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AUTONOMY CORPORATION PLC ANNOUNCES RESULTS FOR
THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2009
Record Q3 results with strong organic growth; Highest Q3 revenues and profits in Autonomy's history; Q3 revenues up 51%; Q3 profit before tax (adjusted)* up 20% to $64.3 million
Autonomy's third quarter conference call will be available live at www.autonomy.com
on October 20, 2009, at 9:30 a.m. BST/4:30 a.m. EST/1:30 a.m. PST.
Cambridge, England - October 20, 2009 - Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software, today reported financial results for the third quarter and nine months ended September 30, 2009.
Financial Highlights
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
Results in US$ ($'000s except per share) |
$'000 |
$'000 |
$'000 |
$'000 |
|
Revenues |
191,606 |
127,105 |
516,577 |
357,842 |
|
Gross profit (adjusted)* |
163,962 |
117,310 |
452,516 |
325,061 |
|
Gross profit margin (adjusted)* |
86% |
92% |
88% |
91% |
|
Profit from operations (adjusted)* |
66,066 |
53,243 |
216,294 |
134,694 |
|
Profit before tax (adjusted)* |
64,265 |
53,667 |
212,023 |
135,581 |
|
Net profit (adjusted)* |
48,577 |
37,495 |
152,326 |
94,551 |
|
|
|
|
|
|
|
Gross profit (IFRS) |
149,372 |
112,642 |
417,467 |
309,996 |
|
Gross profit margin (IFRS) |
78% |
89% |
81% |
87% |
|
Profit from operations (IFRS) |
50,645 |
47,459 |
175,310 |
115,562 |
|
Profit before tax (IFRS) |
48,640 |
47,860 |
170,309 |
115,215 |
|
Net profit (IFRS) |
36,766 |
33,438 |
122,157 |
80,354 |
|
|
|
|
|
|
|
EPS |
|
|
|
|
|
- basic (adjusted)* |
$0.20 |
$0.17 |
$0.64 |
$0.44 |
|
- diluted (adjusted)* |
$0.20 |
$0.17 |
$0.63 |
$0.44 |
|
|
|
|
|
|
|
- basic (IFRS) |
$0.15 |
$0.16 |
$0.52 |
$0.38 |
|
- diluted (IFRS) |
$0.15 |
$0.15 |
$0.51 |
$0.37 |
-----------
* Adjusted results exclude the share of loss of associates, post-acquisition restructuring costs and non-cash charges, namely the amortization of purchased intangibles, share-based compensation and non-cash translational foreign exchange gains and losses and associated tax effects. See reconciliations on page 6.
Third quarter highlights
-
Continued strong adoption of next generation combined Autonomy and Interwoven technologies
-
Record Q3 revenues, up 51% from Q3 2008 including strong organic growth and full quarter post-Interwoven integration
-
Launched IDOL SPE with stronger than expected response to Quick Start program
-
Fully diluted EPS (adj.) of $0.20, up 16% from Q3 2008
-
Deferred revenue stable at $169m as compared to Q2 2009 (Q3 2008: $106m)
-
Very strong cash collection and conversion; Q3 cash conversion of 131% (Q3 CFFO / Q3 adj EBITDA) LTM conversion of 86% (LTM CFFO / LTM adj EBITDA)
-
Strong organic growth of 15%
-
Operating margins (adjusted) at 34% despite product launch expenses higher than announced expectations (Q3 2008: 42%); Operating margins excluding new product effects at 43%
-
Positive cash flow generated from operations of $97.8 million (Q3 2008: $59.6 million); cash balances at $200.7 million at quarter-end
-
Record Q3 net profit (IFRS), up 10% from Q3 2008
-
26th consecutive quarter of year-on-year growth
-
Average selling price for meaning-based technologies at $436,000 (Q3 2008: $395,000)
-
Blue chip third quarter wins include Alstom, Arcelor Mittal, American Medical Association, AT&T, Avid, Bank of America, BBC, Butterfields, Boeing, Citi, CVR Energy, Eli Lilly, Fidelity, Hammonds, Ikea, Lockheed Martin, Morgan Stanley, Nikon, Pfizer, Qwest, Sprint, Staples, Target and Wolters Kluwer, as well as significant deals with multiple government, defence and intelligence agencies around the globe including in the U.S., U.K., European Commission, New Zealand, South Africa and the U.A.E.
