SWCM ( +27 @ $186) $37.6M for Third Quarter 2000
Company Achieves 27% Sequential Revenue Growth
Posts Profitable Quarter
Merger with Phone.com, Inc. Expected to Close Next Month, Creating the Leading Provider of Software for Communications Service Providers Worldwide
SANTA BARBARA, Calif.--(BUSINESS WIRE)--Oct. 18, 2000-- Software.com, Inc., (Nasdaq:SWCM - news), a leading developer of carrier-scale Internet infrastructure software for communications service providers worldwide, today announced record financial results for the third quarter and nine months ended September 30, 2000.
For the third quarter ended September 30, 2000, Software.com reported total revenue of $37.6 million, an increase of 196 percent over revenue of $12.7 million for the same quarter last year, and 27 percent over revenue of $29.5 million reported in the second quarter ended June 30, 2000. Excluding acquisition-related costs, the Company reported net income of $7.4 million, or $0.13 per share on a diluted basis, versus a net loss of $2.8 million, or a $0.07 loss per share for the same quarter last year.
For the nine months ended September 30, 2000, Software.com reported total revenue of $87.3 million, an increase of 185 percent over revenue of $30.7 million for the same period last year. Excluding acquisition-related costs, the Company reported net income of $11.3 million, or $0.20 per share on a diluted basis, versus a net loss of $10.8 million, or a $0.32 loss per share for the same period last year.
``I am very proud that in our last quarter before our proposed merger with Phone.com, our employees remained focused and achieved both record revenues and improved profitability,'' said Software.com Founder and Chief Executive Officer John L. MacFarlane. ``It is gratifying that our carrier customers continued to show their faith in our people and products and gave their approval of the pending merger by licensing record amounts of our carrier-scale infrastructure software.''
Including acquisition-related costs in accordance with generally accepted accounting principles (GAAP), net income for the second quarter was $499,000, or $0.01 per share on a basic and diluted basis versus a net loss of $2.8 million, or a $0.07 loss per share for the same quarter last year. For the nine months ended September 30, 2000, the company reported a net loss of $13.4 million, or $0.28 loss per share on a basic and diluted basis, versus a net loss of $10.8 million, or a $0.32 loss per share for the same period last year.
Software.com® Directory is Launched
``During the third quarter we announced general availability of the Software.com® Directory, our carrier-scale LDAP Directory,'' said MacFarlane. ``With the proven reliability and scalability of the Software.com Directory, our leading wireless and wireline carrier customers can drive down the total cost-of-ownership and quickly deploy new IP-based applications, which increase their revenue and strengthen their subscriber loyalty.''
Licensed Seats Now Exceed 134 Million
``As our carrier customers continue to benefit from the global growth of the Internet, we've seen our installed base of licensed and activated seats grow to more than 134 million and over 83 million, respectively, at the end of the third quarter,'' said MacFarlane.
``Our products' unique scalability again was demonstrated as we ended the third quarter with 28 customers having licensed more than 1 million seats each and 11 of that group having activated over 1 million seats each. Our scalability has proven to be a unique differentiator as we sell to our communication service provider customers the carrier-scale infrastructure software required to build applications such as mobile mail and unified messaging.''
Stockholder Vote on Phone.com Merger set for November 17, 2000
The Company recently announced that stockholders of record as of the close of business on September 25, 2000 will be entitled to vote on the adoption of the merger agreement between Phone.com and Software.com. Software.com will hold a special stockholders meeting on November 17, 2000 at which Software.com stockholders will vote on approval of the merger agreement and the Company expects that the merger will close shortly after anticipated stockholder approval.
Software.com - The Internet Infrastructure Company®
With more than 134 million seats licensed, Software.com (Nasdaq:SWCM - news) is a leading supplier of carrier-scale Internet infrastructure software for Communications Service Providers worldwide. Software.com provides the scalable platform that enables service providers to deploy next-generation business and consumer Internet services; including email, IP unified messaging, mobile mail and mobile instant messaging.
Customers comprise many of the largest service providers worldwide, including: AT&T Canada, AT&T WorldNet® Service, ALLTEL, Bell South, Excite@Home, GTE.net Services, iBasis, Japan Telecom, Phone.com, PSINet, Road Runner, Sprint PCS, Telecom Italia Net (Tin.it) and Telecom Italia Mobile SpA (TIM). In addition, Software.com has established strategic relationships with Cisco Systems, Hewlett-Packard, IBM, Nortel Networks and Telcordia Technologies (formerly Bellcore). Founded in 1993 and headquartered in Santa Barbara, Calif., the company maintains offices throughout the U.S., Europe and Asia. Software.com can be reached in the U.S. at 805-882-2470 or www.software.com.
