EX-99.1 2 y63787exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
Exhibit 99.1
     
PRESS RELEASE   amdocs
Amdocs Limited Reports Quarterly Revenue Growth of 15%
Amdocs Reports Record Quarterly Revenue of $820 Million, Exceeding Guidance
Key highlights:
  •   Third quarter revenue increased to $820 million, exceeding guidance of $790-$805 million
 
  •   Third quarter diluted non-GAAP EPS, excluding acquisition-related costs and equity-based compensation expense, net of related tax effects, increased to $0.61, in line with guidance of $0.59-$0.61 diluted non-GAAP EPS
 
  •   Diluted GAAP EPS of $0.46 for the quarter
 
  •   Free cash flow of $83 million for the quarter
 
  •   Fourth quarter fiscal 2008 guidance: Expected revenue of approximately $825-$835 million and diluted non-GAAP EPS of $0.61-$0.63, excluding acquisition-related costs and approximately $0.06-$0.07 per share of equity-based compensation expense, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.47-$0.50
St. Louis, MO – July 23, 2008 – Amdocs Limited (NYSE: DOX) today reported that for its fiscal third quarter ended June 30, 2008, revenue was $820.3 million, an increase of 15.2% from last year’s third quarter. Net income on a non-GAAP basis was $132.5 million, or $0.61 per diluted share (excluding acquisition-related costs, which include amortization of purchased intangible assets and in-process research and development write-off, and excluding equity-based compensation expense, net of related tax effects, of $31.8 million), compared to non-GAAP net income of $120.6 million, or $0.54 per diluted share, in the third quarter of fiscal 2007 (excluding acquisition-related costs, which include amortization of purchased intangible assets and equity-based compensation expense, net of related tax effects, of $32.4 million). The Company’s GAAP net income was $100.7 million, or $0.46 per diluted share, compared

 

 

to GAAP net income of $88.2 million, or $0.40 per diluted share, in the third quarter of fiscal 2007. Free cash flow for the quarter was $83.2 million, comprised of cash flow from operations of $115.1 million less $31.9 million in net capital expenditures and other.
“Our role as a strategic partner with our customers is translating into excellent business results for Amdocs,” said Dov Baharav, chief executive officer of Amdocs Management Limited. “We continue to provide innovative solutions to solve real-world business needs for the leading service providers around the world. Our unique combination of industry-leading integrated products, services and domain expertise provides us with growth opportunities in areas such as managed services and transformational projects in developed markets and in emerging markets around the world. We continue to see strong demand at this time but there are macro-economic uncertainties which may have an impact on our results in the future. We believe that we are well-positioned for future growth.”
In the third quarter Amdocs had numerous wins across lines of business and geographies. The Company had a win in North America with the Amdocs CES — Qpass 7.5 offering and continues to show momentum in broadband cable and satellite with wins for operational support systems (OSS) and mediation solutions. Amdocs had additional OSS success including a win in Asia Pacific, which builds on a strong existing relationship, and in Europe with Slovak Telecom. Amdocs enjoyed success in emerging markets as Bakcell in Azerbaijan selected Amdocs Compact Convergence Suite and another service provider chose Amdocs CRM.
Financial Outlook
Amdocs expects that revenue for the fourth quarter of fiscal 2008 will be approximately $825-$835 million. Amdocs expects diluted earnings per share on a non-GAAP basis for the fourth quarter to be $0.61-$0.63, excluding acquisition-related costs and approximately $0.06-$0.07 per share of equity-based compensation expense, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.47-$0.50.
Amdocs will host a conference call on July 23, 2008 at 5 p.m. Eastern Time to discuss the Company’s third quarter results. The call will be carried live on the Internet via

 

 

www.InvestorCalendar.com and the Amdocs website, www.amdocs.com.
Non-GAAP Financial Measures
This release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP income taxes and non-GAAP net income. These non-GAAP measures exclude the following items:
  •   amortization of purchased intangible assets;
 
  •   in-process research and development write-off and other;
 
  •   restructuring charges;
 
  •   equity-based compensation expense; and
 
  •   tax effects related to the above.
These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures.
Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP income taxes and non-GAAP net income, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.

 

 

For its internal budgeting process and in monitoring the results of the business, Amdocs’ management uses financial statements that do not include amortization of purchased intangible assets, in-process research and development write-off and other, restructuring charges, equity-based compensation expense, and related tax effects. Amdocs’ management also uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these non-cash expenses in reviewing its results and those of its competitors, because the amounts of the expenses between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the expenses.
Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of service, research and development, selling, general and administrative, operating income, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments.
Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.
About Amdocs
Amdocs is the market leader in customer experience systems innovation, enabling world-leading service providers to deliver an integrated, innovative and the intentional customer experienceTM – at every point of service.  Amdocs provides solutions that deliver customer experience excellence, combining the software, service and expertise to help its customers execute their strategies and achieve service, operational and financial excellence. A global company with revenue of $2.84 billion in fiscal 2007, Amdocs has more than 17,000 employees and serves customers in more than 50 countries around the world. For more information, visit Amdocs at www.amdocs.com.
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 for the fiscal year ended September 30, 2007 filed on December 3, 2007 and on Form 6-K furnished on February 11 and May 6, 2008.
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
(in thousands, except per share data)
                                 
