EX-99.1 3 f91719exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 For Financial Inquiries Contact: John Cummings Sybase Investor Relations JOHN.CUMMINGS@SYBASE.COM (925) 236-8797 For Press Inquiries Contact: Rick Myllenbeck Sybase Public Relations RICK.MYLLENBECK@SYBASE.COM (925) 236-8506 SYBASE SECOND QUARTER RESULTS EXCEED FIRST CALL REVENUE AND EPS ESTIMATES GROWTH IN MOBILE AND WIRELESS BUSINESS FUELS NEW WI-FI INITIATIVES DUBLIN, CALIF. - JULY 23, 2003 - Sybase, Inc. (NYSE: SY), a leading provider of enterprise infrastructure and wireless software, today announced second quarter 2003 total revenues of $192.0 million, including license fees of $63.9 million, exceeding First Call consensus revenue estimates of $186.5 million. Net income on a pro forma basis for the second quarter was $23.2 million, or earnings per share of $0.24 on a diluted basis (EPS), exceeding First Call consensus EPS estimates of $0.21. Pro forma net income was $25.9 million, or EPS of $0.26, for the same period in 2002. Net income for the second quarter calculated in accordance with generally accepted accounting principles (GAAP) was $14.6 million, or EPS of $0.15. Net income on a GAAP basis was $20.2 million, or EPS of $0.20, for the same period in 2002. GAAP-based amounts include amortization of purchased intangibles, stock-based compensation expense and restructuring charges and reversals. A detailed reconciliation of pro forma and GAAP amounts in this release is set forth in the attached financial exhibits, along with full details of the company's financial results. - 5 - "We are encouraged by our second quarter results," said John Chen, chairman, president and CEO of Sybase, Inc. "An increasing number of customers are exploring new IT projects and initiatives involving Sybase, which gives us good reason to be optimistic. We're particularly excited about the strength in our mobile and wireless business and our new Wi-Fi initiatives." BALANCE SHEET AND OTHER DATA For the period ended June 30, 2003, Sybase reported $467.1 million in cash and cash investments, including restricted cash of $7.8 million. This is the highest cash balance in the company's history. The company generated $24.4 million in cash flow from operations in the second quarter bringing total year-to-date cash flow from operations to $119.9 million. Sybase repurchased $15.9 million of its stock during the second quarter, with $19.2 million of its current share repurchase authorization remaining. Through the end of the second quarter 2003, the company has repurchased an aggregate total of 24.9 million shares for $380.8 million at an average price of $15.29 per share since inception of the stock repurchase program in 1998. Days sales outstanding for the three months ended June 30, 2003 was 59 days, compared with 60 days for the three months ended March 31, 2003. ABOUT SYBASE, INC. Sybase provides enterprise infrastructure and wireless software that integrates and "unwires" platforms, databases and applications. Sybase solutions create Information Liquidity -- transforming data into economic value. With Sybase, companies can maximize value from their data assets by getting the right information to the right people at the right time. For more information, visit the Sybase website: http://www.sybase.com. # # # # Forward-looking Statements: Statements in this release concerning Sybase, Inc., its subsidiaries and their respective prospects and future growth are forward-looking statements that involve a number of uncertainties and risks. Factors that could cause actual events or results to differ materially from those - 6 - suggested by such forward-looking statements include general business conditions; sales productivity; possible disruptive effects of organizational or personnel changes; 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; rapid technological changes; competitive factors; unanticipated delays in scheduled product availability dates; interoperability of the company's products with other leading software application products; volatility of the stock markets generally; market growth rates in the client/server and Internet software markets; and other factors discussed 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, 2002, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2003. - 7 - SYBASE SECOND QUARTER 2003 SELECTED HIGHLIGHTS During the second quarter of 2003, Sybase extended its lead in the mobile and wireless computing space with a Wi-Fi application development initiative, while continuing to strengthen its core products through new releases, partnerships and customer wins. In addition, Sybase deepened its influence in the federal government and international markets through the opening of a Government Affairs office in Washington, D.C. and the election of Sybase president, chairman and CEO John Chen to the board of directors of the