EX-99.1 3 f94109exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1

For Financial Inquiries Contact:
Pieter Van der Vorst
pieter@sybase.com
(925) 236-4579

For Press Inquiries Contact:
Leslie Nakajima
leslie.nakajima@sybase.com
(925) 236-8650

SYBASE BEATS THIRD QUARTER PRO FORMA EPS ESTIMATES

Mobile and Wireless Business Grows 30 Percent Year-Over-Year

Database License Revenue Up 11 Percent Year-Over-Year

DUBLIN, Calif. – October 28, 2003 – Sybase, Inc. (NYSE: SY), a leading provider of enterprise infrastructure and wireless software, today announced net income on a pro forma basis for the third quarter was $27.2 million, or earnings per share of $0.28 on a diluted basis (EPS), exceeding First Call consensus EPS estimates of $0.25. Net income for the third quarter calculated in accordance with generally accepted accounting principles (GAAP) was $22.0 million, or EPS of $0.23.

     For the same period in 2002, pro forma net income was $25.2 million, or EPS of $0.26, and net income on a GAAP basis was $11.3 million, or EPS of $0.12.

     Total revenues for the third quarter 2003 were $193.8 million, including license fees of $68.5 million.

     Pro forma amounts exclude amortization of purchased intangibles, stock-based compensation expense, restructuring charges and the related income tax effects. 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.

     “We are very encouraged by the signs of renewed IT spending,” said John Chen, chairman, president and CEO of Sybase, Inc. “Our database business grew 11 percent over last year thanks in part to the release of our new ASE 12.5.1 database. The 30 percent increase year-over-year in our mobile and wireless business is a solid indicator

 

 

of market share gain. Our Unwired Enterprise initiative is also gaining ground as a growing number of larger enterprises express interest in Sybase’s mobile and wireless solutions.”

Balance Sheet and Other Data

     For the period ended September 30, 2003, Sybase reported $506 million in cash and cash investments, including restricted cash of $7.9 million. This is the highest cash balance in the company’s history. The company generated $27.2 million in cash flow from operations in the third quarter bringing total year-to-date cash flow from operations to $147.1 million.

     Days sales outstanding for the three months ended September 30, 2003 was 51 days, compared with 59 days for the three months ended June 30, 2003.

About Sybase, Inc.

     Sybase enables the Unwired Enterprise by delivering enterprise and mobile infrastructure, integration and application 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 critical data in commerce, finance, government, healthcare and defense runs on Sybase. For more information, visit the Sybase Web site: 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 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; actual market growth rates in the mobile and wireless, 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 June 30, 2003.

 

 

Sybase Third Quarter 2003 Selected Highlights

Mobile and wireless, database and enterprise applications, and partnerships represented the bulk of the announcements made by Sybase in the third quarter of 2003.

Mobile & Wireless:

  •   Sybase joined the Wi-Fi Alliance, taking an active role in establishing industry-wide standards for the rapidly expanding market.
      http://www.sybase.com/detail/1,6904,1025573,00.html
 
  •   Announced that an IDC report found iAnywhere Solutions, Inc. is the leader in mobile middleware technology with higher revenues and market share than nearly 20 competitors.
      http://www.ianywhere.com/press_releases/lead_mobile_middleware.html

Database & Enterprise Applications:

  •   Sybase deepened its support for enterprise-class computing on Linux with the opening of its Linux Competency Center in New York.
      http://www.sybase.com/detail/1,6904,1025309,00.html
 
  •   Launched general availability of Sybase Adaptive Server® Enterprise 12.5.1, with increased system performance and advanced Web Services and XML support.
      http://www.sybase.com/detail/1,6904,1026395,00.html
 
  •   Announced general availability of Pocket PowerBuilder™, an integrated application development product designed to create mobile and wireless enterprise applications.
      http://www.sybase.com/detail/1,6904,1025574,00.html

Partnerships:

  •   Forged a new strategic partnership with Fujitsu Software Corp. that will enhance customer value through joint product initiatives.
      http://www.sybase.com/detail/1,6904,1025592,00.html
 
