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Mercury Interactive Q1 Results: US$156.8M, up 42%

  • 23 April, 2004 08:51

<p>· Revenue of US$156.8 million; Increase of 42% versus Q1 2003
· Net Increase in Deferred Revenue of US$20.5 million
· Earnings Per Share: US$0.19 GAAP; US$0.24 Non-GAAP</p>
<p>SUNNYVALE, CALIF. — APRIL 22, 2004 — Mercury Interactive Corporation (NASDAQ: MERQ), the global leader in business technology optimization (BTO), today reported results for the first quarter ended March 31, 2004.</p>
<p>Revenue for the first quarter of 2004 was US$156.8 million, an increase of 42 percent compared to US$110.4 million reported in the first quarter of 2003.</p>
<p>Deferred revenue for the first quarter of 2004 increased by US$20.5 million from the fourth quarter of 2003 to US$301.1 million. Cash generated from operations for the first quarter of 2004 was US$64.5 million compared to US$53.2 million in the first quarter of 2003.</p>
<p>GAAP RESULTS
Net income for the first quarter of 2004 was US$18.9 million, or US$0.19 per diluted share, compared to US$18.1 million, or US$0.20 per diluted share, for the same period a year ago. GAAP results for the first quarter include stock-based compensation and amortization of intangible assets of US$4.1 million, integration and other related charges of US$1.0 million and net loss on investments in non-consolidated companies of US$0.1 million.</p>
<p>NON-GAAP RESULTS
Net income for the first quarter of 2004 was US$23.8 million, or US$0.24 per diluted share, compared to US$18.8 million, or US$0.21 per diluted share, for the same period a year ago. Non-GAAP results, as presented in the attached reconciliation table, exclude the following recurring items: integration and other related charges, stock-based compensation, amortization of intangible assets, net loss on investments in non-consolidated companies as well as related income tax provisions.</p>
<p>“Mercury’s results in the first quarter were very strong, with growth in new orders of over 30 percent,” said Amnon Landan, chairman and CEO at Mercury. “This growth is driven by the continued adoption of our BTO solutions by our global customers.”</p>
<p>Q1 2004 HIGHLIGHTS
· Record results in IT Governance (formerly Kintana) with revenues of US$17.0 million
· Accenture selected Mercury IT Governance Center for internal use throughout their global outsourcing and systems integration practices
· Continued momentum across Application Delivery (AD) and Application Management (AM)
o AD year-over-year order growth exceeds 30%
o AM year-over-year order growth exceeds 40%
· 11 transactions exceeding US$1.0 million
· Cash flow from operations of US$64.5 million</p>
<p>FINANCIAL OUTLOOK
The following financial outlook is provided based on information as of April 22, 2004.
Management provides the following guidance for the quarter ending June 30, 2004:</p>
<p>· New order growth is expected to be in the range of 25 percent to 35 percent
· Revenue is expected to be in the range of US$160.0 million to US$170.0 million
· Net increase in deferred revenue is expected to be in the range of US$10.0 million to US$20.0 million
· Non-GAAP operating margin expected to be in the range of 15 to 17 percent
· GAAP diluted earnings per share is expected to be in a range of US$0.09 to US$0.16
· Non-GAAP diluted earnings per share is expected to be in the range of US$0.21 to US$0.26
· Cash flow from operations is expected to be in the range of US$40.0 million to US$50.0 million</p>
<p>Non-GAAP guidance is adjusted from GAAP guidance by excluding recurring integration and other related charges, stock-based compensation, amortization of intangible assets, and facilities impairment charges related to the move to our new campus.</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 (IT). 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 enterprise 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>Effective April 30, 2004, Mercury’s corporate headquarters will move to 379 North Whisman Road, Mountain View, California 94043. The telephone and fax numbers at that location will be (650) 603-5200 and (650) 603-5300, respectively.</p>
<p>FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" under the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties concerning Mercury Interactive's expected financial performance, as well Mercury Interactive’s future business prospects and product and service offerings. Mercury Interactive’s actual results may differ materially from the results predicted or from any other forward-looking statements made by, or on behalf of, Mercury Interactive and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among other things: 1) the mix of perpetual and term licenses and the effect of the timing of the recognition of revenue from products sold under term licenses; 2) Mercury Interactive has historically received a substantial portion of its orders at the end of the quarter and if an order shortfall occurs at the end of a quarter it could negatively impact the company’s operating results for that quarter; 3) the dependence of Mercury Interactive's financial growth on the continued success and acceptance of its existing and new software products and services, and the success of its BTO strategy; 4) uncertainties related to the integration of products and services, employees and operations as a result of acquisitions; 5) the ability to attract and retain key personnel; 6) intense competition for Mercury Interactive's products and services; and 7) the additional risks and important factors described in Mercury Interactive's SEC reports, including the Annual Report to Stockholders on Form 10-K for the fiscal year ended December 31, 2003, which is available at the SEC’s website at www.sec.gov. All of the information in this press release is as of April 22, 2004, and Mercury Interactive undertakes no duty to update this information.</p>
<p>NON-GAAP FINANCIAL INFORMATION
Mercury Interactive provides non-GAAP net income and earnings per share data as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. Mercury Interactive's management believes these non-GAAP measures are useful to investors because this supplemental information facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this press release.</p>

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