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Informatica Reports Second Quarter Revenues of $53.0 Million
REDWOOD CITY, Calif.,
July 20, 2004—Informatica Corporation (NASDAQ: INFA), a leading provider of data integration software, today announced financial results for the second quarter ended June 30, 2004.
Revenues for the second quarter of 2004 were $53.0 million, up from the $50.6 million recorded in the second quarter of 2003. Net income for the second quarter, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $1.0 million or $0.01 per diluted share, compared with net income of $3.3 million or $0.04 per diluted share in the second quarter of 2003. Pro forma net income for the second quarter of 2004 was $3.3 million or $0.04 per diluted share, compared to $3.4 million and $0.04 per diluted share in the second quarter of 2003.
For the six-month period ending June 30, 2004, revenues were $107.2 million, an increase from the $99.0 million recorded during the first six months of 2003. GAAP net income for the first six months of 2004 was $2.9 million or $0.03 per diluted share. Pro forma net income for the first six months of 2004 was $6.5 million or $0.07 per diluted share. Pro forma operating results discussed in this press release exclude charges related to the amortization of acquired technology, intangible assets and stock-based compensation. A reconciliation of pro forma operating results and GAAP results is included in the financial statements attached below.
"Although this quarter was disappointing, we expect to benefit from the strong team we have put in place as we focus on increasing our sales and marketing productivity during the second half of this year," said Earl Fry, executive vice president and chief financial officer at Informatica.
"It is a great testament to the value that Informatica's products deliver that over two-thirds of our orders come from our installed base of 2000-plus customers," said Sohaib Abbasi, incoming president and chief executive officer at Informatica. "With world-class products, a solid management team, and a strong customer base, I am looking forward to leading Informatica to the next level."
Significant milestones achieved in the second quarter of 2004 include:
- Signed repeat business with 119 customers. Customers continue to derive considerable value from their investments in Informatica solutions. Repeat customers included American Red Cross, Chicago Board of Trade, Dresdner Bank, eBay, Federal Bureau of Investigation, General Electric, Hewlett Packard, La Poste, Lockheed Martin, Societe Air France, Stanford University and Waste Management.
- Signed 62 new customers. Informatica increased its customer base this quarter to over 2,050 companies. New customers included ACH Food Companies, Collegiate Funding Services, Defense Finance & Accounting Service, HNI Corporation, Hyundai Motor Company, State of Louisiana, U.S. Department of Agriculture, U.S. Sugar Corporation, University of Missouri, University of Toronto, Verizon Canada and XM Satellite Radio.
- Launched Universal Data Services (UDS) architecture. Informatica announced its product vision and roadmap for delivering Universal Data Services. Informatica's UDS architecture is unique in that it enables shared data services for access, integration, visualization and auditing to come together on an as-needed basis to address existing and emerging business problems and opportunities.
- Launched new Japanese subsidiary. Informatica launched a Japanese subsidiary, hiring seasoned executive Takemi Hojo as country manager for Informatica KK. The company also strengthened its strategic partnership with Mitsubishi Electric Information Technology Corporation, which is expanding its support for Informatica products and customers in Japan with additional Informatica-certified consultants, technical support capabilities and engineering resources for localization, testing and quality assurance.
- Reached 2,000th customer milestone. Informatica's world-class customer base topped 2,000 with the addition of the U.S. Department of Agriculture (USDA) and the Center for Agribusiness Excellence (CAE) at Tarleton State University.
- Named market share leader by leading analyst firm. In a June 22, 2004 report, Forrester Research stated that Informatica captured the leadership position once again in 2003 with 23 percent of the ETL market, a component of the broader data integration market.
- Won prestigious industry award for customer implementation. The Deutsche Börse Group and Informatica won The Data Warehousing Institute's 2004 Best Practices Award in the Real-time Data Warehousing category, marking the eighth consecutive year that an Informatica customer has won a TDWI Best Practices Award. In addition, Optimus Telecomunicaçöes SA and Owens & Minor won Best Practices Awards this year for their implementations of Informatica's products.
