Amdocs Limited Reports 23% Growth in Revenue to a Record $601 Million for the Second Quarter of Fiscal 2006 |
26% Growth in Diluted Earnings Per Share Before Certain Items to $0.44;
Diluted GAAP EPS of $0.38
Key highlights:
* Second quarter revenue grew 23% to $601 million
* 26% increase in second quarter diluted EPS, excluding acquisition-
related costs and equity-based compensation expense, net of related tax
effects, to $0.44; Exceeds guidance of $0.42
* Diluted GAAP EPS of $0.38
* Free cash flow of $86 million for the quarter
* Sprint Nextel selected Amdocs to provide a single platform to support its
more than 45 million wireless subscribers
* After the quarter, Amdocs announced that it had signed an agreement to
acquire Qpass, a leading provider of digital commerce software and
solutions, for $275 million in cash
* Third quarter fiscal 2006 guidance: Expected revenue of approximately
$622 million and diluted EPS of $0.46, excluding acquisition-related costs,
net of related tax effects, and approximately $0.04-$0.05 per share of
equity-based compensation expense. Diluted GAAP EPS is expected to be
approximately $0.39-$0.40. This guidance excludes any potential impact of
the pending acquisition of Qpass
* Updated fiscal 2006 guidance: Expected revenue of approximately $2.445-
$2.465 billion and diluted EPS of $1.78-$1.80, excluding acquisition-
related costs, net of related tax effects, and approximately $0.16-$0.18
per share of equity-based compensation expense. Diluted GAAP EPS is
expected to be approximately $1.51-$1.55. This guidance excludes any
potential impact of the pending acquisition of Qpass
ST. LOUIS, April 26 /PRNewswire-FirstCall/ -- Amdocs Limited (NYSE:
DOX) today reported that for the second quarter ended March 31, 2006,
revenue was $601.1 million, an increase of 23.1% from last year's second
quarter. Excluding acquisition-related costs and equity-based compensation
expense, net of related tax effects, of $13.7 million, net income was $95.5
million, or $0.44 per diluted share, compared to net income, excluding $1.7
million of acquisition-related costs net of related tax effects, of $76.0
million, or $0.35 per diluted share, in the second quarter of fiscal 2005.
The Company's net income was $81.8 million, or $0.38 per diluted share,
compared to net income of $74.3 million, or $0.34 per diluted share, in the
second quarter of fiscal 2005. Free cash flow, defined as cash flow from
operations less net capital expenditures and principal payments on capital
leases, was $86.4 million in the quarter.
"This was another very successful quarter for Amdocs," said Dov
Baharav, Chief Executive Officer of Amdocs Management Limited. "Revenue
grew 23%, helping to increase earnings at an even greater rate. This
performance is the result of the 13,000 employees at Amdocs executing on
our strategy of providing systems to support integrated customer management
to the top tier service providers.
"This was one of our best quarters ever for new business signings.
Demand for Amdocs products and services continues to be driven by service
providers' need to address competition, consolidation and convergence.
Digital content will be an increasingly important revenue driver in the
future as service providers continue to introduce new products and
services, and we will expand our presence in this area with our acquisition
of Qpass. We are the leading provider to our market and are confident that
we will deliver strong results in fiscal 2006 and beyond," continued
Baharav.
During the second quarter, Amdocs new business included eleven new key
wins. In addition to Sprint Nextel, these wins include a large project with
a subsidiary of a current wireline customer as it adopts an integrated
customer management strategy. In the directory area, Amdocs had several
wins with projects involving sales force automation, digital advertising,
and business process outsourcing. Amdocs was selected by Vimpelcom and its
affiliates in the Commonwealth of Independent States as they standardize on
Amdocs technology to manage their wireless and wireline customers in an
integrated fashion.
Financial Outlook
Amdocs expects that revenue for the third quarter of fiscal 2006 ending
June 30, 2006, will be approximately $622 million. Diluted earnings per
share for the quarter are expected to be $0.46, excluding
acquisition-related costs, net of related tax effects, and the impact of
approximately $0.04-$0.05 per share of equity-based compensation expense.
Diluted GAAP EPS is expected to be approximately $0.39-$0.40. This guidance
excludes any potential impact of the pending acquisition of Qpass. Amdocs
may incur a one-time charge in its third fiscal quarter to account for
certain costs related to the Qpass acquisition.
Updated fiscal 2006 guidance: Expected revenue of approximately $2.445-
$2.465 billion and diluted EPS of $1.78-$1.80, excluding
acquisition-related costs, net of related tax effects, and approximately
$0.16-$0.18 per share of equity-based compensation expense. Diluted GAAP
EPS is expected to be approximately $1.51-$1.55. This guidance excludes any
potential impact of the pending acquisition of Qpass.
