Exhibit 99.1
Actuate Reports Second Quarter 2005 Financial Results;
Revenues of $25.8 Million; GAAP EPS of $0.06; $2.0 Million in
Cash Flow from Operations; Record Non-GAAP Operating Margin of 16.2%
SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--July 27,
2005--Actuate Corporation (NASDAQ:ACTU), the world leader in
Enterprise Reporting Applications, today announced financial results
for the quarter ended June 30, 2005.
Total revenues for the second quarter of 2005 were $25.8 million,
a sequential increase compared with $24.6 million in the first quarter
of 2005. License revenues for the quarter were $8.8 million, compared
with $8.9 million in the first quarter of 2005. Services revenues
totaled $17.0 million for the second quarter of 2005, an increase of
$1.3 million compared with the $15.7 million reported in the first
quarter of 2005. Second quarter 2005 GAAP net income was $3.6 million,
or $0.06 per diluted share, compared with GAAP net income of $245,000
or $0.00 per diluted share in the first quarter of 2005.
Non-GAAP operating margin for the second quarter of 2005 was 16.2%
compared with a non-GAAP operating margin of 6.0% for the first
quarter of 2005. On a non-GAAP basis, net income in the second quarter
of 2005 was $2.9 million, or $0.05 per diluted share, compared with
non-GAAP net income of $1.2 million, or $0.02 per diluted share in the
first quarter of 2005. These non-GAAP financial measures exclude the
amortization of intangibles and purchased technology, asset
impairment, amortization of deferred compensation, restructuring
costs, certain legal fees and an adjustment to the tax provision. All
of these expenses are included in Actuate's GAAP results.
In the second quarter of 2005, Actuate's actual tax rate was 2.4%
compared to the historical non-GAAP tax rate of 37.5%, resulting in
non-GAAP net income that is lower than net income calculated in
accordance with GAAP.
Cash, cash equivalents and short-term investments as of June 30,
2005 totaled $49.3 million, a decrease of $337,000 compared with March
31, 2005. Deferred revenue at June 30, 2005 was $27.8 million, a 6%
increase compared with $26.2 million at March 31, 2005.
"In the second quarter, we continued to solidify our financial
infrastructure and make tangible progress toward our growth
initiatives -- successful performance that positions us squarely on
track to achieve the goals we set for ourselves last October," said
Pete Cittadini, Actuate's president and CEO. "We have posted
year-over-year earnings growth in each of the last three quarters, and
have generated cash flow from operations of $4.8 million year to
date."
"Actuate had another strong quarter of orders from the Global 9000
Financial Services sector particularly with Financial Performance
Management and Customer Self-Service Enterprise Reporting Applications
that support key business processes in highly adoptable fashion,"
continued Cittadini. "In addition, our Open Source initiative
continues to fire on all cylinders, with the on-time June launch of
the BIRT project by the Eclipse Foundation and the simultaneous
release of our commercial Actuate BIRT offering."
Second Quarter Financial Highlights
-- Total revenues of $25.8 million increased 5% compared with the
first quarter of 2005;
-- Non-GAAP EPS increased 150% from the first quarter of 2005;
-- Repurchased 1.3 million shares at a total cost of $2.7
million;
-- Non-GAAP operating income increased 185% compared with the
first quarter of 2005 and increased 55% compared with the
second quarter of 2004;
-- Non-GAAP operating margin was 16.2% compared with 6.0% in the
first quarter of 2005 and 9.7% in the second quarter of 2004;
-- Cash flow from operations for the first six months of 2005
totaled $4.8 million.
Second Quarter Customer Highlights
During second quarter 2005, Actuate received significant new and
repeat business from, among others, Citigroup, HSBC Bank USA, Visa
International, Deka Bank, US Department of Homeland Security, Kyushu
Electric Power Company, Niku, Deltek Systems and ePlus Technology.
Second Quarter Business Highlights
-- Actuate Corporation named top vendor in Enterprise Reporting
by Gartner/Meta;
-- Eclipse Business Intelligence and Reporting Tool project
version 1.0 made generally available on Eclipse.org allowing
Java developers to easily integrate business intelligence and
reporting capability into enterprise Java applications and
commercial products;
-- Launched Actuate BIRT, adding value to the Eclipse BIRT
project with features such as comprehensive live support,
indemnification, professional services and maintenance on an
annual subscription basis;
-- Announced Enterprise Reporting Application Design Services
that leverage Actuate e.Services libraries, best practices,
and experience to ensure the highest quality reports and most
effective use of Actuate technology to meet business
objectives;
-- Actuate BIRT received "Ready for IBM Rational Software"
validation providing developers using IBM Rational Software
Architect, IBM Rational Application Developer and IBM Rational
Web Developer with an open source driven option for their
Business Intelligence and reporting.
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 purchased
technology, asset impairment, amortization of deferred compensation,
restructuring costs, certain legal 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, July 27, 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 August 10, 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 2004 Annual Report
on Form 10-K filed on March 16, 2005 and Quarterly Report on Form 10-Q
filed on May 10, 2005.
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.
