Exhibit 99.1
Actuate Reports Fourth Quarter and Fiscal Year 2004 Financial Results;
Q4 License Revenue Up 36% Sequentially;
Achieved 13% Q4 Non-GAAP Operating Margin
SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Feb. 10,
2005--Actuate Corporation (Nasdaq:ACTU), the world leader in
Enterprise Reporting Applications, today announced its financial
results for the quarter ended December 31, 2004. Revenues for the
fourth quarter of 2004 were $27.4 million, up 15% sequentially from
the third quarter of 2004 and consistent with the $27.4 million
recorded in Q4 2003. License revenues for the quarter were $10.9
million, an increase of 36% compared with $8.0 million in Q3 2004.
Fourth quarter 2004 GAAP net income was $1.2 million, or $0.02 per
diluted share, compared with a net loss of $1.2 million or $0.02 per
share in the year-ago quarter.
Non-GAAP operating margin for the fourth quarter of 2004 was 13%
compared with a GAAP operating margin of 5% for the same period. On a
non-GAAP basis, net income in the fourth quarter of 2004 was $2.5
million, or $0.04 per diluted share, compared to non-GAAP net income
of $1.2 million, or $0.02 per diluted share in the year-ago quarter.
In connection with an expense-reduction initiative that was launched
in the fourth quarter of 2004, the company recorded a one-time
restructuring charge of $1.4 million. The non-GAAP financial results
discussed in this press release do not include this charge. These
non-GAAP financial measures also exclude the amortization of
intangibles and purchased technology, in-process R&D, 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 full fiscal year 2004, revenues totaled $104.7 million,
compared with $104.5 million in fiscal year 2003. GAAP net income for
fiscal year 2004 was $1.3 million, or $0.02 per diluted share,
compared with a GAAP net loss of $4.5 million, or $0.07 per share in
fiscal year 2003. Non-GAAP net income for fiscal year 2004 was $4.4
million, 31% greater than the $3.4 million of non-GAAP net income
reported for fiscal year 2003. Diluted non-GAAP net income per share
was $0.07 for fiscal year 2004 compared with $0.05 per diluted share
recorded in fiscal year 2003.
Cash, cash equivalents and short-term investments ended fiscal
year 2004 at $47.3 million, an increase of $1.8 million compared with
the year ended December 31, 2003. Deferred revenue at December 31,
2004 was $28.8 million, compared with $25.8 million at December 31,
2003.
"Actuate continues to see large, defensible and highly profitable
market opportunities for Enterprise Reporting Applications that are
adopted by 100% of users and deliver breakthrough corporate
performance," said Pete Cittadini, Actuate's president and CEO. "Our
Q4 performance was driven by large Global 9000 accounts, particularly
in Financial Services, with large user populations, diverse data
sources and strong IT capabilities choosing Actuate to develop mission
critical Enterprise Reporting Applications. We are gaining traction
with our solutions targeted at specific business processes,
particularly Customer Self Service and Financial Performance
Management, that contributed significant business in Q4 and positions
us well as we move into 2005."
Q4 Financial Highlights
-- Non-GAAP operating income increased 113% compared with Q4
2003;
-- Non-GAAP operating margin reached 13%, the highest level since
Q4 2000;
-- Non-GAAP EPS doubled to $0.04, compared with $0.02 in Q4 2003;
-- Achieved a record 63% services margin (combined margin of
maintenance support and consulting services), compared with
58% in the year-ago quarter;
-- Received orders greater than $100,000 from 65 customers;
-- Average deal size of orders greater than $100,000 increased to
$286,000 from $247,000 in Q3 2004;
-- Secured two transactions greater than $1 million.
Q4 Customer Highlights
During Q4 2004, Actuate received significant new and repeat
business from, among others, IBM, Mellon Financial, Public Service
Electric and Gas, DaimlerChrysler AG, Citigroup, Carlson Wagonlit
Travel, Big Lots Stores, U.S. Clearing Corporation, Washington Mutual,
Commerzbank AG, Medco Health, American Express, BSkyB and CIGNA.
