| |
|---|
| Exhibit 99.1 | Investor Relations:
John Lawlor
613-738-3503
john.lawlor@cognos.com
Media Contacts:
Sean Reid
Cognos, 613-738-1440
Sean.reid@cognos.com
Kristen Orfanos
LP&P, 781-782-5852
Kristen_Orfanos@lpp.com |
Cognos® Reports Record Fourth Quarter and Full Year Results
39 Percent License Revenue Growth in Fourth Quarter
Ottawa, ON & Burlington, MA, March 31, 2005 – Cognos Incorporated (Nasdaq: COGN; TSX: CSN – all figures in U.S. dollars and in accordance with U.S. GAAP), the world leader in business intelligence (BI) and corporate performance management (CPM) solutions, today announced record results for its fourth quarter and full fiscal year 2005, ended February 28, 2005.
Revenue for the fourth quarter was $256.3 million, an increase of 27 percent compared to $202.1 million for the same period of last fiscal year. License revenue was $129.9 million, an increase of 39 percent from $93.5 million in the fourth quarter of last fiscal year. Net income in the quarter was $54.3 million or $0.58 per diluted share, an increase of 18 percent compared with $46.1 million or $0.50 per diluted share for the same period of last fiscal year.
Revenue for the full fiscal year 2005 was $825.5 million, an increase of 21 percent compared with $683.1 million for the previous fiscal year. Net income for fiscal year 2005 was $136.6 million, or $1.47 per diluted share, an increase of 35 percent compared with the prior year’s net income of $100.9 million, or $1.10 per diluted share.
“Cognos delivered an outstanding quarter, with great license growth, reflecting our leading position in the market,” said Rob Ashe, Cognos President and CEO. “Our strategic vision, superior products and consistent focus on customer success are powering our impressive performance and market share gains.”
Highlights of the Quarter
| • | | License revenue growth of 39 percent compared with the fourth quarter of last fiscal year |
| • | | Cognos ReportNet™ license revenue of $54.3 million, an increase of 83 percent compared with the fourth quarter of last fiscal year, resulting in full-year ReportNet license revenue of $153.4 million |
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| • | | Further acceleration for Cognos Planning, with Planning license revenue growth of 53 percent compared with the fourth quarter of last year, driving 45 percent Planning license revenue growth for the full year |
| • | | 18 contracts greater than $1 million – an all-time high for the Company – including our first-ever contract greater than $10 million |
| • | | 48 contracts greater than $1 million for the full fiscal year 2005, an increase of 30 percent from the prior fiscal year |
| • | | Major customer wins across a broad spectrum of industry segments, as represented by Abbott Laboratories, Amazon.com, AMB Generali, Canada Revenue Agency, CDW, Cendant Mobility, Circuit City, Deltek Systems, Kos Pharmaceuticals, Marriott International, State of New York, Thomson Corporation, TNT, Unilever Asia, U.S. Marines, and Zimmer, Inc. |
| • | | Greater than 20 percent growth in total revenue and license revenue in all three major geographies, the Americas, Europe, and Asia-Pacific. |
Cognos’ balance sheet remains strong. Operating cash flow was $97.6 million. As a result, the Company exited the quarter with $522.9 million in cash, cash equivalents, and short-term investments.
“The outlook for Cognos is excellent,” continued Mr. Ashe. “Through fiscal year 2005, we extended our leadership position in business intelligence and corporate performance management. We enter fiscal 2006 with industry-leading momentum. I am proud of the dedication, hard work and accomplishments of the Cognos team throughout the past year, and I sincerely thank everyone for their unwavering commitment to the success of Cognos.”
Business Outlook
Management offers the following outlook for the first quarter of fiscal year 2006, ending May 31, 2005:
| • | | Revenue is expected to be in the range of $202 million to $210 million; |
| • | | Diluted earnings per share are expected to be in the range of $0.22 to $0.25. |
Management offers the following outlook for the full fiscal year 2006, ending February 28, 2006:
| • | | Revenue is expected to be in the range of $930 million to $950 million; |
| • | | Diluted earnings per share are expected to be in the range of $1.55 to $1.62. |
These estimates assume a tax rate of 21 percent and exclude the expensing of stock options.
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Cognos management will host a Webcast and conference call to present results for the fourth quarter of fiscal year 2005 and to provide prospects for the business going forward at 5:15 p.m. Eastern Time, today, March 31, 2005.
The conference call may be accessed at 416-640-1907. The Webcast and archive may be accessed athttp://www.cognos.com/company/investor/events/fy05q4/index.html. A replay of the conference call may be accessed at 416-640-1917 until April 2, 2005. The passcode for the replay is 21039256#.
