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Ultimate Updates on Q3 2014 Financial Results [Manufacturing Close - Up](Manufacturing Close - Up Via Acquire Media NewsEdge) Ultimate Software reported its financial results for the third quarter of 2014. According to a release on October 28, the Company noted that for the quarter ended September 30, Ultimate reported recurring revenues of $107.4 million, a 26 percent increase, and total revenues of $127.4 million, a 24 percent increase, both compared with 2013's third quarter. GAAP net income for the third quarter of 2014 was $19.7 million, or $0.67 per diluted share, versus GAAP net income of $6.3 million, or $0.22 per diluted share, for the third quarter of 2013. Non-GAAP net income for the third quarter of 2014, which excludes stock-based compensation expense, amortization of acquired intangible assets and an income tax benefit for research and development tax credits, was $14.8 million, or $0.50 per diluted share. Non-GAAP net income for the third quarter of 2013, which excludes stock-based compensation expense and amortization of acquired intangible assets was $11.7 million, or $0.40 per diluted share. "In this year's third quarter, we executed as planned with our recurring revenues and total revenues, positioning us well to achieve our 2014 objectives. Our operating margin came in slightly above our projections, and our recurring revenue customer retention rate for the rolling twelve-month period was once again above 96 percent," said Scott Scherr, CEO, president, and founder of Ultimate. "Earlier this month, we previewed our new UltiPro Onboarding solution at the HR Technology Conference in Las Vegas to a standing- room-only audience of prospects, industry analysts, and our customers. We were pleased with the many positive reviews for its innovative design and focus on welcoming and engaging new employees even before they arrive for their first day of work. UltiPro Onboarding enables dynamic content such as video messages from executives, managers, and co-workers and gives new hires the ability to connect with fellow team members, request a mentor, engage in self-directed learning through a feature called 'Unlock Your Potential,' and complete compliance and other required documents." Financial Highlights -Recurring revenues grew by 26 percent for the third quarter of 2014 as compared with 2013's third quarter. The increase was primarily attributable to revenue growth from our cloud offering. Recurring revenues were 84 percent of total revenues for the third quarter of 2014. -Ultimate's total revenues for the third quarter of 2014 increased by 24 percent as compared with those for the third quarter of 2013. -Our operating income increased by 25 percent, on a non-GAAP basis, for the third quarter of 2014 to $25.2 million as compared with $20.2 million for the same period of 2013. GAAP operating income was $13.6 million for the third quarter of 2014, representing an increase of 12.3 percent in comparison with the same period of 2013. -Our non-GAAP operating margin for the third quarter of 2014 was 19.8 percent versus 19.6 percent for the third quarter of 2013. Our GAAP operating margin was 10.7 percent for the third quarter of 2014 versus 11.7 percent for the third quarter of 2013. -Ultimate's annualized retention rate, on a rolling twelve-month basis, exceeded 96 percent for its existing recurring revenue customer base as of September 30. -Net income, on a non-GAAP basis, for the third quarter of 2014 increased to $14.8 million as compared with $11.7 million for the third quarter of 2013. -Included in GAAP net income for the three and nine months ended September 30, was a one-time $12.1 million tax credit for research and development activities for federal and state income tax purposes, covering years 1998 through 2013. -Cash flows from operating activities for the quarter ended September 30, were $23.1 million, compared with $21.8 million for the same period of 2013. For the nine months ended September 30, Ultimate generated $64.1 million in cash from operations, compared with $54.3 million for the nine months ended September 30, 2013. The combination of cash, cash equivalents, and marketable securities was $110.6 million as of September 30, compared with $90.2 million as of December 31, 2013. -Days sales outstanding were 64 days at September 30, representing a reduction of six days compared with days sales outstanding at December 31, 2013. Stock Repurchases During the nine-month period ended September 30, we used $20.0 million to acquire 162,791 shares of our $0.01 par value common stock ("Common Stock") under our previously announced stock repurchase plan ("Stock Repurchase Plan") and we used $12.2 million to acquire 77,067 shares of our Common Stock to settle employees' tax withholding obligations associated with their restricted stock that vested during the period. We have 783,374 shares available for repurchase under our Stock Repurchase Plan. Financial Outlook Ultimate provides the following financial guidance for the 2014 full year and preliminary financial guidance for the 2015 full year: For the year 2014: -Recurring revenues to increase by approximately 25 percent over 2013, -Total revenues to increase by approximately 23 percent over 2013, and -Operating margin, on a non-GAAP basis, of approximately 20 percent. For the year 2015, preliminary: -Recurring revenues to increase by approximately 23 percent over 2014, -Total revenues to increase by approximately 22 percent over 2014, and -Operating margin, on a non-GAAP basis, in excess of 20 percent. Ultimate is a cloud provider of people management solution. More information: http://www.ultimatesoftware.com ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |