>>New York, New York, Oct 26, 2001 (Market News Publishing via COMTEX) -- Peregrine Systems, Inc., one of the world's leading software companies, released results for the fiscal second quarter ended September 30. Total revenues for the quarter were a record $175.0 million, an increase of 23 percent from the $142.7 million reported in the second quarter of fiscal 2001. Net income, excluding acquisition costs and other charges, was $8.4 million, or $.05 diluted earnings per share, compared with $18.3 million, or $.12 diluted earnings per share, in the second quarter of fiscal 2001.
"While these results were disappointing relative to our original expectations, we met several major milestones in improving upon our overall position in the markets we serve. These included completion of the Remedy acquisition, a new strategic partnership with Geac Computer Corp. for distribution and integration of our products, and an OEM agreement with BEA Systems for our e-Business data transformation technology," stated Steve Gardner, Peregrine's chairman and CEO.
"While the macroeconomic environment remains relatively weak throughout our major markets, we are seeing signs that customers are once again willing to purchase software that provides a measurable return within a reasonable timeframe. Peregrine is well positioned to succeed in this environment. Our products offer significant return on investment, and the breadth and modularity of our offerings allow us to tailor our solutions to meet specific customer requirements and rollout schedules," added Gardner.
Six Month Results
For the six months ended September 30, total revenues were $347.1 million, compared with $237.0 million in the same period of fiscal 2001. Net income, excluding acquisition costs and other charges, was $27.9 million, or $.16 per diluted share, compared with $30.4 million, or $.22 per diluted share, for the first six months of fiscal 2001.
Impact of Acquisition and Other Charges
Including acquisition costs and other charges, the company posted a loss of $522.2 million, or $2.91 loss per diluted share, in the second quarter of fiscal 2002. This compares with a loss of $82.8 million, or $.55 loss per diluted share, for the second quarter of fiscal 2001. The company's reported net loss for the current quarter included charges of $530.6 million for costs associated with the acquisition of Remedy Corp., the write-down of goodwill and certain other intangible assets associated with past acquisitions, as well as amortization of acquired intangible assets. The majority of these charges were noncash in nature and the company ended the quarter with cash, cash equivalents and short-term investments of $142 million, net of $150 million in short-term financing associated with the Remedy acquisition.
Recent Business Highlights
In addition to the milestones outlined above, the following were either announced or occurred since Peregrine's last earnings release:
-- The launch of Xanadu(TM), a revolutionary IT asset management
appliance that sets a new standard of simplicity and ease of
deployment and operation for managing networked IT assets. Xanadu
provides a unified solution to identify, track and manage IT assets,
as well as provide employee self-service functionality. Targeted at
small-to-midsize businesses and departments of larger organizations,
Xanadu is an entirely new approach to the market, which can be
offered either as a hosted service -- or as an appliance installed on
the customer's network.
-- A new alliance with e-Security, Inc., the leading provider of
real-time threat management software, to develop solutions that
integrate security and incident response seamlessly into Peregrine's
Infrastructure Management solutions.
-- A special offer to Computer Associates users to receive additional
licenses of Peregrine's AssetCenter(R) and InfraTools(TM) Automated
Inventory products at no charge when purchasing introductory
packages of these products.
-- The reorganization of the company into a single entity with business
groups focused on Solutions, Customer Relationships and the Xanadu
platform. The new organization will allow the company to better
leverage investments in product delivery, marketing, and customer
relationships, and reduce costs through the elimination of duplicate
functions among the former independent businesss units.
"Looking to the future, we remain cautiously optimistic as we continue to extend both the reach and depth of our offerings," said Gardner. "Peregrine is in the early phases of an important new product cycle, beginning with today's announcement of the Xanadu platform for small-to-midsize businesses, and the upcoming release of Business Integration Suite as part of our business-to-business integration solutions. This will be one of our most significant periods for new products, as we also will be launching new releases of our ServiceCenter(R) and AssetCenter products and the exciting new Web-based Action Request System(R) 5.0 within the next few months. At the same time, we remain focused on the priorities I outlined on Oct. 3, including realistic expense management and generating cash from operations. We have the financial strength, breadth of product and management talent to emerge from this economic cycle as the vendor of choice for businesses seeking to maximize return from their assets, their employees, and their business relationships by removing friction from their business processes through the use of our software and services," Gardner added.