Other Q4 Highlights
During the fourth quarter, Actuate:
-- Launched Actuate 8 e.Spreadsheet to enable companies to
deliver spreadsheets that meet compliance requirements while
giving employees and customers the spreadsheets they demand;
-- Secured the approval of the Eclipse Foundation for BIRT, the
industry's first Open Source Business Intelligence and
Reporting Tools initiative, as a top level project;
-- Attained the "Powered by SAP NetWeaver(tm)" Certification for
its Enterprise Reporting Application Platform;
-- Was named a Top Technology Innovator by VARBusiness Magazine.
Share Repurchase Program
Actuate expects to resume its stock repurchase program in Q1 2005.
Under this ongoing program, Actuate may repurchase its shares time to
time on the open market up to the authorized maximum of $1.5 million
per quarter.
Preliminary Results of Sarbanes-Oxley Section 404 Review
During the course of the audit of Actuate Corporation's 2004
financial statements, KPMG identified a material weakness in internal
controls over financial reporting related to the Q4 2004 restructuring
charge. Specifically, a decision was made to vacate a foreign facility
and a liability aggregating $628,000 was recorded for costs to be
incurred for its remaining term. However, as of December 31, 2004, we
had not met all of the requirements under Financial Accounting
Standard 146 and, therefore, no liability should have been recorded.
The liability is now expected to be recorded in the first quarter of
2005. The restructuring charge was corrected prior to completion of
the audit and, as a result, did not have any effect on reported
year-end or previously reported financial results. Nevertheless,
Actuate is at this time uncertain whether KPMG will issue an adverse
opinion on the company's internal controls as a result of this
restructuring charge.
Actuate Corporation will finalize its evaluation of internal
controls over financial reporting prior to the issuance of its Form
10-K for the year ended December 31, 2004. "Exclusive of this
instance, no other material weaknesses have been identified by
management or our auditors to date," said Dan Gaudreau, Chief
Financial Officer of Actuate Corporation. "Management continues to
take seriously its role in the design and effectiveness of internal
controls and will remediate all deficiencies in a timely manner."
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, certain legal and
accounting fees 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, February 10, 2005 to further discuss these 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 February 24, 2005.
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 over 3,000 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 Reports on Form
10-Q filed on May 6, 2004, August 9, 2004 and November 9, 2004.
Copyright(C) 2005 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)
December 31, December 31,
2004 2003
------------ ------------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 47,273 $ 45,439
Accounts receivable, net 24,776 20,208
Other current assets 2,498 2,599
-------- --------
Total current assets 74,547 68,246
Property and equipment, net 6,158 5,097
Goodwill and other intangibles, net 23,883 26,525
Other assets 867 1,538
-------- --------
$105,455 $101,406
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,414 $ 2,758
Current portion of restructuring
liabilities 3,669 2,198
Accrued compensation 5,244 4,402
Other accrued liabilities 4,996 4,772
Income taxes payable 539 1,241
Deferred revenue 28,763 25,790
-------- --------
Total current liabilities 45,625 41,161
-------- --------
Long term liabilities 12,885 15,064
Stockholders' equity 46,945 45,181
-------- --------
$105,455 $101,406
======== ========
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------- -------- -------------------
2004 2003 2004 2003
------- ------- -------- --------
Revenues:
