REDMOND, Wash., November 19th, 2007 -Concur (NASDAQ: CNQR), the world’s leading provider of on-demand Employee Spend Management services, today reported financial results for its fourth quarter and fiscal year ended September 30, 2007.
Concur reported total revenue for the fourth quarter of fiscal 2007 of $35.7 million, driven by subscription revenue which was up 37% from the year-ago quarter. Total revenue for the quarter was up 30% from the year-ago quarter and up 7% from the prior quarter. Fiscal 2007 fourth quarter net income was $4.1 million, or $0.10 per share, and exceeded company expectations. This compares to net income of $1.0 million, or $0.03 per share, in the year-ago quarter.
"The fourth quarter of fiscal 2007 was an exceptional quarter for the
company and it capped a record fiscal year, as we met or exceeded our recently
raised guidance for revenue, earnings and free cash flow," said Steve Singh,
chairman and CEO of Concur. "Our business continues to accelerate as year-
over-year growth in the fourth quarter exceeded year-over-year growth in the
third quarter. New customer growth was significantly higher than expected as
businesses look for ways to drive down operating costs."
Singh continued, "Last week we launched Concur® Travel & Expense with
Smart Expense(TM), just one year after announcing our vision for delivering a
seamless end-to-end solution. Look for us to continue to drive the innovation
curve in the travel and expense management market focused on delivering a
compelling end user experience and driving down the cost of doing business for
our customers and their suppliers. With the completion of the Gelco
acquisition and the integration of the two organizations ahead of our
expectations and continued strong execution across the business, we are
raising our revenue, earnings and cash flow guidance for fiscal 2008."
Financial Highlights
-- Total revenue was $35.7 million for the fourth quarter of fiscal 2007,
up 30% compared to the year-ago quarter and up 7% sequentially.
-- Total revenue was $129.1 million for fiscal 2007, up 33% year-over-
year.
-- Net income was $4.1 million, or $0.10 per share, for the fourth quarter
of fiscal 2007, compared to $ 1.0 million, or $0.03 per share, for the
year-ago quarter.
-- Net income was $8.2 million, or $0.20 per share, for fiscal 2007 and
included income tax expense of $ 5.3 million, compared to $ 34.2
million, or $0.87 per share for fiscal 2006, which includes an income
tax benefit of $27.5 million. The company released reserves against
its deferred tax assets in the third quarter of fiscal 2006 and began
recording income tax expense in the fourth quarter of fiscal 2006.
-- The effective tax rate for fiscal 2007 used to record income tax
expense was reduced to 39% during the fourth quarter of fiscal 2007.
-- Non-GAAP pretax income was $6.8 million, or $0.16 per share, for the
fourth quarter of fiscal 2007, compared to $4.8 million, or $0.12 per
share, for the year-ago quarter. Please refer to "About Concur's
Non-GAAP Financial Measures" below.
-- Non-GAAP pretax income was $22.3 million, or $0.54 per share, for
fiscal 2007, compared to $14.0 million, or $0.36 per share, for fiscal
2006.
-- Non-GAAP operating margin was 18% for the fourth quarter of fiscal
2007, which was unchanged from the year-ago quarter, and down from 19%
sequentially.
-- Non-GAAP operating margin was 17% for fiscal 2007, up from 15% in
fiscal 2006. Please refer to "About Concur's Non-GAAP Financial
Measures" below.
-- Cash flows from operations were $ 7.0 million for the fourth quarter of
fiscal 2007, up 187% from the year-ago quarter.
-- Cash flows from operations were $ 32.2 million for fiscal 2007, up 183%
year-over-year. Net of capital expenditures of $12.5 million, free
cash flow totaled $19.7 million.
Recent Business Highlights
-- Concur completed its acquisition of privately-held H-G Holdings, Inc.
and its subsidiaries, including Gelco Information Network, Inc., the
owner of Gelco Expense Management, ahead of our expectations, closing
on October 1, 2007.
-- Concur announced the offering of 5,405,000 shares of common stock in a
registered public offering at a price to the public of $28.50 per
share. Total net proceeds from this offering, together with funds drawn
under an extension of its existing credit facility, were used to fund
the consideration for the acquisition of privately-held H-G Holdings,
Inc.
