Well, well, well. Up 3% on good volume prior to the earnings announcement, and up 9% after hours.
Looks like a good report, but haven't had a chance to listen to the conf. call.
ScanSoft Announces First Quarter Results for Fiscal Year 2005
Speech Revenue Growth of 48 Percent Leads to Record Income from Operations
PEABODY, Mass., February 7, 2005 - ScanSoft, Inc. (Nasdaq: SSFT), a global leader of speech and imaging solutions, today announced financial results for the first fiscal quarter of 2005 ended December 31, 2004. ScanSoft reported revenue of $60.6 million for the quarter ended December 31, 2004, a 29 percent increase over revenue of $46.9 million for the quarter ended December 31, 2003.
As previously announced in October 2004, ScanSoft's board of directors approved a change in the company's fiscal year-end to September 30, 2004 from December 31, 2004. As this is the first quarter that ScanSoft is reporting earnings results on its new fiscal calendar, please note that all quarterly comparisons correspond to the previous calendar-year quarter.
On a GAAP basis, ScanSoft recognized net income of $3.1 million, or $0.03 per diluted share, in the first quarter of fiscal 2005, compared with net income of $1.3 million, or $0.01 per diluted share, in the quarter ended December 31, 2003.
In addition to using GAAP results in evaluating ScanSoft's business, management also believes it is useful to measure results using a non-GAAP measure of net income (loss), which excludes, as applicable, non-cash taxes, amortization of intangible assets, non-cash stock-based compensation and restructuring charges. See "GAAP to non-GAAP Reconciliation" below for further information on ScanSoft's non-GAAP measure.
Using this non-GAAP measure, ScanSoft recognized non-GAAP net income for the first quarter of fiscal 2005 of $9.1 million, or $0.08 per diluted share, compared with non-GAAP net income of $6.3 million, or $0.06 per diluted share, for the quarter ended December 31, 2003.
"First quarter revenue exceeded our expectations in every speech market - network, embedded and dictation - leading to solid revenue growth and improved leverage across our operations," said Paul Ricci, chairman and CEO of ScanSoft. "Demand for our network speech solutions and services among enterprises was exceptionally strong. International revenues were robust in every segment and our North American channel operations rebounded significantly from the operational issues we experienced in the previous quarter."
Highlights from ScanSoft's first quarter of fiscal 2005 include:
* Significant Achievement in Network Speech - First quarter results were driven by strong revenue and year-over-year growth from ScanSoft's network speech technologies, applications and services in the U.S. and abroad. ScanSoft benefited from new and expanded agreements with partners and customers such as Aeroplan, Avaya, Mercedes, Moneygram, Monster.com and Nortel Networks. ScanSoft continues to experience strong demand for its speech solutions among enterprises and telecommunications carriers.
* Growth in Embedded Speech Solutions - Growing demand for ScanSoft's speech solutions and services among automotive and consumer electronic manufacturers contributed to 72 percent year-over-year revenue growth for ScanSoft's embedded speech solutions. ScanSoft continues to secure design wins for future vehicles, devices and applications, including contracts with customers and partners such as Aisin, Daimler Chrysler, Delphi, Fiat, Melco, Orange France, Telecom Italia and Volkswagen.
* Record Revenue for Dictation Applications - The November launch of Dragon NaturallySpeaking version 8 contributed to a record revenue quarter for ScanSoft's dictation applications. Dragon NaturallySpeaking version 8 has been met with critical acclaim from customers, partners and the media for its unprecedented accuracy rates, leading to record user upgrades as well as an increase in consumer-driven purchasing. ScanSoft saw continued momentum for its dictation applications in the healthcare industry, both through the direct deployment in medical institutions and increased acceptance of the technology by ScanSoft's channel partners and healthcare IT providers such as Cerner and IDX.
* Expanded Speech Portfolio - ScanSoft is delivering on its strategy for a future where natural, human conversations will be the preferred way that people retrieve information and interact with automated systems. During the quarter, ScanSoft announced and closed the acquisition of Rhetorical Systems Ltd., and announced and has subsequently closed the acquisitions of Phonetic Systems and ART Advanced Recognition Technologies. These acquisitions provide ScanSoft with an array of technologies, customers, partners and talented employees that will help ScanSoft fuel its growth and enhance the quality of speech applications throughout the world. The acquisition of Rhetorical closed on December 6, 2004 and contributed revenues of approximately $200,000 in the post-acquisition period through the quarter end.
* Robust Growth in International Markets - ScanSoft's international revenue grew approximately 31 percent year over year. The robust performance derived from automotive design wins for its embedded solutions in Europe and Japan and continued demand for SpeechPAK TALKS and other mobile embedded speech applications. In addition, Dragon NaturallySpeaking and PaperPort performed well internationally, continuing to demonstrate the strength of ScanSoft international channels.
* Continued Strength and Opportunity in Digital Imaging - Results for ScanSoft's digital imaging solutions were driven largely by strong revenue from the launch of PaperPort 10, the newest version of ScanSoft's scanning and document management application for Microsoft Windows.
For the quarter ended December 31, 2004, ScanSoft generated $5.9 million in cash flow from operations and exited the quarter with cash and marketable securities of approximately $46.6 million, compared to $47.7 million for the quarter ended September 30, 2004.
Stay tuned. |
