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Fourth Quarter Results for Fiscal 2013
Nov 05, 2013
Key highlights:
- Signed definitive agreement to acquire
Celcite Management Solutions, LLC for approximately$129 million in cash, subject to customary closing conditions. Additional consideration may be paid later based on the achievement of certain performance metrics. Closed acquisition of Actix onSeptember 19, 2013 - Fourth fiscal quarter revenue of
$845 million , within the$830-$860 million guidance range. Foreign currency movements had a negligible effect on revenue relative to the third quarter of fiscal 2013 - Fourth fiscal quarter non-GAAP operating income of
$141 million ; non-GAAP operating margin of 16.7%; GAAP operating income of$123 million - Fourth fiscal quarter diluted non-GAAP EPS of
$0.63 , within the$0.60-$0.66 guidance range, excluding amortization of purchased intangible assets and other acquisition related costs and equity-based compensation expense, net of related tax effects - Diluted GAAP EPS of
$0.54 for the fourth fiscal quarter, within the$0.50-$0.58 guidance range - Free cash flow of
$205 million for the fourth fiscal quarter - Twelve-month backlog of
$2.87 billion at the end of the fourth fiscal quarter, up$40 million from the end of the third quarter of fiscal 2013 - Repurchased
$97 million of ordinary shares during the fourth fiscal quarter - The board of directors approved a
$0.13 per share quarterly cash dividend to be paid onJanuary 17, 2014 , and approved an increase in the quarterly cash dividend to$0.155 per share to be paid onApril 17, 2014 , subject to shareholder approval - First quarter fiscal 2014 guidance: Expected revenue of approximately
$845-$875 million which includes the consolidation of Actix for the full quarter but does not incorporate any contribution from Celcite as the deal may not close within the quarter. Expected diluted non-GAAP EPS of approximately$0.72-$0.78 , excluding amortization of purchased intangible assets and other acquisition-related costs and approximately$0.06-$0.07 per share of equity-based compensation expense, net of related tax effects. Expected diluted GAAP EPS of approximately$0.58-$0.66 - Fiscal 2014 guidance: Expected revenue growth of 4-8%, which incorporates an organic growth outlook of roughly 2-5% and an aggregate expected contribution from Actix and Celcite of approximately 2-3%. Expected non-GAAP diluted earnings per share growth of roughly 6-9%, which incorporates modest accretion from the combined impact of Actix and Celcite and the impact of anticipated share repurchase activity over the course of the fiscal year
"We concluded fiscal 2013 with solid fourth quarter results and delivered full year non-GAAP earnings per share growth at the high end of our guidance issued at the start of the year. In
Gelman continued, "We have continued to secure new project awards which broaden and extend our customer relationships. In
Gelman said, "We are continuing to use M&A as a vehicle to execute on our strategy, allocating capital towards companies with leadership positions in new growth markets. Today we signed a definitive agreement to acquire Celcite, a leading provider of network management and self-optimizing network (SON) solutions. Combined with the acquisition of Actix, which closed in the fourth quarter, we are expanding on our existing portfolio of network software to address specific carrier pain points such as network congestion. With these transactions, we expect to leverage
Gelman concluded, "Looking into fiscal 2014, we will continue to closely monitor macro and industry specific risks, including the lingering uncertainties resulting from recent consolidation activity in
Financial Discussion of Fourth Fiscal Quarter Results
Free cash flow was
Twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was
Fiscal Year 2013 Results
For the fiscal year ended
Financial Outlook
Quarterly Cash Dividend Program
On
Conference Call Details
Non-GAAP Financial Measures
This release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including free cash flow, non-GAAP cost of service, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expense, net, non-GAAP income taxes, non-GAAP net income and non-GAAP diluted earnings per share growth. These non-GAAP measures exclude the following items:
- amortization of purchased intangible assets and other acquisition related costs;
- gain on sale of investment;
- equity-based compensation expense; and
- tax effects related to the above.
These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.
