REDMOND, Wash., November 08, 2004 - Concur Technologies, Inc. (NASDAQ: CNQR), the world's leading provider of business services that automate Corporate Expense Management, today reported financial results for its fourth quarter ended September 30, 2004.
Concur reported net income for the fourth quarter of fiscal 2004 of $0.6 million, or $0.02 per share, which was in the middle of the range expected by the company. This compares to net income of $0.7 million, or $0.02 per share, for the third quarter of fiscal 2004, and net income of $1.0 million, or $0.03 per share, for the fourth quarter of fiscal 2003. Excluding the non-cash amortization of intangible assets recorded in the fourth quarter of fiscal 2004, pro forma net income for the quarter was $0.9 million, or $0.02 per share. Fiscal 2004 fourth quarter revenues were $15.5 million, compared to $14.5 million for the third quarter of fiscal 2004, and to $14.2 million for the fourth quarter of fiscal 2003.
"In all respects, 2004 was a breakthrough year for Concur Technologies as we met or surpassed our major financial and business objectives," says Steve Singh, chairman and CEO of Concur Technologies. "Subscription revenue, which is the growth engine of our business, contributed more than 70% of total revenue in fiscal 2004 and grew 20% year over year. We were very pleased with new business growth as Annual Recurring Revenue was once again up quarter over quarter and for the year grew by 135%."
Singh continued, "Our objective is to cement our market leadership position by driving market share growth and operating with the lowest cost of delivery. Looking ahead, we expect continued strong market demand and we will aggressively increase our investments in sales and marketing as well as service delivery. Driven by Annual Recurring Revenue growth in fiscal 2004, subscription revenue as well as total revenue in fiscal 2005 is expected to grow a minimum of 25% year over year. We expect to grow Annual Recurring Revenue by a minimum of 50% year over year, which would deliver a minimum of 20% top line growth in fiscal 2006. We expect license revenue to continue to be very volatile. The strength and leverage of our business model will become readily apparent this year, as we expect to grow earnings between 220% and 430% year over year even as we aggressively increase our investments in the business."
Financial Highlights
- Subscription revenue was $11.0 million for the fourth quarter of fiscal 2004 or 71% of total revenue, compared with $10.4 million for the third quarter of fiscal 2004 or 72% of total revenue, and compared with $8.9 million or 63% of total revenue for the fourth quarter of fiscal 2003.
- Annual Recurring Revenue generated during the fourth quarter of fiscal 2004 was $4.0 million compared with $3.7 million for the third quarter of fiscal 2004, and compared with $1.8 million for the fourth quarter of fiscal 2003. Annual Recurring Revenue is the one-year value of new and incremental subscription contracts signed in the applicable period.
- Cash flows from operations were $1.1 million for the fourth quarter of fiscal 2004, compared with $1.7 million for the third quarter of fiscal 2004, and compared with $1.2 million for the fourth quarter of fiscal 2003.
- Cash and cash equivalents were $23.7 million at the end of the fourth quarter of fiscal 2004, compared with $23.9 million at the end of the third quarter of fiscal 2004, and compared with $21.6 million at the end of the fourth quarter of fiscal 2003.
- Gross margin was 58% for the fourth quarter of fiscal 2004 compared with 59% for the third quarter of fiscal 2004, and compared with 61% for the fourth quarter of fiscal 2003.
- Gross margin was 59% for both fiscal 2004 and 2003. Excluding the impact of declining license revenues, gross margin was 55% for fiscal 2004 compared with 52% for fiscal 2003.
- Operating margin was 3% for the fourth quarter of fiscal 2004 compared with 4% for the third quarter of fiscal 2004, and compared with 7% for the fourth quarter of fiscal 2003.
Recent Business Highlights
- Concur signed contracts with new and existing customers, including Ace Hardware Corp, BAE Systems Plc, Britvic Soft Drinks Ltd, The Charles Schwab Corporation, Loram Maintenance of Way, Inc., MedAssist Group, NVIDIA Corporation, Sabre Europe Management Services Ltd, The Solae Company, Sypris Solutions, Inc., and TALX Corporation.
- Concur announced the availability of Concur Benchmarking Service in partnership with Runzheimer International, one of the world's leading international consulting firms specializing in travel program, policy, and cost benchmarking information. As an integrated value-added service, Concur Benchmarking Service provides customers with real-time travel benchmarking information without any incremental investment in infrastructure or hardware.
- Concur announced that Concur Imaging Service reached a significant milestone as more than one million expense reports have now been made totally paperless through the service since its launch in 2002. As a fully integrated offering, Concur Imaging Service provides companies with the ability to capture, store, archive and view employee receipts electronically.
