Informatica Reports Fourth Quarter Revenues of $56.7 Million
Focus on infrastructure drives fourth-quarter license revenue growth
REDWOOD CITY, Calif.,
January 22, 2004—Informatica Corporation (NASDAQ: INFA), a leading provider of data integration and business intelligence software, today announced financial results for the fourth quarter ended December 31, 2003.
Revenues for the fourth quarter of 2003 were $56.7 million, up significantly from the $50.1 million recorded in the fourth quarter of 2002. Net income for the fourth quarter, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $4.0 million or $0.04 per diluted share, compared with net income of $1.5 million or $0.02 per diluted share in the fourth quarter of 2002. Pro forma net income for the fourth quarter of 2003 was $5.4 million or $0.06 per diluted share, up from $1.8 million or $0.02 per diluted share in the fourth quarter of 2002. Pro forma operating results discussed in this press release exclude charges related to the amortization of acquired technology, intangible assets and stock-based compensation, purchased in-process research and development and restructuring charges. A reconciliation of pro forma operating results and GAAP results is included in the financial statements attached below.
For the year ended December 31, 2003, revenues were $206.4 million, an increase from the $195.4 million recorded in 2002. GAAP net income in 2003 was $8.2 million or $0.10 per diluted share, as compared to a net loss of $15.6 million or $0.20 per share in 2002. Pro forma net income for 2003 was $14.7 million or $0.17 per diluted share, an increase from $2.8 million or $0.03 per diluted share in 2002.
"This was an eventful year for Informatica, as we realigned the company to grow with a sharp focus on infrastructure solutions, offering the premiere data integration platform," said Gaurav Dhillon, president and CEO of Informatica. "Several key achievements in the fourth quarter demonstrated our commitment and progress towards this vision. We launched a significant release of our flagship PowerCenter platform, one that differentiates us from all other data integration vendors and will help us maintain our considerable market-share lead. And consistent with our strategy of expanding the Informatica footprint with our marquee customers, we signed the highest-ever number of repeat deals in our history. Finally, we completed the integration of Striva, which is a significant and valuable addition to our product portfolio."
Significant milestones achieved in the fourth quarter of 2003 included:
- Signed repeat business with 169 customers. Customers continued to derive value from their investment in Informatica solutions. Repeat customers included British Airways, Boeing, Cendant, Cisco Systems, CSFB, the Federal Bureau of Investigation, France Telecom, HP, Internal Revenue Service, Lockheed Martin, Pfizer, Sun Microsystems, U.S. Customs, and Waste Management.
- Signed 75 new customers. Informatica increased its customer base this quarter to 1,935 companies. New customers included Amerigroup, China Unicom, CSAA Inter-Insurance Bureau, Compass Bank, the L.A. Police Department, Ricoh Electronics, Sun Life of Canada, and the U.S. Department of Homeland Security.
- Launched significant release of PowerCenter. Informatica delivered a significant advance in enterprise data integration with the latest release of its PowerCenter data integration platform. PowerCenter 7 is the first data integration platform to provide adaptive capabilities in the face of today's increasing information complexity, pressure to maximally leverage current IT investments, increased demand for real-time decision making, and need for unified business views.
- Expanded relationship with IBM. The existing relationship with IBM has been expanded, with the IBM Data Management group using Informatica on an OEM basis for DB2 migrations. IBM and Informatica have also created an "On-Demand Performance Management" solution that leverages PowerCenter, PowerAnalyzer, and IBM WebSphere Business Integration.
- Completed integration of Striva, a provider of mainframe integration solutions. The acquisition of Striva was announced and completed in the third quarter of 2003, with the former Striva team now fully integrated as Informatica employees. Striva's technology extends Informatica's leadership in comprehensive enterprise data integration and business intelligence with its innovative mainframe technology for high-speed bulk data movement and patented solution for real-time change data capture in legacy and non-legacy environments.
