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First Quarter Results for Fiscal 2014
Jan 29, 2014
Key highlights:
- Closed the previously announced acquisition of Celcite on
January 1, 2014 , for$141 million in cash - First fiscal quarter revenue of
$864 million , within the$845-$875 million guidance range. Foreign currency movements positively affected revenue by approximately$2 million relative to the fourth quarter of fiscal 2013 - First fiscal quarter non-GAAP operating income of
$145 million ; non-GAAP operating margin of 16.8%; GAAP operating income of$121 million - First fiscal quarter diluted non-GAAP EPS of
$0.76 , within the$0.72-$0.78 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
$0.63 for the first fiscal quarter, within the$0.58-$0.66 guidance range - Free cash flow of
$160 million for the first fiscal quarter - Twelve-month backlog of
$2.89 billion at the end of the first fiscal quarter, up$20 million from the end of the fourth quarter of fiscal 2013 - Repurchased
$84 million of ordinary shares during the first fiscal quarter - The board of directors approved a
$0.155 per share quarterly cash dividend to be paid onApril 17, 2014 , subject to shareholder approval - Second quarter fiscal 2014 guidance: Expected revenue of approximately
$880-$910 million which includes full quarter contributions from recently closed acquisitions. Expected diluted non-GAAP EPS of approximately$0.75-$0.81 , 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. Expected diluted GAAP EPS of approximately$0.61-$0.69
"We made a solid start to fiscal 2014, with total revenue, profitability and earnings per share consistent with our expectations.
Gelman continued, "During the first fiscal quarter, we extended our relationships with customers in
Gelman said, "We are also encouraged by our strategic initiatives in radio network optimization. We completed the acquisition of Celcite on
Gelman concluded, "We are closely monitoring the many uncertainties in the global business environment, including those resulting from announced and potential consolidation activity amongst North American operators. We currently expect to deliver full year total revenue growth of 5% to 8% in fiscal 2014. This is slightly ahead of our previous outlook as we factor in the timing of M&A deal closings and the performance of recently acquired assets. These include Actix, Celcite and a small IT services provider in
Financial Discussion of First Fiscal Quarter Results
Free cash flow was
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
Financial Outlook
Quarterly Cash Dividend Program
On
Conference Call Details
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, non-GAAP net income and non-GAAP diluted earnings per share growth. These non-GAAP measures exclude the following items:
- amortization of purchased intangible assets and other acquisition related costs;
- equity-based compensation expense; 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.
For its internal budgeting process and in monitoring the results of the business,
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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 LIMITED Consolidated Statements of Income (in thousands, except per share data) |
||||
Three months ended |
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December 31, |
||||
2013 |
2012 |
|||
Revenue: |
||||
License |
$ 27,209 |
$ 18,916 |
||
Service |
836,836 |
807,443 |
||
864,045 |
826,359 |
|||
Operating expenses: |
||||
Cost of license |
770 |
636 |
||
Cost of service |
556,633 |
535,013 |
||
Research and development |
62,325 |
59,360 |
||
Selling, general and administrative |
111,959 |
107,460 |
||
Amortization of purchased intangible assets and other |
11,668 |
11,233 |
||
743,355 |
713,702 |
|||
Operating income |
