* Pro Forma Revenues Increase 16.9% to EUR 136.1 Million
* Increase in Pro Forma Income from Operations of 26.8%
* Pro Forma EPS of EUR 0.25, an increase of 14.5%
* New Order Bookings of EUR 168.8 Million
MADRID, Spain, May 22, 2008 (PRIME NEWSWIRE) -- Telvent GIT, S.A. (Nasdaq:TLVT), the IT company for a sustainable and secure world, today announced unaudited financial results for the first quarter ended March 31, 2008.
Pro forma revenues for the first quarter 2008 were EUR 136.1 million, reflecting an increase of 16.9% from EUR 116.5 million pro forma revenues in the first quarter 2007.
Pro forma gross margin was 26.6% in the first quarter of 2008 compared to 26.5% in the first quarter of 2007.
Pro forma operating margin for the first quarter 2008 was 7.9%, showing an improvement of 60 basis points, from 7.3% in the first quarter 2007. Pro forma income from operations has increased by 26.8% quarter-over-quarter.
Pro forma net income for the first quarter 2008 was EUR 7.2 million, 14.5% above the EUR 6.3 million reported in the first quarter 2007. Pro forma EPS for the first quarter 2008 was EUR 0.25 compared to EUR 0.21 in the first quarter 2007.
New order bookings (or new contracts signed) during the first quarter of 2008 totaled EUR 168.8 million, representing a 6.6% decrease from EUR 180.7 million recorded in the same period of 2007.
Backlog (representing the portion of signed contracts for which performance is pending) was EUR 575.1 million as of March 31, 2008, reflecting an 11.2% growth over the EUR 517.1 million in backlog at the end of March 2007. In addition, soft backlog (representing pending performance on multi-year frame contracts for which there is no contractual obligation on the part of the client to fulfill the full contract amount) was EUR 146.3 million as of March 31, 2008.
Pipeline, measured as management's estimates of real opportunities for the following six to twelve months, is approximately EUR 2.5 billion.
As of March 31, 2008, cash and cash equivalents were EUR 70.8 million and total debt (including net EUR 20.6 million credit line due to related parties) amounted to EUR 113.7 million, resulting in a net debt position of EUR 42.9 million. As of December 31, 2007, the Company's net debt position was EUR 0.5 million.
For the first three months of 2008, cash used in operating activities was EUR 39.2 million compared to EUR 48.2 million used in the same period last year. Cash provided by investing activities in the first three months of 2008 amounted to EUR 41.8 million compared to EUR 29.6 million provided in the same period of 2007.
Manuel Sanchez, Chairman and Chief Executive Officer, said, "I am satisfied having started another year with good results. This top-line growth has been propelled by the business increase in most of our segments, as we executed our strategy of delivering IT products and services for a sustainable and secure world. Our solid bookings and backlog, along with the strong pipeline, also give us confidence for the rest of 2008."
"I am particularly delighted with the improvement carried out in operating margins. We have shown our ability to build a more efficient company; at the same time we have delivered double-digit revenue growth during the last fifteen quarters. During this quarter we have also started to see the positive benefits derived from our successful integration of the Matchmind acquisition, that we expect will put Telvent in a leadership position in the IT services market," he concluded.
Business Highlights
Energy
During May of 2008, Telvent and DMS Group have signed a joint venture agreement under which Telvent and DMS Group are establishing a limited liability company in Serbia called Telvent DMS LLC. This new joint venture will allow Telvent to have a direct input in DMS technology research and development plans, thereby aligning the product direction to further support Telvent's Smart Grid initiative, bringing energy efficiency to the electric utility market.
Telvent's capital contribution to Telvent DMS will be used by Telvent DMS to carry out the research and development of the DMS software in accordance with the R&D Plan of the Joint Venture. Updates of the R&D Plan will be in full accordance with and coordinated with Telvent's strategy for the development of the Smart Grid Solution Suite and will include specific R&D targets to be accomplished every four months.
