EX-99.1 2 f02626exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1

For Financial Inquiries, Contact:
Lynne Farris
Sybase Investor Relations
lfarris@sybase.com
(925) 236-8797

For Press Inquiries, Contact:
Heather Peterson
Sybase Public Relations
heatherp@sybase.com
(925) 236-6517

SYBASE REPORTS STRONG REVENUE AND EARNINGS
IN 2004 THIRD QUARTER; EXCEEDS EXPECTATIONS

Mobile and Wireless Business Grows 25% Year over Year

DUBLIN, Calif. — October 21, 2004 — Sybase, Inc. (NYSE: SY), a leading provider of enterprise infrastructure and wireless software, today reported total revenues increased to $198.7 million for the third quarter ended September 30, 2004, versus total revenue of $193.8 million for the third quarter of 2003.

     Pro forma net income for the third quarter was $27.5 million, or earnings of $0.29 per share on a diluted basis (EPS). This compares with pro forma net income of $27.2 million, or EPS of $0.28 for the 2003 third quarter. Net income for the 2004 third quarter calculated in accordance with generally accepted accounting principles (GAAP) was $17.8 million, or EPS of $0.19, versus GAAP net income of $22.0 million, or EPS of $0.23 for the third quarter of 2003. Pro forma amounts exclude amortization of certain expenses including certain purchased intangibles, unearned stock-based compensation, and restructuring costs. Accompanying this release is a reconciliation of pro forma and GAAP amounts for the third quarter and nine-month period ended September 30, 2004.

     “We’re very pleased with our performance in the quarter,” said John Chen, Chairman, CEO, and president of Sybase. “Growth in data management and mobility solutions, combined with strong performance in certain geographies, helped us deliver better-than-expected results.”

     “We’re especially encouraged by sales of our new products, the real-time database ASE 12.5.2 and Mirror Activator™, into the financial vertical markets. Sales of

- 1 -

 

these solutions in the market validate our Unwired Enterprise initiative and affirm our confidence in our strategic vision,” concluded Mr. Chen.

 

Balance Sheet and Other Data

     For the period ended September 30, 2004, Sybase reported $453.7 million in cash and cash investments, including restricted cash of $8.2 million. The company generated $23.8 million in cash flow from operations in the third quarter, which brings total year-to-date cash flow from operations to $108.1 million.

     Sybase repurchased approximately $25 million worth of its stock during the 2004 third quarter, with $110 million of its current share repurchase authorization remaining.

     Days sales outstanding for the three months ended September 30, 2004 was 55 days.

 

Conference Call and Webcast Information

     The Sybase 2004 third quarter conference call and Webcast is scheduled to begin at 7:30 a.m., Pacific Time/10:30 a.m. Eastern Time, on Thursday, October 21, 2004. To access the live Webcast, please visit www.fulldisclosure.com or Sybase’s Website at www.sybase.com at least 20 minutes prior to the call to download any necessary audio or plug-in software. A 90-day Webcast replay will be available through January 20, 2005. A one-week conference call replay will be available. To access the replay, please dial (888) 203-1112 for domestic access and (719) 457-0820 for international callers; the access code for the telephone replay is #882614.

 

About Sybase, Inc.

     Celebrating 20 years of innovation, Sybase enables the Unwired Enterprise by delivering enterprise and mobile infrastructure, development and integration software solutions. Organizations can attain maximum value from their data assets by getting the right information to the right people at the right time and place. The world’s most

- 2 -

 

critical data in commerce, finance, government, healthcare, and defense runs on Sybase. For more information, visit the Sybase website: http://www.sybase.com.

 

Forward-Looking Statements

     Certain statements in this release concerning Sybase, Inc. and its prospects and future growth are forward looking and involve a number of uncertainties and risks. Factors that could cause actual events or results to differ materially from those suggested by these forward looking statements include, but are not limited to, the global economy; possible disruptive effects of organizational or personnel changes; the success of certain business combinations; political unrest or acts of war; market acceptance of the company’s products and services; customer and industry analyst perception of the company and its technology vision and future prospects; and other factors described in Sybase, Inc.’s reports filed with the Securities Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2003 and its Quarterly Report on Form 10-Q for the three months ended June 30, 2004.

- 3 -

 

Sybase Third Quarter 2004 Selected Highlights

Sybase announcements during the third quarter of 2004 expanded upon the company’s leadership in the mobile enterprise computing market, while positioning it for growth in the core information management market with the addition of new product offerings. Additionally, Sybase broadened its reach with key strategic partnerships, and deepened its influence in the financial services and international markets.

