-----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, JVRNc5S0w8SV8yZyI0xRIb5rNkp8cH1RUCDrx8Kth9+ucM9r6zeKEceeM3BS0Nff 3sd5qxurZGHwpc+kNlfYKw== 0000898822-96-000148.txt : 20030406 0000898822-96-000148.hdr.sgml : 20030406 19960425170324 ACCESSION NUMBER: 0000898822-96-000148 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960424 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960425 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEYENNE SOFTWARE INC CENTRAL INDEX KEY: 0000738830 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 133175893 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09189 FILM NUMBER: 96550927 BUSINESS ADDRESS: STREET 1: 3 EXPRESSWAY PLZ CITY: ROSLYN HEIGHTS STATE: NY ZIP: 11577 BUSINESS PHONE: 5164845110 8-K 1 FORM 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 Date of Report (Date of earliest event reported) April 24, 1996 CHEYENNE SOFTWARE, INC. (Exact name of registrant as specified in its charter) DELAWARE 1-9189 13-3175893 (State or Other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 3 Expressway Plaza, Roslyn Heights, NY 11577 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (516) 465-4000 Page 1 of 3 ITEM 5. OTHER EVENTS. On April 24, 1996, Cheyenne Software, Inc., issued the press release attached hereto as Exhibit 20, which is hereby incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 20. Press release dated April 24, 1996. Page 2 of 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CHEYENNE SOFTWARE, INC. Date April 25, 1996 /s/ ReiJane Huai Name: ReiJane Huai Title: President and Chief Executive Officer Page 3 of 3 EXHIBIT LIST 20. Press release dated April 24, 1996. EX-99 2 EXHIBIT 20 EXHIBIT 20 [LOGO] NEWS RELEASE Contacts: Roy Winnick/Richard Wolff Kekst and Company (212) 593-2655 CHEYENNE SOFTWARE ISSUES THIRD-QUARTER RESULTS --SALES FOR QUARTER INCREASED 24% TO $44.0 MILLION, WITH NET INCOME OF 14 CENTS PER SHARE VERSUS 20 CENTS IN YEAR-AGO PERIOD -- --"CHEYENNE IS FINANCIALLY, STRATEGICALLY, TECHNOLOGICALLY, AND OPERATIONALLY STRONG" AND IS "WELL-POSITIONED TO CONTINUE TO BUILD VALUE," SAYS CHAIRMAN/CEO REIJANE HUAI IN LETTER TO SHAREHOLDERS-- ROSLYN HEIGHTS, N.Y., April 24, 1996 -- Cheyenne Software, Inc. (AMEX: CYE) today reported that for its third quarter ended March 31, 1996, revenues increased 24% to $44,014,000 from $35,636,000 in the third quarter of 1995, with net income of $5,313,000 or 14 cents per share versus $7,975,000 or 20 cents per share for the comparable 1995 period. Included in last year's comparable quarter were charges of approximately $704,000, or about one cent per share, net of income taxes associated with the write-off of purchased R&D related to the JETserve product acquisition. For the nine months ended March 31, 1996, revenues increased 44% to $124,927,000 from $86,899,000 in the comparable 1995 period. Net income for the nine months was $19,822,000 or 51 cents per share versus $29,526,000 or 74 cents per share one year ago. Excluding one- time factors, earnings per share for the nine months were 58 cents versus 48 cents last year. ReiJane Huai, Chairman, President and Chief Executive Officer of Cheyenne, said: "As we have previously indicated, our third-quarter results reflected the combined impact of lower- than-expected sales in January and the transition from ARCserve 5.0 to our state-of-the-art ARCserve 6.0 family of network backup software products. This transition is now well under way and we fully expect to be back on track for significant revenue and earnings growth by the end of the current quarter. Sell-through in April to date has been robust in North America and based on current trends we expect point of sale revenue in fiscal Q4 to grow between 10% and 15% on a sequential basis. Sales of ARCserve 6.0 now make up approximately 70% of our ARC- serve for NetWare business. Sales of upgrades to ARCserve 6.0, both on a direct basis and through the channel, have been exceptional. We estimate upgrade revenues in FY97 will exceed $20 million." [table follows] (more) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 2 CHEYENNE SOFTWARE, INC. AND SUBSIDIARIES Consolidated Statements of Earnings Three and Nine Months Ended March 31, 1996 and 1995 (Unaudited)
Three Months Ended Nine Months Ended March 31, March 31, 1996 1995 1996 1995 (In thousands, except per share data) Revenues $44,014 $ 35,636 $124,927 $86,899 Cost of sales 9,021 6,372 23,299 14,912 Gross profit 34,993 29,264 101,628 71,987 Operating expenses: Research and development 6,919 4,195 18,232 10,184 Selling and marketing 15,197 10,735 38,747 28,223 General and administrative 5,194 2,902 12,546 6,954 Charge for purchased research and development -- 704 4,199 1,251 Total operating expenses 27,310 18,536 73,724 46,612 Operating income 7,683 10,728 27,904 25,375 Non-operating income: Interest income and other 682 1,091 2,330 2,656 Other (losses) gains, net (464) 272 (464) 21,125 Income before income taxes 7,901 12,091 29,770 49,156 Provision for income taxes 2,588 4,116 9,948 19,630 Net income $ 5,313 $ 7,975 $19,822 $ 29,526 Net income per share $ 0.14 $ 0.20 $ 0.51 $ 0.74 Weighted average number of common shares and equivalents outstanding 38,933 39,925 38,931 39,856