Amdocs will host a conference call on April 26, 2006 at 5 p.m. Eastern
Time to discuss the Company's second quarter results. The call will be
carried live on the Internet via http://www.InvestorCalendar.com and the Amdocs
website, http://www.amdocs.com.
About Amdocs
Amdocs combines innovative software and services with deep business
knowledge to accelerate implementation of integrated customer management by
the world's leading service providers. By delivering a comprehensive
portfolio of software and services that spans the customer lifecycle,
Amdocs enables service companies to deliver an intentional customer
experience(TM), which results in stronger, more profitable customer
relationships. Service providers also benefit from a rapid return on
investment, lower total cost of ownership and improved operational
efficiencies. A global company with revenue of more than $2 billion in
fiscal 2005, Amdocs has 13,000 employees and serves customers in more than
50 countries around the world. For more information, visit Amdocs at
http://www.amdocs.com.
Cautionary statements Investors are cautioned that this press release
contains certain information that is not prepared in accordance with GAAP.
Investors should not construe these financial measures as being superior to
GAAP. The Company's management uses this financial information in its
internal analysis in order to exclude the effect of acquisitions and other
significant items that may have a disproportionate effect in a particular
period. Accordingly, management believes that isolating the effects of such
items enables management and investors to consistently analyze the critical
components and results of operations of the Company's business and to have
a meaningful comparison to prior periods.
This press release includes information that constitutes
forward-looking statements made pursuant to the safe harbor provision of
the Private Securities Litigation Reform Act of 1995, including statements
about Amdocs growth and business results in future quarters. Although we
believe the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, we can give no assurance that our
expectations will be obtained or that any deviations will not be material.
Such statements involve risks and uncertainties that may cause future
results to differ from those anticipated. These risks include, but are not
limited to, the effects of general economic conditions, Amdocs ability to
grow in the business markets that it serves, Amdocs ability to successfully
integrate acquired businesses, adverse effects of market competition, rapid
technological shifts that may render the Company's products and services
obsolete, potential loss of a major customer, our ability to develop
long-term relationships with our customers, and risks associated with
operating businesses in the international market. Amdocs may elect to
update these forward-looking statements at some point in the future;
however, the Company specifically disclaims any obligation to do so. These
and other risks are discussed at greater length in the Company's filings
with the Securities and Exchange Commission, including in our Annual Report
on Form 20-F, filed on December 28, 2005 and our quarterly 6-K furnished on
February 15, 2006.
Contact:
Thomas G. O'Brien
Treasurer and Vice President of Investor Relations
Amdocs Limited
314-212-8328
E-mail: dox_info@amdocs.com
AMDOCS LIMITED
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Three months ended Six months ended
March 31, March 31,
______________________ _______________________
2006(1) 2005 2006(2) 2005
_________ _________ __________ __________
Revenue:
License $30,291 $27,344 $61,952 $47,710
Service 570,838 461,072 1,126,205 910,238
_________ _________ __________ __________
601,129 488,416 1,188,157 957,948
Operating expenses:
Cost of license 916 998 1,978 2,153
Cost of service 388,333 310,291 762,384 605,238
Research and
development 41,823 33,263 84,937 66,174
Selling, general and
administrative 73,799 54,592 152,349 109,552
Amortization of
purchased intangible
assets 7,469 2,079 15,041 5,797
_________ _________ __________ __________
512,340 401,223 1,016,689 788,914
_________ _________ __________ __________
Operating income 88,789 87,193 171,468 169,034
Interest income and
other, net 10,307 5,680 18,721 10,639
________ _________ __________ _________
Income before income
taxes 99,096 92,873 190,189 179,673
Income taxes 17,334 18,576 33,093 35,933
_________ _________ __________ __________
Net income $81,762 $74,297 $157,096 $143,740
========= ========= ========== ==========
Basic earnings per share $0.40 $0.37 $0.78 $0.71
========= ========= ========== ==========
Diluted earnings per
share(3) $0.38 $0.34 $0.74 $0.67
========= ========= ========== ==========
Basic weighted average
number of shares
outstanding 202,515 202,168 201,509 201,933
========= ========= ========== ==========
Diluted weighted
average number of
shares outstanding 217,919 218,807 216,394 218,127
========= ========= ========== ==========
(1) The second quarter of fiscal 2006 includes equity-based compensation
pre-tax expense of $9,940, which was classified as follows: $3,717 to
Cost of service, $720 to Research and development and $5,503 to
Selling, general and administrative.
(2) The first half of fiscal 2006 includes equity-based compensation pre-
tax expense of $21,000, which was classified as follows: $8,072 to
Cost of service, $1,809 to Research and development and $11,119 to
Selling, general and administrative.
