charges, namely the amortization of purchased intangibles, share-based compensation and non-cash translational foreign exchange gains and losses and associated tax effects. See reconciliations on page 5.
Nine Month 2007 Highlights
- Record nine months revenues, up 29% from 2006 including strong organic growth and the contribution from ZANTAZ
- Record profit from operations (IFRS) up 62% from 2006 - Record profit before tax (IFRS), up 70% from 2006 - Record EPS (adjusted) at $0.24, up 53% from 2006 - Gross margins (adjusted) at 89% - Positive cash flow generated by operations of
- Average selling price for meaning-based technologies at
- Blue chip third quarter wins include Boeing, InfoUSA, International Monetary Fund, Oracle, Shell, U.K. Patent Office, Northrop Grumman, Wolters Kluwer, Edgar Online, Toyota.com, Bank of Canada , Norsk Hydro, NYSE, Canon, Dell, News Corp. and Osaka Gas, as well as new and repeat licenses with multiple government, defence and intelligence agencies around the globe such as the U.S., including the US Marine Corps, US Navy, US Department of Defense and US Department of Energy, Italy , UK, Singapore , Colombia and the Netherlands .
- 13 OEM deals signed including new deals and extensions with Oracle, CaseCentral, Kana, Cisco and FatWire
- Positive cash flow generated by operations of
- 31st consecutive quarter of profitability
Commenting on the results, Dr. Mike Lynch , Group CEO of Autonomy said today: "We are pleased to announce our record third quarter and nine month 2007 results which show strong year-on-year growth in all metrics. These results are in line with consensus revenue and profit estimates, despite Q3 seasonally being our quietest quarter and the considerable amount of work involved in integrating the ZANTAZ acquisition. These record results once again bear testament to our unmatched market leadership position."
Dr. Lynch concluded, "Autonomy's dominance in this space is being demonstrated by our almost complete ownership of the OEM market and enterprise-level procurements. The regulatory drivers of FRCP are convincing our customers of the need for integrated operational and information risk management systems. The success of the ZANTAZ acquisition, the integration of which is mainly complete ahead of schedule, continues to demonstrate the fundamental nature of issues relating to unstructured information and the growth opportunities in the marketplace. Autonomy remains extremely well positioned to capitalize on these market opportunities and continue growth."
Third Quarter and Nine Month Financial Highlights
Revenues for the third quarter of 2007 totalled
Gross profits (adjusted) for the third quarter of 2007 were
Net profit (adjusted) for the third quarter of 2007 was
Net profit (adjusted) for the nine months ended September 30, 2007 was
Cash balances were
Receivables for the third quarter of 2007 were
Although IFRS disclosure provides investors and management with an overall view of Autonomy's financial performance, Autonomy believes that it is important for investors to also understand the performance of Autonomy's fundamental business without giving effect to certain specific, non-recurring and non-cash charges. Consequently, the non-IFRS (adjusted) results exclude post-acquisition restructuring costs, share of loss of associates and non-cash charges for the amortization of purchased intangibles, share-based compensation, foreign exchange gains and losses and associated tax effects. Management uses the adjusted results to assess the financial performance of Autonomy's operational business activities.
Q3 Product Sales
Autonomy's infrastructure technology has been adopted by enterprises to process information across all internal and external data formats and sources. During the third quarter of 2007, major customer wins included: Boeing, InfoUSA, Dell, News Corp., Visible, International Monetary Fund, Oracle, Perceptive Software, Shell, U.K. Patent Office, Northrop Grumman, Cox Communications, Wolters Kluwer, Edgar Online, Toyota.com, Bank of Canada , Norsk Hydro, NYSE, Canon, and Osaka Gas. Q3 2007 business also included new and repeat licenses with multiple government, defence and intelligence agencies around the globe such as the U.S., including the US Marine Corps, US Navy, US Department of Defense and US Department of Energy, Italy , UK, Singapore , Colombia and the Netherlands . Repeat business from existing customers accounted for approximately 38% of revenue for the quarter.
