Exhibit 99.1
Actuate Reports Third Quarter 2005 Financial Results;
Record-High EPS, Operating and Net Profit Margins
SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Oct. 26,
2005--Actuate Corporation (Nasdaq:ACTU), the world leader in
Enterprise Reporting Applications, today announced financial results
for the third fiscal quarter ended September 30, 2005.
Total revenues for the third quarter of 2005 were $26.8 million, a
13% increase compared with $23.8 million in the third quarter of 2004.
License revenues increased 11% to $8.9 million in the third quarter of
2005 from $8.0 million in the third quarter of 2004. Services revenues
increased 14% to $18.0 million in the third quarter of 2005 from $15.8
million in the third quarter of 2004. Operating margin on a GAAP basis
for the third quarter of 2005 was 17% and net profit margin on a GAAP
basis was 14%. Both operating margin and net profit margin were record
achievements for the Company. GAAP net income was $3.7 million, or
$0.06 per diluted share, for the third quarter of 2005 compared with a
GAAP net loss of $0.8 million or $0.01 per share in the third quarter
of 2004.
Non-GAAP operating margin for the third quarter of 2005 was 18%
compared with a non-GAAP negative operating margin of 3% for the third
quarter of 2004. On a non-GAAP basis, net income in the third quarter
of 2005 was $3.6 million, or $0.06 per diluted share, compared with a
non-GAAP net loss of $0.5 million, or $0.01 per share in the third
quarter of 2004. These non-GAAP financial measures exclude the
amortization of purchased technology and other intangibles, unrealized
investment loss, restructuring costs and an adjustment to the tax
provision. All of these expenses are included in Actuate's GAAP
results. The income tax rate used to compute third quarter 2005
non-GAAP net income was 30%, compared with an income tax rate of 37.5%
used to compute second quarter 2005 non-GAAP net income.
Cash, cash equivalents and short-term investments as of September
30, 2005 totaled $50.8 million, an increase of $1.5 million from June
30, 2005. Accounts receivable of $20.6 million at September 30, 2005
represented 70 days sales outstanding, an improvement from 76 days
sales outstanding at June 30, 2005. Deferred revenue at September 30,
2005 was $27.5 million, a decrease of $0.3 million compared with $27.8
million at June 30, 2005.
"The third quarter extended our streak of year-over-year earnings
growth as we continue to execute our strategic initiatives for 2005,"
said Pete Cittadini, Actuate's president and CEO. "Our relentless
focus on customer success has resulted in a loyal base of Global 9000
customers who continue to develop and deploy Enterprise Reporting
Applications to support key business processes. These customers form
the foundation for our profitable baseline business."
"Financial Management and Customer Self Service applications
continue to gain strength with our customers currently initiating
numerous new projects," continued Cittadini. "An independent study by
Forrester Research found business and financial benefits that further
validate Actuate's contribution to efficient and cost saving
reporting, as well as customer support and satisfaction. The
enhancements included in Actuate 8 SP1 delivers significant
productivity gains for BI application developers that speed the time
to value for our customers."
Third Quarter Financial Highlights
-- Total revenues of $26.8 million increased 13% compared to the
third quarter of 2004;
-- License revenues of $8.9 million increased 11% compared to the
third quarter of 2004;
-- Non-GAAP EPS of $0.06 increased $0.07 compared with the third
quarter of 2004;
-- Repurchased 864,000 shares at a total cost of $2.0 million;
-- Non-GAAP operating margin was 18%, a record-setting level for
the second consecutive quarter;
-- Non-GAAP net profit margin was a record 13%;
-- Cash flow from operations for the third quarter 2005 was $3.3
million, bringing the 2005 year-to-date total to $8.3 million;
-- Cash, cash equivalents and short-term investments reached a
record $50.8 million;
-- Services margin continued to improve to a record 68%.
Third Quarter Customer Highlights
During third quarter 2005, Actuate received significant new and
repeat business from, among others, ABN-AMRO, AON Warranty Group, BT,
CheckFree, Citigroup, EDS, Federated Department Stores, Humana
Military Healthcare Services, Johnson & Johnson, Kyushu Electric Power
Company, Murex, Olm, Sky, TIAA-CREF, Trendium, UBS, U.S. Federal
Reserve Board and the U.S. Department of Treasury.
