* Revised 2006 Revenue and EPS Guidance Exceeded * Full Year Revenues Increase 25.2% to EUR503.8 Million * Full Year Pro Forma Diluted EPS of EUR0.81 * Record New Order Bookings of EUR552.8 Million for the Year
MADRID, March 1, 2007 (PRIME NEWSWIRE) -- Telvent GIT, S.A. (Nasdaq:TLVT), the Global RealTime IT Company, today announced unaudited financial results for the fourth quarter and fiscal year ended December 31, 2006.
Revenues for the fourth quarter 2006 were EUR172.7 million, an increase of 31.8% compared to EUR131.0 million for the fourth quarter 2005. Revenues for the fiscal year 2006 totaled EUR503.8 million, an increase of 25.2% (18% organic) over EUR402.4 million reported for fiscal year 2005.
Net income for the fourth quarter 2006 was EUR11.4 million, an increase of 109.5% versus EUR5.4 million reported for the fourth quarter 2005. Diluted EPS for the fourth quarter 2006 were EUR0.39, compared to EUR0.19 in the fourth quarter 2005. For the fiscal year 2006, net income totaled EUR21.8 million, an increase of 52.0%, versus EUR14.4 million reported for fiscal year 2005. Diluted EPS for fiscal year 2006 were EUR0.75 compared to EUR0.49 for fiscal year 2005.
Pro forma net income for the fourth quarter 2006 was EUR9.6 million, an increase of 56.5% versus EUR6.1 million for the fourth quarter of 2005. Pro forma diluted EPS for the fourth quarter 2006 were EUR0.33, versus EUR0.21 for the fourth quarter of 2005. Pro forma net income for the fiscal year 2006 was EUR23.6 million, an increase of 31.0% versus EUR18.0 million for the same period of 2005. Pro forma diluted EPS for fiscal year 2006 were EUR0.81, versus EUR0.62 for fiscal year 2005.
New order bookings (or new contracts signed) in the fourth quarter of 2006 were EUR135.9 million, a 15.5% decrease from EUR160.8 million during the same period in 2005. Bookings for the full year were EUR552.8 million, a 15.1% increase from 2005.
Backlog (representing the portion of signed contracts for which performance is pending) was EUR445.2 million as of December 31, 2006, which reflects 14.4% growth over the EUR388.9 million in backlog at the end of December 2005.
Pipeline, measured as management's estimates of real opportunities within the next 6 to 12 months, is approximately EUR1.5 billion.
Manuel Sanchez, Chairman and Chief Executive Officer, said, "Telvent finished the year strongly, delivering revenue and EPS in excess of our previously raised estimates, and supported by organic growth in new products and new geographies.
"The strong fourth quarter, with its excellent operating performance and cash generation, is consistent with our typical seasonality. In addition, our ability to integrate our acquisitions quickly and efficiently, especially Telvent Farradyne, helped to bolster our performance.
"The positive fundamentals driving our business remain undiminished. With the excellent work of the Telvent team, our healthy backlog and pipeline of new opportunities, we believe we are well-positioned for further growth in 2007."
Gross margin was 21.6% in the fourth quarter of 2006, compared to 18.1% in the fourth quarter of 2005. Gross margin for fiscal 2006 was 22.0%, compared to 20.5% in 2005.
Operating expenses, as a percentage of revenues, were 13.5% in the fourth quarter of 2006, versus 13.0% in the same quarter of 2005. Operating expenses, as a percentage of revenues, were 15.8% in fiscal 2006 compared to 15.3% in 2005.
Operating margin was 8.1% in the fourth quarter of 2006, compared to 5.1% in the fourth quarter of 2005. Operating margin for fiscal 2006 was 6.2% in 2006, up from 5.3% in 2005.
As of December 31, 2006, cash and cash equivalents were EUR77.3 million and total debt (including net EUR18.4 million credit line due from related parties) was EUR30.6 million, resulting in a net cash position of EUR46.7 million. As of December 31, 2005, net cash position was EUR58.1 million.
For fiscal year 2006, cash provided by operating activities was EUR36.7 million compared to EUR2.6 million provided in 2005. Cash used in investing activities in fiscal 2006 amounted to EUR46.0 million versus EUR10.6 million in 2005.
"While we continued our strong investment activities in R&D and acquisitions during the year, we generated enough cash from operations to maintain a solid net cash position at year end and a healthy balance sheet that we expect will allow us to continue growing at a double digit pace," commented Mr. Sanchez.
