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MicroStrategy 8-K 2009

Documents found in this filing:

  1. 8-K
  2. Ex-99.1
  3. Ex-99.1
Press Release

Exhibit 99.1

Contact:

MicroStrategy Incorporated

Investor Relations

ir@microstrategy.com

(703) 848-8600

MicroStrategy Announces

Fourth Quarter 2008 Financial Results

Revenues of $95 Million and Diluted EPS of $1.17 Per Share

MCLEAN, Va., February 2nd, 2009—MicroStrategy® Incorporated (NASDAQ: MSTR), a leading worldwide provider of business intelligence software, today announced financial results for the three-month period ended December 31, 2008 (the fourth quarter of its 2008 fiscal year).

Fourth quarter 2008 revenues were $95.0 million versus $95.2 million for the fourth quarter of 2007. Product licenses revenues for the fourth quarter of 2008 were $28.0 million versus $31.7 million for the fourth quarter of 2007, a 12% decrease. Product support and other services revenues for MicroStrategy’s core business intelligence (BI) business in the fourth quarter of 2008 were $64.0 million versus $61.3 million for the fourth quarter of 2007, a 4% increase.

Operating expenses for the fourth quarter of 2008 were $57.6 million versus $53.6 million for the fourth quarter of 2007, an 8% increase. The increase in fourth quarter operating expenses was primarily due to an increase in the worldwide employee headcount and related expenses of the Company’s core BI business. During the fourth quarter of 2008, MicroStrategy capitalized $5.5 million in software development costs associated with the anticipated release of its MicroStrategy 9TM software, which is expected to be generally available in the first quarter of 2009. MicroStrategy did not capitalize any software development costs during the fourth quarter of 2007.

Income from continuing operations before financing and other income and income taxes for the fourth quarter of 2008 was $21.3 million, or 22% of revenue, versus $28.2 million, or 30% of revenue, for the fourth quarter of 2007. Income from continuing operations for the fourth quarter of 2008 was $13.8 million, or $1.13 per share on a diluted basis, compared to $18.5 million, or $1.47 on a diluted basis, for the fourth quarter of 2007. Net income for the fourth quarter of 2008 was $14.3 million, or $1.17 per share on a diluted basis, compared to $17.7 million, or $1.41 per share on a diluted basis, for the fourth quarter of 2007.

As of December 31, 2008, MicroStrategy had cash and cash equivalents of approximately $122.9 million and 9,119,721 shares of class A common stock and 2,770,244 shares of class B common stock outstanding.


New Customers and New Deals with Existing Customers in Q4 2008 Included:

24 Hour Fitness; Adobe Systems Incorporated; Alliance Data Systems Corporation; Ahold USA Holdings Inc.; Allstate Insurance Company; Amica Mutual Insurance; AutoTrader.com, LLC; BJ’s Wholesale Club; Branch Banking & Trust Company; Burlington Coat Factory; Canadian Institute for Health Information; The Container Store, Inc.; Depository Trust & Clearing Corp.; DineEquity; The First American Corporation; GlaxoSmithKline; Idearc Media Corp.; KeySpan Corporate Services LLC; Lowe’s Companies Inc.; McGraw-Hill Companies; Nationwide Mutual Insurance Company; Netflix; Novartis Pharmaceuticals Corporation; Nu Skin Enterprises, Inc.; O’Reilly Automotive; Pacific Sunwear; Payless ShoeSource Worldwide, Inc.; Real Networks; Republic Bank Limited; Silverton Casino, LLC; Spansion; State of Tennessee; Swagelok; VHA Inc.; Wells Fargo Bank, N.A.; Wilton Industries, Inc.

Examples of Customer Deals from Q4 2008:

AutoTrader.com

AutoTrader.com, created in 1997 and headquartered in Atlanta, Georgia, is the Internet’s leading auto classifieds marketplace and consumer information Web site. AutoTrader.com selected MicroStrategy to expand its enterprise-wide reporting and analysis needs due to MicroStrategy’s scalability, end user experience, integrated architecture and rich analytical features. Employees at AutoTrader.com run reports against a 50-terabyte data warehouse, and the company relies on the insight gained from its sales analysis and reporting to improve operational efficiencies and competitive insight.

