DGAP-News: OPNET Announces Financial Results for First Quarter of Fiscal 2012

OPNET Technologies, Inc.

02.08.2011 22:40
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September Dividend Set at $0.12 Per Share

BETHESDA, Md., 2011-08-02 22:39 CEST (GLOBE NEWSWIRE) —
OPNET Technologies, Inc. (Nasdaq:OPNT), a leading provider of solutions for
application and network performance management, today announced that revenue
for the first fiscal quarter, ended June 30, 2011, was $40.2 million, compared
to $31.1 million for the same quarter in the prior fiscal year. Diluted
earnings per share for the first quarter of fiscal 2012 were $0.18, compared to
$0.06 for the same quarter in the prior fiscal year. The Company also announced
today a quarterly dividend of $0.12 per share, which represents one quarter of
the Company–s fiscal 2012 annual dividend target of $0.48, payable on September
29, 2011 to stockholders of record as of the close of business on September 15,
2011. During fiscal 2011, the Company paid aggregate quarterly dividends of
$0.40 per share and a one-time special dividend of $0.75 per share.

Marc A. Cohen, OPNET–s Chairman and CEO, stated, –We are very pleased to report
strong quarterly results for fiscal Q1. Our performance was driven by both
sequential and year over year increases in revenue from corporate enterprise
and United States government customers; although, total revenue was down
sequentially due to the seasonal buying patterns of international customers.
Our strong quarterly performance allowed us to achieve record operating income
of $6.3 million.–

Mr. Cohen continued, –APM product sales continued to drive our performance, and
accounted for 58% of our total product bookings during the quarter. APM product
sales increased 24% over the same quarter last year. We believe that the growth
in APM is being driven by both superior analytics, and our end-to-end solutions
that span networks, applications, and systems. We further believe that these
competitive advantages can generate sustained growth in product revenue and
profitability over the long term.–

The Company–s first quarter fiscal 2012 financial results are presented below.
The non-GAAP results exclude the income statement effects of stock-based
compensation and acquisition-related amortization of intangible assets. A
reconciliation of GAAP results to non-GAAP results has been provided in the
financial statement table following the text of the press release. For further
information, please refer to the section of the press release titled –Use of
Non-GAAP Measures.–

GAAP Financial Highlights for the First Quarter of Fiscal 2012:

— Total revenue increased year-over-year 29.5% to $40.2 million from $31.1
million for the same quarter of fiscal 2011. Total revenue for the quarter
decreased sequentially 2.1% from $41.1 million for the fourth quarter of
fiscal 2011.
— Product revenue increased year-over-year by 49.8% to $19.4 million from
$13.0 million for the same quarter of fiscal 2011. Product revenue for the
quarter decreased sequentially 9.9% from $21.6 million for the fourth
quarter of fiscal 2011.
— Deferred revenue increased year-over-year by 6.1% to $42.9 million from
$40.4 million at the end of the same quarter of fiscal 2011. Deferred
revenue for the quarter decreased sequentially 9.6% from $47.5 million at
the end of the fourth quarter of fiscal 2011.– Gross margin increased year-over-year to 79.3% from 76.4% for the same
quarter of fiscal 2011. Gross margin increased sequentially from 79.1% in
the fourth quarter of fiscal 2011.
— Operating margin increased year-over-year to 15.6% from 7.4% for the same
quarter of fiscal 2011. Operating margin increased sequentially from 15.2%
in the fourth quarter of fiscal 2011.
— Earnings per share increased year-over-year to $0.18 from $0.06 for the
same quarter of fiscal 2011. Earnings per share increased sequentially from
$0.17 in the fourth quarter of fiscal 2011.

Non-GAAP Financial Highlights for the First Quarter of Fiscal 2012:

— Non-GAAP gross margin increased year-over-year to 80.7% from 77.9% for the
same quarter of fiscal 2011. Non-GAAP gross margin increased sequentially
from 80.5% in the fourth quarter of fiscal 2011.
— Non-GAAP operating margin increased year-over-year to 18.4% from 10.3% for
the same quarter of fiscal 2011. Non-GAAP operating margin increased
sequentially from 17.8% in the fourth quarter of fiscal 2011.
— Non-GAAP earnings per share increased year-over-year to $0.21 from $0.09
for the same quarter of fiscal 2011. Non-GAAP earnings per share increased
sequentially from $0.20 in the fourth quarter of fiscal 2011.

