OPNET Announces Financial Results for Second Quarter of Fiscal 2009
Revenue of $32.4 million
Operating Margin of 9.6%
Diluted earnings per share of $0.10
BETHESDA, MD – October 30, 2008 -- OPNET Technologies, Inc. (NASDAQ: OPNT), a leading provider of solutions for managing networks and applications, today announced that revenue for the second fiscal quarter, ended September 30, 2008 was $32.4 million, compared to $25.0 million for the same quarter in the prior fiscal year. Diluted earnings per share for the second quarter of fiscal 2009 were $0.10, compared to diluted earnings per share of $0.06 for the same quarter in the prior fiscal year.
Marc A. Cohen, OPNET’s Chairman and CEO, stated, “We are very pleased to have achieved record quarterly revenue of $32.4 million. Our license revenue of $14.0 million this quarter exceeded our previous license revenue record of $12.9 million, which we achieved last quarter. We are also very pleased to have improved our operating margin for the third consecutive quarter to 9.6%, and we remain committed to further improvements in profitability.”
Cohen continued, “We believe that weakness in the economy during the quarter affected business activity, and may continue to do so in the future. However, we remain cautiously optimistic that the growth opportunities generated by our enhanced solution portfolio will allow us to continue growing sales. In particular, we continue to have strong demand for our end-to-end application performance management solutions.”
The Company’s second quarter fiscal 2009 financial results are presented below. The non-GAAP results exclude the income statement effects of stock-based compensation and acquisition-related amortization of intangible assets. A reconciliation of GAAP results to non-GAAP results has been provided in the financial statement table following the text of the press release. For further information, please refer to the section of the press release titled, “Use of Non-GAAP Measures.”
GAAP Financial Highlights for the Second Quarter of Fiscal 2009:- Grew revenue year-over-year 29.5% to $32.4 million from $25.0 million for the same quarter of fiscal 2008. Revenue for the quarter increased sequentially 7.5% from $30.1 million for the first quarter of fiscal 2009.
- License revenue increased year-over-year by 45.4% to $14.0 million from $9.6 million for the same quarter of fiscal 2008. License revenue for the quarter increased sequentially 8.3% from $12.9 million for the first quarter of fiscal 2009.
- Ended the quarter with deferred revenue of $29.7 million, a 34.6% increase year-over-year from $22.0 million at the end of the same quarter of fiscal 2008 and a 5.6% decrease sequentially from $31.4 million at the end of the first quarter of fiscal 2009.
- Gross profit increased year-over-year to $24.5 million from $19.0 million for the same quarter of fiscal 2008. Gross profit increased sequentially from $22.2 million in the first quarter of fiscal 2009.
- Operating income increased year-over-year to $3.1 million from $211 thousand for the same quarter of fiscal 2008. Operating income increased sequentially from $945 thousand in the first quarter of fiscal 2009.
- Operating margin increased year-over-year to 9.6% from 0.8% for the same quarter of fiscal 2008. Operating margin increased sequentially from 3.1% in the first quarter of fiscal 2009.
Non-GAAP Financial Highlights for the Second Quarter of Fiscal 2009:
- Non-GAAP gross profit increased year-over-year to $25.1 million from $19.2 million for the same quarter of fiscal 2008. Non-GAAP gross profit increased sequentially from $22.9 million in the first quarter of fiscal 2009.
- Non-GAAP operating income increased year-over-year to $4.2 million from $808 thousand for the same quarter of fiscal 2008. Non-GAAP operating income increased sequentially from $2.0 million in the first quarter of fiscal 2009.
- Non-GAAP operating margin increased year-over year to 13.0% from 3.2% for the same quarter of fiscal 2008. Non-GAAP operating margin increased sequentially from 6.6% in the first quarter of fiscal 2009.
- Non-GAAP net income increased year-over-year to $2.7 million from $1.9 million for the same quarter of fiscal 2008. Non-GAAP net income increased sequentially from $1.4 million in the first quarter of fiscal 2009.
- Non-GAAP diluted earnings per share increased year-over-year to $0.13 from $0.09 for the same quarter of fiscal 2008. Non-GAAP diluted earnings per share increased sequentially from $0.07 in the first quarter of fiscal 2009.
Third Quarter Fiscal Year 2009 Financial Outlook
OPNET currently expects fiscal 2009 third quarter GAAP revenue to be between $31.0 million and $34.0 million, and GAAP diluted earnings per share to be between $0.08 and $0.18. These estimates represent management’s current expectations about the Company’s future financial performance, based on information available at this time.