-- Concur announced the general availability of Concur Travel & Expense,
the industry-first innovation featuring Smart Expense that completely
shatters the notion of the traditional expense report by enabling One
Touch Business Travel(TM).
-- Concur made powerful new Attendee Tracking capabilities -- which
provide Concur® Expense clients with the transparency and
accountability required to comply with recently enacted and pending
state and federal regulations -- available at no additional cost. This
industry first innovation provides companies -- specifically those
within the pharmaceutical and financial services industries -- with the
ability to track, monitor and report on the amount they spend on gifts,
meals and gratuities for their clients.
-- Through Concur® Connect -- a global program connecting suppliers from
around the world to over $35 billion of spend driven by Concur's over
6,000 clients -- Concur added Intercontinental Hotels Group (which
includes InterContinental® Hotels & Resorts, Crowne Plaza® Hotels &
Resorts, Holiday Inn® Hotels and Resorts, Holiday Inn Express®,
Staybridge Suites®, Candlewood Suites® and Hotel Indigo®) to its
growing list of direct connect and e-receipt vendors. This list also
includes airlines like Air Canada, AirTran Airways, JetBlue Airways,
Virgin Blue; hotels such as Hilton, Marriott and Starwood; car rental
companies including Hertz, Avis/Budget and Enterprise; rail providers
VIA Rail, SNCF, Rail1, Die Bahn and UK Rail; and OpenTable.com for
restaurant reservations -- providing Concur clients with access to the
industry's broadest selection of travel content.
-- Notable clients such as Regal Entertainment Group, Safeway, Whirlpool
Corporation and Royal Bank of Canada signed contracts for Concur
services, contributing to more new client contracts being signed in the
fourth quarter of fiscal 2007 than in any quarter in Concur's history.
-- Concur opened an office in Prague, Czech Republic to establish a center
of excellence for engineering, services and infrastructure and
reinforce its commitment to European clients and partners.
-- Concur hosted its annual International User Conference in Phoenix,
Arizona, with over 1000 clients and partners in attendance.
Business OutlookThe 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. Please
also refer to "About Concur's Non-GAAP Financial Measures" below for an
explanation of our non-GAAP financial measures and a reconciliation of those
measures to GAAP equivalents. -- Concur expects total revenue to be $46.0 million for the first quarter
of fiscal 2008, and to be $200.0 million for fiscal 2008.
-- Concur expects earnings per share for the first quarter of fiscal 2008
to be $0.03 assuming an estimated effective tax rate of 39% and
non-GAAP pre-tax earnings per share to be $0.13.
-- Concur expects earnings per share for fiscal 2008 to be $0.15 assuming
an estimated effective tax rate of 39% and non-GAAP pre-tax earnings
per share to be $0.70.
-- Concur expects the fiscal 2008 non-GAAP operating margin to be 18% for
the year as a whole.
-- Concur expects cash flows from operations in fiscal 2008 to be $42.0
million, and capital expenditures of approximately $14.0 million.
About ConcurConcur is the world's leading provider of on-demand Employee Spend
Management services. Concur enables organizations to globally control costs by
automating the processes they use to manage employee spending. Concur's end-
to-end solutions seamlessly unite online travel booking with automated expense
reporting, streamline meeting management and optimize the process of managing
vendor payments, employee check requests and direct reimbursements.
Organizations of all sizes trust Concur to help them control spend before it
occurs while eliminating paper and optimizing supplier relations. Concur's
unified approach to managing employee spend delivers a 360° view into all
employee expenses, helping companies globally enforce policies and monitor
vendor compliance, while delivering unprecedented control and valuable
insight. Concur's suite of on-demand services reach millions of employees
across thousands of organizations around the world -- streamlining business
processes, reducing operating costs, improving internal controls and providing
enhanced visibility and actionable expense analysis. More information about
Concur is available at http://www.concur.com.All company or product names are trademarks and/or registered trademarks
of their respective owners.This press release contains forward-looking statements that are inherently
uncertain. These forward-looking statements, such as the statements made by
Mr. Singh, 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
difficulties integrating the operations of H-G Holdings, Inc. with our
operations; potential delays in market adoption and penetration of our
subscription service offerings; potential difficulties associated with our
deployment and support of our products and services; our ability to manage
expected growth of our subscription service offerings; the scalability of the
hosting infrastructure for our subscription service offerings; potential
increases in the rate of attrition of customers of our subscription service
offerings; 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; 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 Torrey, Concur, 425-497-5986, john.torrey@concur.com
Press Contact:
Stefanie Johansen, Weber Shandwick for Concur, 425-452-5468,
sjohansen@webershandwick.com
Concur Technologies, Inc.
