Annual Revenues Grow 18% to $1.77 Billion
MOUNTAIN VIEW, Calif., Jan. 28 /PRNewswire-FirstCall/ -- VERITAS Software
Corporation (Nasdaq: VRTS) today announced financial results for the quarter
ended December 31, 2003. Revenue for the quarter ended December 31, 2003 was
a record $513 million, compared to revenue of $406 million for the same period
a year ago, representing 26 percent growth year over year. Revenue for the
year ended December 31, 2003 was $1.77 billion, compared to revenue of
$1.51 billion for the same period a year ago, representing 18 percent growth
year over year.
GAAP net income for the quarter ended December 31, 2003 was $105.3
million, or $0.24 per diluted share, compared to GAAP net loss of $49.4
million, or $(0.12) per diluted share, for the same period a year ago.
Included in GAAP net income are charges related to amortization of intangibles
and stock compensation of $4.4 million, net of taxes, for the quarter ended
December 31, 2003 and amortization of intangibles and special charges related
to facilities restructuring, totaling $123.8 million, net of taxes, for the
same period a year ago.
GAAP net income for the year ended December 31, 2003 was $274.2 million,
or $0.63 per diluted share, compared to GAAP net income of $57.4 million, or
$0.14 per diluted share, for the same period a year ago. Included in GAAP net
income for the year ended December 31, 2003 are charges related to purchase
accounting adjustments, including write off of in-process research and
development, amortization of intangibles and stock-based compensation; gains
and losses on strategic investments, write-off of debt issuance costs, and the
adoption of FASB Interpretation Number 46, "Consolidation of Variable Interest
Entities," totaling $78.4 million, net of taxes. For the same period a year
ago, GAAP net income includes amortization of intangibles, losses on strategic
investments and disposal of assets, and a facilities restructuring charge,
totaling $199 million, net of taxes.
"Our outstanding fourth quarter performance is a culmination of a
record-breaking year. We attribute this success once again to our focused
execution on our growth strategy of expanding our product portfolio,
delivering these products on a broad range of hardware and software platforms
to further our heterogeneous advantage, and extending our reach worldwide by
investing in sales and service capacity around the globe," said Gary Bloom,
chairman, president and CEO, VERITAS Software. "The continued investment in
our business, coupled with our focus on driving our product strategy through
the eyes of the CIO, places VERITAS in a strong position for growth in 2004.
While our growth depends on a continued IT spending recovery, our business is
strong and we expect to drive the company to a target of $2 Billion in revenue
in 2004."
"Once again we've leveraged the revenue upside, generating approximately
$174 million in cash from operating activities and exiting the quarter with
$2.5 billion in cash and short-term investments," said Ed Gillis, executive
vice president and chief financial officer, VERITAS Software. "Our
over-performance in Q4, combined with the normal seasonal patterns of the
software industry, lead us to a conservative viewpoint relative to sequential
performance as we move from Q4 of 2003 to Q1 of 2004. Our expectations for the
quarter ending March 31, 2004 are for revenues in the range of $455 to $470
million, and diluted earnings per share in the range of $0.17 to $0.20 on a
GAAP basis."
In 2003, VERITAS achieved important milestones in extending our storage
software and enterprise data protection leadership positions, while delivering
the essential building blocks to enable utility computing -- helping customers
achieve optimal IT performance, and availability on an automated, shared
infrastructure. In addition to the successful acquisitions of Precise and
Jareva, which extended VERITAS' market reach beyond storage to application
performance management and server automation, VERITAS also completed the
recently announced acquisition of Ejasent, adding important application
virtualization technology to its utility computing portfolio. The company also
introduced CommandCentral Service(TM), a new utility computing product that
enables IT managers to define service levels for backup and recovery, and
track those metrics against changing business requirements.
During the quarter, VERITAS also introduced several new products and
releases in our traditional product areas, including:
-- VERITAS NetBackup 5.0 -- A major new version of our flagship enterprise
data protection software with advanced data protection functionality
and faster disk-based backup.
-- Desktop/Laptop Option -- Allows customers to automate the protection of
data on millions of corporate laptops and desktops, extending VERITAS'
leadership in backup and recovery to computers outside the central data
center and across the entire enterprise.
-- Data Lifecycle Manager -- To help CIOs better manage regulatory
compliance requirements, VERITAS Data Lifecycle Manager will extend the
strength of our existing data protection software stack to help
companies cope with data growth, compliance, data security, data
organization and resource utilization.
The Company will hold a conference call today at 2:00 p.m. Pacific Time,
5:00 p.m. Eastern Time, to review the results and business outlook. The
conference call will be available to all investors. The telephone dial-in
number for listen-only access to the live call is 913-981-5558, passcode:
203693. A live web cast will also be available at
www.veritas.com
, Investor
section. In addition, a replay will be available via audio Webcast at
www.veritas.com
, Investor section, beginning on Wednesday, January 28 at 4:00
p.m. Pacific Time until January 2005 and via telephone at 719-457-0820, replay
code: 203693.
