Exhibit 99.1
Actuate Reports Third Quarter 2004 Financial Results
SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Oct. 28, 2004--Actuate
Corporation (NASDAQ:ACTU), the world leader in Enterprise Reporting
Applications, today announced its financial results for the quarter ended
September 30, 2004. Revenues for the third quarter of 2004 were $23.8 million,
compared with $25.9 million in Q3 2003. On a GAAP basis, Actuate's net loss in
the third quarter of 2004 was $848,000, or $0.01 per share, compared with a net
loss of $645,000 or $0.01 per share, reported in the same quarter a year ago. On
a non-GAAP basis, net loss in the third quarter of 2004 was $504,000, or $0.01
per share, compared to non-GAAP net income of $429,000 or $0.01 per diluted
share in Q3 2003. Non-GAAP financial measures discussed in this press release
exclude the amortization of intangibles and purchased technology, in-process
R&D, restructuring charges, amortization of deferred compensation, certain legal
and accounting fees and an adjustment to the tax provision. All of these
expenses are included in Actuate's GAAP results.
For the nine months ending September 30, 2004, revenues totaled $77.3
million, compared to $77.0 million for the same period a year ago. GAAP net
income for the first nine months of 2004 was $70,000, or $0.00 per diluted
share, compared to a GAAP net loss of $3.3 million, or $0.06 per share, for the
same prior-year period. Non-GAAP net income for the first nine months of 2004
was $1.9 million, or $0.03 per diluted share, compared to $2.2 million, or $0.03
per diluted share, for the same prior-year period.
Cash, cash equivalents and short-term investments ended the third quarter
at $48.0 million, net of $1.5 million in stock repurchases made during the third
quarter and $1.2 million of fixed asset additions, primarily related to a
financial systems implementation. Deferred revenue ended the quarter at $26.9
million, a slight increase from the $26.7 million reported in the quarter ended
June 30, 2004.
"Although we are very disappointed with our Q3 performance, I continue to
be excited about Actuate's near- and long-term market opportunities," said Pete
Cittadini, Actuate's president and CEO. "Actuate remains the only company that
can demonstrate 100% adoption of Enterprise Reporting Applications that deliver
breakthrough corporate performance in key business processes such as financial
management and sales management. We also offer the only viable platform that
truly scales to meet the performance demands of extranet applications that
improve customer self-service. Our open source BIRT initiative will generate
tremendous awareness for Actuate among Java developers, thus enabling Actuate to
appeal to all key constituents among our prospects. These strategic initiatives,
combined with our growing off-shore capabilities in China, position Actuate to
deliver cost-effective solutions to our customers and therefore profitable
growth for our shareholders."
Significant Q3 Financial Highlights
-- Increased services revenue to a record $15.8 million, a 15% increase
from the year-ago quarter;
-- Achieved a record 62% services margin (combined margin of maintenance
support and consulting services);
-- Received orders greater than $100,000 from 55 customers (average value
of $247,000);
-- Secured one transaction greater than $1 million;
-- Days sales outstanding remained low at 67days;
-- Added 48 new customers;
-- Repurchased over 478,000 shares of stock during Q3 at a total cost of
$1.5 million.
Customer Successes
During Q3 2004, Actuate received significant new and repeat business from,
among others, Barclays Bank, British Telecom, California Independent Systems
Operator, Canadian Imperial Bank of Commerce, CNL Financial Group, Daelim
Concrete Products, Electronic Data Systems, First National Bank of South Africa,
HSBC, Northrop Grumman, Oppenheimer Funds, Toyota Motor Corporation and United
States Postal Service.
