* Nine-month Revenues of EUR 407 Million, a 23 Percent Increase * Nine-month Pro Forma Diluted EPS of EUR 0.59, An Increase of 23 Percent * 2007 Revenue and EPS Guidance Raised
MADRID, Spain, Nov. 27, 2007 (PRIME NEWSWIRE) -- Telvent (Nasdaq:TLVT), the IT company for a secure and sustainable world, today announced unaudited financial results for the third quarter and nine-month periods ended September 30, 2007.
Revenues for the third quarter 2007 were EUR 128.6 million, impacted by USD/EUR exchange, compared to EUR 129.2 million in the third quarter 2006. Revenues for the first nine months of 2007 were EUR 406.6 million, an increase of 22.8% (20% organic), compared to EUR 331.2 million for the first nine months of 2006.
Net income for the third quarter 2007 was EUR 3.6 million, compared to EUR 3.9 million reported for the third quarter 2006. Diluted EPS for the third quarter 2007 were EUR 0.12, compared to EUR 0.13 in the third quarter 2006. Net income for the first nine months of 2007 was EUR 12.3 million, an increase of 17%, versus EUR 10.5 million reported for first nine months of 2006. Diluted EPS for the first nine months of 2007 were EUR 0.42, compared to EUR 0.36 in the same period in 2006.
Pro forma net income for the third quarter 2007 was EUR 5.8 million, an increase of 5.8%, versus EUR 5.5 million for the third quarter of 2006. Pro forma diluted EPS for the third quarter 2007 were EUR 0.20, versus EUR 0.19 in the third quarter 2006. Pro forma net income for the first nine months of 2007 was EUR 17.3 million, an increase of 23.2%, versus EUR 14 million for the first nine months of 2006. Pro forma diluted EPS for the first nine months of 2007 were EUR 0.59, versus EUR 0.48 for the same period in 2006.
New order bookings (or new contracts signed) in the third quarter of 2007 were EUR 104.3 million, a 44.6% decrease from EUR 188.2 million during the same period in 2006, where EUR 54.4 were included from Farradyne bookings. The accumulated bookings year to date were EUR 446.9 million, a 7.2% increase from the same period in 2006.
Backlog (representing the portion of signed contracts for which performance is pending) was EUR 515.7 million as of September 30, 2007, which reflects 4.6% growth over the EUR 493.1 million in backlog at the end of September 2006.
Pipeline, measured as management's estimates of real opportunities within the next 6 to 12 months, is approximately EUR 1.7 billion.
Manuel Sanchez, Chairman and Chief Executive Officer, said, "The strength and momentum of our business have been reflected in the results for the first nine months in 2007. The increase in the demand from the utilities, and good performance in our Transportation, Public Administration and Global Services segments, helped us to deliver double-digit revenue growth. We continued to execute our strategic plan, which has driven improvements in margins and profits. We also expect to have very good visibility for the rest of fiscal 2007, given our strong bookings and backlog."
He added, "I am particularly delighted with the Matchmind acquisition that took place in October and the successful status of its integration into Telvent, which we believe will round out our solutions' delivery. We are convinced it will be of significant benefit to our clients and improve our positioning in the IT market, given the important synergies between the two companies. In addition, Matchmind brings a wide range of skills and experience in areas that include IT consulting, ERP deploying and IT outsourcing, along with a team of seasoned professionals serving a full range of public and private clients."
"The strength of our first nine-month 2007 results shows that we are executing well our business plan, combined with our pipeline and backlog, and gives us confidence that we may outperform our previously stated financial targets for the year. We are pleased to revise upwards our guidance for organic revenue growth to a range of 17% to 20%, complemented with acquisitions, and pro forma diluted EPS to a range of EUR 0.97 to EUR 1.00."
Gross margin was 23.9% in the third quarter of 2007, showing a major improvement from 21.3% in the third quarter of 2006. Gross margin was 23.1% for the first nine months of 2007, up from 22.2% in the same period a year ago.
Operating expenses, as a percentage of revenues, were 16.8% in the third quarter of 2007, versus 15.5% in the same quarter of 2006. Operating expenses, as a percentage of revenues, were 17.5% for the first nine months of 2007, up from 17.0% in the same period a year ago.
Pro forma operating margin was 8.1% in the third quarter of 2007, compared to 7.2% in the third quarter of 2006. Pro forma operating margin was 6.9% for the first nine months of 2007, up from 6.5% in the same period a year ago.
As of September 30, 2007, cash and cash equivalents were EUR 68.3 million and total debt (including net EUR 57.4 million credit line due to related parties) was EUR 115.7 million, resulting in a net debt position of EUR 47.4 million. As of December 31, 2006, net cash position was EUR 46.7 million.