- Informatica Developer Network hit 10,000 members in over 80 countries. Aimed at accelerating the creation of effective customer-developed and third-party add-on solutions, the two-year-old collaborative online community is unique in the industry. The Informatica Developer Network enables customers and their in-house developers to interact, share knowledge, and extend the business value of their Informatica integration and business intelligence implementations.
- Acknowledged as industry's leading data integration vendor. IDC ranked Informatica the leading vendor in the global data integration market for the fourth year in a row. The October report, "Worldwide Data Integration Software Forecast and Analysis, 2002-2007," ranked Informatica as the leading vendor in the data integration space, as measured by revenue. IDC also selected Informatica as a founding member of IDC's Software Leadership Council. The council is a unique, collaborative forum bringing together the viewpoints of senior executives from more than 30 of the most accomplished software vendors in the world.
- Voted third-most influential IT solutions provider by Intelligent Enterprise magazine. According to the magazine, Informatica was selected for the list based on its strengthened focus on data integration, particularly with the acquisition of Striva for mainframe data integration and its launch of the SuperGlue metadata management solution, "one of the most interesting software releases of the year."
- Received "Reader's Choice Award" from Intelligent Enterprise magazine. The readers of CMP Media's Intelligent Enterprise magazine voted for Informatica PowerCenter as their data integration software of choice. Named as part of the Intelligent Enterprise 2003 Reader's Choice Awards, Informatica PowerCenter received the most votes in the category of Data Movement and Transformation Tools.
To supplement the company's condensed consolidated financial statements presented on a GAAP basis, Informatica uses pro forma measures of net income and net income per share, which are adjusted to exclude certain charges and expenses discussed above and in the attached supplemental consolidated statements of operations which the company believes are appropriate to enhance an overall understanding of its historical financial performance. These adjustments to the company's current period GAAP results are made with the intent of providing both management and investors a more complete understanding of the company's underlying operational results and trends and our marketplace performance. Informatica believes that the inclusion of these pro forma financial measures provides consistency and comparability with its historical reports of financial results, as well as comparability to similar companies in the company's industry, many of which present the same pro forma financial measures to investors. In addition, these pro forma results are among the primary indicators management uses as a basis for its planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with generally accepted accounting principles in the United States.
Informatica will be discussing its fourth quarter 2003 results on a conference call today beginning at 2:00 p.m. PST. A live Webcast of the conference call will be available at http://www.informatica.com/investor. A replay of the call will also be available by dialing (888) 286-8010, reservation number 27729835.
About Informatica
Informatica Corporation (NASDAQ: INFA) is a leading provider of data integration and business intelligence software. Using Informatica products, companies can leverage their existing information assets for enterprise insight that helps them improve business performance, increase customer profitability, streamline supply chain operations and proactively manage regulatory compliance. More than 1,800 companies worldwide rely on Informatica to meet their end-to-end needs for enterprise data integration and business intelligence. For more information, call 1.650.385.5000 (1.800.970.1179 in the U.S.), or visit the Informatica Web site at http://www.informatica.com/.