-
11 OEM deals signed including new deals and extensions with Adobe, Kana, Axway and Websense
-
Gross margins (adjusted) at 86% (Q3 2008: 92%)
-
DSOs at 97 days for Q3 2009 (Q2 2009: 89 days)
Commenting on the results, Dr. Mike Lynch, Group CEO of Autonomy said today: "I am pleased to announce strong Q3 results in line with the recent preannouncement that reported results would exceed the then current estimates. We delivered strong growth despite the usual seasonality and challenging comparatives against the strong performance in Q3 2008. These results give us confidence in maintaining our view of the full year. Autonomy was very busy in the quarter preparing for 2010. We successfully launched IDOL SPE, which was very positively received by the industry, and generated a stronger than expected demand on our Quick Start program. We have also invested in our data centre capacity to allow future growth in the Meaning Based Marketing (MBM) side of the business, which has already begun to show good traction. During the quarter we saw some of our large customers promote Autonomy to strategic supplier status. This has led them to adopt a broader set of our solutions in a number of significant deals. We were pleased to note that the cash generation of the business since the beginning of the year has been so strong that our cash balance already covers the remaining part of the debt we took out just six months ago to fund the Interwoven acquisition. We feel that should an upturn start to materialise we are extremely well positioned to accelerate our growth."
Third Quarter and Nine Month Financial Highlights
Revenues
Revenues for the third quarter of 2009 totalled $191.6 million, up 51% from $127.1 million for the third quarter of 2008 including strong organic growth. The effect on revenue in the third quarter of 2009 of movements in foreign exchange rates was a negative impact of approximately 1% compared to the third quarter of 2008. The net impact of foreign exchange movements on operating profit was de minimis. In the third quarter of 2009 the U.S. Dollar strengthened versus Sterling to an average of $1.64 versus $1.90 in the third quarter of 2008.
During the third quarter of 2009 there were 13 license transactions over $1.0 million, compared to 8 for the third quarter of 2008. In the third quarter of 2009, Americas revenues of $135.7 million represented 71% of total revenues, and Rest of World revenues of $55.9 million represented 29% of total revenues.
Revenues for the nine months ended September 30, 2009, totalled $516.6 million, up 44% from $357.8 million for the nine months ended September 30, 2008.
Gross Profits and Gross Margins
Gross profits (adjusted) for the third quarter of 2009 were $164.0 million, up 40% from $117.3 million in the third quarter of 2008. Gross margins (adjusted) were 86% in the third quarter of 2009, versus 92% in the third quarter of 2008. The unexpected demand for our new product programs had a small depressing effect on gross margins. We do not expect this to be a trend. Gross profits (IFRS) for the third quarter of 2009 were $149.4 million, up 33% from $112.6 million in the third quarter of 2008. Gross margins (IFRS) for the third quarter of 2009 were 78%, compared to 89% in the third quarter of 2008.
Gross profits (adjusted) for the nine months ended September 30, 2009 were $452.5 million, up 39% from $325.1 million for the nine months ended September 30, 2008. Gross margins (adjusted) were 88% in the nine months ended September 30, 2009, versus 91% for the nine months ended September 30, 2008. Gross profits (IFRS) for the nine months ended September 30, 2009 were $417.5 million, up 35% from $310.0 million for the nine months ended September 30, 2008. Gross margins (IFRS) for the nine months ended September 30, 2009 were 81%, compared to 87% for the nine months ended September 30, 2008.
Taxes
The effective tax rate in the third quarter of 2009 was 24%, down from 30% in the third quarter of 2008. The decrease is a result of the utilisation of newly available losses in the US based on final determination of losses combined with additional research and development credits as a result of agreement with the relevant tax authorities. The full year tax rate is expected to be between 28% and 30%.
Net Profits
Net profit (adjusted) for the third quarter of 2009 was $48.6 million, or $0.20 per diluted share, compared to net profit (adjusted) of $37.5 million, or $0.17 per diluted share, for the third quarter of 2008. Net profit (IFRS) for the third quarter of 2009 was $36.8 million, or $0.15 per diluted share, compared to net profit (IFRS) of $33.4 million, or $0.15 per diluted share, for the third quarter of 2008.
Net profit (adjusted) for the nine months ended September 30, 2009 was $152.3 million, or $0.63 per diluted share, compared to net profit (adjusted) of $94.6 million, or $0.44 per diluted share, for the nine months ended September 30, 2008. Net profit (IFRS) for the nine months ended September 30, 2009 was $122.2 million, or $0.51 per diluted share, compared to net profit (IFRS) of $80.4 million, or $0.37 per diluted share, for the nine months ended September 30, 2008.
IAS 38 Charges
Under IAS 38 the company is required to capitalize certain aspects of its research and development activities. The amount of R&D that was capitalized in third quarter of 2009 was $11.7 million (Q3 2008: $3.0 million), increasing year-on-year primarily due to the new IDOL SPE product reaching commercial exploitation phase, but is expected to return to historical levels in the fourth quarter. Q3 2009 R&D capitalization is offset by amortization charges of $2.2 million (Q3 2008: $1.4 million) arising from historical R&D capitalization. This results in a net credit (before tax) in the quarter of $9.5 million (Q3 2008: $1.6 million). R&D capitalization for the nine months ended September 30, 2009 was $19.1 million (2008: $8.7 million), offset by amortization charges of $5.7 million (2008: $3.3 million) during the period arising from historical R&D capitalization, resulting in a net credit (before tax) in the period of $13.4 million (2008: $5.4 million).