Telvent's SGS Suite has now become unique in the market through full integration of OASyS SCADA, the geographic information system ArcFM, the outage management Responder OMS, and the named DMS functionality. The integration allows our customers to respond to new distributed and renewable generation capacity coming on-line and to use volt/var control to add "virtual generation" to their network. Additionally, the SGS Suite enables them to implement effective demand response strategies at the consumer level, and thus, respond to all requirements of a modern distribution utility and maximize the business value. With all these functions, the energy efficiency through network management will be possible.
In addition, some of the most relevant projects signed during the first quarter of 2008 were as follows:
* Contract with Sunoco Logistics in the United States, to upgrade an
OASyS DNA SCADA System. Sunoco Logistics is the division of Sunoco
which manages terminals and transportation and storage facilities
for crude oil and refined products. Telvent will consolidate the
SCADA systems of two control centers, one to control the refined
product pipelines and the other to control crude oil pipelines.
With this new OASyS DNA SCADA system, Sunoco has consolidated all
of their SCADA systems with Telvent.
* Contract with the Abu Dhabi Marine Operating Company (ADMA-OPCO) to
install Telvent's SCADA system at its control centers. Through this
contract, Telvent will supply products and solutions, including the
implementation of remote terminal units ("RTUs"), telecom
infrastructure, solar power, hydraulic systems and engineering
services, As a result, ADMA-OPCO will have a comprehensive solution
to control its infrastructure, achieving the highest security level
for its systems as well as providing technology that is
environmentally conscious. The RTU installation along with the
agreed technology solutions is expected to take approximately 18 to
24 months.
* Contract with Equitable Resources, Inc. in the United States to
upgrade its pipeline operations. Equitable Resources is an
integrated energy company with emphasis in the Appalachian area
natural gas supply, transmission and distribution. Equitable
Resources has also chosen Telvent to provide an optional component
for an offline/online leak detection project for a planned natural
gas liquids pipeline, scheduled for operational startup in 2009.
* Contract with CenterPoint Energy in the United States. CenterPoint
Energy is an investor owned utility and one of the largest electric
and gas delivery companies in the United States. This project
includes providing a Telvent system to monitor the electric
delivery system that serves 1.82 million customers in an area that
spans 5,000 square miles.
Transportation
During the first quarter some of the significant contracts signed were:
* Contract signed with OHL Brasil in Brazil to supply, install and start-up Telvent's SmartToll system on three federal highways in Brazil. With this new system, Telvent will contribute to improving road safety for more than 1.5 million automobiles per day. This project will be completed in less than a year. The project entails the supply and installation of 19 toll booths, 3 control centers, 348 toll lanes (of which 80 will be automated), the communications network and video-monitoring CCTV system. The entire toll system with be managed by Telvent's SmartToll management software. * Contract signed with Meishan City Digital Traffic Development Co. Ltd. in China for the supply and installation of an urban traffic control system in the city of Meishan. The project comprises the supply of two main systems: smart traffic control system and smart public management system, under which there are seven subsystems: traffic-light control system, red light violation system (RLV), traffic control center system, traffic support facilities and services, IDC network data center, public transport information platform and data security system. In addition, Telvent will provide the customer with a unique 3D GIS viewable for real-time information via the internet. * Contract with Central Texas Regional Mobility (CTRMA) in the United States to supply maintenance services over the next five years on the free-flow electronic toll management system for Highway 183-A in Austin, TX. The project consists of supplying maintenance services for the free-flow mixed-modality and manual toll management systems that Telvent recently installed with great success, as well as the automatic vehicle location (AVI) system.
Environment
During the first quarter, significant contracts signed were:
* Contract with Australian Bureau of Meteorology in Australia to supply the Next Generation Automatic Weather Stations. This is an extension to the existing contract and came about after the initial design phase identified a greater scope than originally reported last year. This contract extension is expected to be the first of many for this long-term project, if the model for the previous generation of AWS supply is followed.