Other Q3 Highlights
During the third quarter, Actuate:
-- Joined the Eclipse Foundation as a board member and strategic
developer of the Business Intelligence Reporting Tools project to
develop the industry's first open Business Intelligence platform, with
availability currently expected in early 2005;
-- Established an industry-leading performance benchmark running on the
Sun Solaris operating system, supporting 1.5 million users;
-- Was named the strongest current enterprise reporting offering by
Forrester Research;
-- Prevailed on appeal in trade secret litigation against MicroStrategy;
Organizational Restructuring
As announced earlier this month, Actuate has undertaken an
expense-reduction program currently designed to eliminate up to $10 million in
annual operating expenses. This program is expected to return the company to
non-GAAP profitability in Q4 2004. As a result, the Company expects to take a
restructuring charge in its fiscal fourth quarter of approximately $2.0 million
for employee severance and other related costs.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures discussed in the text of this press release
and accompanying non-GAAP supplemental information represent financial measures
used by Actuate's management to evaluate the operating performance of the
Company and to conduct its business operations. Non-GAAP financial measures
discussed in this press release exclude the amortization of intangibles and
other costs arising from acquisitions, restructuring charges and an adjustment
to the tax provision. It is management's belief that these items are not
indicative of ongoing operations and as a result, non-GAAP financial measures
that exclude such items provide additional insight for investors in evaluating
the Company's financial and operational performance. However, these non-GAAP
financial measures are not intended to be an alternative to financial measures
prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation
G, a detailed reconciliation between the Company's GAAP and non-GAAP financial
results is provided in this press release and investors are advised to carefully
review and consider this information as well as the GAAP financial results that
are disclosed in the Company's SEC filings. Additionally, the non-GAAP
reconciliation will be available in the investor relations section of Actuate's
website at www.actuate.com.
Conference Call Information
Actuate will be holding a conference call at 2:00 p.m. Pacific Time, today,
October 28, 2004 to discuss third quarter 2004 financial results. The dial-in
number for the call is 973-528-0008. The conference call will be simultaneously
broadcast live in the Investor Relations section of Actuate's web site at
http://phx.corporate-ir.net/phoenix.zhtml?c=64401&p=irol-irhome and will be
available as an archived replay at the same location until approximately
November 11, 2004.
About Actuate Corporation
Actuate Corporation is the world leader in Enterprise Reporting
Applications that ensure 100% adoption by users. Actuate's Enterprise Reporting
Application Platform is the foundation on which Global 9000 organizations
(companies with annual revenues greater than $1 billion) and packaged
application software vendors develop intuitive, Web portal-like reporting and
analytic applications that empower 100% of users with decision-making
information. These applications are deployed inside and outside the firewall to
improve corporate performance across a range of business functions including
financial management, sales, human resource management, and customer
self-service. When tested against other business intelligence products,
Actuate's Enterprise Reporting Application Platform has been proven to offer
industry-leading scalability and the lowest Total Cost of Ownership. Actuate has
2,900 customers globally in a range of industries including financial services,
pharmaceuticals, insurance, and distribution services, as well as the government
sector.
Founded in 1993, Actuate has headquarters in South San Francisco, Calif.,
and has offices worldwide. Actuate is listed on the NASDAQ exchange under the
symbol ACTU. For more information on Actuate, visit the company's Web site at
www.actuate.com.
Cautionary Note Regarding Forward Looking Statements: The statements
contained in this release that are not purely historical are forward looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, including statements regarding Actuate's expectations, beliefs, hopes,
intentions or strategies regarding the future. All forward-looking statements in
this release are based upon information available to Actuate as of the date
hereof, and Actuate disclaims any obligation to update or revise any such
forward-looking statements based on changes in expectations or the circumstances
or conditions on which such expectations may be based. Actual results could
differ materially from Actuate's current expectations. Factors that could cause
or contribute to such differences include, but are not limited to, the general
spending environment for information technology products and services in general
and Enterprise Reporting Application software in particular, quarterly
fluctuations in our revenues and other operating results, our ability to expand
our international operations, our ability to successfully compete against
current and future competitors, the impact of future acquisitions on the
company's financial and/or operating condition, the ability to increase revenues
through our indirect channels, general economic and geopolitical uncertainties
and other risk factors that are discussed in Actuate's Securities and Exchange
Commission filings, specifically Actuate's 2003 Annual Report on Form 10-K filed
on March 11, 2004 and Quarterly Report on Form 10-Q filed on August 9, 2004.
Copyright(C) 2004 Actuate Corporation. All rights reserved. Actuate and the
Actuate logo are registered trademarks of Actuate Corporation and/or its
affiliates in the U.S. and certain other countries. All other brands, names or
trademarks mentioned may be trademarks of their respective owners.