Balance Sheet and Cash Flow
Cash balances were $200.7 million at September 30, 2009, an increase of $35.0 million from $165.7 million at September 30, 2008, and an increase of $1.5 million from $199.2 million at December 31, 2008 (prior to the Interwoven acquisition). Movements in cash flow during the nine months reflect a combination of good cash generation from operating activities, equity and debt financing for the Interwoven acquisition, and proceeds from exercise of share options, offset by the completion of the Interwoven acquisition, scheduled and early repayment of debt, capital expenditure and instalment tax payments. In addition, during the quarter the company incurred capital expenditures of approximately $19 million relating primarily to data centre expansion in preparation for 2010.
Trade receivables at September 30, 2009, were $218.5 million, compared to $141.3 million at December 31, 2008. Accounts receivable days sales outstanding were 97 days for the third quarter of 2009, compared to 84 days at December 31, 2008. Significant extra revenues, not originally in our forecast for the quarter, arrived on the last day of the quarter, and late payment of one day by a large debtor gave rise to the movement. We expect DSOs to return to normal levels. Deferred revenues were $169 million at September 30, 2009, compared with $99 million at December 31, 2008, displaying usual seasonality.
Accrued income at September 30, 2009 was not material, at under 5% of revenues. Provision for doubtful accounts at September 30, 2009 was not material, at well under 10% of debtors, our flagging range.
Comments
Although IFRS disclosure provides investors and management with an overall view of Autonomy's financial performance, Autonomy believes that it is important for investors to also understand the performance of Autonomy's fundamental business without giving effect to certain specific, non-recurring and non-cash charges. Consequently, the non-IFRS (adjusted) results exclude share of loss of associates, post-acquisition restructuring costs and non-cash charges for the amortization of purchased intangibles, share-based compensation, foreign exchange gains and losses and associated tax effects. Management uses the adjusted results to assess the financial performance of Autonomy's operational business activities.
Supplemental Metrics
Autonomy is supplying supplemental metrics to assist in the understanding and analysis of Autonomy's business.
|
Three Months Ended Sept. 30, 2009 |
|
|
Product including hosted and OEM* |
$125m |
|
Service revenues* |
$9m |
|
Deferred revenue release (primarily maintenance)* |
$58m |
|
OEM derived revenues* |
$24m |
|
Organic Growth* |
15% |
|
Deals over $1 million |
13 |
|
Tax rate |
24% |
|
Available tax losses* |
$218m |
|
Cash conversion (Q3 CFFO/Q3 adj EBITDA**) |
131% |
|
Cash conversion (lagged to account for growth and seasonality of the business) |
99% |
|
Twelve Months Ended Sept. 30, 2009 |
|
|
Cash conversion (LTM CFFO/LTM adj EBITDA**) |
86% |
|
Cash conversion (lagged to account for growth and seasonality of the business) |
91% |
|
Cash conversion as a percentage of the theoretical maximum (90%) |
96% |
-
LTM revenue with terms >365 days in normal range (<2% of revenues)
-
Accrued income in normal range (<5% of revenues)
* The above items are provided for background information and may include qualitative estimates.
** Adj EBITDA is defined as operating cashflow before movements in working capital.
Q3 Product Sales
Autonomy's infrastructure technology has been adopted by enterprises to process information across all internal and external data formats and sources. During the third quarter of 2009, major customer wins included: Alstom, Arcelor Mittal, American Medical Association, AT&T, Avid, Bank of America, BBC, Butterfields, Boeing, Citi, Coffeyville Resources, Eli Lilly, Fidelity, Hammonds, Ikea, Lockheed Martin, Morgan Stanley, Nikon, Pfizer, Qwest, Sprint, Staples, Target, Virgin Media and Wolters Kluwer. Q3 2009 business also included new and repeat licenses with multiple government, defence and intelligence agencies around the globe including in the U.S., the U.K., European Commission, Australia, The Netherlands, New Zealand, South Africa and the U.A.E. Repeat business from existing customers accounted for approximately 45% of revenue for the quarter.
Strategic Partnerships and OEMs
Autonomy's OEM Program continued to grow during Q3 2009. Agreements were signed with 11 customers during the quarter, including new and extended agreements with Adobe, Kana, Axway and Websense.