Public Administration
Significant projects awarded in the first quarter 2008, among others, included:
* The project awarded by the European Commission for the first phase of the pilot project for the Integrated Border Management System, which is part of the European Union's VII Framework Program. Telvent will lead the European consortium responsible for executing the project, aimed to define the strategy for the European Union's border management system.
Global Services
Significant contracts signed in the first quarter 2008, among others, were:
* Contract signed with Grupo Suardiaz, a leading Spanish company in naval logistics, for the outsourcing of its corporate communications technology infrastructures in Telvent's facilities which will assure Suardiaz of the necessary technological environment for immediate and secure access to its equipment, and will also guarantee the implementation of the new services Grupo Suardiaz wants to create and extend to its branch offices and remote user accesses.
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
Manuel Sanchez, Chairman and Chief Executive Officer and Barbara Zubiria, Chief Financial Reporting Officer and Head of Investor Relations, will conduct a conference call to discuss the first quarter 2008 results, which will be simultaneously webcast at 9:00 A.M. Eastern Time / 3:00 P.M. Madrid Time on Friday, May 23, 2008.
To access the conference call, participants in North America should dial (800) 374-0724 and international participants +1 (706) 634-1387. A live webcast of the conference call will be available at the Investor Relations page of Telvent's corporate website at www.telvent.com. Please visit the website at least 15 minutes prior to the start of the call to register for the teleconference webcast and download any necessary audio software.
About Telvent
Telvent (Nasdaq:TLVT), the IT company for a sustainable and secure world, specializes in high value-added products, services and integrated solutions for the Energy, Transportation, Environment and Public Administration industry segments, as well as Global Services. Its innovative technology and client-proven expertise enable the efficient and secure real-time management of operational and business processes for industry-leading companies worldwide. (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, 2007, filed with the Securities and Exchange Commission on March 10, 2008.
Consolidated Balance Sheets
(In thousands of Euros, except share and per share amounts)
As of As of
March 31, December 31,
2008 2007
(Unaudited) (Audited)
----------- -----------
Assets:
Current assets:
Cash and cash equivalents 70,823 73,755
Restricted cash -- 8,590
Other short-term investments 484 461
Derivative contracts 3,504 3,544
Accounts receivable (net of allowances of
EUR 625 as of March 31, 2008 and EUR 639
as of December 31, 2007) 120,587 143,261
Unbilled revenues 217,409 196,307
Due from related parties 14,150 38,773
Inventory 26,770 21,194
Other taxes receivable 9,260 9,309
Deferred tax assets 2,921 2,399
Other current assets 3,533 3,476
----------- -----------
Total current assets 469,441 501,069
Deposits and other investments 7,165 7,103
Investments carried under the equity method 411 219
Property, plant and equipment, net of
accumulated depreciation of EUR 46,993 as
of March 31, 2008 and EUR 45,915 as of
December 31, 2007 54,252 52,975
Long-term receivables and other assets 8,672 8,605
Deferred tax assets 16,230 16,529
Other intangible assets, net of accumulated
amortization of EUR 16,109 as of March 31,
2008 and EUR 16,373 as of December 31, 2007 19,760 22,381
Goodwill 59,735 64,638
----------- -----------
Total assets 635,666 673,519
=========== ===========
Liabilities and shareholders' equity:
Accounts payable 220,118 252,624
Billings in excess of costs and estimated
earnings 29,003 35,501
Accrued and other liabilities 15,258 13,668
Income and other taxes payable 16,954 21,452
Deferred tax liabilities 2,803 2,546
Due to related parties 37,253 25,315
Current portion of long-term debt 1,596 3,488
Short-term debt 54,805 63,998
