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Fourth Quarter Results for Fiscal 2011
Amdocs Limited Reports Quarterly Revenue of $812 Million, Up 6.6% YoY
Expects Fiscal 2012 non-GAAP EPS growth of at least 10-12%

Key highlights:

  • Fourth fiscal quarter revenue of $812 million, compared to the $800-$815 million guidance range. The acquisition of Bridgewater Systems Corporation positively affected revenue by approximately $7 million which was not reflected in the company's guidance. Additionally, foreign currency movements negatively affected revenue by approximately $4 million sequentially relative to the third fiscal quarter of 2011
  • Fourth fiscal quarter non-GAAP operating income of $134 million; non-GAAP operating margin of 16.5%; GAAP operating income of $105 million
  • Fourth fiscal quarter diluted non-GAAP EPS of $0.62, compared to the $0.58-$0.64 guidance range, excluding amortization of purchased intangible assets and other acquisition related costs and equity-based compensation expense, net of related tax effects
  • Diluted GAAP EPS of $0.49 for the fourth fiscal quarter, compared to the $0.46-$0.54 guidance range
  • Free cash flow of $118 million for the fourth fiscal quarter
  • Twelve-month backlog of $2.67 billion at the end of the fourth fiscal quarter, up $50 million from the end of the third fiscal quarter of 2011
  • Repurchased $192 million of ordinary shares during the fourth fiscal quarter
  • First quarter fiscal 2012 guidance: Expected revenue of approximately $805-$825 million and diluted non-GAAP EPS of $0.61-$0.67, excluding amortization of purchased intangible assets and other acquisition-related costs and approximately $0.05-$0.06 per share of equity-based compensation expense, net of related tax effects. Diluted GAAP EPS is expected to be approximately $0.49-$0.57
  • Fiscal 2012 guidance: Expected non-GAAP earnings per share growth of at least 10-12% and revenue growth of approximately 5-6% in fiscal 2012 compared to fiscal 2011

ST. LOUIS, Nov. 8, 2011 /PRNewswire via COMTEX/ -- Amdocs Limited (NYSE: DOX) today reported that for its fourth fiscal quarter ended September 30, 2011, revenue was $812.2 million, up 1.3% sequentially from the third fiscal quarter of 2011 and up 6.6% as compared to last year's fourth fiscal quarter. Net income on a non-GAAP basis was $111.2 million, or $0.62 per diluted share, compared to non-GAAP net income of $122.4 million, or $0.62 per diluted share, in the fourth quarter of fiscal 2010. Non-GAAP net income excludes amortization of purchased intangible assets and other acquisition related costs and equity-based compensation expenses of $23.8 million, net of related tax effects, in the fourth quarter of fiscal 2011 and excludes such amortization and equity-based compensation expenses of $27.6 million, net of related tax effects, in the fourth quarter of fiscal 2010. The Company's GAAP net income for the fourth quarter of fiscal 2011 was $87.4 million, or $0.49 per diluted share, compared to GAAP net income of $94.7 million, or $0.48 per diluted share, in the prior year's fourth fiscal quarter.

"We concluded fiscal 2011 with strong execution, on-going deal momentum in the emerging markets and continued progress in revitalizing our European business. In North America, we continued to see solid demand in 2011 and further extended our market leadership with key competitive wins. Additionally, our profitability improved throughout the year as the investment decisions we made at the beginning of 2011 yielded results," said Eli Gelman, chief executive officer of Amdocs Management Limited.

Gelman continued, "Looking ahead to fiscal 2012, we are embarking on many new, industry-leading projects at several of the world's largest operators. Our focused strategy of empowering service providers to support compelling customer experiences while concurrently improving their ability to monetize new data services is resonating in the market. The acquisition of Bridgewater Systems, which closed in the fourth fiscal quarter, further solidifies our position as a leader in driving the data experience. We are, however, approaching the new fiscal year with some level of caution as the macroeconomic outlook remains uncertain, particularly in Europe."

Gelman concluded, "During the fourth fiscal quarter, we more aggressively executed on our buyback program. Since resuming the program in April 2010, we have now repurchased $1 billion of our ordinary shares as of September 30, 2011, or approximately 17% of our shares outstanding. We expect the combination of a solid fundamental outlook for the business of 5-6% revenue growth along with our previously executed share repurchase activity to drive at least 10-12% non-GAAP earnings per share growth for Amdocs in fiscal 2012."

Financial Discussion of Fourth Fiscal Quarter Results

Free cash flow was $118 million for the quarter, comprised of cash flow from operations of $148 million less $30 million in net capital expenditures and other.

Twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was $2.67 billion at the end of the fourth quarter of fiscal 2011.

Fiscal Year 2011 Results

For the fiscal year ended September 30, 2011, revenue increased by 6.5% to $3.2 billion. Fiscal 2011 net income on a non-GAAP basis was $434.6 million, or $2.33 per diluted share (excluding amortization of purchased intangible assets and other acquisition related costs and equity-based compensation expenses of $87.9 million, net of related tax effects), compared to non-GAAP net income of $471.7 million, or $2.31 per diluted share, in fiscal 2010 (excluding amortization of purchased intangible assets and other acquisition related costs, equity-based compensation expenses and loss from divestiture of a subsidiary of $127.8 million, net of related tax effects). The Company's GAAP net income in fiscal 2011 was $346.7 million, or $1.86 per diluted share, compared to GAAP net income of $343.9 million, or $1.69 per diluted share, in fiscal 2010.

Financial Outlook

Amdocs expects that revenue for the first quarter of fiscal 2012 will be approximately $805-$825 million. Diluted earnings per share on a non-GAAP basis for the first fiscal quarter are expected to be $0.61-$0.67, excluding amortization of purchased intangible assets and other acquisition-related costs and approximately $0.05-$0.06 per share of equity-based compensation expense, net of related tax effects. Amdocs estimates GAAP diluted earnings per share for the first fiscal quarter will be $0.49-$0.57.

For the fiscal year 2012 compared to fiscal year 2011, Amdocs anticipates at least 10-12% non-GAAP earnings per share growth and revenue growth of 5-6%.

Conference Call Details

Amdocs will host a conference call on November 8, 2011 at 5:00 p.m. Eastern Time to discuss the Company's fourth fiscal quarter results. The call will be carried live on the Internet via the Amdocs website, http://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 operating margin, non-GAAP interest and other (expense) income, net, non-GAAP income taxes and non-GAAP net income. These non-GAAP measures exclude the following items:

  • amortization of purchased intangible assets and other acquisition related costs;
  • equity-based compensation expense;
  • loss from divestiture of a subsidiary; 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 operating margin, non-GAAP interest and other (expense) income, net, 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 and other acquisition related costs, equity-based compensation expense, loss from divestiture of a subsidiary, 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, interest and other (expense) income, net, 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. The company combines business and operational support systems, service delivery platforms, proven services, and deep industry expertise to enable service providers and their customers to do more in the connected world. Amdocs' offerings help service providers explore new business models, differentiate through personalized customer experiences, and streamline operations. A global company with revenue of approximately $3.2 billion in fiscal 2011, Amdocs has over 19,000 employees and serves customers in more than 60 countries worldwide. For more information, visit Amdocs at http://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, 2010 filed on December 7, 2010 and in our quarterly 6-K filed on February 8, 2011, May 11, 2011 and August 8, 2011.

AMDOCS LIMITED


Consolidated Statements of Income


(in thousands, except per share data)




Three months ended


Twelve months ended



September 30,


September 30,



2011


2010


2011


2010








Revenue:









License


$ 31,543


$ 25,276


$ 119,237


$ 100,967

Service


780,660


736,918


3,058,491


2,883,256



812,203


762,194


3,177,728


2,984,223

Operating expenses:









Cost of license


1,099


375


2,627


2,021

Cost of service


524,251


485,916


2,066,740


1,903,645

Research and development


58,944


54,287


221,886


207,836

Selling, general and administrative


103,729


96,531


409,465


373,585

Amortization of purchased intangible

assets and other


19,628


22,197


72,646


86,703



707,651


659,306


2,773,364


2,573,790

Operating income


104,552


102,888


404,364


410,433










Interest and other (expense) income, net


(5,405)


2,109


(8,657)


(25,135)

Income before income taxes


99,147


104,997


395,707


385,298










Income taxes


11,768


10,259


49,042


41,392

Net income


$ 87,379


$ 94,738


$ 346,665


$ 343,906

Basic earnings per share


$ 0.49


$ 0.49


$ 1.87


$ 1.70

Diluted earnings per share


$ 0.49


$ 0.48


$ 1.86


$ 1.69

Basic weighted average number of shares

outstanding


178,232


195,189


185,213


202,584

Diluted weighted average number of

shares outstanding


179,378


196,487


186,559


204,076


AMDOCS LIMITED

Selected Financial Metrics

(in thousands, except per share data)




