NAVTEQ Reports Record Second Quarter Revenue and Operating Income
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CHICAGO, July 31 -- NAVTEQ Corporation , a leading global provider of digital map data for vehicle navigation and location-based solutions, today reported record second quarter revenue and operating income for the quarter ended July 1, 2007.
Revenue in the quarter rose 49% over the second quarter of 2006 to $202.3 million. Operating income was $54.0 million, compared to $33.1 million in last year's second quarter. Net income was $40.9 million, compared to $23.8 million in the prior year's second quarter. Earnings per diluted share were $0.41, compared to $0.25 in the second quarter of 2006.
For the first six months of 2007, revenue was $362.3 million, which represented growth of 40% over the first six months of 2006. Year-to-date operating income was $92.4 million, compared to $53.8 million for the same period in 2006. First half net income was $71.1 million, compared to $39.9 million for the same period in 2006. Year-to-date diluted earnings per share were $0.72, compared to $0.42 for the first six months of 2006.
"Our exceptional second quarter results and strong first half performance give us great momentum as we enter the second half of the year," said Judson Green, President and Chief Executive Officer of NAVTEQ. "We are particularly excited by the surging growth we have seen in maps for portable devices and the relative stability of our automotive business despite unfavorable car sales trends in our core geographies."
"First half expenses were lighter than we originally anticipated due to adjustments we made to our database investment plan and lower than expected costs in our distribution business," Mr. Green continued. "We expect the second half of the year will be an important investment period for the company as we work toward completion of the projects and initiatives in our annual operating plan."
Revenue from NAVTEQ's Europe, Middle East & Africa (EMEA) operations totaled $117.6 million in the quarter, up 39% from $84.7 million in the second quarter of 2006. The average U.S. dollar/euro exchange rate in the second quarter was $1.35, compared to $1.26 in the comparable period last year. Americas revenue was $81.8 million in the quarter, a 64% increase over the $49.9 million posted in the second quarter of 2006. Asia Pacific revenue, which is derived from the company's Korean subsidiary, was $2.8 million.
Cash and marketable securities totaled $390.1 million at July 1, 2007. Net cash provided by operating activities for the first six months of 2007 was $153.0 million.
Business Outlook
About NAVTEQ
NAVTEQ is a leading provider of comprehensive digital map information for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, and government and business solutions. NAVTEQ creates the digital maps and map content that power navigation and location-based services solutions around the world. The Chicago-based company was founded in 1985 and has over 3,000 employees located in 168 offices in 30 countries.
NAVTEQ is a trademark in the U.S. and other countries. All rights reserved.
NAVTEQ CORPORATION
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Quarter Ended Six Months Ended
July 2, July 1, July 2, July 1,
2006 2007 2006 2007
(Unaudited)
Net revenue:
Digital map licensing and related
revenues $133,062 183,268 $251,527 333,971
Advertising -- 15,565 -- 21,793
Other 2,883 3,471 6,743 6,491
Total net revenue 135,945 202,304 258,270 362,255
Operating costs and expenses:
Database creation and delivery
costs 65,686 94,263 128,537 168,518
Selling, general, and
administrative expenses 37,133 54,011 75,884 101,364
Total operating costs and
expenses 102,819 148,274 204,421 269,882
Operating income 33,126 54,030 53,849 92,373
Other income 2,034 4,041 4,368 7,828
Income before income taxes 35,160 58,071 58,217 100,201
Income tax expense 11,396 17,177 18,775 29,058
Net income before cumulative effect
of change in accounting principle 23,764 40,894 39,442 71,143
Cumulative effect of change in
accounting principle, net of tax -- -- 506 --
Net income $23,764 40,894 $39,948 71,143
Earnings per share of common stock
before cumulative effect of change
in accounting principle -
Basic $0.26 $0.42 $0.43 $0.74
Diluted $0.25 $0.41 $0.41 $0.72
Cumulative effect of change in
accounting principle per share of
common stock -
Basic $ -- $ -- $0.01 $ --
Diluted $ -- $ -- $0.01 $ --
Earnings per share of common stock -
Basic $0.26 $0.42 $0.43 $0.74
Diluted $0.25 $0.41 $0.42 $0.72
Weighted average shares of common
stock outstanding -
Basic 93,023 97,817 92,680 96,310
Diluted 95,754 100,156 95,644 98,712
NAVTEQ CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
Dec. 31, July 1,
2006 2007
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $122,335 113,855
Short-term marketable securities 137,163 213,468
Accounts receivable, net 126,081 127,391
Deferred income taxes, net 9,232 26,483
Prepaid expenses and other current assets 17,744 20,097
Total current assets 412,555 501,294
Property and equipment, net 27,462 78,353
Capitalized software development costs, net 18,844 23,071
Long-term deferred income taxes, net 187,391 220,231
Long-term marketable securities 63,033 62,759
Goodwill and acquired intangible assets, net 72,814 210,453
Deposits and other assets 12,602 3,716
Total assets $794,701 1,099,877
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $22,874 22,581
Accrued payroll and related liabilities 33,571 36,163
Other accrued expenses 40,327 56,111
Deferred revenue 43,639 55,287
Total current liabilities 140,411 170,142
Long-term deferred revenue 2,874 45,273
Other long-term liabilities 2,035 22,213
Total liabilities 145,320 237,628
Stockholders' equity 649,381 862,249
Total liabilities and
stockholders' equity $794,701 1,099,877
NAVTEQ CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands)
Six Months Ended
July 2, 2006 July 1, 2007
(Unaudited)
Cash flows from operating activities:
Net income $39,948 71,143
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 14,290 19,432
Deferred income taxes 13,661 1,705
Stock compensation expense 8,542 9,542
Cumulative effect of change in
accounting principle (506) --
Provision for doubtful receivables 4,739 1,211
Noncash other 611 --
Changes in operating assets and
liabilities, net of effects of
acquisitions (28,881) 49,968
Net cash provided by operating
activities 52,404 153,001
Cash flows from investing activities:
Acquisition of property and equipment (5,919) (33,617)
Capitalized software development costs (5,536) (10,460)
Net purchases of marketable securities (77,071) (75,484)
Payments for acquisitions, net of cash
acquired (5,044) (47,363)
Note receivable (300) --
Net cash used in investing
activities (93,870) (166,924)
Cash flows from financing activities:
Issuance of common stock and other
equity transactions 3,900 3,298
Net cash provided by financing
activities 3,900 3,298
Effect of exchange rate changes on cash 1,613 2,145
Net increase in cash and cash
equivalents (35,953) (8,480)
Cash and cash equivalents at beginning
of period 85,070 122,335
Cash and cash equivalents at end of period $49,117 113,855