Company Press Release
Computer Associates Reports Record First Quarter
Operating Earnings Up 25%
ISLANDIA, N.Y.--(BUSINESS WIRE)--July 21, 1998--Computer Associates International, Inc. (NYSE:CA - news) today announced record results for its first fiscal quarter.
For the quarter ended June 30, 1998, revenue was $1,046,637,000, an increase of 18% over the $890,739,000 reported in the previous year's first quarter. Net income, excluding the approximate $675 million (after-tax) one-time charge related to stock issuance under the 1995 Key Employee Stock Ownership Plan, was $194,156,000, an increase of 25% over last year's $155,773,000. First quarter earnings per share (diluted), excluding the charge, were $.34, compared to $.28 a year ago, an increase of 21%.
All per share amounts have been adjusted for the Company's three-for-two stock split effective November 5, 1997.
''This was a very exciting quarter for CA in that we rolled out several significant new initiatives at our annual CA World User Conference,'' said Charles B. Wang, CA's chairman and chief executive officer. ''The next version of Unicenter, named Unicenter TND (The Next Dimension), the availability of new Unicenter components as Enterprise and Workgroup Editions, and the integration of cross-platform database and tool offerings into a strategy called Harmony, all show that CA is accelerating its delivery of the latest technology to our clients.''
''We are pleased with client acceptance of Unicenter and other CA products, and the continued momentum indicated by these financial results,'' stated Sanjay Kumar, CA president and chief operating officer. ''Our view of marketplace opportunities and our ability to execute on that vision has allowed us to transform ourselves into the leading cross-platform provider of infrastructure software.
''While our operating units in Asia had more challenges than usual this quarter, our other units, particularly in North and Latin America, stepped up well to compensate,'' continued Mr. Kumar. ''Although this quarter demonstrates the progress we are making in establishing Unicenter as the world-wide standard in enterprise management, we are concerned about the ripple effect of the Asian economic turmoil on our multinational clients and its potentially adverse impact on our near-term business. This, coupled with deferred software purchasing decisions as customers deal with their 'Y2K' projects and mainframe hardware transition issues, leads us to believe that our revenue and earnings growth will slow over the next several quarters. Despite these near term challenges and uncertainties, we remain quite optimistic about our overall competitive positioning and our longer term business fundamentals.''
Highlights of the quarter included:
- In response to client's needs for professional services, CA formed an independent professional services organization, Global Professional Services Organization (GPS). GPS consolidates many of CA's existing service functions and will offer a broad spectrum of IT services, from consulting to implementation to comprehensive outsourcing and facilities management.
- CA and Microsoft announced the inclusion of CA's Real World Interface for Windows NT, with the Microsoft Windows NT Server operating system 5.0. CA's Real World Interface for Windows NT, a WBEM application based on CA's Unicenter TNG Framework, will fully utilize the native management services and instrumentation of Windows and other WBEM-enabled systems, greatly enhancing the integration of those services and instrumentation into the enterprise management environment.
- Extending its long-standing strategic relationship with Microsoft, CA announced that Unicenter TNG will support Windows CE, Microsoft's operating system for PC Companion devises and embedded systems. Unicenter TNG will be able to automatically indentify, monitor and track assets in all Windows CE-based handheld, palm-size, and embedded system devices in use across the enterprise IT environment.
- CA-Fix/2000 won Plugin Datamation's ''Best Year 2000 Tools'' product of the year award. CA-Fix/2000 was selected by nearly 50 percent of the readers participating in a survey and received more than four times as many votes as InterSolv's Factory2000 or Micro Focus' SoftFactory/2000.
- CA launched Enterprise Edition systems, network and database solutions for distribution through direct and indirect channels. This new line of highly-scalable management solutions for specific management areas - network, security, software distribution, help desk, asset management, storage and E-Commerce, offers best-of-class functionality built on the Unicenter TNG Framework.
- CA introduced its Workgroup Edition for exclusive distribution
through indirect channels. Workgroup Edition products make CA's industry leading enterprise management and information management technology available to smaller computing environments for the first time and enables CA's channel partners to fully capitalize on the high demand for cost-effective management solutions.
- Companies which selected Unicenter TNG to manage their computer environments during the quarter included BMC West, American Greetings, Tatung Co., Mutual of Omaha, Bureau of Internal Revenue, Illinois Central Railroad, West Virginia Department of Tax and Revenue, Charleston Area Medical Center, Concentra Managed Care, Inc., Baltimore Gas & Electric, Jacksonville Electric Authority, Greater Waterbury Health Network, Immunex, Edmonds School District, Beijing Mobile Telecom and Shanghai PuDong International Airport.
- CA announced the general availability of Unicenter TNG Japanese Version, the first fully localized enterprise management solution developed specifically for the Japanese market. Sega Enterprises, Ltd. in Japan is using Unicenter TNG to manage its amusement facilities/shop management system, which includes the sale of arcade game machines and employee time management of approximately 900 shops throughout Japan.