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. These measures 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, trends and 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 similar 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 second quarter 2004 results on a conference call today beginning at 2:00 p.m. PDT / 5:00 p.m. EDT. 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 617-801-6888, reservation number 83714997.
About Informatica
Informatica Corporation (NASDAQ: INFA) is a leading provider of data integration software. Using Informatica products, companies can access, integrate, visualize, and audit their enterprise information assets to help improve business performance, increase customer profitability, streamline supply chain operations and proactively manage regulatory compliance. More than 2,000 companies worldwide rely on Informatica for their end-to-end enterprise data integration needs. For more information, call 650-385-5000 (1-800-970-1179 in the U.S.), or visit www.informatica.com.
This press release contains forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995, particularly statements referencing the Company's expected benefits of its newly hired personnel and its focus on increasing sales and marketing productivity. These statements are not guarantees of future developments and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed in any such forward-looking statements. Such risks and uncertainties include the effects of changes in sales management, the impact of increased focus on sales and marketing productivity, possible delays in the development, availability and shipment of new products and enhancements to existing products, and risks associated with changes in general economic conditions. Further risks are detailed from time to time in Informatica's SEC reports, including its Form 10-K Report and Form 10-Q filings. Informatica assumes no duty to update any of the forward-looking statements in this release.
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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
June 30, 2004 June 30, 2003
Adjust- Adjust-
GAAP ments* Pro Forma GAAP ments* Pro Forma
Revenues:
License $23,292 $-- $23,292 $23,588 $-- $23,588
Service 29,742 -- 29,742 27,031 -- 27,031
Total revenues 53,034 53,034 50,619 50,619
Cost of revenues:
License 624 -- 624 637 -- 637
Service 9,663 (12) 9,651 9,679 -- 9,679
Amortization of
acquired technology 581 (581) -- 115 (115) --
Total cost of
revenues 10,868 (593) 10,275 10,431 (115) 10,316
Gross profit 42,166 593 42,759 40,188 115 40,303
Operating expenses:
Research and
development 13,924 (1,451) 12,473 11,358 (19) 11,339
Sales and marketing 22,590 (250) 22,340 20,782 -- 20,782
General and
administrative 4,709 20 4,729 5,395 -- 5,395
Amortization of
intangible assets 48 (48) -- 25 (25) --
Total operating
expenses 41,271 (1,729) 39,542 37,560 (44) 37,516
Income from operations 895 2,322 3,217 2,628 159 2,787
Interest income and
other, net 426 -- 426 1,257 -- 1,257
Income before income
taxes 1,321 2,322 3,643 3,885 159 4,044
Income tax provision 342 -- 342 596 -- 596
Net income $979 $2,322 $3,301 $3,289 $159 $3,448
Net income per share:
Basic and diluted $0.01 $0.04 $0.04 $0.04
Weighted shares used to
compute net
income per share:
Basic 85,557 85,557 80,143 80,143
Diluted 88,394 88,394 82,777 82,777
* The following table summarizes the pro forma adjustments for the
respective periods presented:
Three Months Ended
June 30, 2004
2004 2003
Net income, GAAP: $979 $3,289
Amortization of acquired
technology 581 115
Amortization of intangible
assets 48 25
Amortization of stock-based
compensation 1,693 19
Net income, pro forma: $3,301 $3,448
INFORMATICA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
Adjust- Adjust-
GAAP ments* Pro Forma GAAP ments* Pro Forma
Revenues:
License $48,210 $-- $48,210 $46,454 $-- $46,454
Service 58,997 -- 58,997 52,586 -- 52,586
