Borland 2001 Revenues Rise 16%; Operating Income Increases 44%.Business Editors SCOTTS VALLEY, Calif.--(BUSINESS WIRE)--Jan. 24, 2002 Borland Software Corporation (company) Borland Software Corporation - A company that sells a variety of PC software development and database systems. Borland was founded in 1983 and initially became famous for their low-cost software, particularly Turbo Pascal, Turbo C, and Turbo Prolog. (Nasdaq NM:BORL) today announced its financial results for the fourth quarter and year ended December December: see month. 31, 2001. Revenues Rise 17% in Fourth Quarter For the fourth quarter, revenues increased 17% to $59.0 million from $50.3 million for the same quarter a year ago and increased 7% from the third quarter of 2001. Gross margins were approximately 84% for both the 2001 and 2000 fourth quarters. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rose 12% to approximately $6.0 million in the 2001 fourth quarter from $5.4 million in the year-ago quarter. Net income for the 2001 fourth quarter was $6.2 million, or $0.08 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share on 75.6 million weighted average shares outstanding. Net income for the year-ago fourth quarter was $8.4 million, or $0.12 per diluted share, on 69 million weighted average shares outstanding. The dramatic decline in interest rates throughout 2001 negatively impacted fourth quarter interest income, which declined by $2.3 million, or $0.03 per diluted share, compared to the fourth quarter a year ago. The increase in diluted shares outstanding reflects the increase in the number of dilutive ("in the money") options and the exercise of warrants and options. Operating Income Increases 44% in 2001 For the 12 months ended December 31, 2001, revenues increased 16% to $221.8 million from $191.1 million for the 2000 calendar year. Gross margins for the 2001 period increased slightly to 84% versus 83% for the year-ago 12-month period. Operating income for 2001 grew almost 44% to $17.8 million from $12.4 million for 2000. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. interest income declined by $3.2 million, or $0.04 per diluted share, as a result of falling interest rates during the year. Net income for 2001 increased almost 12% to $23.1 million, or $0.31 per diluted share on 74.1 million weighted average shares outstanding. This compares with net income of $20.7 million, or $0.30 per diluted share on 69.9 million weighted average shares outstanding for the year ended December 31, 2000. Continuing Leadership in Java(TM), Linux Linux Nonproprietary operating system (OS) for digital computers. In 1991 Linus Torvalds of Finland began asking for volunteer programmers over the Internet to collaborate on the development of a UNIX-like OS for personal computers; the “1. (R), Web Services (1) Loosely, any online service delivered over the Web. Such usage appears in articles from non-technical sources, but not in IT-oriented publications, because definition #2 below describes the correct use of the term. Markets "We are very pleased to report strong operating performance for the quarter and the year," stated Dale L. Fuller, Borland's president and chief executive officer. "During the year, we made significant investments in building a direct sales force, strengthening our marketing organization, and developing a pipeline of new product releases. These investments are fueling strong initiatives in the wireless, Web Services, and Linux markets, as well as our continued expansion in the Java development market." Throughout 2001, Borland (Borland Software Corporation, Austin, TX, www.borland.com) A software company founded as Borland International in 1983 by Philippe Kahn. The company is noted for its language and development products. It also popularized the desktop accessory for DOS PCs with its Sidekick program. launched a total of 18 new or upgraded products, almost doubled its overall sales force, and significantly upgraded the sales management Sales Management Role and Goal Importance of sales management is critical for any commercial organization. Expanding business in not possible without increasing sales volumes, and effective sales management goal is to organize sales team work in such a manner that ensures a teams in the Asia/Pacific and Americas A·mer·i·cas , the See America. regions. As a result, Borland achieved its seventh consecutive quarter of profitability, continued to generate positive cashflow from operations, and further strengthened its balance sheet. Added Mr. Fuller, "Once again, our Java Business Unit led Borland's revenue growth, generating almost 50% more revenues in the 2001 fourth quarter compared to same quarter last year. The Java Business Unit, which represented over 40% of revenue for the fourth quarter, continues to be driven by our market-leading, award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" JBuilder A family of Java development tools from Borland. Supporting J2EE and available in personal and enterprise editions, they are used to create all types of Java applications and applets, including support for JavaBeans, Enterprise JavaBeans (EJBs), JSPs and servlets. (TM) products. These products are designed to help our customers accelerate time to market and time to benefit, helping us win market share from the competition." With the launch of several new product releases during the year and the fourth quarter, Borland's Rapid Application Development -- or RAD (1) (Rapid Application Development) Developing systems incrementally and delivering working pieces every three to four months, rather than waiting until the entire project is programmed before implementing it. -- Business Unit remained strong. Borland's focus on Web Services, Linux, and cross-platform (software, hardware) cross-platform - A term that describes a language, software application or hardware device that works on more than one system platform (e.g. Unix, Microsoft Windows, Macintosh). E.g. Netscape Navigator, Java. compatibility between Windows(R) and Linux has helped this business unit grow revenues 15% over the same quarter a year ago to generate 21% of fourth quarter 2001 revenues. Borland's Enterprise Business Unit declined from the year-ago fourth quarter, but demonstrated a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective from revenue levels seen in the last few quarters, generating 19% of 2001 fourth quarter revenues. All geographic regions grew on a calendar year and quarterly basis, with the exception of the Americas, which declined slightly from the fourth quarter a year ago due, in part, to the effects of the September September: see month. 