Borland Announces Fourth Quarter and 2003 Year End Financial Results; 2003 Revenues Increase by 21%.Business Editors/High-Tech Writers SCOTTS VALLEY, Calif.--(BUSINESS WIRE)--Jan. 29, 2004 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:BORL) today announced financial results for the fourth quarter and year ended December December: see month. 31, 2003. Revenues for the fourth quarter were $74.0 million, an increase of 10% over $67.1 million reported in the fourth quarter of 2002, and an increase of 5% over $70.6 million reported in the third quarter of 2003. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss for the fourth quarter was $5.7 million, or $(0.07) per basic and 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, which compares to GAAP net income of $3.1 million, or $0.04 per basic and diluted share, in the fourth quarter of 2002, and to a GAAP net loss of $12.2 million, or $(0.15) per diluted share, in the third quarter of 2003. Non-GAAP net income for the fourth quarter was $4.7 million, or $0.06 per diluted share, which compares to non-GAAP net income of $5.8 million, or $0.08 per diluted share, in the fourth quarter of 2002, and to non-GAAP net income of $0.1 million, or break-even on a per share basis, in the third quarter of 2003. For the fiscal year ended December 31, 2003, revenues were $295.2 million, an increase of 21% over fiscal year 2002. GAAP net loss for fiscal year 2003 was $40.5 million, or $(0.51) per basic and diluted share, as compared to GAAP net income of $17.4 million, or $0.23 per diluted share, reported in 2002. Non-GAAP net income for the 2003 fiscal year was $8.5 million, or $0.10 per diluted share, as compared to non-GAAP net income of $23.8 million, or $0.32 per diluted share, reported in fiscal 2002. The company closed 2003 with $202.6 million in cash 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. equivalents and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . "I am pleased to announce solid fourth quarter financial results that exceeded the guidance we provided at the beginning of last quarter and reiterated in December," said Dale Dale , Sir Henry Hallett 1875-1968. British physiologist. He shared a 1936 Nobel Prize for work on the chemical transmission of nerve impulses, particularly for the isolation and study of acetylcholine (1914). L. Fuller, Borland's President and Chief Executive Officer. "Although we benefited from seasonal strength in the fourth quarter, we believe that these results also reflect improvements we made in 2003 to the company's management team and structure. 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. has always been known for technology excellence, and I believe we now have a solid framework from which we can exploit the application lifecycle opportunity in 2004 and beyond." Kenneth R. Hahn Hahn , Otto 1879-1968. German chemist. He won a 1944 Nobel Prize for his work on atomic fission. Noun 1. Hahn - German chemist who was co-discoverer with Lise Meitner of nuclear fission (1879-1968) Otto Hahn , Borland's senior vice president and chief financial officer added, "We are pleased with our overall financial performance in the quarter, where we increased revenue, improved operating performance, and posted solid net income growth. More importantly, however, we believe that the improvements we made in both our cost structure and operations have set the stage for a more profitable 2004." Customers purchasing one or more products from Borland's best-in-class See best-of-class. application lifecycle platform in the quarter included: Candle Software, Cisco, FedEx, Fujitsu (company) Fujitsu - A Japanese elecronics corporation. Fujitsu owns ICL, Amdahl Corporation, and DMR. Home USA, Japan. , Hitachi Hitachi (hētä`chē), city (1990 pop. 202,141), Ibaraki prefecture, E central Honshu, Japan, on the Kashima Sea. The city is a leading producer of Japan's electrical equipment. , Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. , Orasi, Pfizer Pfizer Incorporated (NYSE: PFE) is a major research-based pharmaceutical company, which ranks number two in sales The company is based in New York City. It produces the number-one selling drug Lipitor (atorvastatin, used to lower blood cholesterol); the oral antifungal , Quest See Qwest and Quest disk. Quest See also Adventurousness, Journey, Wandering. Ahab, Captain pursues Moby Dick, the great white whale, even to the point of losing his own life. [Am. Lit. , and Raytheon Raytheon Company (NYSE: RTN) is a major American defense contractor and industrial corporation with core manufacturing concentrations in defense systems and defense and commercial electronics. . In calculating non-GAAP net income and net income per share, Borland excludes, as applicable, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , amortization of 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. , acquisition-related expenses, in-process research and development and other charges. Investors are encouraged to review the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures as provided below. Business Outlook Management provided the following financial guidance: For the quarter ending March 31, 2004, on a GAAP basis: -- The company expects revenues will in the range of $71 - $75 million. -- Forecast earnings per share should be in the range of $(0.03) to $(0.01). For the quarter ending March 31, 2004, on a non-GAAP basis: -- Forecast earnings per share should be in the range of $0.03 to $0.05. The following table shows our non-GAAP anticipated results for the quarter ending March 31, 2004 reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to the GAAP anticipated results for the quarter ending March 31, 2004. Our non-GAAP anticipated results exclude, as applicable, amortization of intangible assets, acquisition-related expenses, and other charges.