Note to Investors
Except for historical information, the matters discussed in this release are forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause or contribute to such differences include the risk factors discussed in the company's filings with the U.S. Securities and Exchange Commission (SEC), including but not limited to Software.com's Annual Report on Form 10-K for the year ended December 31, 1999, the Form 10-Q for the quarter ended June 30, 2000 and the registration statement on Form S-4 filed by Phone.com, Inc. for our proposed merger with Phone.com, Inc as declared effective on October 12, 2000. Copies of these documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov. The Company assumes no obligation to update the forward-looking statements included in this document.
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Software.com, Inc.
Condensed Consolidated Statements of Operations
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues:
Software licenses $ 26,860 $ 6,871 $ 60,479 $ 17,156
Services 10,784 5,840 26,777 13,507
-------- -------- -------- --------
Total revenues 37,644 12,711 87,256 30,663
Cost of revenues:
Software licenses 815 860 2,143 2,002
Services 7,495 3,837 19,552 9,660
-------- -------- -------- --------
Total cost of revenues 8,310 4,697 21,695 11,662
-------- -------- -------- --------
Gross profit 29,334 8,014 65,561 19,001
Operating expenses:
Sales & marketing 11,388 5,092 27,073 13,341
Research & development 7,976 4,261 20,627 11,046
General & administrative 3,857 2,266 9,635 5,341
Stock based compensation
- acquisition related 959 -- 4,606 --
Amortization of
goodwill and
purchased
intangible assets 5,696 -- 7,411 --
Purchased in-process
research and
development -- -- 2,000 --
Acquisition-related costs 266 -- 10,660 --
Legal assessment -- -- -- (200)
-------- -------- -------- --------
Total operating expenses 30,142 11,619 82,012 29,528
-------- -------- -------- --------
Loss from operations (808) (3,605) (16,451) (10,527)
Interest and other
income (expense), net 1,375 770 3,494 281
-------- -------- -------- --------
Income (loss) before
income taxes 567 (2,834) (12,957) (10,246)
Provision for
income taxes (68) (9) (424) (156)
-------- -------- -------- --------
Net income (loss) 499 (2,844) (13,381) (10,402)
Accretion on redeemable
convertible preferred
stock -- -- -- (403)
-------- -------- -------- --------
Net income (loss)
applicable to common
stockholders $ 499 $ (2,844) $(13,381) $(10,805)
======== ======== ======== ========
Basic net income
(loss) per share $ 0.01 $ (0.07) $ (0.28) $ (0.32)
======== ======== ======== ========
Weighted average
shares of common
stock outstanding
used in computing
basic net income
(loss) per share 49,517 41,299 46,976 33,683
======== ======== ======== ========
Diluted net income
(loss) per share $ 0.01 $ (0.07) $ (0.28) $ (0.32)
======== ======== ======== ========
Weighted average
shares of common stock
outstanding used
in computing
diluted net
income (loss)
per share 57,853 41,299 46,976 33,683
======== ======== ======== ========
Net income (loss)
excluding acquisition
related costs $ 7,420 $ (2,844) $ 11,296 $(10,805)
======== ======== ======== ========
Diluted net income
(loss) per share
excluding
acquisition
related costs $ 0.13 $ (0.07) $ 0.20 $ (0.32)
======== ======== ======== ========
Weighted average
shares of common stock
outstanding used in
computing diluted
net income
(loss) per share 57,853 41,299 55,600 33,683
======== ======== ======== ========
Software.com, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
Sept. 30, Dec. 31,
2000 1999
----------------------------------
Assets
Current assets:
Cash and cash equivalents $ 47,748 $ 47,175
Short-term investments 39,285 25,748
Accounts receivable, net 49,052 23,054
Prepaid expenses and other
current assets 8,000 1,974
--------- ---------
Total current assets 144,085 97,951
Property and equipment, net 9,988 5,302
Goodwill and intangibles, net 64,164 8,048
Deposits and other assets 797 591
--------- ---------
Total assets $ 219,034 $ 111,892
========= =========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 4,745 $ 3,423
Accrued liabilities 10,934 5,878
Deferred revenue 22,875 10,488
Current portion of
capital lease obligations
and long-term debt 363 1,183
--------- ---------
Total current liabilities 38,917 20,972
Capital lease obligations and
long-term debt,
less current portion 5 5,756
Shareholders' equity:
AtMobile convertible
preferred stock - Series A, B & C -- 12,969
Common stock 241,265 120,053
Deferred compensation (1,216) (1,673)
Employee stock loan (361) --
Unrealized loss on investments (16) (6)
Accumulated deficit (59,560) (46,179)
--------- ---------
Total shareholders' equity 180,112 85,164
--------- ---------
Total liabilities and
shareholders' equity $ 219,034 $ 111,892
========= =========
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Contact:
Software.com, Inc.
Laura McCormick, 805/882-2470 ext. 225 (Media)
Mike Musson, 805/882-2470 ext. 289 (Investors)
or
Fitzgerald Communications
Nicole Maloney, 415/677-0211
nmaloney@fitzgerald.com |
