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Exhibit 99.1

 

LOGO

     

11695 Johns Creek Pkwy.

Johns Creek, GA 30097

 

NEWS RELEASE

 

For media information:

      For investor information:

Mike O’Sullivan

      Gregg Swearingen

(937) 242-4786

      (937) 242-4600

mike.osullivan@teradata.com

      gregg.swearingen@teradata.com

For Release on May 3, 2012

    Teradata Announces 2012 First Quarter Results

 

   

Revenue increased 21 percent, up 22 percent in constant currency(1)

 

   

Product revenue increased 31 percent from the prior year period

 

   

GAAP EPS of $0.53, up 39 percent from the first quarter of 2011

 

   

Non-GAAP EPS of $0.60, up 25 percent from the prior year period(2)

 

   

Cash from operations of $192 million, up 81 percent from the first quarter of 2011

ATLANTA – Teradata Corporation (NYSE: TDC) today reported revenue of $613 million for the quarter ended March 31, 2012, an increase of 21 percent from $506 million in the first quarter of 2011. The first-quarter revenue comparison was negatively impacted by 1 point of currency translation.(1)

Gross margin of 55.1 percent was up from the 54.3 percent reported in the first quarter of 2011. On a non-GAAP basis, excluding the special items and stock-based compensation expense described in footnote #2 below,(2) gross margin was 55.9 percent, an improvement from 55.7 percent in the first quarter of 2011. The increase in non-GAAP gross margin was driven by leverage from increased product revenue and a favorable deal mix.

Stock-based compensation expense and a number of special items (primarily acquisition-related) had a net impact of $12 million on Teradata’s first quarter 2012 net income as reported under U.S. Generally Accepted Accounting Principles (GAAP).

Teradata reported GAAP net income of $91 million, or $0.53 per diluted share, which compared to GAAP net income of $65 million, or $0.38 per diluted share, in the first quarter of 2011. Excluding stock compensation expense and the special items described below, non-GAAP net income in the first quarter of 2012 was $103 million, or $0.60 per diluted share, versus $82 million, or $0.48 per diluted share in the first quarter of 2011.(2)


“Teradata delivered our highest organic, constant-currency revenue growth quarter ever in the first quarter, fueled by record product revenue growth of 31 percent,” said Mike Koehler, president and chief executive officer of Teradata. “We have the widest and deepest portfolio in the market to address the analytic data needs of any organization. Teradata is well positioned in three large and growing markets—data warehousing, big data analytics and integrated marketing management.

“Looking forward, data and analytics are increasingly a priority for the C-Suite, and driving strong activity across all regions; and therefore we are raising our 2012 full-year revenue growth guidance.”

Regional Operating Segment Results

Teradata reports its results in three regional operating segments.

Americas

Teradata generated $388 million of revenue in its Americas region, up 26 percent from $307 million in the first quarter of 2011. Currency translation negatively impacted the year-over-year revenue comparison for the Americas region by 1 percentage point. (1)

Europe, Middle East and Africa (EMEA)

Revenue in Teradata’s EMEA region was $136 million, up 9 percent from $125 million generated in the first quarter of 2011. Currency translation negatively impacted the year-over-year revenue comparison for the EMEA region by 4 percentage points.(1)

Asia Pacific / Japan (APJ)

Teradata generated $89 million of revenue in its APJ region, a 20 percent increase from $74 million in the first quarter of 2011. Currency translation benefited the reported year-over-year revenue growth in the APJ region by 2 percentage points. (1)

Operating Income

First-quarter operating income of $127 million increased 40 percent from $91 million reported in the first quarter of 2011. On a non-GAAP basis, operating income of $147 million increased 27 percent from the first quarter of 2011. (2) Higher revenue more than offset the increased investment in selling expense and research and development.


Cash Flow

Teradata generated $192 million of cash from operating activities, compared to $106 million in the prior-year period. Teradata generated $162 million of free cash flow (cash from operations less capital expenditures and additions to capitalized software)(3) in the first quarter of 2012, versus $79 million in the same period in 2011.

