Hyperion (NASDAQ:HYSL)
Historical Stock Chart
From Jun 2019 to Jun 2024
Hyperion Solutions (Nasdaq Global Select: HYSL), the global leader in
Business Performance Management (BPM) software, today announced results
for its fiscal second quarter ended December 31, 2006, which include
records for Q2 license and total revenue, net income, earnings per
share, and number of new customers.
Total revenues for the quarter increased 20% to $222.9 million, compared
to $185.5 million for the same period a year ago. Software license
revenue increased 14% to $84.9 million, compared to $74.4 million for
the same period a year ago, while maintenance and services revenue grew
24% to $138.0 million, compared to $111.0 million in the year-ago period.
The company's second quarter net income, as reported in accordance with
U.S. generally accepted accounting principles (GAAP), increased 39% to
$21.5 million, or $0.36 per diluted share, compared to net income of
$15.5 million, or $0.25 per diluted share, for the second quarter of
fiscal 2006.
Second quarter non-GAAP net income increased 34% year-over-year to a
record $29.9 million, or $0.50 per diluted share, excluding the impact
of charges, net of related tax, for the deferred maintenance revenue
adjustments and the amortization of purchased intangible assets; and
SFAS 123R equity-based compensation. These results compare to non-GAAP
net income of $22.3 million, or $0.37 per diluted share, for the second
quarter of fiscal 2006.
Hyperion’s balance sheet reflects cash and
short-term investments totaling $486.4 million at December 31, 2006,
compared to $436.2 million at September 30, 2006. Cash flow from
operations for the quarter was $47.4 million. The company used cash of
$7.5 million to repurchase stock during the quarter, as part of a $100
million stock repurchase program announced in April 2006. Days sales
outstanding (DSO) for the quarter improved six days sequentially to 58
days.
“We’re pleased to
report the best second fiscal quarter in Hyperion’s
history,” said Godfrey R. Sullivan, Hyperion’s
president and chief executive officer. “License
revenue grew 14%, as customers increasingly recognize Hyperion as the
management system for the global enterprise. This is our third
consecutive quarter of double-digit license revenue growth, fueled by
increasing demand for Hyperion System 9. We set new company records for
number of transactions with new customers, net income, and earnings per
share and are increasingly winning in stand-alone business intelligence
transactions.”
Business Outlook for Q3 FY07
Hyperion also reported today its outlook for the third quarter of fiscal
year 2007. On a GAAP basis, the company currently expects total revenues
in the range of $215 million to $220 million and diluted earnings per
share in the range of $0.24 to $0.29. This outlook assumes an effective
tax rate of 39.4%, and diluted shares outstanding of 59.9 million.
Excluding the impact, net of the related tax expense, of the
amortization of purchased intangible assets, equity-based compensation
expense, and deferred maintenance revenue adjustments, the company
expects diluted earnings per share on a non-GAAP basis for the second
quarter in the range of $0.40 to $0.45, and a non-GAAP effective tax
rate of 37.4%.
Business Outlook for FY07
Hyperion also reported its updated outlook for fiscal year 2007. On a
GAAP basis, the company currently expects total revenues in the range of
$885 million to $895 million and diluted earnings per share in the range
of $1.20 to $1.25. This outlook assumes an effective tax rate for Q3 and
Q4 of 39.4% and diluted shares outstanding of 59.8 million.
Excluding the impact, net of the related tax expense, of the
amortization of purchased intangible assets, equity-based compensation
expense, and deferred maintenance revenue adjustments, the company
expects diluted earnings per share on a non-GAAP basis for the fiscal
year in the range of $1.80 to $1.85, and a non-GAAP effective tax rate
for Q3 and Q4 of 37.4%.
Other Recent Developments
Other recent company developments include:
Won major customer contracts at: AIB Group (UK), AmBev (Brazil), BT
Group plc (UK), Consorzio Operativo Gruppo MPS (Italy), EagleBurgmann
Group (Germany), H.C. Starck GmbH & Co. KG (Germany), International
Flavors & Fragrances, New York University, RadioShack, Sensata
Technologies, Stora Enso (Finland), Sunrise Senior Living Services,
and ThyssenKrupp AG (Germany).
