The company reported second quarter revenues of $68.9 million, an increase of 9 per cent from $63.5 million in the second quarter of 2006. New licence revenues were $32.4 million, up ten per cent from $29.3 million in the same quarter last year. Operating income increased to $10.2 million, or 15 per cent of revenues, from $6.0 million, or 9 per cent of revenues, in the 2006 second quarter.

Diluted earnings per share (EPS) in the 2007 second quarter were $0.36, compared to $0.12 for the same quarter last year. Charges for stock-based compensation were $2.6 million and $2.2 million in the second quarter of 2007 and 2006, respectively.

The company continued to identify cost-saving initiatives and drive productivity improvements in the 2007 second quarter, including the expected closure of three facilities, all of which should be completed by year end. Operating results in the quarter included reorganisation and related pre-tax charges of $0.7 million or approximately $0.02 EPS. Additional charges related to these initiatives will be recorded in the 2007 third and fourth quarters.

"We continued to see good sales momentum in the quarter, including double digit new licence revenue growth in the United States and Europe, increased predictive application sales, and expanding partner influenced transactions," said SPSS president and CEO Jack Noonan. "Overall, the second quarter shows increasing demand for our predictive analytic tools and solutions with the continuation of bottom-line improvement."

Revenues for the six months ended June 30, 2007 totalled $139.1 million, an increase of 11 per cent from $125.7 million for the same period in 2006. New licence revenues were $67.3 million, up 14 per cent from $59.2 million in the same period last year. Operating income increased to $22.3 million, or
16 per cent of revenues, from $13.0 million, or 10 per cent of revenues, in the 2006 six-month period. EPS was $0.75, compared to $0.35 in the same period a year ago. Charges for stock-based compensation were $4.5 million and $3.1 million in the first six months of 2007 and 2006, respectively. The effective income tax rate in the 2007 six-month period was 37 per cent, compared to 38 percent in the same period last year.

Cash at June 30, 2007 was $278.4 million. Cash from operations increased to $34.7 million in the six months ended June 30, 2007 from $14.6 million in the same period in 2006.

"We are pleased with the benefits realised from operational improvements," said Raymond Panza, SPSS executive vice-president and CFO. "During the 2007 second quarter, we initiated the process for closing R&D centres in the United Kingdom and Denmark, closed a small facility in the United States and announced organisational changes. At the same time, the company continues to focus on global productivity initiatives to improve operations and reduce costs."

Panza added, "In the 2007 third quarter we expect revenues of between $72.0 million and $74.0 million, with EPS in the range of $0.38 to $0.42, including an estimated expense of $0.06 for stock-based compensation. For the 2007 fiscal year, we reiterate our revenue guidance of between $285.0 million and $295.0 million. Based on our strong first half earnings results, we are increasing EPS guidance to a range of $1.53 to $1.63. Guidance for the 2007 fiscal year includes the $0.02 charge recognised in the second quarter for restructuring. Additional restructuring costs of approximately $3 million, expected to be incurred in the second half of 2007, are not included in the 2007 third quarter or 2007 fiscal year guidance. The full amount of these 2007 estimated restructuring charges are expected to be more than fully recovered in savings during 2008. EPS guidance for the 2007 fiscal year includes an estimated expense of $0.26 for stock-based compensation and an effective income tax rate of 37 per cent."