Second Quarter Conference Call
Management has scheduled a conference call to discuss the second quarter results on October 24, 2001 at 2 p.m., Pacific Daylight Time (5 p.m. Eastern Daylight Time). The call will be available via webcast at www.peregrine.com/investor or by dialing (415) 247-8503, passcode 19605350. A replay of the call will be available through Nov. 7 by dialing (800) 633-8284 or (858) 812-6440, passcode 19605350. Additionally, the webcast will be archived on the company's Web site through Nov. 24.
About Peregrine
Founded in 1981, Peregrine provides solutions that enable companies to manage infrastructure, as well as extend next generation e-Business capabilities inside the enterprise and across the firewall. As one of the world's largest software companies, Peregrine helps companies achieve a state of frictionless business and gain competitive advantage. Its solutions reduce costs, improve profitability and release capital, generating a lasting and measurable impact on the productivity of assets and people.
Peregrine delivers Infrastructure Management solutions that manage the entire lifecycle of an organization's assets, from IT equipment and fleets of vehicles to telecom and facility assets. Peregrine's Employee Relationship Management solutions facilitate proactive management and empower employees with anytime/anywhere access to these enterprise resources, services and knowledge, and improve productivity, asset utilization, and real-time business intelligence. Peregrine's Business Relationship Management solutions help companies establish a digital dialog for conducting e-Business by automating and integrating the flow of information and business processes among buyers, suppliers and e-Marketplaces.
BusinessWeek recently named Peregrine as one of the 100 best performing IT companies. Headquartered in San Diego, Calif., Peregrine currently has some 4,000 employees located in more than 100 offices worldwide, and its customers include 92 percent of the Fortune 500 companies. For more information, visit Peregrine's Web site at www.peregrine.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements regarding the expectations, beliefs, plans, intentions and strategies of Peregrine. These statements relate to expectations about future events or results and are based upon information available to Peregrine as of today's date. These forward-looking statements are not guarantees of the future performance of Peregrine and actual results may vary materially from the results and expectations discussed in this press release or in any other forward-looking statements made by or on behalf of the Company. Peregrine's business and financial results are subject to numerous risks, including, among others, (1) our revenues and operating results are subject to a number of risk factors, including substantial variability in quarter-to-quarter revenues and long sales cycles, that make estimation of operating results prior to the end of a quarter extremely uncertain; (2) the current downturn in technology capital spending, if it continues, could have an adverse affect on our future revenues and operating results; (3) competition for our products is intense; (4) we have completed a number of acquisitions in the last few years, including the recent and substantial acquisition of Remedy Corporation, and may complete additional acquisitions, each of which poses unique business and integration risks; (5) additional acquisition or financing activities could result in dilution to our stockholders; and (6) litigation in our industry over intellectual property rights is common, and as our business and product portfolio expand, we expect to become increasingly subject to intellectual property claims. In addition, the September 11, 2001 terrorist attacks in New York and Washington, and any resulting actions by the United States and its allies, have created substantial economic and political uncertainties that could have an adverse effect on our business. The risks affecting our business are described in more detail in our Annual Report on Form 10-K for the fiscal year ended March 31, 2001, our subsequent quarterly reports on Form 10-Q, and other current and future filings with the Securities and Exchange Commission. We encourage investors in Peregrine common stock to read this information carefully.
Peregrine Systems, AssetCenter and ServiceCenter are registered trademarks and Xanadu and InfraTools are trademarks of Peregrine Systems, Inc. Action Request System is a registered trademark of Peregrine Remedy, Inc. All other trademarks are the property of their respective owners.
