<font color=black>Siebel Systems Reports Operating Results for the Quarter Ended September 30, 2002
Thursday October 17, 5:35 pm ET
SAN MATEO, Calif.--(BUSINESS WIRE)--Oct. 17, 2002--Siebel Systems, Inc. (Nasdaq:SEBL - News), a leading provider of multichannel eBusiness applications software, today announced results for the quarter ended September 30, 2002.
Revenues for the third quarter of 2002 were $357.2 million, compared to $437.9 million for the same period in 2001, a decrease of 18 percent. Revenues from license fees for the third quarter of 2002 were $126.8 million, compared to $193.5 million for the same period in 2001, a decrease of 34 percent. Revenues from maintenance, consulting, and other services were $230.3 million, compared to $244.4 million for the same period in 2001, a decrease of 6 percent. Net loss, including a restructuring charge of $109.4 million and a special charge related to the repurchase (settlement) of certain outstanding stock options of $54.9 million, was $92.1 million, or $0.19 per share, compared with net income of $35.2 million, or $0.07 per share, for the third quarter of 2001.
Net income from ongoing operations, before the restructuring charge of $109.4 million and the special charge related to the repurchase (settlement) of certain outstanding stock options of $54.9 million, was $13.1 million, or $0.03 per share, compared with net income of $35.2 million, or $0.07 per share, for the third quarter of 2001, representing decreases of 63 percent and 57 percent, respectively.
The restructuring charge includes severance costs related to a reduction in force of $22.0 million, and facilities consolidation and related costs of $87.4 million. The company anticipates recording an additional facilities restructuring charge in the fourth quarter of approximately $140.0 million to $165.0 million related to further facilities consolidation scheduled to occur during the quarter. This will result in total restructuring costs of $250.0 million to $275.0 million.
The special charge related to the repurchase of certain outstanding options resulted from the repurchase of certain out-of-the-money stock options at $1.85 per share. This resulted in the repurchase and cancellation of 28.1 million options for total consideration of $52.0 million, consisting of 5.47 million shares of fully vested stock valued at $31.5 million, and $20.5 million of cash. The company also incurred $2.9 million of employer payroll taxes and professional fees in connection with the repurchase.
The company's cash, cash equivalents, and short-term investments were $2.1 billion at September 30, 2002, an increase of $61 million and $411 million from June 30, 2002 and from December 31, 2001, respectively. The company had 72 days sales outstanding in accounts receivable at September 30, 2002.
Quarterly Highlights
The following highlights were announced or occurred since Siebel Systems' last earnings statement:
Customer Engagements
The company concluded new engagements with more than 175 new customers and expanded engagements at more than 240 customers, including:
American Heart Association
American Heart Association is a national voluntary health agency whose mission is to reduce disability and death from cardiovascular disease and stroke. The proven best practices embedded in Siebel eBusiness Applications enable approximately 2,500 Association employees across all divisions and affiliate offices to improve fund-raising effectiveness. Complementing its existing implementation of Siebel Call Center and Siebel Sales, American Heart Association will deploy Siebel Analytics to measure its fund-raising campaign results in real time and better understand donor trends. By streamlining fund-raising processes and analyzing detailed transactional, demographic, and behavioral data, American Heart Association will be able to enhance the support and education it provides to millions of Americans.
Biochemie GmbH
Biochemie GmbH, a member of the Novartis Business Unit Generics, is a global pharmaceutical company headquartered in Austria, offering a wide variety of generic pharmaceuticals that provide physicians and patients with affordable, high-quality medicines. Siebel Pharma will be used to support Biochemie sales professionals to increase productivity and execute on the business unit's mission to become the generics industry leader. Additionally, Siebel Pharma will provide Biochemie with best-in-class sales, marketing, and analytics processes to maximize market share while delivering superior service. With Siebel Pharma, Biochemie professionals will gain a clear understanding of overall customer potential to more effectively identify, retain, and grow key physician relationships.
