EX-99.1 2 c14759exv99w1.txt PRESS RELEASE Exhibit 99.1 (SPSS LOGO) FOR IMMEDIATE RELEASE Contact: Janine Warell, SPSS 312-261-6535 jwarell@spss.com SPSS REPORTS RECORD FIRST QUARTER New License Sales and Productivity Improvements Drive Growth CHICAGO, IL (USA), May 1, 2007 -- SPSS Inc. (Nasdaq: SPSS), a worldwide provider of predictive analytics software, today announced results for the first quarter ended March 31, 2007. The company reported total revenues of $70.2 million, a 13 percent increase from $62.2 million in the 2006 first quarter, with diluted earnings per share (EPS) of $0.39, compared to $0.24 in the prior year first quarter. New license revenues were $35.0 million, up 17 percent from $29.9 million in the 2006 first quarter. Operating income increased to $12.1 million, or 17 percent of revenues, from $7.0 million, or 11 percent of revenues, in the same quarter last year. Charges for share-based compensation were $0.06 and $0.03 in the first quarters of 2007 and 2006, respectively. At March 31, 2007, cash totaled $256.1 million, including proceeds from the company's recent convertible debt offering less cash used for a concurrent share repurchase. Cash provided by operating activities in the quarter was $21.3 million, up from $8.1 million for the same period in 2006. "This quarter was a solid start to the year," said Jack Noonan, SPSS president and CEO. "We saw double-digit growth in new license revenues with higher sales in all major geographies, along with increased growth from both our predictive tools and deployment solutions. We continued to strengthen our leadership position in predictive analytics by delivering significant recognized value to our customers." OUTLOOK AND GUIDANCE "Our focus is on building upon the successes in this quarter by continuing to increase revenues and achieve further productivity improvements," said Raymond Panza, SPSS executive vice president and CFO. "Next quarter we expect revenues to be between $68.0 million and $70.0 million with EPS in the range of $0.30 to $0.35. This guidance includes an expected expense for share-based compensation of approximately $0.08." He continued, "For the 2007 fiscal year, we are reiterating previous revenue guidance of between $285.0 million and $295.0 million. However, we are increasing previous 2007 fiscal year EPS guidance from $1.20 to $1.30 to a new range of $1.40 to $1.50. This increase reflects both higher earnings realized in the first quarter, as well as the expected benefits from the recently completed convertible debt offering and the related repurchase of common stock. EPS guidance for the 2007 annual period includes an estimated expense of approximately $0.29 for share-based compensation. EPS guidance for the quarter and fiscal year periods does not consider any potential charges resulting from possible cost management initiatives. Guidance for the 2007 fiscal year assumes an effective income tax rate of 38 percent." SHARE / NOTE REPURCHASE AUTHORIZED The SPSS Board of Directors has authorized the company to repurchase up to a maximum of two million shares of its issued and outstanding common stock and up to $20.0 million principal amount of its issued and outstanding convertible notes. These repurchases are not mandatory and will be made from time to time based on the availability of alternative investment opportunities and market conditions. This authorization extends until December 31, 2008. CONFERENCE CALL The company will host a conference call at 5 p.m. CT on Tuesday, May 1, 2007, to discuss its financial results. The live call will be broadcast online at www.spss.com/invest. Those interested in participating in the live call should dial 800-706-7745 in the United States and 617-614-3472 internationally. The live call pass-code is 84803450. A replay will be available via phone for one week after the call. To access it, participants should dial 888-286-8010 in the United States or 617-801-6888 internationally. Access code 29056495 is required for the replay. An archived version of the call will also be made available online at www.spss.com/invest approximately two hours after the live call. ABOUT SPSS INC. SPSS Inc. (Nasdaq: SPSS) is a leading global provider of predictive analytics software and solutions. The company's predictive analytics technology improves business processes by giving organizations forward visibility