BMC Software Announces Fiscal Year 1998 Results; BGS Acquisition Completed; Distributed Systems Revenue Growth Again Tops 100 Percent in the Quarter.HOUSTON--(BUSINESS WIRE)--April 16, 1998--BMC Software 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) ), the leader in providing computer software solutions that improve the management, performance and availability of business-critical applications, databases and data, today announced record financial results for its fourth quarter of fiscal 1998, ended Mar. 31, 1998. Strong growth in 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. products, strong North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. performance and continued strength in 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, revenues highlighted the third consecutive record-breaking Adj. 1. record-breaking - surpassing any previously established record; "a record-breaking high jump"; "record-breaking crowds" best - (superlative of `good') having the most positive qualities; "the best film of the year"; "the best solution"; "the best time for revenue quarter. Total revenues for the fourth quarter of fiscal 1998 increased 33 percent to $213,509,000 from $160,600,000 in the same quarter of fiscal 1997. For the fiscal year, total revenues increased 30 percent to $730,634,000 from $563,210,000. Net earnings, excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. merger costs, increased 36 percent to $72,516,000 over fourth quarter fiscal 1997 net earnings of $53,413,000, and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth quarter of fiscal 1998 were $.67, a 34 percent increase over fourth quarter fiscal 1997 diluted earnings per share of $.50. Net earnings and diluted earnings per share reflecting the one-time merger costs were $66,718,000 and $.61 for the fourth quarter of fiscal 1998. Fiscal year 1998 diluted earnings per share, excluding one-time charges for acquired research and development and merger costs, increased 34 percent to $2.15 from $1.60. Net earnings and diluted earnings per share reflecting the charges for acquired research and development and merger costs were $165,854,000 and $1.53 for the 1998 fiscal year. "Our fiscal year 1998 was stellar -- not only did we accomplish what we said we would, but we did it in a way that increased customer confidence in our product strategy, energized our employees and improved shareholder value. For proof, you need look no farther used elliptically for) go no farther; say no more, etc. See also: Farther than our balance sheet which remains one of the strongest in the software industry," said Max Watson, chairman, president and chief executive officer of 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. . "While the mainframe side of the business continues to be strong, it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have is clear that our 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 (R) Management Suite of products has become the standard for application and database management. With the integration of the BEST/1(R) technology and our PATROL suite, we will offer the industry's first Application Service Assurance products, those that accurately measure, manage and improve an application's performance. Our goal for fiscal 1999 and beyond is simple -- to provide glass house solutions for a new generation of technology." Total license revenue growth was 38 percent for the fourth quarter of fiscal 1998. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. again led license revenue growth with a 53 percent increase over the same period last year. International license revenue grew 16 percent despite continued weakness in the company's Asia/Pacific market and an unfavorable foreign currency market. Maintenance revenue climbed 21 percent from the fourth quarter of fiscal 1997, reflecting customers' increasing implementation of the company's open systems products. Total revenues in the company's 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(a) database tools and utilities increased 27 percent over the fourth quarter of fiscal 1997. Total mainframe revenues increased 15 percent over the fourth quarter of fiscal 1997 and increased 17 percent for the fiscal year. Total distributed systems revenues of $68 million in the fourth quarter increased 101 percent over the fourth quarter of fiscal 1997. Total distributed systems revenues of $192 million increased 87 percent for the fiscal year. Quarterly Highlights -- Announced and completed the BGS Systems Inc. acquisition. This strategic acquisition adds BGS's industry-leading BEST/1 performance analysis and prediction technology to BMC Software's suite of PATROL application management, data management and performance optimization solutions. The combination provides the industry's first service assurances for the availability and performance of enterprise software applications. The organizational integration is now complete and technical integration has begun. -- Announced the appointment of Marco Landi as senior vice president and general manager of Europe. Mr. Landi is an extremely experienced and well respected technology executive, having served most recently as chief operating officer of Apple Computer. -- Expanded the PATROL Developer Network (PDN). The PDN(tm) enables any third-party vendor to independently develop, certify and resell solutions based upon and integrating with the PATROL architecture. PDN should significantly increase the number and scope of PATROL-based solutions, as well as broaden the distribution