Income Statements
(in thousands, except per share data)
(Unaudited)
Three months
ended Year ended
September 30, September 30,
2007 2006 2007 2006
Revenues:
Subscription $32,369 $23,711 $115,996 $80,501
Consulting and other 3,378 3,781 13,111 16,644
Total revenues 35,747 27,492 129,107 97,145
Expenses:
Cost of operations 11,387 10,067 43,711 37,846
Sales and marketing 9,685 6,416 34,154 22,907
Systems development and programming 4,479 3,388 15,866 12,445
General and administrative 5,444 4,170 18,759 14,458
Amortization of intangible assets 583 823 2,965 2,420
Total expenses 31,578 24,864 115,455 90,076
Operating income 4,169 2,628 13,652 7,069
Other income (expense):
Interest income 263 147 897 512
Interest expense (141) (374) (1,240) (962)
Other, net 140 151 231 72
Total other income (expense), net 262 (76) (112) (378)
Income before income tax 4,431 2,552 13,540 6,691
Income tax expense (benefit) 305 1,536 5,315 (27,465)
Net income $ 4,126 $ 1,016 $ 8,225 $34,156
Net income per share available to
common stockholders:
Basic $ 0.11 $ 0.03 $ 0.22 $ 0.97
Diluted 0.10 0.03 0.20 0.87
Weighted average shares used in
computing net income per share:
Basic 38,287 36,127 37,443 35,056
Diluted 42,004 39,878 41,033 39,150
Concur Technologies, Inc.
Balance Sheets
(in thousands, except per share amounts)
(Unaudited)
September 30, September 30,
2007 2006
Assets
Current assets:
Cash and cash equivalents $168,835 $ 16,334
Accounts receivable, net of
allowance of $2,766 and $1,544 31,460 22,734
Prepaid expenses 1,797 1,368
Current portion of deferred income
taxes 2,657 2,759
Other current assets 8,448 5,883
Total current assets 213,197 49,078
Property and equipment, net 24,066 20,429
Intangible assets, net 10,604 13,570
Goodwill 65,628 65,628
Deferred income tax assets, net of
current portion 19,764 24,839
Deposits and other long-term assets 12,223 7,775
Total assets $345,482 $181,319
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 4,193 $ 2,551
Accrued compensation 11,492 5,052
Acquisition-related liabilities 700 8,826
Other accrued liabilities 4,655 3,415
Current portion of long-term debt - 3,312
Current portion of deferred rent 399 240
Current portion of deferred revenues 21,560 15,974
Total current liabilities 42,999 39,370
Long-term debt, net of current portion 5,369 13,520
Deferred rent, net of current portion 2,428 2,827
Deferred revenues, net of current portion 10,326 8,208
Total liabilities 61,122 63,925
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, par
value $0.001 per share - -
Authorized shares: 5,000; No
shares issued or outstanding
Common stock, $0.001 par value 44 36
Authorized shares: 60,000
Shares issued and outstanding:
43,699 and 36,142
Issuable shares: 0 and 284
Additional paid-in capital 445,324 287,382
Accumulated deficit (162,012) (170,237)
Accumulated other comprehensive
income 1,004 213
Total stockholders' equity 284,360 117,394
Total liabilities and stockholders' equity $345,482 $181,319
Concur Technologies, Inc
Cash Flow Statements
(in thousands)
(Unaudited)
Three months ended Year ended
September 30, September 30,
2007 2006 2007 2006
Operating activities:
Net income $4,126 $1,016 $8,225 $34,156
Adjustments to reconcile net income
to net cash provided by operating
activities:
Amortization of intangible assets 583 823 2,965 2,420
Depreciation 2,564 1,640 9,048 5,316
Provision for doubtful accounts
receivable 365 183 1,300 1,565
Share-based compensation expense 1,761 1,413 5,752 4,859
Deferred income taxes 287 1,487 5,177 (27,598)
Changes in operating assets and
liabilities, net of effects from
acquisition:
Accounts receivable (6,495) (3,381) (9,947) (8,760)
Prepaid expenses, deposits and
other assets (2,525) (163) (6,572) (4,090)
Accounts payable (1,284) 607 (1,835) 1,101
Accrued liabilities 5,499 (339) 10,383 (452)
Deferred revenues 2,154 (831) 7,680 2,840
Net cash provided by operating
activities 7,035 2,455 32,176 11,357
Investing activities:
Purchases of property and equipment (2,835) (2,251) (12,508) (9,933)
Decrease in restricted cash balances - 500 - 500
Payments for acquisition, net of
cash acquired (475) - (8,225) (21,900)
Net cash used in investing
activities (3,310) (1,751) (20,733) (31,333)
Financing activities:
Net proceeds from stock-based award
activity 663 659 8,076 4,836
Proceeds from issuance of common
