BMC Software Announces Financial Results for Second Quarter Fiscal 2001.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers HOUSTON--(BUSINESS WIRE)--Oct. 24, 2000 BMC Software BMC Software, Inc. NYSE: BMC, is an American enterprise management software provider, focusing on IT infrastructure applications. BMC was founded in 1980 and is headquartered in Houston, Texas. Inc. (Nasdaq:BMCS BMCS Bristol Muslim Cultural Society (UK) BMCS Senior Chief Boatswain's Mate (Naval Rating) BMCS Blue Mountains Conservation Society (Wentworth Falls, NSW, Australia) ) today announced financial results for its second quarter of fiscal 2001, ended Sept. 30, 2000. BMC (BMC Software, Inc., Houston, TX, www.bmc.com) A leading supplier of software that supports and improves the availability, performance, and recovery of applications in complex computing environments. Software's revenues in the second quarter were $323.0 million, a 22 percent decrease from $415.7 million in the same quarter of fiscal 2000. Net earnings, excluding special charges and amortization of goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , decreased 75 percent to $27.9 million. Earnings per share on the same basis decreased 75 percent to $.11. Reflecting these charges and amortization of goodwill and intangible assets, net earnings and earnings per share were a loss of $12.5 million and a loss of $.05, respectively, in the second quarter of fiscal 2001 and were $58.9 million and $.23 per share in the second quarter of fiscal 2000. "The second quarter of our fiscal 2001 presented us with challenges similar to those that we experienced during the first quarter. We continue to see a reluctance among customers to commit to large enterprise license transactions as the mainframe mainframe Digital computer designed for high-speed data processing with heavy use of input/output units such as large-capacity disks and printers. They have been used for such applications as payroll computations, accounting, business transactions, information retrieval, market remains soft," said Max Watson, chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of BMC Software. "What that means for us is that we are adjusting our business model to this market reality. Going forward, we recognize the need for both short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. earnings growth and the requirement to invest for the future." Total license revenues declined 38 percent in the second quarter of fiscal 2001 from the second quarter of fiscal 2000, with North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. license revenues declining 53 percent and International license revenues declining 7 percent. Total distributed systems Distributed systems (computers) A distributed system consists of a collection of autonomous computers linked by a computer network and equipped with distributed system software. license revenues declined 15 percent from the second quarter of fiscal 2000 with International distributed systems license revenues increasing 59 percent quarter over quarter. Total license revenues for the company's mainframe business declined 54 percent, including a 63 percent decline in the core mainframe IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. and DB2 database tools. Compared to the second quarter of fiscal 2000, maintenance revenues increased 9 percent and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. revenues increased 38 percent. Second Quarter FY 2001 Highlights -- Completed the acquisition of OptiSystems giving BMC Software the most comprehensive management solution for the transactional backbones for e-business (SAP R/3 and mySAP.com). -- Announced industry's first comprehensive management solutions encompassing all critical components in business-to-business (B2B) transactions that will add the ability to manage front office and trading exchange environments to the company's industry-leading solutions for the back office and Web. -- KPN, a leading European telecommunications company based in the Netherlands, announced their partnership with BMC Software for the co-location, selling and re-selling of the SiteAngel(TM) 2000 service. SiteAngel 2000 is an online Web site performance monitoring service that allows for real-time monitoring all the way from the customer experience to the enterprise's back office. -- Reinforced commitment to provide the only Application-Centric Storage Management(TM) solution in the industry by announcing the general availability of PATROL(R) Storage Resource Manager, PATROL for Network Appliance Filers and LAN-free backup and recovery in PATROL Recovery for Oracle. -- Introduced PATROL for Prediction and Capacity Management, an advanced systems management solution that accurately forecasts and helps correct performance issues on distributed systems platforms. -- Strengthened the Enterprise Data Propagation (EDP) solution set with the availability of EDP 2.3, a more complete data propagation solution for companies with large databases and 24x7 availability requirements that need to quickly retrieve and integrate legacy data from their mainframes for their data warehousing or e-business applications. -- Extended reseller agreement with Sun Microsystems whereby Sun Professional Services will resell BMC Software's INCONTROL(TM) and PATROL Enterprise Manager solutions. -- PATROL became the first application monitoring solution to achieve Sun Microsystem's SunTone Certification. BMC Software is one of only seven companies named to pilot the SunTone(SM) Certification