Q3 Corporate Developments
During the third quarter of 2009 Autonomy continued to extend its market leadership with the introduction of key new and upgraded technologies, including the launches of:
-
IDOL SPE, ushering the $18 billion database market into the era of Meaning Based Computing;
-
The world's first hosted web landing page solution, enabling online marketers to rapidly build and optimize landing pages in a secure, private cloud;
-
The first cloud-based archiving solution tailored for law firms, enabling law firms to reduce costs and rapidly respond to eDiscovery requests; and
-
Autonomy's Automatic Spoken Language Identification (ASLI) module, enabling call centres, media organizations and global enterprises to instantly recognize the spoken language in media files and live calls.
During the third quarter Autonomy was recognised in multiple ways for its market leadership and unmatched technology, including being:
-
Identified by IDC as the fastest growing of the top three Search and Discovery vendors with the largest market share by far;
-
Positioned as leader in Gartner's 2009 Information Access Technology Magic Quadrant;
-
Presented with the "Best Innovation Award" 2009 for its ground-breaking MBM solutions portfolio;
-
Recognised as a "2009 Trend-Setter" by KMWorld Magazine;
-
Ranked as one of the world's largest software companies by Software Magazine; and
-
Bestowed the outstanding achievement of the year award by Cambridge Business Magazine.
About Autonomy Corporation plc
Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, spearheads the Meaning Based Computing movement. It was recently ranked by IDC as the clear leader in enterprise search revenues, with market share nearly double that of its nearest competitor. Autonomy's technology allows computers to harness the full richness of human information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice, or video. Autonomy's software powers the full spectrum of mission-critical enterprise applications including pan-enterprise search, customer interaction solutions, information governance, end-to-end eDiscovery, records management, archiving, business process management, web content management, web optimization, rich media management and video and audio analysis.
Autonomy's customer base is comprised of more than 20,000 global companies, law firms and federal agencies including: AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Daimler AG, Deutsche Bank, DLA Piper, Ericsson, FedEx, Ford, GlaxoSmithKline, Lloyds TSB, NASA, Nestlé, the New York Stock Exchange, Reuters, Shell, Tesco, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission. More than 400 companies OEM Autonomy technology, including Symantec, Citrix, HP, Novell, Oracle, Sybase and TIBCO. The company has offices worldwide. Please visit www.autonomy.com to find out more.
Autonomy and the Autonomy logo are registered trademarks or trademarks of Autonomy Corporation plc. All other trademarks are the property of their respective owners.
|
Financial Media Contacts: |
Analyst and Investor Contacts: |
|
Edward Bridges / Haya Herbert-Burns Financial Dynamics +44 (0)20 7831 3113 |
Marc Geall, Head of IR and Corporate Strategy Autonomy Corporation plc +44 (0)1223 448 000 |
AUTONOMY CORPORATION plc
CONDENSED CONSOLIDATED INCOME STATEMENT
(in thousands, except per share amounts)
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
Continuing operations |
$'000 |
$'000 |
$'000 |
$'000 |
|
Revenues (see note 3) |
191,606 |
127,105 |
516,577 |
357,842 |
|
Cost of revenues (excl. amortization) |
(27,644) |
(9,795) |
(64,061) |
(32,781) |
|
Amortization of purchased intangibles |
(14,590) |
(4,668) |
(35,049) |
(15,065) |
|
Total cost of revenues |
(42,234) |
(14,463) |
(99,110) |
(47,846) |
|
Gross profit |
149,372 |
112,642 |
417,467 |
309,996 |
|
Operating expenses: |
|
|
|
|
|
Research and development |
(23,853) |
(19,985) |
(72,644) |
(59,551) |
|
Sales and marketing |
(59,306) |
(35,390) |
(125,176) |
(102,940) |
|
General and administrative |
(16,785) |
(10,080) |
(43,581) |
(32,228) |
|
Other costs |
|
|
|
|
|
Post-acquisition restructuring costs |
- |
(256) |
(846) |
(1,157) |
|
Gain on foreign exchange |
1,217 |
528 |
90 |
1,442 |
|
Total operating expenses |
(98,727) |
(65,183) |
(242,157) |
(194,434) |
|
Profit from operations |
50,645 |
47,459 |
175,310 |
115,562 |
|
Share of loss of associate |
(204) |
(23) |
(730) |
(1,234) |
|
Interest receivable |
184 |