Three months ended


Twelve months ended



September 30,


September 30,



2011


2010


2011


2010










Revenue


$ 812,203


$ 762,194


$ 3,177,728


$ 2,984,223










Non-GAAP operating income


133,883


137,212


513,641


541,591










Non-GAAP net income


111,187


122,351


434,580


471,708










Non-GAAP diluted earnings per

share


$ 0.62


$ 0.62


$ 2.33


$ 2.31










Diluted weighted average number

of shares outstanding


179,378


196,487


186,559


204,076

AMDOCS LIMITED

Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP

(in thousands)



Three months ended

September 30, 2011



Reconciliation items



GAAP

Amortization of
purchased
intangible assets
and other

Equity based
compensation
expense

Tax effect

Non-GAAP

Operating expenses:






Cost of license

$ 1,099

$ -

$ -

$ -

$ 1,099

Cost of service

524,251

-

(4,718)

-

519,533

Research and

development

58,944

-

(714)

-

58,230

Selling, general and

administrative

103,729

-

(4,271)

-

99,458

Amortization of

purchased

intangible assets

and other

19,628

(19,628)

-

-

-

Total operating expenses

707,651

(19,628)

(9,703)

-

678,320







Operating income

104,552

19,628

9,703

-

133,883







Income taxes

11,768

-

-

5,523

17,291







Net income

$ 87,379

$ 19,628

$ 9,703

$ (5,523)

$ 111,187
















Three months ended

September 30, 2010



Reconciliation items



GAAP

Amortization of
purchased
intangible assets
and other

Equity based
compensation
expense

Tax effect

Non-GAAP

Operating expenses:






Cost of license

$ 375

$ -

$ -

$ -

$ 375

Cost of service

485,916

-

(5,438)

-

480,478

Research and

development

54,287

-

(1,064)

-

53,223

Selling, general and

administrative

96,531

-

(5,625)

-

90,906

Amortization of

purchased

intangible assets

and other

22,197

(22,197)

-

-

-

Total operating expenses

659,306

(22,197)

(12,127)

-

624,982







Operating income

102,888

22,197

12,127

-

137,212







Income taxes

10,259

-

-

6,711

16,970







Net income

$ 94,738

$ 22,197

$ 12,127

$ (6,711)

$ 122,351














AMDOCS LIMITED

Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP

(in thousands)



Twelve months ended

September 30, 2011



Reconciliation items



GAAP

Amortization of
purchased
intangible assets
and other

Equity based
compensation
expense

Tax effect

Non-GAAP

Operating expenses:






Cost of license

$ 2,627

$ -

$ -

$ -

$ 2,627

Cost of service

2,066,740

-

(14,641)

-

2,052,099

Research and

development

221,886

-


(2,701)

-

219,185

Selling, general and

administrative

409,465

-


(19,289)

-

390,176

Amortization of

purchased

intangible assets

and other

72,646

(72,646)

-

-

-

Total operating expenses

2,773,364

(72,646)

(36,631)

-

2,664,087







Operating income

404,364

72,646

36,631

-

513,641







Income taxes

49,042

-

-

21,362

70,404







Net income

$ 346,665

$ 72,646

$ 36,631

$ (21,362)

$ 434,580














Twelve months ended

September 30, 2010


Reconciliation items


GAAP

Amortization of
purchased
intangible assets
and other

Equity based
compensation
expense

Loss from
divestiture of a
subsidiary

Tax effect

Non-GAAP

Operating expenses:







Cost of license

$ 2,021

$ -

$ -

$ -

$ -

$ 2,021

Cost of service

1,903,645

-

(20,061)

-

-

1,883,584

Research and

development

207,836

-

(4,218)

-

-

203,618

Selling, general and

administrative

373,585

-

(20,176)

-

-

353,409

Amortization of

purchased

intangible assets

and other

86,703

(86,703)

-

-

-

-

Total operating expenses

2,573,790

(86,703)

(44,455)

-

-

2,442,632








Operating income

410,433

86,703

44,455

-

-

541,591








Interest and other (expense) income, net

(25,135)

-

-

23,399

-

(1,736)








Income taxes

41,392

-

-

-

26,755

68,147








Net income

$ 343,906

$ 86,703

$ 44,455

$ 23,399

$ (26,755)

$ 471,708















AMDOCS LIMITED

Condensed Consolidated Balance Sheets

(in thousands)



