Amdocs Reports Record Quarterly Revenue of $774 Million, Exceeding
Guidance ST. LOUIS, Mo., April 17 /PRNewswire-FirstCall/ -- Amdocs
Limited (NYSE: DOX) today reported that for the quarter ended March
31, 2008, revenue was $774.3 million, an increase of 9.6% from last
year's second quarter. Net income on a non-GAAP basis was $126.6
million, or $0.58 per diluted share (excluding acquisition-related
costs, which include amortization of purchased intangible assets,
and excluding equity-based compensation expense, net of related tax
effects, of $26.8 million), compared to non-GAAP net income of
$114.5 million, or $0.52 per diluted share, in the second quarter
of fiscal 2007 (excluding acquisition-related costs, which include
amortization of purchased intangible assets, in-process research
and development write-off and other, and excluding restructuring
charges and equity-based compensation expense, net of related tax
effects, of $27.3 million). The Company's GAAP net income was $99.9
million, or $0.46 per diluted share, compared to GAAP net income of
$87.2 million, or $0.40 per diluted share, in the second quarter of
fiscal 2007. Free cash flow for the quarter was $63.1 million,
comprised of cash flow from operations of $97.3 million less $34.2
million in net capital expenditures and other. "We are pleased to
report that we have exceeded our plans for this quarter and for the
first half of fiscal 2008," said Dov Baharav, chief executive
officer of Amdocs Management Limited. "Our strong results are
driven by an expansion of our managed services business and by
expanding our implementations of mission-critical systems in both
developed and emerging markets. We recognize that there is
uncertainty in the market as economic conditions have become more
challenging and we believe that our forecasts for the second half
of this fiscal year take this into account. Our customers recognize
that Amdocs systems including our new CES 7.5 offering can help
them to increase revenue and reduce costs; the result for Amdocs is
greater customer commitments and a strong pipeline of potential
business. We continue to see demand for projects supporting new
initiatives as well as from projects focused more on cost savings,
including managed services opportunities, and we look forward to
continued growth in the second half of fiscal 2008." In the second
quarter Amdocs had numerous wins across lines of business and
geographies. The Company continued to show progress in the
operational support systems (OSS) area by winning a strategic deal
with a large North American service provider. In Europe, Amdocs
signed an important CRM deal with a large wireless carrier to help
them improve their customer experience. The Company had several
wins with wireless carriers including a consulting engagement to
help a service provider introduce new, innovative offerings. Amdocs
won several new deals in emerging markets based on the Amdocs
Compact Convergence Suite. Amdocs is continuing to expand and
strengthen its position in the broadband cable and satellite market
with several wins and a recent acquisition. In addition to the wins
noted above, a large broadband cable operator in North America has
chosen Amdocs to provide self-service capabilities including an
eBill presentment and payment solution. The Company also won
service projects related to requirements scoping, which can be the
initial phase of system transformation. Shortly after the end of
the quarter, Amdocs announced the acquisition of Jacobs Rimell in
order to expand its capabilities in OSS for broadband. Financial
Outlook Amdocs expects that revenue for the third quarter of fiscal
2008 will be approximately $790-$805 million. Diluted earnings per
share on a non-GAAP basis for the third quarter are expected to be
$0.59-$0.61, excluding acquisition-related costs and approximately
$0.06-$0.07 per share of equity-based compensation expense, net of
related tax effects. Diluted GAAP EPS is expected to be
approximately $0.45-$0.48, without taking into account potential
purchase price adjustments relating to the acquisition of Jacobs
Rimell in April 2008. Updated fiscal 2008 guidance: Expected
revenue of approximately $3.09-$3.15 billion and diluted non-GAAP
EPS of $2.31-$2.37, excluding acquisition-related costs and
approximately $0.21-$0.24 per share of equity-based compensation
expense, net of related tax effects. Diluted GAAP EPS is expected
to be approximately $1.81-$1.90, without taking into account
potential purchase price adjustments relating to the acquisition of
Jacobs Rimell in April 2008. Amdocs will host a conference call on
April 17, 2008 at 5 p.m. Eastern Time to discuss the Company's
second quarter results. The call will be carried live on the
Internet via http://www.investorcalendar.com/ and the Amdocs
website, http://www.amdocs.com/. 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 income taxes and non-GAAP net income. These non-GAAP
measures exclude the following items: -- amortization of purchased
intangible assets; -- in-process research and development write-off
and other, -- restructuring charges -- 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. Amdocs
believes that non-GAAP financial measures have limitations in that
they do not reflect all of the amounts associated with Amdocs'
results of operations as determined in accordance with GAAP and
that these measures should only be used to evaluate Amdocs' results
of operations in conjunction with the corresponding GAAP measures.