License fees $10,913 $12,621 $ 42,703 $ 47,598
Services 16,453 14,798 61,954 56,857
------- ------- -------- --------
Total revenues 27,366 27,419 104,657 104,455
------- ------- -------- --------
Costs and expenses:
Cost of license fees 867 1,055 3,417 3,140
Cost of services 6,075 6,200 24,763 23,648
Sales and marketing 10,211 11,483 41,296 45,769
Research and development 4,300 4,901 19,847 18,732
General and administrative 2,791 2,648 10,856 12,220
Amortization of other
intangibles 276 284 1,110 2,021
In-Process R&D - - - 600
Restructuring charges 1,420 - 2,006 -
------- ------- -------- --------
Total costs and expenses 25,940 26,571 103,295 106,130
------- ------- -------- --------
Income (loss) from operations 1,426 848 1,362 (1,675)
Interest and other income, net 527 281 822 720
------- ------- -------- --------
Income (loss) before income
taxes 1,953 1,129 2,184 (955)
Provision for income taxes 725 2,284 886 3,542
------- ------- -------- --------
Net income (loss) $ 1,228 $(1,155) $ 1,298 $ (4,497)
======= ======= ======== ========
Basic net income (loss)
per share $ 0.02 $ (0.02) $ 0.02 $ (0.07)
======= ======= ======== ========
Shares used in basic per
share calculation 61,790 61,391 61,577 60,766
======= ======= ======== ========
Diluted net income (loss)
per share $ 0.02 $ (0.02) $ 0.02 $ (0.07)
======= ======= ======== ========
Shares used in diluted per
share calculation 64,475 61,391 65,202 60,766
======= ======= ======== ========
ACTUATE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
Three Months Ended
December 31, 2004
-----------------------------
GAAP Adjustments Non-GAAP
----- ----------- --------
Revenues:
License fees $10,913 $10,913
Services 16,453 16,453
-------- --------
Total revenues 27,366 27,366
-------- --------
Costs and expenses:
Cost of license fees 867 (383)(a) 484
Cost of services 6,075 6,075
Sales and marketing 10,211 10,211
Research and development 4,300 4,300
General and administrative 2,791 2,791
Amortization of other intangibles 276 (276) -
In-Process R&D - -
Restructuring charges 1,420 (1,420) -
-------- --------
Total costs and expenses 25,940 23,861
-------- --------
Income (loss) from operations 1,426 3,505
Interest and other income, net 527 527
-------- --------
Income (loss) before income taxes 1,953 4,032
Provision for income taxes 725 787 (c) 1,512
-------- --------
Net income (loss) $1,228 $2,520
======== ========
Basic net income (loss) per share $0.02 $0.04
======== ========
Shares used in basic per share
calculation 61,790 61,790
======== ========
Diluted net income (loss) per share $0.02 $0.04
======== ========
Shares used in diluted per share
calculation. 64,475 64,475
======== ========
Three Months Ended
December 31, 2003
-------------------- --------
GAAP Adjustments Non-GAAP
----- ----------- --------
Revenues:
License fees $12,621 $12,621
Services 14,798 14,798
-------- --------
Total revenues 27,419 27,419
-------- --------
Costs and expenses:
Cost of license fees 1,055 (373)(a) 682
Cost of services 6,200 6,200
Sales and marketing 11,483 11,483
Research and development 4,901 (139)(b) 4,762
General and administrative 2,648 2,648
Amortization of other intangibles 284 (284) -
In-Process R&D - -
Restructuring charges - -
-------- --------
Total costs and expenses 26,571 25,775
-------- --------
Income (loss) from operations 848 1,644
Interest and other income, net 281 281
-------- --------
Income (loss) before income taxes 1,129 1,925
Provision for income taxes 2,284 (1,563)(c) 721
-------- --------
Net income (loss) $(1,155) $1,204
======== ========
Basic net income (loss) per share $(0.02) $0.02
======== ========
Shares used in basic per share
calculation 61,391 61,391
======== ========
Diluted net income (loss) per share $(0.02) $0.02
======== ========
Shares used in diluted per share
calculation. 61,391 65,494
======== ========
(a) Amortization of purchased technology.
(b) Amortization of deferred compensation.
