San Jose, Calif. – July 29, 2002 – Business Objects (Nasdaq: BOBJ; Euronext Paris Euroclear code 12074), the world’s leading provider of business intelligence (BI) solutions, today announced results for the second quarter and six months ended June 30, 2002.
Second quarter revenues were $111.2 million, an increase of 10 percent over revenues of $101.5 million for the quarter ended June 30, 2001. Net income for the second quarter was $11.9 million, compared to net income of $11.0 million for the same period last year, an increase of 8 percent. Diluted net income per share and per ADS for the second quarter was $0.18, compared to $0.17 in the second quarter of last year. Excluding a gain from the net Cognos patent litigation settlement, and charges relating to employee reductions in Europe, pro forma diluted net income per share and per ADS in the second quarter was $0.17.
“We are pleased with our continued revenue and profitability growth, as we once again clearly stand out from the field in business intelligence and analytics,” said Bernard Liautaud, chairman and chief executive officer. “In light of the especially slow IT spending environment, our performance in the Americas, where revenue increased by 40 percent over last year, was particularly outstanding. However, this performance was partly offset by a continued weak economy in Europe.”
Large Contracts Reflect Priority of Business Intelligence
The company reported that 457 new customers were added in the quarter. “We had a significant number of large contracts in the quarter, including 5 over $1 million, and 65 between $200,000 and $1 million,” said Liautaud. Major customers in the quarter included Cisco Systems, Cingular Wireless, Voicestream, Banque de France, CNAM (French Social Security), Kraft Foods, AEP, Merrill Lynch and Morgan Stanley.
The company also reported that indirect channels contributed 48 percent of license revenue. “We continue to strengthen our relationships with major system integrators, providing us with access to large projects, while at the same time our network of value added resellers gives us an unparalleled reach into small and mid-size accounts,” said Liautaud.
Continued Strength in Americas Region
For the second quarter, revenue distribution by region was as follows: the Americas 52 percent, Europe 42 percent, and rest of world 6 percent. “Business Objects continued to gain market share in the Americas, as total revenue in that region grew by 40 percent over the same period in the prior year,” said Liautaud.
Analytic Applications: Rapid Revenue Growth and New Products
License revenue in analytic applications reached $4.5 million, up 128 percent from the second quarter of last year, with purchases by 34 customers, including Aventis, MasterCard, National Australia Bank, US Cellular, and the U.S. Department of Navy. “The growth of our analytic applications business signals that our unique ‘build or buy’ strategy is the right one for this segment,” said Liautaud. “Customers can use Business Objects Application Foundation to build their own specialized analytics, or employ modules from our suite of pre-built applications. During the quarter, we introduced Business Objects Application Foundation 3.0, which includes two new analytic engines – predictive analysis capability and statistical process control. We also expanded Business Objects Supply Chain Intelligence, adding three new modules.”
Extranet Business Adds 68 New Customers
The extranet group added 68 new customers during the quarter, bringing total extranet customers to 851. More than 100 extranet transactions were signed in the quarter. License and service revenues from extranet products were $19.6 million in the second quarter, a decrease of 10 percent from the same period in the prior year. “Our extranet results reflect the current IT spending environment, particularly in Europe, in which many companies are reluctant to initiate new projects,” said Liautaud. “However, we remain very confident in the value of extranets to a wide range of organizations, as customer deployments continue to move forward successfully.”
Year-to-Date Results
Revenues for the six months ended June 30, 2002 were $218.7 million, compared with revenues in the same period of the prior year of $199.8 million. Net income for the six months ended June 30, 2002 was $22.9 million, or $0.35 per diluted share and ADS, compared with net income for the same period of the prior year of $21.5 million, or $0.33 per diluted share and ADS.
Balance Sheet
As of June 30, 2002, the company had $332.9 million in cash, restricted cash and cash equivalents. Total assets were $499.8 million, compared with $421.5 million at December 31, 2001. Days sales outstanding as of June 30, 2002 were 65 days.
Business Outlook
Management offers the following guidance for the quarter ending September 30, 2002:
Revenue is expected to be in the range of $108 to $110 million.