Short-term leasing obligations 7,538 7,075
Derivative contracts 5,187 3,686
----------- -----------
Total current liabilities 390,515 429,353
Long-term debt less current portion 12,413 12,230
Long-term leasing obligations 22,344 22,959
Other long-term liabilities 9,673 8,198
Deferred tax liabilities 5,519 6,361
Unearned income 1,726 409
----------- -----------
Total liabilities 442,190 479,510
----------- -----------
Consolidated Balance Sheets
(In thousands of Euros, except share and per share amounts)
As of As of
March 31, December 31,
2008 2007
(Unaudited) (Audited)
----------- -----------
Minority interest 3,996 3,889
Commitments and contingencies
Shareholders' equity:
Common stock, EUR 3.005 par value, 29,247,100
shares authorized, issued and outstanding,
same class and series 87,889 87,889
Additional paid-in-capital 42,129 42,072
Accumulated other comprehensive income (11,894) (5,294)
Retained earnings 71,356 65,453
----------- -----------
Total shareholders' equity 189,480 190,120
----------- -----------
Total liabilities and shareholders' equity 635,666 673,519
=========== ===========
Unaudited Consolidated Statements of Operations
(In thousands of Euros, except share and per share amounts)
Three Months ended
March 31,
2008 2007
---------- ----------
Revenues 138,681 121,362
Cost of revenues 102,660 90,627
---------- ----------
Gross profit 36,021 30,735
---------- ----------
General and administrative 14,333 12,095
Sales and marketing 5,070 4,335
Research and development 4,507 4,566
Depreciation and amortization 2,711 2,571
---------- ----------
Total operating expenses 26,621 23,567
---------- ----------
Income from operations 9,400 7,168
Financial income (expense), net (2,546) (1,833)
Income from companies carried under the equity
method 240 --
Total other income (expense) (2,306) (1,833)
---------- ----------
Income before income taxes 7,094 5,335
Income tax expense (benefit) 940 290
---------- ----------
Net income before minority interest 6,154 5,045
---------- ----------
Loss/(Profit) attributable to minority
interests (251) 87
---------- ----------
Net income 5,903 5,132
========== ==========
Earnings per share
Basic and diluted net income per share 0.20 0.18
========== ==========
Weighted average number of shares outstanding
Basic and diluted 29,247,100 29,247,100
========== ==========
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of Euros, except share and per share amounts
Three months ended
March 31,
2008 2007
-------- --------
Cash flows from operating activities:
Net income 5,903 5,132
Adjustments to reconcile net income to net cash
provided by operating activities: 3,699 (2,094)
Change in operating assets and liabilities, net of
amounts acquired: (50,520) (51,696)
Change in operating assets and liabilities due to
temporary joint ventures 1,760 439
Net cash provided by (used in) operating
activities (39,158) (48,219)
-------- --------
Cash flows from investing activities:
Restricted cash -- guaranteed deposit of long-term
investments and commercial transactions 8,590 8,045
Due from related parties 34,726 22,928
Acquisition of subsidiaries, net of cash -- (100)
Purchase of property, plant & equipment (1,251) (777)
Disposal/(acquisitions) of investments (277) (512)
Net cash provided by (used in) investing activities 41,788 29,584
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt 595 343
Repayment of long-term debt (2,303) (2,231)
Proceeds from short-term debt 1,903 3,694
Repayment of short-term debt (12,827) (1,991)
Proceeds (repayments) of government loans 384 (6)
Due to related parties 8,094 15,827
Net cash provided by (used in) financing activities (4,154) 15,636
-------- --------
Net increase (decrease) in cash and cash
equivalents (1,524) (2,999)
Net effect of foreign exchange in cash and cash
equivalents (1,409) (103)
Cash and cash equivalents at the beginning of period 68,409 60,997
Joint venture cash and cash equivalents at the
beginning of period 5,347 8,235
Cash and cash equivalents at the end of period 70,823 66,130
-------- --------
Supplemental disclosure of cash information:
Cash paid for the period:
