NDS Corp.'s (NNDS) strong quarter propelled by DirecTV smartcard shipments

Includes: NNDS, T
by: David Strahlberg

NDS Corp. (NNDS) reported results  on February 1, 2005 for
the fiscal second quarter 2005.  Below are some highlights.

Results F2Q05 vs. F2Q04:

  • EPS: $0.32 vs. $0.19 (+68%)
  • Total revenues: $141.6M vs. 76.5M (+85%)
  • CA revenues: $86.7M vs. $41.5M (+210%)
  • Gross profit: $87.2M vs. 57.6M (+51%)
  • Gross margin: 61.6% vs. 75.3% (-1,370 bps)
  • Operating income: $22.5M vs. $9.6M (+230%)
  • Net income: $17.9M vs. $10.3M (+74%)
  • Free cash flow: $20.2M vs. $36.1M (-44%)
  • Cash: $267M vs. 229M (+17%)
  • Debt: none

Revenue from News Corp. affiliates

  • F2Q05: $102.4M (72% of revenues) vs. F2Q04: $72.3M (95% of revenues)

Fiscal 2005 guidance:

  • Revenues: $520M - $540M
  • Operating income: $75M - $80M
  • Cash generation: equal to operating income

Quick comments:

  • Hired Alexander Gersh as new CFO (1/4/05)
  • Changed corporate domicile to the U.S. from Australia in 11/04; began reporting in U.S. GAAP
  • Completed migration of Sky Italia to NDS platform ahead of schedule; Sky Italia remains piracy free; achieved 3 million subs ahead of schedule
  • XTV launched on Israeli YES network
  • New cable win: Shenzhen Pathway Video Communications
  • Two new deals for Orbis subsidiary (interactive gaming platform)
  • Headcount increased by 360 in past year


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