CIMdata PLM Industry Summary Online Archive
October 26, 2004
Financial News
Embarcadero Technologies Announces Record Total Revenue for the Third Quarter 2005; GAAP Operating Margin Reaches 21% as Income from Operations grows 252% over Prior Year Quarter
Embarcadero Technologies, Inc., a provider of data lifecycle management solutions, today announced results for its third quarter ended September 30, 2005.
Total revenues for the third quarter of 2005 were $14.8 million, a six percent increase as compared to the prior year's third quarter results of $14 million. Net income and diluted net income per share under Generally Accepted Accounting Principles (GAAP) were $2.4 million and $0.09, respectively, for the third quarter of 2005, as compared to GAAP net income and diluted net income per share of $0.9 million and $0.03, respectively, for the third quarter ended September 30, 2004.
Non-GAAP net income and diluted net income per share were $2.5 million and $0.09, respectively, for the third quarter of 2005, as compared to non-GAAP net income and diluted net income per share of $2.0 million and $0.07, respectively, for the third quarter of 2004. Non-GAAP measurements are tax adjusted and exclude amortization of non-cash stock-based compensation, amortization of acquired technology (for the comparable period in 2004). A detailed reconciliation of GAAP to non-GAAP net income is provided in the attached financial statements.
"We're pleased with our financial results for third quarter," said Stephen Wong, chairman and chief executive officer of Embarcadero Technologies, "as the company demonstrated continuing progress in driving growth, higher profitability, and strong cash flow from operations. The company is in the midst of a strong product release cycle, which should help us build further momentum as we close out 2005."
Cash flows from operations were $3.0 million for the three months ended September 30, 2005. Cash, cash equivalents, and short-term investments were $64.7 million at the quarter ended September 30, 2005. The Company purchased $1.1 million of its common stock in the quarter under its stock repurchase program. Total deferred revenues were $15.0 million at September 30, 2005, as compared to $14.7 million at December 31, 2004.
Non-GAAP Financial Measurements
The non-GAAP measurements of operating and net income and net income per share exclude $224,000 of amortization of non-cash stock-based compensation and $10,000 of amortization of acquired technology in the third quarter of 2005 and $556,000 in amortization of acquired technology, $732,000 of amortization of non-cash stock-based compensation in the third quarter of 2004. The non-GAAP results assume a 32% tax provision rate. Embarcadero has previously provided these non-GAAP measurements in press releases reporting operating and net income and earnings per share because we believe these measurements provide a consistent basis for the comparison of data between quarters and are not influenced by changes in certain non-cash or non-recurring charges and are therefore useful to investors. The non-GAAP measurements should not be considered as an alternative to GAAP, and as such, they may not be comparable to information provided by other companies.
Other Corporate Matters
Raj P. Sabhlok, the Company's former Chief Financial Officer, has been promoted to the position of Senior Vice President of Operations. Mr. Sabhlok, has served as the Company's CFO since the Company's initial public offering over five and a half years ago, helped Embarcadero grow from a private company to a leading provider of data lifecycle solutions. Now, as the Company focuses on building comprehensive data management solutions, Mr. Sabhlok will have responsibility to drive the Company's corporate growth strategy. Prior to Embarcadero, Sabhlok spent five years at BMC Software as director of business development. Before joining BMC, Sabhlok held a number of technical, marketing, and sales management positions during his seven years at The Santa Cruz Operation. Sabhlok holds a B.A. in Mathematics from the University of California, Santa Cruz, and a M.B.A. from Duke University.
Michael Shahbazian has been appointed by the Company's Board of Directors to serve as its Senior Vice President and Chief Financial Officer, effective October 20, 2005. Mr. Shahbazian brings over 30 years of diverse high technology experience, including CFO roles in public and private companies. Most recently, he was senior vice president and chief financial officer of Niku Corporation, which was acquired by Computer Associates. He also served as CFO of ANDA Networks, Inventa Technologies, and Walker Interactive. Prior to these roles, Mr. Shahbazian spent nearly 20 years with Amdahl Corporation in a variety of senior finance positions. Mr. Shahbazian holds a B.S. in Business from California State University, Fresno, and a M.B.A. from the University of Southern California, Los Angeles, California. Mr. Shahbazian also received inducement grants of an option to purchase 200,000 shares of the Company's common stock at a price of $6.53 (the closing stock price on October 20, 2005) and 100,000 shares of restricted stock at a purchase price of $0.001 per share. Mr. Shahbazian's option will vest over 4 years. One fourth of the total option amount shall vest on October 20, 2006. The remaining options shall vest pro-rata on a quarterly basis over the next 3 years in accordance with the Company's stock option plan. Mr. Shahbazian's restricted stock will vest over three years as follows: 37,500 shares on October 20, 2006, 18,750 shares on each of April 20, 2007 and October 20, 2007 and 12,500 shares on each of April 20, 2008 and October 20, 2008. The stock options and restricted stock shall become fully vested in the event of a change in control pursuant to a "double trigger" provision or "termination event" (where Mr. Shahbazian is not the CFO of the surviving public company).
Conference Call Information
Embarcadero will discuss its third quarter 2005 results, as well as provide business outlook for the fourth quarter of 2005, on a conference call and simultaneous Web-cast to be held today, October 26, 2005, at 2:00 PM Pacific Time. Those interested in participating may call (913) 981-5519. The Web-cast of this conference call, which will be available live as well as archived, can be accessed by all interested parties at the Embarcadero Technologies Web site in the events calendar under "Investor Relations."
The press release in its entirety, including all pertinent financial statements are found on Embarcadero website.
Become a member of the CIMdata PLM Community to receive your daily PLM news and much more.
Tell us what you think of the CIMdata Newsletter. Send your feedback.
CIMdata is committed to your privacy. Your personal information will never be sold or shared outside of CIMdata without your express permission.