Safe Harbor for Forward-Looking Statements
Certain statements made in this press release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements relate to, among other things, the Company’s expectations with respect to future growth and business outlook, including revenue and earnings for the first quarter of fiscal year 2006 and the full fiscal year ending 2006, business momentum and competitive position.
These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those in the forward-looking statements. Factors that may cause such differences include, but are not limited to: the Company’s ability to maintain revenue growth or to anticipate a decline in revenue from any of its products or services; the Company’s ability to develop and introduce new products and enhancements that respond to customer requirements and rapid technological change; new product introductions and enhancements by competitors; the Company’s ability to compete in an intensely competitive market; the Company’s ability to identify, hire, train, motivate, and retain highly qualified management and other key personnel; the Company’s ability to select and implement appropriate business models/strategies and to execute same; a continuing increase in the number of larger customer transactions; continued BI market consolidation; fluctuations in its quarterly and annual operating results; currency fluctuations; fluctuations in our tax exposure; the impact of global economic conditions on the Company’s business; unauthorized use of the Company’s intellectual property; claims by third parties that the Company’s software infringes their intellectual property; the risks inherent in international operations, such as currency exchange rate fluctuations; the Company’s ability to identify, pursue, and complete acquisitions with desired business results; and the existence of regulatory barriers to integration; as well as the risk factors discussed in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, filed with the United States Securities and Exchange Commission, as well as other periodic reports filed with the SEC. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company disclaims any obligation to publicly update or revise any such statement to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.
Cognos may provide pro forma or non-GAAP measures as defined by SEC Regulation G to provide greater comparability regarding Cognos’ ongoing operating performance. If discussed, these measures should not be considered an alternative to measurements required by accounting principles generally accepted in the United States (“U.S. GAAP”). These pro forma measures are unlikely to be comparable to pro forma information provided by other issuers. In accordance with SEC Regulation G, if such pro forma or non-GAAP measures are provided, a reconciliation of the Cognos U.S. GAAP information to the pro forma information will be provided in a table attached. A replay of the Webcast, slides used in the Webcast and any non-GAAP financial measures that may be discussed on the Webcast (as well as the most directly comparable GAAP financial measures and a reconciliation of the difference between the GAAP and non-GAAP financial measures) will be available on the investor relations page of our web site athttp://www.cognos.com.
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About Cognos:
Cognos, the world leader in business intelligence and corporate performance management solutions, delivers software that helps companies drive, monitor and understand corporate performance.
Cognos delivers the next level of competitive advantage – Corporate Performance Management (CPM) – achieved through the strategic application of BI on an enterprise scale. Our integrated CPM solution helps customers drive performance through planning; monitor performance through scorecarding; and understand performance through business intelligence.
Cognos serves more than 23,000 customers in over 135 countries. Cognos enterprise business intelligence solutions and services are also available from more than 3,000 worldwide partners and resellers. For more information, visit the Cognos Web site at<http://www.cognos.com>.
Cognos, the Cognos logo and ReportNet are trademarks or registered trademarks of Cognos Incorporated in the United States and/or other countries. All other names are trademarks or registered trademarks of their respective companies.
Note to Editors: Copies of previous Cognos press releases and Corporate and product information are available on the Cognos Web site atwww.cognos.com, and at PR Newswire’s site atwww.prnewswire.com.