Strategic Partnerships and OEMs
Autonomy's OEM Program continued to grow during Q3 2007. Agreements were signed with 13 customers during the quarter, including new and extended agreements with Oracle, CaseCentral, Kana, Cisco and FatWire.
Corporate Developments
During the third quarter of 2007 Autonomy announced and completed the
acquisition of ZANTAZ, Inc., a global leader in content archiving and
electronic discovery solutions and software as a service, for a purchase
price of approximately
During the third quarter of 2007 Autonomy continued to extend its market leadership with the introduction of key new and upgraded technologies. During the quarter ZANTAZ unveiled its plans for the next generation of Digital Safe, its consolidated archiving Software as a Service solution, powered by Autonomy's advanced IDOL and IDOL Speech technologies to provide a full spectrum of Proactive Information Management capabilities. Autonomy announced the immediate availability of the Autonomy Business Console, an intuitive and easy-to-use interface to the company's IDOL platform for e-Commerce. Autonomy etalk announced it is revolutionizing the ability to analyze contact center interactions through a unique combination of innovative speech technology and multi-channel interaction analysis software, the expansion of its advanced call and computer screen recording security features to exceed the highest industry standards, and the availability of an off-site hosted archiving solution for storing, managing, and retrieving critical customer call recordings.
During the third quarter Autonomy was recognized in multiple ways for its market leadership and unmatched technology. Recognition during the quarter included: Industry analyst group Gartner, Inc. positioned Autonomy in the Leaders Quadrant of its 2007 Information Access Technology Magic Quadrant Report based on Autonomy's "Ability to Execute" and "Completeness of Vision"; KMWorld magazine selected Autonomy's IDOL Enterprise Desktop Search technology as a "2007 Trendsetter"; Gartner, Inc. awarded Autonomy etalk a "Strong Positive" rating in the 2007 MarketScope for Contact Center Quality Management report, the highest ranking possible; Speech Technology Magazine recognized Autonomy etalk as a Market Leader in speech analytics; and Technology Marketing Corporation's Customer Interaction Solutions magazine named Autonomy etalk's Qfiniti VoIP recording technology as a recipient of a 2007 IP Contact Center Technology Pioneer Award.
About Autonomy Corporation plc
Autonomy Corporation plc (LSE: AU. or AU.L) is a global leader in infrastructure software for the enterprise and is spearheading the meaning-based computing movement. Autonomy's technology forms a conceptual and contextual understanding of any piece of electronic data including unstructured information, be it text, email, voice or video. Autonomy's software powers the full spectrum of mission-critical enterprise applications including information access technology, BI, CRM, KM, call center solutions, rich media management, information risk management solutions and security applications, and is recognized by industry analysts as the clear leader in enterprise search.
Autonomy's customer base comprises of more than 17,000 global companies and organizations including: 3, ABN AMRO, AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Daimler Chrysler, Deutsche Bank, Ericsson, Ford, GlaxoSmithKline, Kraft Foods, Lloyd TSB, NASA, Nestle, the New York Stock Exchange, Reuters, Shell, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission. Autonomy also has over 300 OEM partners and more than 400 VARs and Integrators, numbering among them leading companies such as BEA, Business Objects, Citrix, EDS, IBM Global Services, Novell, Satyam, Sybase, Symantec, TIBCO, Vignette and Wipro. The company has offices worldwide.
The Autonomy Group includes: ZANTAZ, the leader in the archiving, e-Discovery and Proactive Information Risk Management (IRM) markets; Cardiff , a leading provider of Intelligent Document solutions; etalk, award-winning provider of enterprise-class contact center products and Virage, a visionary in rich media management and security and surveillance technology.