U.S. Chamber of Commerce. DURING THE QUARTER SYBASE: Extended its lead in mobility with the announcement of a $25 million initiative to accelerate Wi-Fi enterprise application development, helping businesses to capitalize on the opportunities of mobile computing. http://www.sybase.com/detail/1,6904,1025021,00.html Announced the Sybase Wi-Fi Professional Services practice to help enterprises define and implement strategies to leverage the latest developments in mobile computing for competitive advantage. http://www.sybase.com/detail/1,6904,1025121,00.html Deepened its commitment to the government market with the opening of a Government Affairs office in Washington, D.C. http://www.sybase.com/detail/1,6904,1024807,00.html Launched the Remote Enterprise Management Outsourcing (REMO) service offering, a subscription-based service to keep business critical systems and applications available 24x7 and decrease operational costs. http://www.sybase.com/detail/1,6904,1024905,00.html Announced its Enterprise Portal had been selected by the Department of Defense (DOD) Standard Procurement System (SPS) Joint Program Management Office (JPMO) to run its online Center of Excellence. http://www.sybase.com/detail/1,6904,1024488,00.html Announced the general availability of Adaptive Server (R) IQ 12.5, a highly-scalable analytical engine featuring greater ease-of-use, enhanced support, lower overall total cost of ownership, and easier integration and interoperability. http://www.sybase.com/detail/1,6904,1025180,00.html - 8 - DURING THE QUARTER, IANYWHERE SOLUTIONS, INC. A SUBSIDIARY OF SYBASE: Announced the general availability of SQL Anywhere(R) Studio 9, the industry's leading mobile database featuring Mac support, enhanced Web services and .NET functionality, and an index consultant designed to significantly speed development time. http://www.ianywhere.com/press releases/sqlany 9.html Announced a strategic relationship with Intel Corporation to fuel the development of always-available mobile enterprise applications that extend enterprise information to mobile workers regardless of network availability. http://www.ianywhere.com/press releases/ias intel.html Announced the beta release of SQL Anywhere Studio 9 for Mac OS X, delivering the market-leading database for mobile, embedded and small to medium sized business environments to the Mac. http://www.ianywhere.com/press releases/sqlany9 macosx beta.html Sybase, Adaptive Server and SQL Anywhere are trademarks of Sybase, Inc. or its subsidiaries. Other product names may be trademarks of the companies with which they are associated. "(R)" indicates registration in the United States. - 9 - SYBASE, INC. RECONCILIATION OF GAAP TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1) FOR THE THREE MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
Three Months Ended June 30, 2003 Three Months Ended June 30, 2002 ------------------------------------- -------------------------------------- Pro forma Pro forma (In thousands, except per share data) GAAP Adjustments (2) Pro forma GAAP Adjustments (2) Pro forma ------------------------------------- -------------------------------------- Revenues: License fees $ 63,897 - $ 63,897 $ 77,449 - $ 77,449 Services 128,135 - 128,135 127,814 - 127,814 ----------------------- --------- ------------------------ --------- Total revenues 192,032 - 192,032 205,263 - 205,263 Costs and expenses: Cost of license fees 14,589 (3,831) a 10,758 13,225 (3,731) a 9,494 Cost of services 40,643 - 40,643 48,344 - 48,344 Sales and marketing 59,666 - 59,666 66,962 - 66,962 Product development and engineering 29,348 - 29,348 28,530 - 28,530 General and administrative 20,471 - 20,471 20,428 - 20,428 Amortization of other purchased intangibles 500 (500) a - 500 (500) a - Stock compensation expense 727 (727) b - 497 (497) b - Cost (Reversal) of restructure 7,957 (7,957) c - (795) 795 c - ----------------------- --------- ------------------------ --------- Total costs and expenses 173,901 (13,015) 160,886 177,691 (3,933) 173,758 ----------------------- --------- ------------------------ --------- Operating income 18,131 13,015 31,146 27,572 3,933 31,505 Interest income and expense and other, net 3,524 - 3,524 5,478 - 5,478 ----------------------- --------- ------------------------ --------- Income before income taxes and cumulative effect of an accounting change 21,655 13,015 34,670 33,050 3,933 36,983 Provision for income taxes 7,096 4,345 d 11,441 12,889 (1,794) d 11,095 ----------------------- --------- ------------------------ --------- Income before cumulative effect of an accounting change 14,559 8,670 $ 23,229 20,161 5,727 25,888 Cumulative effect of an accounting change to adopt FAS 142 - - - - - e - ----------------------- --------- ------------------------ --------- Net income (loss) $ 14,559 $ 8,670 $ 23,229 $ 20,161 $ 5,727 $ 25,888 ======================= ========= ======================== ========= Income per share before cumulative effect of an accounting change $ 0.16 $ 0.09 $ 0.25 $ 0.21 $ 0.05 $ 0.26 Cumulative effect of an accounting change - - - - - - ----------------------- --------- ------------------------ --------- Basic net income (loss) per share $ 0.16 $ 0.09 $ 0.25 $ 0.21 $ 0.05 $ 0.26 ======================= ========= ======================== ========= Shares used in computing basic net income (loss) per share 93,787 93,787 93,787 98,308 98,308 98,308 ======================= ========= ======================== ========= Income per share before cumulative effect of an accounting change $ 0.15 $ 0.09 $ 0.24 $ 0.20 $ 0.06 $ 0.26 Cumulative effect of an accounting change - - - - - - ----------------------- --------- ------------------------ --------- Diluted net income (loss) per share $ 0.15 $ 0.09 $ 0.24 $ 0.20 $ 0.06 $ 0.26 ======================= ========= ======================== ========= Shares used in computing diluted net income (loss) per share 96,432 96,432 96,432 100,738 100,738 100,738 ======================= ========= ======================== =========
(1) USE OF PRO FORMA FINANCIAL INFORMATION To supplement our consolidated financial statements presented in accordance with 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, expenses, expenses reversals, and losses. These pro forma adjustments are provided to enhance the users overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the pro forma results provide useful information to both management and investors by excluding certain expenses that we believe are not indicative of our core operations. In addition, since we have historically reported pro forma results to the investment community, we believe the inclusion of pro forma numbers provides consistency and comparability in our financial reporting. Further, these adjusted pro forma results are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. (2) PROFORMA ADJUSTMENTS Proforma adjustments include the following: (a) amoritization of purchased intangibles; (b) amortization of unearned stock compensation; (c) cost (reversal) of restructuring charges; (d) income tax effect of proforma adjustments, (e) cumulative effect of an accounting change. - 10 - SYBASE, INC. RECONCILIATION OF GAAP TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1) FOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
Six Months Ended June 30, 2003 --------------------------------------- (In thousands, except per share data) Pro forma GAAP Adjustments (2) Pro forma --------------------------------------- Revenues: License fees $ 124,771 - $ 124,771 Services 248,808 - 248,808 ------------------------- --------- Total revenues 373,579 - 373,579 Costs and expenses: Cost of license fees 28,518 (7,595) a 20,923 Cost of services 79,874 - 79,874 Sales and marketing 118,162 - 118,162 Product development and engineering 59,266 - 59,266 General and administrative 42,571 - 42,571 Amortization of other purchased intangibles 1,000 (1,000) a - Stock compensation expense 1,388 (1,388) b - Cost (Reversal) of restructure 7,748 (7,748) c - ------------------------- --------- Total costs and expenses 338,527 (17,731) 320,796 ------------------------- --------- Operating income 35,052 17,731 52,783 Interest income and expense and other, net 5,967 - 5,967 ------------------------- --------- Income before income taxes and cumulative effect of an accounting change 41,019 17,731 58,750 Provision for income taxes 13,486 5,901 d 19,387 ------------------------- --------- Income before cumulative effect of an accounting change 27,533 11,830 $ 39,363 Cumulative effect of an accounting change to adopt FAS 142 - - ------------------------- --------- Net income (loss) $ 27,533 $ 11,830 $ 39,363 ========================= ========= Income per share before cumulative effect $ 0.29 $ 0.13 $ 0.42 of an accounting change Cumulative effect of an accounting change - - - ------------------------- --------- Basic net income (loss) per share $ 0.29 $ 0.13 $ 0.42 ========================= ========= Shares used in computing basic net income (loss) per share 94,072 94,072 94,072 ========================= ========= Income per share before cumulative effect of $ 0.28 $ 0.13 $ 0.41 an accounting change Cumulative effect of an accounting change - - - ------------------------- --------- Diluted net income (loss) per share $ 0.28 $ 0.13 $ 0.41 ========================= ========= Shares used in computing diluted net income (loss) per share 96,858 96,858 96,858 ========================= ========= Six Months Ended June 30, 2002 --------------------------------------- (In thousands, except per share data) Pro forma GAAP Adjustments (2) Pro forma --------------------------------------- Revenues: License fees $ 161,298 - $ 161,298 Services 255,002 - 255,002 ------------------------- --------- Total