7/19...MUSE..Reports 113% Revenue Growth for Q3 2000
Pro Forma Earnings Surge 70% Over Q3 1999 to $4.0 Million
SAN FRANCISCO--(BUSINESS WIRE)--July 19, 2000--Micromuse Inc. (Nasdaq: MUSE - news), the leading provider of fault and service-level management software, today announced record financial results for its 3rd fiscal quarter ended June 30, 2000. Revenues for the quarter were a record $32.9 million, representing a 113% increase over the comparable quarter of fiscal 1999. Pro forma earnings for the quarter, excluding the amortization of goodwill and purchased intangible assets, were $4 million, or $0.10 per share on a diluted basis, as compared with reported earnings of $2.4 million, or $0.07 per share on a diluted basis, in the 3rd quarter of fiscal 1999.
``Without a doubt, our strong service provider focus and continued execution were key ingredients in driving us to another record quarter,'' said Greg Brown, Chairman & CEO of Micromuse. ``We were able to capitalize on the continued expansion of the service provider segment and the accompanying increase in capital spending in the market space. These factors played to our strengths, propelling us forward to achieve a record number of new customers during the quarter. We also benefited from our ability to foster repeat business from existing customers. In addition, we launched several new NETCOOL® applications which expanded our reach within our target markets.''
Micromuse's 3rd quarter results revealed continued growth in each of its target markets, including telecommunications and Internet service providers, cable TV operators, and corporate enterprises. The company also continued to yield successful results from its vertical market initiatives, which includes focused efforts on eBusiness, Broadband/Digital Subscriber Line (DSL), and Wireless Applications Protocol (WAP).
The 3rd quarter included the following highlights:
Revenues from service provider customers were 81% of revenue.
European revenues were a record $11.4 million, representing 35% of total revenues.
Profitable operations enabled cash, cash equivalents and investments to increase by $9 million to a record $101 million.
61% of revenues were Internet related.
Increased activity from OEMs, systems integrators and resellers, with a record 75 channel partners contributing to revenue in the quarter. Sales through channel partners were 42% of total revenue.
Days' Sales Outstanding improved to a best-ever 41 days as of June 30, 2000.
For the second consecutive quarter, sequential license revenue growth exceeded 20%.
The on-schedule availability of the company's root-cause analysis and auto-discovery software application, Netcool/Precision(TM).
The general availability of Netcool/OMNIbus for Voice Networks(TM), underscoring Micromuse's continued commitment to meet the needs of the dynamic voice market. Already installed at more than 20 customer sites, the application includes new administrative components and a new suite of sophisticated Netcool software managers for large-scale voice switches.
The total number of companies that have applied for membership in the Micromuse Developers Alliance surpassed 200, indicating the increasing demand for solutions that integrate with the Netcool suite.
With the June acquisition of NetOps Inc., which closed yesterday, Micromuse established an immediate presence in the emerging market for realtime network problem diagnosis.
Net income for the quarter, including the amortization of goodwill and purchased intangible assets, was $2.4 million or $0.06 cents per share on a diluted basis, as compared with reported net income of $2.4 million, or $0.07 per share, in the third quarter of fiscal 1999.
About Micromuse
Micromuse Inc. (Nasdaq: MUSE - news) is the leading provider of fault and service-level management software. Micromuse was named one of the Top 25 Best Performers in the Wall Street Journal's Shareholder Scoreboard, and has recently been recognized in the Forbes 500, Business Week's Info Tech 100, Bloomberg's Top 100 Stocks, Barron's 500, and the San Francisco Chronicle 500. Micromuse customers include AirTouch, AT&T, BT, Cable & Wireless, Cellular One, Charles Schwab, Deutsche Telekom, Digex, EarthLink, GTE, ICG Communications, ITC^DeltaCom, MCI Worldcom, NextLink, and a number of financial investment concerns. Headquarters are located at 139 Townsend Street, San Francisco, Calif. 94107; (415) 538-9090. The Web site is at www.micromuse.com.
Netcool is a registered trademark of Micromuse. All other trademarks and registered trademarks in this document are the properties of their respective owners. Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties.
