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Mercury Interactive Reports Q4 03 and FY03 Results up 29 and 27 p.c. respectively

  • 23 January, 2004 14:03

<p>MERCURY INTERACTIVE REPORTS FOURTH QUARTER AND 2003 RESULTS</p>
<p>· Record Revenue of US$152 million for the quarter and US$506.5 million for 2003
· Net Increase in Deferred Revenue: US$54.6 million for the quarter and US$121.2 million for 2003
· Earnings Per Share for the quarter: US$0.14 GAAP; US$0.27 Non-GAAP
· Earnings Per Share for the year ended 2003: US$0.45 GAAP; US$0.93 Non-GAAP</p>
<p>SUNNYVALE, CALIF. — JANUARY 21, 2004 — Mercury Interactive Corporation (NASDAQ: MERQ), the global leader in business technology optimization (BTO), today reported results for the fourth quarter and year ended December 31, 2003.</p>
<p>Revenue for the fourth quarter of 2003 was US$152.0 million, an increase of 29 percent compared to US$117.8 million reported in the fourth quarter of 2002. For the year ended December 31, 2003 revenue was US$506.5 million, an increase of 27 percent compared to US$400.1 million reported for the year ended December 31, 2002.</p>
<p>Deferred revenue for the fourth quarter of 2003 increased by US$54.6 million from the third quarter of 2003 to US$280.6 million. Cash generated from operations for the fourth quarter of 2003 was US$66.9 million compared to US$40.9 million in the fourth quarter of 2002.</p>
<p>"The fourth quarter capped off an impressive year of growth for Mercury with record revenues, record deferred revenue growth, and record cash flow from operations,” said Amnon Landan, chairman and CEO at Mercury Interactive Corporation. “Our customers are adopting the new Mercury Optimization Centers as they take an enterprise approach to Business Technology Optimization."</p>
<p>Q4 2003 HIGHLIGHTS
· Record 19 transactions greater than US$1 million in the fourth quarter
· Record 51% of new product orders as term licenses
· Record net increase in deferred revenue of US$54.6 million, principally from term licenses
· Record results in Application Management and Application Delivery new orders and revenue
· IT governance (formerly Kintana) orders exceeded management expectations</p>
<p>FINANCIAL OUTLOOK
The following financial outlook is provided based on information as of January 21, 2004. Management provides the following guidance for the quarter ending March 31, 2004:</p>
<p>· New order growth is expected to be in the range of 22 percent to 27 percent
· Term licenses are expected to be in the range of 45 percent to 50 percent of new product orders
· Revenue is expected to be in the range of US$145.0 million to US$155.0 million
· Net increase in deferred revenue is expected to be in the range of US$10.0 million to US$20.0 million
· GAAP diluted earnings per share is expected to be in a range of US$0.12 to US$0.18
· Non-GAAP diluted earnings per share is expected to be in the range of US$0.17 to US$0.23
· Cash flow from operations is expected to be in the range of US$50.0 million to US$60.0 million</p>
<p>Non-GAAP guidance is adjusted from GAAP guidance by excluding recurring acquisition, restructuring, integration and other related charges and stock-based compensation and amortization of intangible assets of approximately US$5.1 million.</p>
<p>GAAP RESULTS
Net income for the fourth quarter of 2003 was US$13.1 million, or US$0.14 per diluted share, compared to US$18.8 million, or US$0.21 per diluted share, for the same period a year ago. GAAP results for the fourth quarter include an executive severance charge of US$6.6 million, stock-based compensation and amortization of intangible assets of US$4.2 million, restructuring, integration and other related charges of US$1.1 million and net loss on investments in non-consolidated companies of US$2.2 million.</p>
<p>For the year ended December 31, 2003, net income was US$41.5 million, or US$0.45 per diluted share compared to US$65.2 million, or US$0.74 per diluted share, for the year ended December 31, 2002. The results for the year ended 2003 include an executive severance charge of US$6.6 million, US$16.9 million of non-cash impairment charges related to real estate consolidation, stock-based compensation and amortization of intangible assets of US$8.4 million, acquisition, restructuring, integration and other related charges of US$15.4 million and net loss on investments in non-consolidated companies of US$2.2 million.</p>
<p>NON-GAAP RESULTS
Net income for the fourth quarter of 2003 was US$26.2 million, or US$0.27 per diluted share, compared to US$23.4 million, or US$0.27 per diluted share, for the same period a year ago. Non-GAAP earnings per share for the fourth quarter of 2003 are calculated using fully diluted shares of 97.0 million. Net income for the year ended December 31, 2003 was US$86.1 million, or US$0.93 per diluted share, compared to US$62.9 million, or US$0.72 per diluted share, for the year ended December 31, 2002. Non-GAAP results for 2003 exclude the following recurring items: acquisition, restructuring, integration and other related charges, asset impairment charges related to real estate, gain on early retirement of debt, stock-based compensation and amortization of intangible assets, net loss on investments in non-consolidated companies as well as related income tax provisions or benefits. Also excluded is a non-recurring charge associated with executive severance.</p>
<p>QUARTERLY CONFERENCE CALL
A live Webcast, together with supplemental financial information, can be accessed through the company's Investor Relations Web site at http://www.mercuryinteractive.com/ir.</p>
<p>ABOUT MERCURY
Mercury Interactive, 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 practices of IT; deliver and manage applications; and integrate IT strategy and execution.</p>
<p>Customers worldwide rely on Mercury Optimization Centers to improve quality and performance of applications and manage IT costs, risk and compliance. Mercury BTO offerings are complemented by technologies and services from global business partners. For more information, visit www.mercuryinteractive.com.</p>
<p>For further information please contact:
Graham Sowden Mercury Interactive 02 8273 1999
Shuna Boyd BoydPR 02 9418 8100</p>

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