Actuate Journal

Actuate Corporation has announced its financial results for the fourth quarter and fiscal year 2008.

Financial and Operational Highlights:

- Repurchased $60 million of Actuate common stock in a "modified Dutch auction" tender offer

- Entered into a revolving credit agreement with Wells Fargo Foothill, LLC, for up to $50 million

- Record annual non-GAAP services margin of 75.6%

- Record annual maintenance revenues of $76.7 million, up 8% year-over-year

- Record quarterly non-GAAP operating margin of 26.6%

- Record annual cash flow from operations of $29.5 million up 29% year-over-year

- Quarterly revenues of $33.2 million and fully diluted non-GAAP EPS of $0.10

- BIRT-related business exceeded $4.5 million in Q4 and totaled $15.4 million for the year

- Booked transactions greater than $100,000 with 76 customers in Q4

- Closed one transaction in Q4 with a license component in excess of $1 million

Revenues for the fourth quarter of 2008 were $33.2 million, compared with $39.2 million in the fourth quarter of 2007. License revenues for the fourth quarter of 2008 were $10.1 million, compared with $13.7 million in the year-ago quarter. Services and maintenance revenues for the fourth quarter of 2008 totaled $23.1 million, compared with $25.5 million in the fourth quarter of 2007. Within this line item, maintenance revenues were $19.9 million for the fourth quarter, compared with $21.2 million in the same period last year. The fourth quarter of 2007 included an unusually large $3 million maintenance catch-up transaction. Total revenues for the fiscal year of 2008 were $131.0 million, compared with $140.6 million in fiscal year 2007. License revenues for 2008 were $40.0 million, with services and maintenance revenues of $91.0 million. Within this line item, maintenance revenues were $76.7 million, up 12.2% from 2007 excluding the unusual maintenance item mentioned above.

Net income for the fourth quarter of 2008, as reported in accordance with U.S. generally accepted accounting principles, was $4.7 million, or $0.08 per diluted share, compared with net income of $10.8 million or $0.16 per diluted share in the fourth quarter of 2007. In Q4 2007, the company recorded a non-cash benefit in the provision for income taxes of approximately $6.8 million associated with the partial reversal of our valuation allowance against deferred tax assets. GAAP net income for the fiscal year 2008 was $13.6 million or $0.21 per diluted share, compared with GAAP net income of $20.2 million or $0.29 per diluted share in the prior year.

Cash flow from operations was $5.1 million for the fourth quarter of 2008, and a record $29.5 million for fiscal year 2008. Cash, cash equivalents and investments totaled $58.4 million at December 31, 2008 compared with $81.3 million as of September 30, 2008, and $68.4 million as of December 31, 2007. During the fourth quarter Actuate repurchased 17.1 million shares of outstanding common stock for a total purchase price of $60 million as part of its tender offer. The company used $30 million in cash and $30 million from its secured line of credit to finance this transaction.

Non-GAAP net income for the fourth quarter of 2008 was $6.2 million, or $0.10 per diluted share, compared with non-GAAP net income of $7.7 million, or $0.11 per diluted share in the fourth quarter of 2007. Non-GAAP operating margin for the fourth quarter of 2008 was a record 26.6%, an increase of 600 basis points from the third quarter of 2008. Non-GAAP net income for fiscal year 2008 was $17.6 million or $0.27 per diluted share, compared with non-GAAP net income of $22.5 million or $0.33 per diluted share in fiscal year 2007.

Actuate expects continued growth in its maintenance revenues in 2009.