and Branding Program. -- Announced support for Microsoft.NET; received additional certifications and support for Windows 2000. About BMC Software One of the world's largest independent software vendors, BMC Software delivers the most comprehensive e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. systems management software with the fastest guaranteed implementation. This Service Assurance(TM) strategy enhances the availability, performance and recoverability of companies' business-critical applications. Companies can use this management methodology to demonstrate their ability to deliver optimal service to their customers and partners by joining BMC Software OnSite(TM), a certification program which includes solution implementation and regular HealthChecks performed by BMC Software Professional Services. BMC Software is a Forbes Forbes , B(ertie) C(harles) 1880-1954. American publisher and businessman who founded and edited (1916-1954) Forbes magazine. His son Malcolm Stevenson Forbes 500 company and a member of the S&P 500, with fiscal 2000 revenues exceeding $1.7 billion. The company is headquartered in Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , with offices worldwide. For more information please visit BMC Software's Web site at www.bmc.com, or call 800/841-2031 or 713/918-8800. This news release contains both historical information and forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information. Statements of plans, objectives, strategies and expectations for future operations and results, identified by words such as "believe," "anticipate" and "expect" are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Numerous important factors affect BMC Software's operating results and could cause BMC Software's actual results to differ materially from the results indicated by this press release or by any other forward-looking statements made by, or on behalf of, BMC Software, and there can be no assurance that future results will meet expectations, estimates or projections. These factors include, but are not limited to, the following: 1) BMC Software's revenues and earnings are subject to a number of factors, including the significant percentage of quarterly sales typically closed at the end of each quarter, that make estimation estimation In mathematics, use of a function or formula to derive a solution or make a prediction. Unlike approximation, it has precise connotations. In statistics, for example, it connotes the careful selection and testing of a function called an estimator. of operating results prior to the end of a quarter extremely uncertain; 2) BMC Software's financial growth depends on the continued success of PATROL An application management suite from BMC that uses agents to report on software activities on all the servers within the enterprise. Using the information in "knowledge modules" (KMs) about each system component, agents detect events, collect information and notify system and network and other distributed systems products; 3) demand for significant additional mainframe MIPS (Million Instructions Per Second) The execution speed of a computer. For example, .5 MIPS is 500,000 instructions per second; 100 MIPS is a hundred million instructions per second. capacity; 4) competition for BMC Software's products is intense and continues to increase for both the distributed systems and the mainframe database utility products; 5) certain platform vendors, including IBM and Microsoft See Microsoft and IBM. , have recently announced strategies to offer management tools for their particular platforms; 6) International results have been and remain volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. ; 7) BMC Software continues to depend on large enterprise license transactions as an integral part of its core mainframe business; 8) the uncertainties of whether new software products and product strategies will be successful; 9) the ability to recruit RECRUIT. A newly made soldier. and retain qualified personnel; and 10) the additional risks and important factors described in the company's quarterly reports on Form 10-Q Form 10-Q See 10-Q. and in its Annual Report to Stockholders on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended March 31, 2000, and other filings with the SEC. Note to interested parties: BMC Software has scheduled a conference call for 4:00 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT today to discuss the second quarter fiscal 2001 results. Interested parties in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. may participate by calling 800/680-9685 with the passcode of "BMC Software." Those outside of the U.S., may call 334/323-9854 or 334/323-9860 with the passcode of "BMC Software." Investors will also have the opportunity to listen to the conference call and view a financial presentation over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through the investor relations Investor relations The process by which the corporation communicates with its investors. section of the BMC Software Web site (http://www.bmc.com). For those unable to listen to the live broadcast, Internet replays will be available shortly after the call on www.bmc.com. BMC Software, BMC Software OnSite, the BMC Software logos, and all other BMC Software product or service names are registered trademarks or trademarks of BMC Software Inc. All other trademarks or registered trademarks belong to their respective companies. (c) 2000 BMC Software Inc. All rights reserved.
BMC SOFTWARE INC. AND SUBSIDIARIES
STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
Sept. 30,
-----------------
Fiscal Fiscal %
2000 2001 Increase
------- -------
(In millions, except
per share data)
Revenues:
License $282.5 $173.9 -38%
Maintenance 118.9 129.3 9%
Professional services 14.3 19.8 38%
------- -------
Total revenues 415.7 323.0 -22%
Selling and marketing expenses 136.4 132.8 -3%
Research and development expenses 49.3 59.1 20%
Cost of maintenance services
and product licenses 40.9 51.1 25%
Cost of professional services 20.0 23.5 18%
General and administrative expenses 29.7 38.2 29%
Acquired research and development -- 6.0 N/A
Merger-related costs and
compensation charges 1.4 3.3 136%
Legal settlement 38.8 -- -100%
Amortization of goodwill,
acquired technology & intangibles 36.3 44.8 23%
------- -------
Operating income (loss) 62.9 (35.8) -157%
Other income, net 9.8 19.4 98%
------- -------
Earnings (loss) before income taxes 72.7 (16.4) -123%
Income taxes 13.8 (3.9) -128%
------- -------
Net earnings (loss) $58.9 $(12.5) -121%
======= =======
Diluted earnings (loss) per share $0.23 $(0.05) -122%
======= =======
Shares used in computing
diluted earnings (loss) per share 253.1 246.1 -3%
======= =======
BMC SOFTWARE INC. AND SUBSIDIARIES
STATEMENTS OF EARNINGS
(Unaudited)
Six Months Ended
Sept. 30,
-----------------
Fiscal Fiscal %
2000 2001 Increase
------- -------
(In millions, except
per share data)
Revenues:
License $562.3 $403.6 -28%
Maintenance 230.9 255.0 10%
Professional services 23.2 37.1 60%
------- -------
Total revenues 816.4 695.7 -15%
Selling and marketing expenses 263.4 285.0 8%
Research and development expenses 106.8 116.6 9%
Cost of maintenance services
and product licenses 78.1 100.2 28%
Cost of professional services 33.4 44.1 32%
General and administrative expenses 64.0 76.5 20%
Acquired research and
development costs 80.8 17.7 -78%
Merger-related costs and
compensation charges 13.9 5.4 -61%
Legal settlement 38.8 -- -100%
Amortization of goodwill,
acquired technology and
intangibles 66.6 84.4 27%
------- -------
Operating income (loss) 70.6 (34.2) -148%
Other income, net 20.7 31.8 54%
------- -------
Earnings (loss) before
income taxes 91.3 (2.4) -103%
Income taxes 16.0 0.1 -99%
------- -------
Net earnings (loss) $75.3 $(2.5) -103%
======= =======
Diluted earnings
(loss) per share $0.30 $(0.01) -103%
======= =======
Shares used in computing
diluted earnings (loss) per share 251.5 245.8 -2%
======= =======
BMC SOFTWARE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, Sept. 30,
2000 2000
--------- ---------
(Unaudited)
(in millions)
Current Assets:
Cash and cash equivalents $152.4 $100.7
Investment securities 102.8 129.1
Trade receivables 532.2 402.8
Other current assets 108.8 124.6
--------- ---------
Total current assets 896.2 757.2
Investment securities 820.3 820.0
Property and equipment 337.5 399.3
Goodwill and other intangibles 329.1 375.3
Other long-term assets 579.0 560.3
--------- ---------
$2,962.1 $2,912.1
========= =========
Current liabilities:
Accounts payable, accrued liabilities
and other $214.3 $156.5
Current portion of deferred revenue 406.6 428.4
Short-term borrowings 263.0 175.0
--------- ---------
Total current liabilities 883.9 759.9
Deferred revenue 288.6 320.4
Other long-term liabilities 8.7 11.1
Total stockholders' equity 1,780.9 1,820.7
--------- ---------
$2,962.1 $2,912.1
========= =========
BMC SOFTWARE INC. AND SUBSIDIARIES
SCHEDULE OF SPECIAL ITEMS
FOR THE THREE MONTHS ENDED SEPT. 30, 2000
(Unaudited)
(in millions)
Special Items
---------------------------------
Amortization
of
Operations Acquired Merger-related Goodwill
(before Research Costs and Net,
Special and and Other as
items) Development Compensation Intangibles Reported
--------- ----------- ------------ ----------- ---------
Earnings
(loss)
before
income
taxes $37.7 $(6.0) $(3.3) $(44.8) $(16.4)
Income
taxes (9.8) 1.8 -- 11.9 3.9
---------- --------- ---------- ---------- ---------
Net earnings
(loss) 27.9 (4.2) (3.3) (32.9) (12.5)
========== ========= ========== ========== =========
Diluted
earnings
(loss)
per share $0.11(a) $(0.02) $(0.01) $(0.13) $(0.05)(a)
========== ========= ========== ========== =========
(a) Diluted earnings per share from operations is computed using
251.9 million diluted shares. Diluted net loss per share, as
reported, is computed using 246.1 million basic shares, as the
incremental shares from stock options, etc. are antidilutive.
BMC SOFTWARE INC. AND SUBSIDIARIES
SCHEDULE OF SPECIAL ITEMS
FOR THE SIX MONTHS ENDED SEPT. 30, 2000
(Unaudited)
(in millions)
Special Items
---------------------------------
Amortization
of
Operations Acquired Merger-related Goodwill
(before Research Costs and Net,
Special and and Other as
items) Development Compensation Intangibles Reported
--------- ----------- ------------ ----------- --------
Earnings
(loss)
before
Income
taxes $105.1 $(17.7) $(5.4) $(84.4) $(2.4)
Income taxes (27.3) 3.5 -- 23.7 (0.1)
--------- --------- ---------- ---------- ---------
Net earnings
(loss) 77.8 (14.2) (5.4) (60.7) (2.5)
========= ========= ========== ========== =========
Diluted
earnings
(loss)
per share $0.31(a) $(0.06) $(0.02) $(0.24) $(0.01)(a)
========== ========= ========== ========== =========
(a) Diluted earnings per share from operations is computed using
253.6 million diluted shares. Diluted net loss per share, as
reported, is computed using 245.8 million basic shares, as the
incremental shares from stock options, etc. are antidilutive.
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