Canadian Institute for Health Information

Canadian Institute for Health Information (CIHI) selected MicroStrategy software to expand its deployment of its eReporting program, a public and client accessible information service. CIHI is an independent, not-for-profit organization that collects and analyzes health data in Canada. The eReporting program enables the public, government officials and health care providers to run reports and access timely, accurate and comparable information on health and health care in Canada. Users are able to access information in an easy-to-use, Web-based environment to explore and answer health care questions. CIHI chose to standardize on MicroStrategy for its Web-based platform, intuitive interface and user scalability.

Silverton Casino Lodge

Silverton Casino Lodge selected MicroStrategy to expand its visibility across multiple areas of the business, including marketing promotions and casino operations. Silverton plans to provide more users with daily reports and dashboards for greater insight into key performance measures across the company. MicroStrategy’s integrated BI platform, easy-to-use Web interface and Dynamic Enterprise Dashboards will enable Silverton employees to view large volumes of data in a highly interactive way to help them make timely, data-driven decisions.

MicroStrategy Positioned in “Leaders” Quadrant of Gartner 2009 Magic Quadrant for Business Intelligence Platforms Report:

In January 2009, MicroStrategy announced that it was positioned by Gartner, Inc. in the “leaders” quadrant in the 2009 Magic Quadrant for Business Intelligence Platforms report. Gartner’s evaluation was based on completeness of vision and ability to execute. Gartner describes “leaders” as “vendors that are reasonably strong in the breadth and depth of their BI platform capabilities, and can deliver on enterprisewide implementations that support a broad BI strategy. Leaders articulate a business proposition that resonates with buyers, supported by the viability and operational capability to deliver on a global basis.”

MicroStrategy Announces MicroStrategy 9:

MicroStrategy recently announced its upcoming software release, MicroStrategy 9, which is expected to be generally available in the first quarter of 2009. The company’s most significant release in nearly a decade, MicroStrategy 9 will deliver new technology and features designed to:

 

   

Extend enterprise BI with enhancements for greater scalability, performance and efficiency;

 

   

Enable rapid development and deployment of departmental BI applications; and

 

   

Provide a seamless consolidation path from departmental BI to enterprise BI.


Extending Enterprise BI

As BI systems grow to thousands of users and hundreds of terabytes of data, maintaining fast query performance can be a tremendous challenge. MicroStrategy 9 includes new adaptive caching technology called In-memory ROLAP, which takes advantage of the large addressable memory now available on 64-bit Unix, Linux and Windows computer servers, and provides a performance-optimized middle-tier database that can respond directly to data requests from reports, dashboards and OLAP analyses. MicroStrategy 9 also introduces new SQL generation optimizations that can greatly improve performance for sophisticated queries involving complex metrics.

As companies merge and expand, there is an increased urgency for business intelligence to span all operations, across business units, across departments and across the globe. This expansion introduces new requirements on BI systems to support global deployments. MicroStrategy 9 offers the ability to present reports, dashboards or OLAP analyses in the local language of business users viewing the information. In addition, MicroStrategy 9 offers numerous capabilities to streamline coordination between development teams working around the globe on the same BI applications.

Rapid Development and Deployment of Departmental BI

MicroStrategy 9 includes significant new architectural components and features designed to support the needs of smaller-scale BI systems for departments and workgroups. MicroStrategy 9 enables departmental BI applications to be set up quickly, providing end users with the ability to create reports and dashboards and distribute information among themselves with little or no IT support.

MicroStrategy’s new Multi-source ROLAP, In-memory ROLAP and rapid metadata creation enables business departments to quickly set up small BI environments, accessing multiple databases without the time-consuming and technically-intensive work of first creating a data mart or data warehouse.

MicroStrategy 9 has numerous new features that make assembling reports simpler and faster. Business users can quickly create their own dashboards using new features in MicroStrategy 9, including out-of-the-box dashboard templates, support for custom-designed templates and new design assistants that aid novice users in creating their own dashboards.

