-----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, KnYXuV/RUl9915yVyxumUD4czMEhTov3Tn6x0+K9oxOKsAwRrQQR/90TzSgYzHC9 HpOtTbdyJ3NvSFE8Jn6uBg== 0001157523-04-007958.txt : 20040820 0001157523-04-007958.hdr.sgml : 20040820 20040819184238 ACCESSION NUMBER: 0001157523-04-007958 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040819 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SERENA SOFTWARE INC CENTRAL INDEX KEY: 0001073967 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 942669809 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25285 FILM NUMBER: 04987285 BUSINESS ADDRESS: STREET 1: 2755 CAMPUS DRIVE STREET 2: 3RD FLOOR CITY: SAN MATEO STATE: CA ZIP: 94403-2538 BUSINESS PHONE: 6505226600 MAIL ADDRESS: STREET 1: 2755 CAMPUS DRIVE STREET 2: 3RD FLOOR CITY: SAN MATEO STATE: CA ZIP: 94403-2538 8-K 1 a4705484.txt SERENA SOFTWARE 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 August 19, 2004 -------------------------------------------------------------- Date of Report (date of earliest event reported) SERENA SOFTWARE INC. - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 000-25285 94-2669809 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification Number) 2755 CAMPUS DRIVE 3RD FLOOR, SAN MATEO, CALIFORNIA 94403-2538 -------------------------------------------------------------- (Address of principal executive offices) (650) 522-6600 -------------------------------------------------------------- (Registrant's telephone number, including area code) ================================================================================ ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. The following exhibits are filed with this report. Exhibit Number Description - --------------------- ------------------------------------------------------- 99.1 Press Release dated August 19, 2004. ITEMS 9 AND 12. REGULATON FD DISCOLUSRE AND DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 19, 2004, Serena Software Inc. issued a press release announcing its financial results for the quarter ended July 31, 2004. A copy of the press release is furnished as Exhibit 99.1 pursuant to Regulation FD and Item 12. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SERENA SOFTWARE INC. By: /s/ ROBERT I. PENDER JR. ------------------------------------- Robert I. Pender Jr. Senior Vice President, Finance and Administration, Chief Financial Officer and Director Dated: August 19, 2004 EX-99.1 2 a4705484ex991.txt PRESS RELEASE EXHIBIT 99.1 SERENA Software Reports Second Quarter Results; Non-GAAP EPS up 65% to $0.28 and Licenses Revenue up 93% to $19.4 Million SAN MATEO, Calif.--(BUSINESS WIRE)--Aug. 19, 2004--SERENA Software, Inc. (Nasdaq:SRNA), an industry-leading supplier of software that automates change to enterprise applications, announced today net income per diluted share on a non-GAAP basis of $0.28 for the second fiscal quarter ending July 31, 2004, up 65% over the same quarter a year ago. The results for the second quarter of fiscal 2005 include the operations of Merant plc ("Merant") for the entire quarter. The acquisition of Merant was completed April 23, 2004. Total revenues on a non-GAAP basis, including the add back of maintenance revenues written down in the purchase accounting for the Merant acquisition, were $58.8 million exceeding the high end of the Company's guidance. Total GAAP revenues of $52.0 million in the second quarter of fiscal 2005 represented a 109% increase over the second quarter of fiscal 2004, and a 54% sequential increase over the first quarter. Software license revenue was $19.4 million, up 93% over the same quarter a year ago. Maintenance revenue on a GAAP basis increased to $25.7 million, up 107% over the same quarter a year ago and services revenues increased to $6.8 million. On a combined basis, license revenue from software change management was 79% of total license revenue, with 70% of license revenue coming from distributed systems platforms. Non-GAAP operating income for the second quarter ended July 31, 2004, including the add back for the deferred revenue write down in the Merant acquisition, was $16.4 million and non-GAAP operating margin was 28%. Non-GAAP net income and net income per diluted share for the second quarter of fiscal 2005 increased 84% and 65%, respectively, to $12.6 million and $0.28 from $6.9 million and $0.17 in the second quarter of fiscal 2004. Net income and net income per diluted share computed in accordance with generally accepted accounting principles ("GAAP") decreased to $0.3 million and $0.01 from $4.7 million and $0.12 in the same quarter a year ago as a result of the acquisition of Merant. The second quarter of fiscal 2005 non-GAAP results exclude amortization of intangible assets and charges relating to the purchase accounting adjustments for the acquisition of Merant, including stock-based compensation, the revenue impact of the deferred maintenance write-down to fair value, amortization of capitalized software and other intangible assets, and restructuring and acquisition related charges. A reconciliation of non-GAAP to GAAP financial results is included in this press release. Total cash, restricted cash, investments