channel for those solutions. Since the inception in September 1997, membership has expanded to more than 180 companies -- with PATROL Knowledge Modules(tm) planned for general availability this quarter. Recent additions to the PDN are Sun Professional Services, Allen Systems Group Inc., and AXENT Technologies Inc. -- Continued mainframe investments with product introductions including Fast Path extended performance products FAST PATH ONLINE IMAGE COPY/EP(tm) and REORG/EP ONLINE(tm). New PATROL product offerings introduced this quarter include PATROL Knowledge Module for Baan Applications, IMS and AS/400. BMC Software is the only vendor to offer complete and functionally rich solutions for the leading ERP applications: Baan, Oracle, Peoplesoft and SAP. -- The PATROL management solution for Lotus Notes took top honors in the "Best Tool/Utility Solution" category in the fourth annual Lotusphere Beacon Awards. The PATROL KM(tm) for Lotus Domino/Notes was nominated for the award by PATROL customer New York State Electric and Gas (NYSEG). About BMC Software BMC Software Inc. (Nasdaq:BMCS) is a worldwide leader in the development of more than 160 computer software solutions that improve the management of business-critical applications and data, as well as optimize optimize - optimisation the performance of that critical data in complex computing computing - computer environments. BMC Software is the world's 12th largest independent software vendor and 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, with fiscal 1998 revenues exceeding $730 million. The company is headquartered in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , with offices, distributors and agents in 50 markets worldwide. For more information on BMC Software, access the World Wide Web at http://www.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. .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. Numerous important factors affect the company's operating results and could cause the company's actual results to differ materially from the results indicated by this press release or by any other 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. made by, or on behalf of, the company, 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) competition for BMC Software's products is increasing for both the open systems and the mainframe database utility products; 3) international results have been 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. over the last two years; 4) BMC Software continues to increasingly depend on large enterprise license transactions as an integral part of its core mainframe business; 5) the uncertainties of whether new software products and product strategies will be successful, 6) the high degree of difficulty of integrating different software products and technologies and the general risks associated with mergers of high technology companies, including the potential loss of key personnel and cultural conflicts; and 7) the additional risks and important factors described in the company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended December December: see month. 31, 1997; 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, 1997 and other filings with the SEC. -0- Note to interested parties: BMC Software has scheduled a conference call for 4:00 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. today to discuss the fourth quarter results. Interested parties may participate by calling 847/413-3310. -0- BMC Software, the BMC Software logo and all other product or service names are registered trademarks or trademarks of BMC Software Inc. in the USA and in other select countries. (R) and (tm) indicate USA registration or USA trademark. (a) DB2 and Sun are registered trademarks of, respectively, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Corp. and Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. Inc. Other logos and product/trade names mentioned are registered trademarks or trademarks of their respective companies. BMC Software is an Equal Opportunity Employer equal opportunity employer An employer or enterprise that does not discriminate against a job candidate, or subject him/her to adverse exclusionary criteria, based on race, sex, religion, or national origin. See Equal employment opportunity. . -0-
BMC Software Inc. and Subsidiaries
Statements of Earnings
(Unaudited)
Three Months
Ended
March 31,
------------
Fiscal Fiscal Percent
1998 1997 Increase
------ ------ --------
(In thousands, except
per share data)
Revenues:
Licenses $155,008 $112,250 38%
Maintenance 58,501 48,350 21%
------- -------
Total revenues 213,509 160,60 33%
Selling and marketing expenses 58,245 41,474 40%
Research and development expenses 23,721 19,711 20%
Cost of maintenance services and 23,777 15,776 51%
product licenses
General and administrative 15,205 12,049 26%
expenses
Merger related costs 7,305 -- N/A
------- ------
Operating income 85,256 71,590 19%
Other income 8,860 5,817 52%
------- ------
Earnings before income 94,116 77,407 22%
taxes
Income taxes 27,398 23,994 14%
------- ------
Net earnings $ 66,718 $ 53,413 25%
======= =======
Diluted earnings per share:
Before merger related costs $ .67 $ .50 34%
Merger related costs (net of
taxes) (.06) -- N/A
------- -------
Diluted earnings per share $ .61 $ .50 22%
======= =======
Shares used in computing diluted
earnings per share 109,025 107,858 1%
======= =======
Notes:
(a) Excluding merger related costs, net earnings in fiscal 1998, was
$72,516,000. Refer to supplemental information on following page.