120,690 |
112,657 |
||
Interest and other expense, net |
1,404 |
108 |
||
Income before income taxes |
119,286 |
112,549 |
||
Income taxes |
17,851 |
13,534 |
||
Net income |
$ 101,435 |
$ 99,015 |
||
Basic earnings per share |
$ 0.64 |
$ 0.61 |
||
Diluted earnings per share |
$ 0.63 |
$ 0.61 |
||
Basic weighted average number of shares outstanding |
159,659 |
162,176 |
||
Diluted weighted average number of shares outstanding |
161,845 |
163,587 |
||
Cash dividends declared per share |
$ 0.13 |
$ 0.13 |
AMDOCS LIMITED Selected Financial Metrics (in thousands, except per share data) |
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Three months ended |
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December 31, |
||||
2013 |
2012 |
|||
Revenue |
$ 864,045 |
$ 826,359 |
||
Non-GAAP operating income |
145,323 |
137,215 |
||
Non-GAAP net income |
122,564 |
119,424 |
||
Non-GAAP diluted earnings per share |
$ 0.76 |
$ 0.73 |
||
Diluted weighted average number of shares outstanding |
161,845 |
163,587 |
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP (in thousands) |
||||||||||
Three months ended December 31, 2013 |
||||||||||
Reconciliation items |
||||||||||
GAAP |
Amortization of |
Equity based |
Tax effect |
Non-GAAP |
||||||
Operating expenses: |
||||||||||
Cost of license |
$ 770 |
$ - |
$ - |
$ - |
$ 770 |
|||||
Cost of service |
556,633 |
- |
(4,554) |
- |
552,079 |
|||||
Research and development |
62,325 |
- |
(933) |
- |
61,392 |
|||||
Selling, general and administrative |
111,959 |
- |
(7,478) |
- |
104,481 |
|||||
Amortization of purchased intangible assets and other |
11,668 |
(11,668) |
- |
- |
- |
|||||
Total operating expenses |
743,355 |
(11,668) |
(12,965) |
- |
718,722 |
|||||
Operating income |
120,690 |
11,668 |
12,965 |
- |
145,323 |
|||||
Income taxes |
17,851 |
- |
- |
3,504 |
21,355 |
|||||
Net income |
$ 101,435 |
$ 11,668 |
$ 12,965 |
$ (3,504) |
$ 122,564 |
|||||
Three months ended December 31, 2012 |
||||||||||
Reconciliation items |
||||||||||
GAAP |
Amortization of |
Equity based |
Tax effect |
Non-GAAP |
||||||
Operating expenses: |
||||||||||
Cost of license |
$ 636 |
$ - |
$ - |
$ - |
$ 636 |
|||||
Cost of service |
535,013 |
- |
(5,033) |
- |
529,980 |
|||||
Research and development |
59,360 |
- |
(1,025) |
- |
58,335 |
|||||
Selling, general and administrative |
107,460 |
- |
(7,267) |
- |
100,193 |
|||||
Amortization of purchased intangible assets and other |
11,233 |
(11,233) |
- |
- |
- |
|||||
Total operating expenses |
713,702 |
(11,233) |
(13,325) |
- |
689,144 |
|||||
Operating income |
112,657 |
11,233 |
13,325 |
- |
137,215 |
|||||
Income taxes |
13,534 |
- |
- |
4,149 |
17,683 |
|||||
Net income |
$ 99,015 |
$ 11,233 |
$ 13,325 |
$ (4,149) |
$ 119,424 |
|||||
AMDOCS LIMITED Condensed Consolidated Balance Sheets (in thousands) |
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As of |
||||
December 31, |
September 30, |
|||
ASSETS |
||||
Current assets |
||||
Cash, cash equivalents and short-term interest-bearing investments |
$ 1,211,558 |
$ 1,326,380 |
||
Accounts receivable, net, including unbilled of $117,037 and $110,626, respectively |
680,947 |
678,219 |
||
Deferred income taxes and taxes receivable |
161,810 |
125,880 |
||
Prepaid expenses and other current assets |
182,395 |
151,595 |
||
Total current assets |
2,236,710 |
2,282,074 |
||
Equipment and leasehold improvements, net |
266,404 |
275,544 |
||
Goodwill and other intangible assets, net |
1,972,777 |
1,975,060 |
||
Other noncurrent assets |
382,065 |
393,135 |
||
Total assets |
$ 4,857,956 |
$ 4,925,813 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
Current Liabilities |
||||
Accounts payable, accruals and other |
$ 716,709 |
$ 683,768 |
||
Short-term financing arrangements |
- |
200,000 |
||
Deferred revenue |