Estimated per Share
---------------------------
Low High
------------ -------------
(unaudited)
GAAP net loss $(0.03) $(0.01)
Amortization of intangible assets 0.05 0.05
Acquisition-related expenses 0.01 0.01
------ ------
Non-GAAP net income $ 0.03 $ 0.05
====== ======
Given the difficulty of predicting levels of revenues and expenses for the first quarter of 2004 and the correlation correlation In statistics, the degree of association between two random variables. The correlation between the graphs of two data sets is the degree to which they resemble each other. of restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , if any, to these amounts, the company cannot provide further non-GAAP to GAAP reconciliation without an unreasonable effort. Earnings Conference Call Information The Borland Software Corporation fourth quarter and year end teleconference and simultaneous webcast is scheduled to begin at 2:30 p.m., Pacific Time, on Thursday Thursday: see week. , January January: see month. 29, 2004. To access the live webcast, please visit Borland's website at www.corporate-ir.net/ireye/ir_site.zhtml?ticker ticker An automated quotation system on which security transactions are reported after they occur on an exchange floor. Even though the newer systems are electronic and no longer actually tick, the name of the old mechanical device has stuck. =BORL&script (1) A program written in a general-purpose programming language. Such languages are typically interpreted and less comprehensive than full-blown compiled languages. See scripting language and interpreter. =2100 at least 30 minutes prior to the scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas 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 An auxiliary program that works with a major software package to enhance its capability. For example, plug-ins are widely used in image editing programs such as Photoshop to add a filter for some special effect. software. A replay will be available approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two hours after the conference call ends, and will be available through midnight February February: see month. 8, 2004. The replay number is (888) 286-8010, or (617) 801-6888 for international callers, and the passcode is 85711631. Separately, the archived webcast will be available on our website following the call. Any financial or statistical information posted on the company's website in connection with the teleconference will be available at: www.corporate-ir.net/ireye/ir_site.zhtml?ticker=BORL&script=2100. Non-GAAP Financial Measures Borland continues to provide all information required in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting practices (GAAP), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Borland uses calculations of non-GAAP net income and net income per share, each of which excludes restructuring, amortization of intangible assets, acquisition-related expenses, in-process research and development, and other income and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges and benefits, internally to evaluate its ongoing operations and to allocate To reserve a resource such as memory or disk. See memory allocation. resources within the organization. Borland's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Borland presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Borland's operating results in a manner that focuses on what management believes to be Borland's ongoing business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Management believes that the inclusion of this non-GAAP net income calculation provides consistency Consistency can refer to:
Borland excludes restructuring charges, including (i) employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and other termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. benefits, (ii) lease termination costs and other expenses associated with exiting a facility, and (iii) other costs associated with terminating contracts, from its non-GAAP net income and net income per share calculations. Expenses related to restructuring have, in some cases, had a significant cash impact and effect on net income as measured in accordance with GAAP. However, Borland's management believes such restructuring charges are periodic costs incurred to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. its operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. with its anticipated future revenues and consequently, does not consider these restructuring costs as a normal component of its expenses related to ongoing operations. As a result, Borland's management believes it is useful for itself and investors to review both GAAP information that includes such charges and non-GAAP measures of net income that exclude these charges to have a better understanding of the overall performance of Borland's ongoing business operations and its performance in the periods presented. In accordance with GAAP, Borland regularly amortizes the remaining value of certain intangible assets over