-0-
BMC Software Inc. and Subsidiaries
Statements of Earnings
Fiscal Fiscal
Year Year Percent
1998 1997 Increase
------ ------ (Decrease)
(Unaudited)
(In thousands, except
per share data)
Revenues:
Licenses $513,947 $380,894 35%
Maintenance 216,687 182,316 19%
-------- --------
Total revenues 730,634 563,210 30%
Selling and marketing expenses 205,219 154,829 33%
Research and development expenses 94,923 77,459 23%
Cost of maintenance services and 77,095 56,569 36%
product licenses
General and administrative 54,462 46,070 18%
expenses
Acquired research and development
costs 65,473 11,259 482%
Merger related costs 7,305 -- N/A
------- -------
Operating income 226,157 217,024 4%
Other income 30,402 20,050 52%
------- -------
Earnings before income 256,559 237,074 8%
taxes
Income taxes 90,705 73,202 24%
------- -------
Net earnings $165,854 $163,872 1%
======= =======
Diluted earnings per share:
Before acquired research $ 2.15 $ 1.60 34%
and development and merger
related costs
Acquired research and (.62) (.07) 786%
development and merger ------- -------
related costs (net of
taxes)
Diluted earnings per share $ 1.53 $ 1.53 0%
======= =======
Shares used in computing diluted 108,295 107,155 1%
earnings per share ======= =======
Notes:
(a) Excluding charges for acquired research and development and merger
related costs, net earnings in fiscal 1998 and 1997, was $232,300,000
and $171,190,000, respectively. Refer to supplemental information on
following page.
-0-
BMC Software Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, March 31,
1998 1997
--------- ---------
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 79,794 72,093
Investment securities 56,174 59,159
Receivables:
Trade 170,778 87,576
Interest and other 19,020 11,247
------- -------
Total receivables 189,798 98,823
Prepaid expenses and other 9,381 10,606
------- -------
Total current assets 327,446 248,382
Property and equipment, net 162,996 116,296
Software development costs, net 63,475 39,486
Purchased software, net 32,063 19,735
Finance receivables 18,218 4,397
Investment securities 587,806 402,742
Deferred charges and other assets 10,059 13,121
------- -------
$1,202,063 $844,159
========= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 11,361 $ 9,439
Accrued liabilities and 78,374 50,025
other
Current portion of deferred 242,821 145,199
revenue ------- -------
Total current liabilities 332,556 204,663
------- -------
Deferred revenue and other 110,350 93,284
------- -------
Total liabilities 442,906 297,947
------- -------
Stockholders' equity:
Common stock 1,050 1,050
Additional paid-in capital 129,098 82,391
Retained earnings 730,976 565,122
Foreign currency translation (1,543) (820)
adjustment
Unrealized gain (loss) on 3,179 (750)
securities available for ------- -------
sale
862,760 646,993
Less treasury stock 99,513 96,901
Less unearned portion of 4,090 3,880
restricted stock ------- -------
compensation
Total stockholders' 759,157 546,212
equity ------- -------
$1,202,063 $844,159
========= =======
-0-
BMC Software, Inc. and Subsidiaries
Supplemental Information
(in thousands, except per share data)
The impact of the charges for acquired research and development and
merger related costs on net earnings per share are outlined below:
Fourth Quarter of Fiscal 1998
(Unaudited) Operations
(before Merger Costs Net
Merger Costs) ------------ ---
-------------
Earnings before
income taxes $101,421 $(7,305) $94,116
Income taxes (28,905) 1,507 (27,398)
------- ------- ------
Net earnings $ 72,516 $(5,798) $66,718
------- ------- ------
Diluted earnings
per share $ .67 $ (.06) $ .61
Fiscal Year 1998
----------------
Operations
(before Acquired Acquired R&D
R&D and Merger
(Unaudited) Costs) and Merger Costs Net
-------------- ---------------- ---
Earnings before
income taxes $329,337 $(72,778) $256,559
Income taxes (97,037) 6,332 (90,705)
------- ------- --------
Net earnings $232,300 $ 66,446 $165,854
======= ====== =======
Diluted earnings $ 2.15 $ (.62) $ 1.53
per share ======= ====== =======
Fiscal Year 1997
----------------
(Unaudited) Operations
(before
Acquired R&D) Acquired R&D Net
------------ ------------ ---
Earnings before $248,333 $ (11,259) $237,074
income taxes
Income taxes (77,143) 3,941 (73,202)
-------- ------- --------
Net earnings $171,190 $ (7,318) $163,872
======== ======= ========
Diluted earnings
per share $ 1.60 $ (.07) $ 1.53
-0- CONTACT: BMC Software Inc., 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; Investor Relations Investor relations The process by which the corporation communicates with its investors. John Cox, 713/918-4291 john_cox@bmc.com or Media Relations Dan D'Armond, 713/918-2372 dan_darmond@bmc.com |
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