and equivalents as of July 31, 2004 was $200 million. Total deferred revenue at July 31, 2004 was $71 million. Days sales outstanding on a GAAP basis were 57 days and 50 days on a non-GAAP basis. Additionally, the Company's board of directors authorized 2,000,000 shares eligible for repurchase going forward. "I am very proud of the company's performance in our first full quarter of combined operations," said President and CEO Mark Woodward. "We delivered immediate earnings accretion on a cash basis and more than doubled our size. Our customers are excited about the New Serena and our SAFE strategy and I am very optimistic about our prospects going forward." The Company also announced its non-GAAP financial outlook for the third quarter of fiscal 2005. Third quarter total revenues, eliminating the reduction in maintenance revenue as a result of the purchase accounting write-down of deferred revenue, are expected to be in the range of $59 million to $62 million and non-GAAP net income per fully diluted share is expected to be between $0.28 and $0.29. Second Quarter Highlights -- Announced that Serena has expanded the application lifecycle solution with the acquisition of a leading requirements management technology. RTM 5.0 accelerates the delivery of Serena's SAFE vision by providing requirements and traceability management. The new offering is key to Serena's vision to meet customer needs for comprehensive lifecycle management. -- Announced that Serena entered a global strategic marketing agreement with SAIC to meet the complex needs of the SAP market, helping Serena strengthen its SAP solution offering and increase its presence in SAP and federal markets. -- Announced that Serena earned placement on the SD Times 100 for the second year running. Serena was recognized in the collaboration category for its SAFE strategy and recently acquired Merant was acknowledged for its innovation in collaboration. -- Announced support for the Microsoft Visual Studio 2005 Team System continuing a long tradition of working with Microsoft helping development organizations improve collaboration, boost productivity and reduce costs. -- Announced that Serena extended the partnership with Software Engineering Services to develop business process improvement solutions helping customers advance development processes and achieve Capability Maturity Model (CMM) Level 2 compliance. -- Announced that Serena earned the prestigious SAP Pinnacle Award 2003. Serena was selected from over 1,200 partners in recognition of early support for the "Powered by SAP NetWeaver" initiative. -- Announced that Micro Focus and Serena partnered to leverage and extend mainframe applications. Micro Focus and Serena will integrate their complementary mainframe technologies to drive down cost of change and lower development risk. -- Announced that Change Management is recognized as essential for IT Governance by The Butler Report. Serena Dimensions is positioned as the core framework for closed loop change management. -- Announced that Serena completed a Remedy validation to deliver the first closed-loop change management solutions for IT service management & software development. Integrated solutions automate communication, speed incident resolution and ensure high levels of IT service availability. Serena provides non-GAAP operating income, net income and earnings per share data as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. These measures differ from US GAAP in that they exclude the amortization of intangible assets and charges relating to the purchase accounting adjustments for the acquisition of Merant, including the revenue impact of the deferred maintenance write-down to fair value, amortization of capitalized software and intangible assets, stock based compensation and restructuring and acquisition related charges. Serena's management believes these non-GAAP measures are useful to investors because this supplemental information facilitates comparisons to prior periods and are more reflective of earnings on a cash basis. Management uses these non-GAAP measures to evaluate its financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results. The following table reconciles the non-GAAP financial measures to GAAP: Quarter Ended July 31, -------------------------------- 2004 2003 --------------- ---------------- Net Diluted Net Diluted Income EPS Income EPS --------------- ---------------- Non-GAAP $12,610 $0.28 $6,856 $0.17 Amortization of capitalized software, intangible assets and stock-based compensation (7,154) (0.16) (2,136) (0.05) Revenue impact of deferred maintenance write-down, net of tax (38%) (4,233) (0.09) -- -- Restructuring and acquisition charges, net of tax (38%) (965) (0.02) -- -- ------- ------- ------- ------- GAAP $258 $0.01 $4,720 $0.12 ======= ======= ======= ======= 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/Q205results. Additionally investors can listen to the call by dialing 877-655-7651 or 706-679-5273 at least 5 minutes prior to the start time. A replay of the call will be available through August 26, 2004 by dialing 800-642-1687 or 706-605-9291 ID# 9000796. 