-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V5WV70YymlfJ7uePfydAuUJg9ZJkoFM1v2EPQwNl8hSfpWxDZ9ueRDYNvq1OkJLx XH/BezS82QVsVruWfsn36A== 0000950135-03-003945.txt : 20030724 0000950135-03-003945.hdr.sgml : 20030724 20030723162508 ACCESSION NUMBER: 0000950135-03-003945 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030723 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETEGRITY INC CENTRAL INDEX KEY: 0000840824 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042911320 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10139 FILM NUMBER: 03798553 BUSINESS ADDRESS: STREET 1: 245 WINTER ST CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178901700 MAIL ADDRESS: STREET 1: 245 WINTER STREET STREET 2: 0 CITY: WALTHAM STATE: MA ZIP: 02184 FORMER COMPANY: FORMER CONFORMED NAME: SOFTWARE DEVELOPERS CO INC/DE/ DATE OF NAME CHANGE: 19920703 8-K 1 b47272nie8vk.txt NETEGRITY, INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-1004 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 23, 2003 NETEGRITY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 1-10139 04-2911320 (STATE OR OTHER JURISDICTION OF (COMMISSION (IRS. EMPLOYER INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.) 201 JONES ROAD, WALTHAM, MA 02451 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (781) 890-1700 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (FORMER ADDRESS, IF CHANGED FROM LAST REPORT) ITEM 9. REGULATION FD DISCLOSURE (INFORMATION FURNISHED PURSUANT TO ITEM 12, "RESULTS OF OPERATIONS AND FINANCIAL CONDITION"). On July 23, 2003, Netegrity, Inc. announced its financial results for the quarter ended June 30, 2003. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. In accordance with the procedural guidance in SEC Release No. 33-8216, the information in this Form 8-K and the Exhibit attached hereto is being furnished under "Item 9. Regulation FD Disclosure" rather than under "Item 12. Results of Operations and Financial Condition." The information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing. USE OF NON-GAAP FINANCIAL INFORMATION To supplement our consolidated financial statements presented in accordance with GAAP, Netegrity, Inc. uses non-GAAP measures of net income (loss) and net income (loss) per share, which are adjusted from results based on GAAP to exclude certain expenses. These non-GAAP adjustments are provided to enhance the user's overall understanding of our current financial performance. Specifically, in order to better understand the comparability of quarters, we believe that it is important to consider non-GAAP net income (loss) (defined as GAAP net loss excluding non-cash amortization of capitalized software) when evaluating our cost structure and measuring our progress towards profitability. The second quarter of 2003 is the last quarter that includes a charge for non-cash amortization because capitalized software was fully amortized as of June 30, 2003. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NETEGRITY, INC. Date: July 23, 2003 /s/Regina O. Sommer ------------------- Regina O. Sommer Chief Financial Officer and Treasurer 3 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ----------- 99.1 Press Release of Netegrity, Inc. issued on July 23, 2003
4 EX-99.1 3 b47272niexv99w1.txt PRESS RELEASE OF NETEGRITY, INC. Exhibit 99.1 INVESTOR CONTACT: PRESS CONTACT: Mindy Kohl Jennifer Menard Netegrity, Inc. Netegrity, Inc. (781) 530-6061 (781) 530-6202 mkohl@netegrity.com jmenard@netegrity.com NETEGRITY ANNOUNCES Q2 2003 RESULTS License Revenues Increase 27% Over First Quarter WALTHAM, MA - JULY 23, 2003 - Netegrity, Inc. (Nasdaq: NETE), a leading provider of identity and access management solutions, today announced financial results for its second quarter ended June 30, 2003. Total revenues were $18.9 million for the second quarter of 2003, a 13% percent increase over total revenues of $16.7 million for the first quarter of 2003. License revenues for the second quarter of 2003 were $10.7 million, a 27% increase over license revenues of $8.4 million in the first quarter. The Company reported a net loss on a GAAP basis for the second quarter of 2003 of $(2.5) million, or $(0.07) per share, compared to $(4.9) million or $(0.14) per share for the first quarter of 2003. The net losses for both Q2 and Q1 include non-cash software amortization of $2.7 million. In order to better understand the comparability of quarters, we believe that it is important to consider non-GAAP net income (loss) (defined as GAAP net loss excluding non-cash software amortization) when evaluating our cost structure and measuring our progress towards profitability. The Company reached profitability on a non-GAAP basis with net income of $167,000 or $0.00 per share for the second quarter of 2003, compared to a non-GAAP net loss of $(2.2) million or $(0.06) per share for the first quarter of 2003. The second quarter of 2003 is the last quarter that includes a charge for non-cash amortization because capitalized software was fully amortized as of June 30, 2003. As of June 30, 2003, Netegrity had $94.2 million in cash and marketable securities. Cash provided by operating activities was $3.0 million for the second quarter of 