The factors that could cause actual future results to differ materially from the forward-looking statements include the following: fluctuations in customer demand, the Company's ability to manage its growth (including the ability to hire sufficient sales and technical personnel), the risks associated with the expansion of the Company's distribution channels, the risk of new product introductions and customer acceptance of new products; the rapid technological change which characterizes the Company's markets, the risks associated with competition, the risks associated with international sales as the Company expands its markets, and the ability of the Company to compete successfully in the future, as well as other risks identified in the Company's Securities and Exchange Commission Filings, including but not limited to those appearing under the caption ``Risk Factors'' in the Company's most recent Quarterly Reports on Form 10-Q and on Form 10-K on file with the Securities and Exchange Commission and available on the Company's Web site.
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MICROMUSE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
ASSETS
June 30, September 30,
2000 1999
Current assets:
Cash and cash equivalents $ 82,083 $ 35,058
Short-term investments 18,466 34,689
Accounts receivable, net 14,960 9,613
Prepaid expenses and other current assets 4,959 3,871
Deferred income taxes 359 359
Total current assets 120,827 83,590
Property and equipment, net 8,584 5,984
Deferred income taxes 1,031 1,031
Goodwill and purchased intangible assets, net 28,516 --
$ 158,958 $ 90,605
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,734 $ 4,210
Accrued expenses 15,021 4,798
Income taxes payable 2,539 1,919
Deferred revenue 20,924 9,672
Total current liabilities 41,218 20,599
Stockholders' equity:
Preferred stock; $0.01 par value;
5,000 shares authorized no shares
issued and outstanding -- --
Common stock; $0.01 par value;
60,000 shares authorized;
34,600 and 32,326 shares outstanding
as of June 30, 2000 and
September 30, 1999, respectively 346 323
Additional paid-in capital 126,700 73,586
Deferred compensation (61) (103)
Accumulated other comprehensive losses (1,110) (286)
Accumulated deficit (8,135) (3,514)
Total stockholders' equity 117,740 70,006
$ 158,958 $ 90,605
MICROMUSE INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding Purchased In-Process R&D and Amortization of Goodwill and
Purchased Intangible Assets
(In thousands, except per share data)
Three months ended Nine months ended
June 30, June 30,
2000 1999 2000 1999
Revenues:
License $ 24,167 $ 11,568 $ 60,619 $ 29,860
Maintenance and services 8,765 3,854 21,783 9,014
Total revenues 32,932 15,422 82,402 38,874
Cost of revenues:
License 1,362 601 3,272 1,768
Maintenance and services 4,233 1,974 10,739 4,783
Total cost of revenues 5,595 2,575 14,011 6,551
Gross profit 27,337 12,847 68,391 32,323
Operating expenses:
Sales and marketing 14,628 7,450 36,292 18,785
Research and development 4,879 2,583 12,459 6,412
General and administrative 3,050 1,466 7,680 4,284
Executive recruiting costs -- -- -- 720
Total operating expenses 22,557 11,499 56,431 30,201
Income from
operations 4,780 1,348 11,960 2,122
Other income, net 1,628 1,279 3,387 2,987
Income before income taxes 6,408 2,627 15,347 5,109
Income tax provision (benefit) 2,371 250 5,678 (635)
Net income $ 4,037 $ 2,377 $ 9,669 $ 5,744
Per share data:
Basic net income $ 0.12 $ 0.07 $ 0.28 $ 0.18
Diluted net income $ 0.10 $ 0.07 $ 0.25 $ 0.17
Weighted average shares
used in computing:
Basic net income per share 34,471 31,822 34,057 31,708
Diluted net
income per share 39,221 34,902 39,058 34,378
PRO FORMA ONLY
The above pro forma amounts for the quarter and nine months ended
June 30, 2000 have been adjusted to eliminate the write-off of
purchased in-process R&D and amortization of goodwill and purchased
intangible assets.
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Contact:
Micromuse Inc.
Investor relations contact:
David Wise, 415/538-9090
Senior Vice President, Finance & I.R.
david.wise@micromuse.com
or
Micromuse Inc.
Media relations contact:
Evan Birkhead, 917/344-7045
Vice President, Marketing
evan.birkhead@micromuse.com
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