  •   Launched a managed services offering with BearingPoint, Inc. that will deliver high-performance management of enterprise processes, applications and IT infrastructure. http://www.sybase.com/detail/1,6904,1025592,00.html
 
  •   Signed an agreement with TIBCO Software, Inc. to develop and deliver Sybase Real-time Services, allowing customers to improve business performance.
      http://www.sybase.com/detail/1,6904,1025590,00.html

Global Reach:

  •   Sybase and Shanghai University (SHU) announced the official opening of the Sybase SHU e-Information (Shanghai) Co., Ltd., also known as the Sybase-Shanghai Information Technology (IT) Institute, and awarded Sybase CEO John Chen the prestigious title of Honorary Professor.
      http://www.sybase.com/detail/1,6904,1026314,00.html
 
  •   Won the “Best Customer Satisfaction Award” from the China Center of Information Industry Development Consulting Co. Ltd., for the third year in a row.
      http://www.sybase.com/detail/1,6904,1026070,00.html

 

 

Awards & Benchmarking:

  •   Ranked among the top three vendors in integration and Web Services by leading European market analyst firm the Butler Group.
      http://www.sybase.com/detail?id=1025591
 
  •   Produced market-leading TPC-H benchmark results, rating the Sun hardware/Sybase IQ configuration Number One for storage efficiency, price/ performance and total cost of ownership.
      http://www.sun.com/smi/press/sunflash/2003-09/sunflash.20030917.2.html

 

 

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

                                                                     
        Three Months Ended September 30, 2003   Three Months Ended September 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
   $ 68,481       —             $ 68,481     $ 78,754       —             $ 78,754  
 
Services
     125,349       —               125,349       124,255       —               124,255  
 
 
    
     
             
     
     
             
 
   
Total revenues
     193,830       —               193,830       203,009       —               203,009  
Costs and expenses:
                                                                
 
Cost of license fees
     15,537       (3,831 ) a           11,706       12,766       (3,731 ) a           9,035  
 
Cost of services
     40,652       —               40,652       46,524       —               46,524  
 
Sales and marketing
     59,270       —               59,270       65,865       —               65,865  
 
Product development and engineering
     29,045       —               29,045       28,046       —               28,046  
 
General and administrative
     20,280       —               20,280       20,819       —               20,819  
 
Amortization of other purchased intangibles
     500       (500 ) a           —       500       (500 ) a           —  
 
Stock compensation expense
     695       (695 ) b           —       497       (497 ) b           —  
 
Cost of restructure
     1,270       (1,270 ) c           —       6,334       (6,334 ) c           —  
 
 
    
     
             
     
     
             
 
   
Total costs and expenses
     167,249       (6,296 )             160,953       181,351       (11,062 )             170,289  
 
 
    
     
             
     
     
             
 
Operating income
     26,581       6,296               32,877       21,658       11,062               32,720  
Interest income and expense and other, net (3)
     6,270       —               6,270       3,250       —               3,250  
 
 
    
     
             
     
     
             
 
Income before income taxes and cumulative effect of an accounting change
     32,851       6,296               39,147       24,908       11,062               35,970  
Provision for income taxes
     10,841       1,099  d           11,940       13,561       (2,770 ) d           10,791  
 
 
    
     
             
     
     
             
 
Income before cumulative effect of an accounting change
     22,010       5,197             $ 27,207       11,347       13,832               25,179  
Cumulative effect of an accounting change to adopt FAS 142
     —       —  e           —       —       —  e           —  
 
 
    
     
             
     
     
             
 
   
Net income (loss)
   $ 22,010     $ 5,197             $ 27,207     $ 11,347     $ 13,832             $ 25,179  
 
 
    
     
             
     
     
             
 
Income per share before cumulative effect of an accounting change
   $ 0.23     $ 0.06             $ 0.29     $ 0.12     $ 0.14             $ 0.26  
Cumulative effect of an accounting change
     —       —               —       —       —               —  
 
 
    
     
             
     
     
             
 
Basic net income (loss) per share
   $ 0.23     $ 0.06             $ 0.29     $ 0.12     $ 0.14             $ 0.26  
 
 
    
     
             
     
     
