Business Objects reports outstanding Q4

Business intelligence software heavyweight Business Objects reported impressive results for the fourth quarter and year, ended 31 December 2003.

Describing what he called 'an outstanding' quarter, Business Objects CFO Jim Tolonen told analysts 4Q revenue was US$184.2 million, up 46 percent from US$126.2 million for the same period a year ago. Newly acquired Crystal Decisions contributed to the increase. The net loss for the quarter was US$8.6 million, or 12 US cents a share, compared with a profit of US$12.8 million, or 20 US cents a share, in 4Q 2002.

Calculated according to GAAP, Business Objects' loss reflected charges related to its US$1.2 billion acquisition of Crystal Decisions, completed 20 days before the end of the quarter. These charges included a US$28 million write-off of acquired in-process technologies, US$1 million in amortised R&D expenses, restructuring charges of US$7.8 million and one-time charges of US$5.5 million. In addition, GAAP rules required the elimination of approximately US$3.4 million in maintenance revenue during the 20-day period of the combined company.

Total licence revenue was approximately US$76 million, up 16 percent from the year-ago quarter.
'Our licence revenue is by far the largest in the BI market and growing faster than our nearest competitor,' said Bernard Liataud, chairman and CEO. 'We have the largest customer base in the industry, with 24,000 customers. Now as part of a larger goal, we will become one of the top 15 software companies in the next three years.'

Business Objects additionally calculated pro forma results under two scenarios: if the companies had operated independently for the full quarter, and if they'd been a combined entity for the three-month period. Pro forma results for Business Objects, alone, would have been total revenue of US$158 million, up 25 percent from the same period. Licence revenue would have climbed 16 percent, to about US$76 million, and gross profit would have increased by 26 percent, or US$133 million. This represented a gross margin of 84 percent.

The company estimated that Crystal Decisions' stand-alone pro forma quarterly results would have been $82 million in total revenue, licence revenue of $51 million, and gross profit of approximately $65 million. These represented increases of 15 percent, 9 percent and 15 percent, respectively, from the same period a year ago. Pro forma estimated the combined company had total revenue of US$240 million, licence revenue of US$127 million and operating income of US$46 million.

Business Objects finished the year with $235 million in cash and US$1.8 billion in total assets.