For the first nine months of 2007, cash used in operating activities was EUR 71.3 million, compared to EUR 51.9 million used in the same period last year. Cash provided by investing activities in the first nine months of 2007 amounted to EUR 20.1 million, versus EUR (11.8) million in the same period last year.
Business Highlights
Energy * Telvent signed a contract with one of Panama's main electricity companies, Elektra Noreste S.A. The company will upgrade Elektra Noreste's electricity management systems, which control distribution lines that supply electricity to more than 300,000 customers in the eastern half of Panama. This project is included in the strategic initiatives that Elektra Noreste is undertaking to upgrade and enhance its services and to ensure more secure, reliable and efficient operation of its electricity distribution grid. Telvent will implement leading-edge systems for data management and control (SCADA), energy distribution operations planning and optimization (DMS) and electric incident on the grid management (ArcFM/Responder). The systems are expected to shorten outage response times and enhance the service quality provided to Elektra's customers. * Telvent, in a consortium with HP Italy, signed a contract with Snam Rete Gas in Italy to upgrade its existing SCADA system to OASyS DNA. The system manages the transmission of approximately 96% of all Natural Gas in Italy. Given the size of the pipeline network, this will be a highly distributed implementation. This project will consolidate Telvent's market penetration in Italy and throughout Mediterranean Europe. * Agreement executed with Emcali, from Colombia, for the supply of a Distributed Management System. The scope of this project includes SCADA, DMS, and AMS/OMS applications which are all performed using Telvent's technology like OASyS in SCADA and ArcFM, and Responder for AM/OMS. This area is one of the greatest challenges of Telvent for the future due to the worldwide planned investments in the utilities sector, for the purpose of optimizing energy management, fostering savings and a sustainable development. * Telvent signed a contract with Fluor Corporation, in the United States, to upgrade to DNA and S2300's. Fluor Corporation is one of the world's largest publicly-owned engineering, procurement, construction, and maintenance services companies. Over the past century, Fluor, through its operating subsidiaries, has become a trusted global business leader by providing exceptional expertise and technical knowledge across every phase of a project. Transportation * The Transit and Road Transport Authority of Panama awarded Telvent a nine-year concession for the construction and management of the Panama City's traffic control infrastructure. The project, which will be financed by Telvent, is valued at more than 14 million euro. This project comprises implementation of the ITACA smart solution for real-time urban mobility management at 130 traffic- light controlled intersections, to be operated from a traffic control center. Telvent will construct the system and then operate it for seven years. By deploying this leading-edge technology, Panama City should achieve enhanced traffic mobility and fluidity on its thoroughfares and increased average vehicle speed which should reduce the time drivers spend behind the wheel on city journeys. * Telvent was awarded a contract by the Florida Department of Transportation, in the United States, to provide telecommunications consulting to FDOT's central office and its District Offices in the planning and development of projects, operations, and maintenance of its telecommunication systems and networks. Also with District 1 of the Florida Department of Transportation in the United States, Telvent signed a contract to provide operations services at its traffic operations center in Ft. Myers, which manages Southwest Florida freeway traffic. Environment * Telvent won a contract with Kahramaa, the Qatari water and electricity utility company. Under the contract, valued at over 5.5 million euros, Telvent will provide consulting services to Kahramaa for a period of four years on ways to enhance its drinking water transmission and distribution network. Through the services and systems to be supplied, Telvent will seek to optimize current distribution network management. The Company will sectorize and study Qatar's current water network, supply equipment required for leak detection, model the network, and design, create and provide related training for leak detection during the four years of the contract's term. The project is expected to allow Kahramaa to achieve management quality levels similar to those of the world's leading water management companies. * Telvent singed a contract with Comtrol Corporation, in Taiwan, to supply an Automated Weather Observation Systems (AWOS) Network to the Republic of China Air Force (ROCAF). The purpose of this project is to install AWOS at 14 airbases in Taiwan, plus a central system to collect, process, display and store all the data from all air bases and other sources, such as satellite, radar, upper-air soundings, and typhoon warning data. There are also 17 transportable AWOS and 1 rapid deployment mobile AWOS system to be delivered. This is a very strategic project for Telvent in the Asian region. Many of the neighboring countries look to Taiwan for technological expertise. It also provides a very good defence contract reference for other military forces in the region. Public Administration * Telvent was awarded a contract with the Andalusian Regional Government, in Spain, for expanding the NISA, Connection Node Security and Access, project. This is the Node through which all the Internet traffic entering/leaving the Andalusian Regional Government's systems travels. Its main objective is to protect the Andalusian Regional Government's Network from outside access, as well as enabling interconnection with other Organisation's networks and controlling external access from these. It comprises two centres with complete redundancy between them. Global Services * Telvent signed an agreement, through its Global Services business unit, with Oracle Iberica S.A. for the joint development of technological solutions applied to businesses, focused on covering an emerging niche in the outsourcing market for new business process outsourcing (BPO).