Autonomy and the Autonomy logo are registered trademarks or trademarks of Autonomy Corporation plc. All other trademarks are the property of their respective owners. Autonomy Corporation plc Consolidated Income Statement (in thousands, except per share amounts) Three Months Ended Nine months Ended (unaudited) (unaudited) Sept.30, Sept.30, Sept. 30, Sept. 30, 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Revenues 89,569 60,234 228,299 177,330 Cost of revenues (excl. amortisation) (13,120) (5,702) (24,826) (16,741) Amortization of purchased intangibles (3,688) (1,903) (7,424) (6,043) Total cost of revenues (16,808) (7,605) (32,250) (22,784) Gross profit 72,761 52,629 196,049 154,546 Operating expenses: Research and development (17,221) (13,162) (43,894) (37,782) Sales and marketing (27,218) (20,651) (72,978) (64,160) General and administrative (9,264) (5,851) (21,578) (18,077) Other costs Post-acquisition restructuring costs (1,132) - (1,132) - Loss on foreign exchange (408) (9) (946) (288) Total operating expenses (55,243) (39,673) (140,528) (120,307) Profit from operations 17,518 12,956 55,521 34,239 Share of loss of associate (413) - (1,218) - Interest receivable 1,896 913 5,943 2,305 Interest payable (719) (667) (1,705) (2,016) Profit before income taxes 18,282 13,202 58,541 34,528 Income taxes (6,086) (4,330) (18,819) (11,297) Net profit 12,196 8,872 39,722 23,231 Basic earnings per share $ 0.06 $ 0.05 $ 0.20 $ 0.13 Diluted earnings per share $ 0.06 $ 0.05 $ 0.20 $ 0.12 Weighted average number of ordinary shares outstanding 209,665 185,259 197,610 183,553 Weighted average number of ordinary shares outstanding, assuming dilution 212,933 187,581 200,603 186,119 Reconciliation of Adjusted Financial Measures Three Months Ended Nine months Ended (unaudited) (unaudited) Sept.30, Sept.30, Sept. 30, Sept. 30, 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Gross profit 72,761 52,629 196,049 154,546 Amortization of purchase intangibles 3,688 1,903 7,424 6,043 Gross profit (adjusted) 76,449 54,532 203,473 160,589 Profit before income taxes 18,282 13,202 58,541 34,528 Loss on foreign exchange 408 9 946 288 Amortization of purchased intangibles 3,688 1,903 7,424 6,043 Share of loss of associate 413 - 1,218 - Share-based compensation (see note 4) 1,019 804 2,652 3,010 Post-acquisition restructuring costs 1,132 - 1,132 - Profit before tax (adjusted) 24,942 15,918 71,913 43,869 Provision for income taxes (8,303) (5,221) (23,118) (14,342) Net profit (adjusted) 16,639 10,697 48,795 29,527 Profit from operations 17,518 12,956 55,521 34,239 Loss on foreign exchange 408 9 946 288 Amortization of purchased intangibles 3,688 1,903 7,424 6,043 Share-based compensation (see note 4) 1,019 804 2,652 3,010 Post-acquisition restructuring costs 1,132 - 1,132 - Profit from operations (adjusted) 23,765 15,672 67,675 43,580 Autonomy Corporation Plc Consolidated Balance Sheet (in thousands, except share data) As at (unaudited) Sept. 30, Dec. 31, 2007 2006 $'000 $'000 ASSETS Non-current assets: Goodwill 770,722 415,758 Other intangible assets (1) 106,853 44,832 Property and equipment, net 26,282 6,226 Equity and other investments 22,496 3,810 Deferred tax asset 8,664 7,155 Total non-current assets 935,017 477,781 Current assets: Trade receivables, net 93,018 77,252 Other receivables 21,772 8,454 Total trade and other receivables 114,790 85,706 Inventory 538 605 Cash and cash equivalents 87,572 121,059 Total current assets 202,900 207,370 TOTAL ASSETS 1,137,917 685,151 CURRENT LIABILITIES Trade payable (9,902) (7,008) Other payables (28,997) (14,596) Total trade and other payables (38,899) (21,604) Bank loan (10,637) (16,283) Tax liabilities (13,889) (2,400) Deferred revenue (66,734) (52,452) Provisions (1,890) (2,953) Total current liabilities (132,049) (95,692) Net current assets 70,851 111,678 NON-CURRENT LIABILITIES Bank loan (39,891) (16,283) Deferred revenue (22,480) - Other payables (264) (311) Provisions (469) (1,243) Total non-current liabilities (63,104) (17,837) Total liabilities (195,153) (113,529) NET ASSETS 942,764 571,622 Shareholders' equity: Ordinary shares (2) 1,179 1,027 Share premium account 775,650 474,645 Capital redemption reserve 135 135 Own shares (981) (1,017) Stock compensation reserve 8,304 5,688 Revaluation reserve 10,898 - Translation reserve 27,702 19,956 Retained earnings 119,877 71,188 TOTAL EQUITY 942,764 571,622 (1) The allocation of intangible assets arising on the ZANTAZ acquisition
has been provisionally determined as
(2) At September 30, 2007 , 600,000,000 ordinary shares of nominal value 1/3 pence each authorized, 210,597,655 issued and outstanding; as of December 31, 2006 , 600,000,000 ordinary shares of nominal value 1/3 pence each authorized, 187,836,204 issued and outstanding.
