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Mercury Interactive Corp Reports Q4 & 2004 Results - best year ever

  • 03 February, 2005 10:55

<p>MERCURY INTERACTIVE CORPORATION REPORTS FOURTH QUARTER AND 2004 RESULTS</p>
<p>· Revenue of US$204.3 million for the quarter; Growth of 34% versus Q4 2003
· Revenue of US$685.5 million for 2004; Growth of 35% versus 2003
· Net Increase in Deferred Revenue of US$67.7 million for the quarter and US$133.7 million for 2004
· Earnings Per Share for the quarter: US$0.36 GAAP; US$0.42 Non-GAAP
· Earnings Per Share for the year ended 2004: US$0.83 GAAP; US$1.09 Non-GAAP
· Cash Flows from Operations: US$66.4 million for the quarter and US$212.8 million for 2004</p>
<p>FEBRUARY 2, 2005 — Mercury Interactive Corporation (NASDAQ: MERQ), the global leader in business technology optimization (BTO), today announced financial results for the fourth quarter and year ended December 31, 2004.</p>
<p>Revenue for the fourth quarter of 2004 was US$204.3 million, an increase of 34 percent compared to US$152.0 million reported in the fourth quarter of 2003. Revenue for the year ended December 31, 2004 was US$685.5 million, an increase of 35 percent compared to US$506.5 million reported for the year ended December 31, 2003.</p>
<p>Deferred revenue for the fourth quarter of 2004 increased by US$67.7 million from the third quarter of 2004 to US$414.3 million. Cash generated from operations for the Q4 2004 was US$66.4 million compared to US$66.9 million in the fourth quarter of 2003. Cash generated from operations for the year ended December 31, 2004 was US$212.8 million, compared to US$180.5 million for the year ended December 31, 2003.</p>
<p>“2004 was our most successful year ever,” said Amnon Landan, chairman and CEO at Mercury. “Our customers are expanding their investments in Mercury Optimization Center offerings as they take an enterprise approach to streamlining IT.”</p>
<p>GAAP RESULTS
Net income for the fourth quarter of 2004 was US$35.0m, or US$0.36 per diluted share, compared to US$13.1m, or US$0.13 per diluted share, for the same period a year ago. Net income for the year ended December 31, 2004 was US$84.6m, or US$0.83 per diluted share, compared to US$41.5, or US$0.41 per diluted share, for the year ended December 31, 2003.</p>
<p>Diluted earnings per share was calculated taking into consideration the recent issuance of EITF 04-08, “Effect of Contingently Convertible Debt on Diluted Earnings per Share.” Net income was adjusted for debt related costs on an ‘as if’ converted basis by US$0.4m and US$1.4m for the quarter and year ended December 31, 2004, respectively. Fully diluted shares were 98.2m shares for the quarter and 103.2m shares for the year ended December 31, 2004. Previously reported net income and diluted earnings per share have also been restated based on the effect of EITF 04-08.</p>
<p>NON-GAAP RESULTS
Non-GAAP net income for the fourth quarter of 2004 was US$40.5m, or US$0.42 per diluted share, compared to US$26.2m, or US$0.25 per diluted share, for the same period a year ago. Non-GAAP results for the fourth quarter of 2004, as presented in the attached reconciliation table, exclude stock-based compensation and amortization of intangibles of US$4.1m, a non-cash reduction to excess facility charge of approximately US$0.2m, a net loss on investments in non-consolidated companies and warrant of US$0.1m and related tax expense decrease of US$1.5m.</p>
<p>Non-GAAP net income for the year ended December 31, 2004 was US$110.6m, or US$1.09 per diluted share, compared to US$86.1m, or US$0.85 per diluted share, for the year ended December 31, 2003. Non-GAAP results for the year ended December 31, 2004, as presented in the attached reconciliation table, exclude stock-based compensation and amortization of intangibles of US$16.4m, in-process research and development of US$0.9m, integration and other acquisition related charges of US$3.1m, a net non-cash excess facilities charge of US$8.9m, a gain on sale of available-for-sale securities of US$0.3m, a net loss on investments in non-consolidated companies and warrant of US$0.6m and related tax expense increase of US$3.6m.</p>
<p>Based on the effect of EITF 04-08, non-GAAP net income and fully diluted shares were also adjusted in the calculation of diluted earnings per share by the same amounts GAAP diluted earnings per share were adjusted. In addition, previously reported non-GAAP net income and diluted earnings per share have been restated.</p>
<p>FINANCIAL OUTLOOK
The following financial outlook is provided based on information as of February 2, 2005 and management assumes no duty to update this guidance. Management provides the following guidance for the first quarter of 2005:
· Revenue for the first quarter is expected to be in the range of US$190 million to US$200 million
· Net increase in deferred revenue for the first quarter is expected to be in the range of US$5 million to US$15 million
· GAAP diluted earnings per share for the first quarter is expected to be in the range of US$0.26 to US$0.32
· Non-GAAP diluted earnings per share for the first quarter is expected to be in the range of US$0.28 to US$0.34
· Fully diluted shares outstanding for the first quarter is expected to be in the range of 98 million to 100 million, which takes into consideration the recent issuance of EITF 04-08, “Effect of Contingently Convertible Debt on Diluted Earnings per Share.”</p>
<p>Non-GAAP guidance for the first quarter of 2005 is adjusted from GAAP guidance by excluding stock-based compensation and amortization of intangible assets of US$4.0 million and a gain on the sale of our idle building of approximately US$0.3 million.</p>
<p>Management provides the following guidance for the full year of 2005:
· New Order Growth (revenue plus change in deferred revenue) for the full year is expected to be in the range of 20 percent to 25 percent
· Revenue growth for the full year is expected to be in the range of 28 percent to 32 percent
· Non-GAAP operating margin for the full year is expected to be in the range of 20 percent to 21 percent
· GAAP diluted earnings per share for the full year is expected to be in the range of US$1.36 to US$1.46
· Non-GAAP diluted earnings per share for the full year is expected to be in the range of US$1.45 to US$1.55
· Cash flow from operations growth for the full year is expected to be in the range of 25 percent to 30 percent</p>
<p>Non-GAAP guidance for 2005 is adjusted from GAAP guidance by excluding stock-based compensation and amortization of intangible assets of US$15.8 million and a gain on the sale of our idle building of approximately US$0.3 million.</p>
<p>ABOUT MERCURY
Mercury Interactive (NASDAQ: MERQ), the global leader in business technology optimization (BTO), is committed to helping customers optimize the business value of information technology. Founded in 1989, Mercury conducts business worldwide and is one of the fastest growing enterprise software companies today. Mercury provides software and services to govern the priorities, people, and processes of IT; deliver and manage applications; and integrate IT strategy and execution. Customers worldwide rely on Mercury offerings to improve quality and performance of applications and manage IT costs, risks and compliance. Mercury BTO offerings are complemented by technologies and services from global business partners. For more information, please visit www.mercury.com.</p>
<p>For further information please contact:
Gabrielle Cichero Mercury 02 8273 1905
Shuna Boyd BoydPR 02 9418 8100</p>

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