Total revenues 107,207 - 107,207 99,040 99,040
Cost of revenues:
License 1,725 -- 1,725 1,224 -- 1,224
Service 19,746 (24) 19,722 18,916 -- 18,916
Amortization of
acquired technology 1,155 (1,155) -- 375 (375) --
Total cost of
revenues 22,626 (1,179) 21,447 20,515 (375) 20,140
Gross profit 84,581 1,179 85,760 78,525 375 78,900
Operating expenses:
Research and
development 27,226 (1,848) 25,378 22,722 (43) 22,679
Sales and marketing 45,142 (500) 44,642 41,922 -- 41,922
General and
administrative 9,666 41 9,707 10,791 -- 10,791
Amortization of
intangible assets 103 (103) -- 50 (50) --
Total operating
expenses 82,137 (2,410) 79,727 75,485 (93) 75,392
Income from operations 2,444 3,589 6,033 3,040 468 3,508
Interest income and
other, net 1,115 -- 1,115 2,380 -- 2,380
Income before income
taxes 3,559 3,589 7,148 5,420 468 5,888
Income tax provision 689 -- 689 1,089 -- 1,089
Net income $2,870 $3,589 $6,459 $4,331 $468 $4,799
Net income per share:
Basic $0.03 $0.08 $0.05 $0.06
Diluted $0.03 $0.07 $0.05 $0.06
Weighted shares used to
compute net
income per share:
Basic 85,184 85,184 80,335 80,335
Diluted 89,320 89,320 82,959 82,959
* The following table summarizes the pro forma adjustments for the
respective periods presented:
Six Months Ended
June 30, 2004
2004 2003
Net income, GAAP: $2,870 $4,331
Amortization of acquired
technology 1,155 375
Amortization of intangible
assets 103 50
Amortization of stock-based
compensation 2,331 43
Net income, pro forma: $6,459 $4,799
INFORMATICA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
June 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $86,604 $82,903
Short-term investments 149,848 140,890
Accounts receivable, net 31,418 34,375
Prepaid expenses and other current
assets 7,598 5,124
Total current assets 275,468 263,292
Property and equipment, net 34,535 38,734
Restricted cash 12,166 12,166
Goodwill and intangible assets, net 86,088 87,511
Other assets 1,416 1,105
Total assets $409,673 $402,808
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other current
liabilities $39,694 $45,828
Deferred revenue 53,766 51,282
Accrued restructuring charges 4,170 4,624
Accrued merger costs 298 543
Total current liabilities 97,928 102,277
Accrued restructuring charges, less
current portion 8,836 10,543
Accrued merger costs, less current
portion 218 389
Stockholders' equity 302,691 289,599
Total liabilities and
stockholders' equity $409,673 $402,808
INFORMATICA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended,
June 30,
2004 2003
Operating activities
Net income $2,870 $4,331
Adjustments to reconcile net income
to net
cash provided by operating
activities:
Depreciation and amortization 5,257 5,751
Provision for doubtful accounts and
accounts receivable reserve (254) 177
Stock-based compensation 2,700 43
Amortization of acquired technology
and other intangible assets 1,258 425
Other 19 62
Changes in operating assets and
liabilities:
Accounts receivable 3,211 3,686
Prepaid expenses and other current
assets (2,301) 3,304
Other assets (311) (25)
Accounts payable and other current
liabilities (6,134) 380
Accrued restructuring charges (2,161) (2,293)
Accrued merger costs (203) --
Deferred revenue 2,454 (1,169)
Net cash provided by operating
activities 6,405 14,672
Investing activities
Purchases of property and equipment,
net (1,434) (1,246)
Purchases of investments (90,281) (120,462)
Sales and maturities of investments 80,582 69,390
Net cash used in investing
activities (11,133) (52,318)
Financing activities
Proceeds from issuance of common
stock 8,408 3,052
Repurchase and retirement of common
stock -- (10,445)
Net cash provided by (used in)
financing activities 8,408 (7,393)
Effect of foreign currency
translation 21 165
Increase (decrease) in cash and cash
equivalents 3,701 (44,874)
Cash and cash equivalents at
beginning of period 82,903 105,590
Cash and cash equivalents at end of
period $86,604 $60,716
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