Remedy Earnings Out EPS up 107%
October 17, 1996
Remedy Corporation Reports Record 1996 Third Quarter Results
Revenue, Earnings Per Share More Than Double
MOUNTAIN VIEW, Calif., Oct. 17, 1996 -- Remedy Corporation(TM) (Nasdaq:
RMDY), announced today record revenues and net income for the third
quarter and the first nine months of 1996.
Revenues for the third quarter ended September 30, 1996 grew 106% to
$21.0 million, compared with $10.2 million in the 1995 third quarter.
Net income increased 111% to $4.4 million in the third quarter of 1996
from the comparable period last year. Earnings per share for the third
quarter were $0.29 versus $0.14 for the third quarter of 1995, an
increase of 107%. Weighted average shares outstanding for the third
quarter of 1996 increased 3% to 14.9 million compared with the third
quarter of 1995.
For the nine months ended September 30, 1996 revenues grew 104%, to
$51.0. Net income for the nine months of 1996 increased 121% to $10.0
million compared with the first nine months of last year, while earnings
per share increased 103% to $0.67 from $0.33. Weighted average shares
outstanding for the nine months of 1996 increased 10% to 14.9 million.
"As noted in our preliminary release at the beginning of October, we are
very pleased with the strength of our business during the quarter,"
remarked Larry Garlick, Remedy's Chairman and Chief Executive Officer.
"Our growth continued to be fueled by strong acceptance of new products,
increasing contribution from major accounts and growing penetration of
international markets. Our international business contributed 36% of
revenue over the past nine months."
Remedy extended its market leadership for the internal help desk
industry during the third quarter, adding more than 350 sites and more
than 200 customers to reach a total of over 3000 sites and 1600
customers worldwide.
George de Urioste, Remedy's Vice President and Chief Financial Officer
observed, "The third quarter exceeded our expectations. Gross margin
improvements in both licenses and services positively influenced
operating profitability, and our productivity continues to improve."
Operating margin for the 1996 third quarter achieved a new high of 30%,
up from 25% in last year's third quarter. For the nine months ended
September 30, 1996, annualized revenue reached $246,000 per employee
versus $202,000 compared to the same period of 1995."
A number of significant events occurred at Remedy in the third quarter:
* Remedy extended its Web based help desk leadership position in the
third quarter by shipping ARWeb 1.1, an enhanced release of the
industry's first Web enabled help desk product. Remedy is viewed as the
leader by the industry press, analyst and user communities as
demonstrated in the coverage received in the quarter. InfoWorld, PCWeek,
WebServer Magazine and Network World all covered how Remedy customers
are using ARWeb to streamline their business processes.
* Boeing has selected Remedy's Action Request System to provide help
desk support for the deployment of its enterprise systems management
solution.
* A major telecom vendor added their 10,000th registered user for the
Action Request System.
* On October 1, 1996 Remedy announced a two-for-one stock split of the
Company's outstanding shares of common stock for stockholders of record
on October 14, 1996. The stock split will be distributed in the form of
a stock dividend, effective October 25, 1996.
* Two new offices opened during the third quarter. Remedy Customer
Services moved to a new location in Pleasanton, California, on September
16, 1996, while Remedy Singapore opened its doors on September 3, 1996.
This announcement may contain forward-looking statements that involve
risks and uncertainties. The Company's actual results may differ
materially from the results described in such statements. Factors that
might cause such a difference include, but are not limited to, those
discussed in the "Risk Factors" section of the Company's Report on Form
10-K filed with the Securities and Exchange Commission in March, 1996, a
copy of which is available on request from the Investor Relations
department of the Company.
About Remedy Corporation
Founded in 1990, Remedy develops, markets and supports adaptable,
client/server applications software to automate support and business
processes. Remedy's AR System is used primarily as an internal help desk
application for tracking and resolving support requests and problems in
PC, UNIX and Windows NT computing environments. Its versatility allows
customers to use the AR System for many other support and business
processes, from change and asset management to bug tracking, sales
tracking and recruiting management. With headquarters in Mountain View,
California, Remedy also operates offices in Washington, D.C., New
Jersey, London, Paris and Singapore. Remedy's products are distributed
worldwide through its direct sales force, complemented by selected VARs,
system integrators and OEMs. The Company has licensed its software to
more than 1600 customers at over 3000 sites in 35 countries.
NOTE: Remedy Corporation, the Remedy logo, Action Request System and
ARWeb are Remedy trademarks. Other companies and products mentioned may
be trademarks of their respective companies and are hereby recognized.
REMEDY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
1996 1995
Assets (Unaudited)
Current assets:
Cash, cash equivalents and
short-term investments $75,736 $56,186
Accounts receivable, net of
allowance for doubtful
accounts of $945 and
$541 respectively 14,563 11,590
Prepaid expenses and other
current assets 2,679 3,230
Deferred tax asset 1,251 1,039
Total current assets 94,229 72,045
Property and equipment, net 4,982 2,688
$99,211 $74,733
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $866 $1,168
Accrued compensation and related
liabilities 4,205 3,550
Other accrued liabilities 4,753 1,734
Deferred revenue 7,215 4,732
Current portion of obligations
under capital leases 226 94
Total current liabilities 17,265 11,278
Noncurrent portion of
obligations under capital leases 573 324
Stockholders' equity 81,373 63,131
$99,211 $74,733
REMEDY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
The following shares and per share amounts do not reflect the
two-for-one stock dividend, which will be effective as of October 25,
1996.
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Revenue:
Products $15,729 $7,630 $37,661 $18,044
Maintenance and
service 5,284 2,588 13,365 6,942
Total revenue 21,013 10,218 51,026 24,986
Costs and expenses:
Cost of product revenue 666 606 1,868 1,374
Cost of maintenance
and service revenue 2,582 1,670 6,673 3,944
Research and
development 3,491 1,853 8,983 4,773
Sales and marketing 6,250 2,731 14,992 6,714
General and
administrative 1,802 771 4,623 2,176
Total costs and
expenses 14,791 7,631 37,139 18,981
Income from operations 6,222 2,587 13,887 6,005
Interest income, net 642 463 1,800 914
Income before provision
for income taxes 6,864 3,050 15,687 6,919
Provision for income
taxes 2,471 966 5,647 2,376
Net income $4,393 $2,084 $10,040 $4,543
Net income per common
and common
equivalent share $0.29 $0.14 $0.67 $0.33
Shares used in computing
per share amounts 14,921 14,466 14,927 13,567
The following shares and per share amounts have been adjusted to reflect
the two-for-one stock dividend, which will be effective as of October
25, 1996.
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Net income per common
and common equivalent
share - post
October 25, 1996 split $0.15 $0.07 $0.34 $0.17
Shares used in computing
per share amounts - post
October 25, 1996 split 29,842 28,932 29,855 27,134 |