    Three months ended     Nine months ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Revenue:
                                
License
   $ 35,244     $ 43,821     $ 93,570     $ 113,091  
Service
     785,044       668,270       2,243,249       1,996,393  
 
                        
 
     820,288       712,091       2,336,819       2,109,484  
Operating expenses:
                                
Cost of license
     555       960       2,267       3,045  
Cost of service
     528,437       448,795       1,493,134       1,330,776  
Research and development
     56,137       56,727       168,240       174,929  
Selling, general and administrative
     104,632       94,445       300,963       274,895  
Amortization of purchased intangible assets
     22,796       19,175       66,302       55,785  
Restructuring charges, in-process research and development and other
     1,780       —       1,780       6,761  
 
                        
 
     714,337       620,102       2,032,686       1,846,191  
 
                        
Operating income
     105,951       91,989       304,133       263,293  
 
                                
Interest income and other, net
     6,159       14,290       23,797       36,928  
 
                        
Income before income taxes
     112,110       106,279       327,930       300,221  
 
                                
Income taxes
     11,438       18,098       31,735       31,527  
 
                        
Net income
   $ 100,672     $ 88,181     $ 296,195     $ 268,694  
 
                        
Basic earnings per share
   $ 0.49     $ 0.42     $ 1.43     $ 1.30  
 
                        
Diluted earnings per share (1)
   $ 0.46     $ 0.40     $ 1.36     $ 1.22  
 
                        
Basic weighted average number of shares outstanding
     206,329       208,262       207,069       207,332  
 
                        
Diluted weighted average number of shares outstanding
     219,120       223,775       220,315       222,997  
 
                        
 
(1)   To reflect the impact of assumed conversion of the convertible notes, $985 and $2,955, representing interest expense and amortization of issuance costs, were added back to net income for the three and nine months ended June 30, 2008 and 2007, for the purpose of computing diluted earnings per share.

 

 

AMDOCS LIMITED
Selected Financial Metrics
(in thousands, except per share data)
                                 
    Three months ended   Nine months ended
    June 30,   June 30,
    2008   2007   2008   2007
Revenue
   $ 820,288     $ 712,091     $ 2,336,819     $ 2,109,484  
 
                                
Non-GAAP operating income
     146,608       123,843       415,925       365,809  
 
                                
Non-GAAP net income
     132,463       120,576       382,400       353,163  
 
                                
Non-GAAP diluted earnings per share (1)
   $ 0.61     $ 0.54     $ 1.75     $ 1.60  
 
                                
Diluted weighted average number of shares outstanding
     219,120       223,775       220,315       222,997  
 
(1)   To reflect the impact of assumed conversion of the convertible notes, $985 and $2,955, representing interest expense and amortization of issuance costs, were added back to net income for the three and nine months ended June 30, 2008 and 2007, for the purpose of computing diluted earnings per share.

 

 

AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(in thousands)
                                                 
    Three months ended
    June 30, 2008
            Reconciliation items    
                    Restructuring            
                    charges,            
            Amortization   in-process            
            of purchased   research and   Equity based        
            intangible   development   compensation        
    GAAP   assets   and other   expense   Tax effect   Non-GAAP
     
Operating expenses:
                                                
Cost of license
   $ 555     $ —     $ —     $ —     $ —     $ 555  
Cost of service
     528,437       —       —       (5,998 )     —       522,439  
Research and development
     56,137       —       —       (1,104 )     —       55,033  
Selling, general and administrative
     104,632       —       —       (8,979 )     —       95,653  
Amortization of purchased intangible assets
     22,796       (22,796 )     —       —       —       —  
Restructuring charges, in-process research and development and other
     1,780       —       (1,780 )     —       —       —  
     
Total operating expenses
     714,337       (22,796 )     (1,780 )     (16,081 )     —       673,680  
     
 
                                                
     
Operating income
     105,951       22,796       1,780       16,081       —       146,608  
     
 
                                                
     
Income taxes
     11,438       —       —       —       8,866       20,304  
     
 
                                                
     
Net income
   $ 100,672     $ 22,796     $ 1,780     $ 16,081     $ (8,866 )   $ 132,463  
     
                                         
    Three months ended
    June 30, 2007
            Reconciliation items    
            Amortization            
            of purchased   Equity based        
            intangible   Compensation        
    GAAP   assets   expense   Tax effect   Non-GAAP
     
Operating expenses:
                                        