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SUPPLEMENTARY INFORMATION (unaudited):
| FY2004 | FY2005 |
|
|
| Q4 | Q1 | Q2 | Q3 | Q4 |
|
| Revenue Statistics ($000s) |
| Total License | 93,542 | 66,070 | 75,362 | 91,580 | 129,946 |
| |
| Year-Over-Year Revenue Growth Statistics |
| Total License | 18% | 14% | 21% | 26% | 39% |
| |
| Geographic Distribution |
| Total Revenue ($000s) |
| Americas | 114,564 | 104,831 | 110,240 | 121,503 | 141,189 |
| Europe | 74,701 | 54,989 | 57,952 | 69,308 | 94,145 |
| Asia/Pacific | 12,881 | 13,799 | 17,028 | 19,555 | 20,992 |
| |
| % of Total |
| Americas | 57% | 60% | 60% | 58% | 55% |
| Europe | 37% | 32% | 31% | 33% | 37% |
| Asia/Pacific | 6% | 8% | 9% | 9% | 8% |
| |
| Year-Over-Year Revenue Growth - Total |
| Americas | 20% | 16% | 15% | 26% | 23% |
| Europe | 32% | 17% | 22% | 18% | 26% |
| Asia/Pacific | 10% | 3% | 17% | 13% | 63% |
| |
| Pro Forma Year-Over-Year Revenue Growth - In Local Currency | |
| Americas | 17% | 15% | 14% | 25% | 22% |
| Europe | 14% | 7% | 11% | 7% | 19% |
| Asia/Pacific | (8%) | (9%) | 10% | 7% | 61% |
| |
| Pro Forma Year-Over-Year Revenue Growth - Due to Foreign Currency |
| Americas | 3% | 1% | 1% | 1% | 1% |
| Europe | 18% | 10% | 11% | 11% | 7% |
| Asia/Pacific | 18% | 12% | 7% | 6% | 2% |
| |
| New vs Existing License Revenue - % of Total |
| New | 31% | 31% | 38% | 32% | 37% |
| Existing | 69% | 69% | 62% | 68% | 63% |
| |
| Channel — License Revenue - % of Total |
| Direct | 80% | 73% | 73% | 74% | 77% |
| Third Party | 20% | 27% | 27% | 26% | 23% |
| |
| Other Statistics |
| Cash, cash equivalents, and short-term investments ($000s) | 388,241 | 416,362 | 440,410 | 439,367 | 522,900 |
| Days sales outstanding | 68 | 55 | 56 | 61 | 67 |
| Total employees | 2,966 | 3,027 | 3,062 | 3,346 | 3,393 |
|
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COGNOS INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(US$000s except share amounts, U.S. GAAP)
| | Three Months Ended
the Last Day of February, | | Years Ended
the Last Day of February, |
| | 2005 | 2004 | | 2005 | 2004 |
| | (Unaudited) | | | |
|
| Revenue |
| Product license | $129,946 | $ 93,542 | | $362,958 | $286,128 |
| Product support | 88,477 | 75,286 | | 320,451 | 274,251 |
| Services | 37,903 | 33,318 | | 142,122 | 122,738 |
|
| Total revenue | 256,326 | 202,146 | | 825,531 | 683,117 |
|
| Cost of revenue |
| Cost of product license | 1,280 | 932 | | 3,025 | 4,270 |
| Cost of product support | 10,048 | 7,283 | | 32,805 | 28,076 |
| Cost of services | 31,796 | 25,125 | | 113,302 | 90,411 |
|
| Total cost of revenue | 43,124 | 33,340 | | 149,132 | 122,757 |
|
| Gross margin | 213,202 | 168,806 | | 676,399 | 560,360 |
|
| Operating expenses |
| Selling, general, and administrative | 122,630 | 95,103 | | 405,575 | 342,795 |
| Research and development | 29,244 | 23,923 | | 105,938 | 91,196 |
| Amortization of intangible assets | 1,818 | 1,848 | | 6,231 | 8,060 |
| Special Charges | — | 1,750 | | — | 1,750 |
|
| Total operating expenses | 153,692 | 122,624 | | 517,744 | 443,801 |
|
| Operating income | 59,510 | 46,182 | | 158,655 | 116,559 |
| Interest expense | (808) | (489) | | (909) | (1,366) |
| Interest income | 2,386 | 1,194 | | 7,480 | 4,756 |
|
| Income before taxes | 61,088 | 46,887 | | 165,226 | 119,949 |
| Income tax provision | 6,753 | 787 | | 28,622 | 19,052 |
|
| Net income | $ 54,335 | $ 46,100 | | $136,604 | $100,897 |
|
| Net income per share |
| Basic | $0.60 | $0.51 | | $1.51 | $1.13 |
|
| Diluted | $0.58 | $0.50 | | $1.47 | $1.10 |
|
| Weighted average number of shares (000s) |
| Basic | 90,982 | 89,946 | | 90,517 | 89,325 |
|
| Diluted | 94,187 | 92,511 | | 93,238 | 91,959 |
|
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COGNOS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(US$000s, U.S. GAAP)
| | February 28,
2005 | February 29,
2004 |
|
| Assets | | |
| Current assets |
| Cash and cash equivalents | $ 378,348 | $224,830 |
| Short-term investments | 144,552 | 163,411 |
| Accounts receivable | 189,602 | 152,859 |
| Prepaid expenses and other current assets | 18,941 | 16,668 |
| Deferred tax assets | 3,856 | 2,445 |