Because of its ROLAP architecture, one of MicroStrategy’s long-standing strengths is the ability of business users to freely investigate the data or “surf” through the data warehouse without having to design a new report for each new combination of data they want to see. MicroStrategy 9 has extended this ability by allowing users to perform these same OLAP manipulations such as pivoting and drilling directly on graphs.

MicroStrategy 9 gives users greater control of report and dashboard distribution with its Distribution Services product. Users can set up report distributions for themselves or for other users, sending reports via e-mail, networked printers, or directly to recipients’ computers or servers. Business users are empowered to create and manage their own information subscriptions, without the intervention of a centralized IT administrator.

Seamless Consolidation from Departmental BI to Enterprise BI

Organizations have a mix of workgroup, departmental and enterprise BI systems, and face the problem of having multiple ‘versions of the truth’ across these BI islands that can undermine the credibility of its BI systems. The solution is to merge the islands of BI into a more cohesive, enterprise-wide BI system gradually and incrementally.

MicroStrategy 9 was designed to enable the easy merger of independent islands of MicroStrategy BI into a larger, more expansive enterprise BI system. Using the new Multi-source ROLAP capability, metadata and reports from departmental BI islands can be gradually merged into larger enterprise BI metadata, without having to move any of the original data into data warehouses or data marts. As a next step, MicroStrategy 9 also enables companies to gradually move their data from disparate databases into the data warehouse simply by “re-pointing” the metadata to access the same data, but at its new location, with no disruption to reports or redesign required.


MicroStrategy Receives TechWeb’s Intelligent Enterprise 2009 Editors’ Choice Award:

MicroStrategy was awarded the 2009 Editors’ Choice Award by TechWeb’s Intelligent Enterprise. Winners of this award are considered by the publication to be the most influential vendors in Enterprise IT for 2009. MicroStrategy joined technology companies, including Microsoft, Oracle, and SAP in the elite “Dozen” companies that are expected to drive the intelligent enterprise in 2009. In selecting the 2009 Editors’ Choice winners, Intelligent Enterprise cited the companies’ exceptional vision, innovation, and leadership.

According to Intelligent Enterprise, MicroStrategy has “focused on delivering world-class BI with state-of-the-art dynamic dashboards. The MicroStrategy 9 release set for Q1 2009 adds in-memory analysis to speed queries and reduce data-prep dependency on IT. And a new multi-source engine opens up data access while supporting flexible modeling as BI spreads from workgroup to enterprisewide deployments.”

MicroStrategy World 2009:

MicroStrategy hosted its 12th annual user conference, MicroStrategy World 2009, January 13-16, 2009 at the Wynn Las Vegas in Las Vegas, Nevada. The event featured numerous keynote presentations, more than 120 educational sessions and an exhibit hall showcasing MicroStrategy partners.

Executives from more than 35 world-class companies presented their success strategies and experiences using BI to enhance business performance. Some of the companies that presented at MicroStrategy World 2009 included AARP, AEG Worldwide, Belgacom, Bluegreen Corporation, Canadian Institute of Health Information, Cancer Care Ontario, Catalina Marketing, CVS Caremark, David’s Bridal, FAMIQ, GUESS?, Herbalife, KeyBank, Liquor Control Board of Ontario, Lowe’s Companies, Meredith Corporation, Nationwide Insurance, Raley’s, Republic Bank Limited, Saint Elizabeth Health Care, Saint-Gobain Abrasives, Sepracor, Target, Transportation Security Administration, Turkcell and Yahoo!.

At the conference, MicroStrategy honored several companies for achieving outstanding business performance with their MicroStrategy-based business intelligence applications:

Nationwide Mutual Insurance Company: Nationwide Mutual Insurance Company was recognized in the Enterprise Deployment category. Nationwide has deployed MicroStrategy across its enterprise, and has 27 MicroStrategy applications in production, primarily focused on four business areas: personal lines policy analysis, claims management, risk management appraisal and agent productivity. Nationwide, based in Columbus, Ohio, is one of the largest diversified insurance and financial services organizations in the world, with more than $158 billion in assets.

