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.
The following forward-looking statements reflect NAVTEQ management's expectations as of July 31, 2007. Management is revising its full-year outlook primarily as a result of the company's strong first half performance and better-than-expected growth trends in maps for portable devices. For the fiscal year 2007, NAVTEQ expects revenue of $780 million to $795 million and earnings per diluted share of $1.45 to $1.50. These ranges assume an effective worldwide tax rate of approximately 29%, an average U.S. dollar/euro exchange rate of $1.35, and average diluted shares outstanding of approximately 99.6 million on a full year basis.
Earnings Call Information
The conference call will take place on Tuesday, July 31, 2007 at 5:00 p.m. ET and be available via webcast at http://investor.navteq.com or by calling 866-831-6247 (North America) 617-213-8856 (international) with passcode 71074582.
An on-demand replay of the conference call will be available at the website above for thirty days following the call. The company will also provide a replay of the conference call at 888-286-8010 (North America) 617-801-6888 (international) with passcode 98949086. The telephone replay will be accessible for one week following the call.
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.
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. Such statements may include, but are not limited to, planned expenditures and expectations of future financial performance 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 each of the Company's Annual Report on Form 10-K for the year ended December 31, 2006 and the Company's Quarterly Report on Form 10-Q for the quarter ended April 1, 2007, 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 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 (Logo: http://www.newscom.com/cgi-bin/prnh/20060313/NAVTEQLOGO)