|
| | 735,299 | 560,213 |
| Fixed assets, net | 73,566 | 71,292 |
| Intangible assets, net | 27,234 | 23,643 |
| Other assets | 6,378 | — |
| Goodwill | 221,490 | 172,323 |
|
| | $1,063,967 | $827,471 |
|
| Liabilities |
| Current liabilities |
| Accounts payable | $ 30,705 | $ 30,698 |
| Accrued charges | 31,047 | 25,483 |
| Salaries, commissions, and related items | 91,010 | 59,903 |
| Income taxes payable | 21,148 | 5,875 |
| Deferred revenue | 217,153 | 178,752 |
|
| | 391,063 | 300,711 |
| Deferred income taxes | 17,083 | 18,098 |
|
| | 408,146 | 318,809 |
|
| Commitments and Contingencies |
| Stockholders’ Equity |
| Capital stock |
Common shares and additional paid-in capital
(2005 - 91,070,967; 2004 - 89,902,895) | 252,561 | 206,499 |
| Treasury shares (2005 - 46,375; 2004 - 43,500) | (1,199) | (1,065) |
| Deferred stock-based compensation | (277) | (730) |
| Retained earnings | 402,020 | 305,399 |
| Accumulated other comprehensive income (loss) | 2,716 | (1,441) |
|
| | 655,821 | 508,662 |
|
| | $1,063,967 | $827,471 |
|
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COGNOS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US$000s, U.S. GAAP)
| | Three Months Ended
the Last Day of February, | | Years Ended
the Last Day of February, |
| | 2005 | 2004 | | 2005 | 2004 |
| | (Unaudited) | | | |
|
| Cash flows from operating activities |
| Net income | $ 54,335 | $ 46,100 | | $136,604 | $100,897 |
| Non-cash items |
| Depreciation and amortization | 5,724 | 8,405 | | 26,384 | 30,123 |
�� Amortization of deferred stock-
based compensation | 220 | 140 | | 734 | 745 |
| Amortization of other deferred compensation | — | 7 | | 7 | 175 |
| Deferred income taxes | (5,336) | 498 | | (4,364) | 5,778 |
| Loss on disposal of fixed assets | 200 | 55 | | 413 | 594 |
|
| | 55,143 | 55,205 | | 159,778 | 138,312 |
| Change in non-cash working capital |
| Increase in accounts receivable | (45,790) | (32,164) | | (23,734) | (5,983) |
Increase in prepaid expenses and
other current assets | (4,269) | (4,807) | | (118) | (6,340) |
| Increase (decrease) in accounts payable | (2,779) | 4,896 | | (5,900) | (5,045) |
| Increase (decrease) in accrued charges | 1,352 | 70 | | (2,891) | (11,612) |
Increase in salaries, commissions,
and related items | 22,682 | 14,379 | | 23,987 | 7,238 |
Increase (decrease) in income
taxes payable | 7,446 | (3,900) | | 15,032 | 1,226 |
| Increase in deferred revenue | 63,855 | 46,798 | | 32,313 | 24,133 |
|
| Net cash provided by operating activities | 97,640 | 80,477 | | 198,467 | 141,929 |
|
| Cash flows from investing activities |
| Maturity of short-term investments | 10,145 | 25,121 | | 330,716 | 230,594 |
| Purchase of short-term investments | (29,268) | (34,097) | | (311,689) | (311,542) |
| Additions to fixed assets | (5,545) | (7,931) | | (17,516) | (25,213) |
| Additions to intangible assets | (206) | (203) | | (977) | (1,270) |
| Increase in other assets | (6,378) | — | | (6,378) | — |
Acquisition costs, net of cash and
cash equivalents | (2,181) | (1,266) | | (51,887) | (1,750) |
|
| Net cash used in investing activities | (33,433) | (18,376) | | (57,731) | (109,181) |
|
| Cash flows from financing activities |
| Issue of common shares | 15,914 | 6,261 | | 48,734 | 33,266 |
| Purchase of treasury shares | — | — | | (335) | (564) |
| Repurchase of shares | (14,915) | (9,698) | | (42,735) | (9,698) |
Decrease in long-term debt and
long-term liabilities | — | — | | — | (1,697) |
|
| Net cash provided by (used in) financing activities | 999 | (3,437) | | 5,664 | 21,307 |
|
| Effect of exchange rate changes on cash | (795) | (61) | | 7,118 | 8,187 |
|
| Net increase in cash and cash equivalents | 64,411 | 58,603 | | 153,518 | 62,242 |
| Cash and cash equivalents, beginning of period | 313,937 | 166,227 | | 224,830 | 162,588 |
|
| Cash and cash equivalents, end of period | 378,348 | 224,830 | | 378,348 | 224,830 |
| Short-term investments, end of period | 144,552 | 163,411 | | 144,552 | 163,411 |
|
| Cash, cash equivalents, and short-term investments, end of period | $522,900 | $388,241 | | $522,900 | $388,241 |
|
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