EX-99.1 2 dex991.htm PRESS RELEASE, DATED MAY 7, 2009, ISSUED BY THE COMPANY Press Release, dated May 7, 2009, issued by the Company

Exhibit 99.1

 

LOGO  

2835 Miami Village Drive

Miamisburg, OH 45342

  NEWS RELEASE

 

For media information:   For investor information:
Dian Terry   Gregg Swearingen
(937) 242-4781   (937) 242-4600
dian.terry@teradata.com   gregg.swearingen@teradata.com

For Release on May 7, 2009

Teradata Announces 2009 First Quarter Results

 

 

Constant currency revenue growth from the first quarter of 2008

 

 

Operating margin improved 220 basis points to 16.3% versus prior year comparison

 

 

Earnings per share increased 13 percent to $0.26 versus the first quarter of 2008

 

 

Cash from operating activity of $165 million increased 15 percent from the prior year period

 

 

Teradata Board of Directors authorizes additional $300 million for share repurchases

MIAMISBURG, Ohio – Teradata Corporation (NYSE: TDC), the world’s largest company solely focused on data warehousing and enterprise analytics, today reported revenue of $367 million for the quarter ended March 31, 2009, a decrease of 2 percent from $375 million in the first quarter of 2008. Revenue increased 5 percent from the first quarter of 2008, when adjusting for 7 percentage points of negative impact from currency fluctuation.(1)

Gross margin in the first quarter was 54.5 percent versus 51.7 percent in the first quarter of 2008. Gross margin in the first quarter increased 280 basis points, with both product and services gross margins improving from the prior year period.

Selling, general and administrative expenses were down $6 million or 5 percent, from the first quarter of 2008, while research and development expenses increased $5 million, or 20 percent from the prior year period.

Teradata reported first-quarter net income of $45 million, or $0.26 per diluted share, which compared to net income of $42 million, or $0.23 per diluted share, in the first quarter of 2008.

“With constant currency revenue growth, meaningful margin improvement, and a 13% increase in operating income in the first quarter, Teradata is off to a good start for 2009,” said

 

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Mike Koehler, president and chief executive officer of Teradata Corporation. “I am pleased with our performance in both generating revenue and managing costs in this difficult economy.

“Customers continue to value and invest in Teradata, enabling them to make better strategic and operational decisions, while reducing costs and managing risk.

“Our number one priority is to drive more innovation to extend our leadership position in data warehousing. The strength of our business model and our disciplined approach to managing our solid financial position is allowing us to invest in our future and increase shareholder value.”

Regional Operating Segment Results

Teradata reports its results in three regional operating segments.

North America and Latin America (Americas)

Teradata generated $205 million of revenue in its Americas region in the first quarter of 2009, down 2 percent from $210 million in the first quarter of 2008. Revenue increased 1 percent, when adjusting for 3 percentage points of negative impact from currency translation.(1)

Gross margin in the Americas region in the quarter was 57.1 percent, compared to 54.3 percent in the first quarter of 2008. Gross margin in the quarter was higher due to improved service margins.

Europe, Middle East and Africa (EMEA)

Revenue in Teradata’s EMEA region in the first quarter of 2009 was $97 million, down 6 percent from $103 million generated in the first quarter of 2008. Revenue increased 12 percent, when adjusting for currency translation, which negatively impacted revenue growth in the EMEA region by 18 percentage points.(1)

Gross margin in the EMEA region in the quarter was 54.6 percent, versus 50.5 percent in the first quarter of 2008. Gross margin in EMEA improved in the first quarter of 2009 driven equally by higher product and service margins.

Asia Pacific / Japan (APJ)

Teradata generated $65 million of revenue in its APJ region in the quarter, a 5 percent increase from $62 million in the first quarter of 2008. Revenue growth in the APJ region was 9 percent, when adjusted for 4 percentage points of negative impact from currency translation.(1)

 

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Gross margin in the APJ region in the quarter was 46.2 percent, compared to 45.2 percent in the first quarter of 2008. Gross margin in the APJ region improved in the quarter due to the increased proportion of product revenues as compared to services revenues.

