Revenues Increase 37.6% to Euro 100.0 Million Year-Over-Year
MADRID, Spain, Nov. 29 /PRNewswire-FirstCall/ -- Telvent GIT, S.A. (NASDAQ:TLVT), the Global RealTime Information Technology Company, today announced financial results for the third quarter ended September 30, 2005.
Telvent's third quarter 2005 revenues totaled Euro 100.0 million, an increase of Euro 27.3 million or 37.6 percent, versus Euro 72.7 million reported for the third quarter of 2004.
Net Income for third quarter 2005 was Euro 3.8 million, an increase of Euro 1.1 million or 39.9 percent, versus Euro 2.7 million reported for the third quarter of 2004. Earnings per diluted share for the third quarter were Euro 0.13 (based on a weighted average of 29,247,100 shares outstanding), compared to Euro 0.14 per diluted share (20,000,000 shares outstanding), in the third quarter of 2004. Pro forma net income for the third quarter 2005 was Euro 5.2 million, an increase of 36.4 percent, versus Euro 3.8 million for the third quarter of 2004. Pro forma earnings per diluted share for the third quarter 2005 were Euro 0.18, versus Euro 0.19 for the third quarter of 2004.
Revenues for the first nine months of 2005 were Euro 271.4 million, an increase of Euro 72.2 million or 36.2 percent, versus Euro 199.2 million reported for the first nine months of 2004.
Net income for the first nine months of 2005 was Euro 8.9 million, an increase of Euro 2.6 million or 40.8 percent, versus Euro 6.4 million reported for the first nine months of 2004. Earnings per diluted share for the first nine months of 2005 were Euro 0.31, compared to Euro 0.32 per diluted share in the same period of 2004. Pro forma net income for the first nine months of 2005 was Euro 11.9 million, an increase of 21.0 percent, versus Euro 9.8 million for the first nine months of 2004. Pro forma earnings per diluted share for the first nine months of 2005 were Euro 0.41, versus Euro 0.49 for the same period of 2004.
Pro forma net income excludes the amortization of intangible assets from the acquisitions' purchase price allocations, stock compensation plan expenses and mark to market hedging, that Telvent believes are not indicative of its core performance or results. A reconciliation between GAAP and pro forma net income is provided in this release in a table immediately following the condensed consolidated financial statements.
"I am very pleased with our overall growth this quarter. Organic growth was strong, specifically in the core businesses and regions that are central to our strategy. As an example, we achieved record growth in China, driven by the solid execution and strong performance of our projects," said Manuel Sanchez Ortega, Telvent Chairman and Chief Executive Officer.
"We maintain a stable revenue base, with more than 92 percent of our business coming from repeat customers. The positive momentum from our existing base is also complemented by growing contributions from recent acquisitions as they are successfully integrated." "I am pleased with how this year is progressing and look forward to further progress in 2006," concluded Manuel Sanchez Ortega.
Gross margin was 21.1 percent in the third quarter of 2005 compared to 22.4 percent in the third quarter of 2004. Gross margin for the first nine months of 2005 was 21.7 percent, compared to 22.4 percent in the same period last year.
Operating expenses for the third quarter, as a percentage of revenues, decreased 0.6 percentage points. However, operating expenses grew in absolute figures, mainly due to higher general and administrative costs from additional legal and accounting expenses that were incurred during this period as a result of being a publicly-traded company in the United States, and higher sales and marketing costs, primarily due to the result of the contribution of Telvent's newly acquired businesses and the increased business activity across sectors and geographies, especially in connection with our efforts to develop the Company's Traffic sector business in North America. Operating expenses, as a percentage of revenues, for the first nine months of 2005 were 16.4 percent, compared to 17.0 percent in the same period last year.
Income from operations, as a percentage of revenues, was 6.4 percent in the third quarter of 2005 compared to 7.0 percent in the third quarter of 2004. For the first nine months of 2005, income from operations, as a percentage of revenues, was 5.3 percent compared to 5.4 percent in the same period last year.