Business Outlook
The following statements are based on our current expectations and we do not undertake any duty to update them. These statements are forward-looking and inherently uncertain. Actual results may differ materially as a result of the factors identified below, the factors identified in our public filings made with the Securities and Exchange Commission, or other factors.
- Concur expects Annual Recurring Revenue to be $19.0 million or greater for fiscal 2005.
- Concur expects total revenues to be $14.7 million or greater for the first quarter of fiscal 2005, and $71 million or greater for fiscal 2005.
- Concur expects earnings per share of between ($0.03) and $0.01 for the first quarter of fiscal 2005 which includes a one-time charge for costs related to an acquisition of another company that Concur evaluated and subsequently terminated during the quarter.
- Concur expects earnings per share of between $0.13 and $0.26 for fiscal 2005. Excluding the non-cash amortization of intangible assets expected to be recorded in fiscal 2005, pro forma earnings per share is expected to be between $0.16 and $0.29 for the fiscal year.
- Concur expects total revenues to be in excess of $85 million and earnings per share of between $0.30 and $0.40 for fiscal 2006. Excluding the non-cash amortization of intangible assets expected to be recorded in fiscal 2006, pro forma earnings per share is expected to be between $0.33 and $0.43 for the fiscal year.
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All company or product names are trademarks and/or registered trademarks of their respective owner.
All company or product names are trademarks and/or registered trademarks of their respective owner. This press release contains forward-looking statements that are inherently uncertain. These forward-looking statements, such as the statements made by Mr. Singh and the statements in the Business Outlook section, are based on Concur's current expectations and involve many risks and uncertainties that could cause actual results to differ materially from current expectations. Factors that could cause or contribute to actual results differing from current expectations include, but are not limited to: potential delays in market adoption of our subscription service offerings; potential increases in the rate of attrition of customers of our subscription service offerings; the current general economic environment, including the level of investment in information technology by our customers; the level of business travel that may reduce the use of our products and services or inhibit new sales of our products and services; potential difficulties associated with strategic relationships and with development of new products and services; risks associated with expansion into new geographic markets; the lengthy sales cycle for our products and services, which makes the prediction of future operating results difficult; and uncertain market acceptance of recently-introduced or future products and services.
Please refer to the company's public filings made with the Securities and Exchange Commission (http://www.sec.gov ) for additional and more detailed information on risk factors that could cause actual results to differ materially from current expectations. Concur assumes no obligation to update the forward-looking information contained in this press release.
Investor Contact:
John Adair, Concur Technologies, Inc., 425-497-6439, johna@concur.com
Press Contact:
Robert Nachbar, Barokas Public Relations, 206-344-3140, robert@barokas.com
CONCUR TECHNOLOGIES, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
| Three months ended | Twelve months ended | ||||
| September 30, | September 30, | ||||
| 2004 | 2003 | | 2004 | 2003 | |
| Revenues: | |||||
| Subscription | $11,005 | $8,863 | $40,244 | $33,590 | |
| Consulting | 3,348 | 3,157 | 11,560 | 14,457 | |
| License | 1,107 | 2,137 | 4,746 | 8,690 | |
Total revenues | 15,460 | 14,157 | 56,550 | 56,737 | |
Expenses: | |||||
| Cost of operations | 6,560 | 5,481 | 23,264 | 23,214 | |
| Sales and marketing | 3,834 | 3,468 | 14,329 | 14,549 | |
| Research and development | 2,112 | 2,348 | 8,773 | 10,356 | |
| General and administrative | 2,150 | 1,632 | 7,295 | 6,710 | |
| Amortization of intangible asset | 285 | 285 | 1,140 | 1,140 | |
Total expenses | 14,941 | 13,214 | 54,801 | 55,969 | |
| Income (loss) from operations | 519 | 943 | 1,749 | 768 | |
| Other income, net | 59 | 61 | 286 | 193 | |
| Net income (loss) | $578 | $1,004 | $2,035 | $961 | |
Net income per share | |||||
| Basic | $0.02 | $0.03 | $0.06 | $0.03 | |
| Diluted | $0.02 | $0.03 | $0.06 | $0.03 | |
Weighted shares outstanding | |||||
