REDMOND, Wash., September 14, 2007 - Concur (NASDAQ: CNQR), the world's leading provider of on-demand Employee Spend Management services today announced updated guidance for the fiscal quarter and year ending September 30, 2007, as well as details on the expected timing of the company’s acquisition of privately-held H-G Holdings, Inc. and its subsidiaries, including Gelco Information Network, Inc., the owner of Gelco Expense Management (Gelco). The company now expects the acquisition to close in early October 2007, ahead of its originally anticipated schedule. As a result, Concur is also providing its business outlook for fiscal 2008.
"Demand for our services continues to be strong as customers continue to embrace our integrated travel & expense service. Customer deployments are ahead of schedule and we are tracking well against our investment objectives. With solid execution across the business, we now expect total revenue for the fourth quarter of fiscal 2007 to be approximately $34.5 million, GAAP earnings per share to be approximately $0.04, and non-GAAP earnings per share to be approximately $0.15. In addition, we expect cash flows from operations for fiscal 2007 to be approximately $33.0 million against capital expenditure needs of approximately $13.0 million," said Steve Singh, chairman and CEO of Concur. "We expect to close the Gelco acquisition in early October 2007 and are pleased with the progress we have made across the business on integration plans. With this acquisition, we expect to substantively and immediately grow our distribution capacity and invest to accelerate the integration of Gelco’s payment processing service with our solutions."
Singh continued, "Assuming we close the acquisition on October 1, 2007, we expect our total revenue for the first quarter of fiscal 2008 to be approximately $45.0 million, GAAP earnings per share to be approximately $0.00, and non-GAAP earnings per share to be approximately $0.11. Included within our expected performance are significant acquisition-related costs, approximately $9.0 million per quarter in revenue resulting from the acquisition of Gelco, and an increase of our total outstanding shares of common stock resulting from our proposed public offering to finance the acquisition of Gelco. We expect total revenue for fiscal 2008 to be approximately $198.0 million, GAAP earnings per share to be approximately $0.11, and non-GAAP earnings per share to be approximately $0.68. In addition, we expect continued significant growth in cash flows in fiscal 2008, with cash flows from operations growing to nearly $40.0 million against capital expenditure needs of approximately $14.0 million."
On July 30, 2007, Concur announced that it had agreed to acquire H-G Holdings. Its Gelco subsidiary provides a wide range of expense management services to its clients, including ExpenseLink. Concur expects the acquisition to be accretive to non-GAAP earnings in fiscal 2008.
Under the terms of the acquisition agreement, Concur will pay $160 million in cash for all of the outstanding equity securities of H-G Holdings. The total amount of the consideration is subject to certain adjustments, escrows, and hold back provisions set forth in the acquisition agreement. The company expects to finance the payment of the consideration by borrowing under an extension of its existing bank financing together with the proceeds of a public offering of our common stock. The acquisition is subject to customary closing conditions and regulatory approvals.
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