ScanSoft Announces Second Quarter Results for Fiscal Year 2005
Monday May 9, 4:13 pm ET
Strong Performance Across Speech Drives Revenue Growth of 24% Year Over Year
Improved Operating Efficiency Generates Earnings above Expectations
PEABODY, Mass.--(BUSINESS WIRE)--May 9, 2005--ScanSoft, Inc. (Nasdaq: SSFT - News), a global leader of speech and imaging solutions, today announced financial results for the second fiscal quarter of 2005 ended March 31, 2005. ScanSoft reported revenue of $53.1 million for the quarter ended March 31, 2005, a 24 percent increase over revenue of $42.8 million for the quarter ended March 31, 2004.
On a GAAP basis, ScanSoft recognized a net loss of $1.0 million, or $0.01 per share, in the second quarter of fiscal 2005, compared with a net loss of $2.8 million, or $0.03 per share, in the quarter ended March 31, 2004.
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, non-cash interest expense, 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 second quarter of fiscal 2005 of $3.5 million, or $0.03 per diluted share, compared with non-GAAP net income of $1.9 million, or $0.02 per diluted share, for the quarter ended March 31, 2004.
"Our second quarter performance was driven by strong revenues within dictation and network speech," said Paul Ricci, ScanSoft chairman and CEO. "In addition, our sustained focus on expense control and productivity throughout the business yielded improved operating margins. These results are further indication of the growth, success and benefits afforded by our diverse product families and ongoing technology investments."
Highlights from ScanSoft's second quarter of fiscal 2005 include:
* Achievement in Speech - ScanSoft is delivering on its strategy to enable natural, human conversations as a preferred way that people retrieve information and interact with automated systems. Throughout the quarter, leading organizations across the globe turned to ScanSoft and its portfolio of speech technologies, applications and services to manage and improve customer interactions.
* Continued Adoption within Network Speech - The company signed new or expanded agreements with partners and customers such as Cigna, United and XM Radio. Revenue was particularly strong within ScanSoft's international operations, with new or expanded agreements with customers and partners including Caisse d'Epargne, Volkswagen, Vodafone Australia and Xerox.
* Demand for Dictation Solutions - ScanSoft sustained momentum from the launch of Dragon NaturallySpeaking 8, as awareness of its high level of accuracy and expanded capabilities grew among customers and partners. The healthcare market continued to be a significant source of increased demand, especially within medical institutions, such as St. John's Heath System, and medical transcription organizations such as Cymed.
* Expanded Opportunity for Business PDF - Throughout the quarter, ScanSoft benefited from sales of its PDF products, as a host of organizations selected ScanSoft PDF solutions for their business needs. During the quarter, the company signed new or expanded volume licensing agreements with large organizations and institutions including Paris Metro and Skadden, Arps.
* Enhanced Operational Capabilities- The company improved operating margins through continued focus on budgetary discipline and cost synergies from acquisitions.
For the quarter ended March 31, 2005, ScanSoft generated $9.9 million in cash flow from operations and exited the quarter with cash and marketable securities of approximately $29.7 million.
In a separate announcement, ScanSoft and Nuance Communications, Inc. (Nasdaq: NUAN - News) today announced a definitive agreement whereby ScanSoft will acquire all of the outstanding common stock of Nuance, merging the two organizations into a single company with the expertise and resources required to satisfy the increasing demand for powerful speech solutions. See today's press release titled, ScanSoft and Nuance to Merge, Creating Comprehensive Portfolio of Enterprise Speech Solutions and Expertise. |