Placed in the leaders quadrant in the “Magic
Quadrant for CPM Suites, 2006” by industry
analyst firm Gartner. Gartner weighed Hyperion’s
completeness of vision and ability to execute in determining its
position in the Magic Quadrant.
Introduced Hyperion System 9 Smart Space with “always-on”
business intelligence, featuring gadgets that leverage the latest
innovations in Microsoft Windows XP and Vista operating systems.
Unveiled powerful new features and functionality in Hyperion System 9
Release 9.3. Major new enhancements give organizations more tools for
improving business performance and include a Capital Expense Planning
module, BPM Architect, and Data Integration Management module.
Hyperion’s Global Partner organization
announced SolutionsNet, a new program that enhances support for
partners who offer targeted BPM solutions built on Hyperion System 9
software.
Announced today that it signed a merger agreement to acquire
Decisioneering, a privately held decision analysis software company
headquartered in Denver, CO.
Conference Call and Webcast
Hyperion’s executive management will host a
conference call at 5:00 p.m. ET today to discuss these financial
results. The conference call and slide presentation will be webcast live
with access from the Investor Relations section of the Hyperion web site
at www.hyperion.com. A replay of
the webcast will also be available from the company’s
web site.
About Hyperion
Hyperion Solutions Corporation (Nasdaq Global Select: HYSL) is the
global leader in Business Performance Management software. More than
12,000 customers in 90 countries rely on Hyperion both for insight into
current business performance and to drive performance improvement. With
Hyperion software, businesses collect, analyze and share data across the
organization, linking strategies to plans and monitoring execution
against goals. Hyperion integrates financial management applications
with a business intelligence platform into a single management system
for the global enterprise. For more information, visit www.hyperion.com.
Forward-Looking Statements
Statements in this press release relating to the future, including but
not limited to those related to our “Business
Outlook, are forward-looking statements within the meaning of the “safe
harbor” provisions of the Private Securities
Litigation Reform Act of 1995. In some cases, forward-looking statements
can be identified by terminology such as “may,”
“will,” “should,”
“potential,” “estimated,”
“projects,” “anticipate,”
“plans,” “expects,”
“believes” and
similar expressions. These forward-looking statements are based on
current plans and expectations, and involve risks and uncertainties,
including important factors that could cause our actual results to
differ materially from those projected in the forward-looking
statements. These factors include, without limitation, our ability to
increase software license revenue (by either increasing sales of newer
products or reducing the decline in revenue from older and existing
products), the occurrence of unexpected and significant product quality
problems, our ability to maintain or increase partner revenue, lower
than expected customer adoption rates for System 9, our ability to
successfully integrate acquired businesses or technologies,
strengthening of the dollar against key European currencies, the impact
of new or existing competitive products and pricing, a decline in
customer demand and technological shifts. For a more detailed discussion
of factors that could affect the company's performance and cause actual
results to differ materially from those anticipated in the
forward-looking statements, interested parties should review the
company's filings with the Securities and Exchange Commission, including
the company’s annual report on Form 10-K
filed on September 1, 2006 and its quarterly report on Form 10-Q filed
on November 8, 2006. The results contained in this press release are
preliminary and therefore subject to change as the company completes its
review of the second quarter. The company does not undertake an
obligation to update its forward-looking statements to reflect future
events or circumstances. Although this release may remain available on
the company's website or elsewhere, its continued availability does not
indicate that the company is reaffirming or confirming any of the
information contained herein as of a later date.
“Hyperion,”
the Hyperion logo, and Hyperion’s product
names are trademarks of Hyperion.
Hyperion Solutions Corporation
Reconciliation of GAAP to Non-GAAP Results
(In thousands except for per share data)
The following table reflects Hyperion’s
GAAP results reconciled to non-GAAP results for its Q2 FY07 as
included in this press release.
