OPNET Technologies, Inc. (Nasdaq:OPNT), the leading provider of
solutions for application and network performance management, today
announced that revenue for the second fiscal quarter, ended
September 30, 2011, was $41.9 million, compared to $36.1 million
for the same quarter in the prior fiscal year. Diluted earnings per
share for the second quarter of fiscal 2012 were $0.21, compared to
$0.13 for the same quarter in the prior fiscal year.
The Company also announced today a quarterly dividend of $0.12
per share, which represents one quarter of the Company's fiscal
2012 annual dividend target of $0.48, payable on December 28, 2011
to stockholders of record as of the close of business on December
14, 2011. During fiscal 2011, the Company paid aggregate quarterly
dividends of $0.40 per share and a one-time special dividend of
$0.75 per share. The declaration of cash dividends in the future,
as well as the amount of any such dividend, is subject to final
determination each quarter by the Board of Directors based on a
number of factors, including the Company's future financial
performance and its available cash resources, its cash
requirements, and its requirements for alternative uses of
cash.
Marc A. Cohen, OPNET's Chairman and CEO, stated, "We are very
pleased to report strong financial performance, and a second
consecutive quarter of record operating income. We also achieved
records in total revenue and maintenance revenue, which allowed us
to increase our operating income 56.1% over the same quarter last
fiscal year. Our performance was driven by strong year over year
increases in revenue from corporate enterprise and United States
government customers. Our strong quarterly performance allowed us
to further expand our operating margin to 17.3%."
Mr. Cohen continued, "APM product sales continued to drive our
performance, and accounted for 82% of our total product bookings
during the quarter. APM product sales increased 32% over the same
quarter last year. We believe that the growth in APM is being
driven by both superior analytics, and our end-to-end solutions
that span networks, applications, and systems. We further believe
that these competitive advantages can generate sustained growth in
product revenue and profitability over the long term."
The Company's second quarter fiscal 2012 financial results are
presented below. The non-GAAP results exclude the income statement
effects of stock-based compensation and acquisition-related
amortization of intangible assets. A reconciliation of GAAP results
to non-GAAP results has been provided in the financial statement
table following the text of the press release. For further
information, please refer to the section of the press release
titled "Use of Non-GAAP Measures."
GAAP Financial Highlights for the Second Quarter of
Fiscal 2012:
- Total revenue increased year-over-year 16.1% to $41.9 million
from $36.1 million for the same quarter of fiscal 2011. Total
revenue for the quarter increased sequentially 4.2% from $40.2
million for the first quarter of fiscal 2012.
- Product revenue increased year-over-year by 16.6% to $20.6
million from $17.7 million for the same quarter of fiscal
2011. Product revenue for the quarter increased sequentially
6.0% from $19.4 million for the first quarter of fiscal 2012.
- Deferred revenue increased year-over-year by 9.5% to $44.1
million from $40.2 million at the end of the same quarter of fiscal
2011. Deferred revenue for the quarter increased sequentially
2.6% from $42.9 million at the end of the first quarter of fiscal
2012.
- Gross margin increased year-over-year to 77.1% from 76.6% for
the same quarter of fiscal 2011. Gross margin decreased
sequentially from 79.3% in the first quarter of fiscal 2012.
- Operating margin increased year-over-year to 17.3% from 12.9%
for the same quarter of fiscal 2011. Operating margin
increased sequentially from 15.6% in the first quarter of fiscal
2012.
- Earnings per share increased year-over-year to $0.21 from $0.13
for the same quarter of fiscal 2011. Earnings per share
increased sequentially from $0.18 in the first quarter of fiscal
2012.
Non-GAAP Financial Highlights for the Second Quarter of
Fiscal 2012:
- Non-GAAP gross margin increased year-over-year to 78.5% from
78.0% for the same quarter of fiscal 2011. Non-GAAP gross
margin decreased sequentially from 80.7% in the first quarter of
fiscal 2012.
- Non-GAAP operating margin increased year-over-year to 20.1%
from 15.4% for the same quarter of fiscal 2011. Non-GAAP
operating margin increased sequentially from 18.4% in the first
quarter of fiscal 2012.
- Non-GAAP earnings per share increased year-over-year to $0.24
from $0.16 for the same quarter of fiscal 2011. Non-GAAP
earnings per share increased sequentially from $0.21 in the first
quarter of fiscal 2012.
