Date of report (Date of earliest event reported): March 22, 2005
FactSet Research Systems Inc.
(Exact name of Registrant as specified in its charter)
| Delaware | 1-11869 | 13-3362547 | |||||||||
| (State or other jurisdiction of | (Commission | (I.R.S. Employer | |||||||||
| incorporation or organization) | File Number) | Identification Number) | |||||||||
| 601 Merritt 7 | |||||||||||
| Norwalk, Connecticut 06851-1091 | |||||||||||
| (Address of principal executive offices) | |||||||||||
| (203) 810-1000 | |||||||||||
| (Registrant’s telephone number, including area code) | |||||||||||
| Not Applicable | |||||||||||
| (Former name or former address, if changed since last report) | |||||||||||
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On March 22, 2005, FactSet Research Systems Inc. issued a press release announcing its results for the three months ended February 28, 2005. The press release is attached as Exhibit 99.1 to this report on Form 8-K. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Exhibit | ||
| No. | Description | |
| ––––– | –––––––––––––––––––––––––––––– | |
| 99.1 | Press Release, dated as of March 22, 2005 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| FACTSET RESEARCH SYSTEMS INC. | |||
| (Registrant) | |||
| By: | |||
| Date: | March 22, 2005 | /s/ PETER G. WALSH | |
| –––––––––––––––––––––––––––––––––– | |||
| Peter G. Walsh | |||
| Senior Vice President, Chief Financial Officer, | |||
| Treasurer and Secretary |
EXHIBIT 99.1
EXHIBIT INDEX
| Exhibit | ||
| No. | Description of Document | |
| ––––– | –––––––––––––––––––––––––––––––––––––––––––––––––––––––– | |
| 99.1 | Press Release of Registrant, dated March 22, 2005 reporting the results of | |
| operations for the Registrant’s second fiscal quarter ended February 28, 2005. |
FactSet Research Systems
Inc.
601 Merrit 7
Norwwalk, Connecticut 06851
203.810.1000/
203.810.1001 Fax
News Release
FOR IMMEDIATE RELEASE
FactSet Research Systems Reports Results for Second Quarter of Fiscal Year 2005
Norwalk, Connecticut - March 22, 2005 - FactSet Research Systems Inc. (NYSE: FDS), a major supplier of computer-based financial and economic data to the investment community, today announced its results for the second quarter of fiscal 2005.
For the quarter ended February 28, 2005, revenues rose 24.6% compared to the prior year period to $76.5 million, net of clearing fees of $1.3 million. Operating income increased 25.7% to $27.0 million, net income advanced 16.5% to $17.2 million and diluted earnings per share rose 17.2% to $0.34. During the second quarter of fiscal 2004, an income tax benefit relating to the settlement of prior year tax returns for certain state credits was recognized amounting to a $0.02 increase to quarterly earnings per share.
For the six months ended February 28, 2005, revenue increased 24.8% to $150.5 million and operating income rose 24.3% to $52.9 million. Net income grew 17.2% to $33.6 million while earnings per share increased 21.8% to $0.67.
| FactSet Research Systems Inc. | |||||||||||
| Consolidated Statements of Income (Condensed and Unaudited) | |||||||||||
| Three Months Ended | Six Months Ended | ||||||||||
| Feb 28, 2005 and Feb 29, 2004 |
Feb 28, 2005 and Feb 29, 2004 | ||||||||||
| (In thousands, except per share data) | 2005 | 2004 | Change | 2005 | 2004 | Change | |||||
| Revenues | $76,472 | $61,371 | 24.6 % | $150,535 | $120,628 | 24.8 % | |||||
| Income from operations | 27,032 | 21,502 | 25.7 | 52,877 | 42,541 | 24.3 | |||||
| Net Income | 17,170 | 14,737 | 16.5 | 33,567 | 28,645 | 17.2 | |||||
| Diluted earnings per share | $0.34 | $0.29 | 17.2 | $0.67 | $0.55 | 21.8 | |||||
| Diluted weighted average common shares | 50,397 | 51,246 | 50,213 | 52,307 | |||||||
“We are pleased to report another solid quarter of performance,” said Philip A. Hadley, Chairman and CEO. “We attribute our success to the delivery of world class service to a loyal client base, as well as the continued development of products and services that enhance our clients' efficiency.”
As of February 28, 2005, the Company’s 1,437 clients, representing approximately 23,200 users, subscribed to services totaling $307.6 million in subscriptions, an increase of 23.4% in the past fiscal year. Of this total, subscriptions from FactSet’s overseas operations were $82.2 million. FactSet’s client retention rate continued to be above 95%. “Subscriptions” at any given point in time represent the forward-looking revenues for the next 12 months from all services currently being supplied to clients.