For the first nine months of 2005, cash used in operating activities was Euro 34.3 million. For the same period in 2004, cash used was Euro 7.0 million.
As of September 30, 2005, cash and cash equivalents were Euro 75.5 million and total debt (including net Euro 14.1 million credit line due from related parties) was Euro 54.1 million, resulting in a net cash position of Euro 21.4 million. As of December 31, 2004, net cash position was Euro 64.5 million.
Segment Discussion Energy
Revenues for the Energy sector in the third quarter 2005 were Euro 48.7 million, an increase of Euro 19.0 million, or 63.8 percent, from Euro 29.7 million in the third quarter 2004. Gross margin in this sector was 21.6 percent in the third quarter 2005, versus 25.6 percent in 2004. The most significant contract in this sector during the third quarter was the design, installation and commissioning of a Supervisory Control And Data Acquisition (SCADA) system for the Alashankou-Dushenzi crude oil pipeline for PetroChina Company Limited. The total contract value is US$1.65 million (approximately Euro 1.38 million).
Revenues for the first nine months of 2005 were Euro 128.7 million, an increase of Euro 47.4 million, or 58.4 percent, from Euro 81.2 million in the same period of 2004. Gross margin in this sector was 22.4 percent in first nine months of 2005 versus 23.7 percent in 2004.
Traffic Revenues for the Traffic sector during the third quarter 2005 were Euro 28.2 million, an increase of Euro 2.1 million, or 8.0 percent, from the Euro 26.1 million recorded in the same period of 2004. Gross margin in this sector was 13.8 percent in the third quarter 2005, unchanged from the comparable period in 2004. The most significant contract in this sector was the maintenance services for all the urban traffic control infrastructures in Madrid. This contract with Ayuntamiento de Madrid has a four-year term with a renewal option for two additional years and is worth Euro 14.5 million.
Revenues for the first nine months of 2005 were Euro 84.8 million, an increase of Euro 15.4 million, or 22.1 percent, from Euro 69.5 million in the same period of 2004. Gross margin in this sector was 17.1 percent in the first nine months of 2005 versus 18.8 percent in 2004.
Transport Revenues for the Transport sector during the third quarter 2005 were Euro 8.7 million, an increase of Euro 4.0 million, or 83.9 percent, from Euro 4.7 million during the same period in 2004. Gross margin in this sector was 23.6 percent in the third quarter 2005, versus 30.6 percent in the same period of 2004. The most significant contract in this sector was for the supply of automatic ticket vending machines for Metro de Madrid. The contract value is approximately Euro 4.0 million.
Revenues for the first nine months of 2005 were Euro 16.8 million, an increase of Euro 3.1 million, or 22.8 percent, from Euro 13.7 million in the same period of 2004. Gross margin in this sector was 22.1 percent in the first nine months of 2005, versus 21.3 percent in 2004.
Environment Revenues for the Environment sector during the third quarter 2005 were Euro 7.0 million, an increase of Euro 1.2 million, or 21.6 percent, from Euro 5.7 million during the same period in 2004. Gross margin in this sector was 15.3 percent in the third quarter of 2005, versus 20.1 percent in the same period of 2004. The most significant contract in this sector was the water supply SCADA system in Doha, capital of the State of Qatar, for Kahramaa "Qatar General Electricity & Water Corporation". The contract value is over Euro 8 million.
This contract reinforced Telvent's presence in the Middle East, where several projects have been performed or are in progress. These include the water supply system for the city of Amman (Jordan), management of the water distribution network in Ankara (Turkey), a gas pipeline control system for GASCO in Cairo (Egypt), and a Meteorological Observation Network and Data Processing System for DGCA in Kuwait.
Revenues for the first nine months of 2005 were Euro 17.8 million, a decrease of Euro 0.9 million, or 4.7 percent, from Euro 18.7 million in the same period of 2004. Gross margin in this sector was 22.7 percent in the first nine months of 2005 versus 20.6 percent in 2004.
