Hummingbird Ltd. (NASDAQ: HUMC, TSX: HUM), a leading global provider of integrated enterprise content management (ECM) solutions, and network connectivity solutions, today reported financial and operating results for the first quarter ended December 31, 2005. The financial figures in this release are reported in U.S. dollars in accordance with U.S. generally accepted accounting principles, except where noted.
“I am pleased with our overall performance in the first quarter” said Barry Litwin, President and Chief Executive Officer of Hummingbird, Ltd. “Our investments in fiscal 2005 continue to yield positive and tangible traction across all our key markets, with our rapidly growing Enterprise Content Management business growing nearly 24% year over year. I am particularly encouraged by the accelerated adoption of Hummingbird Enterprise as the platform of choice for content-based solutions, specifically in the areas of deal management in financial services, correspondence management in government, and contract management. This positive momentum confirms that our strategy to invest in building repeatable high-value content management solutions on the Hummingbird Enterprise platform will form a solid foundation for sustained growth.”
SUMMARY FINANCIAL RESULTS
(Millions of U.S dollars, except share data) U.S. GAAP
Three Months Ended December 31
2005 2004
Sales 62.1 53.9
Net Income (Loss) 0.6 (1.7)
Diluted Earnings (Loss) Per Share 0.03 (0.10)
Diluted Number of Shares (millions) 17.4 17.5
Adjusted Net Income (Note) 5.6 6.1
Adjusted Diluted Earnings Per Share 0.32 0.35
Adjusted Diluted Number of Shares (millions) 17.4 17.6
*Note: Adjusted Net Income comprises Net Income/(Loss) excluding amortization of other intangible assets, restructuring and other charges, and stock-based compensation expense, net of related taxes.
Financial Highlights
Total sales for the quarter ended December 31, 2005 were $62.1 million, representing an increase of 15.2% from the quarter ended December 31, 2004. Enterprise Content Management revenues for the quarter were $45.3 million, a 23.7% increase from the same quarter last year. Connectivity revenues for the quarter were $16.8 million, compared to $17.3 million in the first quarter last year, and flat compared with the prior quarter. Total license revenues were $25.0 million, up 12.1% from the first quarter last year.
Adjusted net income in the current quarter was $5.6 million, compared to $6.1 million in the same period last year. Adjusted diluted earnings per share (based on adjusted net income) for the first quarter were $0.32 compared to $0.35 for the corresponding period last year.
During the quarter the company recorded restructuring and other charges totaling $1.6 million. Of this amount, $1.4 million relates primarily to severance and related costs taken after the Company reviewed its global operations to align costs with revenues, and to recognize cost efficiencies.
Operating expenses for the current quarter excluding amortization of intangibles, stock-based compensation expense, and restructuring and other charges, were $46.6 million, compared to $38.4 million for the first quarter of the previous fiscal year.
For the first quarter of fiscal 2006, Hummingbird reported a net income of $0.6 million, compared to net loss of $1.7 million for the same quarter in 2005. The diluted earnings per share of $0.03 in the current quarter compares to a diluted loss per share of $0.10 for the first quarter of the prior year.
Total assets as at December 31, 2005 were $396.9 million, compared to $389.9 million as at September 30, 2005. The Company's cash position, including short-term investments, was $85.8 million as at December 31, 2005. Cash flow from operations generated in the current quarter was $1.7 million. Deferred revenue was $75.7 million as at December 31, 2005 compared to $74.0 million as at September 30, 2005.
(1)Adjusted net income is presented because management considers it to be a better metric to evaluate and compare the performance of the Company's core business, since it excludes certain non-cash and non-recurring expenses. In addition, it is the primary method that management uses to plan and forecast the Company's results. Adjusted net income is not a recognized profitability measure under U.S. GAAP, and the Company's method of calculating adjusted net income may differ from, and accordingly may not be comparable to, similarly titled measures used by other companies. Adjusted net income should not be considered in isolation and its presentation should not be construed an alternative to net income determined in accordance with U.S. GAAP, as an indicator of the Company's performance.
Operational Highlights
Standard Chartered Bank Selects Hummingbird Contracts Management Solution
On November 14 Hummingbird announced that Standard Chartered Bank had invested in Hummingbird Enterprise™ for Contract Management to capture and proactively manage its worldwide legal relationships, to ensure regulatory compliance and to minimize risk. Standard Chartered is one of the world's most international banks, employing over 40,000 people, representing 80 nationalities, across its network. Standard Chartered operates in over 1,200 locations in more than 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas.
Government of Ontario Selects Hummingbird as Vendor of Record
On November 3 Hummingbird announced it had been chosen as a vendor of record (VOR) to provide Records/Document Management solutions for the Government of Ontario. This VOR arrangement is mandatory for all Ontario Public Sector clients when acquiring new licenses for document and records management capabilities, and was established to support the Government of Ontario in reaching its objective of streamlining government business and the delivery of services to the nearly 12 million citizens of the province. Ontario is home to over one-third of Canada's total population and the Government of Ontario is by far the largest provincial government in the country.