Interest 3,427 2,985
======== ========
Non-cash transactions:
Capital leases 1,580 1,540
Reconciliation between GAAP and Proforma Income and EPS
(In thousands of Euros, except share and per share amounts)
Three months ended March 31, 2008
-----------------------------------
GAAP Adjustments Pro forma
---------- ----------- ----------
Revenues 138,681 (2,574)(1) 136,107
Cost of revenues 102,660 (2,695)(1) 99,965
---------- ----------- ----------
Gross profit 36,021 121 36,142
---------- ----------- ----------
General and administrative 14,333 (450)(2) 13,883
Sales and marketing 5,070 5,070
Research and development 4,507 4,507
Depreciation and amortization 2,711 (847)(3) 1,864
---------- ----------- ----------
Total operating expenses 26,621 (1,297) 25,324
---------- ----------- ----------
Income from operations 9,400 1,418 10,818
Financial (expense), net (2,546) 509 (4) (2,037)
Income from companies under equity
method 240 (240)(1) 0
---------- ----------- ----------
Total other income (expense) (2,306) 269 (2,037)
---------- ----------- ----------
Income before income taxes 7,094 1,687 8,781
Income tax expense (benefit) 940 482(5) 1,422
---------- ----------- ----------
Net income before minority
interest 6,154 1,205 7,359
---------- ----------- ----------
Loss/(Profit) attributable to
minority interests (251) 83(1) (168)
---------- ----------- ----------
Net income 5,903 1,288 7,191
========== =========== ==========
Earnings per share
Basic and diluted net income per
share 0.20 0.25
========== ==========
Weighted average number of shares
outstanding
Basic and diluted 29,247,100 29,247,100
========== ==========
Adjustments to reconcile GAAP with
Pro forma:
(1) Joint ventures
(2) Stock compensation plan expenses
(3) Amortization of intangibles
(4) Mark to market derivatives
(5) Tax effect of previous adjustments
Reconciliation between GAAP and Proforma Income and EPS
(In thousands of Euros, except share and per share amounts)
Three months ended March 31, 2007
-----------------------------------
GAAP Adjustments Pro forma
---------- ----------- ----------
Revenues 121,362 (4,894)(1) 116,468
Cost of revenues 90,627 (4,991)(1) 85,636
---------- ----------- ----------
Gross profit 30,735 97 30,832
---------- ----------- ----------
General and administrative 12,095 (434)(2) 11,661
Sales and marketing 4,335 4,335
Research and development 4,566 4,566
Depreciation and amortization 2,571 (832)(3) 1,739
---------- ----------- ----------
Total operating expenses 23,567 (1,266) 22,301
---------- ----------- ----------
Income from operations 7,168 1,363 8,531
Financial (expense), net (1,833) 246(4) (1,587)
Income from companies under equity
method 0 0 0
---------- ----------- ----------
Total other income(expense) (1,833) 246 (1,587)
---------- ----------- ----------
Income before income taxes 5,335 1,609 6,944
Income tax expense (benefit) 290 363(5) 653
---------- ----------- ----------
Net income before minority
interest 5,045 1,246 6,291
---------- ----------- ----------
Loss/(Profit) attributable to
minority interests 87 (97)(1) (10)
---------- ----------- ----------
Net income 5,132 1,149 6,281
========== =========== ==========
Earnings per share
Basic and diluted net income per
share 0.18 0.21
========== ==========
Weighted average number of shares
outstanding
Basic and diluted 29,247,100 29,247,100
========== ==========
Adjustments to reconcile GAAP with
Pro forma:
(1) Joint ventures
(2) Stock compensation plan expenses
(3) Amortization of intangibles
(4) Mark to market derivatives
(5) Tax effect of previous adjustments
Segment Information
(In thousands of Euros, except share and per share amounts)
Three months ended
March 31,
2008 2007
------------------
Revenues
Energy 40,736 55,356
Transportation 47,245 41,863
Environment 8,448 8,562
Public Administration 11,918 6,744
Global Services 30,334 8,837
-------- --------
138,681 121,362
-------- --------
Gross margin
Energy 24.1% 24.1%
Transportation 26.4% 23.6%
Environment 22.5% 25.5%
Public Administration 13.8% 22.7%
Global Services 33.5% 42.9%
-------- --------
26.0% 25.3%
-------- --------