Mobile Enterprise Computing
In Q3 2004, Sybase:

•   Announced XcelleNet Afaria® from iAnywhere Solutions, a Sybase subsidiary, won the Network Computing Editor’s Choice Award and the leader in frontline device management software: http://www.sybase.com/detail/1,6904,1031557,00.html
 
•   Announced that iAnywhere was named number one in the worldwide mobile device management enterprise software market: http://www.ianywhere.com/press_releases/top_software_market.html
 
•   iAnywhere Presented 2004 Innovator Awards: http://www.ianywhere.com/press_releases/innovator2004_winners.html
 
•   Won five first place awards from Mobile Village: http://www.sybase.com/detail/1,6904,1032488,00.html
 
•   AvantGo® Mobile Lifestyle Survey Revealed the Top Twelve “Dream” Features of an All-In-One Handheld Device: http://www.sybase.com/detail/1,6904,1032464,00.html
 
•   Launched new application messaging technology in SQL Anywhere® Studio: http://www.sybase.com/detail/1,6904,1031218,00.html
 
•   Announced the capability to secure sensitive business information residing on Windows Mobile Smartphones: http://www.ianywhere.com/press_releases/afaria_smartphones.html
 
•   iAnywhere Solutions honored by Frost & Sullivan for marketing strategy leadership in Sales Forces Automation Mobile Middleware: http://www.sybase.com/detail/1,6904,1032468,00.html
 
•   Won mobile benchmark and customer Dynamics U.K.: http://www.ianywhere.com/press_releases/general_dynamics_uk_win.html
 
•   Announced customer, Spaulding & Slye Colliers for Pylon To Increase Mobile Work Force Productivity With Remote Access To Email And PIM: http://www.ianywhere.com/press_releases/spaulding_slye_colliers.html
 
•   Won Mobility Product Of The Year Award for XcelleNet Afaria: http://www.ianywhere.com/press_releases/mobility_award_afaria.html

Information Management and Enterprise Applications
In Q3 2004, Sybase:

•   Announced it was the first to provide the availability of free Linux Enterprise-Class database, Sybase ASE Express Edition for Linux: http://www.sybase.com/detail/1,6904,1032328,00.html
 
•   Announced customer success on Linux with the eOffers solution at the Federal Supply Service for the General Services Administration: http://www.sybase.com/detail/1,6904,1032462,00.html

- 4 -

 

•   Announced the beta program for the next generation of enterprise-class RDBMS with enhanced features of the ASE 12.5: http://www.sybase.com/detail/1,6904,1031473,00.html
 
•   Launched PowerBuilder® 10.0 with open IDE powering rapid application development with support for XML, JSP, EJB, .NET and Web Services: http://www.sybase.com/detail/1,6904,1031468,00.html
 
•   Launched application development tool with Sybase DataWindow® .NET: http://www.sybase.com/detail/1,6904,1031305,00.html

Partnerships, Customer Wins, and Global Reach
In Q3 2004, Sybase:

•   Announced a partnership with Intel for the next phase of enterprise computing at TechWave Conference: http://www.sybase.com/detail/1,6904,1031482,00.html
 
•   Entered worldwide reseller agreement with Ascential to provide enterprise data integration: http://www.sybase.com/detail/1,6904,1031554,00.html
 
•   Announced the partnership with Aeroscout to deliver integrated Wi-Fi location and active RFID tracking solution: http://www.sybase.com/detail/1,6904,1031469,00.html
 
•   Announced the early adopter program to jumpstart development of RFID enterprise solutions: http://www.sybase.com/detail/1,6904,1031470,00.html
 
•   Signed a partnership with Lumigent to provide data auditing solution: http://www.sybase.com/detail/1,6904,1031555,00.html
 
•   Announced the celebration of 20 years of innovation at the annual 2004 TechWave Conference: http://www.sybase.com/detail/1,6904,1031471,00.html
 
•   Announced a partnership with Applix providing real-time business intelligence for Sybase users: http://www.sybase.com/detail/1,6904,1032319,00.html
 
•   Partnered with Ambeo for the first data usage tracing solution for Sybase® IQ: http://www.sybase.com/detail/1,6904,1031556,00.html
 
•   Signed a partnership with WebMD, an application partner, agreeing to embed Sybase ASE and HIPAA toolkit will help leverage the operational cost advantage to assist customers with HIPAA claims processing.
 
•   Extended its partnership with HP to have Sybase ASE embedded in their distributed enterprise network management application, allowing customers to increase performance of their infrastructure.
 
•   Extended partnership with Quadrant Risk Management to embed analytics technology from Sybase as core components within the BASEL II resolution system.
 
•   Announced the inauguration of the Sybase office in Pune, India.

