Wind River Systems Reports Record Fourth Quarter Revenues of $130.2 Million
43% Revenue Growth for Q4, Operating Income Up 103% from Q3; Annual Revenue of $438 million 39% Higher than FY 2000, Net Income Up 44%
ALAMEDA, Calif.--(BUSINESS WIRE)--March 1, 2001-- Wind River Systems, Inc. (Nasdaq:WIND - news), a leading provider of software and services for connected smart devices, reported its fourth quarter fiscal 2001 operating results for the period ended January 31, 2001.
Total revenues for the fourth quarter were $130.2 million, a 43% increase from revenues of $91.2 million reported in the same period of fiscal year 2000 and 13% higher than Q3. Operating income (excluding non-operating charges) was $22.0 million or 16.9% of revenue compared to $10.9 million or 9.5% of revenue in the third fiscal quarter this year, and $5.0 million or 5.4% of revenue for the fourth quarter last year. Net income (excluding non-operating charges) was $15.5 million or $0.19 per diluted share compared to $9.7 million or $0.12 per diluted share in the third fiscal quarter, and $4.5 million or $0.06 per diluted share for the fourth quarter last year. Non-operating charges include costs associated with various acquisitions and the amortization of goodwill, purchased technology, and other intangibles.
``We are quite proud of our results this quarter. This marks the third consecutive quarter of double-digit sequential revenue growth, building on our momentum coming out of Q3,'' said Mike Zellner, vice president and chief financial officer of Wind River. ``Royalties revenue was strong this quarter at $36.0 million, up 39% in a single quarter. Our operating income more than doubled from Q3 to Q4 - excellent progress in our program to drive operating margins back to 20%. We are cash-flow positive - cash, cash equivalents and investments have increased to over $350 million, so our balance sheet continues to be quite strong,'' Zellner added.
Revenues for fiscal year 2001 were $438.0 million, a 39% increase from revenues of $316.1 million reported in the same period of fiscal 2000. Excluding non-operating charges, operating income was $42.8 million compared to $34.9 million for the corresponding period in fiscal 2000. Excluding non-operating charges, net income was $40.7 million (44% higher than net income of $28.2 million for fiscal year 2000) or $0.52 per diluted share, compared to $0.42 per diluted share in fiscal 2000.
For the fourth quarter of fiscal year 2001, on an as-reported basis, including $31.1 million of amortization of goodwill, purchased technology and other intangibles and $1.4 million of acquisition related charges, net loss was $10.6 million or a loss of $0.14 per diluted share compared to a net loss of $1.1 million or $0.02 per diluted share for the same period in the prior year.
For the fiscal year 2001, on an as-reported basis, including $95.9 million of amortization of goodwill, purchased technology and other intangibles and $33.3 million of acquisition related charges, net loss was $76.4 million or a loss of $1.05 per diluted share compared to net income of $10.4 million or $0.15 per diluted share for the same period in the prior year.
Q4 FY 2001 Highlights
During the quarter, Wind River announced the full availability of VxWorks® AE and the associated Tornado® development tools, collectively known as the Tornado AE platform. Tornado AE implements an innovative new computing paradigm for developing embedded applications that require the highest levels of reliability, availability, and serviceability. Wind River also introduced the latest addition to its expanding line of ``solution-level'' products: Tornado for Home Gateways, an integrated software platform and development environment for home and small office gateway equipment. This offering is suitable for developing anything from a simple DSL or cable modem to a robust Internet access-sharing device with home networking capabilities.
Wind River deepened its strong relationships with several strategic partners in Q4, including Motorola and IBM. With Motorola, Wind River established a new Center of Excellence to facilitate the development, optimization, marketing, and distribution of Wind River's premier embedded software products across Motorola's line of PowerPC(TM) microprocessors. Motorola also joined Wind River's value-added reseller program by integrating Motorola's MCT5100 M-DTV(TM) module and Wind River's VxWorks real-time operating system to allow OEMs to develop digital TV products and set top box products with improved time to market. Wind River and Motorola's C-Port(TM) Corporation announced plans to develop a reference design switch support package to integrate the C-Port C-5(TM) Network Processor with Wind River's Tornado for Managed Switches 2.0 product line.
Wind River is also working with IBM to offer a comprehensive hardware and software solution for advanced routing and switching applications by integrating Tornado for Managed Switches 2.0 with IBM's PowerNP network processors.
``I think our accomplishments this quarter and this fiscal year speak for themselves,'' said Tom St. Dennis, president and CEO of Wind River. ``We are delivering on our commitments to customers, which in turn is generating record bookings for Wind River. As embedded software becomes a strategic component of our customers' businesses, as opposed to a tactical issue, we are seeing more and more customers who are finding it vital to leverage Wind River's products and services. We are helping them to get to market faster, while simultaneously reducing their development risks. Wind River has never been in a stronger position, and our customers are validating our investments in technology with their endorsements and purchases.''
Q1 and FY 2002 Outlook
The following statements are forward-looking and actual results may differ materially. Please consult page four of this press release for a description of certain risk factors and Wind River's SEC reports for a complete description of risks. In response to SEC Regulation FD (Fair Disclosure), the Company plans to disseminate its quarterly business outlook, based on current expectations, in conjunction with its quarterly earnings releases and conference calls. The Company does not plan to provide any further material guidance on analysts' financial models beyond the information provided in its quarterly earnings release and conference call.
Wind River continues to expect revenue to grow 30% in fiscal year 2002 (FY 2002), to reach approximately $570 million. For the first time, Wind River is now providing more details regarding the FY 2002 outlook:
-- Operating Margin is expected to expand by 40% in FY 2002 for the
full year, although the margin expansion will vary in any
particular quarter. Given the operating margin result of 9.8% for
FY 2001, Wind River expects operating margin to increase to
approximately 14% for the full fiscal year 2002.
-- Other income is expected to contribute approximately $2.5 million
in revenue per quarter in FY 2002.
-- Provision for income taxes is expected to be approximately 37.5%
of pre-tax income in FY 2002.
-- The fully-diluted share count is currently expected to grow by
approximately one million shares per quarter.
-- Wind River is now introducing an earnings goal for the upcoming
fiscal year. Fully-diluted earnings per share (excluding
non-operating charges) are expected to be in the range of $0.68 to
$0.70 for FY 2002.
-- Revenue by quarter is expected to follow the typical distribution
throughout the year. As such, Wind River is introducing a revenue
goal of $116 million for Q1 FY 2002, which is consistent with
historical Wind River revenue trends at slightly more than 20% of
the annual goal.
-- Earnings for Q1 FY 02 are expected to be approximately $0.06 per
share (excluding non-operating charges) with a fully-diluted share
count of approximately 81 million shares, for Q1.
-- Days Sales Outstanding (DSO) may increase from 82 days in Q4 FY
2001 to approximately 80 to 95 days in Q1 FY 2002.
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