794 |
975 |
2,289 |
|
Interest payable |
(1,985) |
(370) |
(5,246) |
(1,402) |
|
Profit before income taxes |
48,640 |
47,860 |
170,309 |
115,215 |
|
Income taxes (see note 4) |
(11,874) |
(14,422) |
(48,152) |
(34,861) |
|
Net profit |
36,766 |
33,438 |
122,157 |
80,354 |
|
Basic earnings per share (see note 6) |
$0.15 |
$ 0.16 |
$0.52 |
$ 0.38 |
|
Diluted earnings per share (see note 6) |
$0.15 |
$ 0.15 |
$0.51 |
$ 0.37 |
|
|
|
|
|
|
|
Weighted average number of ordinary shares outstanding |
239,474 |
215,052 |
236,693 |
214,152 |
|
Weighted average number of ordinary shares outstanding, assuming dilution |
243,081 |
218,357 |
240,158 |
217,118 |
Reconciliation of Adjusted Financial Measures
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Gross profit |
149,372 |
112,642 |
417,467 |
309,996 |
|
Amortization of purchased intangibles |
14,590 |
4,668 |
35,049 |
15,065 |
|
Gross profit (adjusted) |
163,962 |
117,310 |
452,516 |
325,061 |
|
|
|
|
|
|
|
Profit before income taxes |
48,640 |
47,860 |
170,309 |
115,215 |
|
Post-acquisition restructuring costs |
- |
256 |
846 |
1,157 |
|
Gain on foreign exchange |
(1,217) |
(528) |
(90) |
(1,442) |
|
Amortization of purchased intangibles |
14,590 |
4,668 |
35,049 |
15,065 |
|
Share of loss of associate |
204 |
23 |
730 |
1,234 |
|
Share-based compensation (see note 5) |
2,048 |
1,388 |
5,179 |
4,352 |
|
Profit before tax (adjusted) |
64,265 |
53,667 |
212,023 |
135,581 |
|
Provision for income taxes |
(15,688) |
(16,172) |
(59,697) |
(41,030) |
|
Net profit (adjusted) |
48,577 |
37,495 |
152,326 |
94,551 |
|
|
|
|
|
|
|
Profit from operations |
50,645 |
47,459 |
175,310 |
115,562 |
|
Gain on foreign exchange |
(1,217) |
(528) |
(90) |
(1,442) |
|
Amortization of purchased intangibles |
14,590 |
4,668 |
35,049 |
15,065 |
|
Share-based compensation (see note 5) |
2,048 |
1,388 |
5,179 |
4,352 |
|
Post-acquisition restructuring costs |
- |
256 |
846 |
1,157 |
|
Profit from operations (adjusted) |
66,066 |
53,243 |
216,294 |
134,694 |
The accompanying notes are an integral part of these consolidated financial statements
AUTONOMY CORPORATION plc
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
As at |
|
|
|
(unaudited) |
|
|
|
Sept 30, |
Dec 31, |
|
|
$'000 |
$'000 |
|
ASSETS |
|
|
|
Non-current assets: |
|
|
|
Goodwill |
1,260,953 |
796,632 |
|
Other intangible assets |
400,782 |
98,694 |
|
Property and equipment, net |
38,273 |
27,350 |
|
Equity and other investments |
12,780 |
7,441 |
|
Deferred tax asset |
25,051 |
13,467 |
|
Total non-current assets |
1,737,839 |
943,584 |
|
Current assets: |
|
|
|
Trade receivables, net |
218,490 |
141,252 |
|
Other receivables |
43,939 |
35,554 |
|
Total trade and other receivables |
262,429 |
176,806 |
|
Inventory |
453 |
715 |
|
Cash and cash equivalents |
200,732 |
199,218 |
|
Total current assets |
463,614 |
376,739 |
|
TOTAL ASSETS |
2,201,453 |
1,320,323 |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Trade payable |
(17,928) |
(12,434) |
|
Other payables |
(91,997) |
(19,511) |
|
Total trade and other payables |
(109,925) |
(31,945) |
|
Bank loan |
(52,279) |
(10,637) |
|
Tax liabilities |
(37,621) |
(27,905) |
|
Deferred revenue |
(159,729) |
(89,794) |
|
Provisions |
(3,814) |
(426) |
|
Total current liabilities |
(363,368) |
(160,707) |
|
Net current assets |
100,246 |
216,032 |
|
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
|
Bank loan |
(144,760) |
(26,594) |
|
Deferred tax liabilities |
(57,065) |
(2,537) |
|
Deferred revenue |
(9,150) |
(9,414) |
|
Other payables |
(1,153) |
(1,171) |
|
Provisions |
(5,667) |
- |
|
Total non-current liabilities |
(217,795) |
(39,716) |
|
Total liabilities |
(581,163) |
(200,423) |
|
NET ASSETS |
1,620,290 |
1,119,900 |
|
|
|
|
|
Shareholders' equity: |
|
|
|
Ordinary shares (1) |
1,329 |
1,214 |
|
Share premium account |
1,123,790 |
798,279 |
|
Capital redemption reserve |
135 |
135 |
|
Own shares |
(903) |
(905) |
|
Merger reserve |
27,589 |
27,589 |
|
Stock compensation reserve |
20,023 |
14,846 |
|
Revaluation reserve |
5,466 |
2,987 |
|
Translation reserve |
(8,037) |
(18,261) |
|
Retained earnings |
450,898 |
294,016 |
|
TOTAL EQUITY |
1,620,290 |
1,119,900 |
------------
-
At September 30, 2009, 600,000,000 ordinary shares of nominal value 1/3 pence each authorized, 239,787,030 issued and outstanding; as of December 31, 2008, 600,000,000 ordinary shares of nominal value 1/3 pence each authorized, 215,817,197 issued and outstanding.
