Borland Announces Second Quarter 2003 Financial Results; Increasing Revenues over Previous Quarter and Previous Year.Business Editors/High-Tech Writers SCOTTS VALLEY, Calif.--(BUSINESS WIRE)--July 24, 2003 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 financial results for its second quarter ended June June: see month. 30, 2003. Revenues for the second quarter were $76.3 million, an increase of 28% over $59.7 million reported in the second quarter of 2002, and 3% over $74.4 million reported in the first quarter of 2003. Including costs associated with the recent acquisitions, GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss for the second quarter was $5.0 million, or $(0.06) 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, which compares to GAAP net income of $4.7 million, or $0.06 per diluted share, reported in the second quarter of 2002 and a GAAP net loss of $17.7 million, or $(0.22) per diluted share, reported in the first quarter of 2003. Non-GAAP net income was $3.5 million, or $0.04 per diluted share, which compares to Non-GAAP net income of $6.2 million, or $0.08 per diluted share reported in the second quarter of 2002 and $180,000 or $0.00 per diluted share, reported in the first quarter of 2003. Non-GAAP net income 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 of $8.5 million in the second quarter of 2003, $1.6 million in the second quarter of 2002, and $17.9 million in the first quarter of 2003. "We are pleased with our solid financial performance in the second quarter, which represented our 13th consecutive quarter of profitability on a Non-GAAP basis, and offers a solid foundation for further achievement," said Borland's president and chief executive officer, 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. "Our application lifecycle management The administration and control of an application from inception to its demise. It embraces requirements management, system design, software development and configuration management and implies an integrated set of tools for developing and controlling the project. platform gained traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. , and we experienced an increase in the number of multi-product deals. Our customers in the quarter included 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. , Lucent, Cingular Wireless, Telcordia (Telcordia Technologies, Piscataway, NJ, www.telcordia.com) A telecommunications software, engineering and consulting organization. Telcordia was originally founded as Bellcore in 1984 by the regional Bell telephone companies (RBOCs) after they were split apart from AT&T due to court , McKesson McKesson Corporation (NYSE: MCK) is a large United States-based corporation specializing in the distribution of health care systems, medical supplies and pharmaceutical products. , and eBay (eBay, Inc., San Jose, CA, www.ebay.com) The major auction service on the Web. eBay popularized the concept of buying and selling online, and both individuals and commercial enterprises list items for sale. . In tough economic climates, customers, more than ever, seek maximum return on investment. Borland's application lifecycle management platform increases productivity, and delivers better quality applications to market faster." "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. reported a strong cash position and resumed solid growth in operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , with the acquisitions behind us," stated 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. "While customers remain cautious about committing to larger deals, we have continued to focus on improving our business model, increasing profitability, and aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. with the overall economy so that we are well-positioned for growth once the economy improves." Business Outlook Management provided the following financial guidance which reflects typical seasonality and assumes no changes to the economy: For the quarter ending September September: see month. 30, 2003, on a GAAP basis: -- The Company expects that revenues will be flat to slightly down from the second quarter of 2003. -- Forecast net loss per share should be in the range of $(0.07) to $(0.05). For the quarter ending September 30, 2003, 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 September 30, 2003 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 September 30, 2003. Our Non-GAAP anticipated results exclude, as applicable, restructuring, amortization of intangible assets, acquisition-related expenses, in-process research and development, and other charges.