PEREGRINE SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
September 30, September 30,
Fiscal Fiscal % Fiscal Fiscal %
2002 2001 Chg 2002 2001 Chg
(unaudited)(unaudited) (unaudited)(unaudited)
Revenues:
Licenses $87,877 $87,395 1% $188,076 $149,837 26%
Services 87,129 55,320 58% 158,974 87,202 82%
Total
revenues 175,006 142,715 23% 347,050 237,039 46%
Costs and expenses:
Cost of licenses 1,582 532 197% 2,202 1,010 118%
Cost of services 43,859 30,670 43% 79,510 47,568 67%
Sales and
marketing 71,633 52,265 37% 139,136 89,964 55%
Research and
development 29,187 18,471 58% 53,674 31,312 71%
General and
administrative 14,613 13,477 8% 29,076 21,922 33%
Total costs
and expenses 160,874 115,415 39% 303,598 191,776 58%
Income from
operations
excluding
acquisition costs
and other charges 14,132 27,300 (48%) 43,452 45,263 (4%)
Acquisition costs
and other charges 530,615 101,137 617,581 208,337
Loss from
operations
before interest
(net) and income
tax expense (516,483) (73,837) (574,129) (163,074)
Interest income
(expense), net (1,802) 8 (2,386) 83
Loss from
operations before
income tax
expense (518,285) (73,829) (576,515) (162,991)
Income tax expense 3,946 9,001 13,142 14,964
Net loss $(522,231) $(82,830) $(589,657) $(177,955)
Net income (loss)
per share - basic:
Excluding
acquisition costs
and other charges $0.05 $0.13 (62%) $0.17 $0.24 (29%)
Acquisition costs
and other charges
(net of taxes) (3.11) (0.71) (3.74) (1.63)
Net loss per
share - basic $(3.06) $(0.58) $(3.57) $(1.39)
Shares used in
computing earnings
per share 170,658 142,105 164,974 128,340
Net income (loss)
per share - diluted:
Excluding
acquisition costs
and other charges $0.05 $0.12 (58%) $0.16 $0.22 (27%)
Acquisition costs
and other charges
(net of taxes) (2.96) (0.67) (3.53) (1.51)
Net loss per
share - diluted $(2.91) $(0.55) $(3.37) $(1.29)
Shares used in
computing earnings
per share 179,768 151,724 174,904 137,994
Note 1: Excluding acquisition costs and other charges, net income for
the three and six months ended September 30 for fiscal years
2002 and 2001 is $8,384, $27,924, $18,307, and $30,382,
respectively. Refer to additional disclosure on following page.
Note 2: Acquisition costs and other charges is comprised of acquired
in-process research and development costs, goodwill, other
intangible assets and deferred compensation amortization and
other costs.
PEREGRINE SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
The impact of acquisition costs and other related charges per share, on
a diluted basis, is as follows (unaudited):
Three Months Ended Six Months Ended
September 30, 2001 September 30, 2001
Fiscal 2002 Fiscal 2002
As adjusted* Unadjusted As adjusted* Unadjusted
Income (loss) from
operations before
income tax expense $12,330 $(518,285) $41,066 $(576,515)
Income tax expense 3,946 3,946 13,142 13,142
Net income (loss) $8,384 $(522,231) $27,924 $(589,657)
Net income (loss)
per share - diluted $0.05 $(2.91) $0.16 $(3.37)
Shares used in computing
diluted earnings (loss)
per share 179,768 179,768 174,904 174,904
Three Months Ended Six Months Ended
September 30, 2000 September 30, 2000
Fiscal 2001 Fiscal 2001
As adjusted* Unadjusted As adjusted* Unadjusted
Income (loss) from
operations before
income tax expense $27,308 $(73,829) $45,346 $(162,991)
Income tax expense 9,001 9,001 14,964 14,964
Net income (loss) $18,307 $(82,830) $30,382 $(177,955)
Net income (loss)
per share - diluted $0.12 $(0.55) $0.22 $(1.29)
Shares used in computing
diluted earnings (loss)
per share 151,724 151,724 137,994 137,994
* As adjusted -- Presented as net income before acquisition costs and
other charges.
PEREGRINE SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands)
September 30, March 31,
Fiscal 2002 Fiscal 2001
(unaudited) (audited)
Assets
Current assets:
Cash, cash equivalents and
short-term investments $291,600 $286,658
Accounts receivable, net of allowance
for doubtful accounts of $12,216
and $11,511, respectively 219,887 180,372
Other current assets 72,828 62,811
Total current assets 584,315 529,841
Property and equipment, net 104,441 82,717
Intangible assets and other, net 1,845,676 1,391,208
Total assets $2,534,432 $2,003,766
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $40,199 $36,024
Accrued expenses 230,163 200,886
Deferred revenue 137,325 86,653
Current portion of long-term debt 150,325 1,731
Total current liabilities 558,012 325,294
Deferred revenue, net of current portion 15,068 8,299
Other long-term liabilities 12,597 17,197
Long term-debt, net of current portion 263,308 263,211
Total liabilities 848,985 614,001
Stockholders' equity 1,685,447 1,389,765
Total liabilities and
stockholders' equity $2,534,432 $2,003,766<<
snip
Cheers, Tuck |