             
 
Shares used in computing basic net income (loss) per share
     94,525       94,525               94,525       96,292       96,292               96,292  
 
 
    
     
             
     
     
             
 
Income per share before cumulative effect of an accounting change
   $ 0.23     $ 0.05             $ 0.28     $ 0.12     $ 0.14             $ 0.26  
Cumulative effect of an accounting change
     —       —               —       —       —               —  
 
 
    
     
             
     
     
             
 
Diluted net income (loss) per share
   $ 0.23     $ 0.05             $ 0.28     $ 0.12     $ 0.14             $ 0.26  
 
 
    
     
             
     
     
             
 
Shares used in computing diluted net income (loss) per share
     97,437       97,437               97,437       98,432       98,432               98,432  
 
 
    
     
             
     
     
             
 

(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 from prior restructuring activities because we do not believe they are indicative of our core business. For the sake of consistency and clarity in our financial reporting, we will continue to include the cost of prior restructuring activity as a pro forma adjustment in our financial statements until the related charges and liabilities are completely settled. 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) cost of restructuring charges; (d) income tax effect of proforma adjustments, (e) cumulative effect of an accounting change.
 
(3)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

 

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

                                                                     
        Nine Months Ended September 30, 2003   Nine Months Ended September 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
   $ 193,252       —             $ 193,252     $ 240,051       —             $ 240,051  
 
Services
     374,157       —               374,157       379,257       —               379,257  
 
 
    
     
             
     
     
             
 
   
Total revenues
     567,409       —               567,409       619,308       —               619,308  
Costs and expenses:
                                                                
 
Cost of license fees
     44,055       (11,426 ) a             32,629       37,455       (11,193 ) a             26,262  
 
Cost of services
     120,526       —               120,526       146,953       —               146,953  
 
Sales and marketing
     177,432       —               177,432       203,714       —               203,714  
 
Product development and engineering
     88,311       —               88,311       87,515       —               87,515  
 
General and administrative
     62,851       —               62,851       63,510       —               63,510  
 
Amortization of other purchased intangibles
     1,500       (1,500 ) a             —       1,500       (1,500 ) a             —  
 
Stock compensation expense
     2,083       (2,083 ) b           —       1,491       (1,491 ) b             —  
 
Cost of restructure
     9,018       (9,018 ) c             —       5,424       (5,424 ) c             —  
 
 
    
     
             
     
     
             
 
   
Total costs and expenses
     505,776       (24,027 )             481,749       547,562       (19,608 )             527,954  
 
 
    
     
             
     
     
             
 
Operating income
     61,633       24,027               85,660       71,746       19,608               91,354  
Interest income and expense and other, net (3)
     12,237       —               12,237       11,689       —               11,689  
 
 
    
     
             
     
     
             
 
Income before income taxes and cumulative effect of an accounting change
     73,870       24,027               97,897       83,435       19,608               103,043  
Provision for income taxes
     24,327       7,000  d             31,327       35,877       (4,964 ) d             30,913  
 
 
    
     
             
     
     
             
 
Income before cumulative effect of an accounting change
     49,543       17,027             $ 66,570       47,558       24,572               72,130  
Cumulative effect of an accounting change to adopt FAS 142
     —       —  e             —       (132,450 )     132,450  e             —  
 
 
    
     
             
     
     
             
 
   
Net income (loss)
   $ 49,543     $ 17,027             $ 66,570     $ (84,892 )   $ 157,022             $ 72,130  
 
 
    
     
             
     
     
             
 
Income per share before cumulative effect of an accounting change
   $ 0.53     $ 0.18             $ 0.71     $ 0.49     $ 0.25             $ 0.74  
Cumulative effect of an accounting change
     —       —               —       (1.36 )     1.36               —  
 
 
    
     
             
     
     
             
 
Basic net income (loss) per share
   $ 0.53     $ 0.18             $ 0.71     $ (0.87 )   $ 1.61             $ 0.74  
 
 
    
     
             
     
     
             
 
Shares used in computing basic net income (loss) per share
     94,223       94,223               94,223       97,651       97,651               97,651  
 
 
    
     
             
     
     
