Earnings out - .36 meets estimates.
Superb quarter was the description.
Sterling Software Announces Third Quarter Results
Company Reports 39th Consecutive Quarter of Continuous Growth
DALLAS, Texas (August 3, 1998) - Sterling Software, Inc. (SSW-NYSE) today announced record revenue, operating profit and earnings per share for its third
fiscal quarter ended June 30, 1998. Third quarter revenue was $161.5 million, a 41% increase over last year's $114.2 million. Operating profit was up 113% to
$37.0 million from last year's $17.4 million, and the operating profit margin improved from 15% to 23%. Diluted earnings per share increased 50% to $.36
compared to third quarter 1997 earnings per share of $.24.
For the first nine months of fiscal 1998, revenue was $469.8 million, up 48% compared to $318.1 million in the first nine months of 1997. Operating profit for the
first nine months of 1998 was $90.4 million, up 130% from last year's $39.3 million, and the operating profit margin improved from 12% to 19%. Diluted earnings
per share for the first nine months of fiscal 1998 was up 53% to $.92, compared to $.60 for the first nine months of fiscal 1997. All prior year amounts for operating
profit, operating profit margin and earnings per share are before one-time charges.
All three lines of business posted solid growth during the third quarter. The Company's largest business, Applications Management, grew revenue $52.4 million from
$22.0 million in the third quarter of 1997 to $74.4 million in the third quarter of 1998. The operating profit margin in the Applications Management business doubled,
growing from a 15% margin in the third quarter of 1997 to a 31% margin in the third quarter of 1998. The Applications Management business' operating profit grew
$19.5 million to $22.8 million. Sterling Software's Systems Management business grew revenue $3.9 million, or 9%, to $50.0 million and posted an operating profit
of $19.5 million for the third quarter, representing a 39% margin. The Federal Systems business grew revenue 20% in the third quarter to $37.2 million and
generated a 6% operating profit margin, contributing $2.4 million of operating profit to the quarter's results.
Today, the company separately announced the completion of its acquisition of Synon Corporation, a leader in model-based application development for IBM
AS/400 and Windows NTT platforms. The stock-for-stock merger transaction was valued at approximately $78 million based on recent closing prices for Sterling
Software's common stock.
Sterling L. Williams, the company's president and chief executive officer, said, "We had a superb quarter and continued to produce record results, even with
significant focus on integration activities related to our two recent acquisitions, Synon Corporation and Mystech Associates. Synon is our 29th acquisition and not
only strengthens our enterprise application development tools offerings, but is also expected to be immediately accretive to earnings per share." Mr. Williams further
commented, "We believe that all three of our businesses are well positioned. The Synon acquisition contributes to growth in our Applications Management business,
the Mystech acquisition contributes to growth in our Federal Systems business and our products for the network management and distributed storage management
markets position us for strong growth in our Systems Management business."
Sterling Software is a leading provider of software and services for the applications management, systems management and federal systems markets. Sterling
Software, with its headquarters in Dallas, has a worldwide installed base of more than 20,000 customer sites and has 3,500 employees in 95 offices worldwide. For
more information on Sterling Software, visit the company's Web site at www.sterling.com.
This news release contains certain forward-looking statements that reflect the current views and expectations of Sterling Software with respect to future
events. Such statements are subject to a number of risks, uncertainties and assumptions detailed in Sterling Software's Form 10-Q and other reports filed with
the Securities and Exchange Commission. Actual results may vary significantly. All of the information in this news release is qualified by the more detailed
information in the Company's Quarterly Report on Form 10-Q filed today with the Securities and Exchange Commission.
Contact:
Julie Kupp
Vice President, Investor Relations
Sterling Software, Inc.
(214) 981-1000
Julie_kupp@sterling.com
Note: The summary financial statements included in this release are qualified in their entirety by the financial statements, the notes thereto and other information
contained in Sterling Software's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. |