 

     For the Periods Ended
March 31
 
   (in millions)  
     Three Months  
     2012     2011  

Net Income (GAAP)

   $ 91      $ 65   
  

 

 

   

 

 

 

Cash provided by operating activities (GAAP)

   $ 192      $ 106   

Less capital expenditures for:

    

Expenditures for property and equipment

     (12     (8

Additions to capitalized software

     (18     (19
  

 

 

   

 

 

 

Total capital expenditures

     (30     (27
  

 

 

   

 

 

 

Free Cash Flow (non-GAAP measure) (3)

   $ 162      $ 79   
  

 

 

   

 

 

 

Balance Sheet

Teradata ended the first quarter of 2012 with $978 million in cash, a $206 million increase from December 31, 2011. As of March 31, 2012, Teradata had total debt of $300 million outstanding under a 5-year term loan. Additionally, Teradata has $300 million available through a pre-arranged credit facility; however no funds were drawn from the credit facility.

2012 Outlook

Teradata is increasing its guidance for 2012 revenue growth to 12- 14 percent from its original guidance of 10 to 12 percent. Teradata anticipates that currency translation will negatively impact the year-over-year revenue comparison by approximately one percentage point, based on currency rates on April 30, 2012; the same impact that was assumed when Teradata provided its initial revenue guidance for 2012.

GAAP earnings per share in 2012 is now expected to be in the $2.24 to $2.34 range. Excluding special items primarily associated with acquisitions (which include the amortization of acquisition-related intangible assets, estimated purchase accounting adjustments, and transaction and integration costs) as well as stock-based compensation expense, non-GAAP EPS for 2012 is now expected to be in the $2.60 to $2.70 range, versus Teradata’s original non-GAAP EPS guidance of $2.56 to $2.66.(2)


2012 First-Quarter Earnings Conference Call

A conference call is scheduled today at 8:30 a.m. (EST) to discuss the company’s first-quarter 2012 results. Access to the conference call, as well as a replay of the call, is available on Teradata’s web site at www.teradata.com/investor.

Supplemental financial information regarding Teradata’s operating results is also available on the Investor Relations page of Teradata’s web site.

About Teradata

Teradata Corporation (NYSE: TDC) is the world’s leading analytic data solutions company focused on integrated data warehousing, big data analytics, and business applications. Teradata’s innovative products and services deliver data integration and business insight to empower organizations to achieve competitive advantage. Visit teradata.com for details.

# # #

Teradata is a trademark or registered trademark of Teradata Corporation in the United States and other countries.


1. The impact of currency is determined by calculating the prior-period results using the current-year monthly average currency rates. See the foreign currency schedule on the Investor Relations page of the company’s web site www.teradata.com/investor.

 

     For the Periods Ended March 31  
     (in millions)  
     Three Months  
     2012      2011      %  Chg
As
Rpt’d
    %
Chg
CC
 

Revenue

          

Products (software/hardware)

   $ 308       $ 235         31     32

Consulting services

     165         145         14     15

Maintenance services

     140         126         11     12
  

 

 

    

 

 

      

Total services

     305         271         13     14
  

 

 

    

 

 

      

Total revenue

   $ 613       $ 506         21     22
  

 

 

    

 

 

      
By segment/region    2012      2011      % Chg
As
Rpt’d
    %
Chg
CC
 

Americas region

   $ 388       $ 307         26     27

EMEA region

     136         125         9     13

APJ region

     89         74         20     18
  

 

 

    

 

 

      

Total revenue

   $ 613       $ 506         21     22
  

 

 

    

 

 

      

 

2. Teradata reports its results in accordance with Generally Accepted Accounting Principles in the United States, or GAAP. However, as described below, the company believes that certain non-GAAP measures (such as non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted share, or EPS, which exclude certain items as well as free cash flow) are useful for investors. Our non-GAAP measures are not meant to be considered in isolation or as substitutes for or superior to results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.

