Revenue in the quarter rose 11% over the second quarter of 2005 to $135.9 million. Operating income was $33.1 million, compared to $37.4 million in last year's second quarter. Net income was $23.8 million, compared to $25.3 million in the prior year's second quarter. Earnings per diluted share were $0.25, compared to $0.27 in the second quarter of 2005.
For the first six months of 2006, revenue was $258.3 million, which represented growth of 14% over the first six months of 2005. Year-to-date operating income was $53.8 million, compared to $62.3 million for the same period in 2005. First half net income was $39.9 million, compared to $42.0 million for the same period in 2005. Year-to-date diluted earnings per share were $0.42, compared to $0.45 for the first six months of 2005.
"We faced a number of challenges in the second quarter, including unfavorable car sales trends and delays in customer product launches, which prevented us from achieving the results we expected. Nevertheless, we remain as excited as ever about the many opportunities we see for the industry and our company in particular," said Judson Green, President and Chief Executive Officer of NAVTEQ. "We continue to invest in our database to enhance our leadership position in the marketplace and we expect better performance in the second half of the year."
Revenue from NAVTEQ's Europe, Middle East & Africa (EMEA) operations totaled $84.7 million in the quarter, up 3% from $82.0 million in the second quarter of 2005. The average U.S. dollar/euro exchange rate in the second quarter was $1.26, which was the same as the average rate in the comparable period last year. Americas revenue was $49.9 million in the quarter, a 22% increase over the $40.8 million posted in the second quarter of 2005. Asia Pacific revenue, principally derived from the company's Picture Map International subsidiary in South Korea acquired in July 2005, was $1.4 million.
Cash and marketable securities totaled $259.5 million at July 2, 2006. Net cash provided by operating activities for the first six months of 2006 was $52.4 million.
Earnings Call Information
The information for the company's earnings release conference call is as follows: When: Wednesday, July 26, 2006 at 5:00 PM ET Where: http://investor.navteq.com How: Log on to the web at the URL above or call to listen in at 800-599-9795 (North America) or 617-786-2905 (international), passcode 98125180 Contact: Email Contact
The company will provide a telephone replay of the conference call at 888-286-8010 (North America) or 617-801-6888 (international), passcode 23427467. The telephone replay will be accessible from 7:00 PM ET Wednesday, July 26, 2006 through 11:59 PM ET on Wednesday, August 2, 2006. An on-demand replay of the conference call and a presentation document summarizing our second quarter results will be available online at http://investor.navteq.com until August 28, 2006.
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 approximately 2,000 employees located in 133 offices in 24 countries.
NAVTEQ is a trademark in the U.S. and other countries.
This document may include certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates" or words of similar meaning. These statements also include statements about the company's future financial and operating results. The statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those set forth under "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2005, as filed with the Securities and Exchange Commission.
Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors. NAVTEQ does not undertake any obligation to update any forward-looking statements contained in this document.
NAVTEQ CORPORATION Condensed Consolidated Statements of Income (In thousands, except per share data) Quarter Ended Six Months Ended June 26, July 2, June 26, July 2, 2005 2006 2005 2006 (Unaudited) Net revenue $122,832 135,945 $227,529 258,270 Operating costs and expenses: Database creation and distribution costs 57,433 65,686 108,321 128,537 Selling, general, and administrative expenses 27,957 37,133 56,935 75,884 Total operating costs and expenses 85,390 102,819 165,256 204,421 Operating income 37,442 33,126 62,273 53,849 Other income 837 2,034 1,438 4,368 Income before income taxes 38,279 35,160 63,711 58,217 Income tax expense 13,015 11,396 21,662 18,775 Net income before cumulative effect of change in accounting principle 25,264 23,764 42,049 39,442 Cumulative effect of change in accounting principle, net of tax - - - 506 Net income $25,264 23,764 $42,049 39,948 Earnings per share of common stock before cumulative effect of change in accounting principle - Basic $0.28 $0.26 $0.47 $0.43 Diluted $0.27 $0.25 $0.45 $0.41 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 $0.28 $0.26 $0.47 $0.43 Diluted $0.27 $0.25 $0.45 $0.42 Weighted average shares of common stock outstanding - Basic 89,773 93,023 89,199 92,680 Diluted 93,854 95,754 93,678 95,644 NAVTEQ CORPORATION Condensed Consolidated Balance Sheets (In thousands) Dec. 31, July 2, 2005 2006 (Unaudited) Assets Current assets: Cash and cash equivalents $85,070 49,117 Short-term marketable securities 84,299 184,367 Accounts receivable, net 82,352 85,181 Deferred income taxes 42,584 19,526 Prepaid expenses and other current assets 15,203 16,451 Total current assets 309,508 354,642 Property and equipment, net 20,828 21,655 Capitalized software development costs, net 25,761 24,041 Long-term deferred income taxes, net 169,264 179,289 Long-term marketable securities 49,429 26,065 Acquired intangible assets, net 16,815 18,117 Goodwill 11,778 15,133 Deposits and other assets 12,505 12,422 Total assets $615,888 651,364 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $19,572 12,978 Accrued payroll and related liabilities 28,365 26,368 Fair value of foreign currency derivative 3,265 - Other accrued expenses 28,658 27,139 Deferred revenue 38,703 32,865 Total current liabilities 118,563 99,350 Long-term deferred revenue 3,446 2,932 Other long-term liabilities 3,815 2,796 Total liabilities 125,824 105,078 Stockholders' equity 490,064 546,286 Total liabilities and stockholders' equity $615,888 651,364 NAVTEQ CORPORATION Condensed Consolidated Statements of Cash Flows (In thousands) Six Months Ended June 26, 2005 July 2, 2006 (Unaudited) Cash flows from operating activities: Net income $42,049 39,948 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,277 14,290 Deferred income taxes 18,230 13,661 Stock compensation expense 4,819 8,542 Tax benefit on non-qualified stock options 3,060 - Cumulative effect of change in accounting principle - (506) Provision for doubtful receivables 1,787 4,739 Noncash other 582 1,269 Changes in operating assets and liabilities, net of effects of acquisitions (38,338) (29,539) Net cash provided by operating activities 42,466 52,404 Cash flows from investing activities: Acquisition of property and equipment (2,532) (5,919) Capitalized software development costs (6,128) (5,536) Net purchases of marketable securities (15,053) (77,071) Payments for acquisitions, net of cash acquired - (5,044) Purchase of investments (500) - Note receivable - (300) Net cash used in investing activities (24,213) (93,870) Cash flows from financing activities: Issuance of common stock and other equity transactions 2,667 3,900 Net cash provided by financing activities 2,667 3,900 Effect of exchange rate changes on cash (3,290) 1,613 Net increase (decrease) in cash and cash equivalents 17,630 (35,953) Cash and cash equivalents at beginning of period 30,101 85,070 Cash and cash equivalents at end of period $47,731 49,117 (Logo: http://www.newscom.com/cgi-bin/prnh/20060313/NAVTEQLOGO )