BT Wholesale
BT Wholesale is part of the BT Group and provides comprehensive network services to more than 500 communication companies, network operators, and service providers in the UK. BT Wholesale has standardized on Siebel eBusiness Applications to enable more than 1,700 BT Wholesale customer service representatives as well as its partners and resellers to support BT's company-wide commitment to customer satisfaction. Siebel Partner Relationship Management (Siebel PRM) -- the industry-leading PRM solution -- is a critical new component of BT Wholesale's sales strategy, enabling its partner community to learn about BT solutions; manage sales, marketing, and service processes; and submit orders. Siebel eBusiness Applications will ensure BT Wholesale can collaborate effectively with both its customers and partners to increase revenues as well as reduce operating costs.
Ford Motor Company
Ford Motor Company will deploy Siebel Automotive -- a version of Siebel eBusiness Applications specifically designed to meet the unique and complex requirements of the automotive industry -- to more than 500 agents in its Consumer Affairs, Ford Customer Service Division to enhance agent productivity, improve customer satisfaction, and reduce operating costs. Siebel Automotive will complement Ford's existing deployment of Siebel eBusiness Applications in call centers serving dealers, fleet customers, and field office personnel. As Ford's primary face to consumers, Consumer Affairs will employ the prepackaged service processes in Siebel Automotive Call Center to efficiently and effectively resolve product inquiries and concerns across multiple channels, while driving continuous improvement by using the analytic capabilities of Siebel Automotive to track service metrics.
Merrill Lynch & Co., Inc.
Merrill Lynch & Co., Inc., one of the world's leading financial management and advisory companies, is extending its use of Siebel eBusiness Applications from its call center to 28,500 employees worldwide. Merrill Lynch's U.S. Private Client Group is replacing an internally developed solution with Siebel Finance -- a version of Siebel eBusiness Applications that embeds business processes based on finance best practices -- to provide its financial advisors with a highly scalable single platform for managing client relationships and client portfolios. Siebel Finance will be a key part of a new solution being created that will integrate client information, market data, and financial profile information in a single wealth management advisor workstation, providing a significantly improved service experience for Merrill's clients.
Unilever Bestfoods
A leading global manufacturer of food products, Unilever Bestfoods will implement Siebel Consumer Goods to support multinational sales and merchandising. Unilever Bestfoods will leverage Siebel Consumer Goods' embedded best practices for segmented selling, distributor forecasting, sales volume planning, and integrated analytics to drive trade promotion effectiveness and increase the in-store presence of its well-known brands, such as Bertolli, Knorr, Lipton, Skippy, and Ragu. Unilever Bestfoods plans to rapidly deploy Siebel Consumer Goods to its field organization, while the application's support for Universal Application Network will allow Unilever Bestfoods to seamlessly execute end-to-end, customer-driven business processes that span back-office applications including SAP, PeopleSoft, and several legacy systems.
Siebel Systems Secures New Customers: Select new customers also standardizing on Siebel eBusiness Applications in the third quarter of 2002 included Aventis Pharma SpA; Bally Gaming and Systems; Bayerische Landesbank; The Canada Life Assurance Company; J-Phone Company; Hoffman-La Roche AG; Mercedes-Benz Portugal; Ministere de l'Industries et du Commerce (Canada); Novartis Consumer Health GmbH; Orbitall Ltda.; Organizacion Nacional de Ciegos Espanoles; Precision Response Corporation; Sallie Mae, Inc.; State of New York Department of IT and Telecommunications; State of New South Wales, Department of Community Service; United Overseas Bank Limited; University of Virginia; Vodafone Sverige AB; Volvo IT North America; Winterthur Iberica AIE; and World Editing, Edicao De Publicacoes, Lda.
Siebel Systems Secures Repeat Orders: Additional orders from existing customers continued during the third quarter. Siebel Systems realized significant reorders from American Suzuki Motor Corporation; Barclays Bank plc; Biogen, Inc.; Burlington Northern Santa Fe Corp.; Carnival Cruise Lines; Cesky Telecom a.s.; Commerzbank AG; DGZ DekaBank Deutsche Kommunalbank; DKV Deutsche Krankenversicherung AG; Echostar Communications Corporation; Electricite de France; Eli Lilly Canada; Endesa Servicios, S.L.; Federal Aviation Administration; Fleet National Bank; General Services Administration Federal Supply Service; GISA GmbH; GlaxoSmithKline; HSBC Investment Bank plc; IS: Energy GmbH; Michelin North America Inc.; Mitsubishi Motor Sales of America, Inc.; Network Associates, Inc.; NPower, Ltd.; Reuters Limited; Renault V.I.; Royal Bank of Canada; Siemens Energy & Automation, Inc.; Standard Register Co.; T-Systems CSM GmbH; Telecom Italia Mobile SpA; Telesoft SpA; Vertex Data Science Ltd.; Warner Home Video; and Zapodoceska energrtika, a.s.