Sybase, iAnywhere Solutions, AvantGo, PowerBuilder, Adaptive Server, SQL Anywhere, Afaria, Mirror Activator and Data Window are trademarks of Sybase, Inc. or its subsidiaries. “®” indicates registration with the U.S. Patent and Trademark Office. All other names may be trademarks of the companies with which they are associated.

- 5 -

 

SYBASE, INC.
RECONCILIATION TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(UNAUDITED)

                                                                         
    Three Months Ended September 30, 2004
           Three Months Ended September 30, 2003
(In thousands, except per share data)           Pro forma                                     Pro forma                
    GAAP     Adjustments (2)             Pro forma             GAAP     Adjustments (2)             Pro forma  
   
 		          
 
Revenues:
                                                                        
License fees
   $ 70,380       —             $ 70,380             $ 68,481       —             $ 68,481  
Services
     128,338       —               128,338               125,349       —               125,349  
   
 		            
 		            
 		            
 		  
Total revenues
     198,718       —               198,718               193,830       —               193,830  
Costs and expenses:
                                                                        
Cost of license fees
     15,566       (4,710 )  a       10,856               15,537       (3,831 )  a       11,706  
Cost of services
     39,741       —               39,741               40,652       —               40,652  
Sales and marketing
     59,171       —               59,171               59,270       —               59,270  
Product development and engineering
     29,095       —               29,095               29,045       —               29,045  
General and administrative
     23,526       —               23,526               20,280       —               20,280  
Amortization of other purchased intangibles
     1,677       (1,677 )  a       —               500       (500 )  a       —  
Stock compensation expense
     626       (626 )  b       —               695       (695 )  b       —  
Reversal of purchase accounting accrual
     (2,677 )     2,677    c       —               —       —    c       —  
Cost of restructure
     10,479       (10,479 )  d       —               1,270       (1,270 )  d       —  
   
 		            
 		            
 		            
 		  
Total costs and expenses
     177,204       (14,815 )             162,389               167,249       (6,296 )             160,953  
   
 		            
 		            
 		            
 		  
Operating income
     21,514       14,815               36,329               26,581       6,296               32,877  
Interest income and expense and other, net
     2,518       —               2,518               6,270       —               6,270  
   
 		            
 		            
 		            
 		  
Income before income taxes
     24,032       14,815               38,847               32,851       6,296               39,147  
Provision for income taxes
     6,201       5,186    e       11,387               10,841       1,099    e       11,940  
   
 		            
 		            
 		            
 		  
Net income
   $ 17,831     $ 9,629             $ 27,460             $ 22,010     $ 5,197             $ 27,207  
   
 		            
 		            
 		            
 		  
                                                 
Basic net income per share
   $ 0.19     $ 0.10             $ 0.29             $ 0.23     $ 0.06             $ 0.29  
   
 		            
 		            
 		            
 		  
Shares used in computing basic net income per share
     94,500       94,500               94,500               94,525       94,525               94,525  
   
 		            
 		            
 		            
 		  
Diluted net income per share
   $ 0.19     $ 0.10             $ 0.29             $ 0.23     $ 0.05             $ 0.28  
   
 		            
 		            
 		            
 		  
Shares used in computing diluted net income per share
     95,961       95,961               95,961               97,437       97,437               97,437  
   
 		            
 		            
 		            
 		  

(1)   Use of Pro Forma Financial Information
To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions, and the cost of restructuring because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. We therefore will continue to exclude such items in our pro forma results (and comparable period results). Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.
 
(2)   Proforma adjustments
Proforma adjustments include the following: (a) amortization of purchased intangibles; (b) amortization of unearned stock compensation; (c) reversal of purchase accounting accrual; (d) cost of restructuring charges; (e) income tax effect of proforma adjustments.

- 6 -

 

SYBASE, INC.
RECONCILIATION TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(UNAUDITED)

                                                                         
    Nine Months Ended September 30, 2004
           Nine Months Ended September 30, 2003
              
(In thousands, except per share data)           Pro forma                                     Pro forma                
    GAAP     Adjustments (2)             Pro forma             GAAP     Adjustments (2)             Pro forma  
   
 		          
 
Revenues:
                                                                        
License fees
   $ 188,713       —             $ 188,713             $ 193,252       —             $ 193,252  
Services
     381,195       —               381,195               374,157       —               374,157  
   
 		            
 		            
 		            
 		  
Total revenues
     569,908       —               569,908               567,409       —               567,409  
Costs and expenses:
                                                                        