Diluted earnings per share and per ADS are expected to be in the range of $0.02 to $0.04. This includes a projected impact of a negative $0.11 income per share resulting from the expected purchase of Acta Technology.
Management offers the following guidance for the full fiscal year ending
December 31, 2002:
Revenue is expected to be in the range of $450 million to $460 million.
Diluted earnings per share and per ADS are expected to be in the range of $0.55 to $0.59. This includes a projected impact of a negative $0.14 income per share resulting from the expected purchase of Acta Technology.
This press release contains forward looking statements, including statements regarding the company’s revenue, operating profit, and earnings expectations for the quarter ending September 30, 2002 and the year ending December 31, 2002, the company’s competitive advantage and its ability to manage effectively in a difficult economic environment, and the company’s relationship with resellers and integrators, the benefit to the company of such relationships, the value of extranets to organizations, and the effectiveness of the company’s analytic applications strategy. These forward-looking statements are based on the company’s current expectations, and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. The factors that could cause actual results to differ materially include, but are not limited to, the level of demand for the company’s business intelligence solutions, changes in customer order patterns, the importance of business intelligence in the intranet, extranet, and analytic applications markets, the closing of the acquisition of Acta Technology, the finalization of charges and costs relating to the acquisition of Acta Technology, unexpected expenses, the continued success in technological advances and the ability of the company to adapt to technological changes, the ability of the company to gain acceptance of its products, the company’s reliance on partners and other third party distribution channels to market and distribute its products, the impact of events outside the United States such as fluctuating currency rates, in particular fluctuations of the euro and yen, worldwide economic and political conditions, the ability of the company to protect its intellectual property, litigation involving intellectual property and other issues, and increased competition. For a more complete discussion of these factors and additional risk factors that could materially affect the company’s current and future operating results, see the discussions in the company’s Form 10Q for the quarter ended March 31, 2002, and Form 10-K for the fiscal year ended December 31, 2001 filed with the Securities and Exchange Commission. The company undertakes no obligation to update these forward-looking statements at any time or for any reason.
Business Objects will hold a conference call today, hosted by management, at 8:30 a.m. PDT (5:30 p.m. in Paris), to discuss its Q2 results and outlook for Q3 and the full year 2002. Investors can call 800.399.7988 (from U.S. and Canada) or 706.634.5428 (from Europe). A replay will be available for 48 hours after the call at 800.642.1687 (from U.S. and Canada), or 706.645.9291 (from Europe), both with access code 4718146. Also, a live Webcast and replay can be accessed for 5 days after the call at the “Investor” section of the Business Objects web site, www.businessobjects.com.
About Business Objects
Business Objects is the world's leading provider of business intelligence (BI) solutions. Business intelligence lets organizations access, analyze, and share information internally with employees and externally with customers, suppliers, and partners. Business intelligence helps organizations improve operational efficiency, build profitable customer relationships, and develop differentiated product offerings.
The company’s products include BusinessObjects 2000, the industry’s leading integrated business intelligence toolset and platform, and BusinessObjects Analytics, an integrated suite of enterprise analytic applications.
Business Objects pioneered the modern BI industry in 1990 by inventing a patented “semantic layer” that insulates users from the complexity of databases. In 1995, the company was first to focus on enterprise-scale BI deployments and today supports customers with more than 20,000 users. The company moved aggressively to the Internet in 1997 by pioneering the market for BI extranets, a market that it continues to lead today. In 2000, the company delivered the industry’s first interactive wireless BI solution. Today, Business Objects continues to innovate, creating and delivering a unique vision for enterprise analytic applications.
Business Objects has more than 16,000 customers in over 80 countries. The company's stock is publicly traded under the ticker symbols NASDAQ: BOBJ and Euronext Paris: code Euroclear France 12074, and included in the SBF 120 and IT CAC 50 French stock market indexes. Business Objects can be reached at 408-953-6000 and www.businessobjects.com
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A full-text copy of this announcement may be downloaded from the web; access http://www.businesswire.com/cnn and search on “Business Objects.” Business Objects product inquiries should contact 800-527-0580.