EX-99 3 a4436500ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 PeopleSoft Reports Second Quarter Results; Q2 License Revenue, Total Revenue and Earnings Per Share Exceed Company Guidance PLEASANTON, Calif.--(BUSINESS WIRE)--July 17, 2003--PeopleSoft, Inc. (Nasdaq:PSFT) today reported its second quarter 2003 financial results. The company reported license revenues of $112 million, a sequential increase of 38%, and total revenues of $497 million, an 8% sequential increase. Operating income from recurring operations increased 24% from the prior quarter to $64 million. The operating margin from recurring operations as a percentage of revenues increased to 12.9%, up from 11.3% last quarter. PeopleSoft reported earnings per share from recurring operations of $0.14, above the Company's guidance for earnings per share from recurring operations of $0.11 - $0.12 per share. On a GAAP basis, second quarter operating income was $50 million and operating margin as a percentage of revenues was 10.1%. The second quarter GAAP results include restructuring charges of $14 million that decreased the operating margin from 12.9% to 10.1% and decreased earnings per share by $0.03, from $0.14 to $0.11 per share. GAAP earnings per share of $0.11 exceeded the Company's guidance of $0.08 - $0.09 per share. The Company's cash and investment balances at June 30, 2003 were $2 Billion. In the second quarter, the Company's cash flow from operations was $119 million. Days sales outstanding (DSO) at June 30, 2003 was 57 days. Management Commentary "The simple truth behind our strong quarter is that we are a strong company," said PeopleSoft President and CEO Craig Conway. "All product lines and service lines, all geographies and industries are operating well." "PeopleSoft said all along it has a better plan for shareholders and customers," continued Conway. "As you look beneath the surface of these financial results, you can see how strongly positioned we are to achieve that plan." Customer Wins Leading organizations around the world continue to choose PeopleSoft applications to move their business processes on line and operate in real time. During the quarter, the Company added approximately 100 new customers. Organizations that purchased PeopleSoft pure-internet applications included: ABN AMRO, AIMCO, Bausch & Lomb, Circuit City Stores, Corning, Fleet National Bank, Government of Puerto Rico Department of Treasury, Metropolitan Life Insurance, Guardian Life Insurance, Hewlett-Packard, Hutchison Whampoa 3G, Hydro Ottawa, ING Bank, Intel, Penn Mutual Life Insurance, Sears Canada, Siam Cement, Target, Time, Trammell Crow, U.S. Department of Agriculture, University of Cambridge, University of Pittsburg, United States Department of the Army, and Yum Restaurant Services. Company to Host Conference Call PeopleSoft will host a conference call today, July 17, 2003, at 3:00 p.m. PT/6:00 p.m. ET to discuss the quarterly results. A live audio-only web cast of the call will be made available in the Investor Relations section of the Company's web site at www.peoplesoft.com. Interested parties may also participate by calling (888) 370-7057 in the U.S. or (484) 630-4574 outside the U.S.; passcode: PeopleSoft. A replay of the call will be made available for seven days following the call and will be accessible on the company's web site or by calling (888) 562-7211 or (402) 220-6027, no passcode necessary. Non-GAAP Financial Measures The Company uses non-GAAP financial measures based on recurring operations in analyzing financial results because they provide meaningful information regarding the Company's operational performance and facilitate management's internal comparisons to the Company's historical operating results and comparisons to competitors' operating results. The Company believes that these non-GAAP financial measures are useful to investors as well because they allow for greater transparency. The Company has historically reported similar non-GAAP financial measures to investors and believes that the inclusion of comparative numbers provides for greater comparability in our financial reporting. Wherever non-GAAP financial measures have been included above, the Company has reconciled them in this press release to their GAAP counterparts. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. About PeopleSoft PeopleSoft (Nasdaq: PSFT) is the world's leading provider of application software for the real-time enterprise. PeopleSoft pure internet software enables organizations to reduce costs and increase productivity by directly connecting customers, suppliers, partners and employees to business processes on-line, in real time. PeopleSoft's integrated, best-in-class applications include Customer Relationship Management, Supply Chain Management, Human Capital Management, Financial Management and Application Integration. Today more than 5,200 organizations in 140 countries run on PeopleSoft software. For more information, visit us at www.peoplesoft.com. Additional Information PeopleSoft commenced an exchange offer and filed a Schedule TO and a registration statement on Form S-4 with the SEC on June 19, 2003 for the proposed acquisition of J.D. Edwards & Company. Solicitations and exchanges of J.D. Edwards stock will only be made pursuant to the Offer to Exchange and related materials filed with the SEC. PeopleSoft has filed a Solicitation/Recommendation Statement on Schedule 14D-9 and amendments thereto regarding Oracle's tender offer. Stockholders should read these documents and any amendments thereto because they contain important