Amdocs believes that the presentation of non-GAAP diluted earnings
per share and other 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 income taxes and non-GAAP net income, when shown
in conjunction with the corresponding GAAP measures, provides
useful information to investors and management regarding financial
and business trends relating to its financial condition and results
of operations as well as the net amount of cash generated by its
business operations after taking into account capital spending
required to maintain or expand the business. For its internal
budgeting process and in monitoring the results of the business,
Amdocs' management uses financial statements that do not include
amortization of purchased intangible assets, in-process research
and development write-off and other, restructuring charges,
equity-based compensation expense, and related tax effects. Amdocs'
management also uses the foregoing non-GAAP financial measures, in
addition to the corresponding GAAP measures, in reviewing the
financial results of Amdocs. In addition, Amdocs believes that
significant groups of investors exclude these non-cash expenses in
reviewing its results and those of its competitors, because the
amounts of the expenses between companies can vary greatly
depending on the assumptions used by an individual company in
determining the amounts of the expenses. Amdocs further believes
that, where the adjustments used in calculating non-GAAP diluted
earnings per share are based on specific, identified amounts that
impact different line items in the Consolidated Statements of
Income (including cost of service, research and development,
selling, general and administrative, operating income, income taxes
and net income), it is useful to investors to understand how these
specific line items in the Consolidated Statements of Income are
affected by these adjustments. Please refer to the Reconciliation
of Selected Financial Metrics from GAAP to Non-GAAP tables below.
About Amdocs Amdocs is the market leader in customer experience
systems innovation, enabling world-leading service providers to
deliver an integrated, innovative and the intentional customer
experience(TM) -- at every point of service. Amdocs provides
solutions that deliver customer experience excellence, combining
the software, service and expertise to help its customers execute
their strategies and achieve service, operational and financial
excellence. A global company with revenue of $2.84 billion in
fiscal 2007, Amdocs has more than 17,000 employees and serves
customers in more than 50 countries around the world. For more
information, visit Amdocs at http://www.amdocs.com/. 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 growth and business results in future
quarters. Although we believe the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be obtained or
that any deviations will not be material. Such statements involve
risks and uncertainties that may cause future results to differ
from those anticipated. These risks include, but are not limited
to, the effects of general economic conditions, Amdocs ability to
grow in the business markets that it serves, Amdocs ability to
successfully integrate acquired businesses, adverse effects of
market competition, rapid technological shifts that may render the
Company's products and services obsolete, potential loss of a major
customer, our ability to develop long-term relationships with our
customers, and risks associated with operating businesses in the
international market. Amdocs may elect to update these
forward-looking statements at some point in the future; however,
the Company specifically disclaims any obligation to do so. These
and other risks are discussed at greater length in the Company's
filings with the Securities and Exchange Commission, including in
our Annual Report on Form 20-F for the fiscal year ended September
30, 2007 filed on December 3, 2007 and on Form 6-K furnished on
February 11, 2008. AMDOCS LIMITED Consolidated Statements of Income
(in thousands, except per share data) Three months ended Six months
ended March 31, March 31, ----------------------
------------------------ 2008 2007 2008 2007 --------- ---------
----------- ----------- Revenue: License $ 32,109 $ 37,526 $ 58,326
$ 69,270 Service 742,172 668,835 1,458,205 1,328,123 ---------
--------- ----------- ----------- 774,281 706,361 1,516,531
1,397,393 Operating expenses: Cost of license 938 1,016 1,712 2,085
Cost of service 493,956 446,860 964,697 881,981 Research and
development 56,088 57,734 112,103 118,202 Selling, general and
