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Rocio Castro. Communication Department.
November 20, 2008
November 20, 2008 – Telvent GIT, S.A. (NASDAQ: TLVT), the IT company for a sustainable and secure world, announced today its unaudited financial results for the third quarter and nine–month periods ended September 30, 2008.
Pro forma revenues for the third quarter 2008 were € 160.0 million, an increase of 28.9% (18.2% organic), from € 124.1 million in the third quarter of 2007. Pro forma revenues for the first nine months of 2008 were € 444.4 million, compared € 391.1 million in the first nine months of 2007.
Pro forma gross margin was 25.1% for the third quarter of 2008, compared to 24.3% in the third quarter of 2007. Pro forma gross margin for the first nine months of 2008 was 25.3%, compared to 23.9% in the same period of 2007.
Pro forma operating margin for the third quarter 2008 was 7.7%, compared to 8.1% in the third quarter 2007. Pro forma operating margin was 7.1% for the first nine months of 2008, compared to 6.9% in the first nine months of 2007. Pro forma income from operations increased by 22.8% and 17.2% in the third quarter 2008 and the first nine months of 2008, respectively, compared to the same periods of the prior year.
U.S. GAAP net income for the third quarter 2008 increased by 65.5%, compared to the same period of 2007, while U.S. GAAP net income for the first nine months of 2008 increased by 17.1%, compared to the same period of 2007.
Pro forma net income for the third quarter 2008 was € 6.1 million, compared to € 5.8 million in the third quarter 2007. Pro forma EPS for the third quarter 2008 was € 0.21, compared to € 0.20 in the third quarter 2007. Pro forma net income for the first nine months of 2008 was € 17.9 million, versus € 17.3 million during the first nine months of 2007. Pro forma EPS for the first nine months of 2008 was € 0.61, versus € 0.59 for the same period in 2007.
New order bookings (or new contracts signed) during the third quarter of 2008 totaled € 148.9 million, showing an increase of 42.6% (33% organic) from € 104.3 million in the third quarter 2007. The accumulated bookings year–to–date were € 476.9 million, compared to 446.9 million in the same period of 2007.
Backlog (representing the portion of signed contracts for which performance is pending) was € 573.0 million as of September 30, 2008, reflecting an 11.1% growth over the € 515.7 million in backlog at the end of September 2007. In addition, soft backlog (representing pending performance on multi-year frame contracts for which there is no contractual obligation on the part of the client to fulfill the full contract amount) was € 146.4 million as of September 30, 2008.
Pipeline, measured as management’s estimates of opportunities for the following twelve months, is expected to approximate € 3.2 billion.
As of September 30, 2008, cash and cash equivalents were € 71.4 million and total debt (including € 114.5 million of net credit line due to related parties) amounted to € 200.3 million, resulting in a net debt position of € 128.9 million.
For the first nine months of 2008, cash used in operating activities was € 102.5 million compared to € 71.3 million used in the same period last year. Cash provided by investing activities in the first nine months of 2008 amounted to € 29.9 million, compared to € 20.1 million provided in the same period of 2007.
Manuel Sanchez, Telvent’s Chairman and Chief Executive Officer, said, “I am satisfied to say we have closed a solid quarter despite the unprecedented market environment worldwide. We have achieved double-digit revenue growth in the quarter, most of which came from our core organic business. Our strong bookings and backlog put us in a favorable position to look into the rest of fiscal year 2008 and into 2009. In addition, we continue to achieve commendable improvements in gross and operating margins, in line with our plan to increase our portfolio of value-added solutions.”
“I would also like to point out how particularly pleased I am with the closing of the DTN acquisition, which we completed in October. I strongly believe in the synergies between the two companies, which we have started to work on already. We are convinced that this acquisition will significantly benefit our clients, as we are now able to introduce a new information technology delivery model, with more and new higher value-added products and solutions”, he concluded.
Business Outlook
As a result of the DTN acquisition, the increase in capital and the results achieved up to September 30, 2008, we are updating our guidance for the fiscal year 2008. Organic revenue growth is expected to be between the range of 8% and 10% (from a previous range of 12% to 14%). Gross margin is expected to be between the range of 24% and 26%, while operating margin between 8.5% and 9.5% (from previous ranges of 23% to 25% and 8% to 9%, respectively). Finally, pro forma diluted EPS is expected to be in the range of € 1.18 to € 1.23. Pro forma diluted EPS were determined by using an expected weighted average number of shares issued and outstanding in the year of 30,096,995 shares.
