|First Quarter Results for Fiscal 2011|
Expects 4-6% Revenue Growth in Fiscal 2011 and Improving Profitability During the Fiscal Year
ST. LOUIS, Jan. 25, 2011 /PRNewswire via COMTEX/ -- Amdocs Limited (NYSE: DOX) today reported that for its first fiscal quarter ended December 31, 2010, revenue was $775.2 million, up 1.7% sequentially from the fourth fiscal quarter of 2010 and up 6.9% as compared to last year's first fiscal quarter. Net income on a non-GAAP basis was $99.8 million, or $0.52 per diluted share, compared to non-GAAP net income of $113.1 million, or $0.55 per diluted share, in the first 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 $26.4 million, net of related tax effects, in the first quarter of fiscal 2011 and excludes such amortization and equity-based compensation expenses of $24.8 million, net of related tax effects, in the first quarter of fiscal 2010. The Company's GAAP net income for the first quarter of fiscal 2011 was $73.4 million, or $0.38 per diluted share, compared to GAAP net income of $88.4 million, or $0.43 per diluted share, in the prior year's first quarter.
"Our performance in the first fiscal quarter of 2011 reflects continued revenue growth for Amdocs as a result of healthy demand trends. Additionally, consistent with our guidance, the results reflect a decline in the operating margin due to the effects of several of the current investment initiatives we had cited last quarter, including the one-time impact of winning the strategic emerging markets contract. Furthermore, we made progress over the course of the first quarter with some of our key near-term challenges while sharpening our focus on the long-term growth initiatives of the company," said Eli Gelman, chief executive officer of Amdocs Management Limited.
Gelman continued, "Specific to the discussion of near-term profitability, we have important updates on the progress we made against several initiatives and issues that we shared last quarter, including:
Gelman concluded, "After my first quarter as CEO, I am even more excited about the opportunities in front of Amdocs. Furthermore, I have greater confidence that we have both identified and are appropriately addressing our near-term challenges while focusing the company on the growth potential ahead of us. Looking forward, we now expect revenue to grow in the range of 4-6% in fiscal 2011 as compared to fiscal 2010. In addition, we expect profitability to improve during the fiscal year as we begin to realize the benefits of our internal and customer-focused investments."
Financial Discussion of First Fiscal Quarter Results
Free cash flow was $127 million for the quarter, comprised of cash flow from operations of $162 million less approximately $35 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 $2.56 billion at the end of the first quarter of fiscal 2011.
Amdocs expects that revenue for the second quarter of fiscal 2011 will be approximately $775-$790 million. Diluted earnings per share on a non-GAAP basis for the second quarter are expected to be $0.53-$0.60, excluding acquisition-related costs and approximately $0.03-$0.04 per share of equity-based compensation expense, net of related tax effects. Amdocs estimates GAAP diluted earnings per share for the second quarter will be $0.43-$0.51.
Conference Call Details
Amdocs will host a conference call on January 25, 2011 at 5:00 p.m. Eastern Time to discuss the Company's first quarter results. The call will be carried live on the Internet via 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 operating margin, non-GAAP income taxes and non-GAAP net income. These non-GAAP measures exclude the following items:
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 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 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.
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 $3.0 billion in fiscal 2010, 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.
SOURCE Amdocs Limited