United States Army Corps of Engineers Deploying Hummingbird Enterprise™ for ESRI On November 28 Hummingbird announced that the United States Army Corps of Engineers (USACE) is deploying Hummingbird Enterprise™ for ESRI, its integrated content management and Geographic Information System (GIS) solution. After conducting an extensive vendor evaluation USACE chose Hummingbird's solution for its capabilities to improve decision-making through enhanced responsiveness, better asset awareness, improved project planning, and better information sharing. USACE is made up of approximately 34,600 civilian and 650 military members and is responsible for the Iraq Reconstruction Information Management System, the Tsunami mission in southern Asia and eastern Africa and the Hurricane Katrina reconstruction effort along the U.S. gulf coast.
Microsoft Partnership
On November 7 Hummingbird unveiled extended capabilities for deployment of Hummingbird Enterprise on the Microsoft Office platform, taking advantage of Microsoft SQL Server 2005 as the content repository. Hummingbird has always fully embraced the relevant features and functionality of the Microsoft product family to complement Hummingbird Enterprise and improve the value proposition the Company offers its customers. Hummingbird will continue to invest in R&D to provide organizations with unequaled integration and interoperability between Hummingbird Enterprise and new Microsoft offerings. Hummingbird is recognized for its strong heritage as a long-standing Microsoft partner, with a large installed base of shared Microsoft customers globally.
Awards and Recognition
Hummingbird is proud of the significant industry recognition it received during 2005 confirming the strength of Hummingbird Enterprise™ as an industry leading Enterprise Content Management platform. Hummingbird was first to recognize the value proposition of interoperable ECM capabilities and today boasts a fully integrated ECM suite (a capability that industry observers weigh heavily in current evaluation criteria). This market acknowledgement of Hummingbird's thought leadership and domain expertise reinforces the Company's current first mover advantage in establishing a highly differentiated strategy around a flexible business solution framework in targeted industries.
Gartner MarketScope for Records Management recognized Hummingbird with 'Strong Positive Rating' Forrester Wave™ report names Hummingbird Enterprise™ as a 'Strong Performer' KMWorld recognized Hummingbird Enterprise™ as a 'Trend-Setting Product of 2005' Gartner positioned Hummingbird in the Leaders Quadrant in 2005 ECM Magic Quadrant KMWorld recognized Hummingbird as one of the '100 Companies that Matter in Knowledge Management' Gartner MarketScope recognized RedDot with 'Positive Rating' for Web Content Management EContent Magazine selected Hummingbird as 'One of the Companies that Matter Most in the Digital Content Industry' About Hummingbird
“I am pleased with our overall performance in the first quarter” said Barry Litwin, President and Chief Executive Officer of Hummingbird, Ltd. “Our investments in fiscal 2005 continue to yield positive and tangible traction across all our key markets, with our rapidly growing Enterprise Content Management business growing nearly 24% year over year. I am particularly encouraged by the accelerated adoption of Hummingbird Enterprise as the platform of choice for content-based solutions, specifically in the areas of deal management in financial services, correspondence management in government, and contract management. This positive momentum confirms that our strategy to invest in building repeatable high-value content management solutions on the Hummingbird Enterprise platform will form a solid foundation for sustained growth.”
SUMMARY FINANCIAL RESULTS
(Millions of U.S dollars, except share data) U.S. GAAP
Three Months Ended December 31
2005 2004
Sales 62.1 53.9
Net Income (Loss) 0.6 (1.7)
Diluted Earnings (Loss) Per Share 0.03 (0.10)
Diluted Number of Shares (millions) 17.4 17.5
Adjusted Net Income (Note) 5.6 6.1
Adjusted Diluted Earnings Per Share 0.32 0.35
Adjusted Diluted Number of Shares (millions) 17.4 17.6
*Note: Adjusted Net Income comprises Net Income/(Loss) excluding amortization of other intangible assets, restructuring and other charges, and stock-based compensation expense, net of related taxes.
Financial Highlights
Total sales for the quarter ended December 31, 2005 were $62.1 million, representing an increase of 15.2% from the quarter ended December 31, 2004. Enterprise Content Management revenues for the quarter were $45.3 million, a 23.7% increase from the same quarter last year. Connectivity revenues for the quarter were $16.8 million, compared to $17.3 million in the first quarter last year, and flat compared with the prior quarter. Total license revenues were $25.0 million, up 12.1% from the first quarter last year.
Adjusted net income in the current quarter was $5.6 million, compared to $6.1 million in the same period last year. Adjusted diluted earnings per share (based on adjusted net income) for the first quarter were $0.32 compared to $0.35 for the corresponding period last year.
During the quarter the company recorded restructuring and other charges totaling $1.6 million. Of this amount, $1.4 million relates primarily to severance and related costs taken after the Company reviewed its global operations to align costs with revenues, and to recognize cost efficiencies.
