Indus International, Inc. (NASDAQ: IINT), a leading Service
Delivery Management (SDM)(TM) solution provider, today announced
the results of operations for its fiscal fourth quarter and year
ended March 31, 2006, and provided guidance for future financial
performance. Total revenue for the fourth quarter of fiscal 2006
was $31.9 million, compared with $37.4 million in the same quarter
last year and $34.7 million in the prior quarter. Revenue from
software license fees totaled $5.1 million, compared to $8.9
million in the same period a year ago and $8.1 million in the prior
quarter. Net income for the quarter was $2.1 million, or $0.03 per
fully diluted share, compared to $2.5 million, or $0.04 per fully
diluted share, in the same quarter last year and $2.9 million, or
$0.05 per fully diluted share, in the prior quarter. Adjusted net
income, which excludes restructuring benefits and settlement
expenses, was $1.9 million, or $0.03 per fully diluted share, for
the fourth quarter of fiscal 2006 compared to $2.4 million, or
$0.04 per fully diluted share, in the same quarter last year and
$3.0 million, or $0.05 per fully diluted share, in the prior
quarter. A reconciliation of adjusted net income (loss) is included
in the financial statements that are part of this press release.
Total revenue for fiscal 2006 was $133.2 million, compared with
$142.2 million in fiscal 2005. On a full-year comparison, software
license revenue was $26.0 million; support, outsourcing and hosting
revenue was $59.7 million and consulting, training and other
revenue was $47.5 million in fiscal 2006 compared to $31.9 million,
$59.5 million and of $50.1 million, respectively, for fiscal 2005.
It is important to note that license revenues for fiscal 2005
include a transaction for more than $5 million, which was closed in
2003 but not recognized until fiscal 2005 when the company
completed certain translation efforts for a customer in Japan. The
company's net income for fiscal 2006 totaled $8.2 million, or $0.14
per fully diluted share, compared with a net loss of $6.1 million,
or $0.11 per fully diluted share, during the prior year. Adjusted
net income, which excludes the restructuring benefits and
settlement expenses, was $8.2 million, or $0.14 per fully diluted
share, for fiscal 2006, reflecting a $3.8 million improvement over
the adjusted net income of $4.4 million, or $0.08 per fully diluted
share, for fiscal 2005. Key Quarterly Financial and Business
Highlights: -- Signed new clients in service delivery management
space during the fourth quarter, including Johnson Controls Inc.,
Salt River Project and American Tower Corporation -- Won multiple
successful license expansions during the fourth quarter in utility
industry, including Greater Cincinnati Water Works and several
municipalities -- Signed international license expansions in
Central Europe during the fourth quarter at CEZ in The Czech
Republic, as well as ENTP in Algeria, GE Plastics and Sanofi Key
Annual Financial and Business Highlights: -- Posted adjusted net
income for the year, which excludes restructuring benefits and
settlement expenses, of $8.2 million, or $0.14 per fully diluted
share, reflecting an improvement of 75 percent over the prior year
amount of $4.4 million, or $0.08 per fully diluted share --
Increased cash by $9.1 million over the fiscal year, which is net
of a $2.5 million payment as a result of our lease buyout -- During
fiscal 2006, increased licenses of Service Suite product by more
than 200 percent from the prior year, including several strategic
wins outside of the utility market -- Had successful license sales
during fiscal year 2006 in Europe at CNE of Romania, La Compagnie
Generale Des Matieres Nuclearires (COGEMA) and Danka, as well as a
successful go-live and license expansion at PAKS in Hungary --
Continued development of business opportunity in Japan with a
license expansion at Tokyo Electric Power Company (TEPCO) and the
delivery of the translated product to an additional Japanese
electric power company -- Maintained leadership in the utility
market, particularly for nuclear power generation, as evidenced by
a key license expansion during fiscal 2006 at Entergy, which will
lead to the standardization of Indus products across their entire
fleet of nuclear power plants Executive Commentary "Although the
software license fees for the fourth quarter of fiscal year 2006
were not what we had expected, we did meet our annual projections
on adjusted EPS and continued to make progress toward our business
goals," said Indus President and CEO Greg Dukat. "In all of our key
business areas -- utilities, international markets and commercial
SDM opportunities -- we remained focused and successfully executed
our strategy. License transactions for our field service management
product, Indus Service Suite, grew more than 200 percent for the
year, far exceeding growth in the fast-growing field service market
as a whole. So, while we face challenges in certain areas as all
industry-leading companies do, we enter fiscal 2007 in excellent
shape." Indus Chief Financial Officer Pat Henn added, "Our
restructuring and cost control efforts over the past few years have
allowed us to improve the profitability and financial position of
the company significantly during fiscal 2006. We will continue to
look for opportunities to improve our financial position as we