Siebel Systems Redefines the Standard for CRM by Delivering
Hundreds of Business Processes in Siebel 7.5
With the delivery of hundreds of business processes embedded in Siebel 7.5, the latest release of Siebel eBusiness Applications, Siebel Systems again redefined the standard for CRM. Siebel 7.5 is shipping simultaneously in 17 languages and meets the most rigorous demands of large-scale global deployments. Featuring embedded industry-specific best practices and new functionality for multichannel sales, marketing, service, and partner and employee relationship management, Siebel 7.5 allows organizations to easily leverage and modify proven business processes to deliver superior customer experiences. With comprehensive support for Web Services and Universal Application Network -- the industry's first standards-based solution for multiapplication integration -- Siebel 7.5 ensures that customers can easily integrate data and cross-application business processes from various applications and benefit from reduced integration and deployment costs.
IBM and Siebel Systems Publish 30,000 Concurrent User Benchmark
for Siebel eBusiness Applications on DB2
Siebel Systems and IBM announced a 30,000 concurrent user benchmark for Siebel eBusiness Applications on IBM's DB2 database software, setting a performance and scalability standard for the applications industry. In the Siebel Platform Sizing and Performance Program (PSPP), which simulates deployments across large global enterprises, DB2 running on the eServer pSeries demonstrated exceptional performance and scalability for powering Siebel 7. The Siebel PSPP simulation included employees, partners, and customers using Siebel Call Center, Siebel eService, Siebel PRM, and Siebel Interactive Selling applications. In the industry's first certified PSPP benchmark on Siebel 7, DB2 combined with pSeries delivered subsecond response times to user queries and demonstrated the scalability to handle 30,000 concurrent users. The tests under this program were based on real-world scenarios derived from thousands of Siebel customers, reflecting the most frequently used and most performance-intensive components of Siebel eBusiness Applications, and have been certified by Siebel Systems.
Independent Survey Demonstrates ROI from Siebel eBusiness
Applications
Independent quarterly surveys conducted by Satmetrix Systems, a leading provider of customer satisfaction measurement services, continue to demonstrate high levels of Siebel customer satisfaction. According to an audit completed in September 2002, Siebel Systems' customers reported a median increase of 8 percent in revenue, 23 percent in employee productivity, 13 percent in customer retention, and 23 percent in the satisfaction of their customers and a 13 percent decrease in operating costs as a result of using Siebel eBusiness Applications. Customers realized a median return on their investment in Siebel eBusiness Applications in 12 months.
Siebel Systems Receives Industry Accolades
Siebel Systems was acknowledged by several industry groups in the third quarter of 2002.
Siebel Systems was listed in the Leader quadrant in Gartner's Opportunity Management Systems (OMS) Magic Quadrant Report for 2002.(1) The report, published by Gartner, Inc., a premier research and advisory firm, evaluated and positioned 14 vendors in the OMS market based on the eight key criteria that best-of-class OMS vendors should provide.
Siebel customer British Columbia Automobile Association (BCAA), an affiliate of CAA (Canadian Automobile Association) and AAA (American Automobile Association), was selected by Gartner, Inc. as the recipient of the Gartner Customer Relationship Management Excellence Award in the small-to-midsize category at the Gartner Fall CRM Summit in Chicago September 18-20, 2002. Gartner's CRM Excellence Awards recognize outstanding CRM initiatives based on eight building blocks of CRM that Gartner has defined: vision, strategy, customer experience, organization collaboration, processes, information, technology, and metrics.
Siebel Systems Appoints New Leader of Worldwide Sales
Siebel Systems announced the appointment of Mr. Richard P. Chiarello as Senior Vice President, Worldwide Sales, effective October 1, 2002. An industry veteran with 25 years of experience in information technology, Mr. Chiarello has held management positions with firms including Computer Associates, Cullinet Software, and IBM Corporation. Mr. Chiarello spent 13 years with Computer Associates, where he led a 6,500-employee organization as Executive Vice President and General Manager of Worldwide Sales and Channels. He began his career at IBM Corporation, where he held various sales, staff, and systems engineering positions for eight years.
