BEA Reports Record First Quarter Revenues
Tenth Consecutive Record Quarter Achieved As More Enterprise Customers Adopt BEA's
Middleware Solution
SUNNYVALE, Calif., May 21 /PRNewswire/ -- BEA Systems, Inc. (Nasdaq: BEAS - news) today announced its
tenth straight quarter of record revenues. For its first fiscal quarter ended April 30, 1998, BEA reported revenues of
$56.3 million, up 85 percent from $30.4 million for the same period in the prior year, and up nine percent from $51.6
million reported in the fourth quarter ended January 31, 1998. Full details on BEA's reported results are on page five of
this release.
On an adjusted basis, excluding acquisition-related expenses, and as illustrated in the table below, for the first quarter,
BEA had operating income of $5.7 million versus an operating income of $1.3 million for the prior year first quarter.
BEA's net income per share, on an adjusted basis, was $0.06 for the first quarter versus a net loss of $(0.04) per share
for the first quarter of 1997. The impact of the excluded expenses is summarized on page six of this release.
For the Three Months Ended
Apr. 30, 1998 Jan. 31, 1998 Apr. 30, 1997
(In thousands, except
per share data) Current Prior Quarter Year Ago
Revenues $56,343 $51,625 $30,389
Operating income (a) 5,744 6,025 1,339
Operating margin percentage (a) 10% 12% 4%
Net income (loss) (a) $4,167 $4,976 $(1,715)
Income (loss) per share (b) $0.06 $0.07 $(0.04)
Wgt avg shares outstanding (b) 71,590 70,550 50,710
(a) Adjusted to exclude acquisition related expenses including
amortization of purchased intangible assets, merger-related costs, and
the write-off of acquired in-process research and development (see
page six of this release).
(b) Amounts presented on a diluted basis. For the quarter ended April
30, 1997, amounts adjusted for the pro forma conversion of convertible
securities. All share and per share amounts calculated and restated,
where appropriate to conform with Financial Accounting Standard
No. 128 and Staff Accounting Bulletin No. 98.
''More and more global corporations are adopting middleware technology,'' said Bill Coleman, chairman and chief
executive officer. ''Many of these enterprise customers have chosen BEA's middleware solution, as demonstrated by
our consistent financial performance. We were also recognized last week as the fourth fastest growing company in
Silicon Valley by the San Jose Business Journal.
''At the heart of our strategy are business-driven solutions which support a number of industries and transactions,''
Coleman said. ''These include billing and network management (telco), consumer access to account information
(financial services), and inventory management (retail). Additionally, our new E-commerce initiative is enabling these
same customers and others, such as E*Trade and CyberCash, to adopt a web-based approach to these activities.''
Strategic Initiatives
''We are achieving our objective to offer a complete middleware solution set by identifying and successfully integrating
strategic acquisitions,'' Coleman said. In a move expected to substantially enhance BEA's position as a middleware
leader, BEA announced yesterday the acquisition of NCR's TOP END technology and product family. This acquisition
is designed to give BEA access to another proven middleware technology, and add new development and support staff
to help integrate TOP END, and access to more than 300 current TOP END customers. ''For the past few years we
have demonstrated our ability to absorb other technologies and individuals into our infrastructure, and, in turn, gained
substantial new resources and assets to expand our offerings,'' continued Coleman.
''A major event planned for June is our launch of Iceberg, BEA's new Component Middleware product. BEA has
augmented its support for Iceberg, with the April acquisition of the Leader Group, a 40-person object-oriented solution
company. This new team will establish a 'Worldwide Distributed Component Solution Center' to assist customers
building mission-critical, enterprise-class applications based on BEA's component technology,'' concluded Coleman.
Increasing Commitments to Multi-Year Projects
''As more companies standardize on our solution, our consulting staff is successfully converting a growing number of
initial projects into a larger base of multi-year, enterprise-wide contracts,'' said Ed Scott, executive vice president of
worldwide field operations. ''During the quarter, we added orders from new or existing customers including DirecTV,
Swedish Post Office, DVG, Swedish Telia, German Employment Services, New Zealand Department of Social
Welfare, and Port Authority (China),'' Scott said.