Operating expenses for the current quarter excluding amortization of intangibles, stock-based compensation expense, and restructuring and other charges, were $46.6 million, compared to $38.4 million for the first quarter of the previous fiscal year.
For the first quarter of fiscal 2006, Hummingbird reported a net income of $0.6 million, compared to net loss of $1.7 million for the same quarter in 2005. The diluted earnings per share of $0.03 in the current quarter compares to a diluted loss per share of $0.10 for the first quarter of the prior year.
Total assets as at December 31, 2005 were $396.9 million, compared to $389.9 million as at September 30, 2005. The Company's cash position, including short-term investments, was $85.8 million as at December 31, 2005. Cash flow from operations generated in the current quarter was $1.7 million. Deferred revenue was $75.7 million as at December 31, 2005 compared to $74.0 million as at September 30, 2005.
(1)Adjusted net income is presented because management considers it to be a better metric to evaluate and compare the performance of the Company's core business, since it excludes certain non-cash and non-recurring expenses. In addition, it is the primary method that management uses to plan and forecast the Company's results. Adjusted net income is not a recognized profitability measure under U.S. GAAP, and the Company's method of calculating adjusted net income may differ from, and accordingly may not be comparable to, similarly titled measures used by other companies. Adjusted net income should not be considered in isolation and its presentation should not be construed an alternative to net income determined in accordance with U.S. GAAP, as an indicator of the Company's performance.
Operational Highlights
Standard Chartered Bank Selects Hummingbird Contracts Management Solution
On November 14 Hummingbird announced that Standard Chartered Bank had invested in Hummingbird Enterprise™ for Contract Management to capture and proactively manage its worldwide legal relationships, to ensure regulatory compliance and to minimize risk. Standard Chartered is one of the world's most international banks, employing over 40,000 people, representing 80 nationalities, across its network. Standard Chartered operates in over 1,200 locations in more than 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas.
Government of Ontario Selects Hummingbird as Vendor of Record
On November 3 Hummingbird announced it had been chosen as a vendor of record (VOR) to provide Records/Document Management solutions for the Government of Ontario. This VOR arrangement is mandatory for all Ontario Public Sector clients when acquiring new licenses for document and records management capabilities, and was established to support the Government of Ontario in reaching its objective of streamlining government business and the delivery of services to the nearly 12 million citizens of the province. Ontario is home to over one-third of Canada's total population and the Government of Ontario is by far the largest provincial government in the country.
United States Army Corps of Engineers Deploying Hummingbird Enterprise™ for ESRI On November 28 Hummingbird announced that the United States Army Corps of Engineers (USACE) is deploying Hummingbird Enterprise™ for ESRI, its integrated content management and Geographic Information System (GIS) solution. After conducting an extensive vendor evaluation USACE chose Hummingbird's solution for its capabilities to improve decision-making through enhanced responsiveness, better asset awareness, improved project planning, and better information sharing. USACE is made up of approximately 34,600 civilian and 650 military members and is responsible for the Iraq Reconstruction Information Management System, the Tsunami mission in southern Asia and eastern Africa and the Hurricane Katrina reconstruction effort along the U.S. gulf coast.
Microsoft Partnership
On November 7 Hummingbird unveiled extended capabilities for deployment of Hummingbird Enterprise on the Microsoft Office platform, taking advantage of Microsoft SQL Server 2005 as the content repository. Hummingbird has always fully embraced the relevant features and functionality of the Microsoft product family to complement Hummingbird Enterprise and improve the value proposition the Company offers its customers. Hummingbird will continue to invest in R&D to provide organizations with unequaled integration and interoperability between Hummingbird Enterprise and new Microsoft offerings. Hummingbird is recognized for its strong heritage as a long-standing Microsoft partner, with a large installed base of shared Microsoft customers globally.
Awards and Recognition
Hummingbird is proud of the significant industry recognition it received during 2005 confirming the strength of Hummingbird Enterprise™ as an industry leading Enterprise Content Management platform. Hummingbird was first to recognize the value proposition of interoperable ECM capabilities and today boasts a fully integrated ECM suite (a capability that industry observers weigh heavily in current evaluation criteria). This market acknowledgement of Hummingbird's thought leadership and domain expertise reinforces the Company's current first mover advantage in establishing a highly differentiated strategy around a flexible business solution framework in targeted industries.
Gartner MarketScope for Records Management recognized Hummingbird with 'Strong Positive Rating' Forrester Wave™ report names Hummingbird Enterprise™ as a 'Strong Performer' KMWorld recognized Hummingbird Enterprise™ as a 'Trend-Setting Product of 2005' Gartner positioned Hummingbird in the Leaders Quadrant in 2005 ECM Magic Quadrant KMWorld recognized Hummingbird as one of the '100 Companies that Matter in Knowledge Management' Gartner MarketScope recognized RedDot with 'Positive Rating' for Web Content Management EContent Magazine selected Hummingbird as 'One of the Companies that Matter Most in the Digital Content Industry' About Hummingbird