A number of special items were included in Teradata’s first quarter results reported under GAAP. Teradata’s GAAP results as reported in this release included $7 million of amortization of acquisition-related intangible assets; $1 million of acquisition-related purchase accounting adjustments; $1 million of acquisition-related integration expenses; and $11 million of stock-based compensation expense.

The following tables reconcile Teradata’s actual and projected results and EPS, under GAAP to the company’s actual and projected non-GAAP results and EPS for the periods presented, which exclude certain items. Our management regularly uses supplemental non-GAAP financial measures, such as gross margin, operating income, net income and EPS, excluding certain items internally, to understand, manage and evaluate our business and support operating decisions. The company believes such non-GAAP financial measures (1) provide useful information to investors regarding the underlying business trends and performance of the company’s ongoing operations, (2) are useful for period-over-period comparisons of such operations and results, that may be more easily compared to peer companies and allow investors a view of the company’s operating results excluding special items, (3) provide useful information to management and investors regarding present and future business trends, and (4) provide consistency and comparability with past reports and projections of future results.


(a) Gross Margin Reconciliation of GAAP to Non-GAAP Measures

 

     For the Periods Ended March 31  
     Three Months  
(Shown in $M)    2012     2011     % chg  

Gross Margin (GAAP)

   $ 338      $ 275        23

% of Revenue (GAAP)

     55.1     54.3  

Excluding:

      

Stock-based compensation expense

     1        1     

Purchase accounting adjustments

     1        6     

Amortization of acquisition-related intangible assets

     4        1     

Transaction, integration and reorganization related costs

     —          2     
  

 

 

   

 

 

   

Adjusted Gross Margin (non-GAAP)

   $ 344      $ 285        21
  

 

 

   

 

 

   

% of Revenue (non-GAAP)

     55.9 %      55.7  

(b) Operating Income Reconciliation of GAAP to Non-GAAP Measures

 

     For the Periods Ended March 31  
     Three Months  
(Shown in $M)    2012     2011     % chg  

Operating Income (GAAP)

   $ 127      $ 91        40

% of Revenue (GAAP)

     20.7     18.0  

Excluding:

      

Stock-based compensation expense

     11        9     

Purchase accounting adjustments

     1        6     

Amortization of acquisition-related intangible assets

     7        3     

Transaction, integration and reorganization related costs

     1        7     
  

 

 

   

 

 

   

Adjusted Operating Income (non-GAAP)

   $ 147      $ 116        27
  

 

 

   

 

 

   

% of Revenue (non-GAAP)

     23.9     22.7  

(c) Net Income Reconciliation of GAAP to Non-GAAP Measures

 

     For the Periods Ended March 31  
     Three Months  
(Shown in $M)    2012     2011     % chg  

Net Income (GAAP)

   $ 91      $ 65        40

% of Revenue (GAAP)

     14.8     12.8  

Excluding:

      

Stock-based compensation expense

     7        6     

Purchase accounting adjustments

     —          4     

Amortization of acquisition-related intangible assets

     4        2     

Transaction, integration and reorganization related costs

     1        5     
  

 

 

   

 

 

   

Adjusted Net Income (non-GAAP)

   $ 103      $ 82        26
  

 

 

   

 

 

   

% of Revenue (non-GAAP)

     16.7     16.0  


(d) Earnings Per Share Reconciliation of GAAP to Non-GAAP Measures

 

     For the Periods
Ended March 31
        
     Three Months      2012 FY  
     2012      2011      Guidance  

Diluted Earnings Per Share (GAAP)

   $ 0.53       $ 0.38       $ 2.24 - $2.34   

Excluding:

        

Stock-based compensation expense

     0.04         0.04         0.15   

Purchase accounting adjustments

     —           0.02         0.01   

Amortization of acquisition-related intangible assets

     0.02         0.01         0.12   

Transaction, integration and reorganization related costs

     0.01         0.03         0.08   
  

 

 

    

 

 

    

 

 

 

Adjusted Diluted Earnings Per Share (non-GAAP)

   $ 0.60       $ 0.48       $ 2.60 - $2.70   
  

 

