EX-99.1 2 dex991.htm PRESS RELEASE, DATED MAY 6, 2010, ISSUED BY THE COMPANY Press Release, dated May 6, 2010, issued by the Company

Exhibit 99.1

 

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11695 Johns Creek Pkwy.

Johns Creek, GA 30097

    NEWS RELEASE
For media information:     For investor information:
Mike O’Sullivan     Gregg Swearingen
(937) 242-4786     (937) 242-4600
mike.osullivan@teradata.com     gregg.swearingen@teradata.com

For Release on May 6, 2010

Teradata Announces Record 2010 First Quarter Results

 

   

Revenue increased 17 percent, 12 percent in constant currency, from first quarter of 2009

 

   

Product revenue increased 27% from the first quarter of 2009

 

   

Operating margin improved to 20.0 percent, from 16.3 percent in the first quarter of 2009

 

   

EPS of $0.39, versus $ 0.26 in first quarter of 2009

 

   

Increasing full-year 2010 revenue growth guidance to 8-10 percent

 

   

Increasing full-year EPS guidance to $1.60 to $1.70

ATLANTA – Teradata Corporation (NYSE: TDC), the world’s largest company solely focused on data warehousing and enterprise analytics, today reported revenue of $429 million for the quarter ended March 31, 2010, an increase of 17 percent from $367 million in 2009. The first quarter revenue comparison included 5 percentage points of benefit from currency fluctuations. (1)

Gross margin in the first quarter improved to 55.0 percent versus 54.5 percent in the first quarter of 2009, due to higher services gross margin and a more favorable mix of product versus service revenue.

Teradata reported first-quarter net income under Generally Accepted Accounting Principles (GAAP) of $67 million, or $0.39 per diluted share, which compared to GAAP net income of $45 million, or $0.26 per diluted share, in the first quarter of 2009.

“Teradata started off strong in 2010, delivering record first quarter revenue and earnings for our shareholders,” said Mike Koehler, president and chief executive officer of Teradata Corporation. “All regions grew product revenue by double digits in the quarter.

“As a result, we are raising our guidance for full-year 2010 revenue growth to 8-10 percent and earnings per share to $1.60 to $1.70.


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“The Teradata team executed well in the first quarter, released new models for three members of our purpose-built platform family, launched new offers with key partners, grew our consulting business and increased operating margins,” said Koehler.

Regional Operating Segment Results

Teradata reports its results in three regional operating segments.

Americas

Teradata generated $252 million of revenue in its Americas region in the first quarter of 2010, up 23 percent from $205 million in the first quarter of 2009. Currency translation benefited revenue growth in the Americas by 2 percentage points in the first quarter.(1)

Gross margin in the Americas region in the first quarter of 2010 improved to 57.9 percent, compared to 57.1 percent in the first quarter of 2009. Gross margin in the quarter improved largely due to higher consulting services margins compared to the prior year period.

Europe, Middle East and Africa (EMEA)

Revenue in Teradata’s EMEA region in the first quarter of 2010 was $106 million, up 9 percent from $97 million generated in the first quarter of 2009. Currency translation benefited the revenue comparison in the EMEA region by 6 percentage points.(1)

Gross margin in the EMEA region in the first quarter of 2010 was 53.8 percent, down from 54.6 percent in the first quarter of 2009, due to the impact of lower product margins compared to the prior year period.

Asia Pacific / Japan (APJ)

Teradata generated $71 million of revenue in its APJ region in the first quarter of 2010, a 9 percent increase from $65 million in the first quarter of 2009. The revenue comparison in the APJ region was benefited by 10 percentage points from currency translation.(1)

Gross margin in the APJ region in the first quarter of 2010 was 46.5 percent, versus 46.2 percent in the first quarter of 2009.

Operating Income

First-quarter operating income of $86 million improved from $60 million reported in the first quarter of 2009, driven by higher revenue and a more favorable mix of product versus services revenue.


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Other Items

Included in Teradata’s quarterly results was $5 million of non-cash stock-based compensation expense, or approximately 2 cents of earnings per share, the same as in the prior year period.

The effective income tax rate in the first quarter of 2010 was 22 percent, which compared to a 25 percent tax rate in the prior year period. The first quarter tax rate benefited from the previously disclosed recognition of certain foreign net operating loss carry-forwards resulting from an audit settlement in the first quarter of 2010.