For its internal budgeting process and in monitoring the results of the business,
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This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about
AMDOCS LIMITED |
||||||||
Consolidated Statements of Income |
||||||||
(in thousands, except per share data) |
||||||||
Three months ended |
Twelve months ended |
|||||||
September 30, |
September 30, |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Revenue: |
||||||||
License |
$ 22,180 |
$ 23,966 |
$ 81,613 |
$ 120,443 |
||||
Service |
823,045 |
798,162 |
3,264,241 |
3,126,460 |
||||
845,225 |
822,128 |
3,345,854 |
3,246,903 |
|||||
Operating expenses: |
||||||||
Cost of license |
763 |
541 |
2,602 |
3,523 |
||||
Cost of service |
545,235 |
528,998 |
2,164,450 |
2,081,945 |
||||
Research and development |
61,264 |
61,548 |
240,266 |
242,063 |
||||
Selling, general and administrative |
105,035 |
104,814 |
418,574 |
424,671 |
||||
Amortization of purchased intangible assets and other |
10,052 |
12,726 |
38,410 |
52,229 |
||||
722,349 |
708,627 |
2,864,302 |
2,804,431 |
|||||
Operating income |
122,876 |
113,501 |
481,552 |
442,472 |
||||
Interest and other (expense) income, net |
(1,484) |
116 |
(6,075) |
(948) |
||||
Income before income taxes |
121,392 |
113,617 |
475,477 |
441,524 |
||||
Income taxes |
32,438 |
15,596 |
63,038 |
50,153 |
||||
Net income |
$ 88,954 |
$ 98,021 |
$ 412,439 |
$ 391,371 |
||||
Basic earnings per share |
$ 0.55 |
$ 0.60 |
$ 2.56 |
$ 2.33 |
||||
Diluted earnings per share |
$ 0.54 |
$ 0.60 |
$ 2.53 |
$ 2.31 |
||||
Basic weighted average number of shares outstanding |
161,268 |
163,468 |
161,330 |
168,275 |
||||
Diluted weighted average number of shares outstanding |
163,326 |
164,689 |
163,118 |
169,437 |
||||
Cash dividends declared per share |
$ 0.13 |
$ 0.13 |
$ 0.52 |
$ 0.13 |
AMDOCS LIMITED |
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Selected Financial Metrics |
||||||||
(in thousands, except per share data) |
||||||||
Three months ended |
Twelve months ended |
|||||||
September 30, |
September 30, |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Revenue |
$ 845,225 |
$ 822,128 |
$ 3,345,854 |
$ 3,246,903 |
||||
Non-GAAP operating income |
141,367 |
136,673 |
560,302 |
538,130 |
||||
Non-GAAP net income |
103,385 |
115,684 |
476,539 |
459,998 |
||||
Non-GAAP diluted earnings per share |
$ 0.63 |
$ 0.70 |
$ 2.92 |
$ 2.71 |
||||
Diluted weighted average number of shares outstanding |
163,326 |
164,689 |
163,118 |
169,437 |
AMDOCS LIMITED |
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Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP |
|||||
(in thousands) |
|||||
Three months ended September 30, 2013 |
|||||
Reconciliation items |
|||||
GAAP |
Amortization of |
Equity based |
Tax effect |
Non-GAAP |
|
Operating expenses: |
|||||
Cost of license |
$ 763 |
$ - |
$ - |
$ - |
$ 763 |
Cost of service |
545,235 |
- |
(3,844) |
- |
541,391 |
Research and development |
61,264 |
- |
(745) |
- |
60,519 |
Selling, general and administrative |
105,035 |
- |
(3,850) |
- |
101,185 |
Amortization of purchased intangible assets and other |
10,052 |
(10,052) |
- |
- |
- |
Total operating expenses |
722,349 |
(10,052) |
(8,439) |
- |
703,858 |
Operating income |
122,876 |
10,052 |
8,439 |
- |
141,367 |
Income taxes |
32,438 |
- |
- |
4,060 |
36,498 |
Net income |
$ 88,954 |
$ 10,052 |
$ 8,439 |
$ (4,060) |
$ 103,385 |
Three months ended September 30, 2012 |
|||||
Reconciliation items |
|||||
GAAP |
Amortization of |
Equity based |
Tax effect |
Non-GAAP |
|
Operating expenses: |
|||||
Cost of license |
$ 541 |
$ - |
$ - |
$ - |
$ 541 |
Cost of service |
528,998 |
- |
(5,265) |
- |
523,733 |
Research and development |
61,548 |
- |
(1,039) |