The accompanying notes are an integral part of these consolidated financial statements
AUTONOMY CORPORATION plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Cash flows from operating activities: |
|
|
|
|
|
Profit from operations |
50,645 |
47,459 |
175,310 |
115,562 |
|
Adjustments for: |
|
|
|
|
|
Depreciation and amortization |
22,969 |
9,642 |
55,593 |
28,832 |
|
Share based compensation |
2,048 |
1,388 |
5,179 |
4,352 |
|
Foreign currency movements |
(1,217) |
(528) |
(90) |
(1,442) |
|
Post-acquisition restructuring costs |
- |
- |
596 |
- |
|
Other non-cash items |
1 |
- |
127 |
- |
|
Operating cash flows before movements in working capital |
74,446 |
57,961 |
236,715 |
147,304 |
|
Changes in operating assets and liabilities (net of impact of acquisitions): |
|
|
|
|
|
Receivables |
(20,534) |
4,600 |
(65,375) |
(28,892) |
|
Inventories |
98 |
175 |
268 |
(205) |
|
Payables |
43,834 |
(3,146) |
42,770 |
2,619 |
|
Cash generated by operations |
97,844 |
59,590 |
214,378 |
120,826 |
|
Income taxes paid |
(13,032) |
(8,212) |
(26,183) |
(23,928) |
|
Net cash provided by operating activities |
84,812 |
51,378 |
188,195 |
96,898 |
|
|
|
|
|
|
|
Cash flows from investment activities: |
|
|
|
|
|
Interest received |
184 |
794 |
975 |
2,257 |
|
Purchase of property,plant and equipment and intangibles |
(19,034) |
(1,988) |
(23,398) |
(10,805) |
|
Purchase of investments |
- |
(989) |
(2,152) |
(2,327) |
|
Expenditure on product development |
(11,749) |
(2,993) |
(19,148) |
(8,744) |
|
Acquisition of subsidiaries, net of cash acquired |
(7,607) |
(354) |
(628,530) |
(6,059) |
|
Net cash used in investing activities |
(38,206) |
(5,530) |
(672,253) |
(25,678) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from issuance of shares, net of issuance costs |
4,335 |
6,854 |
17,196 |
15,491 |
|
Proceeds from share placing, net of issuance costs |
- |
- |
308,512 |
- |
|
Interest on bank loan |
(1,462) |
(370) |
(3,960) |
(1,402) |
|
Repayment of bank loan |
- |
(2,675) |
(37,450) |
(8,025) |
|
Drawdown of bank loan |
- |
- |
200,000 |
- |
|
Payment of arrangement fee |
- |
- |
(3,846) |
- |
|
Net cash provided by financing activities |
2,873 |
3,809 |
480,452 |
6,064 |
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
49,479 |
49,657 |
(3,606) |
77,284 |
|
Beginning cash and cash equivalents |
152,549 |
121,401 |
199,218 |
92,571 |
|
Effect of foreign exchange on cash and cash equivalents |
(1,296) |
(5,363) |
5,120 |
(4,160) |
|
Ending cash and cash equivalents |
200,732 |
165,695 |
200,732 |
165,695 |
The accompanying notes are an integral part of these consolidated financial statements
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
Ordinary |
Share |
Capital |
Own |
Merger |
Sub-total |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
At January 1, 2008 |
1,196 |
780,888 |
135 |
(981) |
27,589 |
808,827 |
|
Retained profit |
- |
- |
- |
- |
- |
- |
|
Stock compensation |
- |
- |
- |
- |
- |
- |
|
Share options exercised |
16 |
15,362 |
- |
- |
- |
15,378 |
|
EBT options exercised |
- |
- |
- |
70 |
- |
70 |
|
Deferred tax on stock options |
- |
- |
- |
- |
- |
- |
|
Revaluation of equity investment |
- |
- |
- |
- |
- |
- |
|
Translation of overseas ops |
- |
- |
- |
- |
- |
- |
|
At Sept 30, 2008 |
1,212 |
796,250 |
135 |
(911) |
27,589 |
824,275 |
|
|
Sub-total |
Stock |
Revaluation |
Translation |
Retained |
Total |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
At January 1, 2008 |
808,827 |
9,438 |
10,163 |
23,801 |
146,084 |
998,313 |
|
Retained profit |
- |
- |
- |
- |
80,354 |
80,354 |
|
Stock compensation |
- |
4,352 |
- |
- |
- |
4,352 |
|
Share options exercised |
15,378 |
- |
- |
- |
- |
15,378 |
|
EBT options exercised |
70 |
(70) |
- |
- |
- |
- |
|
Deferred tax on stock options |
- |
- |
- |
- |
13,302 |
13,302 |
|
Revaluation of equity investment |
- |
- |
(3,020) |
- |
- |
(3,020) |
|
Translation of overseas ops |
- |
- |
- |
(12,809) |
- |
(12,809) |
|
At Sept 30, 2008 |
824,275 |
13,720 |
7,143 |
10,992 |
239,740 |
1,095,870 |
|
|
Ordinary |
Share |
Capital |
Own |
Merger |
Sub-total |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
At January 1, 2009 |
1,214 |
798,279 |
135 |
(905) |
27,589 |
826,312 |
|
Retained profit |
- |
- |
- |
- |
- |
- |
|
Stock compensation |
- |
- |
- |
- |
- |
- |
|
Issuance of shares |
115 |
325,511 |
- |
- |
- |
325,626 |
|
EBT options exercised |
- |
- |
- |
2 |
- |
2 |
|
Deferred tax movement |
- |
- |
- |
- |
- |
- |
|
Revaluation of equity investment |
