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SPSS Delivers Strong First Quarter 2006 Results
License Growth Drives 85% Earnings Increase
Operating income for the first quarter of 2006 increased to $7.0 million or 11 percent of total revenues, from $4.0 million or 7 percent of total revenues in the same quarter last year. Cash totaled $100.4 million as of March 31, 2006, up from $84.4 million as of December 31, 2005.
"We started the year on a strong note by maintaining the sales momentum built during 2005," said Jack Noonan, SPSS president and CEO. "Through disciplined execution from our sales and marketing teams, we realized an increase in the number of enterprise transactions, achieved year-over-year growth in all major product categories, and saw long-anticipated improvement in revenue from professional services. This growth occurred in each of the major geographies - the Americas, Europe and the Pacific Rim."
SPSS Gains More Industry Analyst Recognition
The Company's market leadership continued to receive recognition from leading industry analysts. In January, Gartner, Inc. announced that it had positioned SPSS in its leaders' quadrant for customer data mining, as part of Gartner's first quarter 2006 customer data mining "Magic Quadrant" report (http://www.spss.com/pdfs/spss_magicquadrant.pdf).
In April, Nucleus Research (www.NucleusResearch.com) released an ROI case study, "SPSS PredictiveMarketing - FBTO," assessing the SPSS PredictiveMarketing solution at FBTO, a European insurance company. The report found that with SPSS PredictiveMarketing, this customer increased their direct marketing conversion rates by 200 percent, increased the productivity of their marketing staff, and achieved a return on investment of 448 percent.
Outlook and Guidance
"We were pleased with the revenue growth and margin improvements compared with the prior year quarter, particularly in the face of less favorable currency exchange rates," said Raymond Panza, SPSS executive vice president and CFO. "We believe these financial successes reflect a culture of progress marked by consistent execution, cost-efficiency and increasing productivity. The strength of our balance sheet provides greater flexibility and a solid foundation for on-going financial improvement."
Panza further stated, "2006 second quarter revenues are expected to be between $61 and $63 million with EPS in the range of $0.20 to $0.26. EPS for the 2006 second quarter includes an estimated expense of $0.04 for share-based compensation. We are reiterating previous guidance for the 2006 fiscal year, with revenues expected to total between $248 and $254 million and EPS ranging from $0.98 to $1.09. EPS guidance for this annual period includes estimated expense of $0.16 to $0.20 for share-based compensation. Share-based compensation expense includes the effect of Statement of Financial Accounting Standards 123R as well as the company's increased use of restricted stock units."
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