Second Quarter Fiscal Year 2012 Financial Outlook

OPNET currently expects fiscal 2012 second quarter GAAP revenue to be between
$40.0 million and $44.0 million, and GAAP diluted net income per common share
to be between $0.16 and $0.24 and non-GAAP diluted net income per common share
to be between $0.19 and $0.27. The non-GAAP diluted net income per common share
expectation excludes approximately $654,000 of expense associated with
stock-based compensation expense, amortization of acquired intangible assets,
and the related impact of these adjustments on the provision for income taxes.
These estimates represent management–s current expectations about the Company–s
future financial performance, based on information available at this time.

OPNET will hold an investor conference call on Tuesday, August 2, 2011 at 5:00
p.m. Eastern Time to review financial results for the first quarter of fiscal
2012.

To listen to the OPNET investor conference call:

— Call 877-377-7550 in the U.S. or 408-337-0151 for international callers, or
— Use the webcast at www.opnet.com. Investors are advised to go to the web
site at least 15 minutes early to register, download, and install any
necessary audio software.

To listen to the archived call:

— Call the replay phone number at 800-642-1687 or 706-645-9291 for
international callers. For replay, enter passcode # 81559932. The replay
will be available from 8:00 p.m. Eastern Time August 2, 2011 through 11:59
p.m. Eastern Time August 9, 2011.
— The webcast will be available at www.opnet.com, archived for seven days.

Use of Non-GAAP Measures

OPNET uses a variety of financial measures that are not in accordance with
generally accepted accounting principles, or GAAP, as supplemental measures to
GAAP to evaluate its operational performance. These financial measures, which
include non-GAAP gross profit, non-GAAP operating income, non-GAAP operating
margin, non-GAAP net income and non-GAAP diluted earnings per share, exclude
the impact of certain items and, therefore, have not been calculated in
accordance with GAAP. A detailed explanation of each of the adjustments to such
financial measures is described below. A reconciliation of each of these
non-GAAP financial measures to its most comparable GAAP financial measure is
also included below.

Management uses non-GAAP financial measures (a) to evaluate OPNET–s historical
and prospective financial performance as well as its performance relative to
its competitors, and (b) to measure operational profitability and the accuracy
of forecasting. In addition, many financial analysts who follow OPNET focus on
and publish both historical results and future projections based on non-GAAP
financial measures. OPNET believes that it is in the best interest of its
investors to provide this information to analysts so that they accurately
report the non-GAAP financial information. Moreover, investors have
historically requested these non-GAAP financial measures as a means of
providing consistent and comparable information with past reports of financial
results.

While management believes that these non-GAAP financial measures provide useful
supplemental information to investors, there are limitations associated with
the use of these non-GAAP financial measures. These non-GAAP financial measures
are not prepared in accordance with GAAP, are not reported by all of OPNET–s
competitors and may not be directly comparable to similarly titled measures of
OPNET–s competitors due to potential differences in the exact method of
calculation. OPNET compensates for these limitations by using these non-GAAP
financial measures only as supplements to GAAP financial measures and by
providing the reconciliations of the non-GAAP financial measures to their most
comparable GAAP financial measures.

The adjustments we use to derive these non-GAAP financial measures, and the
basis for such adjustments, are outlined below:

Amortization of intangibles and its related tax impact. OPNET incurs
amortization of intangibles related to various acquisitions it has made in
recent years. This amortization is included in the following line items of its
GAAP presentation:

— cost of revenue — amortization of acquired technology and customer
relationships
— operating expenses — research and development

Management excludes these expenses and their related tax impact for the purpose
of calculating non-GAAP operating income, non-GAAP gross profit, non-GAAP
operating margin, non-GAAP net income and non-GAAP diluted earnings per share
when it evaluates the continuing operational performance of OPNET because these
costs are fixed at the time of an acquisition, are then amortized over a period
of three to five years after the acquisition and generally cannot be changed or
influenced by management after the acquisition. Accordingly, management does
not consider these expenses for purposes of evaluating the performance of OPNET
during the applicable time period after a given acquisition, and it excludes
such expenses when evaluating OPNET–s financial performance.