revenues 416,300 - 416,300 Costs and expenses: Cost of license fees 24,689 (7,462) a 17,227 Cost of services 100,429 - 100,429 Sales and marketing 137,850 - 137,850 Product development and engineering 59,469 - 59,469 General and administrative 42,690 - 42,690 Amortization of other purchased intangibles 1,000 (1,000) a - Stock compensation expense 994 (994) b - Cost (Reversal) of restructure (910) 910 c - ------------------------- --------- Total costs and expenses 366,211 (8,546) 357,665 ------------------------- --------- Operating income 50,089 8,546 58,635 Interest income and expense and other, net 8,439 - 8,439 ------------------------- --------- Income before income taxes and cumulative effect of an accounting change 58,528 8,546 67,074 Provision for income taxes 22,316 (2,194) d 20,122 ------------------------- --------- Income before cumulative effect of an 36,212 10,740 46,952 accounting change Cumulative effect of an accounting change to adopt FAS 142 (132,450) 132,450 e - ------------------------- --------- Net income (loss) $ (96,238) $ 143,190 $ 46,952 ========================= ========= Income per share before cumulative effect $ 0.37 $ 0.11 $ 0.48 of an accounting change Cumulative effect of an accounting change (1.35) 1.35 - ------------------------- --------- Basic net income (loss) per share $ (0.98) $ 1.46 $ 0.48 ========================= ========= Shares used in computing basic net income (loss) per share 98,330 98,330 98,330 ========================= ========= Income per share before cumulative effect of $ 0.36 $ 0.10 $ 0.46 an accounting change Cumulative effect of an accounting change (1.31) 1.31 - ------------------------- --------- Diluted net income (loss) per share $ (0.95) $ 1.41 $ 0.46 ========================= ========= Shares used in computing diluted net income (loss) per share 101,403 101,403 101,403 ========================= =========
(1) USE OF PRO FORMA FINANCIAL INFORMATION To supplement our consolidated financial statements presented in accordance with 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, expenses, expenses reversals, and losses. These pro forma adjustments are provided to enhance the users overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the pro forma results provide useful information to both management and investors by excluding certain expenses that we believe are not indicative of our core operations. In addition, since we have historically reported pro forma results to the investment community, we believe the inclusion of pro forma numbers provides consistency and comparability in our financial reporting. Further, these adjusted pro forma results are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. (2) PROFORMA ADJUSTMENTS Proforma adjustments include the following: (a) amoritization of purchased intangibles; (b) amortization of unearned stock compensation; (c) cost (reversal) of restructuring charges; (d) income tax effect of proforma adjustments, (e) cumulative effect of an accounting change. - 11 - SYBASE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31, (In thousands, except share and per share data) 2003 2002 (Unaudited) Current assets: Cash and cash equivalents $ 249,070 $ 231,267 Short-term investments 134,637 63,740 ----------- ----------- Total cash, cash equivalents and short-term cash investments 383,707 295,007 Restricted cash 4,404 5,653 Accounts receivable, net 126,426 169,193 Deferred income taxes 20,139 20,097 Other current assets 14,037 14,669 ----------- ----------- Total current assets 548,713 504,619 Long-term cash investments 75,618 92,173 Restricted long-term cash investments 3,400 - Property, equipment and improvements, net 67,950 70,402 Deferred income taxes 47,944 46,295 Capitalized software, net 63,455 62,266 Goodwill, net 151,701 136,826 Other purchased intangibles, net 47,378 50,473 Other assets 26,885 29,695 ----------- ----------- Total assets $ 1,033,044 $ 992,749 =========== =========== Current liabilities: Accounts payable $ 13,556 $ 13,085 Accrued compensation and related expenses 34,239 36,671 Accrued income taxes 35,813 34,023 Other accrued liabilities 99,455 112,468 Deferred revenue 222,085 200,458 ----------- ----------- Total current liabilities 405,148 396,705 Other liabilities 12,974 10,641 Minority interest 5,029 5,029 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 (2002 - 105,337,362) 105 105 Additional paid-in capital 933,856 929,064 Accumulated deficit (172,655) (189,936) Other comprehensive income/(loss) 8,955 (8,673) Less: Cost of treasury stock (11,520,041 shares and 2002 - 10,677,306) (153,591) (146,816) Unearned compensation (6,777) (3,370) ----------- ----------- Total stockholders' equity 609,893 580,374 ----------- ----------- Total liabilities and stockholders' equity $ 1,033,044 $ 992,749 =========== ===========