various periods. However, these amortization expenses result in no ongoing cash expenditures and otherwise have no material impact on Borland's ongoing business operations. Similarly, from time to time, Borland undertakes strategic acquisitions and investments. The expenses related to such acquisitions and investments may or may not result in a significant cash impact or effect on net income as measured in accordance with GAAP, but their impact is not directly related to Borland's ongoing business activities in such periods. Consequently, Borland excludes the amortization of intangible assets, acquisition-related expenses and in-process research and development expenses, as well as certain one-time charges that do not relate to ongoing operations, from its non-GAAP financial measures. Borland believes that examination of both GAAP information that includes such charges and non-GAAP financial measures that exclude such expenses provides management with a comparative measure between product lines when allocating available resources. Borland believes that if it did not provide such non-GAAP financial information, investors would not have all the necessary data to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. Borland's ongoing operations. About Borland Borland Software Corporation (Nasdaq NM: BORL) is a world leader in platform independent software development and deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. solutions that are designed to accelerate the entire application development lifecycle. By connecting managers, testers, designers, developers, and implementers in real time, Borland enables enterprises worldwide to define and sustain their competitive advantage. For more information, visit: http://www.borland.com or the Borland Developer Network at http://bdn.borland.com. 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 press 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. including statements regarding Borland's strategic focus and near-term near-term adj. Of, for, or involving a short period of time in the near future. and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. outlook. 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, but are not limited to: our ability to sell multi-product solutions for the application development lifecycle; our ability to integrate new members of our executive management and 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; the changing nature of the markets in which we operate, namely the maturing of certain target markets and the uncertainty regarding the growth in other target markets; the effect of some of our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. making products that compete with our products available to their customers for no or a very low fee; potential disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. to our operations and to our sales efforts as a result of our recent reduction in force; market acceptance of new or enhanced products or services developed, marketed or sold by us; and general industry trends, general economic factors and capital market conditions. 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 2002 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. , its quarterly reports on Form 10-Q Form 10-Q See 10-Q. , and other SEC filings, copies of which may be obtained from http://www.sec.gov/. Borland is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.
BORLAND SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
Dec. 31, Dec. 31,
2003 2002
-------- --------
ASSETS
Cash, cash equivalents and
short-term investments $202,645 $296,156
Accounts receivable, net 54,989 47,238
Property held for sale --- 9,935
Property and equipment, net 20,377 7,966
Goodwill and acquired intangibles 210,055 45,000
Other assets 23,723 26,831
-------- --------
Total assets $511,789 $433,126
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenues $ 48,330 $ 35,619
Other current liabilities 82,733 82,120
-------- --------
Total current liabilities 131,063 117,739
Other long-term liabilities 12,856 14,656
Stockholders' equity 367,870 300,731
--------- ---------
Total liabilities and stockholders' equity $511,789 $433,126
======== ========
BORLAND SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
Three Months Ended Years Ended
------------------ -------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
-------- --------- --------- ---------
Revenues
Licenses and other $54,083 $ 56,423 $219,044 $204,481
Services 19,940 10,637 76,192 40,098
------- -------- -------- --------
Total revenues 74,023 67,060 295,236 244,579
Cost of revenues
Licenses and other 3,106 3,904 12,650 15,222
Services 6,008 5,235 26,898 20,798
------- -------- -------- --------
Cost of revenues 9,114 9,139 39,548 36,020
Gross profit 64,909 57,921 255,688 208,559
Operating expenses
Research and development 15,219 13,404 64,251 50,796
Selling, general and
administrative 44,230 37,098 180,558 132,946
Restructuring, amortization of
intangibles and acquisition-
related expenses 11,591 1,214 50,813 5,686