Operating Income

First-quarter operating income of $60 million improved from $53 million reported in the first quarter of 2008, despite higher research and development expense, and incremental investment in new sales territories. Currency translation as well as lower discretionary expense, from items such as travel and the cancellation of the company’s annual sales incentive and kick-off meetings, contributed to the favorable results.

Other Items

“Other Income” declined $3 million from the first quarter of 2008. Interest income was negatively impacted by the current lower interest rate environment, despite Teradata having a $232 million higher cash and short-term investment balance than at the end of the first quarter of 2008.

The effective income tax rate in the first quarter of 2009 was 25.0 percent, the same as in the prior year period.

Cash Flow

During the first quarter of 2009, Teradata generated $165 million of cash from operating activities, compared to $143 million in the prior year period. Capital expenditures in the first quarter of 2009 and 2008 were $20 million. Teradata generated $145 million of free cash flow (cash from operations less capital expenditures and additions to capitalized software)(2) in the first quarter of 2009, versus generating $123 million in the same period in 2008.

 

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     For the Three Months
ended March 31
(in millions)
 
     2009     2008  

Net Income (GAAP)

   $ 45     $ 42  

Cash provided by operating activities (GAAP)

   $ 165     $ 143  

Less capital expenditures for:

    

Expenditures for property and equipment

     (9 )     (4 )

Additions to capitalized software

     (11 )     (16 )
                

Total capital expenditures

     (20 )     (20 )

Free Cash Flow (non-GAAP measure) (2)

   $ 145     $ 123  
                

Free Cash Flow as a percentage of Net Income

     322 %     293 %

Balance Sheet

Teradata ended the first quarter of 2009 with $571 million in cash and short term investments, a $129 million increase from December 31, 2008. The company used approximately $20 million of cash to repurchase approximately 1.3 million shares during the first quarter of 2009. As announced in a separate press release today, Teradata’s Board of Directors authorized an additional $300 million to purchase shares under the Company’s general open market share repurchase program. At the time of this extension, there was approximately $65 million remaining of the initial $250 million authorization.

Although Teradata has $300 million of funds available through a pre-arranged credit facility, there was no short- or long-term debt outstanding as of March 31, 2009.

 

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2009 First-Quarter Earnings Conference Call

A conference call is scheduled today at 8:30 a.m. (EDT) to discuss the company’s first-quarter 2009 results. Access to the conference call, as well as a replay of the call, is available on Teradata’s Web site at www.teradata.com/investor.

Supplemental financial information regarding Teradata’s operating results is also available on the Investor Relations page of Teradata’s Web site.

About Teradata

Teradata Corporation (NYSE: TDC) is the world’s largest company solely focused on raising intelligence through data warehousing, data warehouse appliances, consulting services and enterprise analytics. Teradata is in more than 60 countries and on the web at www.teradata.com.

# # #

Teradata is a trademark or registered trademark of Teradata Corporation in the United States and other countries.

 

1. The impact of currency is determined by calculating the prior period results using the current-year monthly average currency rates. See the foreign currency schedule on the investor page of the company’s web site www.teradata.com

 

     For the Periods Ended March 31
Three Months
 

$ millions

Revenue

   2009    2008    % Change As
Reported
    % Change
Constant
Currency
 

Products (hardware/software)

   $ 157    $ 165    -5 %   2 %

Professional and installation-related services

     106      107    -1 %   7 %
                  

Total solution

     263      272    -3 %   4 %

Maintenance services

     104      103    1 %   6 %
                  

Total revenue

   $ 367    $ 375    -2 %   5 %
                  

Segment revenue

   2009    2008    % Change As
Reported
    % Change
Constant
Currency
 

Americas

   $ 205    $ 210    -2 %   1 %

EMEA

     97      103    -6 %   12 %

APJ

     65      62    5 %   9 %
                  

Total revenue

   $ 367    $ 375    -2 %   5 %
                  

 

2.