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Note: Informatica is a registered trademark of Informatica Corporation in the United States and in jurisdictions throughout the world. All other company and product names may be trade names or trademarks of their respective owners. INFORMATICA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Three Months Ended
December 31, 2003 December 31, 2002
Adjust- Pro Adjust- Pro
GAAP ments* Forma GAAP ments(*) Forma
Revenues:
License $27,441 $-- $27,441 $24,767 $-- $24,767
Service 29,229 -- 29,229 25,356 -- 25,356
Total revenues 56,670 56,670 50,123 50,123
Cost of revenues:
License 941 -- 941 1,702 -- 1,702
Service 10,183 -- 10,183 9,884 -- 9,884
Amortization of
acquired technology 574 (574) -- 260 (260) --
Total cost of
revenues 11,698 (574) 11,124 11,846 (260) 11,586
Gross profit 44,972 574 45,546 38,277 260 38,537
Operating expenses:
Research and
development 12,512 -- 12,512 10,747 -- 10,747
Sales and marketing 24,286 -- 24,286 21,909 -- 21,909
General and
administrative 4,855 -- 4,855 5,191 -- 5,191
Amortization of
intangible assets 80 (80) -- 25 (25) --
Amortization of stock-
based compensation 752 (752) -- 31 (31) --
Total operating
expenses 42,485 (832) 41,653 37,903 (56) 37,847
Income from operations 2,487 1,406 3,893 374 316 690
Interest income and
other, net 1,784 -- 1,784 1,708 -- 1,708
Income before income
taxes 4,271 1,406 5,677 2,082 316 2,398
Income tax provision 254 -- 254 596 -- 596
Net income $4,017 $1,406 $5,423 $1,486 $316 $1,802
Net income per share:
Basic $0.05 $0.01 $0.06 $0.02 $-- $0.02
Diluted $0.04 $0.02 $0.06 $0.02 $-- $0.02
Weighted shares used to
compute net
income per share:
Basic 83,889 83,889 80,720 80,720
Diluted 89,594 89,594 83,082 83,082
(*) The following table summarizes the pro forma adjustments for the
respective periods presented:
Three Months Ended
December 31,
2003 2002
Net income, GAAP: $4,017 $1,486
Amortization of acquired technology 574 260
Amortization of intangible assets 80 25
Amortization of stock-based compensation 752 31
Net income, pro forma: $5,423 $1,802
INFORMATICA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Year Ended
December 31, 2003
GAAP Adjustments(*) Pro Forma
Revenues:
License $97,993 $-- $97,993
Service 108,449 -- 108,449
Total revenues 206,442 206,442
Cost of revenues:
License 3,139 -- 3,139
Service 38,844 -- 38,844
Amortization of acquired technology 1,031 (1,031) --
Total cost of revenues 43,014 (1,031) 41,983
Gross profit 163,428 1,031 164,459
Operating expenses:
Research and development 47,262 -- 47,262
Sales and marketing 86,558 -- 86,558
General and administrative 20,836 -- 20,836
Amortization of intangible assets 147 (147) --
Amortization of stock-based
compensation 817 (817) --
Purchased in-process research and
development 4,524 (4,524) --
Restructuring charges -- -- --
Total operating expenses 160,144 (5,488) 154,656
Income (loss) from operations 3,284 6,519 9,803
Interest income and other, net 7,059 -- 7,059
Income (loss) before income taxes 10,343 6,519 16,862
Income tax provision 2,124 -- 2,124
Net income (loss) $8,219 $6,519 $14,738
Net income (loss) per share:
Basic $0.10 $0.08 $0.18
Diluted $0.10 $0.07 $0.17
Weighted shares used to compute net
income (loss) per share:
Basic 82,049 82,049
Diluted 85,200 85,200
Year Ended
December 31, 2002
GAAP Adjustments(*) Pro Forma
Revenues:
License $99,943 $-- $99,943
Service 95,498 -- 95,498
Total revenues 195,441 195,441
Cost of revenues:
License 6,185 -- 6,185
Service 39,246 -- 39,246
Amortization of acquired technology 1,040 (1,040) --
Total cost of revenues 46,471 (1,040) 45,431
Gross profit 148,970 1,040 150,010
Operating expenses:
Research and development 45,631 -- 45,631
Sales and marketing 86,760 -- 86,760
General and administrative 20,284 -- 20,284
Amortization of intangible assets 100 (100) --
Amortization of stock-based
compensation 221 (221) --
Purchased in-process research and
development -- -- --
Restructuring charges 17,030 (17,030) --
Total operating expenses 170,026 (17,351) 152,675
Income (loss) from operations (21,056) 18,391 (2,665)