Business Highlights
Energy
Some of the most relevant projects signed during the third quarter of 2008 were as follows:
Transportation
During the third quarter, some of the significant contracts signed were:
Environment
During the third quarter, significant contracts signed were:
DTN Acquisition
On September 15, 2008, Telvent reached an agreement, closed on October 2008, to acquire, for $445 million, U.S.-based business information services provider DTN Holding Company, Inc. (DTN). The acquisition of DTN marks another important strategic step in Telvent fulfilling its vision to help build a sustainable world, by adding an important new segment – agriculture – and by strengthening its existing energy, transportation and environment segments. In addition, this acquisition reinforces Telvent’s U.S. base and secures a significant position in the growing information services sector. The synergies between the two companies should enable Telvent to deliver new high value-added services to our customers worldwide, which is expected to result in new growth, more recurrent revenues and improved operating margins for Telvent.
Use of Non-GAAP Financial Information
To supplement our consolidated financial statements presented in accordance with U.S. GAAP, we use certain non-GAAP measures, including pro forma net income and EPS. Pro forma net income and EPS are adjusted from GAAP-based results to exclude certain costs and expenses that we believe are not indicative of our core operating results. Pro forma results are one of the primary indicators management uses for evaluating historical results and for planning and forecasting future periods. We believe pro forma results provide consistency in our financial reporting, which enhances our investors’ understanding of our current financial performance, as well as our future prospects. Pro forma results should be viewed in addition to, and not in lieu of, U.S. GAAP results.
Pro forma net income excludes the amortization of intangible assets from the purchase price allocations in our acquisitions, stock compensation plan expenses and mark-to-market hedging, that Telvent believes are not indicative of its core performance or results. Reconciliation between U.S. GAAP, pro forma net income and EPS is provided in this release in a table immediately following the condensed consolidated financial statements.
Conference Call Details
Manuel Sanchez, Chairman and Chief Executive Officer, and Barbara Zubiria, Chief Financial Reporting Officer and Head of Investor Relations, will conduct a conference call to discuss the third quarter 2008 results, which will be simultaneously webcast at 1:00 P.M. Eastern Time / 7:00 P.M. Madrid Time on Thursday, November 20, 2008.
To access the conference call, participants in North America should dial (800) 374-0724 and international participants +1 (706) 634-1387. A live webcast of the conference call will be available at the Investor Relations page of Telvent’s corporate website at www.telvent.com. Please visit the website at least 15 minutes prior to the start of the call to register for the teleconference webcast and download any necessary audio software.
A replay of the call will be available approximately two hours after the conference call is completed. To access the replay, participants in North America should dial (800) 642-1687 and international participants should dial +1 (706) 645-9291. The passcode for the replay is 71451227.
About Telvent
Telvent (NASDAQ: TLVT) is a unique global company listed on the NASDAQ Stock Exchange and a component of the CleanTech IndexTM —the first and only stock market index of leading clean technology ("cleantech") companies.
Telvent, the IT Company for a sustainable and secure world, specializes in high-value-added products, services and integrated solutions in the Energy, Transportation, Environmental and Public Administration industry segments, as well as Global Services. Its innovative technology and proven experience help ensure secure and efficient management of the operating and business processes of the world’s leading companies. (www.telvent.com)
Investor Relations Contact:
Barbara Zubiria
Tel. +34 902 335599
Email: barbara.zubiria@telvent.com
Lucia Domville
Tel. +1 646 284 9416
Email: ldomville@hfgcg.com
Communication Contact
Patricia Malo de Molina
Tel. +34 954 93 71 11
Email: comunicacion@abengoa.com
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often are proceeded by words such as “believes,” “expects,” “may,” “anticipates,” “plans,” “intends,” “assumes,” “will” or similar expressions. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and involve certain risks and uncertainties. Telvent’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Some of the factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the “Risk Factors” described in Telvent’s Annual Report on Form 20-F for the year ended December 31, 2007, filed with the Securities and Exchange Commission on March 10, 2008, and updated, if applicable, on Telvent’s Quarterly Reports on Form 6-K for the quarters ended March 31, 2008, and June 30, 2008, filed with the Securities and Exchange Commission on May 22, 2008 and September 26, 2008, respectively.