Three Months Ended
December 31,
2006
December 31,
2005
Net income:
GAAP net income
$
21,528
$
15,522
Plus:
Equity-based compensation expense
9,210
7,030
Amortization of purchased intangible assets
3,174
2,408
Restructuring charges
-
446
Deferred maintenance revenue adjustment
369
-
Less: Income tax effect of non-GAAP adjustments
(4,342)
(3,082)
Non-GAAP net income
$
29,939
$
22,324
Three Months Ended
Diluted net income per share:
December 31,
2006
December 31,
2005
GAAP net income per share
$
0.36
$
0.25
Plus:
Equity-based compensation expense
0.15
0.12
Amortization of purchased intangible assets
0.05
0.04
Restructuring charges
-
0.01
Deferred maintenance revenue adjustment
0.01
-
Less: Income tax effect of non-GAAP adjustments
(0.07)
(0.05)
Non-GAAP net income per share
$
0.50
$
0.37
Shares used in computing diluted net income per share
59,721
60,930
The following table reflects Hyperion’s
Q3 FY07 and FY07 Business Outlook on a GAAP basis reconciled to
our results on a non-GAAP basis.
Business Outlook:
Diluted net income:
Q3FY07
FY07
Projected GAAP net income per share
$0.24 – $0.29
$1.20 – $1.25
Plus:
Equity-based compensation expense
0.16
0.62
Amortization of purchased intangible assets
0.07
0.25
Deferred maintenance revenue adjustment
0.01
0.04
Less: Income tax effect of non-GAAP adjustments
(0.08)
(0.31)
Projected Non-GAAP net income per share
$0.40 – $0.45
$1.80 – $1.85
This outlook assumes a GAAP effective tax rate of 39.4% and a
non-GAAP effective tax rate of 37.4%.
Non-GAAP Financial Information
The non-GAAP information included in this press release is not prepared
in accordance with GAAP because it excludes equity-based compensation,
amortization of purchased intangible assets, restructuring charges
(credits), and deferred maintenance revenue adjustments. Management
believes the presentation of this non-GAAP information may be useful to
investors because the Company has historically provided this or similar
information and understands that some investors find it helpful in
analyzing the Company’s revenues and expenses
and comparing them to the revenues and expenses of the Company’s
competitors or others. Management uses this non-GAAP information, along
with GAAP information, in evaluating the Company’s
historical and projected revenues and expenses, primarily with a view to
assessing ongoing revenues and expenses associated with specific,
non-recurring transactions, as is the case with our deferred maintenance
revenue adjustment, purchased intangible assets, and restructuring
charges (credits). Management uses the non-GAAP information relating to
our equity-based compensation, along with GAAP information, to compare
this specific non-cash expense with similar expenses of the Company’s
competitors or others. Management does so, in part, because of the
divergence of opinion as to the best accounting method of equity
compensation, notwithstanding the adoption of FAS 123R.
The non-GAAP information is not prepared in accordance with generally
accepted accounting principles and may differ from the non-GAAP
information used by other companies. Non-GAAP information should not be
considered in isolation from, or as a substitute for, information
prepared in accordance with GAAP. Moreover, there are material
limitations associated with the use of non-GAAP information. In this
regard, while the specific transactions causing the non-GAAP expenses
are non-recurring, the Company in the future may effect other
transactions, such as acquisitions or restructurings that will trigger
similar expenses. Moreover, the Company expects in the future to incur
additional equity-based compensation with the granting of additional
equity compensation pursuant to FAS 123R and otherwise. For these
reasons, our non-GAAP information may not be as useful to investors as
the GAAP information also provided.