| Basic | 32,913 | 32,062 | 32,595 | 31,265 | |
| Diluted | 36,828 | 36,717 | 36,815 | 35,440 | |
Pro Forma Results | |||||
| Pro forma net income, which excludes amortization of intangible asset | $863 | $1,289 | $3,175 | $2,101 | |
| Pro forma net income per share, which excludes amortization of intangible asset | |||||
| Basic | $0.03 | $0.04 | $0.10 | $0.07 | |
| Diluted | $0.02 | $0.04 | $0.09 | $0.06 | |
| Shares used in calculation of basic and diluted pro forma net income per share | |||||
| Basic | 32,913 | 32,062 | 32,595 | 31,265 | |
| Diluted | 36,828 | 36,717 | 36,815 | 35,440 | |
| The pro forma results for the periods presented above are for informational purposes only and are not prepared in accordance with accounting principles generally accepted in the United States. This pro forma information presents our operating results after excluding the non-cash amortization expense of the intangible asset relating to our acquisition of Captura Software, Inc., which totaled $0.3 million and $1.1 million in the three and twelve month periods presented, respectively. | |||||
CONCUR TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(Unaudited)
| September 30, 2004 | September 30, 2003 | ||
| ASSETS | |||
|
Current assets | |||
| Cash and cash equivalents | $23,735 | $21,607 | |
| Accounts receivable, net | 10,277 | 7,862 | |
| Prepaid expenses and other current assets | 3,452 | 2,663 | |
| Total current assets | 37,464 | 32,132 | |
| Property and equipment, net | 5,003 | 1,331 | |
| Restricted cash | 550 | 550 | |
| Intangible assets | 6,934 | 8,074 | |
| Other assets | 2,948 | 886 | |
| Total assets | $52,899 | $42,973 | |
LIABILITIES & STOCKHOLDERS' EQUITY | |||
| Current liabilities | |||
| Accounts payable and accrued liabilities | $5,909 | $4,478 | |
| Current portion of long-term obligations | 252 | 768 | |
| Current portion of deferred revenues | 11,576 | 9,905 | |
| Total current liabilities | 17,737 | 15,151 | |
| Long-term obligations, net of current | - | 199 | |
| Long-term deferred revenues, net of current | 5,017 | 2,015 | |
| Total liabilities | 22,754 | 17,365 | |
Stockholders' equity | |||
| Common stock, $0.001 par value: Authorized - 60,000; issued and outstanding - 32,981 and 32,142 | 239,811 | 237,402 | |
| Accumulated other comprehensive income | 93 | - | |
| Accumulated deficit | (209,759) | (211,794) | |
| Total stockholders' equity |
30,145 | 25,608 | |
| Total liabilities and stockholders' equity | $52,899 | $42,973 | |
CONCUR TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| Three months ended | Twelve months ended | ||||
| September 30, | September 30, | ||||
| 2004 | 2003 | | 2004 | 2003 | |
| Operating activities | |||||
| Net income | $578 | $1,004 | $2,035 | $961 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Amortization of intangible asset | 285 | 285 | 1,140 | 1,140 | |
| Depreciation | 546 | 463 | 1,890 | 2,835 | |
| Provision for allowance for accounts receivable | 350 | 134 | 781 | 387 | |
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | (1,157) | 108 | (3,176) | 937 | |
| Prepaid expenses, deposits, and other assets | (1,307) | (10) | (2,841) | (615) | |
| Accounts payable | 439 | 267 | 764 | (721) | |
| Accrued liabilities | 481 | (1,322) | 575 | (2,127) | |
| Deferred revenues | 892 | 305 | 4,663 | 1,899 | |
| Net cash provided by operating activities | 1,107 | 1,234 | 5,831 | 4,696 | |
Investing activities | |||||
| Purchases of property and equipment | (1,345) | (528) | (5,554) | (1,262) | |
| Maturities of marketable securities | - | - | - | 2,024 | |
| Acquisition of Captura Software Inc., net of cash acquired | - | 1 | - | (550) | |
| Net cash (used in) provided by investing activities | (1,345) | (527) | (5,554) | 212 | |
Financing activities | |||||
| Proceeds from issuance of common stock from exercise of stock options | 257 | 392 | 1,654 | 2,843 | |
| Proceeds from issuance of common stock from employee stock purchase plan | - | - | 755 | 249 | |
| Proceeds from borrowings | - | - | 289 | 915 | |
| Payments on borrowings and capital leases | (235) | (246) | (959) | (1,754) | |
| Decrease in restricted cash balances | - | 1,400 | - | 700 | |
| Net cash provided by financing activities | 22 | 1,546 | 1,739 | 2,953 | |
| Effect of foreign currency exchange rates on cash and cash equivalents | 1 | - | 112 | - | |
| Net (decrease) increase in cash and cash equilvalents | (215) | 2,253 | 2,128 | 7,861 | |
| Cash and cash equivalents at beginning of period | 23,950 | 19,354 | 21,607 | 13,746 | |
Cash and cash equivalents at end of period | $23,735 | $21,607 | $23,735 | $21,607 | |
All company or product names are trademarks and/or registered trademarks of their respective owners.