Autonomy Corporation plc Consolidated Statements of Cash Flows (in thousands) Three Months Ended Nine months Ended (unaudited) (unaudited) Sept.30, Sept.30, Sept. 30, Sept. 30, 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Cash flows from operating activities: Profit from operations 17,518 12,956 55,521 34,239 Adjustments for: Depreciation and amortization 7,381 3,082 14,266 9,991 Loss on disposal of fixed assets - - 17 - Share based compensation 1,019 804 2,652 3,010 Foreign currency movement 408 9 946 288 Operating cash flows before movements in working capital 26,326 16,851 73,402 47,528 Changes in operating assets and liabilities (net of impact of acquisitions): Receivables 5,487 364 (4,787) (2,657) Inventories 27 112 68 18 Payables (11,693) (2,394) (9,516) (8,667) Cash generated by operations 20,147 14,933 59,167 36,222 Income taxes paid (314) (363) (543) (3,441) Net cash provided by operating activities 19,833 14,570 58,624 32,781 Cash flows from investment activities: Interest received 1,896 913 5,943 2,305 Proceeds on disposal of property, plant and equipment..... - - 366 - Purchase of property, plant and equipment (4,752) (420) (7,016) (1,434) Purchase of intangible assets - - - (22) Purchase of investments (1,500) (155) (6,820) (155) Expenditure on product development(2,057) (496) (4,256) (2,653) Acquisition of subsidiaries, net of cash acquired (366,318) (1,538) (368,521) (22,102) Net cash used in investing activities (372,731) (1,696) (380,304) (24,061) Cash flows from financing activities: Proceeds from issuance of shares, net of issuance costs 185,092 5,353 301,756 38,508 Interest on bank loan (718) (667) (1,704) (2,015) Drawdown of bank loan 28,762 - 28,762 - Repayment of bank loan (37,854) (4,083) (46,008) (12,213) Net cash provided by financing activities 175,282 603 282,806 24,280 Net (decrease) increase in cash and cash equivalents (177,616) 13,477 (38,874) 33,000 Beginning cash and cash equivalents 262,082 91,816 121,059 68,565 Effect of foreign exchange on cash and cash equivalents 3,106 1,750 5,387 5,478 Ending cash and cash equivalents 87,572 107,043 87,572 107,043 Autonomy Corporation plc Consolidated Statement of Changes in Equity (in thousands) Capital Ordinary Share redemption shares premium reserve Own shares Sub-total (unaudited) $'000 $'000 $'000 $'000 $'000 At January 1, 2007 1,027 474,645 135 (1,017) 474,790 Retained profit - - - - - Stock compensation - - - - - Share options exercised 21 17,380 - - 17,401 Share placing 131 283,625 - - 283,756 EBT options exercised - - - 36 36 Deferred tax on share - - - - - options Translation of overseas - - - - - operations Revaluation of equity - - - - - investment At September 30, 2007 1,179 775,650 135 (981) 775,983 Stock Reval'n Sub-total comp'n Transl. Retained forwarded reserve reserve reserve earnings Total (unaudited) $'000 $'000 $'000 $'000 $'000 $'000 At January 1, 2007 474,790 5,688 - 19,956 71,188 571,622 Retained profit - - - - 39,722 39,722 Stock compensation - 2,652 - - - 2,652 Share options exercised 17,401 - - - - 17,401 Share placing 283,756 - - - - 283,756 EBT options exercised 36 (36) - - - - Deferred tax on share options - - - - 8,967 8,967 Translation of overseas Operations - - - 7,746 - 7,746 Revaluation of equity Investment - - 10,898 - - 10,898 At September 30, 2007 775,983 8,304 10,898 27,702 119,877 942,764 Autonomy Corporation plc Notes to Quarterly Consolidated Financial Statements - Unaudited 1. Basis of presentationThe accompanying quarterly and nine month consolidated financial statements of Autonomy Corporation plc have been prepared in conformity with International Financial Reporting Standards ("IFRS") as adopted for use in the EU. The quarterly and nine month consolidated financial statements have been prepared using accounting policies consistent in all material respects with those applied in the Company's Annual Report for the year ended December 31, 2006 . Whilst the financial information included in this interim announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.