Because more of Teradata’s profit for the year is now expected to be generated in the United States, the company’s tax rate for full-year 2010 is now expected to increase to the 25.5 to 26.5 percent range.

Cash Flow

During the first quarter of 2010, Teradata generated $138 million of cash from operating activities, compared to $165 million in the prior year period. Capital expenditures in the first quarter of $21 million compared to $20 million in the first quarter of 2009. Teradata generated $117 million of free cash flow (cash from operations less capital expenditures for property and equipment and additions to capitalized software) (2) in the first quarter of 2010, versus generating $145 million in the same period in 2009. The primary driver of the change in free cash flow was a higher accounts receivable balance at December 31, 2008 versus December 31, 2009.

 

    

For the period
ended March 31

(in millions)

 
     Three Months  
     2010     2009  

Net Income (GAAP)

   $ 67      $ 45   

Cash provided by operating activities (GAAP)

   $ 138      $ 165   

Less capital expenditures for:

    

Expenditures for property and equipment

     (6     (9

Additions to capitalized software

     (15     (11
                

Total capital expenditures

     (21     (20

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

   $ 117      $ 145   


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Balance Sheet

Teradata ended the first quarter of 2010 with $712 million in cash and short-term investments, a $51 million increase from December 31, 2009, even though Teradata used approximately $70 million of cash to repurchase 2.4 million shares in the first quarter of 2010.

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, 2010.

2010 Outlook

Teradata is increasing its expectation for full-year 2010 revenue growth to 8-10 percent from the revenue it generated in 2009, and currency is expected to have minimal benefit in the year over year comparison. Teradata’s original revenue growth guidance of 7-9 percent for 2010 had included 1-2 percentage points of benefit from currency translation.

Even though Teradata expects its full-year tax rate to be higher than originally anticipated, the company is increasing its earnings guidance for 2010 to $1.60 to $1.70 per share, from the original guidance range of $1.54 to $1.64 per share.

2010 First-Quarter Earnings Conference Call

A conference call is scheduled today at 8:30 a.m. (ET) to discuss the company’s first-quarter 2010 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 www.teradata.com/investor.

About Teradata

Teradata Corporation (NYSE: TDC) is the world’s largest company solely focused on raising intelligence and achieving enterprise agility through its database softwareenterprise data warehousing, data warehouse appliancesconsulting, and enterprise analytics. Visit Teradata on the web at www.teradata.com.

# # #

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


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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 Relations page of the company’s web site www.teradata.com/investor.

 

    

For the Period Ended March 31

(in millions)

 
     Three Months  

Revenue

   2010    2009    %
Change
As
Reported
    %
Change
Constant
Currency
 

Products (software/hardware)

   $ 200    $ 157    27   22

Consulting services

     117      106    10   4

Maintenance services

     112      104    8   4
                  

Total services

     229      210    9   4

Total revenue

   $ 429    $ 367    17   12

By segment/region

          

Americas region

   $ 252    $ 205    23   21

EMEA region

     106      97    9   3

APJ region

     71      65    9   (1 )% 
                  

Total revenue

   $ 429    $ 367    17   12

 

2. The company believes that free cash flow is a useful non-GAAP measure for investors. 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 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. This non-GAAP measure is not meant to be considered in isolation or as a substitute for or superior to results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.

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 global economic environment 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 enterprise data warehousing business, including the increased pressure on


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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 and successful 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 as well as the reliability, quality and operability of new products because of the difficulty and complexity associated with their testing and production; 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, including its annual report on Form 10-K and subsequent quarterly reports on Forms 10-Q, as well as 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

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TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in millions, except per share amounts)

 

     For the Period Ended March 31  
     Three Months  
     2010     2009     % Chg  

Revenue

      

Products

   $ 200      $ 157      27

Services

     229        210      9
                  

Total revenue

     429        367      17

Product gross margin

     128        103     

% of Revenue

     64.0     65.6  

Services gross margin

     108        97     

% of Revenue

     47.2     46.2  
                  

Total gross margin

     236        200     

% of Revenue

     55.0     54.5  

Selling, general and administrative expenses

     118        110     

Research and development expenses

     32        30     
                  

Income from operations

     86        60     

% of Revenue

     20.0     16.3  

Other income, net

     —          —       

Income before income taxes

     86        60     

% of Revenue

     20.0     16.3  

Income tax expense

     19        15     
                  

% Tax rate

     22     25  

Net income

   $ 67      $ 45     
                  

% of Revenue

     15.6     12.3  

Net income per common share

      