Other Revenues for the Other sector during the third quarter 2005 were Euro 7.5 million, an increase of Euro 1.1 million, or 17.3 percent, from Euro 6.4 million in the same period in 2004. Gross margin in this sector was 47.5 percent in the third quarter 2005, versus 38.3 percent in 2004. The most significant contract in this sector during the third quarter was the corporate validation and electronic signature platform for Spain's Ministry of Public Administration. In addition, Telvent will provide technological assistance for this new electronic signature initiative and the future electronic ID initiative to be implemented in Spain early in 2006. The contract value is approximately Euro 0.5 million.
Revenues for the first nine months of 2005 were Euro 23.3 million, an increase of Euro 7.1 million, or 43.8 percent, from Euro 16.2 million in the same period of 2004. Gross margin in this sector was 34.2 percent in first nine months of 2005, versus 34.5 percent in 2004.
Backlog Backlog (representing the portion of signed contracts for which performance is pending) as of September 30, 2005 was Euro 430.1 million, which reflects 24.1 percent growth over the Euro 346.5 million in backlog at the end of September, 2004.
New Bookings New order bookings (or new contracts signed) in the third quarter 2005 were Euro 113.2 million, a 7.7 percent decrease from Euro 122.6 million during the same period in 2004. New order bookings for the nine months ended September 30, 2005 were Euro 319.6 million, an increase of Euro 51.7 million, or 19.3 percent, from new bookings of Euro 267.9 million for the same period of 2004. New bookings reflect contributions from the Company's successful new products and services solutions, continued sales and marketing activity and acquired businesses.
Pipeline Pipeline, measured as management's estimates of real opportunities within the next 6 to 12 months, is approximately Euro 1.26 billion.
Use of Non-GAAP Financial Information To supplement our consolidated financial statements presented in accordance with U.S. GAAP, we use certain non-GAAP measures, including pro forma net income and pro forma EPS. Pro forma net income and pro forma EPS are adjusted from GAAP-based results to exclude certain costs and expenses that we believe are not indicative of our core operating results. Pro forma results are one of the primary indicators management uses for evaluating historical results and for planning and forecasting future periods. We believe pro forma results provide consistency in our financial reporting, which enhances our investor's understanding of our current financial performance as well as our future prospects. Pro forma results should be viewed in addition to, and not in lieu of, GAAP results.
Conference Call Details Telvent Chairman and Chief Executive Officer, Manuel Sanchez Ortega, Chief Financial Officer Ana Plaza, and Jose Ignacio del Barrio, Vice President of Business Development and Investor Relations, will conduct a conference call to discuss the third quarter 2005 results, which will be simultaneously webcast at 9:00 A.M. Eastern Time / 6:00 A.M. Pacific Time / 3:00 P.M. Madrid Time on Wednesday, November 30, 2005.
To access the conference call, participants in North America should dial 800-374-0724 and international participants should dial +1 (706) 634-1387. A live webcast of the conference call will be available on the investor relations zone of Telvent's corporate web site at http://www.telvent.com/. Please visit the web site at least 15 minutes early to register for the teleconference webcast and download any necessary audio software. A replay of the call will be available on the web site approximately two hours after the conference call is completed. To access the replay, participants in North America should dial 800-642-1687 and international participants should dial +1 (706) 645-9291. The passcode for the replay is 2550836.
About Telvent Telvent (NASDAQ:TLVT), the Global RealTime IT Company, specializes in high value-added solutions for four specific industrial sectors (Energy, Traffic, Transport and Environment) in Europe, North America, Latin America, the Asia-Pacific region, and the Middle East and Africa. (http://www.telvent.com/) This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often are proceeded by words such as "believes," "expects," "may," "anticipates," "plans," "intends," "assumes," "will," or similar expressions. Forward-looking statements reflect management's current expectations, as of the date of this press release, and involve certain risks and uncertainties. Telvent's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Some of the factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the "Risk Factors" described in Telvent's Annual Report on Form 20-F for the year ended December 31, 2004, filed with the Securities and Exchange Commission on May 13, 2005.
