Siebel Systems Reports Financial Results

HostReview.com
Wednesday, July 27, 2005; 10:29 AM

Siebel Systems, Inc. (www.siebel.com), a provider of customer-facing solutions, today announced financial results which were inline with preliminary financial results presented on July 7, 2005, for the quarter ended June 30, 2005.

Total revenues for the second quarter of 2005 were $313.6 million. License revenues were $78.3 million. Maintenance revenues were $122.8 million. Services and other revenues were $112.5 million.

Including the impact of $74.1 million in restructuring and other charges, GAAP operating loss and operating margin for the second quarter of 2005 were $(71.3) million and (22.7)%, respectively. GAAP pre tax loss for the second quarter of 2005 was $(55.6) million. GAAP net loss, net margin and net loss per share for the second quarter of 2005 were $(50.0) million, (15.9)% and $(0.10) per share, respectively. The effective tax rate for GAAP net loss in the second quarter of 2005 was a benefit of 10%.

Excluding the impact of the restructuring and other charges, non-GAAP operating income and operating margin for the second quarter of 2005 were $2.8 million and 0.9%, respectively. Non-GAAP pre tax income for the second quarter of 2005 was $18.4 million. Non-GAAP net income, net margin and net income per share for the second quarter of 2005 were $0.7 million, 0.2% and $0.00 per share, respectively. The effective tax rate for non-GAAP net income in the second quarter of 2005 was an expense of 96%, which differs from the effective tax rate for GAAP net loss in the second quarter and first quarter of 2005 due to the modest amount and geographic source of pre tax income and certain fixed tax expenses that do not vary with pre tax income.

The Company’s cash, cash equivalents, and short-term investments were $2.242 billion as of June 30, 2005. The Company generated $60.6 million of cash in the quarter, which was offset by a $15.1 million outlay related to the Company's acquisition of edocs, Inc., resulting in a net $45.5 million increase in cash from the end of the first quarter. Deferred revenue was $331.4 million as of June 30, 2005. Days sales outstanding in accounts receivable were 60 days for the second quarter of 2005.

“I’ve made a commitment to shareholders to improve Siebel’s financial performance over time and we are taking the necessary steps to achieve this goal,” said George T. Shaheen, Chief Executive Officer of Siebel Systems.

“Although we’ve made some progress, we still have more work to do. We have recently acted to improve our license sales execution, including reorganizing the Americas sales force, appointing a new Chief
Marketing Officer, simplifying sales compensation, refocusing on business development, management and closure practices, and streamlining contract execution. We have reduced our cost structure, took additional restructuring actions at the end of the quarter, and aim to drive future costs down further. We have made significant strides with Siebel CRM OnDemand. In July, we released Siebel Component Assembly, built on industry standard service oriented architectures, on schedule and made our first multimillion
dollar sale.

In the second quarter of 2005, Siebel Systems deployed approximately 240,000 additional live CRM users. With more than 3.4 million total live CRM users and over 4,000 customer engagements, Siebel Systems believes it has several times more live users than its key competitors combined.