stock from employee stock purchase
plan 190 214 806 819
Net proceeds from issuance of
common stock 144,867 - 144,867 -
Payments on repurchase of common
stock - (2,451) (1,853) (2,451)
Proceeds from borrowings - - 11,369 18,000
Repayments on borrowings and
capital leases (6,000) (33) (22,832) (1,293)
Net cash provided by (used in)
financing activities 139,720 (1,611) 140,433 19,911
Effect of foreign currency exchange
rate changes on cash and cash
equivalents 205 148 625 197
Net increase (decrease) in cash and
cash equivalents 143,650 (759) 152,501 132
Cash and cash equivalents at
beginning of year 25,185 17,093 16,334 16,202
Cash and cash equivalents at end of
year $168,835 $16,334 $168,835 $16,334
Concur Technologies, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share and margin data)
(Unaudited)
Three months ended Year ended
September 30, September 30,
2007 2006 2007 2006
Operating income:
Operating income $4,169 $2,628 $13,652 $7,069
Income from operations
as a % of total revenue
(Operating Margin) 12% 10% 11% 7%
Add back:
Effect of share-based
compensation on
operating income 1,761 1,413 5,752 4,859
Effect of
amortization of
intangibles on
operating income 583 823 2,965 2,420
Non-GAAP operating income $6,513 $4,864 $22,369 $14,348
Non-GAAP operating income
as a % of total revenue
(Non-GAAP Operating
Margin) 18% 18% 17% 15%
Net income to pretax income:
Net income $4,126 $1,016 $8,225 $34,156
Add back:
Share-based compensation 1,761 1,413 5,752 4,859
Amortization of intangibles 583 823 2,965 2,420
Income tax expense (benefit) 305 1,536 5,315 (27,465)
Non-GAAP pretax income $6,775 $4,788 $22,257 $13,970
Diluted income per share:
Diluted income per share $0.10 $0.03 $0.20 $0.87
Add back:
Effect of share-based
compensation on income
per share 0.04 0.03 0.14 0.12
Effect of amortization
of intangibles on income
per share 0.01 0.02 0.07 0.07
Income tax expense (benefit) 0.01 0.04 0.13 (0.70)
Non-GAAP pretax diluted income
per share $0.16 $0.12 $0.54 $0.36
Shares used in calculation
of basic and diluted
non-GAAP income per share:
Basic 38,287 36,127 37,443 35,056
Diluted 42,004 39,878 41,033 39,150
CONCUR TECHNOLOGIES, INC.
About Concur's Non-GAAP Financial MeasuresThis release contains non-GAAP financial measures. The tables above
reconcile the non-GAAP financial measures to the most directly comparable
financial measures prepared in accordance with accounting principles generally
accepted in the United States ("GAAP").Non-GAAP financial measures should not be considered as a substitute for,
or as superior to, measures of financial performance prepared in accordance
with GAAP. Concur's non-GAAP financial measures do not reflect a comprehensive
system of accounting, and they differ from GAAP measures with similar names
and from non-GAAP financial measures with the same or similar names that are
used by other companies. We strongly urge investors and potential investors in
our securities to review the reconciliation of our non-GAAP financial measures
to the comparable GAAP financial measures that are included in this release,
and our consolidated financial statements, including the notes thereto, and
the other financial information contained in our periodic filings with the SEC
and not to rely on any single financial measure to evaluate our business.Concur believes that its non-GAAP financial measures provide meaningful
supplemental information regarding Concur's operating results because they
exclude amounts that Concur excludes as part of its monitoring of operating
results and assessing the performance of the business. Concur believes that
its non-GAAP financial measures also facilitate the comparison of results for
current periods and business outlook for future periods with results of past
periods. Concur presents the following non-GAAP financial measures in this
release: non-GAAP operating income; non-GAAP operating margin; non-GAAP pre-
tax income and non-GAAP pre-tax diluted income per share. Concur excludes the
following items as noted from these non-GAAP financial measures: -- Share-based compensation expenses. Concur's non-GAAP financial measures
exclude share-based compensation expenses, which consist of expenses
for stock options and restricted stock units ("RSU") that it records
under the provisions of Statement of Financial Accounting Standard No.