Target Corporation: Target Corporation was the award recipient in the Data Scalability category. The second-largest general-merchandise retailer in America, Target has adopted MicroStrategy as one of its enterprise-wide business intelligence tools. Target uses MicroStrategy’s software to analyze over 100+ terabytes of vendor, sales and product data stored in its data warehouse.

Bank of America: Bank of America was the award recipient in the User Scalability category. Bank of America is one of the world’s largest financial institutions, serving individual consumers, small and middle market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk-management products and services. Global Product Solutions (GPS), a division of Global Corporate & Investment Banking at Bank of America, employs the BI Platform and designs, delivers and services integrated credit and treasury products to more than 140,000 clients around the world, including small businesses, middle-market and large corporations, multi-nationals, financial institutions and governments.

MicroStrategy Recognized as a Top Software Vendor for Retailers:

MicroStrategy was named by Retail Info Systems (RIS) News to its 2008 Software LeaderBoard, which highlights the top software vendors for retailers. The RIS Software LeaderBoard compares software companies serving the retail industry in a head-to-head ranking that is based largely on retailer evaluations. MicroStrategy was also ranked in the top five in the following RIS LeaderBoard categories:

 

 

Top Software Vendors for Tier One Retailers (revenues greater than $1 billion)


 

Leaders in Overall Performance

 

 

Leaders in Technology Innovation

 

 

Leaders in Recommendation

 

 

Leaders in Total Cost of Ownership by Tier One & Mid-size Retailers

 

 

Leaders in ROI by Tier One & Mid-size Retailers

 

 

Leaders in Ease of Installation/Integration by Tier One & Mid-size Retailers

 

 

Leaders in Quality of Support by Tier One & Mid-size Retailers

 

 

Leaders in Quality of Service by Tier One & Mid-size Retailers

 

 

Leaders in Product Reliability by Tier One & Mid-size Retailers

About MicroStrategy Incorporated

Founded in 1989, MicroStrategy is a global leader in business intelligence (BI) technology. MicroStrategy provides integrated reporting, analysis, and monitoring software that helps leading organizations worldwide make better business decisions every day. Companies choose MicroStrategy for its advanced technical capabilities, sophisticated analytics, and superior data and user scalability. More information about MicroStrategy (NASDAQ: MSTR) is available at www.microstrategy.com.

MicroStrategy, MicroStrategy 9 and MicroStrategy Dynamic Enterprise Dashboards are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results and statements containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: the ability of the Company to effect a timely general release of the MicroStrategy 9 software in the first quarter of 2009; the ability of the Company to implement and achieve widespread customer acceptance of its MicroStrategy 9 software on a timely basis; the Company’s ability to recognize deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company’s products in the marketplace; the timing of significant orders; delays in the Company’s ability to develop or ship new products; market acceptance of new products; the Company’s ability to effect the sale of its Alarm.com business on acceptable terms, or at all; competitive factors; general economic conditions, including significant downturns in industries, including the financial services and retail industries, in which we have a significant number of customers; currency fluctuations; and other risks detailed in the Company’s registration statements and periodic reports filed with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.


MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2008    2007     2008    2007  
     (unaudited)    (unaudited)     (unaudited)    (audited)  

Revenues

          

Product licenses

   $ 27,959    $ 31,736     $ 95,924    $ 100,344  

Product support and other services

     67,046      63,491       264,469      235,029  
                              

Total revenues

     95,005      95,227       360,393      335,373  
                              

Cost of Revenues

          

Product licenses

     434      899       1,877      3,055  

Product support and other services

     15,631      12,561       61,529      47,486  
                              

Total cost of revenues

     16,065      13,460       63,406      50,541  
                              

Gross profit

     78,940      81,767       296,987      284,832  
                              

Operating Expenses

          

Sales and marketing

     37,624      31,214       137,683      110,437  

Research and development

     6,122      10,045       30,571      35,172  

General and administrative

     13,878      12,337       60,933      49,512  
                              

Total operating expenses

     57,624      53,596       229,187      195,121  
                              

Income from continuing operations before financing and other income and income taxes

     21,316      28,171       67,800      89,711  
                              

Financing and Other Income

          