Third Quarter Fiscal Year 2012 Financial
Outlook
OPNET currently expects fiscal 2012 third quarter GAAP revenue
to be between $44.0 million and $49.0 million, and GAAP diluted net
income per common share to be between $0.20 and $0.32 and non-GAAP
diluted net income per common share to be between $0.24 and
$0.36. The non-GAAP diluted net income per common share
expectation excludes approximately $735,000 of expense associated
with stock-based compensation expense, amortization of acquired
intangible assets, and the related impact of these adjustments on
the provision for income taxes. 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,
November 9, 2011 at 5:00 p.m. Eastern Time to review financial
results for the second quarter of fiscal 2012.
To listen to the OPNET investor conference call:
- Call 877-377-7550 in the U.S. or 408-337-0151 for international
callers, or
- Use the webcast at www.opnet.com/news. 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 855-859-2056 or 404-537-3406
for international callers. For replay, enter passcode #
17171385. The replay will be available from 8:00 pm Eastern
Time November 9, 2011 through 11:59 pm Eastern Time November 16,
2011.
- The webcast will be available at www.opnet.com/news. The
webcast will be archived for seven days.
Use of Non-GAAP Measures
OPNET uses a variety of financial measures that are not in
accordance with generally accepted accounting principles, or GAAP,
as supplemental measures to GAAP to evaluate its operational
performance. These financial measures, which include non-GAAP gross
profit, non-GAAP operating income, non-GAAP operating margin,
non-GAAP net income and non-GAAP diluted earnings per share,
exclude the impact of certain items and, therefore, have not been
calculated in accordance with GAAP. A detailed explanation of each
of the adjustments to such financial measures is described below. A
reconciliation of each of these non-GAAP financial measures to its
most comparable GAAP financial measure is also included below.
Management uses non-GAAP financial measures (a) to evaluate
OPNET's historical and prospective financial performance as well as
its performance relative to its competitors, and (b) to measure
operational profitability and the accuracy of forecasting. In
addition, many financial analysts who follow OPNET focus on and
publish both historical results and future projections based on
non-GAAP financial measures. OPNET believes that it is in the best
interest of its investors to provide this information to analysts
so that they accurately report the non-GAAP financial information.
Moreover, investors have historically requested these non-GAAP
financial measures as a means of providing consistent and
comparable information with past reports of financial results.
While management believes that these non-GAAP financial measures
provide useful supplemental information to investors, there are
limitations associated with the use of these non-GAAP financial
measures. These non-GAAP financial measures are not prepared in
accordance with GAAP, are not reported by all of OPNET's
competitors and may not be directly comparable to similarly titled
measures of OPNET's competitors due to potential differences in the
exact method of calculation. OPNET compensates for these
limitations by using these non-GAAP financial measures only as
supplements to GAAP financial measures and by providing the
reconciliations of the non-GAAP financial measures to their most
comparable GAAP financial measures.
The adjustments we use to derive these non-GAAP financial
measures, and the basis for such adjustments, are outlined
below:
Amortization of intangibles and its related tax impact. OPNET
incurs amortization of intangibles related to various acquisitions
it has made in recent years. This amortization is included in the
following line items of its GAAP presentation:
- cost of revenue -- amortization of acquired technology and
customer relationships
- operating expenses -- research and development
Management excludes these expenses and their related tax impact
for the purpose of calculating non-GAAP operating income, non-GAAP
gross profit, non-GAAP operating margin, non-GAAP net income and
non-GAAP diluted earnings per share when it evaluates the
continuing operational performance of OPNET because these costs are
fixed at the time of an acquisition, are then amortized over a
period of three to five years after the acquisition and generally
cannot be changed or influenced by management after the
acquisition. Accordingly, management does not consider these
expenses for purposes of evaluating the performance of OPNET during
the applicable time period after a given acquisition, and it
excludes such expenses when evaluating OPNET's financial
performance.
Stock-based compensation expense and its related tax impact.
OPNET incurs expense related to stock-based compensation, which is
included in the following line items of its GAAP presentation:
- cost of revenue – product updates, technical support and
services
- cost of revenue – professional services
- operating expenses – research and development
- operating expenses – sales and marketing
- operating expenses – general and administrative
Although stock-based compensation is an expense of OPNET and is
viewed as a form of compensation, management excludes these
expenses for the purpose of calculating non-GAAP operating income,
non-GAAP gross profit, non-GAAP operating margin, non-GAAP net
income and non-GAAP diluted earnings per share when it evaluates
the continuing operational performance of OPNET. Specifically,
OPNET excludes stock-based compensation during its quarterly and
annual assessments of OPNET's and management's performance. In
evaluating the performance of senior management, stock-based
compensation is excluded from expenditure and profitability
results.
