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SPSS Reports 2009 First Quarter Results

Record 24 Percent Operating Margin

May 06, 2009

SPSS Inc., a global provider of Predictive Analytics software and solutions, today announced financial results for the first quarter ended March 31, 2009. Revenue generation for the quarter met Company expectations despite a difficult global economic environment and a significant negative impact from currency exchange rates. Combined with the benefits of ongoing productivity improvements, operating income for the 2009 first quarter was $17.2 million, or a record 24 percent of total revenues, compared with $13.9 million, or 18 percent of total revenues, for the 2008 first quarter.

The Company reported 2009 first quarter revenues of $72.1 million, down 8 percent from $78.2 million in the same quarter of 2008. Excluding the effects of currency exchange rates, total revenues were down 1 percent from the 2008 first quarter. License revenues were $33.8 million, a 12 percent decline from $38.4 million in the 2008 first quarter, or an 8 percent decline excluding the effects of currency exchange rates. Maintenance revenues for the 2009 first quarter were $32.5 million, up 1 percent from $32.1 million in the 2008 first quarter, or up 11 percent excluding the effects of currency exchange rates.

Net income was $9.4 million, up 4 percent, from $9.0 million in the same period in 2008 with the $3.3 million higher operating income for the quarter offset by lower nonoperating items, primarily less interest income due to lower available interest investment rates and net currency losses. As a result of the required January 1, 2009, adoption of FASB Staff Position on No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (FSP No. APB 14-1), the Company recognized in the 2009 first quarter $1.4 million non-cash interest expense and adjusted the 2008 first quarter results, increasing interest expense by $1.3 million, to reflect the retrospective application of FSP No. APB 14-1. The effective income tax rate for the 2009 and 2008 quarters was 36 percent and 39 percent, respectively.

Diluted earnings per share (EPS) for the 2009 first quarter was $0.48, up 2 percent, from EPS of $0.47 for the 2008 first quarter. EPS includes non-cash expense for FSP 14-1 of $0.04 in both the 2009 and 2008 first quarters, respectively. Expenses for sharebased compensation were $0.06 and $0.07 per share in the 2009 first quarter and the 2008 first quarter, respectively.

Executive quote

“As expected, the global economic environment presented a challenging first quarter. While there remains resistance in closing larger transactions, our customers continue to support our products at the low end, reflecting our competitive price point advantage. In addition, maintenance revenue continued to provide stability to our total quarterly revenues,” said Jack Noonan, SPSS chairman, president and CEO. “Though all product categories were down year-over-year, our market-leading statistics software showed the best economic resistance. Geographically, we had strength in the Pacific Rim, where new license revenue was up, offsetting softness in most of Europe and the U.S.” Noonan continued, “While we expect the global economic environment will present a difficult year ahead, we believe these results demonstrate both the continued demand for our Predictive Analytic products and our proven ability to execute.”

About the company

SPSS Inc. (Nasdaq: SPSS) is a leading global provider of Predictive Analytics software and solutions. The Company’s predictive analytics technology improves business processes by giving organizations forward visibility for decisions made every day. By incorporating Predictive Analytics into their daily operations, organizations become Predictive Enterprises — able to direct and automate decisions to meet business goals and achieve a measurable competitive advantage. More than 250,000 public sector, academic, and commercial customers rely on SPSS technology to help increase revenue, reduce costs, and detect and prevent fraud. Founded in 1968, SPSS is headquartered in Chicago, Illinois. For more information, please visit www.spss.com.

Contact details

Alex Clough at LEWIS PR
Tel: +44 (0) 161 457 2050
Fax: +44 (0) 20 7802 2051
Email: alexc@lewispr.com
Website: www.lewispr.com

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