administrative 98,666 91,280 196,331 180,450 Amortization of
purchased intangible assets 21,753 18,912 43,506 36,610
Restructuring charges, in-process research and development and
other - 6,761 - 6,761 --------- --------- ----------- -----------
671,401 622,563 1,318,349 1,226,089 --------- --------- -----------
----------- Operating income 102,880 83,798 198,182 171,304
Interest income and other, net 8,822 10,899 17,638 22,638 ---------
--------- ----------- ----------- Income before income taxes
111,702 94,697 215,820 193,942 Income taxes 11,843 7,526 20,297
13,429 --------- --------- ----------- ----------- Net income $
99,859 $ 87,171 $ 195,523 $ 180,513 ========= ========= ===========
=========== Basic earnings per share $ 0.48 $ 0.42 $ 0.94 $ 0.87
========= ========= =========== =========== Diluted earnings per
share (1) $ 0.46 $ 0.40 $ 0.89 $ 0.82 ========= =========
=========== =========== Basic weighted average number of shares
outstanding 206,759 207,293 207,437 206,867 ========= =========
=========== =========== Diluted weighted average number of shares
outstanding 219,786 222,499 220,912 222,608 ========= =========
=========== =========== (1) To reflect the impact of assumed
conversion of the convertible notes, $985 and $1,970, representing
interest expense and amortization of issuance costs, were added
back to net income for the three and six months ended March 31,
2008 and 2007, for the purpose of computing diluted earnings per
share. AMDOCS LIMITED Selected Financial Metrics (in thousands,
except per share data) Three months ended Six months ended March
31, March 31, --------------------- ------------------------ 2008
2007 2008 2007 --------- ---------- ----------- ----------- Revenue
$774,281 $706,361 $1,516,531 $1,397,393 Non-GAAP operating income
138,046 121,437 269,317 241,966 Non-GAAP net income 126,647 114,471
249,937 232,587 Non-GAAP diluted earnings per share (1) $ 0.58 $
0.52 $ 1.14 $ 1.05 Diluted weighted average number of shares
outstanding 219,786 222,499 220,912 222,608 (1) To reflect the
impact of assumed conversion of the convertible notes, $985 and
$1,970, representing interest expense and amortization of issuance
costs, were added back to net income for the three and six months
ended March 31, 2008 and 2007, for the purpose of computing diluted
earnings per share. AMDOCS LIMITED Reconciliation of Selected
Financial Metrics from GAAP to Non-GAAP (in thousands) Three months
ended March 31, 2008
-----------------------------------------------------
Reconciliation items ---------------------------------- GAAP
Amortization Equity based Tax Non- of purchased compensation effect
GAAP intangible expense assets
----------------------------------------------------- Operating
expenses: Cost of license $ 938 $ - $ - $ - $ 938 Cost of service
493,956 - (5,431) - 488,525 Research and development 56,088 -
(1,146) - 54,942 Selling, general and administrative 98,666 -
(6,836) - 91,830 Amortization of purchased intangible assets 21,753
(21,753) - - -
----------------------------------------------------- Total
operating expenses 671,401 (21,753) (13,413) - 636,235
----------------------------------------------------- Operating
income 102,880 21,753 13,413 - 138,046
----------------------------------------------------- Income taxes
11,843 - - 8,378 20,221
----------------------------------------------------- Net income $
99,859 $ 21,753 $ 13,413 $ (8,378) $126,647
----------------------------------------------------- Three months
ended March 31, 2007
-----------------------------------------------------------
Reconciliation items ----------------------------------------
Restructuring charges in-process research Amortization and of
develop- Equity purchased ment based intangible and compensation
Tax Non- GAAP assets other expense effect GAAP
-----------------------------------------------------------
Operating expenses: Cost of license $ 1,016 $ - $ - $ - $ - $ 1,016
Cost of service 446,860 - - (6,005) - 440,855 Research and
development 57,734 - - (1,587) - 56,147 Selling, general and
administ- rative 91,280 - - (4,374) - 86,906 Amortization of
purchased intangible assets 18,912 (18,912) - - - - Restructuring
charges, in-process research and development and other 6,761 -
(6,761) - - -
------------------------------------------------------------- Total
operating expenses 622,563 (18,912) (6,761) (11,966) - 584,924
-------------------------------------------------------------
Operating income 83,798 18,912 6,761 11,966 - 121,437
-------------------------------------------------------------