Diluted weighted average common shares
outstanding. Non-GAAP diluted net income per common
share reflects the elimination of amortization of intangibles,
stock-based compensation expense and the related tax impacts, all
as discussed above. In addition, in cases in which the
non-GAAP net income changes from negative to positive when compared
to the GAAP net income, or vice versa, the non-GAAP per-share
calculation also gives effect to an adjustment to the number of
diluted weighted average common shares outstanding reflecting the
application of the treasury method and the fact that shares
previously considered anti-dilutive would now be considered
dilutive, or vice versa.
About OPNET Technologies, Inc.
Founded in 1986, OPNET Technologies, Inc. (Nasdaq:OPNT) is a
leading provider of solutions for application and network
performance management. For more information about OPNET and
its products, visit www.opnet.com.
OPNET, OPNET Technologies, Inc., AppMapper Xpert, AppResponse
Xpert, and AppInternals Xpert 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 such
statements. Forward-looking statements, including statements
regarding the impact of enhancements to our APM product portfolio
or our competitive position and statements concerning expected
revenue and diluted net income per common share and Non-GAAP
diluted net income per common share for the third quarter of fiscal
2012, 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. Factors that may cause OPNET's actual results, levels
of activity, performance or achievements to be materially different
from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking
statements include, among others, those factors listed under the
caption "Risk Factors" in OPNET's Annual Report on Form 10-K for
the fiscal year ended March 31, 2011, as filed with the Securities
and Exchange Commission on June 3, 2011, as updated from time to
time in subsequent SEC filings. The risk factors set forth in the
Company's Form 10-K under the caption "Risk Factors," as updated
from time to time in subsequent SEC filings, are specifically
incorporated by reference into this press release. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Note to editors: The word OPNET is spelled with all upper-case
letters.
OPNET TECHNOLOGIES,
INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share
data) (unaudited)
|
|
|
Three Months
Ended September 30, |
Six Months Ended
September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
|
|
Revenue: |
|
|
|
|
Product |
$ 20,599 |
$ 17,673 |
$ 40,028 |
$ 30,645 |
Product updates, technical support, and
services |
15,413 |
13,050 |
30,105 |
25,372 |
Professional services |
5,909 |
5,395 |
12,035 |
11,186 |
Total revenue |
41,921 |
36,118 |
82,168 |
67,203 |
|
|
|
|
|
Cost of revenue: |
|
|
|
|
Product |
3,928 |
2,487 |
6,399 |
3,779 |
Product updates, technical support, and
services |
1,380 |
1,270 |
2,827 |
2,558 |
Professional services |
3,751 |
4,195 |
7,617 |
8,497 |
Amortization of acquired technology and
customer relationships |
537 |
499 |
1,076 |
958 |
Total cost of revenue |
9,596 |
8,451 |
17,919 |
15,792 |
|
|
|
|
|
Gross profit |
32,325 |
27,667 |
64,249 |
51,411 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Research and development |
9,088 |
8,578 |
18,330 |
16,641 |
Sales and marketing |
13,471 |
11,402 |
26,070 |
21,852 |
General and administrative |
2,504 |
3,035 |
6,293 |
5,958 |
Total operating expenses |
25,063 |
23,015 |
50,693 |
44,451 |
|
|
|
|
|
Income from operations |
7,262 |
4,652 |
13,556 |
6,960 |
Interest and other expense, net |
-- |
(1) |
(59) |
(31) |
Income before provision for income taxes |
7,262 |
4,651 |
13,497 |
6,929 |
Provision for income taxes |
2,476 |
1,735 |
4,522 |
2,675 |
Net income |
$ 4,786 |
$ 2,916 |
$ 8,975 |
$ 4,254 |
|
|
|
|
|
Basic net income per common share |
$ 0.21 |
$ 0.14 |
$ 0.40 |
$ 0.20 |
Diluted net income per common share |
