Indus (NASDAQ:IINT)
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Indus International Inc. (NASDAQ: IINT), a leading
Service Delivery Management (SDM) solution provider, today announced
its results of operations for its third quarter ended December 31,
2005.
The Company reported its fifth consecutive quarter of
profitability with total revenues for the third quarter of $34.7
million, an increase of 3 percent when compared to $33.7 million in
the same quarter last year. Software license revenues totaled $8.1
million, an increase of 15 percent compared to the $7.0 million in
software license revenues during the same period a year ago. Net
income for the third quarter of fiscal 2006 increased 14 percent to
$2.9 million, or $0.05 per fully diluted share, from $2.6 million, or
$0.04 per fully diluted share in the same quarter last year. The cash
balance as of December 31, 2005, was $39.3 million, an increase of
$0.8 million from September 30, 2005.
Adjusted net income for the third quarter of fiscal 2006, which
excludes restructuring and settlement expenses, was $3.0 million, or
$0.05 per fully diluted share, compared to $1.6 million, or $0.03 per
fully diluted share, in the third quarter of last year. A
reconciliation of adjusted net income is included with the financial
statements that are part of this press release.
Key Quarterly Financial and Business Highlights:
-- Adjusted net income increased 89 percent, or $1.4 million, to
$3.0 million for the quarter ended December 31, 2005, from
$1.6 million in the third quarter of last year.
-- Adjusted EPS increased to $0.05 per diluted share for the
quarter ended December 31, 2005, from $0.03 per diluted share.
-- Cash increased $0.8 million from September 30, 2005, to $39.3
million, and increased $5.4 million in the nine months ended
December 31, 2005.
-- The Company signed a multimillion-dollar contract with an
existing customer which standardized its nuclear fleet on
Indus, replacing competing products in several plants.
-- A significant contract was signed with a new utility customer
in the Central European region, which the Company has
identified as a key growth area.
-- The Company continued to expand solutions with existing
customers, including Georgia Pacific, NexInnovations, PAKS,
Platte River, Progress Energy and Southern Company, among
others.
-- The Company achieved 31-percent growth in license revenue over
the previous quarter and 15-percent growth over the same
quarter last year.
-- Gross margin increased to 62 percent of revenues in the third
quarter of fiscal 2006, compared to 59 percent of revenues for
the previous quarter and the same quarter last year.
-- The Company achieved 7-percent growth in year-over-year
recurring revenue, demonstrating steady customer loyalty.
Executive Commentary
"I am proud of what Indus has accomplished as we continue to
execute in a focused manner on the strategy we set three years ago,"
said Indus President and CEO Greg Dukat. "This strategy is bearing
fruit as evidenced by growing market share within our traditional
markets as well as new market segments. Our successful execution and
growing opportunities in these areas validates that we are providing
the right solutions to the right markets at the right time and are
well-positioned for sustained leadership in our target markets."
Indus Chief Financial Officer Pat Henn added, "I'm extremely
pleased with our performance this quarter in growing license revenues
and recurring revenues, while improving our margins in professional
services, which helped lead to continued growth in our cash balance.
We remain focused on improving profitability and cash flows from
operations, and this quarter is another example of success."
Business Outlook
For our fiscal year ending on March 31, 2006, we currently project
adjusted net income, which excludes restructuring charges and
benefits, to fall within a range of $0.12 and $0.18 per fully diluted
share. A reconciliation of adjusted net income (loss) is included as
part of this press release. These projections assume no significant
changes to the current general economic environment and the capital
spending environments within our markets over the course of the year.
Investor Call
As previously announced, Indus will conduct an investor conference
call to discuss the Company's results and other matters related to the
Company at 11:00 a.m. EST today. Investors may access the conference
call over the Internet via the Company's Website (investor.indus.com),
or via telephone by dialing 800-938-0653 (International callers dial
973-321-1100). Those listening via the Internet should go to the site
15 minutes early to register, download and install any necessary audio
software.
For those who cannot listen to the live broadcast, a replay will
be available through February 10, 2006, by dialing 877-519-4471
(international callers dial 973-341-3080) and entering conference ID
#6893575; or by going to the Company's Website (Investor.Indus.com).