for decisions made every day. By incorporating predictive analytics into their daily operations, organizations become Predictive Enterprises--able to direct and automate decisions to meet business goals and achieve a measurable competitive advantage. More than 250,000 public sector, academic, and commercial customers rely on SPSS technology to help increase revenue, reduce costs, and detect and prevent fraud. Founded in 1968, SPSS is headquartered in Chicago, Illinois. For more information, please visit www.spss.com. SAFE HARBOR STATEMENT This press release contains forward-looking information made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements can be identified by phrases such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "could," "designed," "should be" and other similar expressions which denote expectations of future events rather than statements of fact. These forward-looking statements involve factors that are subject to risks and uncertainties. These risks and uncertainties, which may not be currently ascertainable and many of which are beyond the Company's control, may cause the Company's actual results, performance or achievements to be materially different than the results, performance or achievements expressed in or implied by the forward-looking statements. These risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission ("SEC"). Copies of these filings are available either on the SEC's website at www.sec.gov or from the Company's investor relations department. In light of these risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that any future results, performance or achievements will be attained. These forward-looking statements speak only as of the date on which they are made. The Company assumes no obligation to update the forward-looking statements contained in this press release. SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)
Three Months Ended March 31, ----------------------------- Yr/Yr % of Total Revenue ------------------- 2007 2006 % Chg. 2007 2006 ---- ---- ------ ---- ---- Net revenues: License $ 34,972 $ 29,873 17% 50% 48% Maintenance 28,926 26,063 11% 41% 42% Services 6,268 6,290 0% 9% 10% -------- -------- -------- -------- Net revenues 70,166 62,226 13% 100% 100% -------- -------- -------- -------- Operating expenses: Cost of license and maintenance revenues 4,247 4,150 2% 6% 7% Cost of license and maintenance revenues -- software write-off -- 1,283 NM 0% 2% Sales, marketing and services 33,629 30,396 11% 48% 49% Research and development 12,271 12,829 -4% 17% 20% General and administrative 7,944 6,616 20% 12% 11% -------- -------- -------- -------- Operating expenses 58,091 55,274 5% 83% 89% -------- -------- -------- -------- Operating income 12,075 6,952 74% 17% 11% -------- -------- -------- -------- Other income (expense): Net interest income 1,506 346 335% 2% 1% Other (784) 150 NM -1% 0% -------- -------- -------- -------- Other income 722 496 46% 1% 1% -------- -------- -------- -------- Income before income taxes 12,797 7,448 72% 18% 12% Income tax expense 4,646 2,607 78% 6% 4% -------- -------- -------- -------- Net income $ 8,151 $ 4,841 68% 12% 8% ======== ======== ======== ======== Basic net income per common share $ 0.42 $ 0.25 68% Diluted net income per common share $ 0.39 $ 0.24 63% Share data: Shares used in basic per share computation 19,604 19,294 2% Shares used in diluted per share computation 20,997 20,266 4%
SPSS INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
MARCH 31, DECEMBER 31, 2007 2006 --------- --------- ASSETS Current assets Cash and cash equivalents $ 256,080 $ 140,203 Accounts receivable, net 48,653 53,814 Inventories, net 780 752 Deferred income taxes 3,086 3,784 Prepaid income taxes 3,000 3,285 Other current assets 7,113 4,692 --------- --------- Total current assets 318,712 206,530 Net property, equipment and leasehold improvements 16,950 17,708 Capitalized software development costs, net 32,672 31,583 Goodwill 42,022 41,923 Intangibles, net 3,407 3,470 Deferred income taxes 25,913 28,714 Other noncurrent assets 5,734 2,566 --------- --------- Total assets $ 445,410 $ 332,494 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 7,735 $ 6,496 Income and value added taxes payable 12,725 10,249 Deferred revenues 72,725 73,483 Other accrued liabilities 22,686 24,203 --------- --------- Total current liabilities 115,871 114,431 Long-term debt 150,000 -- Noncurrent deferred income taxes 459 795 Noncurrent deferred revenue 797 745 Stockholders' equity Common Stock 199 198 Additional paid-in capital 210,093 205,912 Treasury Stock (49,998) -- Accumulated other comprehensive loss (318) (1,335) Retained earnings 18,307 11,748 --------- --------- Total stockholders' equity 178,283 216,523 --------- --------- Total liabilities and stockholders' equity $ 445,410 $ 332,494 ========= =========
SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
THREE MONTHS ENDED MARCH 31, --------------------- 2007 2006 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 8,151 $ 4,841 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,076 4,175 Deferred income taxes 2,255 722 Excess tax benefit from share-based compensation (255) (2,397) Amortization of share-based compensation 1,910 931 Write-off of software -- 1,283 Changes in assets and liabilities: Accounts receivable 5,546 2,655 Inventories (27) 294 Prepaid and other assets (1,518) (18) Accounts payable 1,211 (2,763) Accrued expenses (1,615) (381) Income taxes 2,288 (1,065) Deferred revenue (1,163) (291) Other, net 461 152 --------- --------- Net cash provided by operating activities 21,320 8,138 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (693) (1,140) Capitalized software development costs (3,584) (1,339) --------- --------- Net cash used in investing activities (4,277) (2,479) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 150,000 -- Debt issuance costs (4,281) -- Purchases of common stock (49,998) -- Proceeds from stock option exercises and employee stock purchase plan 2,060 10,698 Tax benefit from stock option exercises 255 2,397 Net repayments under line-of-credit agreements -- (3,372) --------- --------- Net cash provided by financing activities 98,036 9,723 --------- --------- Effect of exchange rates on cash 798 641 --------- --------- Net change in cash and cash equivalents 115,877 16,023 Cash and cash equivalents at beginning of period 140,203 84,408 --------- --------- Cash and cash equivalents at end of period $ 256,080 $ 100,431 ========= =========
SPSS INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION--EFFECT OF SHARE-BASED COMPENSATION ON OPERATING INCOME (IN THOUSANDS, EXCEPT PERCENT AMOUNTS) (UNAUDITED)
Three Months Ended March 31, ---------------------------------------------------------------------------- Adjusted To Exclude Reported--GAAP Share-Based Compensation Share-Based Compensation -------------------- ------------------------ ------------------------ 2007 2006 2007 2006 2007 2006 ------- ------- ------- ------- ------- ------- Net revenues $70,166 $62,226 $ -- $ -- $70,166 $62,226 ------- ------- ------- ------- ------- ------- Operating expenses: Cost of license and maintenance revenues 4,247 4,150 -- -- 4,247 4,150 Cost of license and maintenance revenues -- software write-off -- 1,283 -- 1,283 Sales, marketing and services 33,629 30,396 476 -- 33,153 30,396 Research and development 12,271 12,829 465 -- 11,806 12,829 General and administrative 7,944 6,616 969 931 6,975 5,685 ------- ------- ------- ------- ------- ------- Operating expenses 58,091 55,274 1,910 931 56,181 54,343 ------- ------- ------- ------- ------- ------- Operating income $12,075 $ 6,952 $(1,910) $ (931) $13,985 $ 7,883 ======= ======= ======= ======= ======= ======= Operating income as % of revenues 17% 11% 20% 13% ======= ======= ======= =======
NOTE - Share-Based Compensation In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment ("SFAS No. 123(R)" or the "Statement"). This Statement is a revision of SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"), and supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB No. 25"), and its related implementation guidance. On January 1, 2006, the Company adopted the provisions of SFAS No. 123(R) using the modified prospective method. SFAS No. 123(R) focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. Prior to the adoption of SFAS No. 123(R), the Company followed the intrinsic value method in accordance with APB No. 25 to account for its employee stock options and share-based awards prior to 2006. The Company has provided the effects of share-based compensation to show the comparable year effects of share-based compensation and the related effects on operating income thereby facilitating year over year comparisons.