Embarcadero Technologies announces fourth quarter and fiscal year 2003 financial results

Embarcadero Technologies, Inc, a provider of application and data lifecycle management solutions, has announced results for its fourth quarter and fiscal year ended 31 December 2003. Total revenues for the fourth quarter were $14.1 million, a ten percent increase over the prior year fourth quarter results of $12.8 million. Net income and diluted earnings per share under generally accepted accounting principles (GAAP) for the quarter were $2.5 million and $0.09, respectively. This compares to GAAP net income and diluted earnings per share of $1.2 million and $0.04, respectively, for the quarter ended 31 December 2002.

For the 2003 fiscal year, revenues were $51.9 million as compared to $49.3 million for 2002. GAAP net income and diluted earnings per share for the year were $5.7 million and $0.20, respectively. This compares to GAAP net income and diluted earnings per share of $2.4 million and $0.08, respectively, for the year ended 31 December 2002.

"We finished 2003 with a solid fourth quarter, delivering higher revenues, profitability, and cash flow from operations," said Stephen Wong, chairman and chief executive officer of Embarcadero Technologies. "During the quarter, we enjoyed other favourable developments, including higher revenues from international operations and new products, which should give us positive momentum as we enter 2004. We continue to focus our efforts on addressing our customers` needs to cost-effectively manage the data and application infrastructure so critical to their business. Even during the difficult economic conditions experienced in 2003, customers responded positively to our solutions. They were willing to invest in our products to make their staff more productive and their systems operate more efficiently."

Cash flow from operations was $5.2 million in the fourth quarter, as compared to $2.7 million in the third quarter and $3.4 million in the fourth quarter of 2002. For the year, the company generated $14.5 million in cash flow from operations, a 23% increase over the $11.8 million generated in 2002. Cash, cash equivalents, and short-term investments grew by $7.1 million in the quarter to reach $58 million at 31 December 2003. Total deferred revenues increased to $13.5 million at 31 December 2003, as compared to $12.2 million at 30 September 2003 and $10.7 million at 31 December 2002.

Non-GAAP net income for the fourth quarter was $2.4 million or $0.08 per diluted share. For the corresponding quarter in 2002, non-GAAP net income was $1.7 million or $0.06 per diluted share. For the years ended 31 December 2003 and 2002, non-GAAP net income was $6.9 million, or $0.24 per diluted share, and $6.2 million, or $0.22 per diluted share, respectively. Non-GAAP numbers are tax adjusted and exclude the following items: amortisation of acquired technology, purchased research and development, amortization of non-cash stock-based compensation, and amortisation of other intangible assets. A detailed reconciliation of GAAP to non-GAAP net income is provided in the attached financial statements.

The non-GAAP measures of net income and earnings per share exclude certain non-cash charges and have not been calculated in accordance with generally accepted accounting principles (GAAP). These differ from GAAP in that the measures exclude amortization of acquired technology, purchased research and development, amortisation of non-cash stock-based compensation, and amortisation of other intangible assets and assume an annualised 32% tax rate, which is higher than our annual effective tax rate of approximately 22% for 2003 as computed in accordance with GAAP. Embarcadero has previously provided these non-GAAP measurements in press releases reporting net income and earnings per share because we believe these measurements provide a consistent basis for comparisons between quarters that are not influenced by changes in certain non-cash or non-recurring expenses or the company`s effective tax rate and are therefore useful to investors. These measures should not be considered an alternative to GAAP, and these non-GAAP measures may not be comparable to information provided by other companies.

Trek to the summit

00Days

:

00Hrs

:

00Min

:

00Sec

Embarcadero introduced significant new products in 2003, including the Embarcadero DBArtisan Analyst Series and Embarcadero Extreme Test. The Analyst Series is a set of products that delivers comprehensive performance, space, and capacity management functionality for complex database environments, extending the depth and functionality of Embarcadero`s award-winning DBArtisan database management solution. Extreme Test is a next-generation, goals-based performance testing solution for measuring and analysing the performance of enterprise applications.

Embarcadero was recognized by a number of organizations in 2003 and received the following awards:

* DM Review 2003 Readership Award

* 2003 DM Review Top 100

* SQL Server Central Best of Breed

* SD Times 2003 100 Award

* Websphere Advisor Editor`s Choice Award 2003

* Intelligent Enterprise Magazine 2003 Companies to Watch

Embarcadero discussed its fourth quarter and year-end 2003 results, as well as its business outlook for 2004, on a conference call and simultaneous Web held on 27 January 2003, at 2pm PT. The Webcast of this conference call, which will be available live as well as archived, can be accessed by all interested parties at the Embarcadero Technologies Web site, www.embarcadero.com, in the events calendar under "Investor Relations".