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Teradata Reports 2013 First Quarter Results
Gross margin was 52.0 percent, as reported under U.S. Generally Accepted Accounting Principles (GAAP), versus 55.1 percent in the first quarter of 2012. On a non-GAAP basis, excluding stock-based compensation expense and the other special items described in footnote #2, gross margin was 53.3 percent, down from the 55.9 percent gross margin in the first quarter of 2012.(2)
Teradata reported first quarter GAAP net income of $59 million, or $0.35 per diluted share, which compared to GAAP net income of $91 million, or $0.53 per diluted share, in the first quarter of 2012. Stock-based compensation expense and other special items reduced Teradata's first quarter net income by $14 million (or 8 cents of EPS) as reported under GAAP.(2) Excluding stock-based compensation expense and the other special items detailed in footnote #2, non-GAAP net income in the first quarter of 2013 was $73 million, or $0.43 per diluted share, versus $103 million, or $0.60 per diluted share, in the first quarter of 2012.(2)
"As we expected, Teradata got off to a slow start in the first quarter of 2013. Although we continue to see softness in large capital purchases, we continue to have strong market momentum with our Aster Big Data Analytics and Integrated Marketing solutions as well as our Unified Data Architecture which helps organizations drive value from all of their data," said Mike Koehler, president and chief executive officer, Teradata Corporation. "In 2013, we will continue to increase our investments in research and development and market coverage in order to further advance our leadership positions and grow our revenues in Data Warehousing, Big Data Analytics, and Integrated Marketing Management in the years to come."
First quarter operating income of $76 million was down from $127 million reported in the first quarter of 2012. On a non-GAAP basis, operating income was $104 million versus $147 million in the first quarter of 2012.(2) The decline was primarily due to lower revenue volume, unfavorable revenue mix as well as increased investment in sales resources and research and development.
During the first quarter of 2013, Teradata generated $243 million of cash from operating activities, compared to $192 million in the prior-year period. The increase was driven by the collection of seasonally high accounts receivables balance as of December 31, 2012. Teradata generated $216 million of free cash flow (cash from operating activities less capital expenditures and additions to capitalized software)(3) in the first quarter of 2013, versus $162 million in the same period in 2012.
Teradata ended the quarter with $853 million in cash, a $124 million increase from December 31, 2012. The overall increase in cash in the first quarter was somewhat offset by Teradata's purchase of 1.6 million shares of its stock for approximately $94 million during the quarter. Year to-date, through April 30, Teradata purchased 2.7 million shares for approximately $155 million.
As of March 31, 2013, Teradata had total debt of $285 million outstanding under a term loan. Additionally, Teradata has $300 million available through a pre-arranged credit facility; however, no funds were drawn from the credit facility.
Teradata now expects revenue growth for the full-year 2013 to be at the lower end of its prior revenue growth rate guidance of 6 to 10 percent, when measured in constant currency.(1) Based on currency rates at the end of April, 2013, Teradata now anticipates currency translation to reduce its year-over-year revenue comparison by approximately 1 percent. Teradata also now expects earnings per share for the full-year 2013 to be at the lower end of its prior guidance ranges of $2.64-$2.79 on a GAAP basis and $3.05-$3.20 on a non-GAAP basis, excluding stock-based compensation expense and other special items.(2)
2013 First Quarter Earnings Conference Call
A conference call is scheduled today at 4:30 p.m. (ET) to discuss the company's first quarter 2013 results. Access to the conference call, as well as a replay of the call, is available on Teradata's web site at www.teradata.com/investor.
Supplemental financial information regarding Teradata's operating results is also available on the Investor Relations page of Teradata's web site.
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