Estimated per Share
--------------------------
Low High
----------- ------------
(unaudited)
GAAP net loss $(0.07) $(0.05)
Amortization of intangible assets 0.07 0.07
Acquisition-related expenses 0.03 0.03
----------- ------------
Non-GAAP net income $0.03 $0.05
=========== ============
Earnings Conference Call Information The Borland Software Corporation second quarter teleconference and simultaneous webcast is scheduled to begin at 2:30 p.m., Pacific Time, on Thursday Thursday: see week. , July July: see month. 24, 2003. To access the live webcast, please visit: 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 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 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. Any financial or statistical information posted on the website in connection with the teleconference can be found at: www.corporate-ir.net/ireye/ir_site.zhtml?ticker=BORL&script=2100. A replay of the webcast 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. The replay number for those who prefer to dial-in to the call is (888) 286-8010 or (617) 801-6888, passcode 18865820. Non-GAAP Financial Measures Borland believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Borland reports Non-GAAP financial measures of its performance to provide investors with an alternative method for assessing its operating results in a manner that is focused on what it believes to be its core 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 . These measures are not 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, or an alternative for, generally accepted accounting principals (GAAP), and may be materially different from Non-GAAP financial measures used by other companies. Borland's management reviews these Non-GAAP measures when assessing the performance of its ongoing operations and making determinations as to resource allocation resource allocation Managed care The constellation of activities and decisions which form the basis for prioritizing health care needs within the organization. In addition, since we have historically reported Non-GAAP results to the investment community, we believe the inclusion of comparative numbers provides consistency Consistency can refer to:
intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. from period to period. Investors are encouraged to review the reconciliation of these Non-GAAP financial measures to their most directly comparable GAAP financial measure as provided below. 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. ," 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Forward-looking statements contained in this release may relate to, but are not limited to, Borland's results for the second quarter and six months ended June 30, 2003, and Borland's 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: general economic factors, capital market conditions and general industry trends; the ability to successfully integrate acquisitions, costs associated with acquisitions, diversion A turning aside or altering of the natural course or route of a thing. The term is chiefly applied to the unauthorized change or alteration of a water course to the prejudice of a lower riparian, or to the unauthorized use of funds. of management attention from other business concerns due to acquisitions, and undisclosed or unanticipated liabilities and risks resulting from acquired companies; Borland's ability to sell comprehensive solutions for the application development lifecycle; our ability to manage a relatively new direct sales force and our ability to integrate sales personnel from recent acquisitions; market acceptance of new or enhanced products or services developed, marketed or sold by Borland; the impact that Severe Acute Respiratory Syndrome Severe Acute Respiratory Syndrome (SARS) Definition Severe acute respiratory syndrome (SARS) is the first emergent and highly transmissible viral disease to appear during the twenty-first century. (SARS) may have on our business and the economy of the countries in which we operate; and any unanticipated impact on economic and financial conditions around the world resulting from geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. conflicts. 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 fiscal 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. 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.
Financial Tables Follow
BORLAND SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
Three
Months Ended Six Months Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Revenues
Licenses and other $56,622 $50,095 $113,431 $97,763
Services 19,648 9,627 37,209 19,036
-------- -------- -------- --------
Total revenues 76,270 59,722 150,640 116,799
Cost of revenues
Licenses and other 3,012 3,557 6,111 7,077
Services 7,324 5,355 13,923 10,390
-------- -------- -------- --------
Cost of revenues 10,336 8,912 20,034 17,467
Gross profit 65,934 50,810 130,606 99,332
Operating expenses
Research and development 15,457 12,711 33,428 24,660
Selling, general and
administrative 46,640 32,102 92,887 63,135
Restructuring, amortization of
intangibles and acquisition-
related expenses 8,510 1,564 26,382 3,086
-------- -------- -------- --------
Total operating expenses 70,607 46,377 152,697 90,881
Operating income (loss) (4,673) 4,433 (22,091) 8,451