IBM and Siebel Systems Extend Global Strategic Alliance to Deliver
Customer-Driven Business Processes
IBM and Siebel Systems announced a significant extension of their Global Strategic Alliance to develop, market, and sell comprehensive, customer-driven business process integration solutions that dramatically reduce costs, complexity, and time to deployment. Under the terms of the new agreement, IBM becomes the Universal Application Network Technology Global Strategic Partner. In support of Universal Application Network, the alliance combines Siebel Systems' world-class business processes based on best practices with IBM's industry-leading WebSphere Business Integration software. Key aspects of the extended Siebel Systems-IBM relationship include:
Siebel Systems will license IBM business process templates and common object models to accelerate the delivery of its extensive prebuilt customer-driven business process library;
The companies will roll out global Joint Solutions Showcase Centers where customers can participate in tailored demonstrations of WebSphere Business Integration server and Universal Application Network business processes;
Customers using Siebel Systems' point-to-point connectors to third-party applications will be offered the opportunity to migrate to Universal Application Network-based solutions leveraging the IBM WebSphere Business Integration platform; and
Siebel Systems has chosen the IBM WebSphere Business Integration server platform for its internal business operations.
Integration Server Vendors Deepen Commitment to Universal
Application Network
Siebel Systems announced new agreements with TIBCO and webMethods to offer Universal Application Network solutions that combine Siebel Systems' customer-driven business processes based on best practices with the integration server platforms from TIBCO and webMethods. Through joint development efforts with Siebel Systems, TIBCO and webMethods are leveraging their current integration server technology to model, generate, import, and export representations of business processes for Universal Application Network. Within the Universal Application Network architecture, the integration server coordinates the interapplication communication required to execute business processes. The availability of open, flexible integration servers allows users to easily define and deploy standards-based business processes that provide seamless interoperability between Siebel eBusiness Applications and other enterprise applications such as HR, back-office, ERP, supply-chain, and legacy systems.
About Siebel Systems
Siebel Systems, Inc. is a leading provider of eBusiness applications software, enabling corporations to sell to, market to, and serve customers across multiple channels and lines of business. With more than 3,500 customers worldwide, Siebel Systems provides organizations with a proven set of industry-specific best practices, CRM applications, and business processes, empowering them to consistently deliver superior customer experiences and establish more profitable customer relationships. Siebel Systems' sales and service facilities are located in more than 28 countries.
(1) Managing Sales Opportunities: Second-Half 2002 Magic Quadrant, W. Close, B. Eisenfeld, J. Galvin, T. Berg, August 2002. The Magic Quadrant is copyrighted August 2002 by Gartner, Inc. and is reused with permission. Gartner's permission to print or reference its Magic Quadrant should not be deemed to be an endorsement of any company or product depicted in the quadrant. The Magic Quadrant is Gartner's opinion and is an analytical representation of a marketplace at and for a specific time period. It measures vendors against Gartner-defined criteria for a marketplace. The positioning of vendors within a Magic Quadrant is based on the complex interplay of many factors. Gartner does not advise enterprises to select only those firms in the Leaders segment. In some situations, firms in the Visionary, Challenger, or Niche Player segments may be the right match for an enterprise's requirements. Well-informed vendor selection decisions should rely on more than a Magic Quadrant. Gartner research is intended to be one of many information sources including other published information and direct analyst interaction. Gartner expressly disclaims all warranties, express or implied of fitness of this research for a particular purpose.
Siebel is a trademark of Siebel Systems, Inc. and may be registered in certain jurisdictions. All other product and company names mentioned are the property of their respective owners and are mentioned for identification purposes only.
Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties. The success of the agreements, relationships and products described above and the future operating results of Siebel Systems, Inc. may differ from the results discussed or forecasted in the forward-looking statements due to factors that include, but are not limited to, risks associated with the eBusiness software applications market, dependence on the Internet, risks associated with new versions and new products and risks associated with rapid technological change. Further information on potential factors that could affect the financial results of Siebel Systems, Inc. are included in its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and its other filings with the Securities and Exchange Commission, which are available at www.sec.gov. Siebel Systems assumes no obligation to update the information in this press release. |
