OPNT Opiant Pharmaceuticals Inc

OPNET Technologies, Inc. (NASDAQ:OPNT), a leading provider of management software for networks and applications, today announced that quarterly revenue for the third fiscal quarter, ended December 31, 2005, was $20.1 million, compared to $16.1 million for the same quarter in the prior fiscal year. Earnings per share for the third quarter of fiscal 2006 were $0.06 on a diluted basis, compared to $0.01 for the same quarter in the prior fiscal year. Marc A. Cohen, OPNET's Chairman and CEO, stated, "We are very pleased to report record quarterly revenue for Q3 of 2006. Our performance was the result of achieving record quarterly revenue across all three revenue categories: new software licenses, software license updates and technical support, and professional services. We achieved record quarterly gross profit of $15.6 million, driven by new software license revenue of $8.4 million. Operating income for Q3 improved by $298 thousand from the prior quarter. We also ended the quarter with record deferred revenue of $16.8 million. Legal expenses related to the lawsuit filed by Compuware Corporation in September of 2004 continue to put considerable pressure on our operating margin, as we incurred related legal expenses during Q3 of $1.5 million." Financial Highlights for the Third Quarter of Fiscal Year 2006 -- Grew revenue year over year 25.1% to $20.1 million from $16.1 million for the same quarter of fiscal 2005. Revenue for the quarter grew sequentially 10% from $18.3 million for the second quarter of fiscal 2006. -- Grew license revenue year over year 8.3% to $8.4 million from $7.8 million for the same quarter of fiscal 2005. License revenue for the quarter grew sequentially 11.2% from $7.6 million for the second quarter of fiscal 2006. -- Ended the quarter with record deferred revenue of $16.8 million, up sequentially from $15.3 million. -- Improved our gross margin sequentially to 77.5% during the third quarter of fiscal 2006 from 76.9%. Gross profit for the quarter was a record $15.6 million. -- While operating income decreased year over year from $583 thousand for the same quarter of fiscal 2005, our operating income improved sequentially to $319 thousand from $21 thousand for the second quarter of fiscal 2006. Mr. Cohen continued, "Our Q3 2006 EPS of $0.06 was positively impacted by recording a tax benefit in the quarter of $101 thousand, which resulted in an effective tax rate for the quarter of negative 9.5%. The tax benefit recorded during Q3 was the result of adjusting previously projected foreign tax credits and projected research and development tax credits to the actual amount of the credits computed on the company's fiscal 2005 tax return, which was completed and filed during the quarter. The tax benefit recorded during Q3 was also the result of adjusting similar benefits for the current fiscal year. The company's effective tax rate for Q2 of fiscal 2006 was 30.7%." Fourth Quarter Fiscal Year 2006 Financial Outlook OPNET currently expects fiscal fourth quarter revenue to be between $19.5 and $20.5 million, and earnings per share to be between negative $0.01 and positive $0.02. These estimates represent management's current expectations about the Company's future financial performance, based on information available at this time. OPNET will hold an investor conference call on Wednesday, February 1, 2006 at 5:00pm Eastern Time to discuss the overall results of Q3. To listen to the OPNET investor conference call: -- Call 877-407-9205 in the U.S. or 201-689-8054 for international callers, or -- Use the webcast at www.opnet.com, or at www.investorcalendar.com (click on OPNT under "VCalls by Date"). Investors are advised to go to the web site at least 15 minutes early to register, download, and install any necessary audio software. To listen to the archived call: -- Call the replay phone number at 877-660-6853 or 201-612-7415 for international callers. For replay, enter account # 286, conference ID # 187082. The replay will be available from 7:00 pm Eastern Time February 1st through 11:59 pm Eastern Time February 6th. -- The webcast will be available at www.opnet.com or at www.investorcalendar.com, archived for seven days. About OPNET Technologies, Inc. Founded in 1986, OPNET Technologies, Inc. (NASDAQ:OPNT) is a leading provider of management