Basic

   $ 0.40      $ 0.26     

Diluted

   $ 0.39      $ 0.26     

Weighted average common shares outstanding

      

Basic

     167.8        173.3     

Diluted

     170.5        174.3     


Schedule B

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TERADATA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions)

 

     March 31,
2010
    December 31,
2009
    March 31,
2009
 

Assets

      

Current assets

      

Cash and cash equivalents

   $ 712      $ 661      $ 506   

Short term investments

     —          —          65   

Accounts receivable, net

     334        387        359   

Inventories

     56        47        52   

Other current assets

     58        57        67   
                        

Total current assets

     1,160        1,152        1,049   

Property and equipment, net

     96        95        91   

Capitalized software, net

     109        102        84   

Goodwill

     109        109        108   

Deferred income taxes

     75        84        100   

Other assets

     27        27        27   
                        

Total assets

   $ 1,576      $ 1,569      $ 1,459   
                        

Liabilities and stockholders’ equity

      

Current liabilities

      

Accounts payable

   $ 81      $ 102      $ 80   

Payroll and benefits liabilities

     77        109        68   

Deferred revenue

     326        256        321   

Other current liabilities

     59        76        68   
                        

Total current liabilities

     543        543        537   

Pension and other postemployment plan liabilities

     81        83        79   

Other liabilities

     35        33        30   
                        

Total liabilities

     659        659        646   
                        

Stockholders’ equity

      

Preferred stock

     —          —          —     

Common stock

     2        2        2   

Paid-in capital

     632        622        580   

Treasury Stock

     (382     (311     (158

Retained earnings

     650        583        374   

Accumulated other comprehensive income

     15        14        15   
                        

Total stockholders’ equity

     917        910        813   
                        

Total liabilities and stockholders’ equity

   $ 1,576      $ 1,569      $ 1,459   
                        


Schedule C

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TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

 

     For the Period Ended March 31  
     Three Months  
     2010     2009  

Operating activities

    

Net income

   $ 67      $ 45   

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

    

Depreciation and amortization

     14        14   

Stock-based compensation expense

     5        5   

Excess tax benefit from stock-based compensation

     (1     —     

Deferred income taxes

     9        8   

Changes in assets and liabilities:

    

Receivables

     52        88   

Inventories

     (10     (7

Current payables and accrued expenses

     (67     (48

Deferred revenue

     72        66   

Other assets and liabilities

     (3     (6
                

Net cash provided by operating activities

     138        165   

Investing activities

    

Purchase of short-term investments

     —          (25

Expenditures for property and equipment

     (6     (9

Additions to capitalized software

     (15     (11

Other investing activities, net

     —          4   
                

Net cash used in investing activities

     (21     (41

Financing activities

    

Repurchase of common stock

     (71     (20

Excess tax benefit from stock-based compensation

     1        —     

Other financing activities, net

     5        3   
                

Net cash used in financing activities

     (65     (17

Effect of exchange rate changes on cash and cash equivalents

     (1     (3
                

Increase in cash and cash equivalents

     51        104   

Cash and cash equivalents at beginning of period

     661        402   
                

Cash and cash equivalents at end of period

   $ 712      $ 506   
                


Schedule D

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TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in millions)

 

     For the Period Ended March 31  
     Three Months  
     2010     2009     %
Change
As
Reported
    %
Change
Constant
Currency
 

Revenue

        

Americas

   $ 252      $ 205      23   21

EMEA

     106        97      9   3

APJ

     71        65      9   -1
                    

Total revenue

     429        367      17   12

Segment gross margin

        

Americas

     146        117       

% of Revenue

     57.9     57.1    

EMEA

     57        53       

% of Revenue

     53.8     54.6    

APJ

     33        30       

% of Revenue

     46.5     46.2    
                    

Total gross margin

     236        200       

% of Revenue

     55.0     54.5    

Selling, general and administrative expenses

     118        110       

Research and development expenses

     32        30       
                    

Income from operations

   $ 86      $ 60       
                    

% of Revenue

     20.0     16.3