- 12 - SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30, --------------------------- ------------------------- (In thousands, except per share data) 2003 2002 2003 2002 --------- --------- --------- --------- Revenues: License fees $ 63,897 $ 77,449 $ 124,771 $ 161,298 Services 128,135 127,814 248,808 255,002 --------- --------- --------- --------- Total revenues 192,032 205,263 373,579 416,300 Costs and expenses: Cost of license fees 14,589 13,225 28,518 24,689 Cost of services 40,643 48,344 79,874 100,429 Sales and marketing 59,666 66,962 118,162 137,850 Product development and engineering 29,348 28,530 59,266 59,469 General and administrative 20,471 20,428 42,571 42,690 Amortization of other purchased intangibles 500 500 1,000 1,000 Stock compensation expense 727 497 1,388 994 Cost (Reversal) of restructure 7,957 (795) 7,748 (910) --------- --------- --------- --------- Total costs and expenses 173,901 177,691 338,527 366,211 --------- --------- --------- --------- Operating income 18,131 27,572 35,052 50,089 Interest income and expense and other, net 3,524 5,478 5,967 8,439 --------- --------- --------- --------- Income before income taxes and cumulative effect of an accounting change 21,655 33,050 41,019 58,528 Provision for income taxes 7,096 12,889 13,486 22,316 --------- --------- --------- --------- Income before cumulative effect of an accounting change 14,559 20,161 27,533 36,212 Cumulative effect of an accounting change to adopt FAS 142 - - - (132,450) --------- --------- --------- --------- Net income (loss) $ 14,559 $ 20,161 $ 27,533 $ (96,238) ========= ========= ========= ========= Income per share before cumulative effect of an accounting change $ 0.16 $ 0.21 $ 0.29 $ 0.37 Cumulative effect of an accounting change - - - (1.35) --------- --------- --------- --------- Basic net income (loss) per share $ 0.16 $ 0.21 $ 0.29 $ (0.98) ========= ========= ========= ========= Shares used in computing basic net income (loss) per share 93,787 98,308 94,072 98,330 ========= ========= ========= ========= Income per share before cumulative effect of an accounting change $ 0.15 $ 0.20 $ 0.28 $ 0.36 Cumulative effect of an accounting change - - - (1.31) --------- --------- --------- --------- Diluted net income (loss) per share $ 0.15 $ 0.20 $ 0.28 $ (0.95) ========= ========= ========= ========= Shares used in computing diluted net income (loss) per share 96,432 100,738 96,858 101,403 ========= ========= ========= =========
- 13 - SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME PRO FORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE (UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30, --------------------------- ------------------------- (In thousands, except per share data) 2003 2002 2003 2002 -------- -------- -------- -------- Revenues: License fees $ 63,897 $ 77,449 $124,771 $161,298 Services 128,135 127,814 248,808 255,002 -------- -------- -------- -------- Total revenues 192,032 205,263 373,579 416,300 Costs and expenses: Cost of license fees 10,758 9,494 20,923 17,227 Cost of services 40,643 48,344 79,874 100,429 Sales and marketing 59,666 66,962 118,162 137,850 Product development and engineering 29,348 28,530 59,266 59,469 General and administrative 20,471 20,428 42,571 42,690 -------- -------- -------- -------- Total costs and expenses 160,886 173,758 320,796 357,665 -------- -------- -------- -------- Operating income 31,146 31,505 52,783 58,635 Interest income and expense and other, net 3,524 5,478 5,967 8,439 -------- -------- -------- -------- Income before income taxes 34,670 36,983 58,750 67,074 Provision for income taxes 11,441 11,095 19,387 20,122 -------- -------- -------- -------- Net income $ 23,229 $ 25,888 $ 39,363 $ 46,952 ======== ======== ======== ======== Basic net income per share $ 0.25 $ 0.26 $ 0.42 $ 0.48 ======== ======== ======== ======== Shares used in computing basic net income per share 93,787 98,308 94,072 98,330 ======== ======== ======== ======== Diluted net income per share $ 0.24 $ 0.26 $ 0.41 $ 0.46 ======== ======== ======== ======== Shares used in computing diluted net income per share 96,432 100,738 96,858 101,403 ======== ======== ======== ========
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., and AvantGo, 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. - 14 - SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT FOR THE THREE MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