 

    

 

 

    

 

 

 

 

3. As described above, the company believes that free cash flow is a useful non-GAAP measure for investors. Teradata defines free cash flow as cash provided/used by operating activities less capital expenditures for property and equipment, and additions to capitalized software. Free cash flow does not have a uniform definition under GAAP and therefore, Teradata’s definition may differ from other companies’ definitions of this measure. Teradata’s management uses free cash flow to assess the financial performance of the company and believes it is useful for investors because it relates the operating cash flow of the company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures for, among other things, investment in the company’s existing businesses, strategic acquisitions, strengthening the company’s balance sheet, repurchase of company stock and repayment of the company’s debt obligations, if any. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. This non-GAAP measure is not meant to be considered in isolation or as a substitute for or superior to results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.

Note to Investors

This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance, within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements include projections of revenue, profit growth and other financial items, future economic performance and statements concerning analysts’ earnings estimates, among other things. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause Teradata’s actual results to differ materially. In addition to the factors discussed in this release, other risks and uncertainties could affect our future results, and could cause actual results to differ materially from those expressed in such forward-looking statements. Such factors include those relating to: the global economic environment in general or on the ability of our suppliers to meet their commitments to us, or the timing of purchases by our current and potential customers, and other general economic and business conditions; the rapidly changing and intensely competitive nature of the information technology industry and the enterprise data warehousing business, including the increased pressure on price/performance for data warehousing solutions; fluctuations in our operating results, unanticipated delays or accelerations in our sales cycles and the difficulty of accurately estimating revenues; risks inherent in operating in foreign countries, including the impact of economic, political, legal, regulatory, compliance, cultural, foreign currency fluctuations and other conditions abroad; the timely and successful development, production or acquisition and market acceptance of new and existing products and services, including our ability to accelerate market acceptance of new products and services as well as the reliability, quality and operability of new products because of the difficulty and complexity associated with their testing and production; tax rates; turnover of workforce and the ability to attract and retain skilled employees; availability and successful exploitation of new acquisition and alliance opportunities; our ability to execute integration plans for newly acquired entities, including the possibility that expected synergies and operating efficiencies may not be achieved, that such integration efforts may be more difficult, time-consuming or costly than expected, and that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; recurring revenue may decline or fail to be renewed; changes in Generally Accepted Accounting Principles (GAAP) and the resulting impact, if any, on the company’s accounting policies; continued efforts to establish and maintain best-in-class internal information technology and control systems; and other factors described from time to time in the company’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K and subsequent quarterly reports on Forms 10-Q, as well as the company’s annual reports to stockholders. The company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


Schedule A

 

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TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in millions, except per share amounts)

 

     For the Period Ended March 31  
     Three Months  
     2012     2011     % Chg  

Revenue

      

Products

   $ 308      $ 235        31

Services

     305        271        13
  

 

 

   

 

 

   

Total revenue

     613        506        21

Product gross margin

     205        156     

% of Revenue

     66.6     66.4  

Services gross margin

     133        119     

% of Revenue

     43.6     43.9  
  

 

 

   

 

 

   

Total gross margin

     338        275     

% of Revenue

     55.1     54.3  

Selling, general and administrative expenses

     165        150     

Research and development expenses

     46        34     
  

 

 

   

 

 

   

Income from operations

     127        91     

% of Revenue

     20.7     18.0  

Other expense, net

     (1     (1  

Income before income taxes

     126        90     

% of Revenue

     20.6     17.8  

Income tax expense

     35        25     
  

 

 

   

 

 

   

% Tax rate

     28     28  

Net income

   $ 91      $ 65     
  

 

 

   

 

 

   

% of Revenue

     14.8     12.8  

Net income per common share

      

Basic

   $ 0.54      $ 0.39     

Diluted

   $ 0.53      $ 0.38     

Weighted average common shares outstanding

      

Basic

     167.9        168.4     

Diluted

     171.6        171.8     


Schedule B

 

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TERADATA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions)