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 solutions that help companies automate change to the applications that run their businesses. With its acquisition of Merant, Serena's products are now in use at over 15,000 customer sites - -- including 49 of the Fortune 50. Serena's Application Framework for Enterprises (SAFETM) is the next step in ECM, providing cross-platform, cross-process and cross-organizational support across application life cycle processes. This approach helps streamline development, improve productivity and lower development costs, resulting in a highly efficient enterprise. With headquarters in San Mateo, California, Serena serves customers worldwide through local offices and an international network of distributors. 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, the successful integration of our recent Merant acquisition; 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; our reliance on our mainframe products for revenue; dependence on revenues from our installed base; continued demand for additional mainframe MIPS capacity; 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 10Q filed on June 9, 2004 and Form 10K filed on April 15, 2004. Serena assumes no obligation to update the forward-looking information contained in this press release. Trademarks Serena, TeamTrack, ChangeMan, Comparex and StarTool are registered trademarks of SERENA Software Inc. SAFE is a trademark 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) 2004 SERENA Software, Inc. All Rights Reserved. SERENA Software, Inc. Condensed Consolidated Statements of Income (Loss) (In thousands, except per share data) (Unaudited GAAP) Three Months Ended Six Months Ended July 31, July 31, ------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- Revenue: Software licenses $19,416 $10,047 $35,256 $20,899 Maintenance 25,732 12,449 40,497 24,360 Professional services 6,812 2,417 9,949 4,021 --------- --------- --------- --------- Total revenue 51,960 24,913 85,702 49,280 --------- --------- --------- --------- Cost of revenue: Software licenses 1,025 171 1,351 383 Maintenance 3,151 1,605 4,714 3,109 Professional services 6,258 2,278 9,048 4,044 Amortization of acquired technology 3,932 1,628 5,977 2,709 --------- --------- --------- --------- Total cost of revenue 14,366 5,682 21,090 10,245 --------- --------- --------- --------- Gross profit 37,594 19,231 64,612 39,035 --------- --------- --------- --------- Operating expenses: Sales and marketing 18,131 7,014 27,488 13,667 Research and development 8,875 3,420 13,824 6,459 General and administrative 4,963 1,728 7,011 3,468 Stock-based compensation 237 -- 255 -- Amortization of intangible assets 2,985 508 3,936 508 Acquired in-process research and development -- -- 10,400 -- Restructuring, acquisition and other charges 1,556 -- 1,766 -- --------- --------- --------- --------- Total operating expenses 36,747 12,670 64,680 24,102 --------- --------- --------- --------- Operating income (loss) 847 6,561 (68) 14,933 Interest income 728 814 2,043 1,819 Interest expense (825) -- (1,650) -- Amortization of debt issuance costs (335) -- (796) -- Income (loss) before income taxes 415 7,375 (471) 16,752 Income taxes 157 2,655 3,547 6,218 --------- --------- --------- --------- Net income (loss) $258 $4,720 $(4,018) $10,534 ========= ========= ========= ========= Net income (loss) per share: Basic $0.01 $0.12 $(0.10) $0.26 ========= ========= ========= ========= Diluted $0.01 $0.12 $(0.10) $0.26 ========= ========= ========= ========= Weighted average shares used in per share calculations: Basic 43,955 40,102 41,413 40,276 ========= ========= ========= ========= Diluted 44,626 41,028 41,413 40,973 ========= ========= ========= ========= SERENA Software, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited GAAP) July 31, January 31, 2004 2004 ---------- ---------- Assets Current assets Cash and cash equivalents $140,530 $257,281 Restricted cash 3,300 3,300 Short-term investments 41,534 39,214 Accounts receivable, net 32,847 15,475 Deferred taxes 6,787 6,787 Prepaid expenses and other current assets 5,918 1,338 ---------- ---------- Total current assets 230,916 323,395 Long-term investments 9,603 70,692 Restricted cash, non-current 4,742 6,312 Property and equipment, net 6,125 3,209 Goodwill, net 379,911 40,471 Other intangible assets, net 63,114 22,987 Other assets 4,673 6,595 ---------- ---------- Total assets $699,084 $473,661 ========== ========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $1,955 $1,232 Income taxes payable 12,272 6,294 Accrued expenses 29,260 7,782 Accrued Interest on subordinated notes 413 413 Deferred revenue 57,575 29,496 ---------- ---------- Total current liabilities 101,475 45,217 Deferred revenue, net of current portion 13,405 9,683 Long-term liabilities 2,819 -- Deferred taxes 45,203 3,483 Subordinated notes 220,000 220,000 ---------- ---------- Total liabilities 382,902 278,383 Stockholders' equity: Total stockholders' equity 316,182 195,278 ---------- ---------- Total liabilities and stockholders' equity $699,084 $473,661 ========== ========== CONTACT: SERENA Software, Inc. Robert I. Pender, 650-522-6604 -----END PRIVACY-ENHANCED MESSAGE-----