EX-99.1 3 e15554ex99-1.txt PRESS RELEASE Exhibit 99.1 SERENA Software Reports Second Quarter Results Non GAAP EPS of $0.17 and Total Revenues of $24.9 Million SAN MATEO, Calif., Aug. 21 /PRNewswire-FirstCall/ -- SERENA Software, Inc. (Nasdaq: SRNA), an industry-leading supplier of software that automates change to enterprise code and content, announced today net income per diluted share, excluding amortization of intangible assets, of $0.17 for the second fiscal quarter ending July 31, 2003. Net income per diluted share, excluding intangibles amortization, exceeded the range provided in the Company's pre- announcement on August 5, 2003, and both license revenue and total revenue were at the high end of the ranges provided. Total revenues of $24.9 million in the second quarter of fiscal 2004 represented an 8% increase over the second quarter of fiscal 2003. Software licenses revenue was $10.0 million, maintenance revenue was $12.5 million, and services revenue was $2.4 million. License revenue from software change management was 66% of license revenue, with 35% of license revenues coming from distributed systems platforms. Excluding intangibles amortization, operating income for the second quarter ended July 31, 2003 was $8.7 million, up 3% over the second quarter a year ago. Operating margin excluding intangibles amortization was 35%. Excluding intangibles amortization, net income and net income per diluted share for the second quarter of fiscal 2004 increased 7% and 6%, respectively, to $6.9 million and $0.17 from $6.4 million and $0.16 in the second quarter of fiscal 2003. Net income and net income per diluted share computed in accordance with generally accepted accounting principles decreased 11% and 8%, respectively, to $4.7 million and $0.12 from $5.3 million and $0.13 in the same quarter a year ago. Cash and investments at July 31, 2003 was $173 million or $4.21 per diluted share. Total deferred revenue increased slightly sequentially to $37.2 million. Days Sales Outstanding were 58 days in the second quarter. "I am pleased to have our second quarter results exceed or come in at the high end of our preannounced ranges, said Mark Woodward, President and CEO. In addition, we have already closed the largest of the deals that slipped from the second quarter and I fully expect to close the other three that slipped in the third quarter." The Company also announced guidance for the third quarter of fiscal 2004. For the third quarter total revenues are expected to be in the range of $25.5 to $26.5 million and net income per fully diluted share excluding intangibles amortization is expected to be between $0.17 and $0.18. Second Quarter Highlights -- Held our 10th Annual Global User Conference -- Serena Xchange 2003, focusing on helping customers do more with less by leveraging existing resources and optimizing new technology. -- Announced Extended Integration with Test Management Software from Mercury Interactive providing best-of-breed solutions for application development. -- Delivered the latest release of Serena ChangeMan ZDD 3.1, an innovative mainframe desktop development solution with several usability, access and development enhancements. -- Announced that Serena received Microsoft Gold Certification for innovative desktop development technology enabling Serena to provide customers with a more robust enterprise change management solution offering and increasing market channel opportunities. -- Announced that Serena earned placement on the first annual SD Times 100, a ranking of software development companies that demonstrated the greatest innovation and leadership during 2002. -- Completed the acquisition of TeamShare Incorporated enabling Serena to compete more effectively in the growing Application Life Cycle Management market. -- Announced that Serena remains among the top three SCM revenue leaders according to the latest market share and revenue findings for the software configuration management (SCM) market as published by IDC. -- Shipped the latest release of the newly acquired TeamTrack product on schedule, TeamTrack 5.8. which includes broader platform support, usability and performance enhancements. -- Announced partnerships with Polaris Technologies, Intergen, and Pro Systems Consulting where these partners will implement Serena ECM solutions and services, helping Serena extend capabilities and support to better meet market needs. -- Announced extended support for the ECLIPSE platform. Serena's Best-of- Breed ECM solution and support for Ppen Source technology helps customers increase enterprise efficiency and accelerate next-generation development. Commentary Available A conference call to discuss the preliminary results is scheduled for 2:00 PM Pacific time today and may be accessed live via the Internet at www.companyboardroom.com or www.serena.com/q2results. Additionally investors can listen to the call by dialing 877-706-2563 or 706-679-5994 at least 5 minutes prior to the start time. A replay of the call will be available through August 28, 2003 by dialing 706-645-9291, code #2240110. About SERENA Software, Inc. SERENA Software Inc. is the Enterprise Change Management (ECM) industry leader. For over twenty years Serena has focused exclusively on providing application change