Siebel Systems Reports Financial Results for the Quarter and Year Ended December 31, 2004
Confirms Fourth Quarter License Revenues Up 54% and Earnings Per Share Up 233% Sequentially
All Fourth Quarter Revenue Categories and Profitability Up Year Over Year
Total revenues for the fourth quarter of 2004 were $392 million, a 24% increase over the third quarter of 2004. License revenues were $161 million, a 54% increase over the third quarter of 2004. Maintenance revenues were $122 million, a 4% increase over the third quarter of 2004. Services and other revenues were $109 million, a 15% increase over the third quarter of 2004.
Operating income and operating margin for the fourth quarter of 2004 were $65 million and 17%, respectively, a 173% and nine percentage point increase over the third quarter of 2004. Net income and net income margin for the fourth quarter of 2004 were $54 million and 14%, respectively, a 194% and eight percentage point increase over the third quarter of 2004. Earnings per share for the fourth quarter of 2004 were $0.10 per share, a 233% increase over the third quarter of 2004. Income for the fourth quarter benefited from a lower than expected effective tax rate of 32%.
Total revenues for the year ended December 31, 2004 were $1.34 billion, a 1% decrease from 2003. For the year, license revenues were $487 million, maintenance revenues were $470 million and services and other revenues were $383 million, representing a 1% increase, 5% increase and 9% decrease, respectively, from 2003.
Operating income and operating margin for the year ended December 31, 2004 were $129 million and 10%, respectively, a $166 million and thirteen percentage point increase over 2003. Net income and net income margin for the year were $111 million and 8%, respectively, a $116 million and eight percentage point increase over 2003. Earnings per share for the year ended December 31, 2004 were $0.20 per share, a $0.21 per share increase over 2003. Income for 2004 benefited from an effective tax rate of 37%.
The Company's cash, cash equivalents, and short-term investments were $2.25 billion as of December 31, 2004, a $93 million and $223 million increase from September 30, 2004 and from December 31, 2003, respectively. Deferred revenue was $357 million as of December 31, 2004, a $68 million and $75 million increase from September 30, 2004 and from December 31, 2003, respectively. Days sales outstanding in accounts receivable were 67 days for the fourth quarter of 2004.
"I am pleased with our results, which return Siebel Systems to quarterly year-over-year growth for the first time in fourteen quarters. We continue to execute on our strategy for the next phase of the company's development and growth," said J. Michael Lawrie, CEO of Siebel Systems. "During the last three quarters we have renewed our commitment to deliver demonstrable business results for our customers. This initiative, along with our pursuit of growth opportunities in analytics, key vertical industries, hosted software and SMB, and emerging markets in Eastern Europe and Asia Pacific, is designed to return the company to sustained growth and maximize shareholder value."
Restatement of Rent Expense
In the course of preparing its 2004 financial results, the Company identified a calculation error that had resulted in an understatement of facility-related expenses and a corresponding understatement of deferred rent liability since 1998. While the effects of this error were not material to any previously reported period, the Company voluntarily corrected the error by restating previously issued financial statements to ensure full transparency and accuracy of its financial statements. There was no cash impact from these restatements. The impact of these restatements on prior period financial statements are summarized in the supplemental schedules attached to the related Form 8-K we filed today, which may be accessed through our investor relations website at http://www.siebel.com/crm-company/investor_information/index.shtm. We also expect to file an amended Form 10-K for 2003 within the next two weeks.
New Executive Appointments
As part of its continuing strategy to add to its leadership team, Siebel Systems announced the following executive appointments:
- David Sardilli, formerly Client Partner at Accenture, responsible for banking in New England and New York, joined Siebel Systems as Senior Vice President and General Manager for the Company's Financial Services business unit, reporting to the CEO. Mr. Sardilli brings more than 20 years of industry experience from Accenture, Meridian Bancorp and Chemical Bank.
- Peter Burridge, formerly SVP for Communications, Media, and Utilities (CMU), Financial Services Institutions (FSI), and Government, Education, and Healthcare (GEH) of the Enterprise Applications team at Oracle in the Asia Pacific Region, joined Siebel Systems as Senior Vice President and General Manager for the Company's Asia Pacific and Japan region reporting to the CEO. Mr. Burridge brings more than 12 years of industry experience from Oracle.
- Brett Ho, formerly CEO at UFsoft, China's largest software company, joined Siebel Systems as Vice President and General Manager of East Asia. Mr. Ho brings more than 17 years of industry experience in Asia and the US from Broadvision and Oracle.
- Shintaro Nezuka, formerly Director of Linux Sales and Marketing Asia/Pacific at IBM, joined Siebel Systems as Vice President and General Manager of Japan and Korea. Mr. Nezuka brings more than 35 years of industry experience in Asia and the US from IBM.
- Nelson Eng, formerly Managing Director of Global Sales for the Financial Services industry at Dell, joined Siebel Systems as Regional Vice President Financial Services East. Mr. Eng brings more than 15 years of industry experience from Dell and IBM.
- Maruf Majed, formerly Vice President Asia at WebMethods, joined Siebel Systems as Vice President OnDemand, SMB and Manufacturing and Distribution Industries in Asia Pacific. Mr. Majed brings more than 20 years of industry experience from WedMethods, Ariba and IBM.
About Siebel Systems
Siebel Systems, Inc. is a leading provider of business applications software, enabling corporations to sell to, market to, and serve customers across multiple channels and lines of business. With more than 4,000 customer deployments worldwide, Siebel Systems provides organizations with a proven set of industry-specific best practices, CRM applications, market-leading analytics products, and business processes, empowering them to consistently deliver superior customer experiences and establish more profitable customer relationships. Siebel Systems' sales and service facilities are located in more than 30 countries.
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Investor Contact: Media Contact:
Terry Lee Anke Santens
Siebel Systems Investor Relations Creative Strategies Public Relations
001- 650 - 295-5656 02-263.21.70
For more information on Siebel Systems solutions and services, please visit our Web site: CRM - http://www.siebel.com/crm; OnDemand Solutions - http://www.crmondemand.com; Industry CRM - http://www.siebel.com/industry-crm; Call Center & Service - http://www.siebel.com/call-center; Sales Force Automation - http://www.siebel.com/sales-force-automation; Marketing Automation - http://www.siebel.com/marketing-automation; Business Intelligence - http://www.siebel.com/business-intelligence; Integration Solutions - http://www.siebel.com/integration-solutions; CRM Services - http://www.siebel.com/crm-services