173,284 |
151,112 |
||
Deferred income taxes and taxes payable |
50,848 |
39,376 |
||
Total current liabilities |
940,841 |
1,074,256 |
||
Other noncurrent liabilities |
584,103 |
576,774 |
||
Shareholders' equity |
3,333,012 |
3,274,783 |
||
Total liabilities and shareholders' equity |
$ 4,857,956 |
$ 4,925,813 |
AMDOCS LIMITED Consolidated Statements of Cash Flows (in thousands) |
||||
Three months ended December 31, |
||||
2013 |
2012 |
|||
Cash Flow from Operating Activities: |
||||
Net income |
$ 101,435 |
$ 99,015 |
||
Reconciliation of net income to net cash provided by operating activities: |
||||
Depreciation and amortization |
35,729 |
39,288 |
||
Equity-based compensation expense |
12,965 |
13,325 |
||
Deferred income taxes |
5,397 |
3,782 |
||
Excess tax benefit from equity-based compensation |
(92) |
(56) |
||
Loss from short-term interest-bearing investments |
308 |
481 |
||
Net changes in operating assets and liabilities, net of amounts acquired: |
||||
Accounts receivable |
(3,660) |
9,306 |
||
Prepaid expenses and other current assets |
(7,596) |
(21,054) |
||
Other noncurrent assets |
(14,453) |
(3,879) |
||
Accounts payable, accrued expenses and accrued personnel |
34,514 |
9,868 |
||
Deferred revenue |
20,460 |
(7,155) |
||
Income taxes payable |
(4,565) |
(8,752) |
||
Other noncurrent liabilities |
6,096 |
11,294 |
||
Net cash provided by operating activities |
186,538 |
145,463 |
||
Cash Flow from Investing Activities: |
||||
Payments for purchase of equipment and leasehold improvements, net |
(26,743) |
(29,903) |
||
Proceeds from sale of short-term interest-bearing investments |
83,763 |
76,296 |
||
Purchase of short-term interest-bearing investments |
(92,878) |
(158,059) |
||
Net cash paid for acquisitions |
(12,603) |
- |
||
Other |
7,309 |
(1,530) |
||
Net cash used in investing activities |
(41,152) |
(113,196) |
||
Cash Flow from Financing Activities: |
||||
Payments under financing arrangements |
(200,000) |
(200,000) |
||
Repurchase of shares |
(84,019) |
(103,707) |
||
Proceeds from employee stock options exercised |
36,014 |
54,358 |
||
Payments of dividends |
(20,812) |
(21,120) |
||
Payments under capital lease and other |
(178) |
(181) |
||
Net cash used in financing activities |
(268,995) |
(270,650) |
||
Net decrease in cash and cash equivalents |
(123,609) |
(238,383) |
||
Cash and cash equivalents at beginning of period |
1,014,192 |
879,158 |
||
Cash and cash equivalents at end of period |
$ 890,583 |
$ 640,775 |
AMDOCS LIMITED Supplementary Information (in millions) |
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Three months ended |
||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
North America |
$ 628.0 |
$ 608.9 |
$ 619.2 |
$ 601.3 |
$ 593.6 |
|||||
Europe |
117.0 |
101.9 |
98.0 |
99.3 |
99.2 |
|||||
Rest of the World |
119.0 |
134.4 |
124.1 |
132.3 |
133.6 |
|||||
Total Revenue |
$ 864.0 |
$ 845.2 |
$ 841.3 |
$ 832.9 |
$ 826.4 |
|||||
As of |
||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
Emerging Markets Revenue |
$ 100.7 |
$ 113.8 |
$ 101.3 |
$ 98.1 |
$ 98.2 |
|||||
As of |
||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
Managed Services Revenue |
$ 429.3 |
$ 414.0 |
$ 417.1 |
$ 439.8 |
$ 429.8 |
|||||
Three months ended |
||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
Customer Experience Systems |
$ 829.6 |
$ 809.3 |
$ 803.2 |
$ 789.3 |
$ 783.8 |
|||||
Directory |
34.4 |
35.9 |
38.1 |
43.6 |
42.6 |
|||||
Total Revenue |
$ 864.0 |
$ 845.2 |
$ 841.3 |
$ 832.9 |
$ 826.4 |
|||||
As of |
||||||||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||
12-Month Backlog |
$ 2,890 |
$ 2,870 |
$ 2,830 |
$ 2,810 |
$ 2,800 |
SOURCE
Elizabeth W. Grausam McDermon, Vice President, Corporate Strategy and Investor Relations, Amdocs, 314-212-8328, dox_info@amdocs.com