EXHIBIT 99.1
Concur Technologies Announces Record Revenue and Earnings for Fourth Quarter Fiscal Year 2005
Company Posts 31% Year-Over-Year Subscription Revenue Growth
REDMOND, Wash., November 9, 2005 - Concur Technologies, Inc. (NASDAQ: CNQR), the world’s leading provider of business services that automate Corporate Expense Management, today reported financial results for its fourth quarter and fiscal year ended September 30, 2005.
Concur reported total revenue for the fourth quarter of fiscal 2005 of $19.6 million, which was driven by 31% year-over-year growth in subscription revenue. Total revenue for the quarter was up 27% from the year-ago quarter and up 5% from the prior quarter. Fiscal 2005 fourth quarter net income was $2.1 million, or $0.06 per share, which was $0.01 per share higher than the company expected. This compares to net income of $0.6 million, or $0.02 per share in the year-ago quarter and net income of $1.7 million, or $0.05 per share in the prior quarter.
“The fourth quarter was the strongest quarter in our history. Total revenue, subscription revenue, annual recurring revenue, operating margin and earnings reached record levels,” said Steve Singh, chairman and CEO of Concur Technologies. “We were very pleased with our performance in fiscal 2005 as total revenue grew 27% and earnings per share grew 150%. We are reaffirming our guidance for fiscal 2006 as demand for our services continues to grow. We expect subscription revenue to grow more than 30% and operating margin to nearly double to 13%.”
Singh continued, “Last quarter, IDC named Concur one of the top five global on-demand software providers, recognizing the delivery and business model that is at the heart of our success. On-demand companies like Concur are at the center of a customer-driven shift that is changing the very nature of the software industry. We are the clear leader in what we believe can be a multi-billion dollar Corporate Expense Management market. As we look to drive even stronger top line growth, we will continue to invest against our core initiatives around distribution, operational excellence and new services.”
Financial Highlights
| | • | | Total revenue was $19.6 million for the fourth quarter of fiscal 2005, up 27% compared to the year-ago quarter and up 5% sequentially. |
| | • | | Net income was $2.1 million, or $0.06 per share for the fourth quarter of fiscal 2005, up 270% compared to the year-ago quarter and up 24% sequentially. |
| | • | | Annual Recurring Revenue reported in the fourth quarter of fiscal 2005 was $6.7 million, up 68% compared to the year-ago quarter and up 29% sequentially. |
| | • | | Deferred revenue was $20.5 million for the fourth quarter of fiscal 2005, up 24% compared to the year-ago quarter and up 4% sequentially. |
| | • | | Cash flows from operations were $2.2 million for the fourth quarter of fiscal 2005, up 101% from the year-ago quarter. |
| | • | | Operating margin was 11% for the fourth quarter of fiscal 2005, up from 3% for the year-ago quarter and up from 9% sequentially. |
| | • | | Total revenue was $71.8 million for fiscal 2005, up 27% compared to fiscal 2004. |
| | • | | Net income was $5.4 million, or $0.15 per share for fiscal 2005, up 164% compared to fiscal 2004. |
Recent Business Highlights
| | • | | Concur signed contracts with new and existing customers, including 180solutions, Air Liquide, American Eurocopter, Danfoss, Henry A. Petter Supply Company, Jet Propulsion Laboratory, |
| | John Crane Inc., Reg Vardy, Regal-Beloit Corporation, RightNow Technologies, Inc., SSA Marine, U.C. Davis, Westinghouse and Worldspan. |
| | • | | Concur was named among the top five worldwide software on-demand vendors by IDC, the premier global provider of market intelligence, advisory services, and events. |
| | • | | For the fifth consecutive year, Concur was named to Deloitte & Touche’s prestigious Technology Fast 50 Program for Washington State, a ranking of the 50 fastest growing technology companies in the area by Deloitte & Touche LLP. |
| | • | | Concur announced the addition of Jeff Seely, chairman and CEO of ShareBuilder Corporation and ShareBuilder Securities Corporation, to the Board of Directors. |
| | • | | Concur announced the promotion of Rajeev Singh to president and chief operating officer, and Kyle Sugamele to chief legal officer. |
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.