Unaudited Consolidated Balance Sheets
(In thousands of Euros, except share and per share amounts) As of As of
September 30, December 31,
2005 2004
Assets:
Current assets: Cash and cash equivalents Euro 56,855 Euro 80,515
Restricted cash -- 8,028
Available-for-sale securities
and other short-term investments 19,810 1,231
Derivative contracts 2,827 4,046
Accounts receivable (net of allowances
of Euro 1,851 as of September 30, 2005
and Euro 2,165 as of December 31, 2004) 116,720 84,536
Unbilled revenues 80,695 36,683
Due from related parties 15,732 37,848
Inventory 27,114 10,760
Deferred tax assets 3,543 3,751
Other current assets 1,401 659
Total current assets Euro 324,697 Euro 268,057
Other investments 1,175 2,137
Property, plant and equipment, net
of accumulated depreciation of
Euro 38,042 as of September 30, 2005
and Euro 30,602 as of December 31, 2004 54,793 53,586
Long-term receivables and other assets 11,011 3,198
Deferred tax assets 13,395 18,004
Other intangible assets, net of
accumulated amortization of Euro 10,211
as of September 30, 2005 and Euro 7,724
as of December 31, 2004 9,548 9,789
Goodwill 17,386 13,689
Total assets Euro 432,005 Euro 368,460 Liabilities and shareholders' equity:
Current liabilities:
Accounts payable Euro 135,793 Euro 123,278
Billing in excess of costs and
estimated earnings 27,063 16,466
Accrued and other liabilities 12,013 7,696
Income taxes payable 11,177 11,778
Deferred tax liabilities 3,705 3,096
Due to related parties 29,726 6,194
Current portion of long-term debt 9,452 9,208
Short-term debt 23,274 18,748
Short-term leasing obligations 2,578 1,960
Derivative contracts 3,484 2,602
Total current liabilities Euro 258,265 Euro 201,026
Long-term debt less current portion 7,247 16,875
Long-term leasing obligations 4,846 4,130
Other long-term liabilities 7,327 8,747
Deferred tax liabilities 232 323
Unearned income 389 525
Total liabilities Euro 278,306 Euro 231,626 Minority interest 1,891 863 Commitments and contingencies Shareholders' equity:
Common stock, Euro 3.005 par value,
29,247,100 shares authorized, issued
and outstanding, same class and series 87,889 87,889
Additional paid-in capital 40,346 40,319
Deferred Compensation (2,334) (3,305)
Accumulated other comprehensive
income (loss) 2,531 (3,364)
Retained earnings 23,376 14,432
Total shareholders' equity Euro 151,808 Euro 135,971
Total liabilities
and shareholders' equity Euro 432,005 Euro 368,460 Unaudited Consolidated Statements of Operations
(In thousands of Euros, except share and per share amounts) Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Revenues Euro 100,023 Euro 72,680 Euro 271,372 Euro 199,217
Cost of revenues 78,940 56,422 212,368 154,565
Gross profit Euro 21,083 Euro 16,258 Euro 59,004 Euro 44,652
General and
administrative 5,893 5,091 18,122 16,446
Sales and marketing 3,231 1,582 9,518 5,928
Research and development 3,378 2,565 10,432 6,079
Depreciation
and amortization 2,184 1,912 6,419 5,461
Total operating
expenses Euro 14,686 Euro 11,150 Euro 44,491 Euro 33,914
Income from operations 6,397 5,108 14,513 10,738
Financial income
(expense), net (879) (949) (1,803) (2,843)
Other income, net -- 34 -- 96
Total other income
(expense) Euro (879) Euro (915) Euro (1,803) Euro (2,747)
Income before income taxes 5,518 4,193 12,710 7,991
Income tax expense (benefit) 1,619 898 3,149 1,008
Net income before minority
interest Euro 3,899 Euro 3,295 Euro 9,561 Euro 6,983
Loss/(Profit) attributable
to minority interests (111) (587) (617) (629)