(more) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 3 Separately, Mr. Huai said that he will be sending a letter to Cheyenne shareholders, the full text of which follows: April 24, 1996 Dear Fellow Cheyenne Shareholder: In light of recent events, I want to share with you this update on the state of the Company, and on what we are doing to achieve our primary objective: building the value of Cheyenne for you. Despite a tough third quarter, and despite the misinformation currently being spread by an opportunistic, unsolicited suitor seeking to take advantage of it, Cheyenne is financially, strategically, technologically and operationally strong. We believe we are well-positioned to continue to build the value of Cheyenne for our shareholders, customers, business partners and employees. And the Board of Directors and management of Cheyenne are 100 percent united in our commitment and determi- nation to do so. Let me describe the basis for our confidence in the Company and its prospects. Financial Strength Largely based on the strength of our strategy, technology, and product offerings, and despite the hiccup we experienced last quarter, our financial performance over the past decade has been very strong. For example, our annual revenue grew from $8 million in 1991 to $128 million in 1995, and our annual net income has grown from $2 million to $38.5 million over the same period. We have achieved this growth with no debt, and we cur- rently have more than $76 million of cash on hand, an increase of about $6.5 million from the previous quarter. Pre-tax operating margins are expected to be approximately 25% before one-time charges for the year ending June 30, 1996. This performance is near the top for software companies. We intend to push for even higher margins and expect that the shift to fee-based technical support currently under way will substantially increase margins in the latter half of fiscal year 1997. We believe, in short, that we are well-positioned for future growth, with many new and innovative products for Windows NT, Windows 95, NetWare and UNIX, among other plat- forms. (MORE) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 4 Market Leader We do not just claim to be, but are universally recognized as, the world's leading provider of network backup and recovery software, with more than one-third of that $410 million market --a market industry analysts expect to double in size over the next three years. We have a broad range of well-established, innovative storage management solutions in such areas as net- work backup, disaster recovery, on-line backup of relational databases and groupware applications, as well as Internet-based solutions. We are confident of our ability to build upon our strength in four key platforms: Microsoft Windows NT, Windows 95, Novell NetWare, and UNIX. Windows NT and Windows 95 Revenues related to Windows NT products grew 66% to $8.3 mil- lion in the third quarter from $5.0 million in the second quar- ter. Unit shipments of ARCserve and InocuLAN grew 80% and 100%, respectively, on a sequential basis. We are gaining mar- ket share rapidly in the backup and anti-virus segments based on our excellence in product quality and our channel strategy. In the desktop arena, Cheyenne is planning additional 32-bit Windows products, including an extensive line of backup, anti- virus, storage management, and communications utilities for Windows 95 and Windows NT that will be unveiled later this quarter, along with some very exciting new strategic alliances. NetWare We are actively committed to Novell NetWare customers and are seeing strong sales growth for our various NetWare offerings. ARCserve 6.0 for NetWare addresses a market in which we have an estimated 65% share and an installed base of more than 500,000 servers. Importantly, the transition to ARCserve 6.0 is already well under way. During the third quarter, sales of the newly-introduced ARCserve 6.0 exceeded those of ARCserve 5.0. We sold close to 40,000 copies into our worldwide distribution channel compared to 5,000 copies sold when the product was re- leased at the end of the previous quarter. This market accep- tance should provide a significant opportunity for the cross- selling of our NetWare anti-virus and fax products. Finally, we also have a number of enhanced NetWare offerings in the pipeline for release later this year. For instance, we re- cently signed an agreement with Novell to integrate our anti- virus and fax technologies with Novell's Groupwise product and we will introduce a Groupwise backup option as well. (MORE) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 5 UNIX UNIX remains a popular platform for deploying enterprise applications. We are shipping and preparing additional prod- ucts for the most popular UNIX platforms, including Hewlett- Packard HP-UX, IBM AIX, SCO Open Server, and Sun Solaris. We will ship ARCserve/Open 2.2 for UNIX in the fourth quarter com- plete with agents to backup Informix, Sybase, Lotus Notes, and Web servers, and our engineers are hard at work on the next release. The Santa Cruz Operation (SCO), the world's leading provider of UNIX, chose to bundle ARCserve/Open with its Open Server software. We expect to distribute approximately 4,000 units of this important new product within the next few months. Other Initiatives