| | • | | Concur expects total revenue to be $19.0 million for the first quarter of fiscal 2006, and $85.0 million for fiscal 2006. |
| | • | | Concur expects earnings per share for the first quarter of fiscal 2006 and for fiscal 2006 to be as follows: |
| | • | | For periods after September 30, 2005, Concur provides non-GAAP net income that excludes both amortization of intangible assets and charges for share-based payments pursuant to Statement of Financial Accounting Standard No. 123(R), Accounting For Share-Based Payments. FAS 123(R) requires companies to expense the fair value of grants made under stock option plans over the vesting period of the options. |
| | • | | Concur expects non-GAAP earnings per share to be $0.02 for the first quarter of fiscal 2006 and $0.33 for fiscal 2006. |
| | • | | Non-GAAP earnings per share for the first quarter of fiscal 2006 and fiscal 2006 exclude non-cash expenses of ($0.01) and ($0.03) per share for the amortization of intangible assets, and ($0.03) and ($0.15) per share from the adoption of FAS 123(R), respectively. |
| | • | | Concur expects GAAP earnings per share to be a loss of ($0.02) for the first quarter of fiscal 2006 and earnings of $0.15 for fiscal 2006. |
| | • | | Concur expects Annual Recurring Revenue to be $25 million for fiscal 2006. |
About Concur Technologies, Inc.
Concur Technologies, Inc. is the world’s leading provider of business services that automate Corporate Expense Management. Concur’s solutions are trusted by thousands of companies worldwide and feature the flagship Concur Expense Service. This comprehensive Web-based service manages travel and entertainment expenses and includes Concur Imaging Service to eliminate the hassle of managing paper receipts and Concur Analysis Service for turning raw expense data into valuable business intelligence. Together, these solutions provide rapid ROI by streamlining business processes, reducing operating costs, improving internal controls and empowering financial managers to apply greater insight into their company’s spending patterns. More information about Concur is available at www.concur.com.
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All company or product names are trademarks and/or registered trademarks of their respective owner.
This press release contains forward-looking statements that are inherently uncertain. These forward-looking statements, such as the statements made by Mr. Singh and the statements in the Business Outlook section, 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: 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 (http://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.
Investor Contact:
John Adair, Concur Technologies, Inc., 425-497-6439, johna@concur.com
Press Contact:
Jeff Pecor, Barokas Public Relations, 206-264-8220, jeff@barokas.com
CONCUR TECHNOLOGIES, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
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| | | Three months ended
September 30,
| | Twelve months ended
September 30,
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| | | 2005
| | 2004
| | 2005
| | 2004
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Revenues: | | | | | | | | | | | | |
Subscription | | $ | 14,392 | | $ | 11,005 | | $ | 53,011 | | $ | 40,244 |
Consulting & Other | | | 5,231 | | | 4,455 | | | 18,820 | | | 16,306 |
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Total revenues | | | 19,623 | | | 15,460 | | | 71,831 | | | 56,550 |
Expenses: | | | | | | | | | | | | |
Cost of operations | | | 7,537 | | | 6,560 | | | 28,450 | | | 23,264 |
Sales and marketing | | | 4,613 | | | 3,834 | | | 17,484 | | | 14,329 |
Systems development and programming | | | 2,287 | | | 2,112 | | | 9,336 | | | 8,773 |
General and administrative | | | 2,797 | | | 2,150 | | | 10,319 | | | 7,295 |
Amortization of intangible asset | | | 285 | | | 285 | | | 1,140 | | | 1,140 |
