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SPSS 'Plans are Working'
MR software leader SPSS has announced results for the first quarter of 2005, exceeding its earnings guidance. Net revenue totaled $57.5m, up just $0.4m on the year, and operating income for the quarter was $4.0m, including nonrecurring charges of $1.7m, up $0.1m on Q1 2004.
President and CEO Jack Noonan cites 'better sales execution, evidenced by an increase in sales pipeline and closure rates'. License and maintenance revenue grew 5% and 6% respectively, according to Noonan, who adds: 'While our favorable performance in the first quarter, following a strong fourth quarter in 2004, still does not constitute a trend, we believe it is a further validation of our strategy and demonstration of our ability to deliver value for customers and shareholders'.
The company reported diluted earnings per share (EPS) of $0.13, up from $0.11 a year previously. Included in the results for the 2005 first quarter are nonrecurring charges related to cost management improvements totalling approximately $1.7m pre-tax. Cash was $47.1m as of March 31, 2005, up $10.0m from December 31, 2004, and cash flow from operating activities was $13.5m for the quarter, compared to $5.2m in the 2004 first quarter.
The nonrecurring charges included a write-off of $1.3m in lease costs for office space consolidations as well as one-time severance costs of approximately $0.4m resulting from other actions implemented in the quarter to improve operating efficiencies.
The list of organizations with which SPSS signed software license or service agreements in the quarter includes Abbott Laboratories, Caterpillar, Inc., DaimlerChrysler AG, HM Revenue & Customs, H.J. Heinz Company, the Home Office, Philips, Telefónica Publicidad e Información, Texas A&M University, Wal-Mart and Yahoo!
The company quotes reports from several sources including IDC, Nucleus Research and Frost & Sullivan, confirmng the fast-growing importance of SPSS' predictive analytics solutions. IDC projects that this sector will grow at a compound annual growth rate of 8 percent during the next five years, while Frost & Sullivan in April selected SPSS as the recipient of the 2005 Product Innovation Award for its pioneering role in predictive customer relationship management (CRM) analytics.
SPSS Executive VP and CFO Raymond Panza said the company's 'plans are working... SPSS is realizing savings from cost-management improvements and increased productivity. While we look for additional operating efficiencies and margin improvements, our earnings growth will continue to be most dependent on increasing revenues'. He expects second quarter revenues between $56m and $58m, with diluted earnings per share of between $0.08 and $0.14.
More details are at www.spss.com
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