             
 
Income per share before cumulative effect of an accounting change
   $ 0.51     $ 0.18             $ 0.69     $ 0.47     $ 0.25             $ 0.72  
Cumulative effect of an accounting change
     —       —               —       (1.31 )     1.31               —  
 
 
    
     
             
     
     
             
 
Diluted net income (loss) per share
   $ 0.51     $ 0.18             $ 0.69     $ (0.84 )   $ 1.56             $ 0.72  
 
 
    
     
             
     
     
             
 
Shares used in computing diluted net income (loss) per share
     96,694       96,694               96,694       100,488       100,488               100,488  
 
 
    
     
             
     
     
             
 

(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 from prior restructuring activities because we do not believe they are indicative of our core business. For the sake of consistency and clarity in our financial reporting, we will continue to include the cost of prior restructuring activity as a pro forma adjustment in our financial statements until the related charges and liabilities are completely settled. 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) cost of restructuring charges; (d) income tax effect of proforma adjustments, (e) cumulative effect of an accounting change.
 
(3)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

 

SYBASE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

                     
        September 30,   December 31,
(In thousands, except share and per share data)   2003   2002
    (Unaudited)    
Current assets:
                
 
Cash and cash equivalents
   $ 339,296     $ 231,267  
 
Short-term investments
     75,645       63,740  
 
 
    
     
 
   
Total cash, cash equivalents and short-term cash investments
     414,941       295,007  
 
Restricted cash
     4,450       5,653  
 
Accounts receivable, net
     109,060       169,193  
 
Deferred income taxes
     20,153       20,097  
 
Other current assets
     16,559       14,669  
 
 
    
     
 
   
Total current assets
     565,163       504,619  
Long-term cash investments
     83,224       92,173  
Restricted long-term cash investments
     3,400       —  
Property, equipment and improvements, net
     63,610       70,402  
Deferred income taxes
     49,215       46,295  
Capitalized software, net
     63,247       62,266  
Goodwill, net
     151,802       136,826  
Other purchased intangibles, net
     43,046       50,473  
Other assets
     36,234       29,695  
 
 
    
     
 
   
Total assets
   $ 1,058,941     $ 992,749  
 
 
    
     
 
Current liabilities:
                
 
Accounts payable
   $ 11,831     $ 13,085  
 
Accrued compensation and related expenses
     31,667       36,671  
 
Accrued income taxes
     42,413       34,023  
 
Other accrued liabilities
     94,225       112,468  
 
Deferred revenue
     192,983       200,458  
 
 
    
     
 
   
Total current liabilities
     373,119       396,705  
Other liabilities
     14,004       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
     933,657       929,064  
 
Accumulated deficit
     (160,402 )     (189,936 )
 
Other comprehensive income/(loss)
     13,289       (8,673 )
 
Less: Cost of treasury stock (8,640,205 shares and 2002 - 10,677,306)
     (113,976 )     (146,816 )
 
Unearned compensation
     (5,884 )     (3,370 )
 
 
    
     
 
   
Total stockholders’ equity
     666,789       580,374  
 
 
    
     
 
   
Total liabilities and stockholders’ equity
   $ 1,058,941     $ 992,749  
 
 
    
     
 

 

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

                                     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
       
 
(In thousands, except per share data)   2003   2002   2003   2002
   
 
 
 
Revenues:
                                
 
License fees
   $ 68,481     $ 78,754     $ 193,252     $ 240,051  
 
Services
     125,349       124,255       374,157       379,257  
 
 
    
     
     
     
 
   
Total revenues
     193,830       203,009       567,409       619,308  
Costs and expenses:
                                
 
Cost of license fees
     15,537       12,766       44,055       37,455  
 
Cost of services
     40,652       46,524       120,526       146,953  
 
Sales and marketing
     59,270       65,865       177,432       203,714  
 
Product development and engineering
     29,045       28,046       88,311       87,515  
 
General and administrative
     20,280       20,819       62,851       63,510  
 
Amortization of other purchased intangibles
     500       500       1,500       1,500  
 
Stock compensation expense
     695       497       2,083       1,491  
 
Cost of restructure
     1,270       6,334       9,018       5,424  
 
 
    
