Kofax Announces Record Software Business Results for the Fiscal Year Ended June 30, 20116 Sep, 2011
IRVINE, CA - Sept, 2011 - Kofax, a leading provider of capture driven business process automation solutions, today announced its preliminary unaudited results for the fiscal year ended June 30, 2011. Kofax reported record software business revenues, adjusted earnings before interest, taxes and amortization (Adjusted EBITA)*, adjusted diluted earnings per share from continuing operations (Adjusted Diluted EPS)*, cash generated from operations and year end cash balances, and significant progress in its business that substantially validate the Company’s strategy and ability to execute as well as the fundamental strength in its business.
• Total revenues grew 12% to $243.9 million (2010: $217.6 million), or 10% in organic constant currency
• Adjusted EBITA grew by 54% to $40.2 million (2010: $26.0 million), or a 16% margin (2010: 12%)
• Adjusted Diluted EPS grew by 72% to $0.31 (2010: $0.18)
• Cash generated from operations increased 53% to $35.6 million (2010: $23.3 million)
• Year end cash balances totalled $98.3 million (2010: $55.5 million)
• Harvey Spencer Associates, a leading industry analyst firm, reported that during calendar year 2010 Kofax increased its overall capture market share to 15% from 11% in 2009
• Consistent with this gain in market share the Company grew its total revenues faster than the overall capture market and faster than its two most direct competitors during the calendar year 2010 and the first six months of 2011
• The Company also:
o Added over 2,155 new customers and closed more six and seven figure sales
o Received widespread recognition for its market position and software products
o Successfully launched six new software product releases
o Disposed of its legacy hardware distribution and maintenance business
o Acquired Atalasoft to add internet browser based applications and portals to its capture onramp
o Appointed Wade Loo to its Board of Directors and Audit Committee
• Subsequent to the fiscal year end the Company:
o Was selected by Microsoft to be part of its exclusive Managed Independent Software Vendor (ISV) Program
o Put a $40.0 million unused, as of today line of credit in place with Bank of America Merrill Lynch to further enhance its financial position
The Company also announced it has restated its financial statements for the fiscal years ended June 30, 2009 and 2010. This corrected the way in which revenue is recognized for maintenance contracts for the fiscal years ended June 30, 2009 and 2010, and to correct certain tax assets and liabilities arising from the acquisition of 170 Systems and correct the valuation of inventories as of the fiscal year ended June 30, 2010. After the restatement, total software business revenues have increased by $0.6 million and $1.8 million in fiscal years 2009 and 2010, respectively, and Adjusted EBITA has increased by $0.6 million in fiscal year 2009 and $1.1 million in fiscal year 2010. A thorough description of the restatement, including the related balance sheet adjustments, is contained in the Chief Financial Officer’s Review attached hereto.
At their meeting on September 1, 2011 Kofax’s Board of Directors confirmed management are performing the preliminary work needed for the Company to eventually effect an initial public offering in the United States. The Board noted that it has not set a specific timeframe for the offering, which will be subject to Kofax’s performance, financial market conditions and other relevant considerations, but it’s unlikely to occur during the current fiscal year. The Board also noted that its intention would be to then maintain a dual listing on both a U.S. and the London Stock Exchange.
Reynolds C. Bish, Chief Executive Officer, said: “We experienced strong revenue growth during the first half of the past year but less during the second half. As stated in our July trading update, we believe this slowdown was caused by longer sales cycles and decision making that emerged as a result of increasing uncertainty and volatility in the global economic environment. We expect these challenges to continue until more confidence and stability return to markets.”
Bish continued: “We recognize that our performance can always be improved but Management and the Board are nonetheless pleased with the Company’s overall progress. Our pipeline of opportunities has continued to grow, we believe we’re well positioned to continue gaining market share and we remain confident in our business but we are cautious in our outlook. While it’s difficult to provide precise guidance at the present time, during the current fiscal year we conservatively expect between eight and ten percent total revenue growth in U.S. dollars on a constant currency basis.”
Jamie Arnold, Chief Financial Officer, said: “Our progress during this past year led to our decision to begin the preliminary work needed for us to eventually effect an initial public offering in the United States. While market conditions are not currently conducive to effecting such a transaction, we want to be in the position of having the flexibility to do so at the appropriate time. As we become a more U.S. centric business, we’ll need to access the leading financial market for global software companies in order to better pursue our organic revenue growth and acquisition strategies.”
Kofax is a leading provider of capture driven business process automation solutions. For 25 years, Kofax has provided award-winning products that streamline the flow of information throughout an organization by managing the capture of business critical information in paper, fax and electronic formats in a more accurate, timely and cost effective manner. These solutions provide a rapid return on investment to thousands of customers in banking and financial services, insurance, government, business process outsourcing and other markets. Kofax delivers these solutions through its own sales and service organization, as well as through a global network of more than 700 authorized partners in more than 60 countries throughout the Americas, EMEA and Asia Pacific. For more information, visit www.kofax.com.