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Total expenses | | | 17,519 | | | 14,941 | | | 66,729 | | | 54,801 |
Income from operations | | | 2,105 | | | 519 | | | 5,102 | | | 1,749 |
Other income, net | | | 33 | | | 59 | | | 264 | | | 286 |
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Net income | | $ | 2,138 | | $ | 578 | | $ | 5,366 | | $ | 2,035 |
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Net income per share | | | | | | | | | | | | |
Basic | | $ | 0.06 | | $ | 0.02 | | $ | 0.16 | | $ | 0.06 |
Diluted | | $ | 0.06 | | $ | 0.02 | | $ | 0.15 | | $ | 0.06 |
Weighted shares outstanding | | | | | | | | | | | | |
Basic | | | 33,012 | | | 32,913 | | | 32,906 | | | 32,595 |
Diluted | | | 36,443 | | | 36,828 | | | 36,348 | | | 36,815 |
Non-GAAP Results | | | | | | | | | | | | |
Non-GAAP net income, which excludes terminated acquisition costs and amortization of intangible asset | | $ | 2,423 | | $ | 863 | | $ | 6,791 | | $ | 3,175 |
Non-GAAP net income per share, which excludes terminated acquisition costs and amortization of intangible asset | | | | | | | | | | | | |
Basic | | $ | 0.07 | | $ | 0.03 | | $ | 0.21 | | $ | 0.10 |
Diluted | | $ | 0.07 | | $ | 0.02 | | $ | 0.19 | | $ | 0.09 |
Shares used in calculation of basic and diluted non-GAAP net income per share | | | | | | | | | | | | |
Basic | | | 33,012 | | | 32,913 | | | 32,906 | | | 32,595 |
Diluted | | | 36,443 | | | 36,828 | | | 36,348 | | | 36,815 |
The non-GAAP results for the periods presented above are for informational purposes only and are not prepared in accordance with accounting principles generally accepted in the United States. This non-GAAP information presents our operating results after excluding $285 thousand in costs related to the acquisition of another company that Concur evaluated and chose not to pursue, all recorded in the first quarter of fiscal 2005, and non-cash amortization expense of the intangible asset relating to our acquisition of Captura Software, Inc., which totaled $285 thousand in each of the three month periods, and $1,140 thousand in each of the twelve month periods presented.
CONCUR TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(Unaudited)
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| | | Sept 30,
2005
| | �� | Sept 30,
2004
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ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 16,202 | | | $ | 23,735 | |
Accounts receivable, net | | | 12,374 | | | | 10,277 | |
Prepaid expenses | | | 1,386 | | | | 1,127 | |
Other current assets | | | 3,527 | | | | 2,325 | |
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Total current assets | | | 33,489 | | | | 37,464 | |
Property and equipment, net | | | 15,022 | | | | 5,003 | |
Restricted cash | | | 500 | | | | 550 | |
Intangible assets, net of amortization | | | 2,090 | | | | 3,230 | |
Goodwill relating to acquisition | | | 3,704 | | | | 3,704 | |
Other assets | | | 5,846 | | | | 2,948 | |
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Total assets | | $ | 60,651 | | | $ | 52,899 | |
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LIABILITIES & STOCKHOLDERS’ EQUITY | | | | | | | | |
Current liabilities | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 6,216 | | | $ | 5,909 | |
Current portion of long-term obligations | | | 145 | | | | 252 | |
Current portion of deferred revenues | | | 13,297 | | | | 11,576 | |
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Total current liabilities | | | 19,658 | | | | 17,737 | |
Long-term obligations, net of current | | | 3,050 | | | | — | |
Long-term deferred revenues, net of current | | | 7,251 | | | | 5,017 | |
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Total liabilities | | | 29,959 | | | | 22,754 | |
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Stockholders’ equity | | | | | | | | |
Common stock and additional paid-in capital, $0.001 par value: | | | | | | | | |
Authorized – 60,000; Issued and outstanding – 33,216 and 32,981 at September 30, 2005 and September 30, 2004 respectively | | | 235,058 | | | | 239,811 | |
Accumulated other comprehensive income | | | 27 | | | | 93 | |
Accumulated deficit | | | (204,393 | ) | | | (209,759 | ) |
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Total stockholders’ equity | | | 30,692 | | | | 30,145 | |
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Total liabilities and stockholders’ equity | | $ | 60,651 | | | $ | 52,899 | |
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CONCUR TECHNOLOGIES, INC
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended
Sept 30,
| | | Twelve months ended
Sept 30,
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| | | 2005
| | | 2004
| | | 2005
| | | 2004
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Operating activities | | | | | | | | | | | | | | | | |
Net income | | $ | 2,138 | | | $ | 578 | | | $ | 5,366 | | | $ | 2,035 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | | | | |
Amortization of intangible asset | | | 285 | | | | 285 | | | | 1,140 | | | | 1,140 | |
Depreciation | | | 824 | | | | 546 | | | | 2,899 | | | | 1,890 | |
Leasehold improvements received from a lessor | | | — | | | | — | | | | 3,200 | | | | — | |
Provision for allowance for accounts receivable | | | 358 | | | | 350 | | | | 804 | | | | 781 | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | |
Accounts receivable | | | (1,076 | ) | | | (1,157 | ) | | | (2,929 | ) | | | (3,176 | ) |
Prepaid expenses, deposits, and other assets | | | (1,522 | ) | | | (1,307 | ) | | | (4,356 | ) | | | (2,841 | ) |
Accounts payable | | | (1,411 | ) | | | 439 | | | | (356 | ) | | | 764 | |
Accrued liabilities | | | 1,839 | | | | 481 | | | | 591 | | | | 575 | |
Deferred revenues | | | 793 | | | | 892 | | | | 3,964 | | | | 4,663 | |
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Net cash provided by operating activities | | | 2,228 | | | | 1,107 | | | | 10,323 | | | | 5,831 | |
Investing activities | | | | | | | | | | | | | | | | |
Acquisition of leasehold improvements | | | — | | | | — | | | | (3,200 | ) | | | — | |
Decrease in restricted cash balances | | | — | | | | — | | | | 50 | | | | — | |
Purchases of property and equipment | | | (2,023 | ) | | | (1,345 | ) | | | (9,721 | ) | | | (5,554 | ) |
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Net cash (used in) investing activities | | | (2,023 | ) | | | (1,345 | ) | | | (12,871 | ) | | | (5,554 | ) |
Financing activities | | | | | | | | | | | | | | | | |
Proceeds from issuance of common stock from exercise of stock options | | | 1,075 | | | | 257 | | | | 2,481 | | | | 1,654 | |
Proceeds from issuance of common stock from employee stock purchase plan | | | 207 | | | | — | | | | 1,753 | | | | 755 | |
Payments on re-purchase of company stock | | | — | | | | — | | | | (8,987 | ) | | | — | |
Proceeds from borrowings | | | — | | | | — | | | | — | | | | 289 | |
Payments on borrowings and capital leases | | | — | | | | (235 | ) | | | (205 | ) | | | (959 | ) |
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Net cash provided by / (used by) financing activities | | | 1,282 | | | | 22 | | | | (4,958 | ) | | | 1,739 | |
Effect of foreign currency exchange rates on cash and cash equivalents | | | (53 | ) | | | 1 | | | | (27 | ) | | | 112 | |
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Net increase/(decrease) in cash and cash equivalents | | | 1,434 | | | | (215 | ) | | | (7,533 | ) | | | 2,128 | |
Cash and cash equivalents at beginning of period | | | 14,768 | | | | 23,950 | | | | 23,735 | | | | 21,607 | |
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Cash and cash equivalents at end of period | | $ | 16,202 | | | $ | 23,735 | | | $ | 16,202 | | | $ | 23,735 | |
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