Teradata defines free cash flow as cash provided/used by operating activities less capital expenditures for property and equipment, and additions to capitalized software. Free cash flow does not have a uniform definition under GAAP and therefore, Teradata’s definition may differ from other companies’ definition of this measure. Teradata’s management uses free cash flow to assess the financial performance of the company and believes it is

 

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useful for investors because it relates the operating cash flow of the company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures for, among other things, investment in the company’s existing businesses, strategic acquisitions, strengthening the company’s balance sheet, repurchase of company stock and repayment of the company’s debt obligations, if any. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure.

 

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Note to Investors

This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance, within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements include projections of revenue, profit growth and other financial items, future economic performance and statements concerning analysts’ earnings estimates, among other things. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause Teradata’s actual results to differ materially.

In addition to the factors discussed in this release, other risks and uncertainties could affect our future results and could cause actual results to differ materially from those expressed in such forward-looking statements. Such factors include those relating to: the current global economic downturn and its impact on the markets in general or on the ability of our suppliers to meet their commitments to us, or the timing of purchases by our current and potential customers, and other general economic and business conditions; the rapidly changing and intensely competitive nature of the information technology industry and the data enterprise warehousing business, including the increased pressure on price/performance for data warehousing solutions; fluctuations in our operating results, unanticipated delays or accelerations in our sales cycles and the difficulty of accurately estimating revenues; risks inherent in operating in foreign countries, including the impact of economic, political, legal, regulatory, compliance, cultural, foreign currency fluctuations and other conditions abroad; the timely development, production or acquisition and market acceptance of new and existing products and services, including our ability to accelerate market acceptance of new products and services; tax rates; turnover of workforce and the ability to attract and retain skilled employees; availability and successful exploitation of new acquisition and alliance opportunities; changes in Generally Accepted Accounting Principles (GAAP) and the resulting impact, if any, on the company’s accounting policies; continued efforts to establish and maintain best-in-class internal information technology and control systems; and other factors described from time to time in the company’s filings with the U.S. Securities and Exchange Commission and the company’s annual reports to stockholders The company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


Schedule A

LOGO

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in millions, except per share amounts)

 

     For the Periods Ended
March 31
 
     Three Months  
     2009     2008     % Chg  

Revenue

      

Products

   $ 157     $ 165     -5 %

Services

     210       210     0 %
                  

Total revenue

     367       375     -2 %

Product gross margin

     103       105    

% of Revenue

     65.6 %     63.6 %  

Services gross margin

     97       89    

% of Revenue

     46.2 %     42.4 %  
                  

Total gross margin

     200       194    

% of Revenue

     54.5 %     51.7 %  

Selling, general and administrative expenses

     110       116    

Research and development expenses

     30       25    
                  

Income from operations

     60       53    

% of Revenue

     16.3 %     14.1 %  

Interest and Other Income, net

     —         3    

Income before income taxes

     60       56    

% of Revenue

     16.3 %     14.9 %  

Income tax expense

     15       14    
                  

% Tax rate

     25.0 %     25.0 %  

Net income

   $ 45     $ 42    
                  

% of Revenue

     12.3 %     11.2 %  

Net income per common share

      

Basic

   $ 0.26     $ 0.23    

Diluted

   $ 0.26     $ 0.23    

Weighted average common shares outstanding

      

Basic

     173.3       180.4    

Diluted

     174.3       182.3    


Schedule B

TERADATA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions)

 

     March 31,
2009
    December 31,
2008
    March 31,
2008
 

Assets

      

Current assets

      