Third Quarter Business Highlights
-- Announced enhancements to the Actuate e.Report Designer
Professional (e.RD Pro) to include an easy-to-use graphical
interface with integrated report design workflow, which
dramatically improves the productivity.
-- Introduced Information Object Designer, which enables
application developers to significantly reduce the time spent
in developing re-useable views of enterprise data.
-- Nearly 50,000 downloads of BIRT and Actuate BIRT since the
release of version 1.0 through the end of Q3 with over 33,000
downloads in Q3.
-- Actuate BIRT was MySQL Network-Certified and became a
recommended reporting and analytics component of a MySQL Data
Warehouse Scale-Out Solution Set.
-- Launched Offshore Professional Services offerings that enable
customers to take advantage of cost-effective blended rate
services to develop Enterprise Reporting Applications.
-- A Forrester Consulting study, "The Total Economic Impact(TM)
of Building Client Reporting Tools on Actuate," created a
composite organization that is using Actuate for customer
self-service reporting with positive cash flow in 15 months
with a return on investment of 92 percent over three years.
-- Named State Street Corporation and American Express as winners
of The Actuate Excellence Award winners for 2005 with
honorable mentions going to Indusa Global -- The Bahamas
Ministry of Tourism, New York Central Mutual Fire Insurance
Company, USPS, Pitt Ohio Express and York University.
-- Named Vincent De Gennaro, with over 27 years of international
sales and management expertise in the Business Intelligence
and enterprise software market, to the position of vice
president, Europe, Middle East and Africa (EMEA).
-- Niku Corporation, the global leader in IT Management and
Governance (IT-MG) solutions, renewed its relationship with
Actuate to provide critical information accessible to every
user of the applications, without necessitating any special
training.
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 purchased technology and other
intangibles, unrealized investment loss, restructuring costs 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. 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 26, 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 November 9, 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 Reports on Form
10-Q filed on May 10, 2005 and August 9, 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.
ACTUATE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September December
30, 31,
2005 2004
--------- ---------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $50,806 $47,273
Accounts receivable, net 20,566 24,776
Other current assets 2,993 2,498
--------- ---------
Total current assets 74,365 74,547
Property and equipment, net 4,756 6,158
Goodwill and other intangibles, net 22,071 23,883
Other assets 696 867
--------- ---------
$101,888 $105,455
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,733 $2,414
Current portion of restructuring liabilities 3,133 3,669
Accrued compensation 4,000 5,244
Other accrued liabilities 2,972 4,996
Income taxes payable 328 539
Deferred revenue 26,352 27,323
--------- ---------
Total current liabilities 38,518 44,185
--------- ---------
Long term liabilities:
Deferred rent 230 320
Deferred revenue 1,133 1,440
Restructuring liabilities and other 10,834 12,565
--------- ---------
Total long term liabilities 12,197 14,325
--------- ---------
Stockholders' equity 51,173 46,945
--------- ---------
$101,888 $105,455
========= =========
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Nine Months
Ended Ended
September September
30, 30,
----------------- -----------------
2005 2004 2005 2004
--------- ------- -------- --------
Revenues:
License fees $8,894 $8,017 $26,647 $31,790
Services 17,951 15,757 50,593 45,502
--------- ------- -------- --------
Total revenues 26,845 23,774 77,240 77,292
--------- ------- -------- --------
Costs and expenses:
Cost of license fees 489 619 1,804 2,549
Cost of services 5,702 6,019 17,271 18,689
Sales and marketing 9,411 10,085 26,564 31,085
Research and development 4,011 5,132 12,370 15,546
General and administrative 2,622 3,019 9,933 8,066
Amortization of other
intangibles 17 276 487 834
Restructuring charges 4 - 751 586
--------- ------- -------- --------
Total costs and expenses 22,256 25,150 69,180 77,355
--------- ------- -------- --------
Income (loss) from operations 4,589 (1,376) 8,060 (63)