------- -------- -------- --------
Total operating expenses 71,040 51,716 295,622 189,428
Operating income (loss) (6,131) 6,205 (39,934) 19,131
Interest income, net and other 460 1,555 3,360 6,869
Loss on write-down of
investments and long-term
asset --- (2,916) --- (2,916)
------- -------- -------- --------
Income (loss) before taxes (5,671) 4,844 (36,574) 23,084
Provision for income taxes 21 1,709 3,971 5,724
------- -------- -------- --------
Net income (loss) $(5,692) $ 3,135 $(40,545) $ 17,360
======= ======== ======== ========
Income (loss) per share
- Basic $ (0.07) $ 0.04 $ (0.51) $ 0.24
Income (loss) per share
- Diluted $ (0.07) $ 0.04 $ (0.51) $ 0.23
Shares used in the calculation of
basic income (loss) per share 80,681 71,671 80,249 71,423
Shares used in the calculation
of diluted income (loss)
per share 80,681 75,040 80,249 74,769
------- -------- -------- --------
BORLAND SOFTWARE CORPORATION
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
Three Months Ended Years Ended
----------------- -------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
-------- -------- --------- ---------
Revenues
Licenses and other $54,083 $56,423 $219,044 $204,481
Services 19,940 10,637 76,192 40,098
------- ------- -------- --------
Total revenues 74,023 67,060 295,236 244,579
Cost of revenues
Licenses and other 3,106 3,904 12,650 15,222
Services 6,008 5,235 26,898 20,798
------- ------- -------- --------
Cost of revenues 9,114 9,139 39,548 36,020
Gross profit 64,909 57,921 255,688 208,559
Operating expenses
Research and development 15,219 13,404 64,251 50,796
Selling, general and
administrative 44,230 37,098 180,558 132,946
Restructuring, amortization of
intangibles and acquisition-
related expenses (1) --- --- --- ---
------- ------- -------- --------
Total operating expenses 59,449 50,502 244,809 183,742
Operating income 5,460 7,419 10,879 24,817
Interest income, net and other 460 1,555 2,860 6,869
Loss on write-down of
investments and long-term
assets --- --- --- ---
------- ------- -------- --------
Income before taxes 5,920 8,974 13,739 31,686
Provision for income taxes (2) 1,255 3,166 5,205 7,857
------- ------- -------- --------
Net income $ 4,665 $ 5,808 $ 8,534 $ 23,829
======= ======= ======== ========
Income per share - Basic $ 0.06 $ 0.08 $ 0.11 $ 0.33
Income per share - Diluted $ 0.06 $ 0.08 $ 0.10 $ 0.32
Shares used in the calculation
of basic income per share 80,681 71,671 80,249 71,423
Shares used in the calculation
of diluted income per share 82,159 75,040 82,422 74,769
--------------------------------- -------- -------- --------- --------
(1) Non-GAAP net income for the quarter and year ended December
31, 2003 excludes approximately $11.6 million and $50.8 million,
respectively, in, as applicable, restructuring, amortization of
intangible assets, acquisition-related expenses, in-process research
and development, and other charges. Non-GAAP net income for the
quarter and year ended December 31, 2002 excludes approximately $1.2
million and $5.7 million, respectively, in, as applicable,
restructuring, amortization of intangible assets, acquisition-related
expenses, in-process research and development, and other charges.
(2) Non-GAAP net income for the quarter and year ended December
31, 2003 includes an adjustment to increase our tax provision in the
amount of $1.2 million. This adjustment reflects the anticipated
income tax benefits from our restructuring activity in certain foreign
locations. Non-GAAP net income for the quarter and year ended December
31, 2002 includes an adjustment to increase our tax provision by $1.5
million and $2.1 million to adjust for the tax effect of our non-GAAP
adjustments.
Reconciliation
In calculating non-GAAP net income and net income per share,
Borland utilizes a non-GAAP financial measure. Investors are
encouraged to review the reconciliation of non-GAAP net income and net
income per share to the most directly comparable GAAP measures as
provided below.
Three Months Ended Years Ended
December 31, December 31,
------------------ -------------------
2003 2002 2003 2002
------- ------- -------- -------
(in thousands, except per share data, unaudited)
GAAP net income (loss) $(5,692) $ 3,135 $(40,545) $17,360
Restructuring 4,116 300 13,091 681
Amortization of intangibles 5,566 1,012 22,560 1,670
Acquisition related expenses 1,909 1,190 10,562 4,623
In process research and
development --- 300 4,600 300
Non-recurring benefit --- (1,588) --- (1,588)
(Gain) Loss on write-down of
long-term assets --- 2,916 (500) 2,916
Adjustment to provision for
income taxes (1,234) (1,457) (1,234) (2,133)
------- ------- -------- -------
Non-GAAP net income $ 4,665 $ 5,808 $ 8,534 $23,829
Basic non-GAAP net income
per share $ 0.06 $ 0.08 $ 0.11 $ 0.33
Shares used in computing
basic net income per share 80,681 71,671 80,249 71,423
Diluted net income per share $ 0.06 $ 0.08 $ 0.10 $ 0.32
Shares used in computing
diluted net income per
share 82,159 75,040 82,422 74,769
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