2003. For the six months ended June 30, 2003, total revenues were $35.5 million, and license revenues were $19.1 million. The Company reported a net loss on a GAAP basis for the first six months of 2003 of $(7.4) million or $(0.22) per share. Non-GAAP net loss (defined as GAAP net loss excluding non-cash software amortization) for the six months ended June 30, 2003 was $(2.0) million or $(0.06) per share. "We had a very strong quarter- exceeding expectations on both the top and bottom lines and accelerating our path to profitability," said Barry Bycoff Netegrity chairman, president, and CEO. "Driving these great results is the growing customer interest in identity management, combined with increased adoption of our integrated identity and access management solution, and our excellent sales and marketing execution." Q2 2003 HIGHLIGHTS - - Netegrity signed agreements with 28 new customers and had 60 follow on software deals, bringing the total number of customers to 747. From a vertical standpoint, Netegrity saw solid momentum in financial services, government, manufacturing, and telecom. - - Netegrity delivered IdentityMinder(TM) technology, which provides customers with an integrated identity and access management solution that spans both Web and enterprise resources. With a single identity infrastructure across the organization, companies can streamline the creation, modification, and deletion of user identities, create entitlement and security policies, and enforce those policies across a broad range of applications and systems. - - Netegrity expanded its support for Oracle and IBM environments furthering its commitment to provide customers with a robust set of out-of-the-box identity and access management capabilities which support the most demanding and diverse environments. BUSINESS OUTLOOK Netegrity expects growth in license revenue for Q3 versus Q2 of approximately 3 percent. Assuming services and other revenue are similar to Q2, this would equate to growth in total revenue for Q3 of approximately 3 percent versus Q2. On the cost side, Netegrity expects operating expenses to be approximately the same as in Q2. On a GAAP basis, Netegrity expects net income in Q3 in the range of $0.00 to $0.01 per share. Netegrity's financial guidance assumes that Q3 will be somewhat tempered by what is typically a seasonally slow quarter in certain geographical regions, and also assumes no significant improvement in the IT spending environment in the short term. Since we are assuming we will be breakeven or profitable in Q3, these per share amounts take into account the "in-the-money stock options" for purposes of calculating the fully diluted shares outstanding. We have assumed approximately 36.5 million fully diluted shares outstanding during Q3. These expected results for the third quarter do not include non-cash software amortization because the capitalized software was fully amortized as of June 30, 2003. EARNINGS WEBCAST In conjunction with this announcement, Netegrity will host a conference call today at 5:00 p.m. EDT to discuss the Company's financial results. Netegrity will broadcast the conference call live via the Internet at www.netegrity.com/investors. This Webcast will also be archived for later listening at www.netegrity.com/investors. In addition, a telephone recording will be available until 11:59 p.m. (EDT) on Friday July 25th. To access the telephone recording, dial (800) 475-6701, or internationally dial (320) 365-3844, and enter access code 690379. ABOUT NETEGRITY, INC. Netegrity, Inc. is a leading provider of security software solutions that securely manage identities and their access to enterprise information assets, letting business in while keeping risk out. Netegrity provides a comprehensive identity and access management product line for continuously evolving computing environments, including legacy, Web, and service-oriented architectures. Netegrity's flexible, standards-based offerings increase security, reduce administrative costs and enable revenue enhancement. Supported by a network of over 1100 trained integration consultants and 200 technology partners, Netegrity solutions are licensed to more than 300 million users at over 700 organizations worldwide, including more than half of the Fortune 100. Customers include industry leaders such as Aetna, Amazon.com, American Express, Bank One, General Electric, Harvard Pilgrim Health Care, the Internal Revenue Service, and Wells Fargo. For more information, visit www.netegrity.com. ### Netegrity and IdentityMInder are trademarks or registered trademarks of Netegrity, Inc. All other product names, service marks, and trademarks mentioned herein are trademarks of their respective owners. Various statements in this release concerning Netegrity's future expectations, plans, and prospects constitute forward-looking statements for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors such as, but not limited to, general economic conditions, weakness in the global economy, increased operating expenses, our ability to develop and enhance our products and services or remain competitive in product pricing, competition in the marketplace, including competitors' sales strategies, development