Business Objects Reports 'Outstanding' Fourth Quarter

Describing what he called "an outstanding" quarter, Business Objects CFO Jim Tolonen told analysts 4Q revenue was $184.2 million, up 46 percent from $126.2 million for the same period a year ago. Newly acquired Crystal Decisions contributed to the increase. The net loss for the quarter was $8.6 million, or 12 cents a share, compared with a profit of $12.8 million, or 20 cents a share, in 4Q 2002.

Calculated according to GAAP, Business Objects' loss reflects charges related to its $1.2 billion acquisition of Crystal Decisions, completed 20 days before the end of the quarter. These charges include a $28 million write-off of acquired in-process technologies, $1 million in amortized R&D expenses, restructuring charges of $7.8 million and one-time charges of $5.5 million. In addition, GAAP rules require the elimination of approximately $3.4 million in maintenance revenue during the 20-day period of the combined company.

Total license revenue was approximately $76 million, up 16 percent from the year-ago quarter.

"Our license revenue is by far the largest in the BI market and growing faster than our nearest competitor," said Bernard Liataud, chairman and CEO. "We have the largest customer base in the industry, with 24,000 customers. Now as part of a larger goal, we will become one of the top 15 software companies in the next three years."

Business Objects additionally calculated pro forma results under two scenarios: if the companies had operated independently for the full quarter, and if they'd been a combined entity for the three-month period. Pro forma results for Business Objects, alone, would have been total revenue of $158 million, up 25 percent from the same period. License revenue would have climbed 16 percent, to about $76 million, and gross profit would have increased by 26 percent, or $133 million. This represents a gross margin of 84 percent.

The company estimates that Crystal Decisions' stand-alone pro forma quarterly results would have been $82 million in total revenue, license revenue of $51 million, and gross profit of approximately $65 million. These represent increases of 15 percent, 9 percent and 15 percent, respectively, from the same period a year ago. Pro forma estimates the combined company had total revenue of $240 million, license revenue of $127 million and operating income of $46 million.

Business Objects finished the year with $235 million in cash and $1.8 billion in total assets.