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. 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's Chief Financial Officer and Head of Investor Relations, Ana Plaza, will conduct a conference call to discuss the third quarter 2007 results, which will be simultaneously webcast at 9:00 A.M. Eastern Standard Time / 3:00 P.M. Madrid Time on Wednesday, November 28, 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 IT company for a secure and sustainable world, specializes in high-value-added products, services and integrated solutions in the Energy, Transport, Environmental and Public Administration industry segments, as well as Global Services. Its innovative technology and proven experience help ensure secure and efficient management of the operating and business processes of the world's leading companies. (www.telvent.com)
The Telvent GIT S.A. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3116
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, 2006, filed with the Securities and Exchange Commission on March 30, 2007, and updated, if applicable, in Telvent's Quarterly Report on Form 6-K for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007, filed with the Securities and Exchange Commission on May 24, 2007, August 30, 2007 and November 27, 2007, respectively.
Unaudited Consolidated Balance Sheets
(In thousands of Euros, except share and per share amounts)
As of As of
Sept. 30, Dec. 31,
2007 2006
(Unaudited) (Audited)
------- -------
Assets:
Current assets:
Cash and cash equivalents 68,313 69,232
Restricted cash -- 8,045
Other short-term investments 494 386
Derivative contracts 3,793 2,814
Accounts receivable (net of allowances of
894 as of September 30, 2007 and 2,719 as
of December 31, 2006) 137,560 144,763
Unbilled revenues 188,214 101,317
Due from related parties 11,445 47,958
Inventory 30,386 19,274
Other taxes receivable 12,022 13,258
Deferred tax assets 2,756 3,692
Other current assets 4,660 7,016
------- -------
Total current assets 459,643 417,755
Deposits and other investments 1,425 1,795
Property, plant and equipment, net of
accumulated depreciation of 51,518 as
of September 30, 2007 and 46,706 as of
December 31, 2006 51,825 51,215
Long-term receivables and other assets 8,769 11,236
Deferred tax assets 15,677 14,954
Other intangible assets, net of accumulated
depreciation of 17,145 as of September 30,
2007 and 14,908 as of December 31, 2006
Goodwill 19,954 21,260
46,322 37,416
------- -------
Total assets 603,615 555,631
======= =======
Liabilities and shareholders' equity:
Accounts payable 209,448 216,614
Billings in excess of costs and estimated
earnings 27,217 26,568
Accrued and other liabilities 15,331 10,389
Income and other taxes payable 20,482 26,901
Deferred tax liabilities 274 5,347
Due to related parties 69,659 23,512
Current portion of long-term debt 3,991 1,514
Short-term debt 42,251 32,295
Short-term leasing obligations 2,530 2,562
Derivative contracts 5,227 3,269
------- -------
Total current liabilities 396,410 348,971
Long-term debt less current portion 12,131 15,188
Long-term leasing obligations 2,243 1,834
Other long term liabilities 5,332 5,716
Deferred tax liabilities 5,879 6,276
Unearned income 869 131
------- -------
Total liabilities 422,864 378,116
------- -------
Unaudited Consolidated Balance Sheets
(In thousands of Euros, except share and per share amounts)
As of As of
September 30, December 31,
2007 2006
(Unaudited) (Audited)
------------ -----------
Minority interest 228 794
Commitments and contingencies
Shareholders' equity:
Common stock, 3.005 par value,
29,247,100 shares authorized, issued
and outstanding, same class and series 87,889 87,889
Additional paid-in-capital 41,638 40,338
Accumulated other comprehensive income (3,130) (2,142)
Retained earnings 54,126 50,636
------- -------
Total shareholders' equity 180,523 176,721
------- -------
Total liabilities and shareholders'
equity 603,615 555,631
======= =======
Unaudited Consolidated Statements of Operations
(In thousands of Euros, except share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Revenues 128,643 129,228 406,602 331,170
Cost of revenues 97,953 101,751 312,857 257,773
---------- ---------- ---------- ----------
Gross profit 30,690 27,477 93,745 73,397
---------- ---------- ---------- ----------
General and
administrative 10,529 10,410 36,946 26,825
Sales and
marketing 4,569 3,659 12,816 12,335
Research and
development 4,105 4,469 13,864 11,652
Depreciation and
amortization 2,360 1,555 7,523 5,541
---------- ---------- ---------- ----------
Total operating
expenses 21,563 20,093 71,149 56,353
---------- ---------- ---------- ----------
Income from
operations 9,127 7,384 22,596 17,044
Financial income 2,229 2,249 8,009 7,924