Interest and other income
(expense), net 376 (89) 909 295
--------- ------- -------- --------
Income (loss) before income taxes 4,965 (1,465) 8,969 232
Provision for income taxes 1,225 (617) 1,507 162
--------- ------- -------- --------
Net income (loss) 3,740 (848) 7,462 70
========= ======= ======== ========
Basic net income (loss) per share $0.06 $(0.01) $0.12 $-
========= ======= ======== ========
Shares used in basic per share
calculation 60,513 61,671 61,351 61,506
========= ======= ======== ========
Diluted net income (loss) per
share $0.06 $(0.01) $0.12 $-
========= ======= ======== ========
Shares used in diluted per share
calculation 62,313 61,671 63,366 65,444
========= ======= ======== ========
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, 2005 September 30, 2004
---------------------- -----------------------
Adjust- Non- Adjust- Non-
GAAP ments GAAP GAAP ments GAAP
------ -------- ------ ------ -------- ------
Revenues:
License fees $8,894 - $8,894 $8,017 - $8,017
Services 17,951 - 17,951 15,757 - 15,757
------ ------ ------ ------
Total revenues 26,845 - 26,845 23,774 - 23,774
------ ------ ------ ------
Costs and expenses:
Cost of license
fees 489 (115)(a) 374 619 (383)(a) 236
Cost of services 5,702 - 5,702 6,019 - 6,019
Sales and
marketing 9,411 - 9,411 10,085 - 10,085
Research and
development 4,011 - 4,011 5,132 - 5,132
General and
administrative 2,622 - 2,622 3,019 - 3,019
Amortization of
other intangibles 17 (17) - 276 (276) -
Restructuring
charges 4 (4) - - - -
------ ------ ------ ------
Total costs and
expenses 22,256 - 22,120 25,150 - 24,491
------ ------ ------ ------
Income (loss) from
operations 4,589 - 4,725 (1,376) - (717)
Interest and other
income (expense),
net 376 17 (b) 393 (89) - (89)
------ ------ ------ ------
Income (loss) before
income taxes 4,965 - 5,118 (1,465) - (806)
Provision for income
taxes 1,225 310 (c) 1,535 (617) 315 (c) (302)
------ ------ ------ ------
Net income (loss) 3,740 - 3,583 (848) - (504)
====== ====== ====== ======
Basic net income
(loss) per share $0.06 - $0.06 $(0.01) - $(0.01)
====== ====== ====== ======
Shares used in basic
per share
calculation 60,513 60,513 61,671 61,671
====== ====== ====== ======
Diluted net income
(loss) per share $0.06 - $0.06 $(0.01) - $(0.01)
====== ====== ====== ======
Shares used in
diluted per share
calculation 62,313 62,313 61,671 61,671
====== ====== ====== ======
(a) Amortization of purchased technology.
(b) Unrealized investment loss.
(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 30% and 37.5% for fiscal years 2005 and 2004,
respectively. The amount of provision for income taxes used in
arriving at the non-GAAP net income does not necessarily reflect
the actual or future expected provision for income taxes.
ACTUATE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30,
2005 2004
-------- --------
Operating activities
Net Income $7,462 $70
Adjustments to reconcile net loss to net cash
from operating activities:
Amortization of other intangibles 1,286 1,983
Depreciation 1,315 1,730
Tax benefit from exercise of stock options 1,513 -
Unrealized investment loss 301 -
Changes in operating assets and liabilities:
Accounts receivable 4,210 2,796
Other current assets (495) 286
Accounts payable (153) (127)
Accrued compensation (1,244) (702)
Other accrued liabilities (2,024) (55)
Income taxes payable (210) (44)
Deferred rent liabilities (90) -
Restructuring liabilities (2,268) (1,424)
Deferred revenue (1,278) 1,154
-------- --------
Net cash provided by operating activities 8,325 5,667
-------- --------
Investing activities
Purchases of property and equipment 87 (2,891)
Proceeds from maturity of short-term investments 60,099 40,553
Purchases of short-term investments (58,764) (27,058)
Net change in other assets (130) 380
-------- --------
Net cash provided by investing activities 1,292 10,984
-------- --------
Financing activities
Proceeds from issuance of common stock 1,667 2,007
Stock repurchases (6,202) (2,689)
-------- --------
Net cash used in financing activities (4,535) (682)
-------- --------
Net increase in cash and cash equivalents 5,082 15,969
Effect of exchange rate on cash (157) 184
Cash and cash equivalents at the beginning of the
period 7,341 8,950
-------- --------
Cash and cash equivalents at the end of the period $12,266 $25,103
======== ========
CONTACT: Actuate Corporation
Keren Ackerman, 650-837-4545
kackerman@actuate.com