Infrastructure iAnywhere Financial (In thousands, except per share data) Platform Group Solutions, Inc. Fusion, Inc. -------------- -------------- -------------- Revenues: License fees Enterprise $ 35,506 $ 9 $ - E-Business 8,313 - - Mobile and Embedded 6,099 8,268 - E-Finance 792 - 494 Datawarehouse 4,416 - - -------------- -------------- -------------- Subtotal license fees 55,126 8,277 494 Intersegment license revenues 22 5,087 660 -------------- -------------- -------------- Total license fees 55,148 13,364 1,154 Services 123,264 2,681 2,190 Intersegment service revenues - 6,688 1,180 -------------- -------------- -------------- Total services 123,264 9,369 3,370 -------------- -------------- -------------- Total revenues 178,412 22,733 4,524 Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology 154,740 18,552 5,984 -------------- -------------- -------------- Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology 23,672 4,181 (1,460) Cost of restructure - 2003 Activity 8,291 341 13 Amortization of customer lists - - 500 Amortization of purchased technology 2,920 100 811 -------------- -------------- -------------- Operating income (loss) before unallocated costs $ 12,461 $ 3,740 $ (2,784) Other unallocated expenses Operating income after unallocated expenses Interest income and expense and other, net Income before income taxes Provision for income taxes Net income Basic net income per share Shares used in computing basic net income per share Diluted net income per share Shares used in computing diluted net income per share Consolidated (In thousands, except per share data) Eliminations Total -------------- -------------- Revenues: License fees Enterprise $ - $ 35,515 E-Business - 8,313 Mobile and Embedded - 14,367 E-Finance - 1,286 Datawarehouse - 4,416 -------------- -------------- Subtotal license fees - 63,897 Intersegment license revenues (5,769) - -------------- -------------- Total license fees (5,769) 63,897 Services - 128,135 Intersegment service revenues (7,868) - -------------- -------------- Total services (7,868) 128,135 -------------- -------------- Total revenues (13,637) 192,032 Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology (13,637) 165,639 -------------- -------------- Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology - 26,393 Cost of restructure - 2003 Activity - 8,645 Amortization of customer lists - 500 Amortization of purchased technology - 3,831 -------------- -------------- Operating income (loss) before unallocated costs $ - $ 13,417 Other unallocated expenses (4,714) -------------- Operating income after unallocated expenses 18,131 Interest income and expense and other, net 3,524 -------------- Income before income taxes 21,655 Provision for income taxes 7,096 -------------- Net income $ 14,559 ============== Basic net income per share $ 0.16 ============== Shares used in computing basic net income per share 93,787 ============== Diluted net income per share $ 0.15 ============== Shares used in computing diluted net income per share 96,432 ==============
- 15 - SYBASE, INC. CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT INFRASTRUCTURE PLATFORM GROUP FOR THE THREE MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
Enterprise Business Solutions E-Business Intelligence (In thousands, except per share data) Division Division Division -------------- -------------- -------------- Revenues: License fees Enterprise $ 35,468 $ 12 $ 26 E-Business 6,524 1,778 11 Mobile and Embedded 6,099 - - E-Finance 792 - - Datawarehouse 4,030 - 386 -------------- -------------- -------------- Subtotal license fees 52,913 1,790 423 Intersegment license revenues 22 5,423 3,359 -------------- -------------- -------------- Total license fees 52,935 7,213 3,782 Services 116,477 6,705 82 Intersegment service revenues 17 6,558 2,871 -------------- -------------- -------------- Total services 116,494 13,263 2,953 -------------- -------------- -------------- Total revenues 169,429 20,476 6,735 IPG Infrastructure (In thousands, except per share data) Eliminations Platform Group -------------- -------------- Revenues: License fees Enterprise $ - $ 35,506 E-Business - 8,313 Mobile and Embedded - 6,099 E-Finance - 792 Datawarehouse - 4,416 -------------- -------------- Subtotal license fees - 55,126 Intersegment license revenues (8,782) 22 -------------- -------------- Total license fees (8,782) 55,148 Services - 123,264 Intersegment service revenues (9,446) - -------------- -------------- Total services (9,446) 123,264 -------------- -------------- Total revenues (18,228) 178,412
- 16 - SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
