Concur Technologies Announces 23% Quarter over Quarter Growth in New Annual Recurring Revenue
REDMOND, Wash., July 28, 2004 - Concur Technologies, Inc. (NASDAQ: CNQR), the world's leading provider of Corporate Expense Management solutions, today reported financial results for its third quarter ended June 30, 2004.
Concur reported net income for the third quarter of fiscal 2004 of $0.7 million, or $0.02 per share, which was at the high end of the range expected by the company. This compares to net income of $0.2 million, or $0.01 per share, for the second quarter of fiscal 2004, and net income of $0.4 million, or $0.01 per share, for the third quarter of fiscal 2003. Excluding the non-cash amortization of intangible assets recorded in the third quarter of fiscal 2004, pro forma net income for the quarter was $0.9 million, or $0.03 per share. Fiscal 2004 third quarter revenues were $14.5 million, compared to $13.2 million for the second quarter of fiscal 2004, and to $14.2 million for the third quarter of fiscal 2003.
"The broad appeal of Concur's subscription service model is the catalyst behind our growth and our positive business outlook. Once again, we have raised our expectations for Annual Recurring Revenue in fiscal 2004. Quarterly subscription revenues topped $10 million for the first time in our company's history, and grew 21% year over year. Just as importantly, our guidance model affords transparency to investors. Investors can approximate subscription revenue for the September 2004 quarter, the December 2004 quarter and the March 2005 quarter," said Steve Singh, chairman and CEO of Concur Technologies.
Singh continued, "Total quarterly revenue, EPS, cash flow from operations, deferred revenue and subscription revenue were all up quarter over quarter and year over year. Our strong financial performance continues to be driven by the rapid return on investment and predictable cost structure our services afford our customers."
Financial Highlights
- Subscription revenue was $10.4 million for the third quarter of fiscal 2004 or 72% of total revenue, compared with $9.7 million for the second quarter of fiscal 2004 or 73% of total revenue, and compared with $8.5 million or 60% of total revenue for the third quarter of fiscal 2003.
- Annual recurring revenue generated during the third quarter of fiscal 2004 was $3.7 million, compared with $3.0 million for the second quarter of fiscal 2004, and compared with $1.5 million for the third quarter of fiscal 2003. Annual recurring revenue is the one-year value of new and incremental subscription contracts signed in the applicable quarter.
- Cash flows provided by operations were $1.7 million for the third quarter of fiscal 2004, compared with $1.2 million for the second quarter of fiscal 2004, and compared with cash flows used in operations of ($0.7) million for the third quarter of fiscal 2003.
- Cash and cash equivalents were $23.9 million at the end of the third quarter of fiscal 2004, compared with $23.1 million at the end of the second quarter of fiscal 2004, and compared with $19.4 million at the end of the third quarter of fiscal 2003.
- Gross margin was 59% for the third quarter of fiscal 2004 compared with 60% for the second quarter of fiscal 2004, and compared with 61% for the third quarter of fiscal 2003.
- Operating margin was 4% for the third quarter of fiscal 2004 compared with 1% for the second quarter of fiscal 2004, and compared with 2% for the third quarter of fiscal 2003.
Business Highlights
- Concur signed contracts with new and existing customers, including Anadarko Petroleum, Booz Allen Hamilton, Campus Crusade for Christ, Claas Omaha LLC, FBL Financial Group Inc., Interpublic Group of Companies Inc., Polycom Inc., Regis Corporation, RMC Industries Corporation, Tennant Company, Universal Orlando, and USI Holdings Corporation.
- Concur announced the availability of Concur Analysis Service. Concur Analysis Service puts an extensive range of reporting capabilities at the fingertips of business decision makers, providing dynamic views into expense data, real-time spending analysis, and the ability to create and publish a variety of reports on-the-fly. As a fully integrated component within Concur Expense Service, Concur Analysis Service requires no additional investment in infrastructure or software.
- Concur continued to see strong contributions from partners including Accenture, ADP, Microsoft Business Solutions, and USBank. Consistent with past performance from ADP in the June quarter, Concur experienced exceptional results from that channel specifically. In addition, Concur's relationship with Accenture continued to build momentum based on the signing of a customer agreement with a Global 100 financial institution.
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.
