A sigh of relief, I think.
Attention Business Editor And Technology Editor:
Cognos® Reports Record Fourth Quarter and Full Year Results
Web Products Drive 33 Percent Growth in Fourth Quarter Business
Intelligence License Sales
OTTAWA, APRIL 7 /CNW/ -- Cognos Incorporated
(Nasdaq: COGN; TSE: CSN) today announced final results for its fourth quarter and full year ended February 28, 1999. Revenue for the quarter was $86.9 million, a 23 percent increase over the same period last year. Pretax and net income for the fourth quarter include writedowns related to the previously announced acquisitions of Relational Matters and LEX2000 Inc. These writedowns amount to a charge against after-tax income of $3.3 million, representing the valuation of in-process research and development associated with these acquisitions. Excluding the effects of both these items, net income for the fourth quarter would have been $20.5 million and 47 cents per share. This compares with $17.0 million and 38 cents per share, respectively, for the same period last year. Including the effects of both these writedowns, pretax income for the fourth quarter was $21.3 million, compared to pretax income of $20.8 million in the fourth quarter of last year, and net income for the fourth quarter was $17.2 million and 39 cents per share.
Revenue for the fiscal year ended February 28, 1999 was $301.1 million, an increase of 23 percent over revenue of $244.8 million for the previous fiscal year. Excluding the effects of the charges taken during both the fiscal years to write down in-process research and development related to acquisitions, net income for the fiscal year 1999 was $61.8 million and $1.39 per share, compared to net income of $50.6 million and $1.11 per share for the previous fiscal year. Including the effects of these charges in both fiscal years, net income for the fiscal year 1999 was $58.4 million and $1.31 per share. This compares with net income of $32.6 million and 71 cents per share for the same period a year ago. (All figures are stated in U.S. dollars and in accordance with U.S. GAAP.)
Ron Zambonini, President and CEO of Cognos, stated, “This was a strong finish to our fiscal year and we are very pleased with the financial performance of the company. As importantly, we believe we have significantly strengthened the company's leadership position within the business intelligence software market...we have both developed and acquired market-leading products and technologies, we are adding resources to our worldwide sales and service force and we are fortunate to have attracted a large number of significant new customers to our installed base.”
Total revenue from the Company's market leading business intelligence products for the quarter was $70.6 million, an increase of 33 percent from the fourth quarter of last year. For the full year, revenue from these products was $230.9 million, an increase of 31 percent from the previous fiscal year. Zambonini said, “This quarter's sales continued to show that we have a clear market lead in Web and intranet-based business intelligence solutions. Demand for PowerPlay® Server, Impromptu® Web Reports, Impromptu Web Query and DataMerchant™ was strong again this quarter. License sales of these products were 50 percent higher than those in the third quarter of this fiscal year and added over $17 million in license revenue to the quarter. Total license revenue for all business intelligence products exceeded $43 million for the quarter, some 33 percent higher than a year ago.”
Zambonini continued, “The profile of the business this quarter continued to demonstrate that our overall strategies for this business are working effectively as well. Very large enterprises are making substantial commitments to these products. Significant transactions with accounts such as General Electric, Marriott, United Airlines, Consolidated Freightways and Kaiser Aluminum contributed to the quarter's results. These were among over 100 orders in excess of $100,000 in the fourth quarter. As well, we added over 200 resellers of these products to our third party channel organization during the quarter. In total, these partner channels generated one-third of our fourth quarter license sales. Regardless of company size, customers today are starting to look for more complete solutions to their business intelligence needs...solutions that can effectively deliver value to the desktops of all their workers. We believe that Cognos is uniquely positioned to address these needs...from Web to client/server, from managed reporting to ad hoc needs, from tools to complete data mart solutions.”
Revenue from the company's PowerHouse® and Axiant® products during the quarter was $16.3 million, compared to $17.7 million in the fourth quarter of last year. For the year, these products generated $70.2 million in revenue, compared to $68.6 million in the previous fiscal year. Zambonini added, “We believe that this year's results for these products reflect some demand associated with customers' Year 2000 programs. This is a solid indication to us that these customers will continue to use these products through the turn of the century and that this part of our business will continue to benefit our shareholders.”
Operationally and financially, the fourth quarter completed a year of record performance for the company. Zambonini stated, “some 57 percent of this quarter's business came from North America, 35 percent from Europe and 8 percent from Asia/Pacific. Operating margins in the quarter, excluding the effects of writedowns on acquisitions, were over 27 percent, a credit to over 1700 Cognos employees around the world. Operating margins for the full year on the same basis were 23 percent, taxes for the year came in as expected and our balance sheet, with almost $150 million in cash, has never been stronger.”