Quarterly and nine month information is unaudited, but reflects all normal adjustments which are, in the opinion of management, necessary to provide a fair statement of results and the company's financial position for and as at the periods presented. The results of operations for the three months and nine months ended September 30, 2007 , are not necessarily indicative of the operating results for future operating periods. The information for the year ended 31 December 2006 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The quarterly and nine month financial statements should be read in connection with the company's audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2006 . These have been delivered to the Registrar of Companies, contained an unqualified audit report and did not contain statements under s237(2) or (3) Companies Act 1985.
These financial statements for the three and nine months ended September 30, 2007 , are unaudited and do not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985. This announcement was approved by the Board of Directors on October 22, 2007 .
2. Geographical information Three Months Ended Nine months Ended (unaudited) (unaudited) Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2007 2006 2007 2006 Revenue by region: $'000 $'000 $'000 $'000 Americas 65,521 40,473 156,373 118,945 Rest of World 24,048 19,761 71,926 58,385 Total 89,569 60,234 228,299 177,330 3. Income taxes Three Months Ended Nine months Ended (unaudited) (unaudited) Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2007 2006 2007 2006 Tax charge by region: $'000 $'000 $'000 $'000 UK 3,718 2,960 13,395 7,682 Foreign 2,368 1,370 5,424 3,615 Total 6,086 4,330 18,819 11,297 4. Share based compensationShare based compensation charges have been charged in the consolidated income statement within the following functional areas:
Three Months Ended Nine months Ended (unaudited) (unaudited) Sept.30, Sept.30, Sept. 30, Sept. 30, 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Research and development 336 267 874 992 Sales and marketing 550 371 1,432 1,456 General and administrative 133 166 346 562 Total share based compensation charge 1,019 804 2,652 3,010Independent Review Report to Autonomy Corporation Plc
We have been engaged by the company to review the condensed set of financial statements in the quarterly financial report for the three months ended September 30, 2007 which comprises the income statement, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 4. We have read the other information contained in the quarterly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The quarterly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the quarterly financial report in accordance with the Listing Rules of the United Kingdoms' Financial Services Authority.
As disclosed in note 1, the annual financial statements of the company are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this quarterly financial report have been prepared in accordance with the accounting policies the group intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the quarterly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland ) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom . A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland ) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with the Listing Rules of the United Kingdom's Financial Services Authority.
Deloitte & Touche LLP Chartered Accountants and Registered Auditor October 23, 2007 Cambridge, UK Financial Media Contacts: Edward Bridges / Haya Chelhot Financial Dynamics +44-207-831-3113 Analyst and Investor Contacts Sushovan Hussain, Chief Financial Officer Autonomy Corporation plc +44-1223-448-000SOURCE Autonomy Corporation plc