Income taxes 7,526 - - - 10,339 17,865
------------------------------------------------------------- Net
income $ 87,171 $ 18,912 $ 6,761 $11,966 $(10,339) $114,471
-------------------------------------------------------------
AMDOCS LIMITED Reconciliation of Selected Financial Metrics from
GAAP to Non-GAAP (in thousands) Six months ended March 31, 2008
-----------------------------------------------------
Reconciliation items ---------------------------------- GAAP
Amortization Equity based Tax Non- of purchased compensation effect
GAAP intangible expense assets
------------------------------------------------------ Operating
expenses: Cost of license $ 1,712 $ - $ - $ - $ 1,712 Cost of
service 964,697 - (11,713) - 952,984 Research and development
112,103 - (2,522) - 109,581 Selling, general and administrative
196,331 - (13,394) - 182,937 Amortization of purchased intangible
assets 43,506 (43,506) - - -
------------------------------------------------------- Total
operating expenses 1,318,349 (43,506) (27,629) - 1,247,214
------------------------------------------------------- Operating
income 198,182 43,506 27,629 - 269,317
------------------------------------------------------- Income
taxes 20,297 - - 16,721 37,018
------------------------------------------------------- Net income
$ 195,523 $ 43,506 $ 27,629 $(16,721) $ 249,937
------------------------------------------------------- Six months
ended March 31, 2007
------------------------------------------------------------
Reconciliation items ---------------------------------------
Restructuring charges in-process research Amortization and of
develop- Equity purchased ment based intangible and compensation
Tax Non- GAAP assets other expense effect GAAP
-----------------------------------------------------------
Operating expenses: Cost of license $ 2,085 $ - $ - $ - $ - $ 2,085
Cost of service 881,981 - - (12,327) - 869,654 Research and
development 118,202 - - (3,365) - 114,837 Selling, general and
administ- rative 180,450 - - (11,599) - 168,851 Amortization of
purchased intangible assets 36,610 (36,610) - - - - Restructuring
charges, in-process research and development and other 6,761 -
(6,761) - - -
------------------------------------------------------------ Total
operating expenses 1,226,089 (36,610) (6,761) (27,291) - 1,155,427
------------------------------------------------------------
Operating income 171,304 36,610 6,761 27,291 - 241,966
------------------------------------------------------------ Income
taxes 13,429 - - - 18,588 32,017
------------------------------------------------------------ Net
income $ 180,513 $36,610 $ 6,761 $27,291 $(18,588) $232,587
------------------------------------------------------------ AMDOCS
LIMITED Condensed Consolidated Balance Sheets (in thousands) As of
-------------------------------- March 31, September 30, 2008 2007
-------------- ---------------- ASSETS Current assets Cash, cash
equivalents and short-term interest-bearing investments $1,181,797
$1,179,280 Accounts receivable, net, including unbilled of $41,300
and $43,870 respectively (*) 568,503 473,847 Deferred income taxes
and taxes receivable 108,959 117,623 Prepaid expenses and other
current assets 113,463 98,746 -------------- ---------------- Total
current assets 1,972,722 1,869,496 Equipment, vehicles and
leasehold improvements, net 296,288 283,839 Goodwill and other
intangible assets, net 1,772,346 1,792,588 Other noncurrent assets
(*) 464,047 399,427 -------------- ---------------- Total assets
$4,505,403 $4,345,350 ============== ================ LIABILITIES
AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and
accruals $ 581,437 $ 592,937 Short-term portion of capital lease
obligations and other financing arrangements 2,178 2,055 Deferred
revenue (*) 209,226 174,526 Deferred income taxes and taxes payable
35,882 205,960 -------------- ---------------- Total current
liabilities 828,723 975,478 0.50% Convertible notes 450,000 450,000
Noncurrent liabilities and other 502,986 319,629 Shareholders'
equity 2,723,694 2,600,243 -------------- ---------------- Total
liabilities and shareholders' equity $4,505,403 $4,345,350
============== ================ (*) Certain amounts in prior period
financial statements have been reclassified to conform to the
current period presentation. DATASOURCE: Amdocs Limited CONTACT:
Thomas G. O'Brien, Treasurer and Vice President of Investor
Relations of Amdocs Limited, +1-314-212-8328, Web site:
http://www.amdocs.com/ http://www.investorcalendar.com/
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