Infrastructure iAnywhere Financial (In thousands, except per share data) Platform Group Solutions, Inc. Fusion, Inc. -------------- -------------- -------------- Revenues: License fees Enterprise $ 69,175 $ 732 $ - E-Business 20,586 - - Mobile and Embedded 10,925 14,943 - E-Finance 941 - 635 Datawarehouse 6,834 - - -------------- -------------- -------------- Subtotal license fees 108,461 15,675 635 Intersegment license revenues 43 9,096 802 -------------- -------------- -------------- Total license fees 108,504 24,771 1,437 Services 239,667 4,718 4,423 Intersegment service revenues 3 12,666 2,284 -------------- -------------- -------------- Total services 239,670 17,384 6,707 -------------- -------------- -------------- Total revenues 348,174 42,155 8,144 Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology 307,240 34,515 11,531 -------------- -------------- -------------- Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology 40,934 7,640 (3,387) Cost of restructure - 2003 Activity 8,291 341 13 Amortization of customer lists - - 1,000 Amortization of purchased technology 5,840 133 1,622 -------------- -------------- -------------- Operating income (loss) before unallocated costs $ 26,803 $ 7,166 $ (6,022) Other unallocated expenses Operating income after unallocated expenses Interest income and expense and other, net Income before income taxes Provision for income taxes Net income Basic net income per share Shares used in computing basic net income per share Diluted net income per share Shares used in computing diluted net income per share Consolidated (In thousands, except per share data) Eliminations Total -------------- -------------- Revenues: License fees Enterprise $ - $ 69,907 E-Business - 20,586 Mobile and Embedded - 25,868 E-Finance - 1,576 Datawarehouse - 6,834 -------------- -------------- Subtotal license fees - 124,771 Intersegment license revenues (9,941) - -------------- -------------- Total license fees (9,941) 124,771 Services - 248,808 Intersegment service revenues (14,953) - -------------- -------------- Total services (14,953) 248,808 -------------- -------------- Total revenues (24,894) 373,579 Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology (24,894) 328,392 -------------- -------------- Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology - 45,187 Cost of restructure - 2003 Activity - 8,645 Amortization of customer lists - 1,000 Amortization of purchased technology - 7,595 -------------- -------------- Operating income (loss) before unallocated costs $ - $ 27,947 Other unallocated expenses (7,105) -------------- Operating income after unallocated expenses 35,052 Interest income and expense and other, net 5,967 -------------- Income before income taxes 41,019 Provision for income taxes 13,486 -------------- Net income $ 27,533 ============== Basic net income per share $ 0.29 ============== Shares used in computing basic net income per share 94,072 ============== Diluted net income per share $ 0.28 ============== Shares used in computing diluted net income per share 96,858 ==============
- 17 - SYBASE, INC. CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT INFRASTRUCTURE PLATFORM GROUP FOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED) (In thousands, except per share data)
Enterprise Business Solutions E-Business Intelligence IPG Infrastructure Division Division Division Eliminations Platform Group ---------- ------------ ------------ ------------ -------------- Revenues: License fees Enterprise $ 69,137 $ 12 $ 26 $ - $ 69,175 E-Business 14,421 6,154 11 - 20,586 Mobile and Embedded 10,925 - - - 10,925 E-Finance 962 (21) - - 941 Datawarehouse 6,258 - 576 - 6,834 --------- ------------ ---------- ---------- ---------- Subtotal license fees 101,703 6,145 613 - 108,461 Intersegment license revenues 43 12,025 5,217 (17,242) 43 --------- ------------ ---------- ---------- ---------- Total license fees 101,746 18,170 5,830 (17,242) 108,504 Services 226,423 13,070 174 - 239,667 Intersegment service revenues 20 12,256 5,403 (17,676) 3 --------- ------------ ---------- ---------- ---------- Total services 226,443 25,326 5,577 (17,676) 239,670 --------- ------------ ---------- ---------- ---------- Total revenues 328,189 43,496 11,407 (34,918) 348,174
- 18 - SYBASE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT FOR THE THREE MONTHS ENDED JUNE 30, 2003 PRO FORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE (UNAUDITED) (In thousands, except per share data)
Infrastructure iAnywhere Financial Consolidated Platform Group Solutions, Inc. Fusion, Inc. Eliminations Total -------------- --------------- ------------ ------------ ------------ Revenues: License fees Enterprise $ 35,506 $ 9 $ - $ - $ 35,515 E-Business 8,313 - - - 8,313 Mobile and Embedded 6,099 8,268 - - 14,367 E-Finance 792 - 494 - 1,286 Datawarehouse 4,416 - - - 4,416 ---------- --------- -------- -------- ---------- Subtotal license fees 55,126 8,277 494 - 63,897 Intersegment license revenues 22 5,087 660 (5,769) - ---------- --------- -------- -------- ---------- Total license fees 55,148 13,364 1,154 (5,769) 63,897 Services 123,264 2,681 2,190 - 128,135 Intersegment service revenues - 6,688 1,180 (7,868) - ---------- --------- -------- -------- ---------- Total services 123,264 9,369 3,370 (7,868) 128,135 ---------- --------- -------- -------- ---------- Total revenues 178,412 22,733 4,524 (13,637) 192,032 Total allocated costs and expenses 154,740 18,552 5,984 (13,637) 165,639 ---------- --------- -------- -------- ---------- Operating income (loss) before unallocated expenses $ 23,672 $ 4,181 $ (1,460) $ - $ 26,393 Other unallocated expenses (4,753) ---------- Operating income after unallocated expenses 31,146 Interest income and expense and other, net 3,524 ---------- Income before income taxes 34,670 Provision for income taxes 11,441 ---------- Net income $ 23,229 ========== Basic net income per share $ 0.25 ========== Shares used in computing basic net income per share 93,787 ========== Diluted net income per share $ 0.24 ========== Shares used in computing diluted net income per share 96,432 ==========