execute our Service Delivery Management strategy." Business Outlook
For the fiscal year ending on March 31, 2007, the company currently
projects adjusted net income, which excludes restructuring charges
and benefits and stock option compensation expense under SFAS
123(R), to fall within a range of $0.17 and $0.23 per fully diluted
share. A reconciliation of adjusted net income (loss) is included
as part of this press release. These projections assume the company
will not be subject to income taxes and that there are 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 May 19, 2006, by dialing
877-519-4471 (international callers dial 973-341-3080) and entering
conference ID #7299211; 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, which help 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,
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 fiscal year ending March 31, 2007, 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 recent 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 filed with the SEC on June 13, 2005, and its subsequent
quarterly reports on Form 10-Q filed with the SEC 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
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. -0- *T INDUS
INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In
Thousands) March 31, March 31, 2006 2005 ---------- ----------
ASSETS Current assets: Cash and cash equivalents $ 37,165 $ 27,779
Restricted cash 2,793 194 Billed accounts receivable, net 14,020
16,844 Unbilled accounts receivable 6,257 14,293 Other current
assets 3,683 3,672 ---------- ---------- Total current assets
63,918 62,782 Property and equipment, net 26,990 30,755 Capitalized
software, net 3,760 5,014 Goodwill 7,442 7,442 Acquired intangible
assets, net 9,066 10,536 Restricted cash, noncurrent 2,976 5,821
Other assets 681 427 ---------- ---------- Total assets $ 114,833 $
122,777 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Notes payable $ 767 $ 767 Accounts payable
3,836 4,208 Accrued liabilities 14,051 19,213 Deferred revenue
30,233 34,911 ---------- ---------- Total current liabilities
48,887 59,099 Income taxes payable 2,553 3,137 Mortgage and other
liabilities 13,312 20,128 Stockholders' equity: Common stock 59 58
Additional paid-in capital 163,218 165,280 Treasury stock, at cost
- (4,681) Deferred compensation (480) - Accumulated deficit
(113,142) (121,322) Accumulated other comprehensive income 426
1,078 ---------- ---------- Total stockholders' equity 50,081
40,413 ---------- ---------- Total liabilities and stockholders'
equity $ 114,833 $ 122,777 ========== ========== *T -0- *T INDUS
INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In
Thousands, except per share data) Three Months Twelve Months Ended
Ended March 31, March 31, ---------------- --------------------
2006 2005 2006 2005 -------- -------- --------- --------- Revenue:
Software license fees $ 5,104 $ 8,850 $ 25,971 $ 31,866 Services:
Support, outsourcing and hosting 15,442 15,276 59,694 59,543
Consulting, training and other 11,387 13,254 47,491 50,760 --------
-------- --------- --------- Total revenue 31,933 37,380 133,156
142,169 -------- -------- --------- --------- Cost of revenue:
Software license fees 568 488 2,041 3,737 Services: Support,
outsourcing and hosting 3,860 3,678 14,474 16,975 Consulting,
training and other 9,432 9,593 37,398 38,995 -------- --------
--------- --------- Total cost of revenue 13,860 13,759 53,913
59,707 -------- -------- --------- --------- Gross margin 18,073
23,621 79,243 82,462 -------- -------- --------- ---------
Operating expenses: Research and development 6,741 8,711 29,357
31,956 Sales and marketing 6,286 8,190 27,234 30,619 General and
administrative 3,373 4,062 15,187 15,125 Restructuring and
settlement (benefits)/expenses (153) (118) (24) 10,430 --------
-------- --------- --------- Total operating expenses 16,247 20,845
71,754 88,130 -------- -------- --------- --------- Operating
income (loss) 1,826 2,776 7,489 (5,668) Other income (expense), net
147 (232) 529 (285) -------- -------- --------- --------- Pre-tax
income (loss) 1,973 2,544 8,018 (5,953) Provision (benefit) for
income taxes (89) 32 (162) 112 -------- -------- ---------
--------- Net income (loss) $ 2,062 $ 2,512 $ 8,180 $ (6,065)
======== ======== ========= ========= Net income (loss) per share:
Basic $ 0.04 $ 0.04 $ 0.14 $ (0.11) ======== ======== =========
========= Diluted $ 0.03 $ 0.04 $ 0.14 $ (0.11) ======== ========
========= ========= Shares used in computing per share data: Basic
58,410 57,456 57,951 57,259 Diluted 61,512 58,131 60,195 57,259 *T
-0- *T INDUS INTERNATIONAL, INC. RECONCILIATION OF ADJUSTED NET
INCOME (LOSS) (In Thousands, except per share data) Three Months
Twelve Months Ended Ended March 31, March 31, ---------------
---------------- 2006 2005 2006 2005 ------- ------- -------
-------- Reconciliation of adjusted net income (loss)*: Net income
(loss) $2,062 $2,512 $8,180 $(6,065) Restructuring and settlement
(benefits)/expenses (153) (118) (24) 10,430 Income tax effect - - -
- ------- ------- ------- -------- Adjusted net income* $1,909
$2,394 $8,156 $ 4,365 ======= ======= ======= ======== -------
------- ------- -------- Adjusted net income per diluted share* $
0.03 $ 0.04 $ 0.14 $ 0.08 ======= ======= ======= ======== *T
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