NORWALK, Conn., Dec. 18, 2007 (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 2008.
For the quarter ended November 30, 2007, revenues increased $25.3 million, up 23.2% compared to the prior year. Operating income for the first quarter advanced to $42.5 million, up 20.0% over the prior year. On a constant currency basis, revenues increased 22% while operating income advanced 23% over the year ago quarter. Net income rose 23.6% to $29.4 million as compared to $23.8 million a year ago. Diluted earnings per share were $0.58, up from $0.47 in the same period of fiscal 2007.
Consolidated Statements of Income
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(Condensed and Unaudited) Three Months Ended
November 30,
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(In thousands, except per share data) 2007 2006 Change
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Revenues $134,175 $108,881 23.2%
Total operating expenses 91,678 73,460 24.8%
Income from operations 42,497 35,421 20.0%
Net income 29,399 23,795 23.6%
Diluted earnings per common share $ 0.58 $ 0.47 23.4%
Diluted weighted average common shares 50,610 51,079
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Philip A. Hadley, Chairman and CEO said, "We delivered subscription growth of at least $20 million in each of the last four quarters. We were pleased to achieve this in the first quarter given an environment in which many large banks are carefully managing expenses."
First Quarter Financial Highlights
Subscriptions increased $24.3 million during the quarter and were up $21.1 million excluding currency. On a constant currency basis, subscriptions advanced $97.2 million over the last twelve months, up 22.2%. At November 30, 2007 subscriptions were $541.2 million. Of this total, subscriptions from FactSet's domestic operations were $373.7 million, while overseas operations were $167.5 million.
"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.
Demand for FactSet's services continued unabated. Users rose to 37,800, up from 35,000 at the beginning of the quarter. Client count was 1,993 as of November 30, a net increase of 40 clients during the quarter.
Other financial and operational highlights of the first quarter of fiscal 2008 include:
* U.S. revenues were $93.9 million, up 22% excluding non-subscription revenues. * Revenues from non-U.S. operations increased 24% to $40.3 million. On a constant currency basis and excluding non-subscription revenues, the increase was 22%. * 565 clients, consisting of 5,070 users, subscribed to the PA 2.0 application at quarter-end. * Employee count as of November 30, 2007 was 1,743, up 5% during the quarter and up 22% over the last twelve months. * Client retention rate remained above 95%. * The Company repurchased 443,065 shares for $29.3 million. At November 30, 2007, $27.8 million is authorized for future repurchases. Common shares outstanding at November 30, 2007 were 48.2 million. * FactSet successfully held its third annual Investment Process Symposium in November 2007 with 292 client attendees.
Foreign Currency
The U.S. dollar weakened significantly during the first quarter of fiscal 2008, particularly against the Euro. The decline in value had the following effects in the first quarter when holding currencies constant from the fourth quarter of fiscal 2007:
* Increased revenues by $0.4 million and operating expenses by $0.9 million. * Decreased income from operations by $0.5 million and operating margins by 50 basis points. * Decreased diluted earnings per share by $0.01.
Capital Expenditures
Capital expenditures in the first quarter of fiscal 2008 were $5.7 million, net of landlord contributions for construction. Expenditures for computer equipment were $5.6 million and the remainder covered office space expansion. Major expenditures included adding eight Hewlett Packard Integrity mainframes to the Company's data centers. To recap where FactSet stands on its technology transition, 12 Integrity mainframes have been deployed in the last five months and four additional machines will be purchased in early 2008. The successful upgrade to Hewlett Packard Integrity mainframes from Hewlett Packard Alpha mainframes is scheduled to be completed in the upcoming second quarter of fiscal 2008.
Business Outlook
The following forward-looking statements reflect FactSet's expectations as of December 18, 2007. 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 2008 Expectations
* Revenues are expected to range between $137 million and $141 million. * Operating margins are expected to range between 30.5% and 32.5%. This operating margin guidance holds currencies constant and assumes no change in the expected outcome of performance based stock options. * The effective tax rate is expected to range between 34.0% and 35.0%.
Full Year Fiscal 2008
* Capital expenditures, net of landlord contributions, are expected to range between $38 million and $44 million.