Segment Discussion
Energy
Revenues for the Energy segment in the fourth quarter 2006 were EUR66.1 million, an increase of 35.0% from EUR49.0 million in the fourth quarter 2005. Gross margin was 25.7% in the fourth quarter 2006, versus 14.7% in the same period in 2005. The most significant contract in this segment during the fourth quarter was the upgrade of PEMEX's data acquisition and control systems (SCADA) and supply of advanced oil and gas management applications for the main Operation Center of the Ku-Maloob-Zaap oil field, PEMEX's biggest oil and gas complex in the Gulf of Mexico. Telvent's technology will enable real-time monitoring by PEMEX of both the oil rig operation process and security.
Revenues for the Energy segment in 2006 were EUR217.2 million, an increase of 22.3% from EUR177.6 million in 2005. Gross margin was 23.4% in 2006, versus 20.3% in 2005.
Traffic
Revenues for the Traffic segment in the fourth quarter 2006 were EUR62.8 million, an increase of 58.1% from EUR39.7 million in the fourth quarter 2005. Gross margin was 17.3% in the fourth quarter 2006, versus 14.6% in the same period in 2005. In the most significant contract during the quarter, Telvent will provide enhancements to the traffic management system for the State of Maryland in the U.S. Telvent will utilize its significant experience in smart transportation systems to develop software for the Maryland State Highway Administration's Intelligent Transportation Systems.
Revenues for the traffic segment in 2006 were EUR156.5 million, an increase of 25.6% from EUR124.6 million in 2005. Gross margin was 17.9% in 2006, versus 16.3% in 2005.
Transport
Revenues for the Transport segment in the fourth quarter 2006 were EUR16.5 million, an increase of 32.8% from EUR12.4 million in the fourth quarter 2005. Gross margin was 11.8% in the fourth quarter 2006, versus 18.9% in the same period in 2005. The most significant contract during the quarter was with Electrans in Spain for the supply and installation of a fixed equipment telecommand system for the "Finca Adoc-Mercado" section of the Alicante light train.
Revenues for the Transport segment in 2006 were EUR43.9 million, an increase of 50.6% from EUR29.2 million in 2005. Gross margin was 21.0% in 2006, versus 20.7% in 2005.
Environment
Revenues for the Environment segment in the fourth quarter 2006 were EUR15.3 million, a decrease of 16.1% from EUR18.2 million in the fourth quarter 2005. Gross margin was 19.7% in the fourth quarter 2006, versus 24.0% in the same period in 2005. The most significant contract in this segment during the quarter was with the Indian Meteorological Department for the supply of Integrated Aviation Meteorological Systems at eight airports in India including Mumbai and Delhi International Airports. The systems consist of several components integrated into one solution and are part of a major upgrade of all Indian aviation meteorological systems.
Revenues for the Environment segment in 2006 were EUR43.5 million, an increase of 20.7% from EUR36.0 million in 2005. Gross margin was 21.7% in 2006, versus 23.3% in 2005.
Other
Revenues for the Other segment (Public Administration, Healthcare IT and Managed Services) in the fourth quarter 2006 were EUR12.0 million, an increase of 2.9% from EUR11.7 million in the fourth quarter 2005. Gross margin was 36.6% in the fourth quarter 2006, versus 33.7% in the same period in 2005. The most significant contract in this segment during the quarter was with the Andalusian Health Service in Spain to develop its Corporate Radiology Information System and its Centralized Medical Imaging Management System.
Revenues for the Other segment in 2006 were EUR42.8 million, an increase of 22.3% from EUR35.0 million in 2005. Gross margin was 30.6% in 2006, versus 34.0% in 2005.
Business Outlook
For fiscal 2007, Telvent expects revenues to grow organically (excluding any contributions from acquisitions) within the range of 12% to 14%, versus fiscal year 2006. Telvent forecasts full-year 2007 pro forma earnings per share will be within a range of EUR0.93 per diluted share to EUR0.97 per diluted share. Pro forma earnings per share were determined by using a weighted average number of shares issued and outstanding in the period of 29,247,100 shares.
Use of Non-GAAP Financial Information
To supplement our consolidated financial statements presented in accordance with U.S. GAAP, we use certain non-GAAP measures, including pro forma net income and EPS. Pro forma net income and EPS are adjusted from GAAP-based results to exclude certain costs and expenses that we believe are not indicative of our core operating results. Pro forma results are one of the primary indicators management uses for evaluating historical results and for planning and forecasting future periods. We believe pro forma results provide consistency in our financial reporting which enhances our investors' understanding of our current financial performance as well as our future prospects. Pro forma results should be viewed in addition to, and not in lieu of, GAAP results.
Pro forma net income excludes the amortization of intangible assets from the purchase price allocations in our acquisitions, stock compensation plan expenses and mark to market hedging, that Telvent believes are not indicative of its core performance or results. A reconciliation between GAAP, pro forma net income and EPS is provided in this release in a table immediately following the condensed consolidated financial statements.