- |
- |
- |
- |
- |
- |
|
Translation of overseas ops |
- |
- |
- |
- |
- |
- |
|
At Sept 30, 2009 |
1,329 |
1,123,790 |
135 |
(903) |
27,589 |
1,151,940 |
|
|
Sub-total |
Stock |
Revaluation |
Translation |
Retained |
Total |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
At January 1, 2009 |
826,312 |
14,846 |
2,987 |
(18,261) |
294,016 |
1,119,900 |
|
Retained profit |
- |
- |
- |
- |
122,157 |
122,157 |
|
Stock compensation |
- |
5,179 |
- |
- |
- |
5,179 |
|
Issuance of shares |
325,626 |
- |
- |
- |
- |
325,626 |
|
EBT options exercised |
2 |
(2) |
- |
- |
- |
- |
|
Deferred tax movement |
- |
- |
- |
- |
34,725 |
34,725 |
|
Revaluation of equity investment |
- |
- |
2,479 |
- |
- |
2,479 |
|
Translation of overseas ops |
- |
- |
- |
10,224 |
- |
10,224 |
|
At Sept 30, 2009 |
1,151,940 |
20,023 |
5,466 |
(8,037) |
450,898 |
1,620,290 |
The accompanying notes are an integral part of these consolidated financial statements
AUTONOMY CORPORATION plc
NOTES TO THE CONDENSED SET OF CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 - UNAUDITED
1. General information
Quarterly information is unaudited, but reflects all normal adjustments which are, in the opinion of management, necessary to provide a fair statement of results and the company's financial position for and as at the periods presented. The results of operations for the three and nine months ended September 30, 2009, are not necessarily indicative of the operating results for future operating periods. The quarterly financial statements should be read in connection with the company's audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2008. The information for the year ended December 31, 2008 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
2. Accounting policies
The accompanying quarterly consolidated financial statements of Autonomy Corporation plc have been prepared in conformity with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted by the EU. The accounting policies applied are consistent in all material respects with those applied in the Company's Annual Report for the year ended December 31, 2008. Whilst the financial information included in this quarterly announcement has been computed in accordance with International Financial Reporting Standards (IFRSs) and IAS 34 Interim financial reporting, this announcement does not itself contain all of the disclosures required by IFRSs and IAS 34.
Basis of preparation
The group has considerable financial resources together with contracts with a number of customers across different geographic areas and industries. As a consequence, the directors believe that the group is well placed to manage its business risks successfully despite the current uncertain economic outlook.
After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the quarterly consolidated financial statements.
The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except for as described below.
Adoption of new and current standards
In the current financial year, the Group has adopted International Financial Reporting Standard 8 "Operating Segments" as required, and applied these principles throughout the year. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. In contrast, the predecessor Standard (IAS 14 "Segment Reporting") required the Group to identify two sets of segments (business and geographical), using a risks and rewards approach, with the Group's system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments. The adoption of this standard has resulted in no changes in the segmental disclosures provided in note 3 of this condensed set of financial statements, or in any prior periods.
3. Segmental information
Whilst the group currently operates under a number of different divisions, the group's core technology, types of revenue and associated costs and returns are comparable. Each of these divisions is founded on the group's unique Intelligent Data Operating Layer, the group's core infrastructure for automating the handling of all forms of unstructured information. As a result, the group maintains only one reportable business segment. The group's operations are located primarily in the United Kingdom, the US and Canada. The company also has a significant presence in a number of other European countries as well as China, Japan, Singapore and Australia.
The following table provides an analysis of the group's sales by geographical market based upon the location of the Group's customers for all periods.