     
     
     
 
   
Total costs and expenses
     167,249       181,351       505,776       547,562  
 
 
    
     
     
     
 
Operating income
     26,581       21,658       61,633       71,746  
Interest income and expense and other, net (1)
     6,270       3,250       12,237       11,689  
 
 
    
     
     
     
 
Income before income taxes and cumulative effect of an accounting change
     32,851       24,908       73,870       83,435  
Provision for income taxes
     10,841       13,561       24,327       35,877  
 
 
    
     
     
     
 
Income before cumulative effect of an accounting change
     22,010       11,347       49,543       47,558  
Cumulative effect of an accounting change to adopt FAS 142
     —       —       —       (132,450 )
 
 
    
     
     
     
 
   
Net income (loss)
   $ 22,010     $ 11,347     $ 49,543     $ (84,892 )
 
 
    
     
     
     
 
Income per share before cumulative effect of an accounting change
   $ 0.23     $ 0.12     $ 0.53     $ 0.49  
Cumulative effect of an accounting change
     —       —       —       (1.36 )
 
    
     
     
     
 
Basic net income (loss) per share
   $ 0.23     $ 0.12     $ 0.53     $ (0.87 )
 
 
    
     
     
     
 
Shares used in computing basic net income (loss) per share
     94,525       96,292       94,223       97,651  
 
 
    
     
     
     
 
Income per share before cumulative effect of an accounting change
   $ 0.23     $ 0.12     $ 0.51     $ 0.47  
Cumulative effect of an accounting change
     —       —       —       (1.31 )
 
    
     
     
     
 
Diluted net income (loss) per share
   $ 0.23     $ 0.12     $ 0.51     $ (0.84 )
 
 
    
     
     
     
 
Shares used in computing diluted net income (loss) per share
     97,437       98,432       96,694       100,488  
 
 
    
     
     
     
 

(1)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
PRO FORMA 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)   2003   2002   2003   2002
   
 
 
 
Revenues:
                                
 
License fees
   $ 68,481     $ 78,754     $ 193,252     $ 240,051  
 
Services
     125,349       124,255       374,157       379,257  
 
 
    
     
     
     
 
   
Total revenues
     193,830       203,009       567,409       619,308  
Costs and expenses:
                                
 
Cost of license fees
     11,706       9,035       32,629       26,262  
 
Cost of services
     40,652       46,524       120,526       146,953  
 
Sales and marketing
     59,270       65,865       177,432       203,714  
 
Product development and engineering
     29,045       28,046       88,311       87,515  
 
General and administrative
     20,280       20,819       62,851       63,510  
 
 
    
     
     
     
 
   
Total costs and expenses
     160,953       170,289       481,749       527,954  
 
 
    
     
     
     
 
Operating income
     32,877       32,720       85,660       91,354  
Interest income and expense and other, net (1)
     6,270       3,250       12,237       11,689  
 
 
    
     
     
     
 
Income before income taxes
     39,147       35,970       97,897       103,043  
Provision for income taxes
     11,940       10,791       31,327       30,913  
 
 
    
     
     
     
 
   
Net income
   $ 27,207     $ 25,179     $ 66,570     $ 72,130  
 
 
    
     
     
     
 
Basic net income per share
   $ 0.29     $ 0.26     $ 0.71     $ 0.74  
 
 
    
     
     
     
 
Shares used in computing basic net income per share
     94,525       96,292       94,223       97,651  
 
 
    
     
     
     
 
Diluted net income per share
   $ 0.28     $ 0.26     $ 0.69     $ 0.72  
 
 
    
     
     
     
 
Shares used in computing diluted net income per share
     97,437       98,432       96,694       100,488  
 
 
    
     
     
     
 

    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.
 
