— Cognos 8 BI delivers $43.5 million in license revenue —
Ottawa, ON & Burlington, MA, July 21, 2006 – Cognos Incorporated (Nasdaq: COGN; TSX: CSN – all figures in U.S. dollars), the world leader in business intelligence (BI) and performance management solutions, today announced financial results for its first quarter of fiscal year 2007, ended May 31, 2006.
Revenue for the first quarter was $217.0 million, compared with $200.1 million for the same period last fiscal year. License revenue was $73.7 million, compared with $71.1 million in the first quarter of last fiscal year.
Net income on a U.S. GAAP basis in the quarter was $14.5 million or $0.16 per diluted share, compared with $20.4 million or $0.22 per diluted share for the same period last fiscal year. Net income on a non-GAAP basis (excluding amortization of acquisition-related intangible assets and stock-based compensation expense) for the quarter was $19.8 million or $0.22 per diluted share, compared with $25.0 million or $0.27 per diluted share for the same period last fiscal year.
First quarter non-GAAP results differ from results measured under U.S. GAAP as they exclude $1.1 million and $4.1 million of amortization of acquisition-related intangible assets and stock-based compensation expense, net of taxes, respectively. A reconciliation of U.S. GAAP to non-GAAP results is included at the end of this press release.
“I am pleased with our first quarter results,” said Cognos president and chief executive officer Rob Ashe. “Cognos 8 delivered another strong quarter. It has now achieved more than $100 million in cumulative revenue in just over two quarters of general availability.”
“We are pleased to have the recent SEC staff review completed, eliminating the associated uncertainty for our customers and shareholders,” continued Mr. Ashe. “I am confident in our business prospects and strategy moving forward.”
The company’s outlook for the second quarter and full fiscal year 2007 assumes no significant changes in the economy, a business intelligence and performance management market growth rate of approximately 7 percent, a U.S. GAAP tax rate of 24% and a Canadian dollar of $0.88 U.S. and a Euro of $1.27 U.S. for the year. This outlook includes incremental costs associated with the company’s efforts to complete the SEC review of $0.02 in both the second quarter and full fiscal year.
Management offers the following outlook for the second quarter of fiscal year 2007 ending August 31, 2006:
Expected non-GAAP diluted earnings per share for the quarter ending August 31, 2006 exclude approximately $1.1 million of amortization of acquisition-related intangible assets and approximately $4.9 million of stock-based compensation expense, which is an increase of approximately $0.06 per share, after the effect of taxes.
Management offers the following outlook for the full fiscal year 2007 ending February 28, 2007:
Expected non-GAAP diluted earnings per share for fiscal year 2007 ending February 28, 2007, exclude approximately $4.5 million of amortization of acquisition-related intangible assets and approximately $21.0 million of stock-based compensation expense, which is an increase of approximately $0.28 per share, after the effect of taxes.
Cognos management will host a Webcast and conference call to present results for the first quarter of fiscal year 2007 and business outlook at 8:15 a.m. Eastern Time, today, July 21, 2006.
The conference call may be accessed at 800-366-8058 for North America and 416-640-1907 outside North America. The Webcast and archive may be accessed at http://www.cognos.com/company/investor/events/fy07q1. A replay of the conference call may be accessed at 416-640-1917 until Friday, August 4, 2006 at 11:59 p.m. Eastern Time. The passcode for the replay is 21197580#.
Certain statements made in this press release that are not based on historical information (including those in the section entitled “Business Outlook”) are forward-looking statements which are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and Section 138.4(9) of the Ontario Securities Act. Such forward-looking statements relate to, among other things, the company’s expectations with respect to revenue and earnings per share (on both a GAAP and non-GAAP basis) for the second quarter of fiscal year 2007 and the full fiscal year 2007; the assumptions set out in the “Business Outlook” including those relating to the economy, the growth rate for the business intelligence and performance management markets, U.S. GAAP tax rate, the exchange rate for the Canadian dollar and Euro in U.S. currency, the impact of amortization of acquisition-related intangible assets and stock-based compensation on earnings per share; the impact of incremental costs associated with the company’s efforts to complete the SEC review in both the second quarter and full fiscal year; and other matters. Certain assumptions were applied in making the forward-looking statements, such as the business outlook, and material assumptions are set out above in the section entitled “Business Outlook”.
