Siebel Systems Reports Record Sales and Earnings for the Quarter and Year Ended Dec. 31, 1998
1998 Revenue Increases 89 Percent over 1997
SAN MATEO, Calif.--(BUSINESS WIRE)--Jan. 28, 1999--Siebel Systems, Inc. (Nasdaq:SEBL - news) today announced record results for the quarter and year ended Dec. 31, 1998.
Total revenues in 1998 were $391.5 million, an increase of 89 percent over total revenues in 1997.
Revenues, net income, and net income per diluted share for the fourth quarter of 1998 were $123.2 million, $19.9 million and $0.20, respectively. This compares with revenues, pro-forma net income, and pro-forma net income per diluted share of $69.2 million, $9.3 million and $0.10, respectively, recorded during the corresponding period in 1997.
Revenues from license fees for the fourth quarter of 1998 increased 72 percent over the comparable period of the prior year, and accounted for 73 and 76 percent of total revenues for the fourth quarters of 1998 and 1997, respectively. Revenues from maintenance, consulting and other services increased 97 percent over the comparable period of the prior year.
Revenues, pro-forma net income, and pro-forma net income per diluted share for the year ended Dec. 31, 1998 were $391.5 million, $55.7 million and $0.56, respectively. This compares with revenues, pro-forma net income and pro-forma net income per diluted share of $207.6 million, $23.7 million and $0.25, respectively, recorded during the corresponding period in 1997.
Pro-forma net income and net income per diluted share exclude costs related to the merger with Scopus Technology in the second quarter of 1998, and write-off of in-process research and development related to the acquisitions of Nomadic Systems and Interactive Workplace and costs related to the termination of a proposed merger with Clear With Computers in the fourth quarter of 1997.
Revenues from license fees for the year ended Dec. 31, 1998 increased 85 percent over the prior year and accounted for 74 and 76 percent of total revenues for each of the twelve month periods ended Dec. 31, 1998 and 1997. Revenues from maintenance, consulting and other services increased 99 percent over the prior year.
Actual net income for the year ended Dec. 31, 1998 was $42.9 million. Actual net income per diluted share for the year ended Dec. 31, 1998 was $0.43. The results of operations include the results of Scopus Technology, which was acquired in a transaction accounted for as a pooling of interests on May 18, 1998, for all periods presented.
Quarterly Highlights
The following highlights were announced or occurred since Siebel Systems' last earnings statement:
-- Siebel 99 Ships: Siebel 99, the new family of entirely Web-based
sales, marketing and customer service solutions, shipped in
December 1998. Siebel 99 allows organizations to deploy Siebel
software to disconnected mobile users on laptops and handheld
devices, connected call center users on desktops and
intermittently connected users over the Internet. Siebel 99
completes the integration of the technologies from Siebel Systems
and Scopus Technology following the merger of the two companies
in May 1998.
-- Acquisition of The 20-20 Group: Siebel acquired The 20-20 Group,
a leading provider of end-user training for the Enterprise
Relationship Management (ERM) market. This acquisition will
enable Siebel to provide high-quality end-user training to
further ensure successful Siebel software implementations and
long-term customer satisfaction.
-- New Customers: Siebel continues to attract the attention of
organizations looking to implement Web-based sales, marketing and
customer service solutions. New customers in the fourth quarter
included: ABN AMRO Bank NV; The Acer Group; Allied Signal, Inc.;
Bank of America National Trust and Savings Association; Bell
Canada; Johnson & Johnson affiliates, Janssen Pharmaceutical N.V.
and Ortho-McNeil Pharmaceutical, Inc.; Lockheed Martin Corp.; The
Manufacturers Life Insurance Co.; Perrier Group of America; and
Takeda Pharmaceuticals America, Inc.
-- Revenue from Existing Customers: Additional orders from existing
customers continued at a healthy pace during the quarter and
accounted for $50.3 million of license revenue. The company
realized significant reorders from: Bell South P. Corp.; The
Chase Manhattan Bank; Connecticut General Life Insurance Co.
(CIGNA); Citibank International Technology, Inc.; Dell Products
L.P.; Ford Motor Co.; Honeywell, Inc.; MCI Telecommunications
Corp.; Prudential Assurance Co. Limited; and Volvo Information
Technology AB.
About Siebel Systems
Siebel Systems, Inc. (Nasdaq:SEBL - news) is the world's leading supplier of Enterprise Relationship Management software systems. Siebel Systems provides an integrated family of sales, marketing and customer service application software for field sales, customer service, telesales, telemarketing, field service, third-party resellers and Internet based e-commerce and self service.
Siebel Systems products are designed to meet the needs of small, medium and large businesses. Siebel Systems sales and service facilities are deployed locally in over 20 countries and can be reached through the World Wide Web at www.siebel.com.
SIEBEL SYSTEMS, INC.
