NORWALK, Conn., Dec. 19, 2006 (PRIME NEWSWIRE) -- FactSet Research Systems Inc. (NYSE:FDS), a leading provider of integrated financial information and analytical applications to the global investment community, today announced its results for the first quarter of fiscal 2007.
For the quarter ended November 30, 2006, revenues increased to $108.9 million, up 21% compared to the prior year. Operating income for the first quarter rose to $35.4 million from $27.4 million in the same period of fiscal 2006. Net income advanced 24% to $23.8 million as compared to $19.2 million a year ago. Diluted earnings per share increased to $0.47, up from $0.38 in the same period of fiscal 2006. Included in net income in the first quarter of fiscal 2006 was an after-tax gain of $0.9 million from the sale of company-owned real estate. The effective tax rate for the quarter was 35.5%, up from 34.0% a year ago. Included in last year's first quarter rate were tax benefits of $0.8 million or $0.02 per share from the completion of an audit and the favorable effect of the U.S. Federal R&D tax credit which was enacted at that time.
Consolidated Statements of Income
(Condensed and Unaudited)
Three Months Ended
(In thousands, except November 30,
per share data) 2006 2005 Change
--------------------- -------- -------- --------
Revenues $108,881 $ 89,654 21 %
Total operating expenses 73,460 62,251 18
Income from operations 35,421 27,403 29
Net income 23,795 19,195 24
Diluted earnings
per common share $ 0.47 $ 0.38 24
Diluted weighted
average common shares 51,079 50,061
"We are pleased to report a solid first quarter," said Philip A. Hadley, Chairman and CEO. "Revenues and profitability improved, while we continued to invest in areas critical for future growth."
First Quarter Financial Highlights
Subscriptions increased $16.9 million during the quarter and totaled $439.5 million at November 30, 2006. On a constant currency basis, the subscription increase was $16.4 million. Of this total, subscriptions from FactSet's domestic operations were $308.2 million, while overseas operations were $131.3 million. FactSet's client retention rate continued to be above 95%. "Subscriptions" at any given point in time represent the forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients.
Operational highlights of the first quarter of fiscal 2007 include:
-- Users rose to 31,000, up from 29,800 at the beginning of the
quarter.
-- Client count was 1,830 at November 30, a net increase of 45
clients during the quarter.
-- Approximately 485 clients consisting of 4,000 users subscribe
to the PA 2.0 application at quarter-end.
-- Revenues from non-U.S. operations increased 28% to $32.4
million. On a constant currency basis and excluding the
acquisition of europrospectus.com Limited, revenues from non-
U.S. operations advanced 22%.
-- Employee count at November 30, 2006 was 1,432, up 17% from a
year ago and up 5% over the last three months.
-- FactSet successfully held its second annual Investment
Process Symposium in October 2006 with 270 client attendees.
Recent Events and Business Outlook
The following forward-looking statements reflect FactSet's expectations as of December 19, 2006. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. The Company does not intend to update its forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
Second Quarter Fiscal 2007 Expectations
-- Revenues are expected to range between $112 million and $115
million.
-- Operating margins are expected to range between 31.5% and
33.5%.
-- The effective tax rate is expected to range between 35.3% and
36.3%. This guidance assumes the U.S. Federal R&D tax credit
is reenacted for all periods in fiscal 2007. If the U.S.
Federal R&D tax credit is reenacted retroactive to January 1,
2006, the second quarter will include a favorable impact of
$0.02 per share from reducing FactSet's estimated taxes from
January to November 2006.
Full Year Fiscal 2007
-- Capital expenditures should total approximately $31 million
to $35 million. Approximately 50% relates to computer-
related equipment and the remainder for the expansion of
various office locations.
Forward-looking statements
This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company's strategy for growth, product development, market position, subscriptions, expected expenditures and financial results are forward-looking statements. Forward-looking statements may be identified by words like "expected," "anticipates," "plans," "intends," "projects," "should," "indicates," "continues," "subscriptions" and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in FactSet's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K and quarterly reports on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, the ability to integrate newly acquired companies; the ability to hire qualified personnel; the maintenance of the Company's leading technological position; the impact of global market trends on the Company's revenue growth rate and future results of operations; the negotiation of contract terms with corporate vendors, data suppliers and potential landlords; the retention of key clients; the successful resolution of ongoing audits by tax authorities; the continued employment of key personnel; the absence of U.S. or foreign governmental regulation restricting international business; and the sustainability of historical levels of profitability and growth rates in cash flow generation.
Conference Call
The Company will host a conference call today, December 19, 2006 at 11:00 a.m. (EST) to review the first quarter fiscal 2007 earnings release. To listen, please visit the investor relations section of the Company's website at www.factset.com.