(c) 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)
Twelve Months Ended
December 31, 2004
----------------------------
GAAP Adjustments Non-GAAP
----- ----------- --------
Revenues:
License fees $ 42,703 $ 42,703
Services 61,954 61,954
-------- --------
Total revenues 104,657 104,657
-------- --------
Costs and expenses:
Cost of license fees 3,417 (1,532)(a) 1,885
Cost of services 24,763 24,763
Sales and marketing 41,296 41,296
Research and development 19,847 (96)(b) 19,751
General and administrative 10,856 (145)(c) 10,711
Amortization of other intangibles 1,110 (1,110) -
In-Process R&D - -
Restructuring charges 2,006 (2,006) -
-------- --------
Total costs and expenses 103,295 98,406
-------- --------
Income (loss) from operations 1,362 6,251
Interest and other income, net 822 822
-------- --------
Income (loss) before income taxes 2,184 7,073
Provision for income taxes 886 1,766 (d) 2,652
-------- --------
Net income (loss) $ 1,298 $ 4,421
======== ========
Basic net income (loss) per share $ 0.02 $ 0.07
======== ========
Shares used in basic per share
calculation 61,577 61,577
======== ========
Diluted net income (loss) per share $ 0.02 $ 0.07
======== ========
Shares used in diluted per share
calculation. 65,202 65,202
======== ========
Twelve Months Ended
December 31, 2003
--------------------------------
GAAP Adjustments Non-GAAP
----- ----------- --------
Revenues:
License fees $ 47,598 $ 47,598
Services 56,857 56,857
-------- --------
Total revenues 104,455 104,455
-------- --------
Costs and expenses:
Cost of license fees 3,140 (1,166)(a) 1,974
Cost of services 23,648 23,648
Sales and marketing 45,769 45,769
Research and development 18,732 (139)(b) 18,593
General and administrative 12,220 (2,441)(c) 9,779
Amortization of other intangibles 2,021 (2,021) -
In-Process R&D 600 (600) -
Restructuring charges - -
-------- --------
Total costs and expenses 106,130 99,763
-------- --------
Income (loss) from operations (1,675) 4,692
Interest and other income, net 720 720
-------- --------
Income (loss) before income taxes (955) 5,412
Provision for income taxes 3,542 (1,514)(d) 2,028
-------- --------
Net income (loss) $ (4,497) $ 3,384
======== ========
Basic net income (loss) per share $ (0.07) $ 0.06
======== ========
Shares used in basic per share
calculation 60,766 60,766
======== ========
Diluted net income (loss) per share $ (0.07) $ 0.05
======== ========
Shares used in diluted per share
calculation. 60,766 63,415
======== ========
(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
twelve months ended December 31, 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.
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Twelve Months Ended
December 31,
2004 2003
-------- --------
Operating activities
Net Income (loss) $ 1,298 $ (4,497)
Adjustments to reconcile net loss to net
cash from operating activities:
Amortization of deferred compensation 96 41
Amortization of other intangibles 2,642 3,186
Depreciation 2,293 3,020
Purchased in-process research and
development - 600
Tax benefit from exercise of stock
options 880 163
Changes in operating assets and
liabilities:
Accounts receivable (4,568) 3,776
Other current assets 5 1,308
Deferred income taxes - 2,140
Accounts payable (344) (1,319)
Accrued compensation 842 (1,197)
Other accrued liabilities 224 (2,137)
Income taxes payable (702) 291
Deferred rent liabilities 320 -
Restructuring liabilities (1,028) (3,601)
Deferred revenue 2,973 2,517
-------- --------
Net cash provided by operating activities 4,931 4,291
-------- --------
Investing activities
Purchases of property and equipment (3,354) (1,658)
Proceeds from maturity of short-term
investments 43,558 41,240
Purchases of short-term investments (36,170) (56,472)
Acquisition of Nimble Technology, net of
cash assumed - (3,016)
Net change in other assets 671 (97)
-------- --------
Net cash provided (used) by investing
activities 4,705 (20,003)
-------- --------
Financing activities
Proceeds from issuance of common stock 2,372 4,108
Stock repurchases (2,690) (2,964)
-------- --------
Net cash provided (used) in financing
activities (318) 1,144
-------- --------
Net increase (decrease) in cash and cash
equivalents 9,318 (14,568)
Effect of exchange rate on cash (27) (77)
Cash and cash equivalents at the beginning
of the period 8,950 23,595
-------- --------
Cash and cash equivalents at the end of the
period $ 18,241 $ 8,950
======== ========
CONTACT: Actuate Corporation
Keren Ackerman, 650-837-4545
kackerman@actuate.com