ACTUATE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30, December 31,
2004 2003
------------- ------------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $48,034 $45,439
Accounts receivable, net 17,412 20,208
Other current assets 2,313 2,599
------------- ------------
Total current assets 67,759 68,246
Property and equipment, net 6,258 5,097
Goodwill and other intangibles, net 24,542 26,525
Other assets 1,158 1,538
------------- ------------
$99,717 $101,406
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,631 $2,758
Current portion of restructuring
liabilities 2,527 2,198
Accrued compensation 3,700 4,402
Other accrued liabilities 4,717 4,772
Income taxes payable 1,197 1,241
Deferred revenue 26,945 25,790
------------- ------------
Total current liabilities 41,717 41,161
------------- ------------
Restructuring liabilities,
net of current portion 13,311 15,064
Stockholders' equity 44,689 45,181
------------- ------------
$99,717 $101,406
============= ============
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
----------------- ------------------
2004 2003 2004 2003
-------- -------- --------- --------
Revenues:
License fees $8,017 $12,223 $31,790 $34,977
Services 15,757 13,677 45,502 42,059
-------- -------- --------- --------
Total revenues 23,774 25,900 77,292 77,036
-------- -------- --------- --------
Costs and expenses:
Cost of license fees 619 853 2,549 2,085
Cost of services 6,019 5,692 18,689 17,448
Sales and marketing 10,085 11,564 31,085 34,286
Research and development 5,132 4,864 15,546 13,831
General and administrative 3,019 2,722 8,066 9,572
Amortization of other intangibles 276 267 834 1,737
In-Process R&D - 600 - 600
Restructuring charges - - 586 -
-------- -------- --------- --------
Total costs and expenses 25,150 26,562 77,355 79,559
-------- -------- --------- --------
Income (loss) from operations (1,376) (662) (63) (2,523)
Interest and other income, net (89) 139 295 439
-------- -------- --------- --------
Income (loss) before income taxes (1,465) (523) 232 (2,084)
Provision for income taxes (617) 122 162 1,258
-------- -------- --------- --------
Net (loss) income $(848) $(645) $70 $(3,342)
======== ======== ========= ========
Basic net (loss) income per share $(0.01) $(0.01) $- $(0.06)
======== ======== ========= ========
Shares used in basic per share
calculation 61,671 61,040 61,506 60,557
======== ======== ========= ========
Diluted net (loss) income per
share $(0.01) $(0.01) $- $(0.06)
======== ======== ========= ========
Shares used in diluted per share
calculation. 61,671 61,040 65,444 60,557
======== ======== ========= ========
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September
2004 2003
------------ --------------
Operating activities
Net Income $70 $(3,342)
Adjustments to reconcile net loss to
net cash from operating activities:
Amortization of deferred compensation - 41
Amortization of other intangibles 1,983 2,530
Depreciation 1,730 2,350
Purchased in-process research and
development - 600
Changes in operating assets and
liabilities:
Accounts receivable 2,796 4,504
Other current assets 286 219
Deferred tax assets - 146
Accounts payable (127) (371)
Accrued compensation (702) (1,156)
Other accrued liabilities (55) (1,806)
Income taxes payable (44) 67
Restructuring liabilities (1,424) (3,023)
Deferred revenue 1,154 816
------------ --------------
Net cash provided by operating
activities 5,667 1,575
------------ --------------
Investing activities
Purchases of property and equipment (2,891) (1,277)
Proceeds from maturity of short-term
investments 40,553 30,192
Purchases of short-term investments (27,058) (19,918)
Acquisition of Nimble Technology, net
of cash assumed - (3,016)
Net change in other assets 380 (145)
------------ --------------
Net cash provided by investing
activities 10,984 5,836
------------ --------------
Financing activities
Proceeds from issuance of common
stock 2,007 3,638
Stock repurchases (2,689) (1,318)
------------ --------------
Net cash used in financing activities (682) 2,320
------------ --------------
Net increase in cash and cash
equivalents 15,969 9,731
Effect of exchange rate on cash 184 (72)
Cash and cash equivalents at the
beginning of the period 8,950 23,595
------------ --------------
Cash and cash equivalents at the end of
the period $25,103 $33,254
============ ==============
ACTUATE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
Three Months Ended Three Months Ended
September 30, 2004 September 30, 2003
------------------------ --------------------------
