* Quarterly and Six-month Revenues of EUR 157 million and EUR 278 million * Quarterly and Six-month Pro Forma Diluted EPS of EUR 0.18 and EUR 0.39 * New Order Bookings of EUR 162 million
MADRID, Spain, Aug. 30, 2007 (PRIME NEWSWIRE) -- Telvent GIT, S.A. (Nasdaq:TLVT), the IT company for a sustainable and secure world, today announced unaudited financial results for the second quarter and six month periods ended June 30, 2007.
Revenues for the second quarter 2007 were EUR 156.6 million, an increase of 46.9 percent (39.4 percent organic), compared to EUR 106.6 million for the second quarter 2006. Revenues for the first six months of 2007 were EUR 278.0 million, an increase of 37.6 percent (29.7 percent organic), compared to EUR 202.0 million for the first six months of 2006.
Net income for the second quarter 2007 was EUR 3.5 million, an increase of 84.2 percent, versus EUR 1.9 million reported for the second quarter 2006. Diluted EPS for the second quarter 2007 were EUR 0.12, compared to EUR 0.06 in the second quarter 2006. Net income for the first six months of 2007 was EUR 8.7 million, an increase of 31.8 percent, versus EUR 6.6 million reported for the first six months of 2006. Diluted EPS for the first six months of 2007 were EUR 0.30, compared to EUR 0.23 in the same period in 2006.
Pro forma net income for the second quarter 2007 was EUR 5.2 million, an increase of 62.5 percent versus EUR 3.2 million for the second quarter of 2006. Pro forma diluted EPS for the second quarter 2007 were EUR 0.18, versus EUR 0.11 in the second quarter 2006. Pro forma net income for the first six months of 2007 was EUR 11.5 million, an increase of 35.3 percent, versus EUR 8.5 million for the first six months of 2006. Pro forma diluted EPS for the first six months of 2007 were EUR 0.39, versus EUR 0.29 for the same period in 2006.
New order bookings (or new contracts signed) in the second quarter of 2007 were EUR 161.9 million, a 90.5 percent increase from EUR 85.0 million during the same period in 2006.
Backlog (representing the portion of signed contracts for which performance is pending) was EUR 541.5 million as of June 30, 2007, which reflects 26.6 percent growth over the EUR 427.7 million in backlog at the end of June 2006.
Pipeline, measured as management's estimates of real opportunities within the next 6 to 12 months, is approximately EUR 1.6 billion.
Manuel Sanchez, Chairman and Chief Executive Officer, said, "Telvent recorded another positive quarter of strong growth as we executed our strategy of delivering IT services for a sustainable and secure world.
"The energy segment, providing solutions that allow better management of energy delivery efficiency, continued to perform well. This was driven by the ongoing successful performance of our Vattenfall electrical smart metering contract in Sweden. Following two extensions of the contract in the first six months of 2007, we will be providing integrated systems that allow smart metering to be used by approximately 600,000 Vattenfall customers.
"We also were pleased with the ongoing development of our public administration business as it works to meet the sustainability and security challenges faced by governments globally. In the second quarter, we signed a significant contract with the Spanish government to supply and implement specialized personalization equipment used for a new electronic identity document being deployed across the country.
"We remain committed to technological innovation and were pleased to complete our acquisition of Caseta Technologies, an important U.S. provider of leading-edge electronic toll collection technology that will further support the global expansion of our transportation business.
"The strength of our first half 2007 results, combined with our pipeline and backlog, give us confidence that we are on track to meet our previously stated financial targets for the year."
Gross margin was 20.6 percent in the second quarter of 2007, compared to 21.1 percent in the second quarter of 2006. Gross margin was 22.7 percent for the first six months of 2007, unchanged from the same period a year ago.
Operating expenses, as a percentage of revenues, were 16.6 percent in the second quarter of 2007, versus 17.0 percent in the same quarter of 2006. Operating expenses, as a percentage of revenues, were 17.8 percent for the first six months of 2007, down from 18.0 percent in the same period a year ago.
Pro forma operating margin was 5.5 percent in the second quarter of 2007, compared to 5.4 percent in the second quarter of 2006. Pro forma operating margin was 6.3 percent for the first six months of 2007, up from 6.1 percent in the same period a year ago.