These forward-looking statements are neither promises nor guarantees, but involve risks, factors and uncertainties that may cause actual results to differ materially from those in the forward-looking statements. Factors that may cause such differences include, but are not limited to: the impact on Cognos’ business of the delay in filing its annual and quarterly reports; Cognos’ transition to Cognos 8 and customer acceptance and implementation of Cognos 8; a continuing increase in the number of larger customer transactions and the related lengthening of sales cycles and challenges in executing on these sales opportunities; the company’s ability to identify, hire, train, motivate, and retain highly qualified management/other key personnel (including sales personnel) and its ability to manage changes and transitions in management/other key personnel; the incursion of enterprise resource planning and other major software companies into the BI market; continued BI and software market consolidation and other competitive changes in the BI and software market; currency fluctuations; the impact of the implementation of SFAS No. 123R; the company’s ability to develop, introduce and implement new products as well as enhancements or improvements for existing products that respond to customer/product requirements and rapid technological change; the impact of global economic conditions on the company’s business; the company’s ability to maintain or accurately forecast revenue or to anticipate and accurately forecast a decline in revenue from any of its products or services; the company’s ability to compete in an intensely competitive market; new product introductions and enhancements by competitors; the company’s ability to select and implement appropriate business models, plans and strategies and to execute on them; fluctuations in the company’s quarterly and annual operating results; fluctuations in the company’s tax exposure; the impact of natural disasters on the overall economic condition of North America; unauthorized use or misappropriation of the company’s intellectual property; claims by third parties that the company’s software infringes their intellectual property; the risks inherent in international operations, such as the impact of the laws, regulations, rules and pronouncements of foreign jurisdictions and their interpretation by foreign courts, tribunals, regulatory and similar bodies; the company’s ability to identify, pursue, and complete acquisitions with desired business results; the existence of regulatory barriers to integration; the impact of the implementation of changes in the application of accounting pronouncements and interpretations; as well as the risk factors discussed in the company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, filed with the United States Securities and Exchange Commission (“SEC”) and the Canadian Securities Administrators (“CSA”), as well as other periodic reports filed with the SEC and the CSA. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The company disclaims any obligation to publicly update or revise any such statement to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.
Cognos, the world leader in business intelligence and performance management solutions, provides world-class enterprise planning and BI software and services to help companies plan, understand and manage financial and operational performance.
Cognos brings together technology, analytical applications, best practices, and a broad network of partners to give customers a complete performance system. The Cognos performance system is an open and adaptive solution that leverages an organization’s ERP, packaged applications, and database investments. It gives customers the ability to answer the questions -- How are we doing? Why are we on or off track? What should we do about it? – and enables them to understand and monitor current performance while planning future business strategies.
Cognos serves more than 23,000 customers in more than 135 countries, and its top 100 enterprise customers consistently outperform market indexes. Cognos performance management solutions and services are also available from more than 3,000 worldwide partners and resellers. For more information, visit the Cognos Web site at http://www.cognos.com.
Cognos management utilizes certain non-GAAP measures to evaluate its performance, including the impact of business acquisitions on Cognos’ results of operations. In addition, Cognos discloses non-GAAP measures of net income and earnings per share to investors and securities analysts to enable them to, among other things, more accurately compare our performance against their financial models and similar companies in its industry many of which present similar non-GAAP measures. Non-GAAP measures should not be considered an alternative to measurements required by US GAAP, such as net income and earnings per share and should not be considered measures of our liquidity. Non-GAAP measures may not be comparable to non-GAAP information provided by other issuers in its industry or in other industries.
Cognos, the Cognos logo and Cognos 8 are trademarks or registered trademarks of Cognos Incorporated in the United States and/or other countries. All other names are trademarks or registered trademarks of their respective companies.
Cognos management utilizes certain non-GAAP measures to evaluate its performance, including the impact of business acquisitions on Cognos’ results of operations. In addition, Cognos discloses non-GAAP measures of net income and earnings per share to investors and securities analysts to enable them to, among other things, more accurately compare our performance against their financial models and similar companies in our industry many of which present similar non-GAAP measures. Non-GAAP measures should not be considered an alternative to measurements required by US GAAP, such as net income and earnings per share and should not be considered measures of our liquidity. Non-GAAP measures may not be comparable to non-GAAP information provided by other issuers in its industry or in other industries.
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