Among other new initiatives, in March 1996 we announced our "Application Agent Strategy" for groupware, database, and Web applications. Under our innovative approach, we are delivering software agents that work in tandem with ARCserve, and that permit on-line backup of mission-critical groupware and on-line transaction processing (OLTP) applications running on Windows NT, UNIX, NetWare and OS/2. Our Application Agent Strategy has been strongly endorsed by several industry consultants, trade publications and existing and potential customers, who are already purchasing or beta-testing many of these Application Agents for such groupware systems as Lotus Notes, cc:Mail and Microsoft Exchange Server, and such database systems as Microsoft SQL Server, Oracle, Sybase, Btrieve, Gupta and others. We also previewed the industry's first Web server backup agent at NetWorld+Interop in Las Vegas, which generated a lot of excitement among our customers, Web masters, and in- dustry analysts. Strategic Relationships One of Cheyenne's often unrecognized competitive advantages is the number of relationships we enjoy with more than 40 of the world's leading technology companies, including Compaq, Com- puter Associates, Fujitsu, Hewlett-Packard, IBM, and Microsoft. These partners license our software, integrate it into their own solutions, and participate with us in joint development and joint marketing. Many of them sell and distribute Cheyenne products directly as well. We have recently formed several new strategic partnerships, including, last month, a contract with Novell to integrate Cheyenne FAXserve with Novell Groupwise and partnerships with Intel and Symantec to integrate ARCserve with their respective network and systems management software. (MORE) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 6 Additionally, we have been working with the leaders in the "firewall" market--which refers to products designed to prevent unauthorized access to an enterpris--to enhance their data protection by providing real-time virus scanning capabilities. This market will increase in both size and importance as increasing numbers of transactions are conducted and informa- tion disseminated via the Internet. Just yesterday, we signed a letter of intent with CheckPoint Software Technologies Ltd. to create the industry's first integrated firewall and anti- virus solution. The benefit of these strategic relationships is clear. For example, ARCserve for Windows NT has shown impressive momentum, with unit shipments of that offering nearly doubling over the last quarter. Several of our partners offer widely respected system and network management platforms. Cheyenne's strategy is to partner--not compete--with these companies. Through these partnerships, Cheyenne customers are assured that our products are tightly integrated with market-leading management platforms. In fact, we are the only data storage management software company that supports all major network management server operating systems. A Growing Global Company As for our market scope, more than 50% of Cheyenne's revenue now comes from outside North America, and we are aggressively and successfully expanding our global presence. For example, in the three years since we established CSKK, our wholly owned Japanese subsidiary, its annual revenues have increased from less than $1 million in its first year to $18 million today, and CSKK has already achieved strong profitability. We are the leading provider of storage management, anti-virus, and com- munications software in Japan, and have OEM relationships with virtually all of the major Japanese systems vendors, including Fujitsu, NEC, Mitsubishi, Toshiba and Hitachi. And we recently opened offices in China and Taiwan, which join our existing and well-established sales and technical support offices in Europe, Asia, and North and South America. *** The McAfee Proposal As many of you know, our Board of Directors last week unani- mously rejected an unsolicited proposal from McAfee Associates, Inc. After careful consideration, the Board determined that the proposal was not in the best interests of Cheyenne's share- holders, customers, business partners or employees from a financial, strategic, technological, or operational point of view, and that it represents little more than an attempt by an opportunistic suitor to take advantage of Cheyenne's substan- tially undervalued stock and to deprive Cheyenne's shareholders and other constituents of the values to which they are entitled and which they were instrumental in creating. (MORE) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 7 Under the proposal, McAfee would have exchanged each Cheyenne share for 0.4783 of a share of McAfee. Consequently, the value to be received by Cheyenne shareholders would not be $27.50 as widely reported, but rather would be dependent on the value of McAfee stock. Our Board, management, and investment bankers do not believe that the proposal is in your interests, for several reasons. First, under the McAfee proposal, McAfee shareholders would receive the lion's share of the combined company but would con- tribute far less to the combined entity. Cheyenne shareholders would suffer significant dilution from the near-doubling of McAfee's outstanding