Cost of license fees
     44,704       (13,108 )  a       31,596               44,055       (11,426 )  a       32,629  
Cost of services
     122,780       —               122,780               120,526       —               120,526  
Sales and marketing
     179,409       —               179,409               177,432       —               177,432  
Product development and engineering
     88,864       —               88,864               88,311       —               88,311  
General and administrative
     64,600       —               64,600               62,851       —               62,851  
Amortization of other purchased intangibles
     3,462       (3,462 )  a       —               1,500       (1,500 )  a       —  
Stock compensation expense
     3,472       (3,472 )  b       —               2,083       (2,083 )  b       —  
Reversal of purchase accounting accrual
     (2,677 )     2,677    c       —               —       —    c       —  
Cost of restructure
     10,351       (10,351 )  d       —               9,018       (9,018 )  d       —  
   
 		            
 		            
 		            
 		  
Total costs and expenses
     514,965       (27,716 )             487,249               505,776       (24,027 )             481,749  
   
 		            
 		            
 		            
 		  
Operating income
     54,943       27,716               82,659               61,633       24,027               85,660  
Interest income and expense and other, net
     8,495       —               8,495               12,237       —               12,237  
   
 		            
 		            
 		            
 		  
Income before income taxes
     63,438       27,716               91,154               73,870       24,027               97,897  
Provision for income taxes
     19,599       8,526    e       28,125               24,327       7,000    e       31,327  
   
 		            
 		            
 		            
 		  
Net income
   $ 43,839     $ 19,190             $ 63,029             $ 49,543     $ 17,027             $ 66,570  
   
 		            
 		            
 		            
 		  
                                                 
Basic net income per share
   $ 0.46     $ 0.20             $ 0.66             $ 0.53     $ 0.18             $ 0.71  
   
 		            
 		            
 		            
 		  
Shares used in computing basic net income per share
     95,973       95,973               95,973               94,223       94,223               94,223  
   
 		            
 		            
 		            
 		  
Diluted net income per share
   $ 0.44     $ 0.20             $ 0.64             $ 0.51     $ 0.18             $ 0.69  
   
 		            
 		            
 		            
 		  
Shares used in computing diluted net income per share
     98,522       98,522               98,522               96,694       96,694               96,694  
   
 		            
 		            
 		            
 		  

(1)   Use of Pro Forma Financial Information
To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions, and the cost of restructuring because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. We therefore will continue to exclude such items in our pro forma results (and comparable period results). Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.
 
(2)   Proforma adjustments
Proforma adjustments include the following: (a) amortization of purchased intangibles; (b) amortization of unearned stock compensation; (c) reversal of purchase accounting accrual; (d) cost of restructuring charges; (e) income tax effect of proforma adjustments.

- 7 -

 

SYBASE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

                 
    September 30,     December 31,  
     (In thousands, except share and per share data)   2004     2003  
    (Unaudited)        
Current assets:
                
Cash and cash equivalents
   $ 243,554     $ 315,404  
Short-term investments
     144,749       155,093  
 
  
 		    
 		  
Total cash, cash equivalents and short-term cash investments
     388,303       470,497  
Restricted cash
     4,812       4,747  
Accounts receivable, net
     122,418       140,332  
Deferred income taxes
     11,702       12,739  
Other current assets
     15,743       16,167  
 
  
 		    
 		  
Total current assets
     542,978       644,482  
Long-term cash investments
     57,197       103,296  
Restricted long-term cash investments
     3,400       3,400  
Property, equipment and improvements, net
     66,228       67,462  
Deferred income taxes
     44,831       58,506  
Capitalized software, net
     61,544       58,947  
Goodwill and other purchased intangibles, net
     287,710       179,590  
Other assets
     32,331       35,673  
 
  
 		    
 		  
Total assets
   $ 1,096,219     $ 1,151,356  
 
  
 		    
 		  
Current liabilities:
                
Accounts payable
   $ 17,846     $ 15,425  
Accrued compensation and related expenses
     35,196       39,134  
Accrued income taxes
     33,321       33,677  
Other accrued liabilities
     68,519       94,611  
Deferred revenue
     190,809       200,612  
 
  
 		    
 		  
Total current liabilities
     345,691       383,459  
Other liabilities
     30,377       15,129  
Long-term deferred revenue
     10,179       6,269  
Minority interest
     5,030       5,030  
Stockholders’ equity:
                
Preferred stock, $0.001 par value, 8,000,000 shares authorized; none issued or outstanding
     —       —  
Common stock, $0.001 par value, 200,000,000 shares authorized; 105,337,362 shares issued
(2003 - 105,337,362)
     105       105  
Additional paid-in capital
     940,631       933,657  
Accumulated deficit
     (88,303 )     (126,385 )
Other comprehensive income
     25,740       26,849  
Less: Cost of treasury stock (10,259,466 shares and 2003 - 6,811,898)
     (164,875 )     (87,672 )
Unearned compensation
     (8,356 )     (5,085 )
 