Cash and cash equivalents

   $ 506     $ 402     $ 339  

Short term investments

     65       40       —    

Accounts receivable, net

     359       451       417  

Inventories

     52       44       48  

Other current assets

     67       78       50  
                        

Total current assets

     1,049       1,015       854  

Property and equipment, net

     91       88       93  

Capitalized software, net

     84       80       67  

Goodwill

     108       110       108  

Deferred income taxes

     100       109       142  

Other assets

     27       28       38  
                        

Total assets

   $ 1,459     $ 1,430     $ 1,302  
                        

Liabilities and stockholders’ equity

      

Current liabilities

      

Accounts payable

   $ 80     $ 99     $ 98  

Payroll and benefits liabilities

     68       83       66  

Deferred revenue

     321       255       300  

Other current liabilities

     68       103       90  
                        

Total current liabilities

     537       540       554  

Pension and other postemployment plan liabilities

     79       83       92  

Other liabilities

     30       30       11  
                        

Total liabilities

     646       653       657  
                        

Stockholders’ equity

      

Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding

     —         —         —    

Common stock: par value $0.01 per share, 500.0 shares authorized, 180.9 and 180.5 shares issued at March 31, 2009 and December 31, 2008, respectively

     2       2       2  

Paid-in capital

     580       572       525  

Treasury Stock

     (158 )     (137 )     —    

Retained earnings

     374       329       121  

Accumulated other comprehensive income

     15       11       (3 )
                        

Total stockholders’ equity

     813       777       645  
                        

Total liabilities and stockholders’ equity

   $ 1,459     $ 1,430     $ 1,302  
                        


Schedule C

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TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

 

     For the Periods Ended March 31  
     Three Months  
     2009     2008  

Operating activities

    

Net income

   $ 45     $ 42  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     14       17  

Stock-based compensation expense

     5       5  

Excess tax benefit from stock-based compensation

     —         (1 )

Deferred income taxes

     8       6  

Changes in assets and liabilities:

    

Receivables

     88       102  

Inventories

     (7 )     3  

Current payables and accrued expenses

     (48 )     (59 )

Deferred revenue

     66       59  

Other assets and liabilities

     (6 )     (31 )
                

Net cash provided by operating activities

     165       143  

Investing activities

    

Purchase of short-term investments

     (25 )     —    

Expenditures for property and equipment

     (9 )     (4 )

Additions to capitalized software

     (11 )     (16 )

Other investing activities and business acquisitions, net

     4       (22 )
                

Net cash used in investing activities

     (41 )     (42 )

Financing activities

    

Repurchase of common stock

     (20 )     (38 )

Excess tax benefit from stock-based compensation

     —         1  

Other financing activities, net

     3       1  
                

Net cash used in financing activities

     (17 )     (36 )

Effect of exchange rate changes on cash and cash equivalents

     (3 )     4  
                

Increase in cash and cash equivalents

     104       69  

Cash and cash equivalents at beginning of period

     402       270  
                

Cash and cash equivalents at end of period

   $ 506     $ 339  
                


Schedule D

LOGO

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in millions, except per share amounts)

 

     For the Periods Ended March 31  
     Three Months  
     2009     2008     % Change As
Reported
    % Change
Constant
Currency
 

Revenue

        

Americas

   $ 205     $ 210     -2 %   1 %

EMEA

     97       103     -6 %   12 %

APJ

     65       62     5 %   9 %
                    

Total revenue

     367       375     -2 %   5 %

Segment gross margin

        

Americas

     117       114      

% of Revenue

     57.1 %     54.3 %    

EMEA

     53       52      

% of Revenue

     54.6 %     50.5 %    

APJ

     30       28      

% of Revenue

     46.2 %     45.2 %    
                    

Total gross margin

     200       194      

% of Revenue

     54.5 %     51.7 %    

Selling, general and administrative expenses

     110       116      

Research and development expenses

     30       25      
                    

Income from operations

   $ 60     $ 53      
                    

% of Revenue

     16.3 %     14.1 %