July 23, 2008
Knobias Clip Report (07-22-2008) PTEC
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Submitted By Knobias ClipReport
PTEC: Management Discusses Q3 Earnings and Raises FY08 Revenue Guidance
By Fain Hughes, fhughes@knobias.com
Phoenix Technologies LTD. (PTEC) reported today that its third quarter revenues grew 53% to $19.3 million, compared with $12.6 million in Q3 FY2007. On a non-GAAP basis, net income was $1.3 million, or $0.04 per diluted share, compared with a non-GAAP net loss of ($0.3) million, or ($0.01) per share in Q3 FY2007. Gross margin expanded to 86% of revenues, compared with 81% in Q3 FY2007.
Richard Arnold, COO and CFO of Phoenix Technologies, added in a conference call today, “We also ended Q3 with a backlog of $30.4 million from VPAs that have not been recoreded as revenue or deferred revenue, a $16 million or 107% increase over our prior Q3 balance. The total backlog now sits at $44.4 million, reflecting the combined effect of overall business growth and our decision at the beginning of fiscal 2008 to enter into certain agreements with major customers to extend periods for greater than one year. Approximately 30% of our current backlog will be reflected in revenues during the balance of fiscal 2008; 60% will be reflected in 2009; and the balance in 2010.”
He noted, “In spite of our increased spending, we achieved positive cash flow from operations. We are also raising our full year revenue guidance to $75.2 million from guidance that had already been raised to $74 million. We continue to expect non-GAAP earnings of about 10% of revenues. This governs our appetite for spending increases.”
Woody Hobbs, President and CEO of Phoenix Technologies, commented in the conference call, “We have just completed an exceptional third quarter. Financially, we exceeded even our own lofty expectations with top-line revenues, non-GAAP earnings and cash flow from operations all exceeding our internal targets.”
“Sales, marketing and business development have also exceeded expectations. Our management is delivering high growth, innovative development, superior salesmanship and rigorous control. We expect to maintain pro-forma profits at their current level through the next fiscal year and then begin building bottom line profit margins in the following year with an aim towards 15% after-tax profit rates by the end of 2011.”
Mr. Hobbs concluded, “We are a company in a truly enviable position in the PC marketplace with assets and relationships that most companies can only dream about. We are rapidly seeing our new initiatives deliver a fantastic and ever-improving opportunity for all of us.”
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