Zambonini concluded, “Fiscal 1999 was a most successful year for Cognos. We believe that businesses around the world are coming to look at business intelligence as a strategic investment. As such, we are in ‘a race to the enterprise'. Our product plans for the upcoming year will deliver a reliable, complete and integrated platform for business intelligence. We are expanding the capacity of our sales and service organizations to deliver and successfully deploy solutions for our customers. We are looking forward to the race.”
Forward-looking statements in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This news release contains forward-looking statements concerning the future prospects of the Company's current and future products and the Company's positioning in the business intelligence and application development tools marketplace. Investors are cautioned that these forward-looking statements, like all forward-looking statements, are subject to risks and uncertainties that may cause future results to differ materially from those expected. There can be no guarantee that future results will turn out as expected. Such risks include, but are not limited to: the Company's ability to maintain revenue growth at current levels or anticipate a decline in revenue from any of its products; the Company's ability to identify and develop new technologies and to commercialize those technologies into new products; the Company's ability to identify and complete the acquisition of complementary technologies, successful integration of the acquired operations and technologies, and the ability to appropriately value the acquired in-process research and development; the introduction of new products in a timely manner and the Company's ability to generate demand for, and gain market acceptance of, those products in an intensely competitive marketplace; the Company's ability to identify, develop and deliver product enhancements which anticipate market demand and address customer needs; the Company's ability to establish and maintain a competitive advantage; the Company's ability to address issues relating to Year 2000 compliance through testing and, if necessary, modification of its software products, and the ability to obtain assurances from its suppliers with respect to its internal processes and systems; the Company's ability to identify, hire, train, motivate and retain highly qualified personnel; the Company's reliance on third party distribution channels as part of its sales and marketing strategy; the Company's ability to accurately select and implement appropriate business models and strategies; the Company's ability to enforce its intellectual property rights; and other risks detailed under the heading “Certain Factors That May Affect Future Results” in the Company's most recent Annual Report on Form 10-K filed with the United States Securities and Exchange Commission.
Cognos is the leading vendor of enterprise business intelligence solutions. Business Intelligence software makes corporate data easily accessible to everyone in an organization, so they can better coordinate decision-making across the entire enterprise, and improve the performance of the business. Cognos products are available directly from Cognos and through an extensive network of channel partners. The Company also develops, markets and supports software tools for application development.
Founded in 1969, Cognos is a publicly traded company with offices around the world and headquartered in Ottawa, Canada. For more information, visit the Cognos Web site at cognos.com.
Cognos, the Cognos logo, Axiant, DataMerchant, Impromptu, PowerHouse and PowerPlay are trademarks of Cognos Incorporated.
Fourth Quarter and Full-Year Results
All figures are reported in thousands of United States dollars (except per share amounts) and in accordance with U.S. GAAP.
Fourth Quarter Ended
February 28,
1999(A) 1999(B) 1998
(US$000)
Revenue $86,925 $86,925 $70,727
Operating expenses 63,245 63,245 51,172
Acquired in-process technology 3,800 --- ---
Operating income 19,880 23,680 19,555
Income before taxes 21,259 25,059 20,750
Net income 17,181 20,549 17,015
Net income per share
Basic $0.40 $0.47 $0.38
Diluted $0.39 $0.47 $0.38
NOTE(A): Includes the writedown of acquired in-process technology from
Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.
NOTE(B): Excludes the writedown of acquired in-process technology from
Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.
Year Ended February 28,
1999(A) 1998(B) 1999(C) 1998(D)
(US$000)
Revenue $301,125 $244,834 $301,125 $244,834
Operating expenses 231,660 187,934 231,660 187,934
Acquired in-process
technology 3,800 18,000 --- ---
Operating income 65,665 38,900 69,465 56,900
Income before taxes 71,568 43,759 75,368 61,759
Net income 58,434 32,642 61,802 50,642
Net income per share
Basic $1.34 $0.74 $1.41 $1.15
Diluted $1.31 $0.71 $1.39 $1.11
NOTE(A): Includes the writedown of acquired in-process technology from
Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.
NOTE(B): Includes the writedown of acquired in-process technology from
Right Information Systems Limited and Interweave Software, Inc. which occurred in the first and third quarters of fiscal 1998, respectively.
NOTE©: Excludes the writedown of acquired in-process technology from
Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.
NOTE(D): Excludes the writedown of acquired in-process technology from
Right Information Systems Limited and Interweave Software, Inc. which occurred in the first and third quarters of fiscal 1998, respectively.
 0- 04/07/1999
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