Accelrys beats earnings estimates, but is light on revenue. Orders, the best metric of peformance because of the change in revenue recognition, were flat. Might be a long term buy, but the short term looks murky, at best.
>>SAN DIEGO--(BUSINESS WIRE)--July 29, 2004--Accelrys Inc. (NASDAQ:ACCL - News) today reported results for the first quarter of fiscal 2005, ended June 30, 2004. Revenues in the June 2004 quarter were $14.2 million compared to $19.1 million reported in the June 2003 quarter. Orders booked in the June 2004 quarter were flat, at about $15 million, when compared to the June 2003 quarter, excluding a contract renewal that was booked in the June 2003 quarter but renewed in the March 2004 quarter at the request of a customer. The lower revenue in the June 2004 quarter was attributed to the change in revenue recognition for annual and multi-year licenses, the earlier renewal of the contract noted above, lower consulting and consortia revenues and lower maintenance revenues when compared to the same period in 2003.
As previously reported, the change in revenue recognition to subscription accounting will continue to dramatically affect reported revenue through the next three to four quarters when compared to the equivalent periods in the prior year. During this transition, orders booked in the period are a key indicator of the company's performance.
Consulting and consortia revenues were lower as the company has discontinued performing unprofitable consulting projects and various consortia were closed in the prior period. Having launched the new Nanotech Consortium on July 1, 2004, the company expects revenues from such upcoming consortia to be reported in future periods.
Cash flow from operations was lower in the June 2004 quarter when compared to the June 2003 quarter principally as a result of the payment of accrued expenses related to the spin-off of Pharmacopeia Drug Discovery which was completed on April 30, 2004. Consistent with the introduction of subscription accounting, the balance of deferred revenues was $28.1 million at June 30, 2004 compared to $21.9 million at June 30, 2003.
Cost of revenues were $1.2 million lower in the June 2004 quarter compared to the June 2003 quarter and total operating expenses were $2.1 million lower in 2004 compared to 2003.
A net loss of ($6.2) million or ($.25) per share was reported for the June 2004 quarter compared to a net loss of ($3.8) million or ($.16) per share recognized in the June 2003 quarter. The results for the June 2004 quarter included a net loss from discontinued Pharmacopeia Drug Discovery (PDD) operations of ($1.1) million. The comparable net loss from the discontinued PDD operations in the June 2003 quarter was ($345) thousand. The loss from discontinued operations represented ($.05) per share in 2004 and ($.01) per share in 2003.
With regard to guidance, John Hanlon, CFO, said, "We expect orders to increase modestly in fiscal 2005 when compared to the 12 months ended March 31, 2004. Revenues for fiscal 2005 will be substantially lower as Accelrys customers adopt our new license offering that requires subscription accounting. Deferred revenues, which will be recorded as revenue in future periods, will increase in relation to the decrease in reported revenues. Accelrys has elected to close its year on March 31 rather than December 31. As a result, the three months ended March 31, 2004 will be reported in future periods as a "transition period" per SEC guidelines."
At 5:00 p.m. EDT today, Accelrys will conduct a conference call to discuss its fiscal 2005 first quarter financial results. Mark Emkjer, CEO, will host the call. To participate, please dial 800-299-9086 (1-617-786-2903 outside the United States) and enter the access code, 79632078, approximately 15 minutes before the scheduled start of the call. The conference call will also be accessible live on the Investor Relations section of the Accelrys Web site at www.accelrys.com.
A replay of the conference call will be available online at www.accelrys.com and via telephone by dialing 888-286-8010 (1-617-801-6888 outside the United States) and entering access code 76642531 from 1:00 p.m. EDT July 30, through 11:59 p.m. EDT, August 13. <<
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Cheers, Tuck |