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
Revenue by region: |
$'000 |
$'000 |
$'000 |
$'000 |
|
Americas |
135,733 |
83,146 |
354,844 |
228,565 |
|
Rest of World |
55,873 |
43,959 |
161,733 |
129,277 |
|
Total |
191,606 |
127,105 |
516,577 |
357,842 |
Segment information about these geographical segments is presented below:
|
|
Three Months Ended |
|||||
|
|
Sept 30, 2009 |
Sept 30, 2008 |
||||
|
|
Americas |
ROW |
Total |
Americas |
ROW |
Total |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Segment result |
39,767 |
9,661 |
49,428 |
37,374 |
9,813 |
47,187 |
|
Post-acq'n restruct. costs |
|
|
- |
|
|
(256) |
|
Gain on foreign exch. |
|
|
1,217 |
|
|
528 |
|
Operating profit |
|
|
50,645 |
|
|
47,459 |
|
Share of loss of associate |
|
|
(204) |
|
|
(23) |
|
Interest receivable |
|
|
184 |
|
|
794 |
|
Interest payable |
|
|
(1,985) |
|
|
(370) |
|
Profit before tax |
|
|
48,640 |
|
|
47,860 |
|
Tax |
|
|
(11,874) |
|
|
(14,422) |
|
Profit for the period |
|
|
36,766 |
|
|
33,438 |
|
|
Nine Months Ended |
|||||
|
|
Sept 30, 2009 |
Sept 30, 2008 |
||||
|
|
Americas |
ROW |
Total |
Americas |
ROW |
Total |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Segment result |
136,226 |
39,840 |
176,066 |
90,122 |
25,155 |
115,277 |
|
Post-acq'n restruct. costs |
|
|
(846) |
|
|
(1,157) |
|
Gain on foreign exch. |
|
|
90 |
|
|
1,442 |
|
Operating profit |
|
|
175,310 |
|
|
115,562 |
|
Share of loss of associate |
|
|
(730) |
|
|
(1,234) |
|
Interest receivable |
|
|
975 |
|
|
2,289 |
|
Interest payable |
|
|
(5,246) |
|
|
(1,402) |
|
Profit before tax |
|
|
170,309 |
|
|
115,215 |
|
Tax |
|
|
(48,152) |
|
|
(34,861) |
|
Profit for the period |
|
|
122,157 |
|
|
80,354 |
4. Income taxes
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
Tax charge by region: |
$'000 |
$'000 |
$'000 |
$'000 |
|
UK |
3,507 |
9,226 |
23,851 |
24,338 |
|
Foreign |
8,367 |
5,196 |
24,301 |
10,523 |
|
Total |
11,874 |
14,422 |
48,152 |
34,861 |
5. Share based compensation
Share based compensation charges have been charged in the consolidated income statement within the following functional areas:
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Research and development |
550 |
399 |
1,391 |
1,350 |
|
Sales and marketing |
1,004 |
676 |
2,539 |
2,184 |
|
General and administrative |
494 |
313 |
1,249 |
818 |
|
Total share based compensation charge |
2,048 |
1,388 |
5,179 |
4,352 |
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
(unaudited) |
(unaudited) |
||
|
|
Sept 30, |
Sept 30, |
Sept 30, |
Sept 30, |
|
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Earnings for the purposes of basic and |
36,766 |
33,438 |
122,157 |
80,354 |
|
|
|
|
|
|
|
Number of shares |
|
|
|
|
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
239,474 |
215,052 |
236,693 |
214,152 |
|
Effect of dilutive potential ordinary shares: |
|
|
|
|
|
Share options |
3,607 |
3,305 |
3,465 |
2,966 |
|
|
|
|
|
|
|
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
243,081 |
218,357 |
240,158 |
217,118 |
Earnings per share (adjusted) is calculated by dividing the net profit (adjusted) amounts shown on page 6 by the share denominators shown above.
7. Related Party Transactions
There have been no related party transactions or changes in related party transactions described in the latest annual report that could have a material effect on the financial position or performance of the Group in the first nine months of the financial year.
INDEPENDENT REVIEW REPORT TO AUTONOMY CORPORATION PLC
We have been engaged by the company to review the condensed set of financial statements in the quarterly financial report for the three and nine months ended September 30, 2009, which comprises the income statement, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 7. We have read the other information contained in the quarterly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The quarterly financial report is the responsibility of, and has been approved by, the directors.
As disclosed in note 2, the annual financial statements of the company are prepared in accordance with the recognition and measurement criteria of IFRSs as adopted by the European Union. The condensed set of financial statements included in this quarterly financial report have been prepared in accordance with the accounting policies the group intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the quarterly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of quarterly financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying quarterly financial information is not prepared, in all material respects, in accordance with the recognition and measurement criteria of IFRSs as adopted for use in the EU and the basis set out in note 2.
Deloitte LLP
Chartered Accountants and Registered Auditor
October 20, 2009
Cambridge, UK
This information is provided by RNS
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