Adjust Adjust
- -
GAAP ments Non-GAAP GAAP ments Non-GAAP
------- ------ ---------------- ------ --------
Revenues:
License fees $8,017 $8,017 $12,223 $12,223
Services 15,757 15,757 13,677 13,677
------- ------- -------- --------
Total revenues 23,774 23,774 25,900 25,900
------- ------- -------- --------
Costs and expenses:
Cost of license
fees 619 (383)(a) 236 853 (342)(a) 511
Cost of services 6,019 6,019 5,692 5,692
Sales and
marketing 10,085 10,085 11,564 11,564
Research and
development 5,132 5,132 4,864 4,864
General and
administrative 3,019 3,019 2,722 2,722
Amortization of
other intangibles 276 (276) - 267 (267) -
In-Process R&D - - 600 (600) -
Restructuring
charges - - - -
------- ------- -------- --------
Total costs and
expenses 25,150 24,491 26,562 25,353
------- ------- -------- --------
Income (loss) from
operations (1,376) (717) (662) 547
Interest and other
income, net (89) (89) 139 139
------- ------- -------- --------
Income (loss)
before income
taxes (1,465) (806) (523) 686
Provision for
income taxes (617) 315 (b) (302) 122 135 (b) 257
------- ------- -------- --------
Net (loss) income $(848) $(504) $(645) $429
======= ======= ======== ========
Basic net (loss)
income per share $(0.01) $(0.01) $(0.01) $0.01
======= ======= ======== ========
Shares used in
basic per share
calculation 61,671 61,671 61,040 61,040
======= ======= ======== ========
Diluted net (loss)
income per share $(0.01) $(0.01) $(0.01) $0.01
======= ======= ======== ========
Shares used in
diluted per share
calculation. 61,671 61,671 61,040 64,926
======= ======= ======== ========
(a) Amortization of purchased technology.
(b) The provision for income taxes used in arriving at the non-GAAP
net income for all of the periods presented was computed using an
income tax rate of 37.5%. The amount of provision for income taxes
used in arriving at the non-GAAP net income does not reflect the
actual or future expected provision for income taxes.
ACTUATE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
Nine Months Ended Nine Months Ended
September 30,2004 September 30, 2003
--------------------------- --------------------------
Adjust Adjust
- -
GAAP ments Non-GAAP GAAP ments Non-GAAP
-------- ------- ----------------- ------- --------
Revenues:
License fees $31,790 $31,790 $34,977 $34,977
Services 45,502 45,502 42,059 42,059
-------- -------- -------- --------
Total revenues 77,292 77,292 77,036 77,036
-------- -------- -------- --------
Costs and
expenses:
Cost of license
fees 2,549 (1,148)(a) 1,401 2,085 (793)(a) 1,292
Cost of
services 18,689 18,689 17,448 17,448
Sales and
marketing 31,085 31,085 34,286 34,286
Research and
development 15,546 (96)(b) 15,450 13,831 13,831
General and
administrative 8,066 (145)(c) 7,921 9,572 (2,441)(c) 7,131
Amortization of
other
intangibles 834 (834) - 1,737 (1,737) -
In-Process R&D - - 600 (600) -
Restructuring
charges 586 (586) - - -
-------- -------- -------- --------
Total costs and
expenses 77,355 74,546 79,559 73,988
-------- -------- -------- --------
Income (loss)
from operations (63) 2,746 (2,523) 3,048
Interest and
other income,
net 295 295 439 439
-------- -------- -------- --------
Income (loss)
before income
taxes 232 3,041 (2,084) 3,487
Provision for
income taxes 162 978(d) 1,140 1,258 49(d) 1,307
-------- -------- -------- --------
Net (loss)
income $70 $1,901 $(3,342) $2,180
======== ======== ======== ========
Basic net (loss)
income per
share $- $0.03 $(0.06) $0.04
======== ======== ======== ========
Shares used in
basic per share
calculation 61,506 61,506 60,557 60,557
======== ======== ======== ========
Diluted net
(loss) income
per share $- $0.03 $(0.06) $0.03
======== ======== ======== ========
Shares used in
diluted per
share
calculation. 65,444 65,444 60,557 62,722
======== ======== ======== ========
(a) Amortization of purchased technology.
(b) Amortization of deferred compensation.
(c) Legal costs related to the litigation with MicroStrategy,
Incorporated and nonrecurring accounting fees related to the
special review of unauthorized license agreements during the nine
months ended September 30, 2003.
(d) The provision for income taxes used in arriving at the non-GAAP
net income for all of the periods presented was computed using an
income tax rate of 37.5%. The amount of provision for income taxes
used in arriving at the non-GAAP net income does not reflect the
actual or future expected provision for income taxes.
CONTACT: Actuate Corporation
Keren Ackerman, 650-837-4545
kackerman@actuate.com