Like most companies, Indus will be taking live questions from
securities analysts and institutional portfolio managers, but the
complete call is open to all interested parties on a listen-only
basis. Furthermore, individual investors may submit questions at any
time prior to and during the call by sending an email to
investorqa@indus.com.
About Indus International
Indus is a leading Service Delivery Management (SDM) solution
provider, helping clients in a broad array of industries optimize the
management of their customers, workforce, spare parts inventory, tools
and documentation in order to maximize performance and customer
satisfaction while achieving significant cost savings. Indus customer,
asset and workforce management software products, professional
services and hosted service offerings improve our clients'
profitability by reducing costs, increasing capacity and
competitiveness, improving service to their customers, facilitating
billing for services and ensuring regulatory compliance. Indus
solutions have been purchased by more than 400 companies in more than
40 countries, representing diverse industries -- including
manufacturing, utilities, telecommunications, government, education,
transportation, facilities and property management, high tech,
consumer packaged goods and more. For more information, visit our
Website at http://www.indus.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This press release contains statements, estimates or projections
that are not historical in nature and that may constitute
"forward-looking statements" as defined under U.S. federal securities
laws. These statements include, but are not limited to, estimated
operating results for the year ending March 31, 2006, and sustaining
leadership in our target markets. These statements, which speak only
as of the date given, are subject to certain risks and uncertainties
that could cause actual results to differ materially from our
Company's historical experience and our expectations or projections.
These risks include, but are not limited to, projected growth in the
emerging service delivery management market, market acceptance of our
service delivery management strategy, current market conditions for
our products and services, our ability to achieve growth in our asset
management and customer management offerings, market acceptance and
the success of our new products and enhancements and upgrades to our
existing products, the success of our product development strategy,
our competitive position, the ability to establish and retain
partnership arrangements, our ability to develop our indirect sales
channels, changes in our executive management team, uncertainty
relating to and the management of personnel changes, the ability to
realize the anticipated benefits of our restructurings, timely
development and introduction of new products, releases and product
enhancements, current economic conditions, heightened security and war
or terrorist acts in countries of the world that affect our business,
and other risks identified from time-to-time in the Company's SEC
filings. Investors are advised to consult the Company's filings with
the SEC, including its 2005 Annual Report on Form 10-K and the Form
10-Q for the quarter ended December 31, 2005, anticipated to be filed
with the SEC on or before February 9, 2006, for a further discussion
of these and other risks.
The information presented in this press release includes financial
measures using accounting principles generally accepted in the U.S.
("GAAP") and using adjustments to GAAP. In particular, we have shown
certain GAAP measures adjusted to eliminate restructuring and
settlement expenses as well as subsequent revisions of the estimates
used in the determination of such charges which relate to excess lease
costs for vacated space and severance costs in the periods shown and
discussed herein. We have presented such non-GAAP financial measures
because we believe that they allow management to view trends and
changes in operating performance excluding the effects of certain
items, they are helpful for a period-to-period comparison of our
results and are frequently used by securities analysts, investors and
other interested parties, in addition to and not in lieu of GAAP
results, to compare the performance of companies.
Indus is a registered trademark of Indus International Inc. Other
company and product names may be trademarks of the respective
companies with which they are associated.