As of June 30, 2007, cash and cash equivalents were EUR 59.8 million and total debt (including net EUR 46.9 million credit line due to related parties) was EUR 110.3 million, resulting in a net debt position of EUR 50.4 million. As of December 31, 2006, net cash position was EUR 46.7 million.
For the first six months of 2007, cash used in operating activities was EUR 76.8 million compared to EUR 44.4 million used in the same period last year. Cash provided by investing activities in the first six months of 2007 amounted to EUR 21.8 million, versus EUR 21.1 million in the same period last year.
Business Highlights
Energy * Telvent continued to strengthen its position in the energy efficiency area through the extension of its project with Swedish utility company, Vattenfall. Having completed the first phase of the original contract to supply an electric metering system for 300,000 customers, Telvent has received two further extensions of the contract. This has doubled the initial number of residential users, and will continue to generate revenues for the Company. Telvent is also providing complementary metering and data management services, utilizing an integrated solution for the management and operation of the system that includes management of metering information, reporting, maintenance and support of all system devices. * Telvent's OASyS systems have been installed to manage the transmission of gas on the major Snam Rete Gas pipeline network in Italy. Combined with the gas transported by our current customer Edison Gas, Telvent's OASyS systems now manage 100 percent of the natural gas transmission in Italy. In addition, a natural gas energy corridor from Central Asia to Western Europe is being created via Turkey, Greece and Italy, and Telvent's OASyS systems have been installed and are operating in these three countries. Transportation * Telvent was awarded a contract to design, construct and commission a traffic infrastructure management system for the City of Mumbai in India. The aim of the project is to enhance traffic mobility and fluidity, as well as increase the average vehicle speed on Mumbai's roads. Telvent will implement its RealTime intelligent urban traffic management technological solution -- ITACA -- at 253 traffic-light- controlled intersections across the city. This will be managed from a traffic control center. Special emphasis will be placed on using low energy consumption technologies for traffic lights and controllers at the intersections. As a result, it is expected that travel times will be reduced, contaminating gas emissions will be curbed, and consumption of fossil fuels and electric energy will fall. Environment * The Qatari water and electricity utility company, Kahramaa, awarded Telvent a contract to provide consulting services for a period of four years on ways to enhance its drinking water transmission and distribution network. Through the services and systems to be supplied, Telvent will seek to optimize current distribution network management. The project will allow Kahramaa to achieve management quality levels similar to those of the world's leading water management companies. Telvent and Kahramaa will be contributing to sustainable development, managing and controlling the water consumption with maximum efficiency. Public Administration * Telvent has been awarded two contracts for the deployment stage of the electronic National ID (NID) system throughout Spain. Under this strategic project, Telvent will supply personalization systems for the electronic NID, specifically the hardware and software required for laser recording of citizens' personal data on their NID cards. Together with the recently completed project for electronic verification of identification documents at border check-points, these contracts strengthen Telvent's presence in homeland security, one of the major security concerns worldwide. Global Services * Telvent has been chosen as technology partner by the Spanish Institute for Foreign Trade (ICEX) for a critical project to provide for the integral management of ICEX's information technology infrastructure and its corporate applications. Telvent will house ICEX's computer systems and technologies in the Telvent high- security DPC in Madrid. In addition, the project includes the execution of advisory tasks aimed at technology renovation, and the operation, administration, monitoring and control of the infrastructures at the customer head offices and trade offices.
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 EPS. Pro forma net income and 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 investors' 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.
Pro forma net income excludes the amortization of intangible assets from the purchase price allocations in our acquisitions, 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, pro forma net income and EPS is provided in this release in a table immediately following the condensed consolidated financial statements.
Conference Call Details
Telvent Chairman and CEO, Manuel Sanchez and Chief Financial Officer and Head of Investor Relations, Ana Plaza, will conduct a conference call to discuss the second quarter 2007 results, which will be simultaneously webcast at 9:00 A.M. Eastern Daylight Savings Time / 3:00 P.M. Madrid Time on Friday, August 31, 2007.
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 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.
About Telvent
Telvent (Nasdaq:TLVT), the IT company for a sustainable and secure world, specializes in high-value-added products, services and integrated solutions in the Energy, Transport, Environmental and Public Administration industry segments, as well as Global IT Services. Its innovative technology and proven experience help ensure secure and efficient management of the operating and business processes of the world's leading companies. (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, 2006, filed with the Securities and Exchange Commission on March 30, 2007 and Telvent's Quarterly Report on Form 6-K for the quarter ended March 31, 2007, filed with the Securities and Exchange Commission on May 24, 2007.