About FactSet
FactSet Research Systems Inc. combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations along with its affiliates from more than twenty-two locations worldwide, including Boston, New York, Chicago, San Mateo, London, Frankfurt, Paris, Milan, Tokyo, Hong Kong, and Sydney.
FactSet Research Systems Inc.
Consolidated Statements of Financial Condition
November 30, August 31,
(In thousands) 2006 2006
---- ----
(unaudited)
ASSETS
Cash and cash equivalents $ 138,877 $ 126,549
Investments 16,908 16,641
Receivables from clients
and clearing broker, net 61,199 59,190
Deferred taxes 1,500 1,600
Other current assets 3,911 3,000
--------- ---------
Total current assets 222,395 206,980
Property, equipment, and
leasehold improvements, net 63,461 59,812
Goodwill 144,058 141,354
Intangible assets, net 42,000 43,074
Deferred taxes 4,219 3,554
Other assets 2,422 2,454
--------- ---------
Total assets $ 478,555 $ 457,228
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 19,174 $ 18,110
Accrued compensation 6,981 21,407
Deferred fees 22,821 25,322
Dividends payable 2,939 2,933
Taxes payable 19,026 9,689
Notes payable 1,924 1,840
--------- ---------
Total current liabilities 72,865 79,301
Deferred taxes 8,373 8,536
Deferred rent and other
non-current liabilities 11,692 10,703
--------- ---------
Total liabilities 92,930 98,540
--------- ---------
Stockholders' Equity
Common stock 556 554
Capital in excess of par value 137,907 130,033
Retained earnings 398,705 377,846
Treasury stock (158,196) (153,073)
Accumulated other comprehensive income 6,653 3,328
--------- ---------
Total stockholders' equity 385,625 358,688
--------- ---------
Total liabilities and
stockholders' equity $ 478,555 $ 457,228
========= =========
FactSet Research Systems Inc.
Consolidated Statements of Income
Three Months Ended
November 30,
(In thousands, except per 2006 2005
share data and unaudited) ---- ----
Revenues $108,881 $ 89,654
Operating expenses
Cost of services 34,941 28,064
Selling, general and administrative 38,519 34,187
-------- --------
Total operating expenses 73,460 62,251
-------- --------
Income from operations 35,421 27,403
Other income 1,487 1,702
-------- --------
Income before income taxes 36,908 29,105
Provision for income taxes 13,113 9,910
-------- --------
Net income $ 23,795 $ 19,195
======== ========
Basic earnings per common share $ 0.49 $ 0.40
======== ========
Diluted earnings per common share $ 0.47 $ 0.38
======== ========
Weighted average common shares (Basic) 48,957 48,373
======== ========
Weighted average common shares (Diluted) 51,079 50,061
======== ========
FactSet Research Systems Inc.
Consolidated Statements of Cash Flows
Three Months Ended
November 30,
(In thousands and unaudited) 2006 2005
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 23,795 $ 19,195
Adjustments to reconcile net
income to net cash provided by
operating activities
Depreciation and amortization 6,574 5,675
Stock-based compensation expense 2,449 2,538
Deferred income taxes (961) (1,014)
Gain on sale of Company-owned
real estate -- (1,342)
Changes in assets and liabilities,
net of effects of acquisitions
Receivables from clients and
clearing broker, net (1,972) (1,740)
Accounts payable and accrued expenses 1,023 (5,694)
Accrued compensation (14,540) (10,982)
Deferred fees (2,717) (949)
Taxes payable 9,308 6,134
Landlord contributions 359 --
Other working capital accounts, net (371) 235
--------- ---------
Net cash provided by operating
activities 22,947 12,056
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments,
net of proceeds from sales (284) (621)
Acquisition of businesses,
net of cash acquired -- (21,163)
Proceeds from sale of Company-owned
real estate -- 2,910
Purchases of property, equipment and
leasehold improvements (7,973) (1,417)
--------- ---------
Net cash used in investing activities (8,257) (20,291)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payments (2,931) (2,378)
Repurchase of common stock (5,123) (256)
Proceeds from employee stock plans 3,978 1,822
Income tax benefits from stock
option exercises 1,447 343
--------- ---------
Net cash used in financing activities (2,629) (469)
Effect of exchange rate changes on
cash and cash equivalents 267 318
--------- ---------
Net increase (decrease) in cash
and cash equivalents 12,328 (8,386)
Cash and cash equivalents
at beginning of period 126,549 59,457
--------- ---------
Cash and cash equivalents
at end of period $ 138,877 $ 51,071
========= =========
IR_FDS