$ 0.21 |
$ 0.13 |
$ 0.39 |
$ 0.19 |
Basic weighted average common shares
outstanding |
22,240 |
21,251 |
22,149 |
21,090 |
Diluted weighted average common shares
outstanding |
22,687 |
21,788 |
22,646 |
21,675 |
|
|
OPNET TECHNOLOGIES,
INC. RECONCILIATION OF GAAP TO NON-GAAP
INCOME (in thousands, except per share
data) (unaudited)
|
|
|
|
|
Three Months
Ended September 30, |
|
Three Months Ended June
30, |
|
|
2011 |
|
2010 |
|
2011 |
|
|
|
|
|
|
|
|
GAAP gross profit |
$ 32,325 |
|
$ 27,667 |
|
$ 31,924 |
|
Stock-based compensation expense included
in cost of revenue |
27 |
|
23 |
|
26 |
|
Amortization of intangibles included in
cost of revenue |
537 |
|
499 |
|
540 |
|
Non-GAAP gross profit |
$ 32,889 |
|
$ 28,189 |
|
$ 32,490 |
|
|
|
|
|
|
|
|
GAAP income from operations |
$ 7,262 |
|
$ 4,652 |
|
$ 6,294 |
|
Stock-based compensation expense – total
(included in cost of revenue and in operating expenses) |
606 |
|
389 |
|
539 |
|
Amortization of intangibles -- total
(included in cost of revenue and in research and development
expenses) |
562 |
|
525 |
|
565 |
|
Non-GAAP income from operations |
$ 8,430 |
|
$ 5,566 |
|
$ 7,398 |
|
|
|
|
|
|
|
|
GAAP net income |
$ 4,786 |
|
$ 2,916 |
|
$ 4,189 |
|
Stock-based compensation expense --
total |
606 |
|
389 |
|
539 |
|
Amortization of intangibles -- total |
562 |
|
525 |
|
565 |
|
Provision for income tax |
(479) |
(1) |
(366) |
(2) |
(453) |
(1) |
Non-GAAP net income |
$ 5,475 |
|
$ 3,464 |
|
$ 4,840 |
|
|
|
|
|
|
|
|
Diluted net income per common share: |
|
|
|
|
|
|
GAAP |
$ 0.21 |
|
$ 0.13 |
|
$ 0.18 |
|
Non-GAAP |
$ 0.24 |
|
$ 0.16 |
|
$ 0.21 |
|
|
|
|
|
|
|
|
Diluted weighted average common shares
outstanding |
|
|
|
|
|
|
GAAP |
22,687 |
|
21,788 |
|
22,637 |
|
Non-GAAP |
22,687 |
|
21,788 |
|
22,637 |
|
(1) Reflects the tax
effect of non-GAAP adjustments above at the statutory rate of 41%
based on projected taxable income. (2) Reflects the tax effect
of non-GAAP adjustments above at the statutory rate of 40% based on
actual taxable income. |
|
|
OPNET TECHNOLOGIES,
INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands, except per share
data) (unaudited) |
|
|
September 30, |
March 31, |
|
2011 |
2011 |
ASSETS |
Current assets: |
|
|
Cash and cash equivalents |
$ 71,718 |
$ 83,296 |
Marketable securities |
39,640 |
31,432 |
Accounts receivable, net |
36,685 |
32,597 |
Unbilled accounts receivable |
1,586 |
1,915 |
Inventory |
893 |
666 |
Deferred income taxes, prepaid expenses
and other current assets |
7,924 |
4,289 |
Total current assets |
158,446 |
154,195 |
|
|
|
Property and equipment, net |
13,805 |
12,701 |
Intangible assets, net |
3,380 |
4,507 |
Goodwill |
15,406 |
15,406 |
Deferred income taxes and other assets |
5,607 |
5,014 |
Total assets |
$ 196,644 |
$ 191,823 |
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
Current liabilities: |
|
|
Accounts payable |
$ 2,316 |
$ 1,247 |
Accrued liabilities |
13,212 |
14,698 |
Other income taxes |
157 |
186 |
Deferred rent |
207 |
182 |
Deferred revenue |
39,030 |
42,282 |
Total current liabilities |
54,922 |
58,595 |
|
|
|
Accrued liabilities |
77 |
107 |
Deferred rent |
2,731 |
2,422 |
Deferred revenue |
5,023 |
5,215 |
Other income taxes |
734 |
661 |
Total liabilities |
63,487 |
67,000 |
|
|
|
Stockholders' equity: |
|
|
Common stock |
30 |
30 |
Additional paid-in capital |
126,499 |
121,230 |
Retained earnings |
28,944 |
25,348 |
Accumulated other comprehensive loss |
(871) |
(649) |
Treasury stock, at cost |
(21,445) |
(21,136) |
Total stockholders' equity |
133,157 |
124,823 |
Total liabilities and stockholders'
equity |
$ 196,644 |
$ 191,823 |
CONTACT: OPNET Media Contact:
Sue Cole
OPNET Technologies, Inc.
(919) 461-2445
Media@opnet.com
www.opnet.com
OPNET Investor Relations:
Mel Wesley
OPNET Technologies, Inc.
(240) 497-3000
ir@opnet.com
www.opnet.com
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