Cost of license
   $ 960     $ —     $ —     $ —     $ 960  
Cost of service
     448,795       —       (6,587 )     —       442,208  
Research and development
     56,727       —       (1,734 )     —       54,993  
Selling, general and administrative
     94,445       —       (4,358 )     —       90,087  
Amortization of purchased intangible assets
     19,175       (19,175 )     —       —       —  
     
Total operating expenses
     620,102       (19,175 )     (12,679 )     —       588,248  
     
 
                                        
     
Operating income
     91,989       19,175       12,679       —       123,843  
     
 
                                        
     
Income taxes
     18,098       —       —       (541 )     17,557  
     
 
                                        
     
Net income
   $ 88,181     $ 19,175     $ 12,679     $ 541     $ 120,576  
     

 

 

AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(in thousands)
                                                 
    Nine months ended
    June 30, 2008
            Reconciliation items    
                    Restructuring            
                    charges,            
            Amortization   in-process            
            of purchased   research and   Equity based        
            intangible   development   compensation        
    GAAP   assets   and other   expense   Tax effect   Non-GAAP
     
Operating expenses:
                                                
Cost of license
   $ 2,267     $ —     $ —     $ —     $ —     $ 2,267  
Cost of service
     1,493,134       —       —       (17,711 )     —       1,475,423  
Research and development
     168,240       —       —       (3,626 )     —       164,614  
Selling, general and administrative
     300,963       —       —       (22,373 )     —       278,590  
Amortization of purchased intangible assets
     66,302       (66,302 )     —       —       —       —  
Restructuring charges, in-process research and development and other
     1,780       —       (1,780 )     —       —       —  
     
Total operating expenses
     2,032,686       (66,302 )     (1,780 )     (43,710 )     —       1,920,894  
     
 
                                                
     
Operating income
     304,133       66,302       1,780       43,710       —       415,925  
     
 
                                                
     
Income taxes
     31,735       —       —       —       25,587       57,322  
     
 
                                                
     
Net income
   $ 296,195     $ 66,302     $ 1,780     $ 43,710     $ (25,587 )   $ 382,400  
     

 

 

AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(in thousands)
                                                 
    Nine months ended
    June 30, 2007
            Reconciliation items        
                    Restructuring            
                    charges,            
                    in-process            
            Amortization of   research and   Equity based        
            purchased   development   compensation        
    GAAP   intangible assets   and other   expense   Tax effect   Non-GAAP
     
Operating expenses:
                                                
Cost of license
   $ 3,045     $ —     $ —     $ —     $ —     $ 3,045  
Cost of service
     1,330,776       —       —       (18,914 )     —       1,311,862  
Research and development
     174,929       —       —       (5,099 )     —       169,830  
Selling, general and administrative
     274,895       —       —       (15,957 )     —       258,938  
Amortization of purchased intangible assets
     55,785       (55,785 )     —       —       —       —  
Restructuring charges, in-process research and development and other
     6,761       —       (6,761 )     —       —       —  
     
Total operating expenses
     1,846,191       (55,785 )     (6,761 )     (39,970 )     —       1,743,675  
     
 
                                                
Operating income
     263,293       55,785       6,761       39,970       —       365,809  
     
 
                                                
Income taxes
     31,527       —       —       —       18,047       49,574  
     
 
                                                
Net income
   $ 268,694     $ 55,785     $ 6,761     $ 39,970     $ (18,047 )   $ 353,163  
     

 

 

AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(in thousands)
                 
    As of  
    June 30,     September 30,  
    2008     2007  
ASSETS
                
 
                
Current assets
                
Cash, cash equivalents and short-term interest-bearing investments
   $ 1,180,405     $ 1,179,280  
Accounts receivable, net, including unbilled of $35,744 and $43,870 respectively (*)
     588,667       473,847  
Deferred income taxes and taxes receivable
     98,605       117,623  
Prepaid expenses and other current assets
     104,050       98,746  
 
            
Total current assets
     1,971,727       1,869,496  
 
                
Equipment, vehicles and leasehold improvements, net
     304,146       283,839  
Goodwill and other intangible assets, net
     1,794,893       1,792,588  
Other noncurrent assets (*)
     493,225       399,427  
 
            
Total assets
   $ 4,563,991     $ 4,345,350  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Accounts payable and accruals
   $ 584,424     $ 592,937  
Short-term portion of capital lease obligations and other financing arrangements
     2,033       2,055  
Deferred revenue (*)
     188,336       174,526  
Deferred income taxes and taxes payable
     39,591       205,960  
 
            
Total current liabilities
     814,384       975,478  
0.50% Convertible notes
     450,000       450,000  
Noncurrent liabilities and other
     500,238       319,629  
Shareholders’ equity
     2,799,369       2,600,243  
 
            
Total liabilities and shareholders’ equity
   $ 4,563,991     $ 4,345,350  
 
            
 
(*)   Certain amounts in prior period financial statements have been reclassified to conform to the current period presentation.