  
 		    
 		  
Total stockholders’ equity
     704,942       741,469  
 
  
 		    
 		  
Total liabilities and stockholders’ equity
   $ 1,096,219     $ 1,151,356  
 
  
 		    
 		  

- 8 -

 

SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
(UNAUDITED)

                                 
    Three Months Ended September 30,
   Nine Months Ended September 30,
     (In thousands, except per share data)   2004
     2003
     2004
     2003
  
                                 
Revenues:
                                
License fees
   $ 70,380     $ 68,481     $ 188,713     $ 193,252  
Services
     128,338       125,349       381,195       374,157  
 
  
 		    
 		    
 		    
 		  
Total revenues
     198,718       193,830       569,908       567,409  
Costs and expenses:
                                
Cost of license fees
     10,856       11,706       31,596       32,629  
Cost of services
     39,741       40,652       122,780       120,526  
Sales and marketing
     59,171       59,270       179,409       177,432  
Product development and engineering
     29,095       29,045       88,864       88,311  
General and administrative
     23,526       20,280       64,600       62,851  
 
  
 		    
 		    
 		    
 		  
Total costs and expenses
     162,389       160,953       487,249       481,749  
 
  
 		    
 		    
 		    
 		  
Operating income
     36,329       32,877       82,659       85,660  
Interest income and expense and other, net
     2,518       6,270       8,495       12,237  
 
  
 		    
 		    
 		    
 		  
Income before income taxes
     38,847       39,147       91,154       97,897  
Provision for income taxes
     11,387       11,940       28,125       31,327  
 
  
 		    
 		    
 		    
 		  
Net income
   $ 27,460     $ 27,207     $ 63,029     $ 66,570  
 
  
 		    
 		    
 		    
 		  
Basic net income per share
   $ 0.29     $ 0.29     $ 0.66     $ 0.71  
 
  
 		    
 		    
 		    
 		  
Shares used in computing basic net income per share
     94,500       94,525       95,973       94,223  
 
  
 		    
 		    
 		    
 		  
Diluted net income per share
   $ 0.29     $ 0.28     $ 0.64     $ 0.69  
 
  
 		    
 		    
 		    
 		  
Shares used in computing diluted net income per share
     95,961       97,437       98,522       96,694  
 
  
 		    
 		    
 		    
 		  

    Note: The pro forma statement of operations is intended to present the Company’s operating results excluding purchase accounting adjustments associated with the acquisitions of Home Financial Network, Inc., New Era of Networks, Inc., AvantGo Inc., Dejima, Inc., and XcelleNet, Inc. and other purchased intangibles. Such purchase accounting adjustments would include amortization of developed technology, amortization of intangibles, goodwill impairment loss, in-process research and development costs, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense, restructuring costs, and cumulative effect of an accounting change which we do not believe are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. We therefore will continue to exclude such items in our pro forma results (and comparable period results). Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.  

- 9 -

 

SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

                                 
    Three Months Ended September 30,
   Nine Months Ended September 30,
     (In thousands, except per share data)   2004
     2003
     2004
     2003
  
                                 
Revenues:
                                
License fees
   $ 70,380     $ 68,481     $ 188,713     $ 193,252  
Services
     128,338       125,349       381,195       374,157  
 
  
 		    
 		    
 		    
 		  
Total revenues
     198,718       193,830       569,908       567,409  
Costs and expenses:
                                
Cost of license fees
     15,566       15,537       44,704       44,055  
Cost of services
     39,741       40,652       122,780       120,526  
Sales and marketing
     59,171       59,270       179,409       177,432  
Product development and engineering
     29,095       29,045       88,864       88,311  
General and administrative
     23,526       20,280       64,600       62,851  
Amortization of other purchased intangibles
     1,677       500       3,462       1,500  
Stock compensation expense
     626       695       3,472       2,083  
Reversal of purchase accounting accrual
     (2,677 )     —       (2,677 )     —  
Cost of restructure
     10,479       1,270       10,351       9,018  
 
  
 		    
 		    
 		    
 		  
Total costs and expenses
     177,204       167,249       514,965       505,776  
 
  
 		    
 		    
 		    
 		  
Operating income
     21,514       26,581       54,943       61,633  
Interest income and expense and other, net
     2,518       6,270       8,495       12,237  
 
  
 		    
 		    
 		    