Stock-based compensation expense and its related tax impact. OPNET incurs
expense related to stock-based compensation, which is included in the following
line items of its GAAP presentation:

— cost of revenue — product updates, technical support and services
— cost of revenue — professional services
— operating expenses –research and development
— operating expenses — sales and marketing
— operating expenses – general and administrative

Although stock-based compensation is an expense of OPNET and is viewed as a
form of compensation, management excludes these expenses for the purpose of
calculating non-GAAP operating income, non-GAAP gross profit, non-GAAP
operating margin, non-GAAP net income and non-GAAP diluted earnings per share
when it evaluates the continuing operational performance of OPNET.
Specifically, OPNET excludes stock-based compensation during its quarterly and
annual assessments of OPNET–s and management–s performance. In evaluating the
performance of senior management, stock-based compensation is excluded from
expenditure and profitability results.

Diluted weighted average common shares outstanding. Non-GAAP diluted net
income per common share reflects the elimination of amortization of
intangibles, stock-based compensation expense and the related tax impacts, all
as discussed above. In addition, in cases in which the non-GAAP net income
changes from negative to positive when compared to the GAAP net income, or vice
versa, the non-GAAP per-share calculation also gives effect to an adjustment to
the number of diluted weighted average common shares outstanding reflecting the
application of the treasury method and the fact that shares previously
considered anti-dilutive would now be considered dilutive, or vice versa.

About OPNET Technologies, Inc.

Founded in 1986, OPNET Technologies, Inc. (Nasdaq:OPNT) is a leading provider
of application and network performance management solutions. For more
information about OPNET and its products, visit www.opnet.com.

OPNET, OPNET Technologies, Inc., AppMapper Xpert, AppResponse Xpert, and
AppInternals Xpert are trademarks of OPNET Technologies, Inc. All other
trademarks are the property of their respective owners.

Statements in this press release that are not purely historical facts may
constitute forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. OPNET Technologies, Inc. (–OPNET–) assumes no
obligation to update such statements. Forward-looking statements, including
statements regarding the impact of enhancements to our APM product portfolio or
our competitive position and statements concerning expected revenue and diluted
net income per common share and Non-GAAP diluted net income per common share
for the second quarter of fiscal 2012, are predictions based upon information
available to OPNET as of the date of this press release and involve risks and
uncertainties; therefore, actual events or results may differ materially.
Factors that may cause OPNET–s actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements include, among others, those factors listed under
the caption –Risk Factors– in OPNET–s Annual Report on Form 10-K for the fiscal
year ended March 31, 2011, as filed with the Securities and Exchange Commission
on June 3, 2011, as updated from time to time in subsequent SEC filings. The
risk factors set forth in the Company–s Form 10-K under the caption –Risk
Factors,– as updated from time to time in subsequent SEC filings, are
specifically incorporated by reference into this press release. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

Note to editors: The word OPNET is spelled with all upper-case letters.

OPNET TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

Three Months Ended
June 30,
——————-
2011 2010
——————-

Revenue:
Product $ 19,429 $ 12,972
Product updates, technical support, and services 14,692 12,322
Professional services 6,126 5,791
——————-
Total revenue 40,247 31,085
——————-

Cost of revenue:
Product 2,471 1,292
Product updates, technical support, and services 1,447 1,288
Professional services 3,866 4,302
Amortization of acquired technology and customer 539 459
relationships
——————-
Total cost of revenue 8,323 7,341
——————-

Gross profit 31,924 23,744
——————-

Operating expenses:
Research and development 9,242 8,063
Sales and marketing 12,599 10,450
General and administrative 3,789 2,923
——————-
Total operating expenses 25,630 21,436
——————-

Income from operations 6,294 2,308
Interest and other expense, net (59) (30)
——————-
Income before provision for income taxes 6,235 2,278
Provision for income taxes 2,046 939
——————-
Net income $ 4,189 $ 1,339
===================

Basic net income per common share $ 0.19 $ 0.06
===================
Diluted net income per common share $ 0.18 $ 0.06
===================
Basic weighted average common shares outstanding 22,090 20,926
===================
Diluted weighted average common shares outstanding 22,637 21,562
===================