(1)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

SYBASE , INC.
CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)

                                               
          Infrastructure   iAnywhere   Financial           Consolidated
(In thousands, except per share data)   Platform Group   Solutions, Inc.   Fusion, Inc.   Eliminations   Total
   
 
 
 
 
Revenues:
                                        
 
License fees
                                        
   
Enterprise
   $ 38,459     $ 11     $ —     $ —     $ 38,470  
   
E-Business
     9,224       —       —       —       9,224  
   
Mobile and Embedded
     7,208       9,160       —       —       16,368  
   
E-Finance
     236       —       1,098       —       1,334  
   
Datawarehouse
     3,085       —       —       —       3,085  
 
    
     
     
     
     
 
     
Subtotal license fees
     58,212       9,171       1,098       —       68,481  
   
Intersegment license revenues
     21       6,073       197       (6,291 )     —  
 
    
     
     
     
     
 
     
Total license fees
     58,233       15,244       1,295       (6,291 )     68,481  
 
Services
     119,258       2,699       3,392               125,349  
   
Intersegment service revenues
     —       6,431       1,186       (7,617 )     —  
 
    
     
     
     
     
 
     
Total services
     119,258       9,130       4,578       (7,617 )     125,349  
   
 
    
     
     
     
     
 
   
Total revenues
     177,491       24,374       5,873       (13,908 )     193,830  
Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology
     152,254       18,902       6,386       (13,908 )     163,634  
   
 
    
     
     
     
     
 
Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology
     25,237       5,472       (513 )     —       30,196  
Cost of restructure - 2003 Activity
     1,285       —       —       —       1,285  
Amortization of customer lists
     —       —       500       —       500  
Amortization of purchased technology
     2,920       100       811       —       3,831  
   
 
    
     
     
     
     
 
Operating income (loss) before unallocated costs
   $ 21,032     $ 5,372     $ (1,824 )   $ —     $ 24,580  
Other unallocated expenses
                                     (2,001 )
 
                                    
 
Operating income after unallocated expenses
                                     26,581  
Interest income and expense and other, net (1)
                                     6,270  
 
                                    
 
Income before income taxes
                                     32,851  
Provision for income taxes
                                     10,841  
 
                                    
 
Net income
                                   $ 22,010  
 
                                    
 
Basic net income per share
                                   $ 0.23  
 
                                    
 
Shares used in computing basic net income per share
                                     94,525  
 
                                    
 
Diluted net income per share
                                   $ 0.23  
Shares used in computing diluted net income per share
                                     97,437  
 
                                    
 

(1)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)

                                               
          Infrastructure   iAnywhere   Financial           Consolidated
(In thousands, except per share data)   Platform Group   Solutions, Inc.   Fusion, Inc.   Eliminations   Total
   
 
 
 
 
Revenues:
                                        
 
License fees
                                       
   
Enterprise
   $ 107,634     $ 742     $ —     $ —     $ 108,376  
   
E-Business
     29,810       —       —       —       29,810  
   
Mobile and Embedded
     18,133       24,104       —       —       42,237  
   
E-Finance
     1,177       —       1,733       —       2,910  
   
Datawarehouse
     9,919       —       —       —       9,919  
 
    
     
     
     
     
 
     
Subtotal license fees
     166,673       24,846       1,733       —       193,252  
   
Intersegment license revenues
     64       15,169       999       (16,232 )     —  
 
    
     
     
     
     
 
     
Total license fees
     166,737       40,015       2,732       (16,232 )     193,252  
 
Services
     358,925       7,417       7,815       —       374,157  
   
Intersegment service revenues
     3       19,097       3,470       (22,570 )     —  
 
    
     
     
     
     
 
     
Total services
     358,928       26,514       11,285       (22,570 )     374,157  
 
 
    
     
     
     
     
 
   
Total revenues
     525,665       66,529       14,017       (38,802 )     567,409  
Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology
     459,494       53,417       17,917       (38,802 )     492,026  
 
 
    
     
     
     
     
 
Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology
     66,171       13,112       (3,900 )     —       75,383  
Cost of restructure - 2003 Activity
     9,577       341       13       —       9,931  
Amortization of customer lists
     —       —       1,500       —       1,500  
Amortization of purchased technology
     8,759       233       2,434       —       11,426  
 
 
    
     
     
     
     
 
Operating income (loss) before unallocated costs
   $ 47,835     $ 12,538     $ (7,847 )   $ —     $ 52,526  
Other unallocated expenses
                                     (9,107 )
 
