Concur Reports Strong Results For Third Quarter Fiscal 2009

Year-over-year third quarter revenue grows 13% driving 63% earnings growth

REDMOND, Wash., Aug. 5, 2009 -- Concur (Nasdaq: CNQR), the world's leading provider of on-demand Employee Spend Management services, today reported financial results for its third quarter ended June 30, 2009.

Concur reported total revenue for the third quarter of fiscal 2009 of $62.2 million, driven by subscription revenue which was up 14% from the year-ago quarter. Total revenue for the quarter was up 13% from the year-ago quarter. Fiscal 2009 third quarter net income was $7.2 million, or $0.14 per share, exceeding company expectations. This compares to net income of $4.5 million, or $0.09 per share, in the year-ago quarter.

"We are very pleased with our fiscal third quarter performance, as subscription revenue grew four percent quarter-over-quarter and non-GAAP EPS grew 14% quarter-over-quarter,” said Steve Singh, chairman and CEO of Concur. “New customer growth in the quarter was among the strongest in our history and we see a solid demand environment for our services as we head into the fourth quarter of fiscal 2009.”

Singh continued, “Against the backdrop of an environment that is beginning to stabilize, our ongoing ability to execute well, and the large-scale opportunity in front of us, we are beginning to reaccelerate our investments across the business while we continue to execute on our core objectives of expanding distribution, driving innovation in our industry, and setting the bar for service excellence. For example, we recently announced our acquisition of Etap-On-Line, which expands our presence in the European market and underscores our ongoing commitment to providing both global and local leadership to the travel and expense industry.”

Financial Highlights

-- Total revenue was $62.2 million for the third quarter of fiscal 2009, up 13% compared to the year-ago quarter, and up 0.4% sequentially. Total subscription revenue was $60.9 million for the third quarter of fiscal 2009, up 14% compared to the year-ago quarter, and up 4% sequentially.

-- Net income was $7.2 million, or $0.14 per share, for the third quarter of fiscal 2009, compared to $4.5 million, or $0.09 per share, for the year-ago quarter.

-- Non-GAAP pretax income was $16.5 million, or $0.32 per share, for the third quarter of fiscal 2009, compared to $11.3 million, or $0.24 per share, for the year-ago quarter. Please refer to "About Concur's Non-GAAP Financial Measures" below for an explanation of our non-GAAP financial measures used in this press release.

-- Non-GAAP operating margin was 26% for the third quarter of fiscal 2009, up from 21% the year-ago quarter.

-- Cash flows from operations were $18.1 million for the third quarter of fiscal 2009, down 7% from the year-ago quarter.

Recent Business Highlights

-- Concur announced the acquisition of Etap-On-Line, a leading European provider of business travel and expense management solutions based in Paris, France. Concur expects the acquisition, which closed on August 1, 2009, to be accretive to fiscal 2010 non-GAAP earnings.

-- Concur released Concur® Mobile for general availability. This innovative companion for business travelers extends the power of Concur® Travel & Expense by allowing mobile workers using their smartphones to easily change itineraries; book taxis, hotels or dining; capture expenses; and approve expense reports – all within policy while on the road.

-- Concur’s market-leading corporate booking technology is the first to support the TSA’s new Secure Flight Program requirements, making it easy for corporate travel managers to be in compliance.

-- Concur announced that Concur clients can now access car rental inventory from Sixt AG, a leading European car rental company and global provider of high-quality mobility services, and make reservations via a direct connect between Sixt AG and Concur’s online corporate travel booking services.

-- Concur announced a new partner service in conjunction with Ireland-based Tax Back International (TBI) to help Concur clients reclaim foreign value-added tax (VAT) costs.

-- Concur announced that Concur chairman and CEO Steve Singh was recognized by Business Travel News (BTN) as one the “Top of the Top 25s” leaders in the business travel industry.

-- Concur ranked 5th on Seattle Business Magazine’s list of 100 Best Companies To Work For.

-- Concur was placed 12th on the Northwest 100, The Seattle Times' annual ranking of the region's best-performing public companies.

-- CIOZone.com named Concur as one of the 50 Fastest-Growing Software Companies.