Expanding BEA's Partnerships
''We are expanding relationships with other industry leaders through strategic marketing and development partners, ISV
relationships, Authorized Service Providers, and our Built on BEA partners. Our open platform approach remains a key
component in attracting partners as our joint efforts can simplify and lower costs across a variety of customer systems,''
said Scott.
In the first quarter, BEA established a relationship with JavaSoft that furthers the deployment of Java for the enterprise,
and recently announced the support of Jolt Beans on BEA Jolt 1.1. During the quarter, BEA also introduced BEA
Connect for SAP R/3, a wrapper for integrating SAP R/3 with custom or packaged enterprise applications; and an
integrated solution with Compaq and Wolfpack, Microsoft's Windows NT clustering technology.
Extending BEA's Global Operations
''As we add products and offerings to service more needs of our customers, we are also ensuring that we maintain the
resources and infrastructure to support a growing customer base,'' Scott said. ''Since the end of the year, we have
opened an additional nine offices around the world and entered Norway, Spain, Denmark, and Italy. This brings BEA to
50 offices in 24 countries. In just the past few months, we have added a number of senior industry executives who held
critical roles at other leading companies. These key hires include a founder of Tibco, a Vice President from Oracle, a
Vice President from Veritas and Silicon Graphics, the head of IBM's Component Broker marketing group, a Vice
President from NCR, and a Vice President of server engineering from Netscape. These individuals are quickly stepping
into major roles to enhance product marketing, vertical sales programs, development and international activities,'' Scott
concluded.
About BEA Systems, Inc.
BEA Systems, Inc., is a leading provider of cross-platform middleware solutions for enterprise applications. BEA's
products and services enable mission-critical, distributed applications that work seamlessly in client/server, Internet, and
legacy environments. BEA provides transactional, messaging, and distributed object-based software for developing and
deploying these enterprise applications. In addition to its product line, BEA provides complete solutions through its
extensive partner network, and a full range of services including consulting, training, and support. BEA is headquartered
in Sunnyvale, Calif. The company's common stock trades on the Nasdaq National Market under the symbol ''BEAS.''
Additional information on BEA is available on the Internet at beasys.com.
Legal Notice Regarding Forward-Looking Statements
Some of the statements in this press release are forward-looking, including the Company's success in achieving its
objective of providing a complete business solution, the Company's success in identifying and integrating strategic
acquisitions, future product developments, the timing of the Iceberg launch, the effect of the acquisitions of the Leader
Group and TOP END, the Company's success on converting initial projects into multi-year projects, the Company's
success in attracting strategic marketing and development partners, and the effect of such relationships. BEA's actual
results could differ materially. Corresponding risks and uncertainties that BEA faces include difficulty in integrating new
and recently acquired businesses and products, lack of market acceptance of new products, delays in customer orders,
competition from new or existing commercial middleware providers or in-house solutions, failure to effectively manage
recent and anticipated growth, and failure to raise cash sufficient to satisfy payment obligations and capital needs.
Readers should also refer to the Risk Factors section of BEA's Annual Report or Form 10-KSB for the fiscal year
ended January 31, 1998. The forward-looking statements and risks stated in this press release are based on information
available to BEA today. BEA assumes no obligation to update them.
BEA, BEA Connect, and BEA Jolt are trademarks of BEA Systems, Inc. All other company and product names may
be trademarks of the company with which they are associated.