 		  
Income before income taxes
     24,032       32,851       63,438       73,870  
Provision for income taxes
     6,201       10,841       19,599       24,327  
 
  
 		    
 		    
 		    
 		  
Net income
   $ 17,831     $ 22,010     $ 43,839     $ 49,543  
 
  
 		    
 		    
 		    
 		  
Basic net income per share
   $ 0.19     $ 0.23     $ 0.46     $ 0.53  
 
  
 		    
 		    
 		    
 		  
Shares used in computing basic net income per share
     94,500       94,525       95,973       94,223  
 
  
 		    
 		    
 		    
 		  
Diluted net income per share
   $ 0.19     $ 0.23     $ 0.44     $ 0.51  
 
  
 		    
 		    
 		    
 		  
Shares used in computing diluted net income per share
     95,961       97,437       98,522       96,694  
 
  
 		    
 		    
 		    
 		  

- 10 -

 

SYBASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                 
    Nine Months Ended
    September 30,
(Dollars in thousands)
   2004
     2003
  
Cash and cash equivalents, beginning of year
   $ 315,404     $ 231,267  
Cash flows from operating activities:
                
Net income
     43,839       49,543  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     63,340       63,208  
Write-off of assets in restructuring
     6,908       379  
(Gain) Loss on disposal of assets
     575       (263 )
Reversal of purchase accounting accrual
     (2,677 )     —  
Deferred income taxes
     (4,208 )     (3,959 )
Amortization of deferred stock-based compensation
     3,472       2,083  
Changes in assets and liabilities:
                
Accounts receivable
     24,308       67,593  
Other current assets
     1,117       1,337  
Other assets — operating
     3,441       —  
Accounts payable
     3,707       (1,907 )
Accrued compensation and related expenses
     (5,041 )     (5,960 )
Accrued income taxes
     (150 )     8,483  
Other accrued liabilities
     (27,984 )     (28,663 )
Deferred revenues
     (9,036 )     (8,276 )
Other liabilities
     6,481       3,484  
 
  
 		    
 		  
Net cash provided by operating activities
     108,092       147,082  
Cash flows from investing activities:
                
(Increase) Decrease in restricted cash
     (65 )     1,203  
Purchases of available-for-sale cash investments
     (161,095 )     (186,129 )
Maturities of available-for-sale cash investments
     107,822       137,907  
Sales of available-for-sale cash investments
     108,738       45,162  
Business combinations, net of cash acquired
     (81,272 )     (13,900 )
Purchases of property, equipment and improvements
     (20,106 )     (26,043 )
Proceeds from sale of fixed assets
     193       152  
Capitalized software development costs
     (27,918 )     (22,812 )
(Increase) Decrease in other assets — investing
     2       (184 )
 
  
 		    
 		  
Net cash used for investing activities
     (73,701 )     (64,644 )
Cash flows from financing activities:
                
Repayments of long-term obligations
     (22,173 )     —  
Net proceeds from the issuance of common stock and reissuance of treasury stock
     26,761       33,315  
Purchases of treasury stock
     (109,491 )     (30,883 )
 
  
 		    
 		  
Net cash provided by (used for) financing activities
     (104,903 )     2,432  
Effect of exchange rate changes on cash
     (1,338 )     23,159  
 
  
 		    
 		  
Net increase (decrease) in cash and cash equivalents
     (71,850 )     108,029  
 
  
 		    
 		  
Cash and cash equivalents, end of period
     243,554       339,296  
Cash investments, end of period
     201,946       158,869  
 
  
 		    
 		  
Total cash, cash equivalents and cash investments, end of period
   $ 445,500     $ 498,165  
 
  
 		    
 		  

- 11 -

 

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED)

                                         
(In thousands, except per share data)                                
    Infrastructure     iAnywhere     Financial             Consolidated  
    Platform Group
     Solutions
     Fusion
     Eliminations
     Total
  
Revenues:
                                       
License fees
                                       
Infrastructure
   $ 51,844     $ 10     $ —     $ —     $ 51,854  
Mobile and Embedded
     6,226       11,641       —       —       17,867  
E-Finance
     178       —       481       —       659  
 
  
 		    
 		    
 		    
 		    
 		  
Subtotal license fees
     58,248       11,651       481       —       70,380  
Intersegment license revenues
     22       5,163       148       (5,333 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total license fees
     58,270       16,814       629       (5,333 )     70,380  
Services
     117,758       6,925       3,655       —       128,338  
Intersegment service revenues
     —       6,743       1,209       (7,952 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total services
     117,758       13,668       4,864       (7,952 )     128,338  
 
  
 		    
 		    
 		    
 		    
 		  