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. 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 earnings per share for the fourth quarter of fiscal 2009 to be $0.11, assuming an estimated effective tax rate of 36%, and non-GAAP pre-tax earnings per share to be $0.27.

-- Concur expects earnings per share for fiscal 2009 to be $0.49, assuming an estimated effective tax rate of 36%, and non-GAAP pre-tax earnings per share to be $1.12.

-- Concur expects the fiscal 2009 non-GAAP operating margin to be 22% or more for the year as a whole.

-- Concur expects cash flows from operations in fiscal 2009 to be between $64 million and $66 million, and capital expenditures of approximately $19 million.

About Concur

Concur is the world’s leading provider of on-demand Employee Spend Management services. Trusted by thousands of organizations to reach millions of employees, Concur’s award-winning solutions streamline business travel and expense reporting, and improve invoice processing – delivering rapid ROI by helping companies increase efficiency, control employee spend and drive down operational costs. Learn more at 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: adverse economic or market conditions, such as the current economic downturn, which may cause customers and prospects to delay or reduce purchases of our products and services, cause customers to reduce business travel and correspondingly reduce the use of our products and services, reduce the ability of customers, channel partners, vendors and suppliers to fulfill their obligations to us, increase volatility of our stock price and foreign exchange rates, and otherwise adversely affect our operations and financial performance; potential difficulties associated with our realization of the benefits related to our acquisition of Etap-On-Line; potential difficulties associated with our realization of the benefits related to our business relationship with American Express; 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 at 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.

                          Concur Technologies, Inc.
                              Income Statements
                    (In thousands, except per share data)
                                 (Unaudited)

                                       Three Months        Nine Months
                                           Ended              Ended
                                         June 30,            June 30,
                                       -------------       -------------
                                       2009     2008      2009      2008
                                       ----     ----      ----      ----

    Revenues:
      Subscription                  $60,915  $53,240  $176,294  $150,615
      Consulting and other            1,311    1,689     6,487     7,329
                                      -----    -----     -----     -----
    Total revenues                   62,226   54,929   182,781   157,944

    Expenses (1):
      Cost of operations             19,130   17,176    55,942    50,986
      Sales and marketing            17,998   15,451    53,330    42,543
      Systems development and
       programming                    5,822    5,349    18,201    17,162
      General and administrative      6,839    7,937    20,820    23,041
      Amortization of intangible
       assets                         1,542    1,542     4,624     4,655
                                      -----    -----     -----     -----
    Total expenses                   51,331   47,455   152,917   138,387
                                     ------   ------   -------   -------

    Operating income                 10,895    7,474    29,864    19,557

    Other income (expense):
      Interest income                   372      154     1,840       584
      Interest expense                 (123)    (349)     (373)   (1,202)
      Other, net                        175     (111)     (392)     (170)
                                        ---     ----      ----      ----
    Total other income (expense),
     net                                424     (306)    1,075      (788)
                                        ---     ----     -----      ----

    Income before income tax         11,319    7,168    30,939    18,769

    Income tax expense                4,076    2,712    11,138     7,227

                                     ------   ------   -------   -------
    Net income                       $7,243   $4,456   $19,801   $11,542
                                     ======   ======   =======   =======

    Net income per share available
     to common stockholders:
      Basic                           $0.15    $0.10     $0.41     $0.27
      Diluted                          0.14     0.09      0.38      0.24

    Weighted average shares used in
     computing net income per share:
      Basic                          48,560   43,136    48,603    43,554
      Diluted                        51,608   46,969    51,528    47,393



    --------------------------------
    (1) Includes share-based
         compensation as follows:
      Cost of operations               $551     $487    $1,261    $1,171
      Sales and marketing             1,762    1,044     3,609     2,340
      Systems development and
       programming                      481      303     1,287       757
      General and administrative        824      769     2,105     1,693
                                        ---      ---     -----     -----
        Total share-based
         compensation                $3,618   $2,603    $8,262    $5,961
                                     ======   ======    ======    ======



                           Concur Technologies, Inc.
                                 Balance Sheets
                    (In thousands, except per share amounts)
                                  (Unaudited)