and performance of our direct and indirect sales channels, delays in product development, changes in customer and market requirements and standards, market acceptance of new products and technologies, and technological changes in the computer industry, as well as those risks more fully discussed in the Company's reports on file with the Securities and Exchange Commission including the Company's latest Form 10-K/A, Form 10-Q and any subsequent filings. In addition, any forward-looking statements represent the Company's views only as of today and should not be relied upon as representing its views as of any subsequent date. While we may elect to update forward looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and, therefore, you should not rely on any of these forward-looking statements as representing the Company's views as of any date subsequent to today. NETEGRITY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 -------------------------- ------------------------ 2003 2002 2003 2002 ---- ---- ---- ---- REVENUES: Software licenses $ 10,714 $ 7,669 $ 19,132 $ 21,286 Services 7,500 7,493 15,129 15,071 Other 650 646 1,281 1,421 ------ ------ ------ ------ Total revenues 18,864 15,808 35,542 37,778 Cost of revenues 3,526 4,363 7,367 9,237 Non-cash cost of revenues 2,699 917 5,398 1,834 ------ ------ ------ ------ Total cost of revenues 6,225 5,280 12,765 11,071 GROSS PROFIT 12,639 10,528 22,777 26,707 Selling, general, and administrative expenses 10,493 14,038 20,989 27,528 Research and development costs 5,036 6,478 9,910 12,536 Non-recurring charges -- 689 -- 689 ------ ------ ------ ------ OPERATING LOSS (2,890) (10,677) (8,122) (14,046) Other income, net 417 724 791 1,380 ------ ------ ------ ------ Loss before income taxes (2,473) (9,953) (7,331) (12,666) Provision for income taxes 59 -- 59 40 ------ ------ ------ ------ NET LOSS $ (2,532) $ (9,953) $ (7,390) $(12,706) ====== ====== ====== ====== Net loss per share attributable to common stockholders - basic and diluted $ (0.07) $ (0.29) $ (0.22) $ (0.37) ====== ====== ====== ====== Weighted average common shares outstanding - basic and diluted 34,416 34,001 34,367 33,938 ====== ====== ====== ======
NETEGRITY, INC. RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURE (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) The second quarter of 2003 is the last quarter that includes a charge for non-cash amortization because capitalized software was fully amortized as of June 30, 2003. In order to better understand the comparability of quarters, we believe that it is important to consider non-GAAP net income (loss) (defined as GAAP net loss excluding non-cash amortization of capitalized software) when evaluating our cost structure and measuring our progress towards profitability. Below is a table that reconciles GAAP net loss to non-GAAP net income (loss) for the three and six months ended June 30, 2003 and 2002 as well as the three months ended March 31, 2003. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States.
THREE MONTHS ENDED THREE MONTHS ENDED SIX MONTHS ENDED MARCH 31 JUNE 30 JUNE 30 2003 2003 2002 2003 2002 ---- ---- ---- ---- ---- GAAP net loss $ (4,858) $ (2,532) $ (9,953) $ (7,390) $(12,706) Adjustments: Non-cash amortization of capitalized software 2,699 2,699 917 5,398 1,834 -------- -------- -------- -------- -------- Non-GAAP net income (loss) $ (2,159) $ 167 $ (9,036) $ (1,992) $(10,872) ======== ======== ======== ======== ======== GAAP net loss per share - basic and diluted $ (0.14) $ (0.07) $ (0.29) $ (0.22) $ (0.37) Adjustments: Non-cash amortization of capitalized software per share - basic and diluted 0.08 0.07 0.02 0.16 0.05 -------- -------- -------- -------- -------- Non-GAAP net income (loss) per share Basic $ (0.06) $ 0.00 $ (0.27) $ (0.06) $ (0.32) ======== ======== ======== ======== ======== Diluted $ (0.06) $ 0.00 $ (0.27) $ (0.06) $ (0.32) ======== ======== ======== ======== ======== Weighted average common shares outstanding Basic 34,318 34,416 34,001 34,367 33,938 ======== ======== ======== ======== ======== Diluted 34,318 36,159 34,001 34,367 33,938 ======== ======== ======== ======== ========
NETEGRITY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS)
JUNE 30, 2003 DECEMBER 31, 2002 ------------- ----------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 13,761 $ 25,707 Short-term marketable securities 26,139 48,361 Accounts receivable, net 9,685 15,046 Prepaid and other current assets (including restricted cash) 2,399 3,230 -------- -------- Total current assets 51,984 92,344 Property and equipment, net 6,029 6,837 Long-term marketable securities 53,526 12,655 Other intangible assets, net -- 5,398 Other assets (including restricted cash) 1,098 1,128 -------- -------- Total assets $112,637 $118,362 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable - trade $ 2,421 $ 1,906 Accrued compensation and benefits 3,276 4,293 Other accrued expenses 6,499 6,530 Deferred revenue 16,677 14,875 -------- -------- Total current liabilities 28,873 27,604 STOCKHOLDERS' EQUITY 83,764 90,758 -------- -------- Total liabilities and stockholders' equity $112,637 $118,362 ======== ========
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