Hyperion Solutions Corporation
Consolidated Balance Sheets
(In thousands, except par value)
December 31,
June 30,
2006
2006
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
209,877
$
166,055
Short-term investments
276,557
271,228
Accounts receivable, net of allowances of $10,000 and $10,370
142,526
180,384
Deferred tax assets
11,103
10,869
Prepaid expenses and other current assets
32,297
35,205
TOTAL CURRENT ASSETS
672,360
663,741
Property and equipment, net
73,478
76,221
Goodwill
161,238
157,208
Other intangible assets, net
31,972
38,525
Deferred tax assets
46,254
40,956
Other assets
12,247
5,669
TOTAL ASSETS
$
997,549
$
982,320
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
73,269
$
78,014
Accrued employee compensation and benefits
54,912
68,243
Income taxes payable
46,771
47,009
Deferred revenue
158,733
171,142
Restructuring liabilities
6,832
6,943
TOTAL CURRENT LIABILITIES
340,517
371,351
Long-term restructuring liabilities and other
17,896
21,384
TOTAL LIABILITIES
358,413
392,735
Stockholders' equity:
Preferred stock - $0.001 par value; 5,000 shares authorized; none
issued
-
-
Common stock - $0.001 par value; 300,000 shares authorized; 58,528
and 58,301 shares issued and outstanding
59
58
Additional paid-in capital
572,302
534,716
Retained earnings
67,184
57,142
Accumulated other comprehensive loss
(409)
(2,331)
TOTAL STOCKHOLDERS' EQUITY
639,136
589,585
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
997,549
$
982,320
Hyperion Solutions Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
Six Months Ended
December 31,
December 31,
2006
2005
2006
2005
REVENUES
Software licenses
$
84,879
$
74,445
$
153,009
$
134,969
Maintenance and services
138,031
111,049
268,404
220,750
TOTAL REVENUES
222,910
185,494
421,413
355,719
COSTS AND EXPENSES
Cost of revenues:
Software licenses
5,522
4,626
11,395
8,465
Maintenance and services
53,169
42,845
103,142
80,799
Sales and marketing
82,644
69,807
155,803
136,455
Research and development
32,149
28,360
62,345
56,241
General and administrative
19,325
17,385
42,368
33,514
Restructuring charges (credits)
-
446
(26)
346
TOTAL COSTS AND EXPENSES
192,809
163,469
375,027
315,820
OPERATING INCOME
30,101
22,025
46,386
39,899
Interest and other income, net
3,909
2,809
7,461
5,385
INCOME BEFORE INCOME TAXES
34,010
24,834
53,847
45,284
Income tax provision
12,482
9,312
20,383
16,470
NET INCOME
$
21,528
$
15,522
$
33,464
$
28,814
Basic net income per share
$
0.37
$
0.26
$
0.58
$
0.49
Diluted net income per share
$
0.36
$
0.25
$
0.56
$
0.47
Shares used in computing basic net income per share
58,068
59,102
57,784
59,176
Shares used in computing diluted net income per share
59,721
60,930
59,341
60,834
Hyperion Solutions Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
December 31,
2006
2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$
33,464
$
28,814
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
19,857
16,430
Stock-based compensation
18,284
14,807
Provision for accounts receivable allowances
2,707
2,660
Deferred tax assets
(3,217)
(4,236)
Income tax benefit from exercise of stock options
803
-
Changes in operating assets and liabilities:
Accounts receivable
38,092
(7,316)
Prepaid expenses and other current assets
3,249
1,277
Other assets
285
221
Accounts payable and accrued liabilities
(8,631)
2,927
Accrued employee compensation and benefits
(14,284)
(3,182)
Income taxes payable
(387)
8,234
Deferred revenue
(14,799)
(14,894)
Restructuring liabilities
(207)
(894)
Long-term restructuring liabilities and other
(3,419)
(3,077)
Net cash provided by operating activities
71,797
41,771
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale and other investments
(150,689)
(184,661)
Proceeds from sales and maturities of investments
139,139
182,058
Purchases of property and equipment
(8,107)
(10,216)
Purchases of other intangible assets