OPNET will hold an investor conference call on Thursday, October 30, 2008 at 5:00 pm EDT to review financial results for the second quarter of fiscal 2009.
To listen to the OPNET investor conference call:
- Call 877-407-9205 in the U.S. or 201-689-8054 for international callers, or
- Use the webcast at www.opnet.com, or at www.investorcalendar.com (click on OPNT under "VCalls by Date"). Investors are advised to go to the web site at least 15 minutes early to register, download, and install any necessary audio software.
To listen to the archived call:
- Call the replay phone number at 877-660-6853 or 201-612-7415 for international callers. For replay, enter account # 286, conference ID # 299212. The replay will be available from 7:00 pm EDT October 30, 2008 through 11:59 pm EDT November 6, 2008.
- The webcast will be available at www.opnet.com or at www.investorcalendar.com, archived for seven days.
OPNET uses a variety of financial measures that are not in accordance with generally accepted accounting principles, or GAAP, including non-GAAP gross profit, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share as supplemental measures to GAAP to evaluate its operational performance. These financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. A detailed explanation of each of the adjustments to such financial measures is described below. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is also included below.
Management uses non-GAAP financial measures (a) to evaluate OPNET’s historical and prospective financial performance as well as its performance relative to its competitors, and (b) to measure operational profitability and the accuracy of forecasting. In addition, many financial analysts who follow OPNET focus on and publish both historical results and future projections based on non-GAAP financial measures. OPNET believes that it is in the best interest of its investors to provide this information to analysts so that they accurately report the non-GAAP financial information. Moreover, investors have historically requested these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results.
While management believes that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of OPNET's competitors and may not be directly comparable to similarly titled measures of OPNET's competitors due to potential differences in the exact method of calculation. OPNET compensates for these limitations by using these non-GAAP financial measures only as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.
The adjustments to these non-GAAP financial measures, and the basis for such adjustments, are outlined below:
Amortization of intangibles and its related tax impact. OPNET incurs amortization of intangibles, which is included in its GAAP presentation of amortization of acquired technology and customer relationships, and research and development, related to various acquisitions it has made in recent years. Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP operating income, non-GAAP gross profit, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share when it evaluates the continuing operational performance of OPNET because these costs are fixed at the time of an acquisition, and are then amortized over a period of three to five years after the acquisition and generally cannot be changed or influenced by management after the acquisition. Accordingly, management does not consider these expenses for purposes of evaluating the performance of OPNET during the applicable time period after a given acquisition, and it excludes such expenses when evaluating OPNET’s financial performance.
Stock-based compensation expense and its related tax impact. OPNET incurs expense related to stock-based compensation, which is included in its GAAP presentation of cost of software license updates, technical support and services, cost of professional services, research and development expense, sales and marketing expense and general and administrative expense. Although stock-based compensation is an expense of OPNET and viewed as a form of compensation, management excludes these expenses for the purpose of calculating non-GAAP operating income, non-GAAP gross profit, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share when it evaluates the continuing operational performance of OPNET. Specifically, OPNET excludes stock-based compensation during its quarterly and annual assessments of OPNET's and management's performance. In evaluating the performance of senior management, stock-based compensation is excluded from expenditure and profitability results.
About OPNET Technologies, Inc.
Founded in 1986, OPNET Technologies, Inc. (NASDAQ:OPNT) is a leading provider of solutions for managing networks and applications. For more information about OPNET and its products, visit www.opnet.com.
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OPNET and OPNET Technologies, Inc. are trademarks of OPNET Technologies, Inc. All other trademarks are the property of their respective owners.
Statements in this press release that are not purely historical facts may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. OPNET Technologies, Inc. ("OPNET"). Forward-looking statements, including comments concerning expected revenue for the third quarter of fiscal 2009, are predictions based upon information available to OPNET as of the date of this press release and involve risks and uncertainties; therefore, actual events or results may differ materially. Factors that may cause OPNET's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements include, among others, those factors listed under the caption "Risk Factors" of OPNET's Annual Report on Form 10-K for the fiscal year ended March 31, 2008, as filed with the Securities and Exchange Commission on June 9, 2008 and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008. The risk factors set forth in the Form 10-K and Form 10-Q under the caption "Risk Factors" are specifically incorporated by reference into this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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Note to editors: The word OPNET is spelled with all upper-case letters.
OPNET Media Contact: |
OPNET Investor Relations: Mel Wesley OPNET Technologies (240) 497-3000 ir@opnet.com www.opnet.com |