- Concur expects total revenues to be between $15.0 and $16.0 million for the fourth quarter of fiscal 2004, and between $56.0 million and $57.0 million for fiscal 2004.
- Concur expects its gross margin to be between 56% and 60% for the fourth quarter of fiscal 2004, and between 58% and 60% for the fiscal year.
- Concur expects its operating margin to be between 0% and 9% for the fourth quarter of fiscal 2004, and between 2% and 5% for the fiscal year.
- Concur expects earnings per share of between $0.00 and $0.04 for the fourth quarter of fiscal 2004, and between $0.04 and $0.08 for the fiscal year. Excluding the non-cash amortization of intangible assets expected to be recorded in fiscal 2004, pro forma earnings per share is expected to be between $0.07 and $0.11 for the fiscal year.
- Concur expects annual recurring revenues generated during fiscal 2004 to be between $12.0 million and $14.0 million.
- Concur expects earnings per share of between $0.25 and $0.40 for fiscal 2005. Excluding the non-cash amortization of intangible assets expected to be recorded in fiscal 2005, pro forma earnings per share is expected to be between $0.28 and $0.43 for the year.
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All company or product names are trademarks and/or registered trademarks of their respective owner.
All company or product names are trademarks and/or registered trademarks of their respective owner. This press release contains forward-looking statements that are inherently uncertain. These forward-looking statements, such as the statements made by Mr. Singh and the statements in the Business Outlook section, 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: potential delays in market adoption of our subscription service offerings; potential increases in the rate of attrition of customers of our subscription service offerings; the current general economic environment, including 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, which makes the prediction of future operating results difficult; 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 (http://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.
Investor Contact:
John Adair, Concur Technologies, Inc., 425-497-6439, johna@concur.com
Press Contact:
Robert Nachbar, Barokas Public Relations, 206-344-3140, robert@barokas.com
CONCUR TECHNOLOGIES, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
| Three months ended | Nine months ended | ||||
| June 30, | June 30, | ||||
|
|
2004 |
2003 |
2004 |
2003 |
|
| Revenues: | |||||
| Subscription | $10,365 | $8,546 | $29,239 | $24,727 | |
| Consulting | 2,985 | 3,085 | 8,212 | 11,300 | |
| License | 1,107 | 2,543 | 3,639 | 6,553 | |
| Total revenues |
14,457 |
14,174 |
41,090 |
42,580 |
|
| Expenses: | |||||
| Cost of operations | 5,922 | 5,536 | 16,704 | 17,733 | |
| Sales and marketing | 3,663 | 3,654 | 10,495 | 11,081 | |
| Research and development | 2,177 | 2,627 | 6,661 | 8,008 | |
| General and administrative | 1,814 | 1,750 | 5,145 | 5,078 | |
| Amortization of intangible asset | 285 | 285 | 855 | 855 | |
| Total expenses |
13,861 |
13,852 |
39,860 |
42,755 |
|
| Income (loss) from operations | 596 | 322 | 1,230 | (175) | |
| Other income, net | 58 | 77 | 227 | 132 | |
| Net income (loss) |
$654 |
$399 |
$1,457 |
$(43) |
|
| Net income (loss) per share | |||||
| Basic | $0.02 | $0.01 | $0.04 | $(0.00) | |
| Diluted | $0.02 | $0.01 | $0.04 | $(0.00) | |
| Weighted shares outstanding | |||||
| Basic | 32,753 | 31,433 | 32,488 | 30,998 | |
| Diluted | 36,892 | 35,630 | 36,816 | 30,998 | |
| Pro Forma Results | |||||
| Pro forma net income, which excludes amortization of intangible asset | $939 | $684 | $2,312 | $812 | |
| Pro forma net income per share, which excludes amortization of intangible asset | |||||
| Basic | $0.03 | $0.02 | $0.07 | $0.03 | |
| Diluted | $0.03 | $0.02 | $0.06 | $0.02 | |
| Shares used in calculation of basic and diluted pro forma net income per share | |||||
| Basic | 32,753 | 31,433 | 32,488 | 30,998 | |
| Diluted | 36,892 | 35,630 | 36,816 | 34,600 | |
