PeopleSoft Announces Solid Results for the Third Quarter of 2002
Thursday October 17, 4:15 pm ET
PLEASANTON, Calif.--(BUSINESS WIRE)--Oct. 17, 2002--PeopleSoft, Inc. (Nasdaq:PSFT - News) today announced its third quarter 2002 results. For the quarter ended September 30, the Company reported license revenue of $122 million, in line with its guidance. Earnings per share were $0.14, above the Company's guidance of $0.13. Operating income from recurring operations increased to $63 million, a 5 percent improvement over the prior quarter. Operating margins from recurring operations as a percentage of revenue increased to 13.3 percent, up from 12.4 percent in Q2 2002.
The Company's cash and investment balances at September 30, 2002 were $1.8 billion. Cash flow from operations for the third quarter was $24 million. Days sales outstanding at September 30, 2002 remained an industry-leading 60 days.
Management Commentary
"PeopleSoft continues to deliver strong financial results at a time when many companies are struggling," said PeopleSoft President and CEO Craig Conway.
"In a difficult economy, organizations worldwide are choosing PeopleSoft applications to improve their operational efficiency," said Conway. "PeopleSoft's pure Internet applications enable customers to move their business processes on-line and dramatically reduce their costs.
"PeopleSoft's continued investment in product innovation is a key factor driving our performance," said Conway. "So far this year PeopleSoft has introduced more than 35 new products in Customer Relationship Management, Supply Chain Management, Financial Management, Human Capital Management, and Application Integration."
Customer Wins
PeopleSoft won significant deals against its competitors in the third quarter. New and existing customers that purchased PeopleSoft enterprise applications include: ABN AMRO, American National Red Cross, Boeing, Canada Life Assurance, Cedars-Sinai Health System, Corning, Citigroup, Credit Suisse, Duke Energy, FedEx, Florida University Consortium, French Ministry of Finance, Goodrich, Ingram Micro, Kaiser Permanente, Novell, McKesson, Michelin, Pfizer, Pernod Ricard, Safeway PLC, Spherion, Texas Children's Hospital, Toyota Motor Manufacturing, U.S. Department of Health and Human Services, and United States Navy.
Net Income Including Non-Recurring Items
The results for the third quarter of 2002 do not include any non-recurring items.
The reported results for the nine months ended September 30, 2002 include non-recurring acquisition-related charges of $11.5 million ($10.4 million after-tax) for purchased in-process research and development. The inclusion of these non-recurring charges in reported net income for the nine months ended September 30, 2002 decreases earnings per share by $0.03, from $0.42 to $0.39 per share.
The results for the third quarter of 2001 included two non-recurring items, a favorable adjustment to existing restructuring reserves of $2.2 million (no tax impact) and an acquisition related charge of $3 million ($1.8 million after-tax). The inclusion of these non-recurring items in reported net income for the third quarter 2001 increased earnings per share by $0.01, from $0.15 to $0.16 per share.
The reported results for the nine months ended September 30, 2001 included two non-recurring items, a favorable adjustment to existing restructuring reserves of $4.9 million (no tax impact) and acquisition related charges of $4.9 million ($3 million after-tax). The inclusion of these non-recurring items in reported net income for the nine months ended September 30, 2001 increased earnings per share by $0.01, from $0.41 to $0.42 per share.
About PeopleSoft
PeopleSoft (Nasdaq:PSFT - News) is the world's leading provider of application software for the real-time enterprise. PeopleSoft pure Internet software enables organizations to reduce costs and increase productivity by directly connecting customers, suppliers, partners and employees to business processes on-line, in real time. PeopleSoft's integrated, best-in-class applications include Customer Relationship Management, Supply Chain Management, Human Capital Management, Financial Management and Application Integration. Today more than 4,900 organizations in 140 countries run on PeopleSoft software. For more information, visit us at www.peoplesoft.com.
Note to Editors: PeopleSoft and the PeopleSoft logo are registered trademarks and Pure Internet Architecture is a trademark of PeopleSoft, Inc. All other company and product names may be trademarks of their respective owners.