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INDUS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
December 31, March 31,
2005 2005
------------ -----------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 33,205 $ 27,779
Restricted cash 769 194
Billed accounts receivable, net 25,258 17,225
Unbilled accounts receivable 4,329 12,240
Other current assets 3,197 3,672
--------- ---------
Total current assets 66,758 61,110
Property and equipment, net 27,698 30,755
Capitalized software, net 4,074 5,014
Goodwill 7,442 7,442
Acquired intangible assets, net 9,428 10,536
Restricted cash, noncurrent 5,293 5,821
Other
assets 229 427
--------- ---------
Total assets $ 120,922 $ 121,105
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 767 $ 767
Accounts payable 4,432 4,208
Accrued liabilities 19,506 19,213
Deferred revenue 32,171 33,239
--------- ---------
Total current liabilities 56,876 57,427
Income taxes payable 2,813 3,137
Mortgage and other liabilities 14,245 20,128
Stockholders' equity:
Common stock 59 58
Additional paid-in capital 162,488 165,280
Treasury stock, at cost - (4,681)
Deferred compensation (513) -
Accumulated deficit (115,204) (121,322)
Accumulated other comprehensive income 158 1,078
--------- ---------
Total stockholders' equity 46,988 40,413
--------- ---------
Total liabilities and stockholders'
equity $ 120,922 $ 121,105
========= =========
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INDUS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
------------------- ------------------
2005 2004 2005 2004
------- ------- -------- --------
(As (As
restated) restated)
(1) (1)
Revenue:
Software license fees $ 8,075 $ 7,041 $ 20,867 $ 23,016
Services:
Support, outsourcing
and hosting 15,189 14,153 44,253 44,267
Consulting, training
and other 11,480 12,477 36,103 37,506
------- ------- -------- --------
Total revenue 34,744 33,671 101,223 104,789
------- ------- -------- --------
Cost of revenue:
Software license fees 496 598 1,474 3,248
Services:
Support, outsourcing
and hosting 3,578 3,875 10,613 13,297
Consulting, training
and other 9,047 9,449 27,966 29,402
------- ------- -------- --------
Total cost of revenue 13,121 13,922 40,053 45,947
------- ------- -------- --------
Gross margin 21,623 19,749 61,170 58,842
------- ------- -------- --------
Operating expenses:
Research and development 7,403 7,179 22,616 23,246
Sales and marketing 7,533 7,483 20,948 22,429
General and
administrative 4,066 3,717 11,814 11,063
Restructuring and
settlement expenses 45 (991) 129 10,548
------- ------- -------- --------
Total operating
expenses 19,047 17,388 55,507 67,286
------- ------- -------- --------
Operating income (loss) 2,576 2,361 5,663 (8,444)
Other income (expense), net 247 60 383 (53)
------- ------- -------- --------
Pre-tax income (loss) 2,823 2,421 6,046 (8,497)
Provision (benefit) for income
taxes (101) (141) (72) 80
-------------------------------------
Net income (loss) $ 2,924 $ 2,562 $ 6,118 $ (8,577)
======= ======= ======== ========
Net income (loss) per share:
Basic $ 0.05 $ 0.04 $ 0.11 $ (0.15)
======= ======= ======== ========
Diluted $ 0.05 $ 0.04 $ 0.10 $ (0.15)
======= ======= ======== ========
Shares used in computing per
share data:
Basic 58,025 57,285 57,800 57,195
Diluted 60,519 57,897 59,658 57,195
(1) As reported on May 10, 2005, the Company restated previously
issued financial statements dating back to the fiscal year ended
December 31, 2000 to reflect a correction in its accounting
practices for leases and leasehold improvements.
INDUS INTERNATIONAL, INC.
RECONCILIATION OF ADJUSTED NET INCOME (LOSS)
(In Thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------- -------------------
2005 2004 2005 2004
-------- ------- ------- -------
(As (As
restated) restated)
(1) (1)
Reconciliation of adjusted
net income (loss) (a):
Net income (loss) $ 2,924 $ 2,562 $ 6,118 $(8,577)
Restructuring and
settlement expenses 45 (991) 129 10,548
Income tax effect - - - -
-------- ------- ------- -------
Adjusted net income(a) $ 2,969 $ 1,571 $ 6,247 $ 1,971
======== ======= ======= =======
Adjusted net income per
diluted share(a) $ 0.05 $ 0.03 $ 0.10 $ 0.03
======== ======= ======= =======
(1) As reported on May 10, 2005, the Company restated previously
issued financial statements dating back to the fiscal year ended
December 31, 2000 to reflect a correction in its accounting
practices for leases and leasehold improvements.
(a) The information presented above includes financial measures using
accounting principles generally accepted in the U.S. ("GAAP") and
using adjustments to GAAP. In particular, we have shown certain
GAAP measures adjusted to eliminate restructuring and settlement
expenses, as well as subsequent revisions of the estimates used in
the determination of such expenses, relating to excess lease costs
for vacated office space, severance costs and contract settlement
costs. We have presented such non-GAAP financial measures because
we believe that they allow management to view trends and changes
in operating performance excluding the effects of certain items,
they are helpful for a period-to- period comparison of our results
and are frequently used by securities analysts, investors and
other interested parties, in addition to and not in lieu of GAAP
results, to compare the performance of companies.
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