management solutions to the world's leading enterprises, and today its products are in use at over 3,000 customer sites -- including 46 of the fortune 50. Serena leads the way in ECM by providing a single point of control to manage software code and Web content changes throughout the enterprise, from the mainframe to the Web. Serena is headquartered in San Mateo, California and maintains international offices in Canada, Germany, France, Benelux and the United Kingdom. Serena can be reached through the World Wide Web at www.serena.com. This press release contains "forward-looking statements" under the Private Securities Reform Act of 1995. There can be no assurance that future results will be achieved, and actual results could differ materially from forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to, our reliance on our mainframe products for revenue; the percentage of license revenue typically closed at the end of each quarter making estimation of operating results prior to the end of the quarter extremely uncertain; weak economic conditions worldwide which may continue to affect the overall demand for software and services, which has resulted in and could continue to result in decreased revenues or lower revenue growth rates; changes in revenue mix and seasonality; our ability to deliver our products on the distributed systems platform; dependence on revenues from our installed base; continued demand for additional mainframe MIPS capacity; successful integration of our recent acquisition; expansion of our international organizations; and our ability to manage our growth. Information about potential factors that could affect the Company's financial results is included in the Company's Form 10K filed on April 29, 2003 and Form 10Q filed on June 13, 2003. SERENA assumes no obligation to update the forward-looking information contained in this press release. Trademarks Serena, ChangeMan and StarTool are registered trademarks of SERENA Software Inc. All other products or company names mentioned are used for identification purposes only, and may be trademarks of their respective owners. (C) 2003 SERENA Software, Inc. All Rights Reserved. - FINANCIAL TABLES TO FOLLOW - SERENA Software, Inc. Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended July 31, July 31, 2003 2002 2003 2002 Revenue: Software licenses $10,047 $10,305 $20,899 $19,956 Maintenance 12,449 11,016 24,360 21,792 Professional services 2,417 1,677 4,021 3,296 Total revenue 24,913 22,998 49,280 45,044 Cost of revenue: Software licenses 171 332 383 582 Maintenance 1,605 1,415 3,109 2,787 Professional services 2,278 1,500 4,044 2,922 Total cost of revenue 4,054 3,247 7,536 6,291 Gross profit 20,859 19,751 41,744 38,753 Operating expenses: Sales and marketing 7,014 6,637 13,667 13,001 Research and development 3,420 2,973 6,459 5,892 General and administrative 1,728 1,679 3,468 3,389 Stock-based compensation -- 6 -- 17 Amortization of intangible assets 2,136 1,146 3,217 2,291 Total operating expenses 14,298 12,441 26,811 24,590 Operating income 6,561 7,310 14,933 14,163 Interest and other income, net 814 1,198 1,819 2,395 Income before income taxes 7,375 8,508 16,752 16,558 Income taxes 2,655 3,233 6,218 6,292 Net income $4,720 $5,275 $10,534 $10,266 Net income, excluding intangibles amortization $6,856 $6,421 $13,751 $12,557 Net income per share: Basic $0.12 $0.13 $0.26 $0.25 Diluted $0.12 $0.13 $0.26 $0.25 Diluted, excluding intangibles amortization $0.17 $0.16 $0.34 $0.31 Weighted average shares used in per share calculations: Basic 40,102 40,288 40,276 40,228 Diluted 41,028 40,655 40,973 40,658 Reconciliation of U.S. GAAP to Non-U.S. GAAP Financial Information: U.S. GAAP operating income $6,561 $7,310 $14,933 $14,163 Add back: Amortization of intangible assets 2,136 1,146 3,217 2,291 Non-U.S. GAAP operating income $8,697 $8,456 $18,150 $16,454 U.S. GAAP net income $4,720 $5,275 $10,534 $10,266 Add back: Amortization of intangible assets 2,136 1,146 3,217 2,291 Non-U.S. GAAP net income $6,856 $6,421 $13,751 $12,557 SERENA Software Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) July 31, January 31, 2003 2003 Assets Current assets Cash and cash equivalents $97,951 $105,402 Short-term investments 19,004 37,672 Accounts receivable, net 16,058 16,514 Deferred taxes, net 4,862 6,549 Prepaid expenses and other current assets 1,410 744 Total current assets 139,285 166,881 Long-term investments 55,722 48,374 Property and equipment, net 3,208 3,078 Deferred taxes, net 259 103 Goodwill and other intangible assets, net 64,296 45,360 Other assets 300 269 Total assets $263,070 $264,065 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $1,298 $533 Income taxes payable 3,951 7,921 Accrued expenses 7,437 8,266 Deferred revenue 28,523 26,010 Total current liabilities 41,209 42,730 Deferred revenue, net of current portion 8,711 8,373 Total liabilities 49,920 51,103 Stockholders' equity: Total stockholders' equity 213,150 212,962 Total liabilities and stockholders' equity $263,070 $264,065 SOURCE SERENA Software, Inc. -0- 08/21/2003 /CONTACT: Robert I. Pender, Jr., Chief Financial Officer of SERENA Software, Inc., +1-650-522-6604/ /Web site: http://www.serena.com / (SRNA) CO: SERENA Software, Inc. ST: California IN: CPR STW SU: ERN ERP CCA