Interest income and other, net 6,363 -- 6,363
Income (loss) before income taxes (14,693) 18,391 3,698
Income tax provision 921 -- 921
Net income (loss) $(15,614) $18,391 $2,777
Net income (loss) per share:
Basic $(0.20) $0.23 $0.03
Diluted $(0.20) $0.23 $0.03
Weighted shares used to compute net
income (loss) per share:
Basic 79,753 79,753
Diluted 79,753 79,753
(*) The following table summarizes the pro forma adjustments for the
respective periods presented:
Year Ended
December 31,
2003 2002
Net income (loss), GAAP: $8,219 $(15,614)
Amortization of acquired technology 1,031 1,040
Amortization of intangible assets 147 100
Amortization of stock-based compensation 817 221
Purchased in-process research and development 4,524 --
Restructuring charges -- 17,030
Net income, pro forma: $14,738 $2,777
INFORMATICA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, September December 31,
2003 30, 2003 2002
ASSETS
Current assets:
Cash and cash equivalents $82,903 $80,714 $105,590
Short-term investments 140,890 137,575 130,285
Accounts receivable, net 34,375 27,093 29,982
Prepaid expenses and other current
assets 5,124 4,683 8,680
Total current assets 263,292 250,065 274,537
Property and equipment, net 38,734 40,862 47,370
Restricted cash 12,166 12,166 12,166
Goodwill and intangible assets, net 87,511 87,694 30,791
Other assets 1,105 355 330
Total assets $402,808 $391,142 $365,194
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other current
liabilities $45,828 $44,368 $41,383
Deferred revenue 50,373 48,020 51,702
Accrued restructuring charges 4,624 4,857 4,812
Accrued merger costs 543 1,431 --
Total current liabilities 101,368 98,676 97,897
Accrued restructuring charges, less
current portion 10,543 11,435 14,894
Accrued merger costs, less current
portion 389 603 --
Stockholders' equity 290,508 280,428 252,403
Total liabilities and
stockholders' equity $402,808 $391,142 $365,194
INFORMATICA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Operating activities
Net income (loss) $4,017 $1,486 $8,219 $(15,614)
Adjustments to reconcile net income
(loss)
to net cash provided by operating
activities:
Depreciation and amortization 2,775 3,212 11,181 10,477
Provision for doubtful accounts
and other receivable allowances (44) 173 133 1,606
Amortization of stock-based
compensation 752 31 817 221
Amortization of intangible assets 654 285 1,178 1,140
Purchased in-process research and
development -- -- 4,524 --
Non-cash restructuring charges -- -- -- 1,887
Gain on the sale of investments -- -- (121) (154)
Loss on disposal of property and
equipment 39 -- 43 357
Other 47 9 123 190
Adjustment to acquisition
allocation -- (710) -- (710)
Changes in operating assets and
liabilities:
Accounts receivable (7,205) 18 (3,096) (2,457)
Prepaid expenses and other
current assets (441) (2,338) 4,068 (1,619)
Other assets (750) 49 (768) 595
Accounts payable and other
current liabilities 889 3,946 1,950 4,774
Accrued restructuring charges (1,125) (1,378) (4,539) 10,374
Accrued merger costs (955) -- (955) --
Deferred revenue 2,353 7,911 (2,258) 15,148
Net cash provided by operating
activities 1,006 12,694 20,499 26,215
Investing activities
Purchases of property and
equipment, net (811) (1,546) (2,569) (6,911)
Purchases of investments (37,399) (19,834) (193,019) (240,184)
Sales and maturities of investments 34,075 42,100 181,964 199,913
Acquistions, net of cash acquired 0 -- (30,279) --
Net cash provided by (used in)
investing activities (4,135) 20,720 (43,903) (47,182)
Financing activities
Proceeds from issuance of common
stock, net of payments
for repurchases 5,093 329 11,625 7,860
Repurchases and retirements of
common stock -- (1,750) (11,448) (1,750)
Net cash provided by (used in)
financing activities 5,093 (1,421) 177 6,110
Effect of foreign currency
translation 225 395 540 783
Increase (decrease) in cash and
cash equivalents 2,189 32,388 (22,687) (14,074)
Cash and cash equivalents at
beginning of period 80,714 73,202 105,590 119,664
Cash and cash equivalents at end of
period $82,903 $105,590 $82,903 $105,590
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