Interest income, net and other 889 1,700 2,123 3,430
-------- -------- -------- --------
Income (loss) before taxes (3,784) 6,133 (19,968) 11,881
Provision for income taxes 1,185 1,464 2,693 2,615
-------- -------- -------- --------
Net income (loss) $(4,969) $4,669 $(22,661) $9,266
======== ======== ======== ========
Income (loss) per share -- Basic $(0.06) $0.07 $(0.28) $0.13
Income (loss) per share --
Diluted $(0.06) $0.06 $(0.28) $0.12
Shares used in the calculation of
basic income (loss) per share 80,547 70,406 79,729 70,224
Shares used in the calculation of
diluted income (loss) per share 80,547 74,632 79,729 75,304
BORLAND SOFTWARE CORPORATION
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
Three
Months Ended Six Months Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Revenues
Licenses and other $56,622 $50,095 $113,431 $97,763
Services 19,648 9,627 37,209 19,036
-------- -------- -------- --------
Total revenues 76,270 59,722 150,640 116,799
Cost of revenues
Licenses and other 3,012 3,557 6,111 7,077
Services 7,324 5,355 13,923 10,390
-------- -------- -------- --------
Cost of revenues 10,336 8,912 20,034 17,467
Gross profit 65,934 50,810 130,606 99,332
Operating expenses
Research and development 15,457 12,711 33,428 24,660
Selling, general and
administrative 46,640 32,102 92,887 63,135
Restructuring, amortization of
intangibles and acquisition-
related expenses (1) -- -- -- --
-------- -------- -------- --------
Total operating expenses 62,097 44,813 126,315 87,795
Operating income 3,837 5,997 4,291 11,537
Interest income, net and other 889 1,700 2,123 3,430
-------- -------- -------- --------
Income before taxes 4,726 7,697 6,414 14,967
Provision for income taxes (2) 1,185 1,464 2,693 2,615
-------- -------- -------- --------
Net income $3,541 $6,233 $3,721 $12,352
======== ======== ======== ========
Income per share -- Basic $0.04 $0.09 $0.05 $0.18
Income per share -- Diluted $0.04 $0.08 $0.05 $0.16
Shares used in the calculation of
basic income per share 80,547 70,406 79,729 70,224
Shares used in the calculation of
diluted income per share 82,821 74,632 82,404 75,304
(1) Non-GAAP income for the second quarter and six months ended June
30, 2003 excludes, approximately $8.5 million and $26.4 million,
respectively, in, as applicable, restructuring, amortization of
intangible assets, acquisition-related expenses, in-process
research and development, and other charges. Non-GAAP income for
the second quarter and six months ended June 30, 2002 excludes
approximately $1.6 million and $3.1 million, respectively, in, as
applicable, restructuring, amortization of intangible assets,
acquisition-related expenses, in-process research and development,
and other charges.
(2) In prior years, we presented the Non-GAAP net income including the
tax effect of the Non-GAAP adjustments. In the current year, we
have not tax affected the Non-GAAP adjustments as we have a
negative effective tax rate on a GAAP basis. Therefore, we have
presented Non-GAAP income for the quarter and six months ended
June 30, 2003 including the provision for income taxes on a GAAP
basis. To provide comparability to the current year presentation,
no adjustment was made to the provision for income taxes included
in the Non-GAAP income statement in the quarter and six months
ended June 30, 2002.
The following table shows our Non-GAAP results reconciled to the GAAP
Condensed Consolidated Statements of Income for the quarters and six
months ended June 30, 2003 and 2002. Our Non-GAAP results exclude, as
applicable, restructuring, amortization of intangible assets,
acquisition-related expenses, in-process research and development, and
other charges.
Three Months Ended Six Months Ended
June 30, June 30,
----------------- -----------------
2003 2002 2003 2002
-------- -------- -------- --------
(in thousands, except
per share data, unaudited)
GAAP net income $(4,969) $4,669 $(22,661) $9,266
Restructuring (79) 200 5,323 380
Amortization of intangible assets 5,903 218 11,226 414
Acquisition-related expenses 2,686 1,146 5,233 2,292
In-process research and
development -- -- 4,600 --
-------- -------- -------- --------
Non-GAAP net income $3,541 $6,233 $3,721 $12,352
Basic Non-GAAP net income per
share $0.04 $0.09 $0.05 $0.18
Shares used in computing basic
net income per share 80,547 70,406 79,729 70,224
Diluted Non-GAAP net income per
share $0.04 $0.08 $0.05 $0.16
Shares used in computing diluted
net income per share 82,821 74,632 82,404 75,304
BORLAND SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
June 30, Dec. 31,
2003 2002
-------- --------
ASSETS
Cash, cash equivalents and short-term investments $205,400 $296,156
Accounts receivable, net 57,841 47,238
Property held for sale 9,935 9,935
Property and equipment, net 10,434 7,966
Goodwill and acquired intangibles 223,896 45,000
Other assets 43,087 26,831
-------- --------
Total assets $550,593 $433,126
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenues $47,703 $35,619
Other current liabilities 92,920 82,120
-------- --------
Total current liabilities 140,623 117,739
Other long-term liabilities 22,267 9,638
Minority interest -- 5,018
Stockholders' equity 387,703 300,731
-------- --------
Total liabilities and stockholders' equity $550,593 $433,126
======== ========
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