Unaudited Consolidated Balance Sheets
(All numbers in thousands of Euros, except share and per share amounts)
As of As of
June 30, December 31,
2007 2006
(Unaudited) (Audited)
------- -------
Assets:
Current assets:
Cash and cash equivalents 59,819 69,232
Restricted cash -- 8,045
Other short-term investments 259 386
Derivative contracts 2,963 2,814
Accounts receivable (net of
allowances of 2,809 as of June
30, 2007 and 2,719 as
of December 31, 2006) 154,422 144,763
Unbilled revenues 175,103 101,317
Due from related parties 12,027 47,958
Inventory 19,526 19,274
Other taxes receivable 13,150 13,258
Deferred tax assets 7,560 3,692
Other current assets 4,593 7,016
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Total current assets 449,422 417,755
Deposits and other investments 1,415 1,795
Property, plant and equipment,
net of accumulated depreciation
of 50,587 as of June 30, 2007
and 46,706 as of December 31, 2006 52,028 51,215
Long-term receivables and
other assets 8,897 11,236
Deferred tax assets 15,211 14,954
Other intangible assets, net of
accumulated depreciation of
17,095 as of June 30, 2007 and
14,908 as of December 31, 2006 21,862 21,260
Goodwill 46,708 37,416
------- -------
Total assets 595,543 555,631
======= =======
Liabilities and shareholders' equity:
Accounts payable 203,451 216,614
Billings in excess of costs and
estimated earnings 25,934 26,568
Accrued and other liabilities 16,148 10,389
Income and other taxes payable 27,491 26,901
Deferred tax liabilities 568 5,347
Due to related parties 59,158 23,512
Current portion of long-term debt 1,537 1,514
Short-term debt 49,013 32,295
Short-term leasing obligations 2,767 2,562
Derivative contracts 3,819 3,269
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Total current liabilities 389,886 348,971
Long-term debt less current portion 12,757 15,188
Long-term leasing obligations 2,688 1,834
Other long term liabilities 4,834 5,716
Deferred tax liabilities 6,470 6,276
Unearned income 1,082 131
------- -------
Total liabilities 417,717 378,116
------- -------
Minority interest (72) 794
Commitments and contingencies
Shareholders' equity:
Common stock, 3.005 par value,
29,247,100 shares authorized, issued
and outstanding, same class and series 87,889 87,889
Additional paid-in-capital 41,205 40,338
Accumulated other comprehensive income (1,722) (2,142)
Retained earnings 50,526 50,636
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Total shareholders' equity 177,898 176,721
------- -------
Total liabilities and
shareholders' equity 595,543 555,631
======= =======
Unaudited Consolidated Statements of Operations
(All numbers in thousands of Euros, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Revenues 156,597 106,636 277,959 201,942
Cost of revenues 124,277 84,104 214,904 156,022
---------- ---------- ---------- ----------
Gross profit 32,320 22,532 63,055 45,920
---------- ---------- ---------- ----------
General and
administrative 14,322 8,193 26,417 16,415
Sales and marketing 3,912 3,606 8,247 8,676
Research and
development 5,193 4,203 9,759 7,183
Depreciation and
amortization 2,592 2,102 5,163 3,986
---------- ---------- ---------- ----------
Total operating
expenses 26,019 18,104 49,586 36,260
---------- ---------- ---------- ----------
Income from operations 6,301 4,428 13,469 9,660
Financial income 2,504 2,292 5,781 5,675
Financial expense (5,595) (3,983) (10,705) (6,795)
---------- ---------- ---------- ----------
Total other income
(expense) (3,091) (1,691) (4,924) (1,120)
---------- ---------- ---------- ----------
Income before income
taxes 3,210 2,737 8,545 8,540
Income tax expense
(benefit) (57) 710 233 1,908
---------- ---------- ---------- ----------
Net income before
minority interest 3,267 2,027 8,312 6,632
---------- ---------- ---------- ----------
Loss/(profit)
attributable to
minority interests 266 (136) 352 (18)
---------- ---------- ---------- ----------
Net income 3,533 1,891 8,664 6,614
========== ========== ========== ==========
Earnings per share
Basic and diluted net
income per share 0.12 0.06 0.30 0.23
========== ========== ========== ==========
Weighted average
number of shares
outstanding