Financial expense (6,421) (5,959) (17,125) (12,754)
---------- ---------- ---------- ----------
Total other income
(expense) (4,192) (3,710) (9,116) (4,830)
---------- ---------- ---------- ----------
Income before
income taxes 4,935 3,674 13,480 12,214
Income tax expense
(benefit) 1,033 420 1,266 2,328
---------- ---------- ---------- ----------
Net income before
minority interest 3,902 3,254 12,214 9,886
---------- ---------- ---------- ----------
Loss/(profit)
attributable to
minority interests (302) 610 50 592
---------- ---------- ---------- ----------
Net income 3,600 3,864 12,264 10,478
========== ========== ========== ==========
Earnings per share
Basic and diluted
net income per
share 0.12 0.13 0.42 0.36
========== ========== ========== ==========
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)
Nine Months
Ended September 30,
------------------------
2007 2006
-------- --------
Cash flow from operating activities:
Net income 12,264 10,478
Adjustments to reconcile net income to net
cash provided by operating activities 7,263 9,591
Change in operating assets and liabilities,
net of amounts acquired (85,592) (68,531)
Change in operating assets and liabilities
due to temporary joint ventures (5,200) (3,462)
-------- --------
Net cash provided by (used in)
operating activities (71,265) (51,924)
-------- --------
Cash flows from investing activities:
Restricted cash - guaranteed deposit of long
term investments and commercial transactions 8,045 3,183
Due from related parties 22,917 27,494
Acquisition of subsidiaries, net of cash (4,152) (2,398)
Purchase of property, plant & equipment (6,997) (40,719)
Disposal / (Acquisition) of investments 260 684
-------- --------
Net cash provided by (used in)
investing activities 20,073 (11,756)
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt 2,193 2,244
Repayment of long-term debt (4,942) (11,084)
Proceeds from short-term debt 25,712 16,260
Repayment of short-term debt (15,756) (7,395)
Due to related parties 52,824 30,278
Dividend paid (8,774) --
Proceeds (repayment) of long term liabilities (711) (400)
-------- --------
Net cash provided by (used in)
financing activities 50,546 29,903
-------- --------
Net decrease in cash and cash equivalents (646) (33,777)
Net effect of foreign exchange in cash and
cash equivalents (273) (556)
Cash and cash equivalents at the beginning
of period 60,997 67,796
Joint venture cash and cash equivalents at
the beginning of period 8,235 12,214
-------- --------
Cash and cash equivalents at the end
of period 68,313 45,677
======== ========
Supplemental disclosure of cash information:
Cash paid for the period:
Interest 8,820 5,779
Income tax 2,098 1,019
======== ========
Non-cash transactions:
Capital leases 2,546 1,373
Reconciliation between GAAP and Pro forma Income and EPS
(In thousands of Euros, except share and per share amounts)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
------------------------ ------------------------
GAAP basis income
before income
taxes 4,935 3,674 13,480 12,214
Adjustments to
Net Income
Amortization of
intangibles 767 442 2,315 1,746
Stock compensa-
tion plan
expenses 691 478 2,072 1,433
Mark to market
derivatives 1,626 584 2,677 780
---------- ---------- ---------- ----------
Total Adjustments 3,084 1,504 7,064 3,959
---------- ---------- ---------- ----------
Adjusted income
before income
taxes 8,019 5,178 20,544 16,173
---------- ---------- ---------- ----------
Income tax
provision (1,754) (308) (3,274) (2,741)
Profit
attributable
to minority
interests (470) 610 6 592
---------- ---------- ---------- ----------
Proforma Net
Income 5,795 5,480 17,276 14,024
========== ========== ========== ==========
Earnings per share
Basic and
diluted net
income per
share 0.20 0.19 0.59 0.48
========== ========== ========== ==========
Weighted average
number of shares
outstanding
Basic and
diluted 29,247,100 29,247,100 29,247,100 29,247,100
========== ========== ========== ==========
Segment Information
(In thousands of Euros, except share and per share amounts)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
---------------------- -----------------------
Revenues
Energy 52,470 57,840 164,842 141,964
Transportation 50,948 48,179 155,174 121,148
Environment 6,957 9,862 26,454 28,172
Public
Administration 7,226 7,039 29,283 16,329
Global Services 11,042 6,308 30,849 23,557
---------- ---------- ----------- ----------
128,643 129,228 406,602 331,170
---------- ---------- ----------- ----------
Gross Margin
Energy % 23.5 % 20.3 % 21.6 % 21.6
Transportation 22.3 19.3 21.9 20.1
Environment 21.3 21.5 25.8 22.8
Public
Administration 19.0 13.1 16.4 16.2
Global Services 37.3 53.7 40.5 39.3
---------- ---------- ----------- ----------
% 23.9 % 21.3 % 23.1 % 22.2
---------- ---------- ----------- ----------