2001 tragedies. Borland continues to benefit from a revenue stream generated from a diverse product portfolio with a wide range of price points, as well as multiple distribution channels across various geographies. At December 31, 2001, Borland's financial position remains strong, with cash, cash equivalents, and 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. investments reaching almost $295 million. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). were 59, below the company's target range of 60 to 65 days. Deferred revenues rose $5.1 million to $23.9 million, a 27% increase over the year-ago quarter. Frederick Frederick, city, United States Frederick, city (1990 pop. 40,148), seat of Frederick co., NW Md.; settled 1745, inc. 1817. The processing center of a fertile farm and dairying area, it makes beer, household items, optical and glass products, leather goods, A. Ball, Borland's executive vice president and chief financial officer, stated, "Our continued focus on financial discipline helped us increase operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. by almost 12% compared with the fourth quarter of 2000. Furthermore, the strength of our balance sheet demonstrates management's ongoing ability to steward corporate assets. We believe our financial position provides us the strength and flexibility we need to support our strategic growth objectives and meet our customers' needs." Concluded Mr. Fuller, "Borland is a leading provider of best-in-class, cross-platform software technology solutions used to build, deploy, and integrate applications across the enterprise, including 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 . Our value proposition is simple: Borland's solutions accelerate time to market and lower the total cost of ownership. We believe we have the products, infrastructure, and financial strength to continue growing throughout 2002." First Quarter 2002 and Full Year 2002 Outlook Borland expects revenues to increase approximately 14%-17% in first quarter of 2002 when compared with the first quarter of 2001. Gross margins for the 2002 first quarter are expected to remain in the 83%-85% range, and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: are expected to approximate those delivered in the fourth quarter of 2001. Non-operating income is expected to continue to be impacted by changes in the Federal Funds rate Federal Funds Rate The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. . Earnings per diluted share are expected to be in the range of $0.07 to $0.09 in the first quarter of 2002. Depending on Borland's stock price performance, weighted average shares outstanding could range from 75 million to 77 million diluted shares as determined by the Treasury method. Looking forward, Borland anticipates 2002 annual revenues to increase 12%-18% over 2001 revenues. Conference Call Information The Borland Software Corporation fourth quarter teleconference call and simultaneous Webcast is scheduled to begin at 2:30 p.m. Pacific Time, on Thursday, January 24, 2002. To access the live Webcast, please visit www.companyboardroom.com or Borland's Website at www.borland.com/about/investor at least 30 minutes prior to the call to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. any necessary audio or plug-in software. About Borland Borland Software Corporation is a leading provider of technology used to develop, deploy and integrate software applications. Delivering best-in-class technology solutions dedicated to interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. , Borland allows enterprises of all sizes to move into Web-based computing computing - computer while leveraging legacy systems. From the Fortune 1000 to the "Borland Nation" comprised of millions of developers around the world, Borland provides customers the freedom to develop applications, deploy them anywhere, and integrate and manage them across the enterprise. Borland solutions enable organizations to increase productivity and deliver higher-performance projects faster and on budget, while lowering total cost of ownership. Founded in 1983, Borland is headquartered in Scotts Valley, California Scotts Valley is a small city located in eastern Santa Cruz County, California, United States, about ten miles (16 km) south of San Jose and six miles (10 km) north of the beach in the upland slope of the Santa Cruz Mountains. As of the 2000 census, the city population was 11,385. with operations worldwide. To learn more, visit Borland at http://www.borland.com, the community site at http://community.borland.com, the OptimizeIt site at http://www.optimizeit.com, or call Borland at 800/632-2864. All Borland brand and product names are trademarks or registered trademarks of Borland Software Corporation, 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. and other countries. All other marks are the property of their respective owners. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This release contains "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. " as defined under the Federal Securities Laws, including the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All statements that are not historical are forward-looking. Forward-looking statements may relate to, but are not limited to, the effect of the acquisition of VMGEAR on Borland's future results, customer base and R&D capabilities; Borland's ability to successfully integrate VMGEAR; Borland's future financial performance, revenues, gross margins, operating margins, non-operating income, capital expenditures, costs, days sales outstanding, earnings per share, weighted average shares outstanding, acquisitions, product development plans, global expansion plans, estimated size of potential customer markets, demand for Borland's products, the projected acceptance of new technologies by existing or potential customers and the potential features of, or benefits to be derived from, the products developed, marketed or sold by Borland; market and technological trends in the software industry and various economic and business trends. Such forward-looking statements are based on current expectations that involve a number of uncertainties and risks that may cause actual events or results to differ materially. Factors that could cause actual events or results to differ materially include, among others, the following: general economic factors and capital market conditions, general industry trends, the potential effects on Borland of competition in computer software product and services markets, growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in the software and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. markets that Borland participates in, rapid technological change that can adversely affect the demand for Borland's products, shifts in customer demand, market acceptance of new or enhanced products or services developed, marketed or sold by Borland, delays in scheduled product availability dates The date after notification of mobilization by which forces will be marshalled at their home station or mobilization station and available for deployment. See also home station; mobilization; mobilization station. , actions or announcements by competitors, software errors, reduction in sales to or loss of any significant customers, the ability to successfully integrate acquisitions, Borland's ability to protect its intellectual property rights, the dependence of certain of Borland's business units on licenses from third parties, Borland's ability to attract and retain qualified personnel, Borland's failure to contain costs, and unanticipated impact of economic and financial conditions in the United States and around the world resulting from the terrorist attacks on September 11, 2001 and the U.S. war against terrorism. These and other risks may be detailed from time to time in Borland's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its latest Annual Report 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. and its latest Quarterly Report on Form 10-Q Form 10-Q See 10-Q. , copies of which may be obtained from www.sec.gov. Borland is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
BORLAND SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2001 2000 2001 2000
------ ------ ------ ------
Revenues
Licenses and other $ 50,113 $ 43,030 $187,043 $163,730
Services 8,917 7,264 34,728 27,337
-------- -------- -------- --------
Total revenues 59,030 50,294 221,771 191,067
Cost of revenues
Licenses and other 3,573 2,573 13,448 12,004
Services 5,826 5,156 22,452 19,916
-------- -------- -------- --------
Cost of revenues 9,399 7,729 35,900 31,920
Gross profit 49,631 42,565 185,871 159,147
Operating expenses
Research and development 11,994 10,407 46,981 42,484
Selling, general
and administrative 31,655 27,949 121,056 104,793
Restructuring, merger-
related expenses and other --- (1,151) --- (562)
-------- -------- -------- --------
Total operating expenses 43,649 37,205 168,037 146,715
Operating income 5,982 5,360 17,834 12,432
Interest income, net and other 1,728 4,158 11,118 13,276
-------- -------- -------- --------
Income before taxes 7,710 9,518 28,952 25,708
Provision for income taxes 1,542 1,092 5,844 4,982
-------- -------- -------- --------
Net income $ 6,168 $ 8,426 $23,108 $20,726
======== ======== ======== ========
Income per share - Basic (1) $ 0.09 $ 0.13 $ 0.34 $ 0.32
Income per share - Diluted $ 0.08 $ 0.12 $ 0.31 $ 0.30
Shares used in the calculation
of basic income per share 67,382 61,600 66,494 61,357
Shares used in the calculation
of diluted income per share 75,564 69,021 74,136 69,874
(1) The calculation of net income per share for the quarter and year
ended December 31, 2001 includes an accretion to the Preferred
Stock Series C of approximately $0 and $397,000, respectively. The
calculation of net income per share for the quarter and year ended
December 31, 2000 includes an accretion to the Preferred Stock
Series C of approximately $219,000 and $875,000, respectively.
BORLAND SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, unaudited)
Dec. 31, Dec. 31,
2001 2000
------ ------
ASSETS
Cash, cash equivalents and short-term investments $294,370 $262,559
Accounts receivables, net 38,405 33,495
Property and equipment, net 18,994 20,438
Other assets 24,054 24,411
-------- --------
Total assets $375,823 $340,903
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue $ 23,859 $ 18,765
Other current liabilities 64,710 60,143
-------- --------
Total current liabilities 88,569 78,908
Long-term debt --- 8,764
Other long-term liabilities 10,469 10,551
Stockholders' equity 276,785 242,680
-------- --------
Total liabilities and stockholders' equity $375,823 $340,903
======== ========
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