123®. Concur excludes these expenses from its non-GAAP financial
measures primarily because they are non-cash expenses that it does not
consider part of ongoing operating results when assessing the
performance of our business, and the exclusion of these expenses
facilitates the comparison of results and business outlook for future
periods with results for prior periods.
-- Amortization of acquired intangible assets. In accordance with GAAP,
operating expenses include amortization of software and other
technology assets, other purchased intangible assets such as customer
lists and covenants not to compete. Concur excludes these items from
its non-GAAP financial measures because they are non-cash expenses that
Concur does not consider part of ongoing operating results when
assessing the performance of our business, and Concur believes that
doing so facilitates comparisons to its historical operating results
and to the results of other companies in our industry, which have their
own unique acquisition histories.
-- Income tax expense (benefit). In accordance with GAAP, Concur began
recording income tax expense in the fourth quarter of fiscal 2006.
Concur excludes this expense from its non-GAAP financial measures
primarily because it is largely a non-cash expense that Concur does not
consider part of ongoing operating results when assessing the
performance of its business, and the exclusion of this expense
facilitates the comparison of business outlook for future periods with
results for prior periods, which did not include income tax expense.
Except as noted below, Concur believes that all of the following
considerations apply equally to each of the non-GAAP financial measures that
we present: -- Concur's management uses non-GAAP operating income (including the
derived non-GAAP operating margin), non-GAAP pre-tax income, and non-
GAAP pre-tax diluted income per share in internal reports used by
management in monitoring and making decisions regarding Concur's
business. For example, these measures are used in monthly financial
reports prepared for management, and in quarterly reports to Concur's
Board of Directors. Concur also uses non-GAAP pre-tax diluted income
per share as a measure to determine executive cash incentive
compensation, along with GAAP measures, such as revenue.
-- Because share-based compensation, amortization of acquired intangible
assets are non-cash in nature and income tax expense is largely non-
cash in nature, Concur believes that non-GAAP operating income, non-
GAAP pre-tax income and non-GAAP pre-tax diluted income per share
provide a more focused view of the operations of its business. In
particular, share-based compensation amounts are difficult to forecast,
because the magnitude of the charges depends upon the volume and timing
of stock option and RSU grants -- which are unpredictable and can vary
dramatically from period to period -- and external factors such as
interest rates and the trading price and volatility of Concur's common
stock. In addition, the income tax expense can vary significantly
because losses in its foreign operations are not included in the
calculation of the consolidated income tax expense as we have not yet
released the reserves against the deferred tax assets for our foreign
operations. Excluding these amounts improves comparability of the
performance of the business across periods.
-- The principal limitation of Concur's non-GAAP financial measures is
that they exclude significant expenses that are required by GAAP to be
recorded. In addition, non-GAAP financial measures are subject to
inherent limitations because they reflect the exercise of judgments by
management about which charges are excluded from the non-GAAP financial
measures.
-- To mitigate this limitation, Concur presents its non-GAAP financial
measures in connection with its GAAP results, and recommends that
investors do not give undue weight to its non-GAAP financial measures.
Concur notes that the dilutive effect of outstanding options is
reflected in fully-diluted shares outstanding used in calculating both
GAAP earnings per share and our non-GAAP pre-tax diluted income per
share.
Concur's management believes that its non-GAAP financial measures provide
useful information to investors because it allows investors to view the
business through the eyes of management, facilitates comparison of its results
across historical and future periods, and because its non-GAAP financial
measures provide a special focus on the underlying operating performance of
the business relative to expectations.
All company or product names are trademarks and/or registered trademarks of their respective owners.