Net income Euro 3,788 Euro 2,708 Euro 8,944 Euro 6,354 Earnings per share
Basic and diluted net
income per share Euro 0.13 Euro 0.14 Euro 0.31 Euro 0.32
Weighted average number
of shares outstanding
Basic and diluted 29,247,100 20,000,000 29,247,100 20,000,000 Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of Euros, except share and per share amounts) Nine Months Ended
September 30,
2005 2004
Cash flows from operating activities:
Net income before minority interest Euro 9,561 Euro 6,983
Adjustments to reconcile net income
to net cash provided by operating activities 17,157 5,058
Change in operating assets and liabilities (48,320) (18,096)
Change in operating assets and liabilities
due to temporary joint ventures (12,673) (942)
Net cash provided by (used in)
operating activities Euro (34,275) Euro (6,997)
Cash flows from investing activities:
Restricted cash - guaranteed deposit
of long term investments
and commercial transactions 8,028 --
Due from related parties 22,107 (28,143)
Deferred payment on Miner & Miner acquisition (3,147) --
Almos acquisition, net of cash (1,706) --
Long-term receivables -- --
ICX acquisition, net of cash -- (720)
Metso acquisition, net of cash -- (5,225)
Xwave acquisition, net of cash -- (996)
Purchase of property, plant & equipment (3,223) (3,057)
Disposal of investments, net of cash (1,237) 32,433
Purchase of short-term investments (18,368) --
Net cash provided by (used in)
investing activities Euro 2,454 Euro (5,708)
Cash flows from financing activities:
Proceeds and (repayment) of
short-term debt, net 4,526 (11,946)
Proceeds and (repayment) of
long-term debt, net (13,050) (8,761)
Due to related parties 12,798 20,390
Net cash provided by (used in)
financing activities Euro 4,274 Euro (317)
Net decrease in cash and
cash equivalents Euro (27,547) Euro (13,022)
Net effect of foreign exchange
in cash and cash equivalents 3,887 (340)
Cash and cash equivalents at the
beginning of period, excluding
joint ventures 69,582 27,735
Joint venture cash and cash
equivalents at the beginning of period 10,933 3,250
Cash and cash equivalents
at the end of period Euro 56,855 Euro 17,623 Supplemental disclosure of cash information:
Cash paid for the period:
Income taxes Euro 1,150 Euro 1,709
Interest Euro 3,751 Euro 4,531
Non-cash transactions: Capital leases Euro 3,754 Euro 672
Bilateral credit agreement
between related parties Euro -- Euro 24,537 Reconciliation between GAAP and Pro Forma Net Income and EPS
(In thousands of Euros, except share and per share amounts) Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
GAAP basis income before
income taxes Euro 5,518 Euro 4,193 Euro 12,710 Euro 7,991 Adjustments to income
before income taxes
Amortization of intangibles 526 675 1,500 1,718
Stock compensation
plan expenses 534 288 998 1,060
Mark to market derivatives 811 7 1,502 1,033
Total Adjustments 1,871 970 4,000 3,811 Adjusted income before
income taxes Euro 7,389 Euro 5,163 Euro 16,710 Euro 11,802 Pro forma Net Income Euro 5,192 Euro 3,806 Euro 11,894 Euro 9,831 Earnings per share
Basic and diluted net
income per share Euro 0.18 Euro 0.19 Euro 0.41 Euro 0.49
Weighted average number
of shares outstanding
Basic and diluted 29,247,100 20,000,000 29,247,100 20,000,000
DATASOURCE: Telvent GIT, S.A.
CONTACT: Investor Relations Contacts: Jose Ignacio del Barrio of Telvent GIT, S.A., +34-902-335599, , or Mark Jones, +1-646-284-9414, , for Telvent GIT, S.A.
Web site: http://www.telvent.com/
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