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 stability of global securities markets; 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 18, 2007 at 11:00 a.m. (EST) to review the first quarter fiscal 2008 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-three locations worldwide, including Boston, New York, Chicago, San Mateo, London, Frankfurt, Paris, Amsterdam, Milan, Tokyo, Hong Kong, and Sydney.
IR_FDS
FactSet Research Systems Inc.
Consolidated Statements of Financial Condition
November 30, August 31,
(In thousands and unaudited) 2007 2007
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ASSETS
Cash and cash equivalents $154,922 $168,834
Investments 16,386 17,388
Receivables from clients and clearing
broker, net 62,989 59,579
Deferred taxes 2,930 2,808
Other current assets 4,354 3,723
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Total current assets 241,581 252,332
Property, equipment, and leasehold
improvements, net 79,280 78,945
Goodwill 149,127 146,187
Intangible assets, net 36,360 36,789
Deferred taxes 8,911 7,211
Other assets 2,407 2,286
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Total assets $517,666 $523,750
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 18,611 $ 23,461
Accrued compensation 9,288 30,105
Deferred fees 22,313 25,730
Dividends payable 5,788 5,802
Taxes payable 8,920 5,552
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Total current liabilities 64,920 90,650
Deferred taxes 6,443 6,450
Taxes payable 3,772 --
Deferred rent and other non-current liabilities 18,477 17,339
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Total liabilities $ 93,612 $114,439
Stockholders' Equity
Common stock 565 562
Capital in excess of par value 177,571 162,561
Retained earnings 494,781 469,880
Treasury stock, at cost (263,043) (233,372)
Accumulated other comprehensive income 14,180 9,680
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Total stockholders' equity 424,054 409,311
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Total liabilities and
stockholders' equity $517,666 $523,750
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FactSet Research Systems Inc.
Consolidated Statements of Income
Three Months Ended
(In thousands, except per November 30,
share data and unaudited) 2007 2006
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Revenues $134,175 $108,881
Operating expenses
Cost of services 44,943 34,941
Selling, general and administrative 46,735 38,519
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Total operating expenses 91,678 73,460
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Income from operations 42,497 35,421
Other income 2,042 1,487
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Income before income taxes 44,539 36,908
Provision for income taxes 15,140 13,113
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Net income $ 29,399 $ 23,795
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Basic earnings per common share $ 0.61 $ 0.49
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Diluted earnings per common share $ 0.58 $ 0.47
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Weighted average common shares (Basic) 48,381 48,957
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Weighted average common shares (Diluted) 50,610 51,079
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FactSet Research Systems Inc.
Consolidated Statements of Cash Flows Three Months Ended
November 30,
(In thousands and unaudited) 2007 2006
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 29,399 $ 23,795
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 7,112 6,574
Stock-based compensation expense 2,714 2,449
Deferred income taxes (1,845) (961)
Loss on sale of assets 88 --
Changes in assets and liabilities, net of
effects of acquisitions
Receivables from clients and
clearing broker, net (3,410) (1,972)
Accounts payable and accrued expenses (5,016) 1,023
Accrued compensation (20,911) (14,540)
Deferred fees (3,417) (2,717)
Taxes payable 8,381 9,308
Deferred rent 930 916
Landlord contributions 90 359
Other working capital accounts, net (491) (1,287)
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Net cash provided by operating activities 13,624 22,947
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of investments 4,154 5,154
Purchases of investments (3,079) (5,438)
Insurance proceeds from fixed asset recoveries 175 --
Purchases of property, equipment
and leasehold improvements (5,750) (7,973)
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Net cash used in investing activities (4,500) (8,257)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payments (5,788) (2,931)
Repurchase of common stock (29,669) (5,123)
Proceeds from employee stock plans 7,760 3,978
Income tax benefits from stock option exercises 4,320 1,447
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Net cash used in financing activities (23,377) (2,629)
Effect of exchange rate changes on
cash and cash equivalents 341 267
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Net (decrease) increase in
cash and cash equivalents (13,912) 12,328
Cash and cash equivalents at beginning of period 168,834 126,549
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Cash and cash equivalents at end of period $154,922 $138,877
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