| The pro forma results presented above are for informational purposes only and are not prepared in accordance with accounting principles generally accepted in the United States. This pro forma information presents our operating results after excluding the non-cash amortization expense of the intangible asset relating to our acquisition of Captura Software, Inc., which totaled $0.3 million and $0.9 million in the three and nine month periods presented, respectively. | |||||
CONCUR TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(Unaudited)
|
|
June 30, 2004 |
September 30, 2003 |
|
| ASSETS | |||
|
Current assets |
|||
| Cash and cash equivalents | $23,950 | $21,607 | |
| Accounts receivable, net | 9,467 | 7,862 | |
| Prepaid expenses and other current assets | 3,093 | 2,663 | |
| Total current assets |
36,510 |
32,132 |
|
| Property and equipment, net | 4,205 | 1,331 | |
| Restricted cash | 550 | 550 | |
| Intangible assets | 7,219 | 8,074 | |
| Other assets | 2,003 |
886 |
|
| Total assets | $50,487 |
$42,973 |
|
| LIABILITIES & STOCKHOLDERS' EQUITY | |||
| Current liabilities | |||
| Accounts payable and accrued liabilities | $4,976 | $4,478 | |
| Current portion of long-term obligations | 440 | 768 | |
| Current portion of deferred revenues | 11,363 | 9,905 | |
| Total current liabilities |
16,779 |
15,151 |
|
| Long-term obligations, net of current | 65 | 199 | |
| Long-term deferred revenues, net of current | 4,349 |
2,015 |
|
| Total liabilities | 21,193 |
17,365 |
|
| Stockholders' equity | |||
| Common stock, $0.001 par value: Authorized - 60,000; issued and outstanding - 32,851 and 32,142 |
239,554 | 237,402 | |
| Accumulated other comprehensive income | 77 | - | |
| Accumulated deficit | (210,337) |
(211,794) |
|
| Total stockholders' equity | 29,294 |
25,608 |
|
| Total liabilities and stockholders' equity | $50,487 |
$42,973 |
|
CONCUR TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| Three months ended | Nine months ended | ||||
| June 30, | June 30, | ||||
|
|
2004 |
2003 |
2004 |
2003 |
|
| Operating activities | |||||
| Net income (loss) | $654 | $399 | $1,457 | $(43) | |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||
| Amortization of intangible asset | 285 | 285 | 855 | 855 | |
| Depreciation | 535 | 601 | 1,344 | 2,372 | |
| Provision for allowance for accounts receivable | 7 | 53 | 431 | 253 | |
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | (1,372) | (1,479) | (2,019) | 829 | |
| Prepaid expenses, deposits, and other assets | (785) | (75) | (1,534) | (605) | |
| Accounts payable | 40 | 46 | 325 | (988) | |
| Accrued liabilities | 43 | 59 | 94 | (805) | |
| Deferred revenues | 2,264 |
(588) |
3,771 |
1,594 |
|
| Net cash provided by (used in) operating activities | 1,671 | (699) | 4,724 | 3,462 | |
| Investing activities | |||||
| Purchases of property and equipment | (1,608) | (277) | (4,209) | (734) | |
| Maturities of marketable securities | - | 1,024 | - | 2,024 | |
| Acquisition of Captura Software Inc., net of cash acquired | - | (41) | - | (551) | |
| Net cash (used in) provided by investing activities | (1,608) | 706 | (4,209) | 739 | |
| Financing activities | |||||
| Proceeds from issuance of common stock from exercise of stock options | 343 | 2,113 | 1,397 | 2,451 | |
| Proceeds from issuance of common stock from Employee Stock Purchase Plan | 755 | 249 | 755 | 249 | |
| Proceeds from borrowings | - | - | 289 | 915 | |
| Payments on borrowings and capital leases | (235) | (381) | (724) | (1,508) | |
| Increase in restricted cash balances | - |
- |
- |
(700) |
|
| Net cash provided by financing activities | 863 | 1,981 | 1,717 | 1,407 | |
| Effect of foreign currency exchange rates on cash and cash equivalents | (29) | - | 111 | - | |
| Net increase in cash and cash equilvalents | 897 | 1,988 | 2,343 | 5,608 | |
| Cash and cash equivalents at beginning of period | 23,053 |
17,366 |
21,607 |
13,746 |
|
| Cash and cash equivalents at end of period | $23,950 | $19,354 | $23,950 | $19,354 | |
All company or product names are trademarks and/or registered trademarks of their respective owners.