stock under its proposed transaction, re- ceiving only an approximately 46% ownership interest in the combined entity even though Cheyenne (based on calendar 1995 results) would be contributing 64% of its revenues, 57% of its combined pre-tax income, and the tremendous value and earnings potential represented by our technological expertise, our broad and rapidly growing range of market-leading and innovative products, our strategic relationships, our international pres- ence, and our loyal and dedicated employees. Indeed, McAfee has emphasized that it would not enter into any transactions that was not "prima facie accretive" to McAfee stock, which by definition means that any McAfee transaction would be dilutive to Cheyenne shareholders. Moreover, from a strategic and operational perspective, McAfee's proposal raises a number of difficult questions: - How solid are McAfee's growth prospects and therefore its valuation, given that in its core business McAfee directly competes against the established market leaders, Symantec and Intel, in the highly competitive desktop management and anti-virus markets? (By contrast, Cheyenne is the market leader in the higher-value-added enterprise storage management market.) - How could McAfee, a California-based company with some 300 employees, hope to acquire and successfully manage a com- pany twice its size, and to retain the people who are its principal assets, in what amounts to a different industry, with a radically different and incompatible business model, located more than 3,000 miles away? - How could McAfee hope to deliver on its promise of so- called manufacturing efficiencies and other cost savings when Cheyenne already outsources all of its manufacturing, when there is virtually no significant geographic or func- tional overlap between the two organizations, and when Cheyenne is already operating at a very high level of organizational efficiency? (MORE) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 8 - What sense does it make for Cheyenne to link up with a company in direct competition with many of Cheyenne's most important strategic partners? - What sense does it make to combine two companies whose distribution strategies are fundamentally incompatible? For these and other reasons, our Board and management have rejected McAfee's proposal. We deplore McAfee's stated intent to pursue its proposal and the resulting confusion and concern this has caused among our shareholders, customers, employees, and other constituents. Please be assured that all of us on the Board of Directors and management team of your Company very much appreciate your con- tinuing interest and support and reaffirm our commitment to you, our shareholders. On behalf of the Board of Directors, Sincerely, /signed/ ReiJane Huai Chairman, President and Chief Executive Officer *** Safe Harbor Statement Except for any statements of historical fact, the above state- ments constitute forward-looking statements and are inherently subject to uncertainties. The actual results of Cheyenne may differ materially from the forward looking statements noted above based on a number of important factors including, but not limited to: receipt and fulfillment of expected orders; the level and timing of returns and exchanges; changes in general business conditions and seasonality; the growth in computer networking; market volatility related to the competition be- tween Novell, Microsoft and other network operating system ven- dors and other factors; the successful expansion of Cheyenne into the Windows NT, UNIX, desktop, groupware, Internet, and firewall markets; the ability to expand successfully into new geographic regions; the maintenance and expansion of strategic partnerships; the effectiveness of price and other competition faced by (MORE) [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] Cheyenne Announces Third Quarter Results Page 9 Cheyenne; the market acceptance of new products like ARCserve Version 6 and the timing of such acceptance; the successful establishment of fee-based technical support; changes in dis- tributors' and other customers' buying patterns; the continua- tion of the April trend in sell-through; changes in the Com- pany's and the industry's sales practices; one-time events and other factors which may disrupt the Company's business; and other important factors disclosed from time to time in the Com- pany's Form 10K and Form 10Q and other Securities and Exchange Commission filings, including the Form 10Q for the quarter ended Dec. 31, 1995 and, when filed, for the quarter ended March 31, 1996. About Cheyenne Software Cheyenne Software, Inc. is an international developer of essential software solutions for NetWare, Windows NT, UNIX, Macintosh, OS/2, Windows 3.1 and Windows 95 operating systems. Its enterprise-wide offerings include an array of storage man- agement, security, and communications products, including Cheyenne[R] HSM, JETserve[TM], InocuLAN[R], FAXserve[TM], and its flagship product line, the ARCserve[R] family of network backup software. Cheyenne can be contacted at (800) 243-9462 (U.S. or Canada) or (516) 465-4000, or by visiting its WWW home page at: http://www.cheyenne.com. # # # [CHEYENNE SOFTWARE, INC. ADDRESS FOOTER] -----END PRIVACY-ENHANCED MESSAGE-----