- |
60,509 |
Selling, general and administrative |
104,814 |
- |
(4,142) |
- |
100,672 |
Amortization of purchased intangible assets and other |
12,726 |
(12,726) |
- |
- |
- |
Total operating expenses |
708,627 |
(12,726) |
(10,446) |
- |
685,455 |
Operating income |
113,501 |
12,726 |
10,446 |
- |
136,673 |
Income taxes |
15,596 |
- |
- |
5,509 |
21,105 |
Net income |
$ 98,021 |
$ 12,726 |
$ 10,446 |
$ (5,509) |
$ 115,684 |
AMDOCS LIMITED |
||||||||||
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP |
||||||||||
(in thousands) |
||||||||||
Twelve months ended September 30, 2013 |
||||||||||
Reconciliation items |
||||||||||
GAAP |
Amortization of |
Equity based |
Tax effect |
Non-GAAP |
||||||
Operating expenses: |
||||||||||
Cost of license |
$ 2,602 |
$ - |
$ - |
$ - |
$ 2,602 |
|||||
Cost of service |
2,164,450 |
- |
(18,284) |
- |
2,146,166 |
|||||
Research and development |
240,266 |
- |
(3,805) |
- |
236,461 |
|||||
Selling, general and administrative |
418,574 |
- |
(18,251) |
- |
400,323 |
|||||
Amortization of purchased intangible assets and |
38,410 |
(38,410) |
- |
- |
- |
|||||
Total operating expenses |
2,864,302 |
(38,410) |
(40,340) |
- |
2,785,552 |
|||||
Operating income |
481,552 |
38,410 |
40,340 |
- |
560,302 |
|||||
Income taxes |
63,038 |
- |
- |
14,650 |
77,688 |
|||||
Net income |
$ 412,439 |
$ 38,410 |
$ 40,340 |
$ (14,650) |
$ 476,539 |
|||||
Twelve months ended September 30, 2012 |
||||||||||
Reconciliation items |
||||||||||
GAAP |
Amortization of |
Equity based |
Gain on sale of |
Tax effect |
Non-GAAP |
|||||
Operating expenses: |
||||||||||
Cost of license |
$ 3,523 |
$ - |
$ - |
$ - |
$ - |
$ 3,523 |
||||
Cost of service |
2,081,945 |
- |
(22,641) |
- |
- |
2,059,304 |
||||
Research and development |
242,063 |
- |
(4,320) |
- |
- |
237,743 |
||||
Selling, general and administrative |
424,671 |
- |
(16,468) |
- |
- |
408,203 |
||||
Amortization of purchased intangible assets and |
52,229 |
(52,229) |
- |
- |
- |
- |
||||
Total operating expenses |
2,804,431 |
(52,229) |
(43,429) |
- |
- |
2,708,773 |
||||
Operating income |
442,472 |
52,229 |
43,429 |
- |
- |
538,130 |
||||
Interest and other expense, net |
948 |
- |
- |
6,270 |
- |
7,218 |
||||
Income taxes |
50,153 |
- |
- |
- |
20,761 |
70,914 |
||||
Net income |
$ 391,371 |
$ 52,229 |
$ 43,429 |
$ (6,270) |
$ (20,761) |
$ 459,998 |
||||
AMDOCS LIMITED |
||||
Condensed Consolidated Balance Sheets |
||||
(in thousands) |
||||
As of |
||||
September 30, |
September 30, |
|||
ASSETS |
||||
Current assets |
||||
Cash, cash equivalents and short-term interest-bearing investments |
$ 1,326,380 |
$ 1,118,177 |
||
Accounts receivable, net, including unbilled of $110,626 and $130,697, respectively |
678,219 |
687,223 |
||
Deferred income taxes and taxes receivable |
125,880 |
109,282 |
||
Prepaid expenses and other current assets |
151,595 |
126,388 |
||
Total current assets |
2,282,074 |
2,041,070 |
||
Equipment and leasehold improvements, net |
275,544 |
277,907 |
||
Goodwill and other intangible assets, net |
1,975,060 |
1,883,064 |
||
Other noncurrent assets |
393,135 |
443,182 |
||
Total assets |
$ 4,925,813 |
$ 4,645,223 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
Current Liabilities |
||||
Accounts payable, accruals and other |
$ 683,768 |
$ 690,823 |
||
Short-term financing arrangements |
200,000 |
200,000 |
||
Deferred revenue |
151,112 |
145,184 |
||
Deferred income taxes and taxes payable |
39,376 |
29,551 |
||
Total current liabilities |
1,074,256 |
1,065,558 |
||
Other noncurrent liabilities |
576,774 |
546,463 |
||
Shareholders' equity |
3,274,783 |
3,033,202 |
||
Total liabilities and shareholders' equity |
$ 4,925,813 |
$ 4,645,223 |
AMDOCS LIMITED |
||||