(205)
(637)
Payments for acquisitions, net of cash acquired
(5,992)
-
Net cash used in investing activities
(25,854)
(13,456)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on capital leases
(126)
-
Purchases of common stock
(32,460)
(80,081)
Proceeds from issuance of common stock
25,136
30,406
Income tax benefit from exercise of stock options
2,401
6,761
Net cash used in financing activities
(5,049)
(42,914)
Effect of exchange rate on cash and cash equivalents
2,928
(1,769)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
43,822
(16,368)
Cash and cash equivalents at beginning of period
166,055
170,740
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
209,877
$
154,372
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
$
44
$
153
Cash paid for income taxes
$
19,376
$
4,980
Hyperion Solutions Corporation
Supplemental Financial Data
($ in thousands)
(Unaudited)
Fiscal 2006
Fiscal 2007
% Change over Q1 07
% Change overQ2 06
Q1
Q2
Q3
Q4
Q1
Q2
Revenue Analysis
Software License Revenue
$
60,524
35%
$
74,445
40%
$
64,351
35%
$
95,797
43%
$
68,130
34%
$
84,879
38%
25%
14%
Maintenance and Services Revenue:
Maintenance Revenue
77,940
46%
81,396
44%
83,499
45%
85,983
38%
89,610
45%
95,067
43%
6%
17%
Consulting and Training Revenue
31,761
19%
29,653
16%
37,793
20%
42,090
19%
40,763
21%
42,964
19%
5%
45%
Total Maintenance and Services Revenue
109,701
65%
111,049
60%
121,292
65%
128,073
57%
130,373
66%
138,031
62%
6%
24%
Total Revenue
$
170,225
100%
$
185,494
100%
$
185,643
100%
$
223,870
100%
$
198,503
100%
$
222,910
100%
12%
20%
Revenue by Geography
Americas
$
108,034
63%
$
111,368
60%
$
113,857
61%
$
143,244
64%
$
127,787
64%
$
133,567
60%
5%
20%
EMEA
49,332
29%
59,456
32%
58,436
32%
66,144
30%
56,636
29%
75,082
34%
33%
26%
APAC
12,859
8%
14,670
8%
13,350
7%
14,482
6%
14,080
7%
14,261
6%
1%
-3%
Total Revenue
$
170,225
100%
$
185,494
100%
$
185,643
100%
$
223,870
100%
$
198,503
100%
$
222,910
100%
12%
20%
Software License Revenue by Geography
Americas
$
36,407
60%
$
40,683
55%
$
35,498
55%
$
60,210
63%
$
40,718
60%
$
46,240
54%
14%
14%
EMEA
18,537
31%
25,891
35%
22,254
35%
27,999
29%
20,323
30%
32,306
38%
59%
25%
APAC
5,580
9%
7,871
10%
6,599
10%
7,588
8%
7,089
10%
6,333
8%
-11%
-20%
Total Software License Revenue
$
60,524
100%
$
74,445
100%
$
64,351
100%
$
95,797
100%
$
68,130
100%
$
84,879
100%
25%
14%
Software License Revenue by Channel
Direct
$
44,293
73%
$
57,960
78%
$
49,946
78%
$
78,504
82%
$
56,181
82%
$
65,379
77%
16%
13%
Indirect
16,231
27%
16,485
22%
14,405
22%
17,293
18%
11,949
18%
19,500
23%
63%
18%
Total Software License Revenue
$
60,524
100%
$
74,445
100%
$
64,351
100%
$
95,797
100%
$
68,130
100%
$
84,879
100%
25%
14%
Transaction and Customer Information
Average Selling Price
$
121
$
118
$
119
$
148
$
145
$
131
-10%
11%
Number of Software Transactions > $500
15
21
18
43
27
29
7%
38%
Number of Software Transactions > $1,000
6
5
5
12
9
7
-22%
40%
Number of New Customers
310
292
289
285
272
407
50%
39%
Percentage of License Revenue from New Customers
27%
20%
26%
17%
26%
27%
4%
35%
Selected Balance Sheet and Cash Flow Information
Cash, Cash Equivalents and Short-Term Investments
$
436,468
$
425,368
$
445,824
$
437,283
$
436,175
$
486,434
12%
14%
Cash Flow from Operations
$
36,395
$
5,376
$
48,887
$
63,881
$
24,408
$
47,389
94%
781%
Repurchases of Common Stock
$
45,860
$
34,221
$
29,329
$
35,446
$
25,000
$
7,460
-70%
-78%
Days Sales Outstanding
63
70
80
73
64
58
-9%
-17%
Headcount
Quota-Carrying Sales Representatives
314
324
336
349
341
350
3%
8%
Americas Headcount
1,745
67%
1,752
67%
1,777
67%
1,836
67%
1,853
66%
1,870
65%
1%
7%
EMEA Headcount
632
24%
633
24%
653
25%
673
25%
712
26%
757
27%
6%
20%
APAC Headcount
212
9%
217
9%
224
8%
211
8%
218
8%
237
8%
9%
9%
Total Company Headcount
2,589
100%
2,602
100%
2,654
100%
2,720
100%
2,783
100%
2,864
100%
3%
10%