Fourth Consecutive Quarter of Profitability; License Revenues Increase Versus Q4 of Prior Year
MCLEAN, Va., Jan. 30 -- MicroStrategy(R) Incorporated (Nasdaq: MSTR), a leading worldwide provider of business intelligence software, today announced its financial results for the three- month period ended December 31, 2002 (the fourth quarter of its 2002 fiscal year), reporting its fourth consecutive quarter of GAAP profitability and full year earnings of $3.12 per share on a diluted basis.
Fourth quarter 2002 revenues were $42.0 million versus $33.4 million in the third quarter of 2002 and $43.7 million in the fourth quarter of 2001. Fourth quarter 2002 license revenues were $20.5 million versus $12.9 million in the third quarter of 2002 and $18.7 million in the fourth quarter of 2001. Net income attributable to common stockholders for the fourth quarter of 2002, determined in accordance with Generally Accepted Accounting Principles (GAAP), was $4.6 million, or $0.33 per share on a diluted basis. This result included restructuring and impairment charges of $1.4 million, charges for amortization of goodwill and intangible assets of $0.5 million, a charge for discount amortization expense on notes payable of $1.0 million, and a gain on the partial extinguishment of notes payable of $2.0 million. Excluding these items, adjusted net earnings for the fourth quarter of 2002 was $5.5 million, or $0.40 per share on a diluted basis.
"A full year of profitability and four consecutive profitable quarters are significant achievements for MicroStrategy. Our license revenues in the fourth quarter grew by 9 percent over the same period in 2001, which indicates that our field operations, supported by several new product releases, had solid execution," said MicroStrategy President and CFO, Eric F. Brown. "We have implemented rigorous changes to all aspects of our operations and made substantial improvements to our balance sheet."
"The earnings speak for themselves. MicroStrategy has become a profitable, more cost-efficient and productive company," said MicroStrategy Chairman and CEO Michael J. Saylor. "In 2002, in contrast to many software companies, we grew our sales force by approximately 30 percent, and we won major new business with leading companies across the globe. Acknowledging the strength of our scalable, pure web MicroStrategy 7i(TM) platform, industry leaders now view MicroStrategy as a technically superior alternative to vendors such as Business Objects and Cognos. These vendors have numerous small-scale implementations but are not well-architected to meet the deployment and on-going maintenance needs of mid-size and large organizations."
Highlights from Q4 2002
Signed Agreements with 11 Systems Integrators and OEMs (Original Equipment Manufacturers)
New partners include: Wingspan Technology, Eureaka Technocrates, Inc., Miix Ltd, Vallence Solutions, LLC, SoftPro LLC, and Intelligent Communications.
Added 128 New Customers
New Customers and New Deals with Existing Customers in Q4 2002 Included:
Alitalia, Aventis Pasteur, BellSouth, Crane & Company, Discovery Communications, GE Medical Systems, Grange Insurance, Harris Teeter, IMS Health Canada, Katz Group, Koch Industries, Lending Tree, Prescription Solutions, Rheem Manufacturing, RBC Financial Group, Shaw Industries, Solucient, Toyota Financial Services, Universal Studios, Upsher-Smith Laboratories, U.S. Air Force Gunter Annex, and Wells Fargo & Company.
Examples of Noteworthy Customer Deals from Q4 2002:
In the fourth quarter of 2002, Discovery Communications, Inc., the leading global real world media and entertainment company with over 830 million subscribers around the world and home to the Discovery Channel, Travel Channel, Animal Planet, and The Learning Channel, selected the MicroStrategy platform as its enterprise business intelligence standard. The company selected MicroStrategy because of its platform`s integrated architecture, ease of use, and low cost of administration. Discovery plans to deploy sales, financial and management analytic applications with MicroStrategy. Eventually more than two hundred employees will perform analyses to optimize Discovery`s business performance.
Toyota Financial Services
In the fourth quarter of 2002, Toyota Financial Services, a leading captive finance company in the United States with managed assets totaling more than $40 billion dollars, purchased MicroStrategy software and services to expand its MicroStrategy financial reporting applications out to the enterprise. Impressed by the scalability and functionality of the MicroStrategy Business Intelligence Platform, Toyota Financial Services expects its user base to grow to over 400 associates across the country. TFS is the finance and insurance brand for Toyota in the U.S., offering retail auto financing and leasing through Toyota Motor Credit Corporation (TMCC) and extended service contracts through Toyota Motor Insurance Services (TMIS).
Alitalia is one of the leading airlines in Europe and the world. With more than 50 years of experience it is one of Italy`s largest and most successful companies, carrying more than 25 million passengers per year. To maintain its leadership position, Alitalia chose the MicroStrategy platform as its business intelligence solution for customer profiling and campaign management. Alitalia deploys MicroStrategy Web and MicroStrategy Narrowcast to analyze a multimillion record database of historical reservation data and provide dynamic Web reporting and information delivery. MicroStrategy offers Alitalia a solution for customer profiling, including client segmentation by frequency and relationship tenure; for campaign creation and management; and for market basket analysis, to analyze the relationship between flight purchases and the use of commercial partners.
IMS Health Canada
IMS Health Canada has developed an ASP application with the MicroStrategy Business Intelligence Platform(TM) that provides sales and marketing data to pharmaceutical companies. The recent purchase of additional MicroStrategy software and services will allow the company to expand its reach from 650 customers on the Web to 1,000, and from 2,000 subscribers who will receive personalized insight via e-mail based data stores in its Oracle data warehouse to 3,500. The company offers the services to its pharmaceutical customers to help them determine optimal sales and marketing strategies to improve their market presence.
Year of Technological Milestones & Innovation Solidifies MicroStrategy`s Leadership