Consolidated Balance Sheets
(In thousands, except per share data; unaudited)
December 31, December 31,
1998 1997
Assets
Current assets:
Cash and cash equivalents $ 79,961 $ 70,202
Short-term investments 151,888 91,999
Accounts receivable, net 122,818 63,056
Deferred income taxes 13,120 4,778
Prepaids and other 13,908 6,701
Total current assets 381,695 236,736
Property and equipment, net 45,537 24,843
Other assets 14,714 6,585
Total assets $ 441,946 $ 268,164
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,899 $ 5,684
Accrued expenses 84,917 28,362
Income taxes payable 10,917 2,345
Deferred revenue 50,875 22,243
Total current liabilities 150,608 58,634
Deferred income taxes 710 162
Total liabilities 151,318 58,796
Stockholders' equity:
Common stock; $.001 par value;
300,000 shares authorized;
89,630 and 85,864 shares
issued and outstanding,
respectively 90 86
Additional paid-in capital 235,302 195,432
Notes receivable from
stockholders (406) (406)
Deferred compensation (360) (639)
Accumulated other
comprehensive losses (669) (365)
Retained earnings 56,671 15,260
Total stockholders' equity 290,628 209,368
Total liabilities and
stockholders' equity $ 441,946 $ 268,164
SIEBEL SYSTEMS, INC.
Consolidated Statements of Operations
(In thousands, except per share data; unaudited)
Three Months Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
Revenues:
Software $90,323 $52,536 290,890 156,971
Maintenance, consulting
and other 32,834 16,695 100,649 50,657
Total revenues 123,157 69,231 391,539 207,628
Cost of revenues:
Software 1,305 1,550 5,600 4,393
Maintenance, consulting
and other 18,817 9,133 61,547 28,787
Total cost of revenues 20,122 10,683 67,147 33,180
Gross margin 103,035 58,548 324,392 174,448
Operating expenses:
Product development 11,836 8,833 42,698 26,105
Sales and marketing 50,783 31,537 172,946 98,748
General and administrative 10,677 4,706 28,401 16,938
Merger termination costs -- -- -- 3,298
Merger-related expenses -- 22,740 13,500 22,740
Total operating expenses 73,296 67,816 257,545 167,829
Operating income 29,739 (9,268) 66,847 6,619
Other income, net 1,807 1,421 6,283 5,374
Income before
income taxes 31,546 (7,847) 73,130 11,993
Income taxes 11,672 5,637 30,255 13,180
Net income (loss) $19,874 $(13,484) 42,875 (1,187)
Diluted net income
(loss) per share $ 0.20 $ (0.16) 0.43 (0.01)
Shares used in diluted
net income (loss)
per share computation 100,317 85,263 99,948 83,798
Basic net income
(loss) per share $ 0.22 $(0.16) 0.49 (0.01)
Shares used in basic
net income (loss)
per share computation 89,037 85,263 87,569 83,798
SIEBEL SYSTEMS, INC.
Pro Forma Consolidated Statements of Operations
(In thousands, except per share data; unaudited)
Three Months Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
Revenues:
Software $ 90,323 $ 52,536 290,890 156,971
Maintenance, consulting
and other 32,834 16,695 100,649 50,657
Total revenues 123,157 69,231 391,539 207,628
Cost of revenues:
Software 1,305 1,550 5,600 4,393
Maintenance, consulting
and other 18,817 9,133 61,547 28,787
Total cost of revenues 20,122 10,683 67,147 33,180
Gross margin 103,035 58,548 324,392 174,448
Operating expenses:
Product development 11,836 8,833 42,698 26,105
Sales and marketing 50,783 31,537 171,162 98,748
General and
administrative 10,677 4,706 28,401 16,938
Total operating
expenses 73,296 45,076 242,261 141,791
Operating income 29,739 13,472 82,131 32,657
Other income, net 1,807 1,421 6,283 5,374
Income before
income taxes 31,546 14,893 88,414 38,031
Income taxes 11,672 5,637 32,713 14,319
Net income $19,874 $ 9,256 55,701 23,712
Diluted net income
per share $ 0.20 $ 0.10 0.56 0.25
Shares used in diluted
net income per share
computation 100,317 97,211 99,948 94,515
Basic net income
per share $ 0.22 $ 0.11 0.64 0.28
Shares used in
basic net income
per share computation 89,037 85,263 87,569 83,798
Pro forma results for 1998 are net of $13.5 million of direct merger costs, including fees for investment bankers, attorneys, accountants, and costs of duplicate facilities and equipment. They are also net of $1.8 million of indirect, one-time costs such as joint sales training and merger-related marketing costs.
Pro forma results for 1997 are net of a $22.7 million write-off of in-process research and development related to the acquisitions of Nomadic Systems and Interactive Workplace and $3.3 million related to the termination of the planned merger with Clear With Computers, Inc.
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