                                    
 
Operating income after unallocated expenses
                                     61,633  
Interest income and expense and other, net (1)
                                     12,237  
 
                                    
 
Income before income taxes
                                     73,870  
Provision for income taxes
                                     24,327  
 
                                    
 
Net income
                                   $ 49,543  
 
                                    
 
Basic net income per share
                                   $ 0.53  
 
                                    
 
Shares used in computing basic net income per share
                                     94,223  
 
                                    
 
Diluted net income per share
                                   $ 0.51  
 
                                    
 
Shares used in computing diluted net income per share
                                     96,694  
 
                                    
 

(1)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

SYBASE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
PRO FORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE,
AND STOCK COMPENSATION EXPENSE
(UNAUDITED)

                                               
          Infrastructure   iAnywhere   Financial           Consolidated
(In thousands, except per share data)   Platform Group   Solutions, Inc.   Fusion, Inc.   Eliminations   Total
   
 
 
 
 
Revenues:
                                        
 
License fees
                                       
   
Enterprise
   $ 38,459     $ 11     $ —     $ —     $ 38,470  
   
E-Business
     9,224       —       —       —       9,224  
   
Mobile and Embedded
     7,208       9,160       —       —       16,368  
   
E-Finance
     236       —       1,098       —       1,334  
   
Datawarehouse
     3,085       —       —       —       3,085  
 
    
     
     
     
     
 
     
Subtotal license fees
     58,212       9,171       1,098       —       68,481  
   
Intersegment license revenues
     21       6,073       197       (6,291 )     —  
 
    
     
     
     
     
 
     
Total license fees
     58,233       15,244       1,295       (6,291 )     68,481  
 
Services
     119,258       2,699       3,392       —       125,349  
   
Intersegment service revenues
     —       6,431       1,186       (7,617 )     —  
 
    
     
     
     
     
 
     
Total services
     119,258       9,130       4,578       (7,617 )     125,349  
 
 
    
     
     
     
     
 
   
Total revenues
     177,491       24,374       5,873       (13,908 )     193,830  
Total allocated costs and expenses
     152,254       18,902       6,386       (13,908 )     163,634  
 
 
    
     
     
     
     
 
Operating income (loss) before unallocated expenses
   $ 25,237     $ 5,472     $ (513 )   $ —     $ 30,196  
Other unallocated expenses
                                     (2,681 )
 
                                    
 
Operating income after unallocated expenses
                                     32,877  
Interest income and expense and other, net (1)
                                     6,270  
 
                                    
 
Income before income taxes
                                     39,147  
Provision for income taxes
                                     11,940  
 
                                    
 
Net income
                                   $ 27,207  
 
                                    
 
Basic net income per share
                                   $ 0.29  
 
                                    
 
Shares used in computing basic net income per share
                                     94,525  
 
                                    
 
Diluted net income per share
                                   $ 0.28  
 
                                    
 
Shares used in computing diluted net income per share
                                     97,437  
 
                                    
 

    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.
 
(1)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

SYBASE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
PRO FORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE,
AND STOCK COMPENSATION EXPENSE
(UNAUDITED)

                                               
          Infrastructure   iAnywhere   Financial           Consolidated
(In thousands, except per share data)   Platform Group   Solutions, Inc.   Fusion, Inc.   Eliminations   Total
 
 
 
 
 
Revenues:
                                        
 
License fees
                                       
   
Enterprise
   $ 107,634     $ 742     $ —     $ —     $ 108,376  
   
E-Business
     29,810       —       —       —       29,810  
   
Mobile and Embedded
     18,133       24,104       —       —       42,237  
   
E-Finance
     1,177       —       1,733       —       2,910  
   
Datawarehouse
     9,919       —       —       —       9,919  
 
    
     
     
     
     
 
     
Subtotal license fees
     166,673       24,846       1,733       —       193,252  
   
Intersegment license revenues
     64       15,169       999       (16,232 )     —  
 
    
     
     
     
     
 
     
Total license fees
     166,737       40,015       2,732       (16,232 )     193,252  
 