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*T
ACTUATE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
June 30, December 31,
2005 2004
-----------------------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 49,336 $ 47,273
Accounts receivable, net 21,597 24,776
Other current assets 1,960 2,498
-----------------------
Total current assets 72,893 74,547
Property and equipment, net 5,204 6,158
Goodwill and other intangibles, net 22,203 23,883
Other assets 621 867
-----------------------
$100,921 $105,455
=======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,430 $ 2,414
Current portion of restructuring liabilities 2,974 3,669
Accrued compensation 3,752 5,244
Other accrued liabilities 3,564 4,996
Income taxes payable 694 539
Deferred revenue 26,856 28,153
-----------------------
Total current liabilities 40,270 45,015
-----------------------
Long term liabilities
Deferred rent 262 320
Deferred revenue 972 610
Restructuring liabilities and other 11,748 12,565
-----------------------
12,982 13,495
-----------------------
Stockholders' equity 47,669 46,945
-----------------------
$100,921 $105,455
=======================
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Six Months
Ended Ended
June 30 June 30
----------------- -----------------
2005 2004 2005 2004
------- ------- ------- -------
Revenues:
License fees $ 8,805 $12,296 $17,753 $23,773
Services 16,965 15,553 32,642 29,744
------- ------- ------- -------
Total revenues 25,770 27,849 50,395 53,517
------- ------- ------- -------
Costs and expenses:
Cost of license fees 578 831 1,315 1,931
Cost of services 5,735 6,580 11,569 12,669
Sales and marketing 8,640 10,706 17,058 21,000
Research and development 4,131 5,224 8,359 10,415
General and administrative 2,802 2,373 7,311 5,046
Amortization of other intangibles 194 276 470 558
Restructuring charges 178 - 747 586
Asset impairment 284 - 284 -
------- ------- ------- -------
Total costs and expenses 22,542 25,990 47,113 52,205
------- ------- ------- -------
Income from operations 3,228 1,859 3,282 1,312
Interest and other income, net 433 214 817 384
------- ------- ------- -------
Income before income taxes 3,661 2,073 4,099 1,696
Provision for income taxes 89 778 282 778
------- ------- ------- -------
Net income 3,572 1,295 3,817 918
======= ======= ======= =======
Basic net income per share $ 0.06 $ 0.02 $ 0.06 $ 0.01
======= ======= ======= =======
Shares used in basic per share
calculation 61,467 61,488 61,778 61,423
======= ======= ======= =======
Diluted net income per share $ 0.06 $ 0.02 $ 0.06 $ 0.01
======= ======= ======= =======
Shares used in diluted per share
calculation 63,027 65,623 63,806 65,366
======= ======= ======= =======
ACTUATE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004
------------------------- ---------------------------
Adjust- Adjust-
GAAP ments Non-GAAP GAAP ments Non-GAAP
-------- ------ -------- -------- ------ ---------
Revenues:
License fees $ 8,805 $ 8,805 $12,296 $12,296
Services 16,965 16,965 15,553 15,553
------- ------- ------- -------
Total revenues 25,770 25,770 27,849 27,849
------- ------- ------- -------
Costs and
expenses:
Cost of license
fees 578 (301)(a) 277 831 (383)(a) 448
Cost of
services 5,735 5,735 6,580 6,580
Sales and
marketing 8,640 8,640 10,706 10,706
Research and
development 4,131 4,131 5,224 (41)(b) 5,183
General and
administrative 2,802 2,802 2,373 (145)(c) 2,228
Amortization of
other
intangibles 194 (194) - 276 (276) -
Restructuring
charges 178 (178) - - -
Asset
impairment 284 (284) - - -
------- ------- ------- --------
Total costs and
expenses 22,542 21,585 25,990 25,145
------- ------- ------- -------
Income from
operations 3,228 4,185 1,859 2,704
Interest and
other income,
net 433 433 214 214
------- ------- ------- -------
Income before
income taxes 3,661 4,618 2,073 2,918
Provision for
income taxes 89 1,643 (d) 1,732 778 316 (d) 1,094
------- ------- ------- -------
Net income 3,572 2,886 1,295 1,824
======= ======= ======= =======
Basic net income
per share $ 0.06 $ 0.05 $ 0.02 $ 0.03
======= ======= ======= =======
Shares used in
basic per share
calculation 61,467 61,467 61,488 61,488
======= ======= ======= =======
Diluted net
income per
share $ 0.06 $ 0.05 $ 0.02 $ 0.03
======= ======= ======= =======
Shares used in
diluted per
share
calculation 63,027 63,027 65,623 65,623
======= ======= ======= =======
(a) Amortization of purchased technology.
(b) Amortization of deferred compensation.
(c) Legal costs related to the litigation with MicroStrategy,
Incorporated.
(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)
Six Months Ended
June 30
2005 2004
--------------------
Operating activities
Net Income $ 3,817 $ 918
Adjustments to reconcile net loss to net
cash from operating activities:
Amortization of other intangibles 1,680 1,324
Depreciation 831 1,225
Changes in operating assets and liabilities:
Accounts receivable 3,179 763
Other current assets 538 89
Accounts payable 16 752
Accrued compensation (1,492) (263)
Other accrued liabilities (1,432) 313
Income taxes payable 155 723
Deferred rent liabilities (58) -
Restructuring liabilities (1,512) (782)
Deferred revenue (935) 959
--------------------
Net cash provided by operating activities 4,787 6,021
--------------------
Investing activities
Purchases of property and equipment 123 (1,658)
Proceeds from maturity of short-term
investments 48,659 35,388
Purchases of short-term investments (50,012) (24,999)
Net change in other assets 246 358
--------------------
Net cash (used) provided by investing
activities (984) 9,089
--------------------
Financing activities
Proceeds from issuance of common stock 1,161 1,334
Stock repurchases (4,216) (1,179)
--------------------
Net cash (used) provided in financing
activities (3,055) 155
--------------------
Net increase in cash and cash equivalents 748 15,265
Effect of exchange rate on cash (33) 88
Cash and cash equivalents at the beginning of
the period 7,341 8,950
--------------------
Cash and cash equivalents at the end of
the period $ 8,056 $ 24,303
====================
CONTACT: Actuate Corporation
Keren Ackerman, 650-837-4545
kackerman@actuate.com