                                                   June 30,     September 30,
                                                     2009           2008
                                                     ----           ----


    Assets

    Current assets:
      Cash and cash equivalents                    $128,955       $267,725
      Short-term investments                        114,570              -
      Restricted cash                                 2,481          3,055
      Accounts receivable, net of allowance of
       $4,166 and $5,543                             38,086         38,479
      Prepaid expenses                                3,131          3,160
      Deferred tax assets                            26,405         14,289
      Deferred costs and other current assets        14,011         14,104
                                                     ------         ------
    Total current assets                            327,639        340,812
    Property and equipment, net                      34,536         32,304
    Investments                                      17,057              -
    Deferred costs and other long-term assets        18,454         16,067
    Intangible assets, net                           34,485         39,108
    Deferred tax assets                              25,643         47,257
    Goodwill                                        165,471        165,471
                                                    -------        -------
    Total assets                                   $623,285       $641,019
                                                   ========       ========

    Liabilities and stockholders' equity

    Current liabilities:
      Accounts payable                               $3,326         $4,198
      Customer funding liabilities                   42,760         22,470
      Accrued compensation                           10,035         18,308
      Acquisition-related liabilities                    92          2,036
      Other accrued and current liabilities           8,069          8,442
      Long-term debt, current portion                 1,240          1,505
      Deferred revenues, current portion             32,546         29,572
                                                     ------         ------
    Total current liabilities                        98,068         86,531
    Long-term debt                                      491          1,328
    Deferred rent                                     1,743          2,126
    Deferred revenues                                13,232         12,511
    Non-current tax liabilities                       4,594          3,985
                                                      -----          -----
    Total liabilities                               118,128        106,481
                                                    -------        -------

    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 per share           49             50
        Authorized shares: 60,000
        Shares issued and outstanding:
         48,633 and 50,286
      Additional paid-in capital                    631,930        679,526
      Accumulated deficit                          (125,027)      (144,828)
      Accumulated other comprehensive loss           (1,795)          (210)
                                                     ------           ----
    Total stockholders' equity                      505,157        534,538
                                                    -------        -------
    Total liabilities and stockholders' equity     $623,285       $641,019
                                                   ========       ========



                            Concur Technologies, Inc.
                               Cash Flow Statements
                                  (In thousands)
                                   (Unaudited)

                                           Three Months        Nine Months
                                              Ended               Ended
                                             June 30,            June 30,
                                           ------------        ------------
                                           2009     2008      2009      2008
                                           ----     ----      ----      ----

    Operating activities:
    Net income                            $7,243   $4,456   $19,801   $11,542
    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
      Amortization of intangible
       assets                              1,542    1,542     4,624     4,655
      Depreciation                         4,143    3,793    12,283    11,191
      Allowance for uncollectible
       accounts receivable                  (513)     108    (1,376)    1,840
      Share-based compensation expense     3,618    2,603     8,262     5,961
      Deferred income taxes                3,500    2,505     9,529     6,639
      Changes in operating assets and
       liabilities, net of effects from
       acquisition:
        Accounts receivable                 (710)   1,602     1,661       966
        Prepaid expenses and other
         assets                           (1,202)  (1,153)   (4,228)   (2,655)
        Accounts payable                  (3,521)     (78)     (851)     (522)
        Accrued liabilities                2,543    2,025    (7,848)   (6,371)
        Deferred revenues                  1,414    1,967     3,714     7,900
                                           -----    -----     -----     -----
    Net cash provided by operating
     activities                           18,057   19,370    45,571    41,146
                                          ------   ------    ------    ------
    Investing activities:
      Purchases of investments          (127,582)       -  (127,582)        -
      Increase in customer funding
       liabilities, net of changes in
       restricted cash                    19,656    2,193    20,855     1,465
      Investments in unconsolidated
       affiliate                             (25)       -    (4,045)        -
      Purchases of property and
       equipment                          (3,803)  (4,057)  (14,348)   (9,731)
      Payments for acquisition, net
       of cash acquired                   (1,706)  (1,292)   (1,864) (163,142)
                                          ------   ------    ------  --------
    Net cash used in investing
     activities                         (113,460)  (3,156) (126,984) (171,408)
                                        --------   ------  --------  --------
    Financing activities:
      Payments for issuance of common
       stock                                   -        -    (2,829)        -
      Net proceeds from share-based
       award activity                      1,262    2,584     2,189     5,609
      Proceeds from employee stock
       purchase plan activity                539      263       889       846
      Payments on repurchase of
       common stock                            -  (12,875)  (54,773)  (43,763)
      Net (payments) proceeds from
       borrowings                              -   (4,021)        -    19,189
      Repayments on borrowings and
       capital leases                       (249)    (416)   (1,101)   (1,247)
                                            ----     ----    ------    ------
    Net cash provided by (used in)
     financing activities                  1,552  (14,465)  (55,625)  (19,366)
                                           -----  -------   -------   -------
      Effect of foreign currency
       exchange rate changes on cash
       and cash equivalents                  651      687    (1,732)      699
                                             ---      ---    ------       ---
    Net (decrease) increase in cash
     and cash equivalents                (93,200)   2,436  (138,770) (148,929)
    Cash and cash equivalents at
     beginning of period                 222,155   17,470   267,725   168,835
                                         -------   ------   -------   -------
    Cash and cash equivalents at end
     of period                          $128,955  $19,906  $128,955   $19,906
                                        ========  =======  ========   =======