Statements made in this press release that state the Company or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. The specific forward-looking statements relate to such matters as the current and expected technology spending and macro-economic environment, the Company's competitive position and the market acceptance of existing products and services, as well as those under development. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected. These risks, assumptions and uncertainties include: economic conditions in the U.S. and abroad; the ability to complete and deliver products and services within currently estimated time frames and budgets; the ability to achieve revenues from products and services that are completed or are currently under development; competitive and pricing pressures; and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission. Please refer to the Company's annual report to shareholders (Form 10-K) and subsequent filings on Form 10-Q for more information on the risk factors that could cause actual results to differ.
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per share data and employee count)
(unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- ---------------------
2002 2001 2002 2001
--------- --------- ---------- ----------
Revenues:
License fees $121,616 $151,763 $386,835 $471,346
Services 349,597 344,846 1,042,327 1,024,086
Development and other
services - 24,127 7,530 83,999
--------- --------- ---------- ----------
Total revenues 471,213 520,736 1,436,692 1,579,431
Costs and expenses:
Cost of license fees 11,484 12,022 33,103 46,523
Cost of services 159,369 180,491 495,058 561,202
Cost of development and
other services - 21,842 6,755 76,202
Sales and marketing
expense 127,641 126,009 378,373 383,629
Product development
expense 83,002 70,939 252,882 223,812
General and
administrative expense 27,209 40,940 84,851 116,484
Restructuring,
acquisition and other
charges - 750 11,479 12
--------- --------- ---------- ----------
Total costs and
expenses 408,705 452,993 1,262,501 1,407,864
--------- --------- ---------- ----------
Operating income 62,508 67,743 174,191 171,567
Other income, net 5,607 7,751 21,324 29,810
--------- --------- ---------- ----------
Income before provision for
income taxes 68,115 75,494 195,515 201,377
Provision for income taxes 23,500 25,149 70,336 67,593
--------- --------- ---------- ----------
Net income $44,615 $50,345 $125,179 $133,784
========= ========= ========== ==========
Basic income per share $0.14 $0.17 $0.40 $0.45
========= ========= ========== ==========
Shares used in basic per
share computation 312,214 302,153 310,231 296,036
========= ========= ========== ==========
Diluted income per share $0.14 $0.16 $0.39 $0.42
========= ========= ========== ==========
Shares used in diluted per
share computation 315,367 322,323 321,060 322,199
========= ========= ========== ==========
SEPTEMBER 30, DECEMBER 31,
2002 2001
------------ ------------
Assets:
Current assets:
Cash and cash equivalents $311,651 $433,700
Short-term investments 1,385,358 1,199,046
Accounts receivable, net 315,367 375,437
Income taxes receivable 34,092 7,288
Deferred tax assets 48,627 58,088
Other current assets 50,067 59,309
----------- -----------
Total current assets 2,145,162 2,132,868
Property and equipment, net 225,501 214,162
Investments 66,732 40,587
Deferred tax assets 115,218 94,932
Capitalized software, net 48,312 16,213
Other assets 75,083 49,243
----------- -----------
$2,676,008 $2,548,005
=========== ===========
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable and accrued liabilities $146,756 $181,761
Accrued compensation and related expenses 148,838 184,237
Income taxes payable 18,046 6,236
Convertible debt - 57,000
Short-term deferred revenues 391,984 409,316
----------- -----------
Total current liabilities 705,624 838,550
Long-term deferred revenues 93,138 98,025
Other liabilities 20,857 19,490
Stockholders' equity:
Common stock 3,137 3,068
Additional paid-in capital 1,354,017 1,226,155
Retained earnings 542,393 417,214
Treasury stock (35,543) (35,414)
Accumulated other comprehensive loss (7,615) (19,083)
----------- -----------
1,856,389 1,591,940
----------- -----------
$2,676,008 $2,548,005
=========== ===========
Worldwide employee count 8,343 8,436
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Contact:
PeopleSoft Inc.
Lori Varlas, 877/528-7413 (Investor Relations)
lori_varlas@peoplesoft.com
Steve Swasey, 925/694-5230 (Public Relations)
or 925/899-8108 (cell)
steve_swasey@peoplesoft.com
Lorna Fernandes, 925/694-5451 (Public Relations)
lorna_fernandes@peoplesoft.com
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Source: PeopleSoft Inc. |