software for networks and applications. For more information about OPNET and its products, visit www.opnet.com. OPNET and OPNET Technologies, Inc. are trademarks of OPNET Technologies, Inc. All other trademarks are the property of their respective owners. Statements in this press release that are not purely historical facts may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. OPNET Technologies, Inc. ("OPNET") assumes no obligation to update statements. Forward-looking statements are predictions based upon information available to OPNET as of the date of this press release and involve risks and uncertainties; therefore, actual events or results may differ materially. For a discussion of risk factors, see OPNET's reports, including its most recent 10-Q and 10-K, filed with the Securities & Exchange Commission. Note to editors: The word OPNET is spelled with all upper-case letters. -0- *T OPNET TECHNOLOGIES, INC. CONDENSED 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 -------- -------- -------- -------- Revenue: New software licenses $ 8,436 $ 7,793 $22,646 $21,578 Software license updates and technical support 6,198 4,998 17,922 14,617 Professional services 5,464 3,272 14,271 10,869 -------- -------- -------- -------- Total revenue 20,098 16,063 54,839 47,064 -------- -------- -------- -------- Cost of revenue: New software licenses 184 202 546 578 Software license updates and technical support 639 597 1,932 1,734 Professional services 3,517 2,367 9,961 7,128 Amortization of acquired technology 192 192 575 460 -------- -------- -------- -------- Total cost of revenue 4,532 3,358 13,014 9,900 -------- -------- -------- -------- Gross profit 15,566 12,705 41,825 37,164 -------- -------- -------- -------- Operating expenses: Research and development 4,608 3,780 13,796 10,836 Sales and marketing 6,813 5,867 18,989 16,568 General and administrative 3,826 2,475 9,867 5,865 -------- -------- -------- -------- Total operating expenses 15,247 12,122 42,652 33,269 -------- -------- -------- -------- Income (loss) from operations 319 583 (827) 3,895 Interest and other income, net 746 326 1,873 787 -------- -------- -------- -------- Income before provision for income taxes 1,065 909 1,046 4,682 Provision (benefit) for income taxes (101) 740 (106) 1,979 -------- -------- -------- -------- Net income $ 1,166 $ 169 $ 1,152 $ 2,703 ======== ======== ======== ======== Basic net income per common share $ 0.06 $ 0.01 $ 0.06 $ 0.13 ======== ======== ======== ======== Diluted net income per common share $ 0.06 $ 0.01 $ 0.06 $ 0.13 ======== ======== ======== ======== Basic weighted average common shares outstanding 20,229 20,168 20,345 20,129 ======== ======== ======== ======== Diluted weighted average common shares outstanding 20,523 20,758 20,607 20,626 ======== ======== ======== ======== OPNET TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (unaudited) December 31, March 31, 2005 2005 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 57,423 $ 38,171 Marketable securities 25,568 44,014 Accounts receivable 12,590 13,480 Unbilled accounts receivable 3,534 2,341 Deferred income taxes, prepaid expenses and other current assets 3,172 3,729 ------------ ------------ Total current assets 102,287 101,735 Property and equipment, net 5,948 6,227 Intangible assets, net 704 1,279 Goodwill 14,639 14,639 Deferred income taxes and other assets 2,070 1,306 ------------ ------------ Total assets $ 125,648 $ 125,186 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,453 $ 828 Accrued liabilities 7,478 6,874 Deferred and accrued income taxes 245 380 Deferred rent 67 - Deferred revenue 16,115 14,824 ------------ ------------ Total current liabilities 25,358 22,906 ------------ ------------ Notes payable 150 150 Deferred rent 1,065 1,107 Deferred revenue 727 1,058 ------------ ------------ Total liabilities 27,300 25,221 ------------ ------------ Commitments and contingencies (Note 7) Stockholders' equity: Common stock 27 26 Additional paid-in capital 80,026 79,421 Deferred compensation - (15) Retained earnings 25,865 24,713 Accumulated other comprehensive loss (415) (80) Treasury stock, at cost (7,155) (4,100) ------------ ------------ Total stockholders' equity 98,348 99,965 ------------ ------------ Total liabilities and stockholders' equity $ 125,648 $ 125,186 ============ ============ *T