OPNET TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP INCOME
(in thousands, except per share data)
(unaudited)

Three Months Ended Three
June 30, Months
Ended
March
31,
————————– ———-
2011 2010 2011
———– ———- ———-

GAAP grossprofit $ 31,924 $ 23,744 $ 32,515
Stock-based compensation expense 26 22 22
included in cost of revenue
Amortization of intangibles 540 459 540
included in cost of revenue
———– ———- ———-
Non-GAAP gross profit $ 32,490 $ 24,225 $ 33,077
=========== ========== ==========

GAAP income from operations $ 6,294 $ 2,308 $ 6,239
Stock-based compensation expense 539 397 533
– total (included in cost of
revenue and in
operating expenses)
Amortization of intangibles — 565 484 565
total (included in cost of
revenue and in
research and development
expenses)
———– ———- ———-
Non-GAAP income from operations $ 7,398 $ 3,189 $ 7,337
=========== ========== ==========

GAAP net income $ 4,189 $ 1,339 $ 3,823
Stock-based compensation expense 539 397 533
— total
Amortization of intangibles — 565 484 565
total
Provision for income tax (453) (1) (352) (2) (439) (2)
———– ———- ———-
Non-GAAP net income $ 4,840 $ 1,868 $ 4,482
=========== ========== ==========

Diluted net income per common
share:
GAAP $ 0.18 $ 0.06 $ 0.17
=========== ========== ==========
Non-GAAP $ 0.21 $ 0.09 $ 0.20
=========== ========== ==========

Diluted weighted average common
shares outstanding
GAAP 22,637 21,562 22,507
=========== ========== ==========
Non-GAAP 22,637 21,562 22,507
=========== ========== ==========
(1) Reflects the tax effect of non-GAAP adjustments above at the statutory rate
of 41% based on projected taxable income.
(2) Reflects the tax effect of non-GAAP adjustments above at the statutory rate
of 40% based on actual taxable income.OPNET TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)

June 30, March 31,
2011 2011
———————
ASSETS
Current assets:
Cash and cash equivalents $ 88,277 $ 83,296
Marketable securities 32,992 31,432
Accounts receivable, net 25,202 32,597
Unbilled accounts receivable 2,108 1,915
Inventory 577 666
Deferred income taxes, prepaid expenses and other current 4,292 4,289
assets
———————
Total current assets 153,448 154,195
———————

Property and equipment, net 13,496 12,701
Intangible assets, net 3,942 4,507
Goodwill 15,406 15,406
Deferred income taxes and other assets 5,373 5,014
———————
Total assets $ 191,665 $ 191,823
=====================

LIABILITIES AND STOCKHOLDERS– EQUITY
Current liabilities:
Accounts payable $ 1,639 $ 1,247
Accrued liabilities 14,124 14,698
Other income taxes 324 186
Deferred rent 192 182
Deferred revenue 38,154 42,282
———————
Total current liabilities 54,433 58,595
———————

Accrued liabilities 67 107
Deferred rent 2,714 2,422
Deferred revenue 4,769 5,215
Other income taxes 707 661
———————
Total liabilities 62,690 67,000
———————

Stockholders– equity:
Common stock 30 30
Additional paid-incapital 124,036 121,230
Retained earnings 26,858 25,348
Accumulated other comprehensive loss (594) (649)
Treasury stock, at cost (21,355) (21,136)
———————
Total stockholders– equity 128,975 124,823
———————
Total liabilities and stockholders– equity $ 191,665 $ 191,823
=====================

CONTACT: OPNET Media Contact:
Sue Cole
OPNET Technologies, Inc.
(919) 461-2445
Media@opnet.com
www.opnet.com

OPNET Investor Relations:
Mel Wesley
OPNET Technologies, Inc.
(240) 497-3000
ir@opnet.com
www.opnet.com
News Source: NASDAQ OMX

02.08.2011 Dissemination of a Corporate News, transmitted by DGAP –
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The issuer is solely responsible for the content of this announcement.

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Language: English
Company: OPNET Technologies, Inc.

United States
Phone:
Fax:
E-mail:
Internet:
ISIN: US6837571081
WKN:

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