About VERITAS Software
With revenue of $1.77 billion in 2003, VERITAS Software ranks among the
top 10 software companies in the world. VERITAS Software is the world's
leading storage software company, providing data protection, storage
management, high availability, disaster recovery, and application performance
management software to 99 percent of the Fortune 500. VERITAS Software's
corporate headquarters is located at 350 Ellis Street, Mountain View, CA,
94043, tel: 650-527-8000, fax: 650-527-8050, e-mail:
vx-sales@veritas.com
,
Web site:
www.veritas.com
.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning
of the Securities Act of 1933 and the Securities Exchange Act of 1934,
including statements relating to projections of future revenue and earnings,
the performance of our new product offerings and the continued positive
momentum in our business. These forward-looking statements involve a number
of risks and uncertainties, including: the risk that economic conditions
generally or IT spending specifically may decline and cause a reduction in
customer demand for our products and services; the risk that we will not gain
market acceptance of our products and services; the risk that we may lose
market share to existing or new competitors; the risk that general economic
conditions and our business will be adversely affected by acts of terrorism or
war; the risk that we will be unable to meet the current release schedule for
our new products; and the risk that we may not be able to manage our business
adequately in response to changing market conditions. These and other factors
could cause our actual results to differ materially from what we project in
our forward-looking statements. For more information regarding potential
risks, see the "Factors That May Affect Future Results" section of our most
recent quarterly report on Form 10-Q for the quarter ended September 30, 2003
and annual report on Form 10-K for the year ended December 31, 2002, which are
on file with the SEC. We undertake no obligation to update any
forward-looking statement to reflect events or circumstances after the date
hereof.
NOTE: VERITAS, the VERITAS Logo, i3, OpForce, and all other VERITAS
product names and slogans are trademarks or registered trademarks of VERITAS
Software Corporation. VERITAS, the VERITAS Logo, OpForce, Reg. U.S. Pat. & Tm.
Off. Other product names and/or slogans mentioned herein may be trademarks or
registered trademarks of their respective companies.
VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
Net revenue:
User license fees $308,986 $264,427 $1,114,731 $1,006,713
Services 203,894 141,305 656,332 499,842
Total net revenue 512,880 405,732 1,771,063 1,506,555
Cost of revenue:
User license fees 13,294 10,885 47,605 37,107
Services (1) 56,901 46,407 209,768 179,100
Amortization of developed
technology 4,888 16,654 35,267 66,917
Total cost of revenue 75,083 73,946 292,640 283,124
Gross profit 437,797 331,786 1,478,423 1,223,431
Operating expenses:
Selling and marketing (1) 165,642 129,303 549,761 505,039
Research and development (1) 80,535 71,125 302,466 273,192
General and
administrative (1) 38,214 38,542 153,665 141,446
Amortization of other
intangibles 2,354 18,016 35,249 72,064
In-process research and
development -- -- 19,400 --
Loss on disposal of assets -- 3,122 -- 3,122
Acquisition and
restructuring costs -- 100,263 -- 100,263
Total operating expenses 286,745 360,371 1,060,541 1,095,126
Income (loss) from operations 151,052 (28,585) 417,882 128,305
Interest and other income, net 10,335 5,029 46,681 42,509
Interest expense (5,616) (7,781) (30,401) (30,770)
Loss on extinguishment of debt -- -- (4,715) --
Loss on strategic investments - 3,003 (3,518) (11,799)
Income (loss) before income
taxes and cumulative change
in accounting principle 155,771 (28,334) 425,929 128,245
Provision for income taxes 50,430 21,028 145,488 70,869
Income (loss) before
cumulative change in
accounting principle 105,341 (49,362) 280,441 57,376
Cumulative change in accounting
principle, net of tax -- -- 6,249 --
Net income (loss) $105,341 $(49,362) $274,192 $57,376
Net income (loss) per share -
basic $0.25 $(0.12) $0.65 $0.14
Net income (loss) per share -
diluted $0.24 $(0.12) $0.63 $0.14
Shares used in per share
calculation - basic 428,010 411,773 420,754 409,523
Shares used in per share
calculation - diluted 444,914 411,773 434,446 418,959
(1) For the three months ended December 31, 2003, cost of services
revenue includes $55, selling and marketing includes $232, research
and development includes $515 and general and administrative includes
$37 of stock-based compensation expense. For the twelve months ended
December 31, 2003, cost of services revenue includes $125, selling
and marketing includes $479, research and development includes $1,560
and general and administrative includes $82 of stock-based
compensation expense. |