Interest income, net

     185      892       2,266      3,674  

Other income (expense), net

     974      (77 )     705      (866 )
                              

Total financing and other income

     1,159      815       2,971      2,808  
                              

Income from continuing operations before income taxes

     22,475      28,986       70,771      92,519  

Provision for income taxes

     8,638      10,514       29,003      33,311  
                              

Income from continuing operations

     13,837      18,472       41,768      59,208  

Income (loss) from discontinued operations, net of tax provision (benefit) ($358 and ($638) for the three months ended, respectively, and $534 and ($591) for the twelve months ended, respectively)

     448      (798 )     65      (740 )
                              

Net Income

   $ 14,285    $ 17,674     $ 41,833    $ 58,468  
                              

Basic earnings (loss) per share (1):

          

From continuing operations

   $ 1.16    $ 1.54     $ 3.51    $ 4.80  

From discontinued operations

   $ 0.04    $ (0.07 )   $ 0.01    $ (0.06 )
                              

Basic earnings per share

   $ 1.20    $ 1.47     $ 3.52    $ 4.74  
                              

Weighted average shares outstanding used in computing basic earnings per share

     11,889      12,055       11,886      12,325  
                              

Diluted earnings (loss) per share (1):

          

From continuing operations

   $ 1.13    $ 1.47     $ 3.39    $ 4.61  

From discontinued operations

   $ 0.04    $ (0.06 )   $ 0.01    $ (0.06 )
                              

Diluted earnings per share

   $ 1.17    $ 1.41     $ 3.40    $ 4.55  
                              

Weighted average shares outstanding used in computing diluted earnings per share

     12,226      12,556       12,303      12,853  
                              

 

(1) Basic and fully diluted earnings per share for class A and class B common stock are the same


MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

     Core BI Business     Angel.com     Consolidated  
     Three Months Ended
December 31,
    Three Months Ended
December 31,
    Three Months Ended
December 31,
 
     2008    2007     2008     2007     2008    2007  

Revenues

              

Product licenses

   $ 27,959    $ 31,736     $ —       $ —       $ 27,959    $ 31,736  

Product support and other services

     64,030      61,296       —         —         64,030      61,296  

Angel.com telephony services

     —        —         3,016       2,195       3,016      2,195  
                                              

Total revenues

     91,989      93,032       3,016       2,195       95,005      95,227  
                                              

Cost of Revenues

              

Product licenses

     434      899       —         —         434      899  

Product support and other services

     14,729      12,180       —         —         14,729      12,180  

Angel.com telephony services

     —        —         902       381       902      381  
                                              

Total cost of revenues

     15,163      13,079       902       381       16,065      13,460  
                                              

Gross profit

     76,826      79,953       2,114       1,814       78,940      81,767  
                                              

Operating Expenses

              

Sales and marketing

     35,759      29,841       1,865       1,373       37,624      31,214  

Research and development

     5,318      9,416       804       629       6,122      10,045  

General and administrative

     13,811      12,232       67 (a)     105 (a)     13,878      12,337  
                                              

Total operating expenses

     54,888      51,489       2,736       2,107       57,624      53,596  
                                              

Income (loss) from continuing operations before financing and other income and income taxes

     21,938      28,464       (622 )     (293 )     21,316      28,171  
                                              

Financing and Other Income

              

Interest income, net

     185      892       —         —         185      892  

Other income (expense), net

     974      (77 )     —         —         974      (77 )
                                              

Total financing and other income

     1,159      815       —         —         1,159      815  
                                              

Income (loss) from continuing operations before income taxes

   $ 23,097    $ 29,279     $ (622 )   $ (293 )   $ 22,475    $ 28,986  

Provision for income taxes

              8,638      10,514  
                        

Income from continuing operations

              13,837      18,472  

Income (loss) from discontinued operations, net of tax

              448      (798 )
                        

Net income

            $ 14,285    $ 17,674  
                        

Basic earnings (loss) per share:

              

From continuing operations

            $ 1.16    $ 1.54  

From discontinued operations

            $ 0.04    $ (0.07 )
                        

Basic earnings per share

            $ 1.20    $ 1.47  
                        

Diluted earnings (loss) per share:

              

From continuing operations

            $ 1.13    $ 1.47  

From discontinued operations

            $ 0.04    $ (0.06 )
                        

Diluted earnings per share

            $ 1.17    $ 1.41  
                        

Basic weighted average shares outstanding

              11,889      12,055  
                        

Diluted weighted average shares outstanding

              12,226      12,556  
                        

 

(a) An insignificant amount of general and administrative services is provided to the Angel.com business unit by MicroStrategy’s core business operations.


MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

     Core BI Business     Angel.com     Consolidated  
     Twelve Months Ended
December 31,
    Twelve Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2008    2007     2008     2007     2008    2007  

Revenues

              

Product licenses

   $ 95,924    $ 100,344     $ —       $ —       $ 95,924    $ 100,344  

Product support and other services

     253,660      227,917       —         —         253,660      227,917  

Angel.com telephony services

     —        —         10,809       7,112       10,809      7,112  
                                              

Total revenues

     349,584      328,261       10,809       7,112       360,393      335,373  
                                              

Cost of Revenues

              

Product licenses

     1,877      3,055       —         —         1,877      3,055  

Product support and services revenues

     59,331      45,662       —         —         59,331      45,662  

Angel.com telephony services

     —        —         2,198       1,824       2,198      1,824  
                                              

Total cost of revenues

     61,208      48,717       2,198       1,824       63,406      50,541  
                                              

Gross profit

     288,376      279,544       8,611       5,288       296,987      284,832  
                                              

Operating Expenses

              

Sales and marketing

     129,721      104,526       7,962       5,911       137,683      110,437  

Research and development

     27,546      32,465       3,025       2,707       30,571      35,172  

General and administrative

     60,651      49,400       282 (a)     112 (a)     60,933      49,512  
                                              

Total operating expenses

     217,918      186,391       11,269       8,730       229,187      195,121  
                                              

Income (loss) from continuing operations before financing and other income and income taxes

     70,458      93,153       (2,658 )     (3,442 )     67,800      89,711  
                                              

Financing and Other Income

              

Interest income, net

     2,266      3,674       —         —         2,266      3,674  

Other expense, net

     705      (866 )     —         —         705      (866 )
                                              

Total financing and other income

     2,971      2,808       —         —         2,971      2,808  
                                              

Income (loss) from continuing operations before income taxes

   $ 73,429    $ 95,961     $ (2,658 )   $ (3,442 )   $ 70,771    $ 92,519  

Provision for income taxes

              29,003      33,311  
                        

Income from continuing operations

              41,768      59,208  

Income (loss) from discontinued operations, net of tax

              65      (740 )
                        

Net income

            $ 41,833    $ 58,468  
                        

Basic earnings (loss) per share:

              

From continuing operations

            $ 3.51    $ 4.80  

From discontinued operations

            $ 0.01    $ (0.06 )
                        

Basic earnings per share

            $ 3.52    $ 4.74  
                        

Diluted earnings (loss) per share:

              

From continuing operations

            $ 3.39    $ 4.61  

From discontinued operations

            $ 0.01    $ (0.06 )
                        

Diluted earnings per share

            $ 3.40    $ 4.55  
                        

Basic weighted average shares outstanding

              11,886      12,325  
                        

Diluted weighted average shares outstanding

              12,303      12,853  
                        

 

(a) An insignificant amount of general and administrative services is provided to the Angel.com business unit by MicroStrategy’s core business operations.


MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

     December 31,
2008
    December 31,
2007
 
     (unaudited)     (audited)  

Assets

    

Current assets

    

Cash and cash equivalents

   $ 122,915     $ 85,194  

Restricted cash and investments

     619       2,982  

Accounts receivable, net

     49,670       49,392  

Prepaid expenses and other current assets

     9,518       12,106  

Deferred tax assets, net

     26,743       29,652  

Assets held-for-sale

     4,964       4,272  
                

Total current assets

     214,429       183,598  

Property and equipment, net

     8,978       9,473  

Capitalized software development cost, net

     14,823       2,340  

Deposits and other assets

     36,804       11,433  

Deferred tax assets, net

     17,105       35,347  
                

Total Assets

   $ 292,139     $ 242,191  
                

Liabilities and Stockholders’ Equity

    

Current liabilities

    

Accounts payable and accrued expenses

   $ 27,697     $ 22,083  

Accrued compensation and employee benefits

     42,634       38,604  

Deferred revenue and advance payments

     66,495       64,234  

Liabilities held-for-sale

     6,325       3,436  
                

Total current liabilities

     143,151       128,357  

Deferred revenue and advance payments

     1,679       1,368  

Other long-term liabilities

     9,268       9,137  
                

Total Liabilities

     154,098       138,862  
                

Stockholders’ Equity

    

Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding

     —         —    

Class A common stock, $0.001 par value; 330,000 shares authorized; 14,167 shares issued and 9,120 shares outstanding, and 14,113 shares issued and 9,184 shares outstanding, respectively

     14       14  

Class B common stock, $0.001 par value; 165,000 shares authorized; 2,770 issued and outstanding, respectively

     3       3  

Additional paid-in capital

     450,953       448,229  

Treasury stock, at cost; 5,047 and 4,929 shares, respectively

     (366,191 )     (357,804 )

Accumulated other comprehensive income

     1,471       2,929  

Retained earnings

     51,791       9,958  
                

Total Stockholders’ Equity

     138,041       103,329  
                

Total Liabilities and Stockholders’ Equity

   $ 292,139     $ 242,191  
                


MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

     Twelve Months Ended
December 31,
 
     2008     2007  
     (unaudited)     (audited)  

Operating activities:

    

Net income

   $ 41,833     $ 58,468  

Plus: (Income) loss from discontinued operations, net

     (65 )     740  
                

Income from continuing operations

     41,768       59,208  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     6,399       7,557  

Bad debt expense

     1,142       1,370  

Deferred taxes

     20,925       26,137  

Stock-based compensation

     46       528  

Excess tax benefits from stock-based payment arrangements

     (422 )     (3,270 )

Other, net

     72       160  

Changes in operating assets and liabilities:

    

Accounts receivable

     (2,975 )     4,879  

Prepaid expenses and other current assets

     1,643       (3,301 )

Deposits and other assets

     157       (1,434 )

Accounts payable and accrued expenses, compensation and employee benefits

     10,676       3,382  

Deferred revenue and advance payments

     5,278       4,119  

Other long-term liabilities

     190       1,244  
                

Net cash provided by operating activities from continuing operations

     84,899       100,579  

Net cash provided by (used in) operating activities from discontinued operations

     4,019       (2,683 )
                

Net cash provided by operating activities

     88,918       97,896  
                

Investing activities:

    

Advance deposits on purchases of property and equipment

     (25,000 )     (7,500 )

Purchases of property and equipment

     (5,167 )     (3,426 )

Capitalized software development costs

     (13,575 )     (2,650 )

Decrease in restricted cash and investments

     1,100       931  
                

Net cash used in investing activities from continuing operations

     (42,642 )     (12,645 )

Net cash used in investing activities from discontinued operations

     (160 )     (50 )
                

Net cash used in investing activities

     (42,802 )     (12,695 )
                

Financing activities:

    

Proceeds from sale of class A common stock under exercise of employee stock options and employee stock purchase plan

     2,104       3,293  

Excess tax benefits from stock-based payment arrangements

     422       3,270  

Purchases of treasury stock

     (8,387 )     (89,028 )
                

Net cash used in financing activities from continuing operations

     (5,861 )     (82,465 )

Net cash used in financing activities from discontinued operations

     —         —    
                

Net cash used in financing activities

     (5,861 )     (82,465 )

Effect of foreign exchange rate changes on cash and cash equivalents

     (2,534 )     3,478  
                

Net increase in cash and cash equivalents from continuing operations

     37,721       6,214  

Cash and cash equivalents, beginning of period

     85,194       78,980  
                

Cash and cash equivalents, end of period

   $ 122,915     $ 85,194  
                
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