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Other operational highlights of the second quarter of fiscal 2005 include:
| • | Revenues from FactSet’s European and Pacific Rim operations were $16.9 million and $3.7 million, up 76.0% and 30.9% respectively, from the same period a year ago. |
| • | Demand for FactSet’s Portfolio Managers Workstation (PMW) applications continued to rise, with over 405 clients consisting of approximately 3,100 users, subscribing to the services as of February 28, 2005. |
| • | The Company acquired TrueCourse, Inc., a leading provider of corporate takeover defense intelligence, for $7.7 million on January 4, 2005. |
| • | FactSet’s IBCentral, an application designed to mirror the daily workflow of an investment banker, was released on January 18, 2005. |
| • | A three-for-two common stock split on February 4, 2005 resulted in a 50% increase of the Company’s outstanding shares of common stock. |
| • | As the Company reported in January, Peter Walsh has assumed the position of Senior Vice President, Chief Financial Officer, and Treasurer. |
Business Outlook
The following forward-looking statements reflect FactSet’s expectations
as of March 22, 2005. Given the number of risk factors,uncertainties and assumptions
discussed below, actual results may differ materially. The Company does not intend to update its
forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
| Third Quarter Fiscal 2005 Expectations |
| • | Revenues are expected to range between $77.0 million and $80.0 million. |
| • | Operating margins are expected to range between 34% and 35%. |
| • | The effective tax rate is expected to range between 36.8% and 37.4%. |
| Full Year Fiscal 2005 |
| • | Capital expenditures should total approximately $22 million. |
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This news release contains forward-looking statements based on management’s current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, product development, market position, subscriptions and expected expenditures and financial results are forward-looking statements. Forward-looking statements may be identified by words like “expected,” “anticipates,” “plans,” “intends,” “projects,” “should,” “indicates,” “continues”, “subscriptions” and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in FactSet’s filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, the ability to hire qualified personnel; maintenance of the Company’s leading technological position; the impact of global market trends on the Company’s revenue growth rate and future results of operations; the negotiation of contract terms with corporate vendors, data suppliers and potential landlords; retention of key clients; the successful resolution of ongoing audits by tax authorities; the continued employment of key personnel; the absence of U.S. or foreign governmental regulation restricting international business; the ability to continue to integrate acquired businesses; and the sustainability of historical levels of profitability and growth rates in cash flow generation.
Conference Call
The Company will host a conference call today, March 22, 2005 at 11:00 a.m. (EST) to review the second quarter fiscal 2005 earnings
release. To listen, please visit the investor relations section of the Company's website at www.factset.com.
About FactSet
FactSet Research Systems Inc. is a leading provider of global financial and economic information, including fundamental data on tens
of thousands of companies worldwide. Combining more than 200 databases into its own dedicated online service, the Company also
provides the tools to download, combine and manipulate the data for investment analysis.
The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations, along with its affiliates, from more than twenty-two locations worldwide, including Boston, New York, Chicago, San Mateo, London, Frankfurt, Paris, Tokyo, Hong Kong, and Sydney.
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| FactSet Research Systems Inc. | |||||
| Consolidated Statements of Financial Condition | |||||
| (In thousands and unaudited) | February 28, | August 31, | |||
| ASSETS | 2005 | 2004 | |||
| Cash and cash equivalents | $ 37,394 | $ 78,580 | |||
| Investments | 26,014 | 19,524 | |||
| Receivables from clients and clearing brokers, net | 67,182 | 45,935 | |||
| Deferred taxes | 4,759 | 5,875 | |||
| Other current assets | 3,809 | 4,834 | |||
| Total current assets | 139,158 | 154,748 | |||
| Property, equipment and leasehold improvements, net | 46,382 | 43,909 | |||
| Goodwill | 77,243 | 19,937 | |||
| Intangible assets, net | 30,060 | 5,944 | |||
| Deferred taxes | 3,772 | 3,098 | |||
| Other assets | 2,715 | 2,291 | |||
| Total assets | $299,330 | $229,927 | |||