Services
     358,925       7,417       7,815       —       374,157  
   
Intersegment service revenues
     3       19,097       3,470       (22,570 )     —  
 
    
     
     
     
     
 
     
Total services
     358,928       26,514       11,285       (22,570 )     374,157  
 
 
    
     
     
     
     
 
   
Total revenues
     525,665       66,529       14,017       (38,802 )     567,409  
Total allocated costs and expenses
     459,494       53,417       17,917       (38,802 )     492,026  
 
 
    
     
     
     
     
 
Operating income (loss) before unallocated expenses
   $ 66,171     $ 13,112     $ (3,900 )   $ —     $ 75,383  
Other unallocated expenses
                                     (10,277 )
 
                                    
 
Operating income after unallocated expenses
                                     85,660  
Interest income and expense and other, net (1)
                                     12,237  
 
                                    
 
Income before income taxes
                                     97,897  
Provision for income taxes
                                     31,327  
 
                                    
 
Net income
                                   $ 66,570  
 
                                    
 
Basic net income per share
                                   $ 0.71  
 
                                    
 
Shares used in computing basic net income per share
                                     94,223  
 
                                    
 
Diluted net income per share
                                   $ 0.69  
 
                                    
 
Shares used in computing diluted net income per share
                                     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., 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.
 
(1)   Non-recurring gain in interest income and expense and other, net
 
    Interest income and expense and other, net for the three and nine months ended September 30, 2003 includes a gain of approximately $3.2 million relating to the realization of a note receivable originally generated from the sale of our SLI Swiss subsidiaries.

 

SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

                       
          Nine Months Ended
            September 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)
     49,543       (84,892 )
Adjustments to reconcile net loss to net cash provided by operating activities:
                
   
Depreciation and amortization
     63,208       61,070  
   
Write-off of assets in restructuring
     379       —  
   
Gain on disposal of assets
     (263 )     (3,126 )
   
Cumulative effect of an accounting change
     —       132,450  
   
Deferred income taxes
     (3,959 )     (3,859 )
   
Amortization of deferred stock-based compensation
     2,083       1,490  
   
Changes in assets and liabilities:
                
     
Accounts receivable
     67,593       58,562  
     
Other current assets
     1,337       3,833  
     
Accounts payable
     (1,907 )     (34 )
     
Accrued compensation and related expenses
     (5,960 )     (13,092 )
     
Accrued income taxes
     8,483       17,820  
     
Other accrued liabilities
     (28,663 )     (34,382 )
     
Deferred revenues
     (8,276 )     (15,302 )
     
Other liabilities
     3,484       3,637  
 
    
     
 
Net cash provided by operating activities
     147,082       124,175  
Cash flows from investing activities:
                
 
(Increase) Decrease in restricted cash
     1,203       (496 )
 
Purchases of available-for-sale cash investments
     (186,129 )     (174,584 )
 
Maturities of available-for-sale cash investments
     137,907       40,613  
 
Sales of available-for-sale cash investments
     45,162       143,699  
 
Business combinations, net of cash acquired
     (13,900 )     (1,973 )
 
Purchases of property, equipment and improvements
     (26,043 )     (33,805 )
 
Proceeds from sale of fixed assets
     152       1,001  
 
Capitalized software development costs
     (22,812 )     (24,880 )
 
(Increase) Decrease in other assets
     (184 )     1,212  
 
    
     
 
Net cash used for investing activities
     (64,644 )     (49,213 )
Cash flows from financing activities:
                
 
Net proceeds from the issuance of common stock and reissuance of treasury stock
     33,315       21,307  
 
Purchases of treasury stock
     (30,883 )     (79,042 )
 
    
     
 
Net cash provided by (used for) financing activities
     2,432       (57,735 )
Effect of exchange rate changes on cash
     23,159       11,135  
 
    
     
 
Net increase in cash and cash equivalents
     108,029       28,362  
 
    
     
 
Cash and cash equivalents, end of period
     339,296       251,155  
Cash investments, end of period
     158,869       111,868  
 
    
     
 
Total cash, cash equivalents and cash investments, end of period
   $ 498,165     $ 363,023