                           Concur Technologies, Inc.
             Reconciliation of GAAP to Non-GAAP Financial Measures
                (In thousands, except per share and margin data)
                                  (Unaudited)

                                     Three Months Ended   Nine Months Ended
                                          June 30,            June 30,
                                     ------------------   -----------------
                                       2009       2008     2009       2008
                                       ----       ----     ----       ----

    Operating income:
      Operating income              $10,895     $7,474  $29,864    $19,557
      Income from operations as a
       % of total revenue
       (Operating Margin)                18%        14%      16%        12%
      Add back:
        Share-based compensation
         expense                      3,618      2,603    8,262      5,961
        Amortization of intangible
         assets                       1,542      1,542    4,624      4,655
                                      -----      -----    -----      -----
      Non-GAAP operating income     $16,055    $11,619  $42,750    $30,173
                                    =======    =======  =======    =======
        Non-GAAP operating income
         as a % of total revenue
         (Non-GAAP Operating
         Margin)                         26%        21%      23%        19%

    Net income:
      Net income                     $7,243     $4,456  $19,801    $11,542
      Add back:
        Share-based compensation
         expense                      3,618      2,603    8,262      5,961
        Amortization of intangible
         assets                       1,542      1,542    4,624      4,655
        Income tax expense            4,076      2,712   11,138      7,227
                                      -----      -----   ------      -----
      Non-GAAP pre-tax income       $16,479    $11,313  $43,825    $29,385
                                    =======    =======  =======    =======

    Diluted net income per share:
      Diluted net income per share    $0.14      $0.09    $0.38      $0.24
      Add back:
        Share-based compensation
         expense                       0.07       0.06     0.16       0.13
        Amortization of intangible
         assets                        0.03       0.04     0.09       0.10
        Income tax expense             0.08       0.05     0.22       0.15
                                       ----       ----     ----       ----
      Non-GAAP pre-tax diluted
       income per share               $0.32      $0.24    $0.85      $0.62
                                      =====      =====    =====      =====

    Shares used in calculation of
     diluted non-GAAP income per
     share:                          51,608     46,969   51,528     47,393



CONCUR TECHNOLOGIES, INC.

About Concur's Non-GAAP Financial Measures

This 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 Securities and Exchange Commission and not to rely on any single financial measure to evaluate our business.

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. Further, 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. In addition, Concur believes that its non-GAAP financial measures facilitate the comparison of results for current periods and the business outlook for future periods with results of past periods because the measures provide a special focus on the underlying operating performance of the business relative to expectations.

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. Concur’s non-GAAP financial measures exclude share-based compensation, 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(R). 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 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. 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 our 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 intangible assets and income tax expense are 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 expense 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. 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 stock options is reflected in fully-diluted shares outstanding used in calculating both GAAP net income per share and our non-GAAP pre-tax diluted income per share.

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