Conference Call Details
Telvent Chairman and CEO, Manuel Sanchez Ortega, and Chief Financial Officer and Head of Investor Relations, Ana Plaza, will conduct a conference call to discuss the fourth quarter and fiscal year 2006 results, which will be simultaneously webcast at 12:00 Noon Eastern Time/6:00 P.M. Madrid Time on Thursday, March 1, 2007.
To access the conference call, participants in North America should dial 800-374-0724 and international participants should dial +1 (706) 634-1387. A live webcast of the conference call will be available on the investor relations zone of Telvent's corporate web site at www.telvent.com. Please visit the web site at least 15 minutes early to register for the teleconference webcast and download any necessary audio software. A replay of the call will be available on the web site approximately two hours after the conference call is completed.
About Telvent
Telvent (Nasdaq:TLVT), the Global RealTime IT Company, specializes in high value-add solutions and services in four industry segments (Energy, Traffic, Transport and Environment). Its technology allows high performing companies to make real-time business decisions using data acquisition, control, and advanced operational applications, providing secure actionable information delivery to the enterprise.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often are proceeded by words such as "believes," "expects," "may," "anticipates," "plans," "intends," "assumes," "will" or similar expressions. Forward-looking statements reflect management's current expectations, as of the date of this press release, and involve certain risks and uncertainties. Telvent's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Some of the factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the "Risk Factors" described in Telvent's Annual Report on Form 20-F for the year ended December 31, 2005, filed with the Securities and Exchange Commission on May 3, 2006, and Telvent's Quarterly Reports on Form 6-K for the quarters ended March 31, 2006, June 30, 2006, and September 30, 2006 filed May 30, 2006, August 30, 2006, and November 27, 2006, respectively.
Unaudited Consolidated Balance Sheets
(In thousands of Euros, except share and per share amounts)
As of
December 31,
-------------------
2006 2005
------- -------
Assets:
Current assets:
Cash and cash equivalents 69,232 80,010
Restricted cash 8,045 3,183
Other short-term investments 386 709
Derivative contracts 2,814 1,194
Accounts receivable (net of allowances
of EUR2,719 as of December 31, 2006
and EUR2,650 as of December 31, 2005) 144,763 92,494
Unbilled revenues 101,317 77,069
Due from related parties 47,958 45,449
Inventory 19,274 11,622
Other taxes receivable 13,258 8,434
Deferred tax assets 3,328 6,043
Other current assets 7,016 1,532
------- -------
Total current assets 417,391 327,739
Deposits and other investments 1,795 1,870
Property, plant and equipment, net 51,215 52,965
Long-term receivables and other assets 11,236 11,317
Deferred tax assets 14,954 14,446
Other intangible assets, net 21,260 10,143
Goodwill 37,416 16,862
------- -------
Total assets 555,267 435,342
======= =======
Liabilities and shareholders' equity:
Accounts payable 216,614 150,246
Billings in excess of costs and
estimated earnings 26,568 20,417
Accrued and other liabilities 10,389 9,418
Income and other taxes payable 26,901 17,835
Deferred tax liabilities 4,983 3,082
Due to related parties 23,512 11,146
Current portion of long-term debt 1,514 8,515
Short-term debt 32,295 23,958
Short-term leasing obligations 2,562 1,948
Derivative contracts 3,269 1,440
------- -------
Total current liabilities 348,607 248,005
Long-term debt less current portion 15,188 15,310
Long-term leasing obligations 1,834 4,035
Other long term liabilities 5,716 7,507
Deferred tax liabilities 6,276 673
Unearned income 131 211
------- -------
Total liabilities 377,752 275,741
------- -------
Minority interest 794 1,604
Commitments and contingencies
Shareholders' equity:
Common stock, EUR3.005 par value,
29,247,100 shares authorized, issued and
outstanding, same class and series 87,889 87,889
Additional paid-in-capital 40,338 40,471
Deferred compensation -- (2,044)
Accumulated other comprehensive income (loss) (2,142) 2,883
Retained earnings 50,636 28,798
------- -------
Total shareholders' equity 176,721 157,997
------- -------
Total liabilities and shareholders' equity 555,267 435,342
======= =======
Unaudited Consolidated Statements of Operations
(In thousands of Euros, except share and per share amounts)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenues 172,674 130,997 503,844 402,369
Cost of revenues 135,447 107,344 393,220 319,712
---------- ---------- ---------- ----------
Gross profit 37,227 23,653 110,624 82,657
---------- ---------- ---------- ----------
General and
administrative 13,025 7,164 39,850 25,286
Sales and marketing 1,395 3,505 13,730 13,023