 

     March 31,     December 31,     March 31,  
     2012     2011     2011  

Assets

      

Current assets

      

Cash and cash equivalents

   $ 978      $ 772      $ 778   

Accounts receivable, net

     499        494        467   

Inventories

     54        61        66   

Other current assets

     83        85        56   
  

 

 

   

 

 

   

 

 

 

Total current assets

     1,614        1,412        1,367   

Property and equipment, net

     122        120        111   

Capitalized software, net

     145        140        125   

Goodwill

     743        742        516   

Acquired intangible assets

     156        163        131   

Deferred income taxes

     16        28        62   

Other assets

     16        11        47   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 2,812      $ 2,616      $ 2,359   
  

 

 

   

 

 

   

 

 

 

Liabilities and stockholders’ equity

      

Current liabilities

      

Accounts payable

   $ 97      $ 97      $ 98   

Payroll and benefits liabilities

     111        169        99   

Deferred revenue

     454        339        400   

Other current liabilities

     83        90        63   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     745        695        660   

Long-term debt

     286        290        300   

Pension and other postemployment plan liabilities

     77        77        83   

Other liabilities

     64        60        42   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     1,172        1,122        1,085   
  

 

 

   

 

 

   

 

 

 

Stockholders’ equity

      

Preferred stock

     —          —          —     

Common stock

     2        2        2   

Paid-in capital

     815        765        706   

Treasury Stock

     (526     (526     (399

Retained earnings

     1,328        1,237        949   

Accumulated other comprehensive income

     21        16        16   
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     1,640        1,494        1,274   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,812      $ 2,616      $ 2,359   
  

 

 

   

 

 

   

 

 

 


Schedule C

 

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TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

 

     For the Period Ended March 31  
     Three Months  
     2012     2011  

Operating activities

    

Net income

   $ 91      $ 65   

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

    

Depreciation and amortization

     30        21   

Stock-based compensation expense

     11        9   

Excess tax benefit from stock-based compensation

     (17     (3

Deferred income taxes

     13        6   

Changes in assets and liabilities:

    

Receivables

     (5     (43

Inventories

     7        (1

Current payables and accrued expenses

     (43     (49

Deferred revenue

     116        113   

Other assets and liabilities

     (11     (12
  

 

 

   

 

 

 

Net cash provided by operating activities

     192        106   

Investing activities

    

Expenditures for property and equipment

     (12     (8

Additions to capitalized software

     (18     (19

Business acquisitions and other investing activities, net

     —          (499
  

 

 

   

 

 

 

Net cash used in investing activities

     (30     (526

Financing activities

    

Proceeds from long-term borrowings

     —          300   

Excess tax benefit from stock-based compensation

     17        3   

Other financing activities, net

     24        8   
  

 

 

   

 

 

 

Net cash provided by financing activities

     41        311   

Effect of exchange rate changes on cash and cash equivalents

     3        4   
  

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

     206        (105

Cash and cash equivalents at beginning of period

     772        883   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 978      $ 778   
  

 

 

   

 

 

 


Schedule D

 

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TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in millions)

 

     For the Period Ended March 31  
     Three Months  
     2012     2011     % Change
As Reported
    % Change
Constant
Currency
 

Segment Revenue

        

Americas

   $ 388      $ 307        26     27

EMEA

     136        125        9     13

APJ

     89        74        20     18
  

 

 

   

 

 

     

Total revenue

     613        506        21     22

Segment gross margin

        

Americas

     232        175       

% of Revenue

     59.8     57.0    

EMEA

     66        70       

% of Revenue

     48.5     56.0    

APJ

     40        30       

% of Revenue

     44.9     40.5    
  

 

 

   

 

 

     

Total gross margin

     338        275       

% of Revenue

     55.1     54.3    

Selling, general and administrative expenses

     165        150       

Research and development expenses

     46        34       
  

 

 

   

 

 

     

Income from operations

   $ 127      $ 91       
  

 

 

   

 

 

     

% of Revenue

     20.7     18.0