- CA launched ''CA-TV'' - a no-cost Internet-based service that automatically delivers news about CA, technical updates, software maintenance releases and sales promotions, directly to clients, channel partners and other subscribers. Powered by software from BackWeb Technologies, Inc., CA-TV sends news flashes to recipients based on their unique environments and preferences.
- HP and CA extended their relationship to deliver leading scalability and ensure long-term investment protection for mutual customers by announcing that Unicenter TNG and Jasmine will support future IA-64 (Intel Architecture, 64-bit) based systems. This announcement further strengthens Unicenter TNG's position as a leading enterprise management platform and will enable Jasmine to exploit performance and scalability of the IA-64 architecture.
- In CA's continuing efforts to assist missing and/or exploited children, eShare and CA joined forces and offered an online chat with parents, youngsters and other concerned parties to learn more about the vital role that photo identification can play in finding missing children.
- Fujitsu and CA shipped a Japanese version of Jasmine, the first pure object solution for building next-generation business systems over the Internet and client/server computing environments.
- In a move to ensure the protection of their clients' heterogeneous IT enterprises, China Jinchen and CA announced an agreement to develop, market and distribute advanced antivirus technologies. China Jinchen and CA will bring together their respective technologies and R&D resources to produce advanced antivirus products.
- As further evidence of CA's commitment to employees, the U.S. Department of Labor cited CA for its family-friendly business practices in its recent report, Meeting the Needs of Today's Workforce: Child Care Best Practices. In addition, a ComputerWorld survey named CA as one of the ''100 Best Places to Work in IS'', for the fourth consecutive year.
- CA and PageNet announced plans to jointly develop and market a product that integrates PageNet's wireless information delivery capabilities and CA's Unicenter TNG. The new integrated product will enable clients to receive immediate wireless notification of changes in the working conditions of their operations. The product will include an application jointly developed by the two companies using CA's Unicenter TNG infrastructure and run on two-way pagers. PageNet also selected Unicenter TNG as its internal enterprise management solution, replacing IBM/Tivoli TME.
Computer Associates International, Inc. (NYSE: CA - news), with headquarters in Islandia, N.Y., is the world leader in mission-critical business software. The company develops, licenses and supports more than 500 integrated products that include enterprise computing and information management, application development, manufacturing and financial applications. CA has over 11,000 people in 160 offices in 43 countries and had revenue of $4.7 billion in fiscal year 1998. CA can be reached by visiting cai.com, emailing info@cai.com or calling 1-516-342-5224.
All referenced product names are trademarks of their respective companies.
Statements in this release concerning the Company's future prospects are ''forward-looking statements'' under the Private Securities Litigation Reform Act of 1995. There can be no assurances that future results will be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially include: the significant percentage of CA's quarterly sales recorded in the last few days of the quarter, making financial predictions especially difficult and raising a substantial risk of variance in actual results; the emergence of new competitive initiatives resulting from rapid technological advances or changes in pricing in the market; the risks associated with new product introductions as well as the uncertainty of customer acceptance of these new or enhanced products from either CA or its competition; delays in product delivery; the ability to recruit and retain qualified personnel; negative implications from the ''Year 2000'' or ''Euro'' implementation technology problem, including customer indecision, purchasing delays or budget re-allocations; business conditions in the client/server and mainframe software and hardware markets; use of software patent rights to attempt to limit competition; assimilation of business or technology acquisitions, fluctuations in foreign currency exchange rates; the volatility of the international marketplace, including the recent Asia turmoil, and other risks described in filings with the Securities and Exchange Commission.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
Earnings Before Stock Plan Charges
(in thousands, except per share data)
(Unaudited)
Three Months
Ended June 30,
1998 (A) 1997
Revenue $1,046,637 $890,739
Income before taxes 310,649 249,237
Net Income 194,156 155,773
Basic Earnings per share $ .35 $ .29
Shares used in
Computation 552,295 544,176
Diluted Earnings per share $ .34 $ .28
Shares used in
Computation 572,989 562,348
(A) Excludes the non-cash $1,071,413,000 pre-tax ($674,992,000 after-tax)
charge associated with the vesting of 20,250,000 shares under the 1995 Key
Employee Stock Ownership Plan (the "1995 Plan"), as previously disclosed.
The shares are subject to seven year transfer restrictions in accordance with
the 1995 Plan.
Condensed Consolidated Income Statement
(in thousands, except per share data)
(Unaudited)
Three Months
Ended June 30,
1998 1997
Revenue $1,046,637 $890,739
(Loss) Income before taxes (760,764) 249,237
Net (Loss) Income (480,836) 155,773
Basic (Loss) Earnings per share $ (.87) $ .29
Shares used in
Computation 552,295 544,176
Diluted (Loss) Earnings per share $ (.87) $ .28
Shares used in
Computation 552,295 562,348
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Contact:
Computer Associates International, Inc., Islandia
Doug Robinson - Investor Relations
(516) 342-2745
dougr@cai.com
or
Bob Gordon - Public Relations
(516) 342-2391
bobg@cai.com
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