Research and
development 4,812 4,548 16,464 14,980
Depreciation and
amortization 4,021 1,806 9,562 8,225
---------- ---------- ---------- ----------
Total operating
expenses 23,253 17,023 79,606 61,514
---------- ---------- ---------- ----------
Income from
operations 13,974 6,630 31,018 21,143
Financial income
(expense), net (1,814) (1,629) (6,644) (3,432)
Other income
(expense), net (388) -- (388) --
---------- ---------- ---------- ----------
Total other income
(expense) (2,202) (1,629) (7,032) (3,432)
---------- ---------- ---------- ----------
Income before income
taxes 11,772 5,001 23,986 17,711
Income tax expense
(benefit) (247) (177) 2,081 2,972
---------- ---------- ---------- ----------
Net income before
minority interest 12,019 5,178 21,905 14,739
---------- ---------- ---------- ----------
Loss (profit)
attributable to
minority interests (662) 244 (70) (373)
---------- ---------- ---------- ----------
Net income 11,357 5,422 21,835 14,366
========== ========== ========== ==========
Earnings per share
Basic and diluted
net income per
share 0.39 0.19 0.75 0.49
========== ========== ========== ==========
Weighted average
number of shares
outstanding
Basic and
diluted 29,247,100 29,247,100 29,247,100 29,247,100
========== ========== ========== ==========
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of Euros, except share and per share amounts)
Year Ended December 31,
----------------------
2006 2005
------- -------
Cash flow from operating activities:
Net income before minority interest 21,905 14,737
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 9,986 10,625
Foreign exchange losses (901) 849
Allowance for doubtful accounts 278 485
Deferred income taxes (2,769) (3,066)
Compensation related to the stock
compensation plan 1,910 1,413
Gains on sales of investments 388 --
Change in operating assets and liabilities:
Accounts receivable (44,333) (18,058)
Inventory (8,149) (1,136)
Unbilled revenues (26,743) (36,917)
Related parties receivable and other assets (8,484) 23,796
Billing in excess of cost and estimated
earnings on uncompleted contracts 8,248 3,951
Accounts payable, accrued and other
liabilities, related parties payable 87,443 17,474
Due to temporary joint ventures (2,060) (11,515)
------- -------
Net cash provided by operating activities 36,719 2,638
------- -------
Cash flows from investing activities:
Restricted cash - guaranteed deposit of
long term investments and commercial
transactions (4,862) 4,845
Due from related parties 4,552 (5,018)
Purchase of property, plant & equipment (2,313) (3,894)
Acquisition of subsidiaries, net of cash (43,208) (4,957)
Acquisition (disposal) of investments (153) (1,553)
------- -------
Net cash (used in) investing activities (45,984) (10,577)
------- -------
Cash flows from financing activities:
Proceeds from long-term debt 1,084 9,196
Repayment of long-term debt (11,576) (15,128)
Proceeds from short-term debt 16,095 7,157
Repayment of short-term debt (5,758) (1,947)
Due to related parties (218) 3,099
------- -------
Net cash provided by (used in)
financing activities (373) 2,377
------- -------
Net decrease in cash and
cash equivalents (9,638) (5,562)
Net effect of foreign exchange in cash
and cash equivalents (1,145) 5,057
Cash and cash equivalents at the
beginning of period, excluding
joint ventures 67,796 69,582
Joint venture cash and cash equivalents
at the beginning of period 12,219 10,933
------- -------
Cash and cash equivalents at
the end of period 69,232 80,010
======= =======
Supplemental disclosure of
cash information:
Cash paid for the period:
Income taxes 2,507 1,153
Interest 8,275 5,802
======= =======
Reconciliation between GAAP and Proforma Income and EPS
(In thousands of Euros, except share and per share amounts)
Three months ended Year ended
December 31, December 31,
----------------------- -----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
GAAP basis income
before income taxes 11,772 5,001 23,986 17,711
Adjustments to
Net Income
Amortization of
intangibles 1,707 1,256 3,453 2,756
Stock compensation
plan expenses 477 414 1,910 1,413
Mark to market
derivatives (1,245) (797) (465) 705
---------- ---------- ---------- ----------
Total Adjustments 939 873 4,898 4,874
---------- ---------- ---------- ----------
Adjusted income
before income taxes 12,711 5,874 28,884 22,585
---------- ---------- ---------- ----------
Income tax provision (2,451) 16 (5,192) (4,183)
Profit attributable
to minority
interests (662) 244 (70) (373)
---------- ---------- ---------- ----------
Proforma Net Income 9,598 6,134 23,622 18,029
========== ========== ========== ==========
Earnings per share
Basic and diluted
net income per
share 0.33 0.21 0.81 0.62
========== ========== ========== ==========
Weighted average
number of shares
outstanding
Basic and
diluted 29,247,100 29,247,100 29,247,100 29,247,100
========== ========== ========== ==========