BEA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data)
(Unaudited)
Three months ended
April 30,
1998 1997
Revenues:
License fees $39,741 $24,478
Services 16,602 5,911
Total revenues 56,343 30,389
Cost of revenues:
Cost of license fees 775 578
Cost of services 10,690 3,854
Amortization of certain
acquired intangible assets 3,182 2,603
Total cost of revenues 14,647 7,035
Gross margin 41,696 23,354
Operating expenses:
Sales and marketing 25,035 15,917
Research and development 9,268 5,143
General and administrative 5,032 3,611
Non-recurring charges 491 16,000
Total operating expenses 39,826 40,671
Income (loss) from operations 1,870 (17,317)
Interest and other, net 208 (2,482)
Income (loss) before
provision for taxes 2,078 (19,799)
Provision for income taxes 623 572
Net income (loss) $1,455 $(20,371)
Net income (loss) per share:
Basic $0.02 $(1.02)
Diluted $0.02 $(1.02)
Pro Forma * $(0.41)
Shares used in computing net
income (loss) per share:
Basic 65,450 20,323
Diluted 71,590 20,323
Pro Forma * 50,710
* For the quarter ended April 30, 1997, amounts are adjusted for the pro
forma conversion of convertible securities.
BEA SYSTEMS, INC.
IMPACT OF ACQUISITION RELATED CHARGES ON REPORTED NET INCOME (LOSS)
(In thousands, except for per share data)
(unaudited)
For the Three Months Ended For the Three Months ended
April 30, 1998 April 30, 1997
As As As As
Reported Adjustments Adjusted Reported Adjustments Reported
Revenues $56,343 $56,343 $30,389 $30,389
Cost of revenues 14,647 (3,182) 11,465 7,035 (2,603) 4,432
Gross margin 41,696 3,182 44,878 23,354 2,603 25,957
Operating
expenses 39,826 (692) 39,134 40,671 (16,053) 24,618
Income (loss)
from
operations 1,870 3,874 5,744 (17,317) (18,656) 1,339
Interest and
other, net 208 208 (2,482) (2,482)
Income (loss)
before
provision
for taxes 2,078 3,874 5,952 (19,799) 18,660 (1,143)
Provision for
income taxes 623 1,162 1,785 572 572
Net income
(loss) $1,455 $2,712 $4,167 $(20,371) $18,660 $(1,715)
Diluted net
income (loss)
per share $0.02 $0.06 $(1.02) $(0.10)
Weighted average
shares
outstanding 71,590 71,590 20,323 20,323
Pro forma net
loss per share $(0.41) $(0.04)
Pro forma
weighted
average shares
outstanding** 50,710 50,710
* The adjustments represent the reversals of acquisition related charges
including the write-offs of acquired in-process research and
development, merger-related costs, and the amortization of acquired
intangible assets. The pro forma adjustments for the quarter ended
April 30, 1998 have been tax effected using the Company's estimated tax
rate.
** For the quarter ended April 30, 1997, the weighted average shares
outstanding used for the "As Adjusted" results of operations have been
adjusted as if the shares issued and converted in the public offering
had been outstanding since the beginning of the quarter.
BEA SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 30, 1998 January 31, 1998
(Unaudited) (*)
ASSETS
Current assets:
Cash and cash equivalents $92,521 $89,702
Short-term investments 4,759 8,708
Accounts receivable, net 52,441 46,910
Other current assets 4,369 2,970
Total current assets 154,090 148,290
Computer equipment, furniture
and leasehold
improvements, net 8,136 7,815
Acquired intangible assets,
net 14,631 12,315
Other assets 5,365 2,897
$182,222 $171,317
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under lines
of credit $2,843 $1,879
Accounts payable and accrued
liabilities 37,463 32,989
Deferred revenues 17,946 14,620
Current portion of notes
payable and capital lease
obligations 38,037 42,301
Total current liabilities 96,289 91,789
Notes payable and capital
lease obligations 595 691
Stockholders' equity:
Common stock 66 65
Additional paid-in capital 213,671 208,971
Accumulated deficit (127,928) (129,627)
Foreign currency translation
adjustment (471) (572)
Total stockholders' equity 85,338 78,837
$182,222 $171,317
(*) Derived from audited consolidated financial statements.
SOURCE: BEA Systems, Inc.
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