| ======= | ======= | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Accounts payable and accrued expenses | $ 17,868 | $ 21,123 | |||
| Accrued compensation | 9,334 | 17,328 | |||
| Deferred fees | 18,249 | 9,530 | |||
| Dividends payable | 2,404 | 2,182 | |||
| Current taxes payable | 1,360 | 7,624 | |||
| Total current liabilities | 49,215 | 57,787 | |||
| Deferred taxes | 7,506 | - - | |||
| Deferred rent and other non-current liabilities | 8,876 | 7,594 | |||
| Total liabilities | 65,597 | 65,381 | |||
| Stockholders’ Equity: | |||||
| Common stock | 541 | 352 | |||
| Capital in excess of par value | 85,658 | 60,420 | |||
| Retained earnings | 272,249 | 243,324 | |||
| Treasury stock | ( 130,410 | ) | ( 139,504 | ) | |
| Accumulated other comprehensive gain (loss) | 5,695 | ( 46 | ) | ||
| Total stockholders’ equity | 233,733 | 164,546 | |||
| Total liabilities and stockholders’ equity | $299,330 | $229,927 | |||
| ======= | ======= | ||||
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| FactSet Research Systems Inc. | |||||||||
| Consolidated Statements of Income | |||||||||
| Three Months Ended |
Six Months Ended | ||||||||
| Feb 28, | Feb 29, | Feb 28, | Feb 29, | ||||||
| (In thousands, except per share data and unaudited) | 2005 | 2004 | 2005 | 2004 | |||||
| Revenues | $76,472 | $61,371 | $150,535 | $120,628 | |||||
| Cost of services | 21,293 | 18,198 | 43,300 | 36,073 | |||||
| Selling, general and administrative | 28,147 | 21,671 | 54,358 | 42,014 | |||||
| Total operating expenses | 49,440 | 39,869 | 97,658 | 78,087 | |||||
| Income from operations | 27,032 | 21,502 | 52,877 | 42,541 | |||||
| Other income | 216 | 687 | 384 | 1,422 | |||||
| Income before income taxes | 27,248 | 22,189 | 53,261 | 43,963 | |||||
| Provision for income taxes | 10,078 | 7,452 | 19,694 | 15,318 | |||||
| Net income | $17,170 | $14,737 | $33,567 | $28,645 | |||||
| ====== | ====== | ====== | ====== | ||||||
| Basic earnings per common share | $0.36 | $0.30 | $0.70 | $0.57 | |||||
| ==== | ==== | ==== | ==== | ||||||
| Diluted earnings per common share | $0.34 | $0.29 | $0.67 | $0.55 | |||||
| ==== | ==== | ==== | ==== | ||||||
| Weighted average common shares (Basic) | 48,001 | 49,392 | 47,797 | 50,046 | |||||
| ===== | ===== | ===== | ===== | ||||||
| Weighted average common shares (Diluted) | 50,397 | 51,246 | 50,213 | 52,307 | |||||
| ===== | ===== | ===== | ===== | ||||||
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| FactSet Research Systems Inc. | |||||
| Consolidated Statements of Cash Flows | Six Months Ended | ||||
| Feb 28, | Feb 29, | ||||
| (In thousands and unaudited) | 2005 | 2004 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||
| Net income | $33,567 | $28,645 | |||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||
| Depreciation and amortization | 9,081 | 7,549 | |||
| Deferred tax provision (benefit) | 112 | ( 1,637 | ) | ||
| Gain on sale of equipment | - - | ( 210 | ) | ||
| Accrued ESOP contribution | - - | 1,320 | |||
| 42,760 | 35,667 | ||||
| Changes in assets and liabilities, net of effects of acquisitions | |||||
| Receivables from clients and clearing brokers, net | ( 17,134 | ) | ( 3,075 | ) | |
| Accounts payable and accrued expenses | ( 5,643 | ) | ( 634 | ) | |
| Accrued compensation | ( 6,451 | ) | ( 5,603 | ) | |
| Deferred fees | 1,048 | ( 1,522 | ) | ||
| Current taxes payable | ( 6,421 | ) | 1,489 | ||
| Landlord contributions to leasehold improvements | 500 | 6,092 | |||
| Other working capital accounts, net | 4,432 | ( 117 | ) | ||
| Income tax benefits from stock option exercises | 5,192 | 479 | |||
| Net cash provided by operating activities | 18,283 | 32,776 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||
| (Purchases) Sales of investments, net | ( 6,452 | ) | 31,553 | ||
| Acquisition of business, net of working capital acquired | ( 52,098 | ) | - - | ||
| Purchases of property, equipment and leasehold improvements | (9,015 | ) | ( 6,405 | ) | |
| Net cash (used in) provided by investing activities | ( 67,565 | ) | 25,148 | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||
| Dividend payments | ( 4,214 | ) | ( 3,856 | ) | |
| Repurchase of common stock | ( 280 | ) | ( 72,205 | ) | |
| Proceeds from employee stock plans | 13,319 | 3,822 | |||
| Net cash provided by (used in) financing activities | 8,825 | ( 72,239 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents | ( 729 | ) | - - | ||
| Net decrease in cash and cash equivalents | ( 41,186 | ) | ( 14,315 | ) | |
| Cash and cash equivalents at beginning of period | 78,580 | 51,126 | |||
| Cash and cash equivalents at end of period | 37,394 | 36,811 | |||
| ====== | ====== | ||||
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