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., and AvantGo, 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. - 19 - SYBASE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT FOR THE SIX MONTHS ENDED JUNE 30, 2003 PRO FORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE (UNAUDITED) (In thousands, except per share data)
Infrastructure iAnywhere Financial Consolidated Platform Group Solutions, Inc. Fusion, Inc. Eliminations Total -------------- --------------- ------------ ------------ ------------ Revenues: License fees Enterprise $ 69,175 $ 732 $ - $ - $ 69,907 E-Business 20,586 - - - 20,586 Mobile and Embedded 10,925 14,943 - - 25,868 E-Finance 941 - 635 - 1,576 Datawarehouse 6,834 - - - 6,834 ---------- --------- -------- -------- ---------- Subtotal license fees 108,461 15,675 635 - 124,771 Intersegment license revenues 43 9,096 802 (9,941) - ---------- --------- -------- -------- ---------- Total license fees 108,504 24,771 1,437 (9,941) 124,771 Services 239,667 4,718 4,423 - 248,808 Intersegment service revenues 3 12,666 2,284 (14,953) - ---------- --------- -------- -------- ---------- Total services 239,670 17,384 6,707 (14,953) 248,808 ---------- --------- -------- -------- ---------- Total revenues 348,174 42,155 8,144 (24,894) 373,579 Total allocated costs and expenses 307,240 34,515 11,531 (24,894) 328,392 ---------- --------- -------- -------- ---------- Operating income (loss) before unallocated expenses $ 40,934 $ 7,640 $ (3,387) $ - $ 45,187 Other unallocated expenses (7,596) ---------- Operating income after unallocated expenses 52,783 Interest income and expense and other, net 5,967 ---------- Income before income taxes 58,750 Provision for income taxes 19,387 ---------- Net income $ 39,363 ========== Basic net income per share $ 0.42 ========== Shares used in computing basic net income per share 94,072 ========== Diluted net income per share $ 0.41 ========== Shares used in computing diluted net income per share 96,858 ==========
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., and AvantGo, 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. - 20 - SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30 (Dollars in thousands) 2003 2002 ---------- ---------- Cash and cash equivalents, beginning of year $ 231,267 $ 222,793 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) 27,533 (96,238) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 42,127 40,172 Write-off of assets in restructuring 343 - Gain on disposal of assets (168) (2,938) Cumulative effect of an accounting change - 132,450 Deferred income taxes (2,675) (2,477) Amortization of deferred stock-based compensation 1,388 994 Changes in assets and liabilities: Accounts receivable 52,531 59,276 Other current assets 778 431 Accounts payable (182) 1,722 Accrued compensation and related expenses (3,389) (4,942) Accrued income taxes 1,773 9,301 Other accrued liabilities (23,433) (32,628) Deferred revenues 20,826 6,475 Other liabilities 2,414 2,344 ---------- ---------- Net cash provided by operating activities 119,866 113,942 CASH FLOWS FROM INVESTING ACTIVITIES: Decrease in restricted cash 1,249 911 Purchases of available-for-sale cash investments (134,283) (119,907) Maturities of available-for-sale cash investments 41,350 30,966 Sales of available-for-sale cash investments 38,755 96,626 Business combinations, net of cash acquired (13,900) (2,087) Purchases of property, equipment and improvements (20,608) (26,589) Proceeds from sale of fixed assets 141 679 Capitalized software development costs (15,130) (15,800) (Increase) Decrease in other assets 2,216 (214) ---------- ---------- Net cash used for investing activities (100,210) (35,415) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from the issuance of common stock and 13,853 14,122 reissuance of treasury stock Purchases of treasury stock (30,883) (39,123) ---------- ---------- Net cash used for financing activities (17,030) (25,001) Effect of exchange rate changes on cash 15,177 11,512 ---------- ---------- Net increase in cash and cash equivalents 17,803 65,038 ---------- ---------- Cash and cash equivalents, end of period 249,070 287,831 Cash investments, end of period 210,255 112,948 ---------- ---------- Total cash, cash equivalents and cash investments, end of period $ 459,325 $ 400,779 ========== ========== - 21 -