As of



September 30,
2011


September 30,
2010






ASSETS










Current assets





Cash, cash equivalents and short-term interest-bearing investments


$ 1,173,470


$ 1,433,299

Accounts receivable, net, including unbilled of $72,048 and $62,246,

respectively


565,853


580,000

Deferred income taxes and taxes receivable


112,656


126,083

Prepaid expenses and other current assets


127,341


112,417

Total current assets


1,979,320


2,251,799






Equipment and leasehold improvements, net


258,402


258,273

Goodwill and other intangible assets, net


1,933,154


1,856,178

Other noncurrent assets


465,696


454,354

Total assets


$ 4,636,572


$ 4,820,604






LIABILITIES AND SHAREHOLDERS' EQUITY










Current liabilities





Accounts payable, accruals and other


$ 594,603


$ 621,549

Short-term financing arrangements


250,000


200,000

Deferred revenue


151,423


184,481

Deferred income taxes and taxes payable


15,180


18,117

Total current liabilities


1,011,206


1,024,147






Other noncurrent liabilities


602,065


567,077

Shareholders' equity


3,023,301


3,229,380

Total liabilities and shareholders' equity


$ 4,636,572


$ 4,820,604


AMDOCS LIMITED

Consolidated Statements of Cash Flows

(in thousands)




Year ended September 30,



2011


2010






Cash Flow from Operating Activities:





Net income


$ 346,665


$ 343,906

Reconciliation of net income to net cash provided by operating activities:





Depreciation and amortization


181,477


195,940

Loss from divestiture of a subsidiary


-


23,399

Equity-based compensation expense


36,631


44,455

Deferred income taxes


1,252


(19,137)

Excess tax benefit from equity-based compensation


(178)


(126)

Loss (gain) from short-term interest-bearing investments


1,386


(1,284)

Net changes in operating assets and liabilities, net of amounts acquired:





Accounts receivable, net


38,062


(131,387)

Prepaid expenses and other current assets


(10,741)


9,009

Other noncurrent assets


(15,807)


(35,948)

Accounts payable, accrued expenses and accrued personnel


(46,976)


187,652

Deferred revenue


(34,444)


33,927

Income taxes payable


27,289


20,272

Other noncurrent liabilities


10,876


14,520

Net cash provided by operating activities


535,492


685,198






Cash Flow from Investing Activities:





Payments for purchase of equipment and leasehold improvements, net


(109,779)


(86,945)

Proceeds from sale of short-term interest-bearing investments


591,147


1,503,231

Purchase of short-term interest-bearing investments


(521,999)


(1,449,494)

Net cash paid for acquisitions


(162,964)


(200,307)

Net cash received from divestiture of a subsidiary


-


20,275

Other


(18,076)


1,734

Net cash used in investing activities


(221,671)


(211,506)






Cash Flow from Financing Activities:





Borrowings under financing arrangements


250,000


200,000

Payments under financing arrangements


(200,000)


-

Repurchase of shares


(624,241)


(389,287)

Proceeds from employee stock options exercised


56,474


23,644

Payments under capital lease, short-term financing arrangements and other


(878)


(616)

Net cash used in financing activities


(518,645)


(166,259)






Net (decrease) increase in cash and cash equivalents


(204,824)


307,433

Cash and cash equivalents at beginning of year


1,036,195


728,762

Cash and cash equivalents at end of year


$ 831,371


$ 1,036,195






AMDOCS LIMITED

Supplementary Information

(in millions)




Three months ended



September 30,
2011


June 30,
2011


March 31,
2011


December 31,
2010


September 30,
2010

North America


$ 585.1


$ 584.9


$ 598.4


$ 564.6


$ 569.7

Europe


102.0


105.5


97.2


98.4


91.0

Rest of World


125.1


111.0


93.3


112.2


101.5

Total Revenue


$ 812.2


$ 801.4


$ 788.9


$ 775.2


$ 762.2





Three months ended



September 30,
2011


June 30,
2011


March 31,
2011


December 31,
2010


September 30,
2010

Emerging Markets Revenue


$ 79.5


$ 73.2


$ 52.1


$ 67.8


$ 69.5





Three months ended



September 30,
2011


June 30,
2011


March 31,
2011


December 31,
2010


September 30,
2010

Managed Services Revenue


$ 384.8


$ 384.2


$ 382.6


$ 371.2


$ 355.5














Three months ended



September 30,
2011


June 30,
2011


March 31,
2011


December 31,
2010


September 30,
2010

Customer Experience Systems


$ 764.6


$ 751.1


$ 737.2


$ 725.4


$ 714.9

Directory


47.6


50.3


51.7


49.8


47.3

Total Revenue


$ 812.2


$ 801.4


$ 788.9


$ 775.2


$ 762.2





As of



September 30,
2011


June 30,
2011


March 31,
2011


December 31,
2010


September 30,
2010

12-Month Backlog


$ 2,670


$ 2,620


$ 2,590


$ 2,560


$ 2,525


SOURCE Amdocs

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