Actuate Corp. (ACTU, Financial) filed Annual Report for the period ended 2011-12-31.
Actuate Corp. has a market cap of $220.7 million; its shares were traded at around $5 with a P/E ratio of 13.4.
The 10% increase in our total revenues in fiscal 2010 compared to fiscal 2009 was primarily due to a favorable transaction with IBM totaling $11 million, which ended a dispute regarding distributions of Actuate software by IBM, revenues from our acquisition of Xenos, which was completed in February of 2010, and revenues from our transaction with Oracle during the second quarter of 2010, which ended a dispute regarding distributions of Actuate software by Oracle. The agreement required Oracle to pay Actuate a total of $16 million. The terms of the agreement called for equal cash payments by Oracle to Actuate between June 2010 and March 2013 in accordance with a pre-determined schedule. Accordingly, Actuate recognizes the revenue similar to an extended payment term contract. Consequently, every period as the payments from Oracle become due, approximately $1.3 million of revenue is recognized by Actuate. This amount is apportioned between license and maintenance revenue based on the maintenance rate dictated in the underlying Oracle contract.
License revenue in fiscal 2011 remained unchanged compared with fiscal 2010. Fiscal 2010 included a large transaction with IBM that resulted in approximately $8.9 million of additional license revenues. Our BIRT-based product sales increased by 70% during fiscal 2011 as we continue to see new customer additions, higher transaction counts as well as increases in average order sizes. Similar positive trends in North America and Asia resulted in increased license revenues of 4% or approximately $1.8 million and 43% or approximately $700,000 over last year, respectively. These positive trends were offset by weaker European license sales which decreased 31% or approximately $2.4 million.
Non-Xenos sales and marketing expenses decreased in almost every category during fiscal 2010 as compared to fiscal 2009. Compensation related expenses decreased by approximately $1.9 million as our average non-Xenos headcount decreased by approximately 14% or 21 employees from 155 in fiscal 2009 to 134 during fiscal 2010. Most of the decrease in compensation expense was driven by lower salaries and benefits due to these headcount reductions. These decreases were partially offset by higher commissions due to increase in license revenues. We also continued our efforts to streamline our processes and lower operating expenses. Significant decreases were reflected in lower contractor costs of approximately $447,000, lower travel expenses of approximately $347,000 and lower marketing program expenses of approximately $2.3 million. The remaining reductions in marketing expenses were due to consolidation and streamlining of programs as well as scaling down of event costs. These decreases were offset by increased operating expenses as a result of our acquisition of Xenos in February of 2010.
The provision for income taxes represents Federal, State and foreign taxes as adjusted for the impact of net operating losses utilized, income tax credits benefited and the reversal or establishment of tax reserves. The provision for income taxes of $7.6 million, $3.7 million, and of $3.9 million is based on pretax income of $19.6 million, $14.3 million and $16.1 million in fiscal years 2011, 2010 and 2009, respectively. The increase in the tax provision in fiscal year 2011 compared to fiscal year 2010 was primarily due to the significant increase in U.S. profit before tax. The decrease in the provision for income taxes in fiscal year 2010 compared to fiscal year 2009 was due to the release of valuation allowance of $1.5 million, offset by an increase in U.S. profit before tax. The decrease in the valuation allowance in fiscal year 2010 was primarily the result of managements determination that it was more likely than not that the Canadian deferred tax assets would be realized based on the expected future profitability of the Companys Canadian operations and after weighing the applicable positive and negative evidence.
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Actuate Corp. has a market cap of $220.7 million; its shares were traded at around $5 with a P/E ratio of 13.4.
Highlight of Business Operations:
For the fiscal year ended December 31, 2011, we recorded total revenue of $134.9 million, an increase of 3% over fiscal 2010. License revenue was $49.2 million, almost unchanged compared to the previous year. Our operating income grew by 19% or $3.3 million to $20.9 million in fiscal 2011 and we generated $21.2 million of operating cash flows. Diluted earnings per share under generally accepted accounting principles in the United States of America (U.S. GAAP) was $0.23 in fiscal 2011 as compared to $0.22 for fiscal 2010 for an increase of 5%. We ended fiscal 2011 with $67.4 million in cash, cash equivalents and short-term investments, compared with $79.3 million at December 31, 2010. During fiscal 2011, we fully paid down $40 million in outstanding debt and repurchased $10 million of our common stock.The 10% increase in our total revenues in fiscal 2010 compared to fiscal 2009 was primarily due to a favorable transaction with IBM totaling $11 million, which ended a dispute regarding distributions of Actuate software by IBM, revenues from our acquisition of Xenos, which was completed in February of 2010, and revenues from our transaction with Oracle during the second quarter of 2010, which ended a dispute regarding distributions of Actuate software by Oracle. The agreement required Oracle to pay Actuate a total of $16 million. The terms of the agreement called for equal cash payments by Oracle to Actuate between June 2010 and March 2013 in accordance with a pre-determined schedule. Accordingly, Actuate recognizes the revenue similar to an extended payment term contract. Consequently, every period as the payments from Oracle become due, approximately $1.3 million of revenue is recognized by Actuate. This amount is apportioned between license and maintenance revenue based on the maintenance rate dictated in the underlying Oracle contract.
License revenue in fiscal 2011 remained unchanged compared with fiscal 2010. Fiscal 2010 included a large transaction with IBM that resulted in approximately $8.9 million of additional license revenues. Our BIRT-based product sales increased by 70% during fiscal 2011 as we continue to see new customer additions, higher transaction counts as well as increases in average order sizes. Similar positive trends in North America and Asia resulted in increased license revenues of 4% or approximately $1.8 million and 43% or approximately $700,000 over last year, respectively. These positive trends were offset by weaker European license sales which decreased 31% or approximately $2.4 million.
Non-Xenos sales and marketing expenses decreased in almost every category during fiscal 2010 as compared to fiscal 2009. Compensation related expenses decreased by approximately $1.9 million as our average non-Xenos headcount decreased by approximately 14% or 21 employees from 155 in fiscal 2009 to 134 during fiscal 2010. Most of the decrease in compensation expense was driven by lower salaries and benefits due to these headcount reductions. These decreases were partially offset by higher commissions due to increase in license revenues. We also continued our efforts to streamline our processes and lower operating expenses. Significant decreases were reflected in lower contractor costs of approximately $447,000, lower travel expenses of approximately $347,000 and lower marketing program expenses of approximately $2.3 million. The remaining reductions in marketing expenses were due to consolidation and streamlining of programs as well as scaling down of event costs. These decreases were offset by increased operating expenses as a result of our acquisition of Xenos in February of 2010.
The provision for income taxes represents Federal, State and foreign taxes as adjusted for the impact of net operating losses utilized, income tax credits benefited and the reversal or establishment of tax reserves. The provision for income taxes of $7.6 million, $3.7 million, and of $3.9 million is based on pretax income of $19.6 million, $14.3 million and $16.1 million in fiscal years 2011, 2010 and 2009, respectively. The increase in the tax provision in fiscal year 2011 compared to fiscal year 2010 was primarily due to the significant increase in U.S. profit before tax. The decrease in the provision for income taxes in fiscal year 2010 compared to fiscal year 2009 was due to the release of valuation allowance of $1.5 million, offset by an increase in U.S. profit before tax. The decrease in the valuation allowance in fiscal year 2010 was primarily the result of managements determination that it was more likely than not that the Canadian deferred tax assets would be realized based on the expected future profitability of the Companys Canadian operations and after weighing the applicable positive and negative evidence.
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