Total revenues
     176,028       30,482       5,493       (13,285 )     198,718  
Total allocated costs and expenses
     141,483       26,825       7,557       (13,285 )     162,580  
 
  
 		    
 		    
 		    
 		    
 		  
Operating income (loss) before unallocated expenses
   $ 34,545     $ 3,657     $ (2,064 )   $ —     $ 36,138  
Other unallocated expenses
                                     (191 )
 
                                  
 		  
Operating income after unallocated expenses
                                     36,329  
Interest income and expense and other, net
                                     2,518  
 
                                  
 		  
Income before income taxes
                                     38,847  
Provision for income taxes
                                     11,387  
 
                                  
 		  
Net income
                                   $ 27,460  
 
                                  
 		  
Basic net income per share
                                   $ 0.29  
 
                                  
 		  
Shares used in computing basic net income per share
                                     94,500  
 
                                  
 		  
Diluted net income per share
                                   $ 0.29  
 
                                  
 		  
Shares used in computing diluted net income per share
                                     95,961  
 
                                  
 		  

    Note: The pro forma statement of operations is intended to present the Company’s operating results excluding purchase accounting adjustments associated with the acquisitions of Home Financial Network, Inc., New Era of Networks, Inc., AvantGo Inc., Dejima, Inc., and XcelleNet, Inc. and other purchased intangibles. Such purchase accounting adjustments would include amortization of developed technology, amortization of intangibles, goodwill impairment loss, in-process research and development costs, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense, restructuring costs, and cumulative effect of an accounting change which we do not believe are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. We therefore will continue to exclude such items in our pro forma results (and comparable period results). Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.  

- 12 -

 

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED)

                                         
(In thousands, except per share data)                                
    Infrastructure     iAnywhere     Financial             Consolidated  
    Platform Group
     Solutions
     Fusion
     Eliminations
     Total
  
Revenues:
                                        
License fees
                                        
Infrastructure
   $ 133,967     $ 56     $ —     $ —     $ 134,023  
Mobile and Embedded
     19,225       31,310       —       —       50,535  
E-Finance
     690       —       3,465       —       4,155  
 
  
 		    
 		    
 		    
 		    
 		  
Subtotal license fees
     153,882       31,366       3,465       —       188,713  
Intersegment license revenues
     96       16,134       594       (16,824 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total license fees
     153,978       47,500       4,059       (16,824 )     188,713  
Services
     356,209       13,809       11,177       —       381,195  
Intersegment service revenues
     11       19,933       3,539       (23,483 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total services
     356,220       33,742       14,716       (23,483 )     381,195  
 
  
 		    
 		    
 		    
 		    
 		  
Total revenues
     510,198       81,242       18,775       (40,307 )     569,908  
Total allocated costs and expenses
     437,890       73,026       21,468       (40,307 )     492,077  
 
  
 		    
 		    
 		    
 		    
 		  
Operating income (loss) before unallocated expenses
   $ 72,308     $ 8,216     $ (2,693 )   $ —     $ 77,831  
Other unallocated expenses
                                     (4,828 )
 
                                  
 		  
Operating income after unallocated expenses
                                     82,659  
Interest income and expense and other, net
                                     8,495  
 
                                  
 		  
Income before income taxes
                                     91,154  
Provision for income taxes
                                     28,125  
 
                                  
 		  
Net income
                                   $ 63,029  
 
                                  
 		  
Basic net income per share
                                   $ 0.66  
 
                                  
 		  
Shares used in computing basic net income per share
                                     95,973  
 
                                  
 		  
Diluted net income per share
                                   $ 0.64  
 
                                  
 		  
Shares used in computing diluted net income per share
                                     98,522  
 
                                  
 		  

    Note: The pro forma statement of operations is intended to present the Company’s operating results excluding purchase accounting adjustments associated with the acquisitions of Home Financial Network, Inc., New Era of Networks, Inc., AvantGo Inc., Dejima, Inc., and XcelleNet, Inc. and other purchased intangibles. Such purchase accounting adjustments would include amortization of developed technology, amortization of intangibles, goodwill impairment loss, in-process research and development costs, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense, restructuring costs, and cumulative effect of an accounting change which we do not believe are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. We therefore will continue to exclude such items in our pro forma results (and comparable period results). Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.  