Consolidated Statements of Cash Flows |
||||
(in thousands) |
||||
Year ended September 30, |
||||
2013 |
2012 |
|||
Cash Flow from Operating Activities: |
||||
Net income |
$ 412,439 |
$ 391,371 |
||
Reconciliation of net income to net cash provided by operating activities: |
||||
Depreciation and amortization |
140,776 |
159,614 |
||
Equity-based compensation expense |
40,339 |
43,429 |
||
Deferred income taxes |
12,485 |
(4,857) |
||
Excess tax benefit from equity-based compensation |
(366) |
(181) |
||
Gain on sale of investment |
- |
(9,172) |
||
Loss from short-term interest-bearing investments |
2,269 |
3,041 |
||
Net changes in operating assets and liabilities, net of amounts acquired: |
||||
Accounts receivable |
29,999 |
(106,551) |
||
Prepaid expenses and other current assets |
(86) |
1,601 |
||
Other noncurrent assets |
29,384 |
19,734 |
||
Accounts payable, accrued expenses and accrued personnel |
(4,104) |
60,200 |
||
Deferred revenue |
(15,078) |
(55,811) |
||
Income taxes payable |
(5,268) |
14,305 |
||
Other noncurrent liabilities |
27,758 |
(2,654) |
||
Net cash provided by operating activities |
670,547 |
514,069 |
||
Cash Flow from Investing Activities: |
||||
Payments for purchase of equipment and leasehold improvements, net |
(106,724) |
(122,053) |
||
Proceeds from sale of short-term interest-bearing investments |
311,677 |
440,145 |
||
Purchase of short-term interest-bearing investments |
(386,876) |
(337,989) |
||
Net cash paid for acquisitions |
(112,405) |
- |
||
Cash received from sale of investment |
- |
11,172 |
||
Other |
(2,801) |
(8,564) |
||
Net cash used in investing activities |
(297,129) |
(17,289) |
||
Cash Flow from Financing Activities: |
||||
Borrowings under financing arrangements |
200,000 |
200,000 |
||
Payments under financing arrangements |
(200,000) |
(250,000) |
||
Repurchase of shares |
(367,061) |
(484,608) |
||
Proceeds from employee stock options exercised |
213,430 |
86,674 |
||
Payments of dividends |
(84,008) |
- |
||
Payments under capital lease and other |
(745) |
(1,059) |
||
Net cash used in financing activities |
(238,384) |
(448,993) |
||
Net increase in cash and cash equivalents |
135,034 |
47,787 |
||
Cash and cash equivalents at beginning of period |
879,158 |
831,371 |
||
Cash and cash equivalents at end of period |
$ 1,014,192 |
$ 879,158 |
||
AMDOCS LIMITED |
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Supplementary Information |
||||||||||
(in millions) |
||||||||||
Three months ended |
||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||
North America |
$ 608.9 |
$ 619.2 |
$ 601.3 |
$ 593.6 |
$ 570.4 |
|||||
Europe |
101.9 |
98.0 |
99.3 |
99.2 |
113.1 |
|||||
Rest of World |
134.4 |
124.1 |
132.3 |
133.6 |
138.6 |
|||||
Total Revenue |
$ 845.2 |
$ 841.3 |
$ 832.9 |
$ 826.4 |
$ 822.1 |
Three months ended |
||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||
Emerging Markets Revenue |
$ 113.8 |
$ 101.3 |
$ 98.1 |
$ 98.2 |
$ 99.9 |
Three months ended |
|||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||
Managed Services Revenue |
$ 414.0 |
$ 417.1 |
$ 439.8 |
$ 429.8 |
$ 423.7 |
Three months ended |
||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||||||
Customer Experience Systems |
$ 809.3 |
$ 803.2 |
$ 789.3 |
$ 783.8 |
$ 783.1 |
|||||||||
Directory |
35.9 |
38.1 |
43.6 |
42.6 |
39.0 |
|||||||||
Total Revenue |
$ 845.2 |
$ 841.3 |
$ 832.9 |
$ 826.4 |
$ 822.1 |
As of |
|||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||
12-Month Backlog |
$ 2,870 |
$ 2,830 |
$ 2,810 |
$ 2,800 |
$ 2,790 |
(Logo: http://photos.prnewswire.com/prnh/20120722/NY44154LOGO )
SOURCE
Elizabeth W. Grausam McDermon, Vice President, Corporate Strategy and Investor Relations, Amdocs, 314-212-8328, dox_info@amdocs.com