Basic and diluted 29,247,100 29,247,100 29,247,100 29,247,100
========== ========== ========== ==========
Unaudited Condensed Consolidated Statements of Cash Flows
(All numbers in thousands of Euros, except share and per share amounts)
Three Months Ended
June 30,
-------------------
2007 2006
------- -------
Cash flow from operating activities:
Net income 8,664 6,614
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities (1,420) 8,049
Change in operating assets and
liabilities, net of amounts acquired (81,430) (56,799)
Change in operating assets and
liabilities due to temporary joint
ventures (2,627) (2,299)
------- -------
Net cash provided by (used in)
operating activities (76,813) (44,435)
------- -------
Cash flows from investing activities:
Restricted cash - guaranteed deposit of
long term investments and commercial
transactions 8,045 3,183
Due from related parties 22,916 27,499
Purchase of property, plant & equipment (2,223) (1,791)
Purchase of software technology (383) --
Acquisition of subsidiaries, net of cash (7,018) (7,911)
Acquisition (disposal) of investments 503 149
------- -------
Net cash provided by (used in)
investing activities 21,840 21,129
------- -------
Cash flows from financing activities:
Proceeds from long-term debt 23 225
Repayment of long-term debt (3,944) (8,867)
Proceeds from short-term debt 17,533 16,464
Repayment of short-term debt (814) (3,502)
Due to related parties 42,408 20,311
Dividend paid (8,774) --
Proceeds (repayment) of long-term
liabilities (914) (400)
------- -------
Net cash provided by (used in)
financing activities 45,518 24,231
------- -------
Net increase (decrease) in cash
and cash equivalents (9,455) 925
Net effect of foreign exchange in
cash and cash equivalents 42 625
Cash and cash equivalents at the
beginning of period 60,997 67,796
Joint venture cash and cash
equivalents at the beginning of period 8,235 12,214
------- -------
Cash and cash equivalents at the
end of period 59,819 81,560
======= =======
Supplemental disclosure of cash information:
Cash paid for the period:
Interest 5,855 2,407
======= =======
Non-cash transactions:
Capital leases 2,575 483
Reconciliation between GAAP and Proforma Income and EPS (All numbers
in thousands of Euros, except share and per share amounts)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
---------- ---------- ---------- ----------
GAAP basis income
before income taxes 3,210 2,737 8,545 8,540
Adjustments to Net Income
Amortization of
intangibles 716 763 1,548 1,304
Stock compensation plan
expenses 947 461 1,381 955
Mark to market
derivatives 805 496 1,051 196
---------- ---------- ---------- ----------
Total Adjustments 2,468 1,720 3,980 2,455
---------- ---------- ---------- ----------
Adjusted income before
income taxes 5,678 4,457 12,525 10,995
---------- ---------- ---------- ----------
Income tax provision (867) (1,151) (1,521) (2,433)
Profit attributable
to minority interests 389 (136) 476 (18)
---------- ---------- ---------- ----------
Proforma Net Income 5,200 3,170 11,480 8,544
========== ========== ========== ==========
Earnings per share
Basic and diluted net
income per share 0.18 0.11 0.39 0.29
========== ========== ========== ==========
Weighted average number
of shares outstanding
Basic and diluted 29,247,100 29,247,100 29,247,100 29,247,100
========== ========== ========== ==========
Segment Information
(All numbers in thousands of Euros, except share and per share amounts)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
------- ------- ------- -------
Revenues
Energy 57,016 46,863 112,372 84,124
Transportation 62,363 37,199 104,226 72,969
Environment 10,935 8,901 19,497 18,310
Public Administration 15,313 5,160 22,057 9,290
Global Services 10,970 8,513 19,807 17,249
------- ------- ------- -------
156,597 106,636 277,959 201,942
------- ------- ------- -------
Gross Margin
Energy 17.4% 20.0% 20.7% 22.6%
Transportation 20.4 21.2 21.7 20.6
Environment 29.0 18.7 27.5 23.5
Public Administration 12.4 15.9 15.6 18.5
Global Services 41.7 32.9 42.2 34.0
------- ------- ------- -------
20.6% 21.1% 22.7% 22.7%
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