- 13 -

 

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED)

                                         
(In thousands, except per share data)                                
    Infrastructure     iAnywhere     Financial             Consolidated  
    Platform Group
     Solutions
     Fusion
     Eliminations
     Total
  
Revenues:
                                        
License fees
                                        
Infrastructure
   $ 51,844     $ 10     $ —     $ —     $ 51,854  
Mobile and Embedded
     6,226       11,641       —       —       17,867  
E-Finance
     178       —       481       —       659  
 
  
 		    
 		    
 		    
 		    
 		  
Subtotal license fees
     58,248       11,651       481       —       70,380  
Intersegment license revenues
     22       5,163       148       (5,333 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total license fees
     58,270       16,814       629       (5,333 )     70,380  
Services
     117,758       6,925       3,655       —       128,338  
Intersegment service revenues
     —       6,743       1,209       (7,952 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total services
     117,758       13,668       4,864       (7,952 )     128,338  
 
  
 		    
 		    
 		    
 		    
 		  
Total revenues
     176,028       30,482       5,493       (13,285 )     198,718  
Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology
     141,483       26,825       7,557       (13,285 )     162,580  
 
  
 		    
 		    
 		    
 		    
 		  
Operating income (loss) before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology
     34,545       3,657       (2,064 )     —       36,138  
Cost of restructure - 2004 Activity
     10,437       143       40       —       10,620  
Amortization of customer lists
     —       711       500       —       1,211  
Amortization of covenant not to compete
     —       466       —       —       466  
Amortization of purchased technology
     2,920       979       811       —       4,710  
 
  
 		    
 		    
 		    
 		    
 		  
Operating income (loss) before unallocated costs
   $ 21,188     $ 1,358     $ (3,415 )   $ —     $ 19,131  
Other unallocated expenses
                                     (2,383 )
 
                                  
 		  
Operating income after unallocated expenses
                                     21,514  
Interest income and expense and other, net
                                     2,518  
 
                                  
 		  
Income before income taxes
                                     24,032  
Provision for income taxes
                                     6,201  
 
                                  
 		  
Net income
                                   $ 17,831  
 
                                  
 		  
Basic net income per share
                                   $ 0.19  
 
                                  
 		  
Shares used in computing basic net income per share
                                     94,500  
 
                                  
 		  
Diluted net income per share
                                   $ 0.19  
 
                                  
 		  
Shares used in computing diluted net income per share
                                     95,961  
 
                                  
 		  

- 14 -

 

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED)

                                         
(In thousands, except per share data)                                
    Infrastructure     iAnywhere     Financial             Consolidated  
    Platform Group
     Solutions
     Fusion
     Eliminations
     Total
  
Revenues:
                                        
License fees
                                        
Infrastructure
   $ 133,967     $ 56     $ —     $ —     $ 134,023  
Mobile and Embedded
     19,225       31,310       —       —       50,535  
E-Finance
     690       —       3,465       —       4,155  
 
  
 		    
 		    
 		    
 		    
 		  
Subtotal license fees
     153,882       31,366       3,465       —       188,713  
Intersegment license revenues
     96       16,134       594       (16,824 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total license fees
     153,978       47,500       4,059       (16,824 )     188,713  
Services
     356,209       13,809       11,177       —       381,195  
Intersegment service revenues
     11       19,933       3,539       (23,483 )     —  
 
  
 		    
 		    
 		    
 		    
 		  
Total services
     356,220       33,742       14,716       (23,483 )     381,195  
 
  
 		    
 		    
 		    
 		    
 		  
Total revenues
     510,198       81,242       18,775       (40,307 )     569,908  
Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology
     437,890       73,026       21,468       (40,307 )     492,077  
 
  
 		    
 		    
 		    
 		    
 		  
Operating income (loss) before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology
     72,308       8,216       (2,693 )     —       77,831  
Cost of restructure - 2004 Activity
     10,991       140       40       —       11,171  
Amortization of customer lists
     —       1,185       1,500       —       2,685  
Amortization of covenant not to compete
     —       777       —       —       777  
Amortization of purchased technology
     8,760       1,915       2,433       —       13,108  
 
  
 		    
 		    
 		    
 		    
 		  
Operating income (loss) before unallocated costs
   $ 52,557     $ 4,199     $ (6,666 )   $ —     $ 50,090  
Other unallocated expenses
                                     (4,853 )
 
                                  
 		  
Operating income after unallocated expenses
                                     54,943  
Interest income and expense and other, net
                                     8,495  
 
                                  
 		  
Income before income taxes
                                     63,438  
Provision for income taxes
                                     19,599  
 
                                  
 		  
Net income
                                   $ 43,839  
 
                                  
 		  
Basic net income per share
                                   $ 0.46  
 
                                  
 		  
Shares used in computing basic net income per share
                                     95,973  
 
                                  
 		  
Diluted net income per share
                                   $ 0.44  
 
                                  
 		  
Shares used in computing diluted net income per share
                                     98,522  
 
                                  
 		  

- 15 -