(3) To reflect the impact of assumed conversion of the convertible notes,
$979 and $1,979, representing interest expense and amortization of
issuance costs, were added back to net income for the three and six
months ended March 31, 2006, respectively, and $983 and $1,967 were
added back to net income for the three and six months ended March 31,
2005, respectively, for the purpose of computing diluted earnings per
share.
AMDOCS LIMITED
Consolidated Statements of Income
Excluding Amortization of Purchased Intangible Assets,
Equity-Based Compensation Expense and Related Tax Effects
(in thousands, except per share data)
Three months ended Six months ended
March 31, March 31,
_____________________ _______________________
2006(1) 2005(1) 2006(2) 2005(2)
_________ ________ __________ __________
Revenue:
License $30,291 $27,344 $61,952 $47,710
Service 570,838 461,072 1,126,205 910,238
_________ ________ __________ __________
601,129 488,416 1,188,157 957,948
Operating expenses:
Cost of license 916 998 1,978 2,153
Cost of service 384,616 310,291 754,312 605,238
Research and
development 41,103 33,263 83,128 66,174
Selling, general and
administrative 68,296 54,592 141,230 109,552
_________ ________ __________ __________
494,931 399,144 980,648 783,117
_________ ________ __________ __________
Operating income 106,198 89,272 207,509 174,831
Interest income and
other, net 10,307 5,680 18,721 10,639
_________ _________ __________ __________
Income before income
taxes 116,505 94,952 226,230 185,470
Income taxes 20,971 18,990 40,721 37,094
_________ _________ __________ __________
Net income $95,534 $75,962 $185,509 $148,376
========= ======== ========== ==========
Diluted earnings per
share(3) $0.44 $0.35 $0.87 $0.69
========= ======== ========== ==========
Diluted weighted
average number of
shares outstanding 217,919 218,807 216,394 218,127
========= ======== ========== ==========
(1) Excludes $7,469 and $2,079 for amortization of purchased intangible
assets, $9,940 and $0 for equity-based compensation expense and tax
effects related to the above of $(3,637) and $(414) for the three
months ended March 31, 2006 and 2005, respectively. Including the
above items, income before income taxes was $99,096 and $92,873, and
diluted earnings per share were $0.38 and $0.34 for the three months
ended March 31, 2006 and 2005, respectively.
(2) Excludes $15,041 and $5,797 for amortization of purchased intangible
assets, $21,000 and $0 for equity-based compensation expense and tax
effects related to the above of $(7,628) and $(1,161) for the six
months ended March 31, 2006 and 2005, respectively. Including the
above items, income before income taxes was $190,189 and $179,673, and
diluted earnings per share were $0.74 and $0.67 for the six months
ended March 31, 2006 and 2005, respectively.
(3) To reflect the impact of assumed conversion of the convertible notes,
$979 and $1,979, representing interest expense and amortization of
issuance costs, were added back to net income for the three and six
months ended March 31, 2006, respectively, and $983 and $1,967 were
added back to net income for the three and six months ended March 31,
2005, respectively, for the purpose of computing diluted earnings per
share.
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(in thousands)
As of
___________________________
March 31, September 30,
2006 2005
___________ ___________
(Unaudited) (Audited)
ASSETS
Current assets
Cash, cash equivalents and short-term
interest-bearing investments $1,353,046 $1,145,563
Accounts receivable, net, including unbilled
of $42,572 and $28,994, respectively 349,744 304,237
Deferred income taxes and taxes receivable 80,889 101,162
Prepaid expenses and other current assets 78,538 76,780
___________ ___________
Total current assets 1,862,217 1,627,742
Equipment, vehicles and leasehold
improvements, net 159,891 181,812
Goodwill and other intangible assets, net 1,111,752 1,129,258
Other noncurrent assets 288,231 263,656
___________ ___________
Total assets $3,422,091 $3,202,468
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accruals $418,217 $462,276
Short-term portion of capital lease
obligations and other financing arrangements 1,976 8,480
Deferred revenue 245,689 216,770
Deferred income taxes and taxes payable 179,093 171,377
___________ ___________
Total current liabilities 844,975 858,903
0.50% Convertible notes 450,000 450,000
Noncurrent liabilities and other 228,898 237,113
Shareholders' equity 1,898,218 1,656,452
___________ ___________
Total liabilities and shareholders' equity $3,422,091 $3,202,468
=========== ===========
SOURCE Amdocs Limited
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CONTACT:
Thomas G. O'Brien, Treasurer and Vice
President of Investor Relations of Amdocs Limited,
+1-314-212-8328, dox_info@amdocs.com