information. These filings can be obtained without charge at www.sec.gov and at www.peoplesoft.com. Forward-Looking Statements These materials may contain forward-looking statements, which reflect PeopleSoft's and management's current beliefs based on information currently available to PeopleSoft. These statements are only predictions and actual results may differ materially. For a more detailed discussion of information regarding risks that may affect PeopleSoft generally, see PeopleSoft's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Additional risks relating to the proposed J.D. Edwards acquisition and Oracle's tender offer are described in PeopleSoft's most recent SEC filings. All forward-looking statements are only as of the date they are made and PeopleSoft undertakes no obligation to update or revise them. PeopleSoft and the PeopleSoft logo are registered trademarks of PeopleSoft, Inc. All other company and product names may be trademarks of their respective owners. Copyright (C) 2003 PeopleSoft, Inc. All rights reserved. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, -------- -------- 2003 2002 2003 2002 ---- ---- ---- ---- Revenues: License fees $111,726 $131,929 $192,567 $265,219 Maintenance revenue 205,563 171,327 405,484 335,900 Professional services revenue 180,153 178,956 359,647 356,830 -------- -------- -------- -------- Service revenue 385,716 350,283 765,131 692,730 Development and other services -- -- -- 7,530 -------- -------- -------- -------- Total revenues 497,442 482,212 957,698 965,479 Costs and expenses: Cost of license fees 9,563 10,182 18,289 21,619 Cost of services 166,698 171,159 330,167 335,689 Cost of development and other services -- -- -- 6,755 Sales and marketing expense 131,492 126,162 251,050 250,732 Product development expense 84,646 87,547 168,351 169,880 General and administrative expense 41,024 27,396 74,039 57,642 Restructuring, acquisition and other charges 13,799 8,679 13,799 11,479 -------- -------- -------- -------- Total costs and expenses 447,222 431,125 855,695 853,796 -------- -------- -------- -------- Operating income 50,220 51,087 102,003 111,683 Other income, net 4,712 8,478 11,678 15,717 -------- -------- -------- -------- Income before provision for income taxes 54,932 59,565 113,681 127,400 Provision for income taxes 18,398 23,545 38,668 46,836 -------- -------- -------- -------- Net income $ 36,534 $ 36,020 $ 75,013 $ 80,564 ======== ======== ======== ======== Basic income per share $ 0.12 $ 0.12 $ 0.24 $ 0.26 ======== ======== ======== ======== Shares used in basic per share computation 315,707 310,617 315,302 309,276 ======== ======== ======== ======== Diluted income per share $ 0.11 $ 0.11 $ 0.23 $ 0.25 ======== ======== ======== ======== Shares used in diluted per share computation 318,630 318,535 319,299 322,590 ======== ======== ======== ======== CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except employee count) (unaudited) JUNE 30, DECEMBER 31, 2003 2002 ---------- ------------- Assets: Current assets: Cash and cash equivalents $ 272,860 $ 319,344 Short-term investments 1,666,693 1,588,172 Accounts receivable, net 312,291 357,353 Deferred tax assets 38,700 40,559 Prepaid expenses and other current assets 54,568 45,448 ----------- ----------- Total current assets 2,345,112 2,350,876 Property and equipment, net 389,974 222,800 Investments 37,764 21,946 Deferred tax assets 140,839 149,187 Capitalized software, net 35,679 44,101 Goodwill 54,657 54,294 Other assets 6,217 5,359 ----------- ----------- Total assets $3,010,242 $2,848,563 =========== =========== Liabilities and Stockholders' Equity: Current liabilities: Accounts payable and accrued liabilities $ 138,362 $ 132,687 Accrued compensation and related expenses 148,878 172,566 Income taxes payable 23,471 48,095 Short-term deferred revenues 468,501 422,657 ----------- ----------- Total current liabilities 779,212 776,005 Long-term deferred revenues 90,319 95,460 Other liabilities 29,617 21,486 ----------- ----------- Total liabilities 899,148 892,951 Stockholders' equity: Common stock 3,191 3,150 Additional paid-in capital 1,439,759 1,382,442 Retained earnings 674,816 599,803 Treasury stock (36,429) (35,563) Accumulated other comprehensive income 29,757 5,780 ----------- ----------- Total stockholders' equity 2,111,094 1,955,612 ----------- ----------- Total liabilities and stockholders' equity $3,010,242 $2,848,563 =========== =========== Worldwide employee count 8,083 8,293 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) SIX MONTHS ENDED JUNE 30, --------- 2003 2002 ---- ---- Operating activities: Net income $ 75,013 $ 80,564 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 56,710 46,335 Provision for doubtful accounts 5,544 6,140 Tax benefits from employee stock transactions 3,585 22,496 Provision (benefit) for deferred income taxes 7,739 (4,268) Gain on sales of investments and disposition of property and equipment, net (1,289) (2,881) Non-cash stock compensation 4,628 3,752 Restructuring, acquisition and other charges 13,799 11,479 Changes in operating assets and liabilities, net of effects of acquisitions: Accounts receivable 45,350 54,293 Accounts payable and accrued liabilities (1,342) (10,963) Accrued compensation and related expenses (26,157) (22,323) Income taxes, net (23,529) 11,176 Deferred revenues 26,439 12,755 Other 6,769 5,832 ------------------------ Net cash provided by operating activities 193,259 214,387 Investing activities: Purchase of investments (6,822,384) (4,733,065) Proceeds from sales and maturities of investments 6,732,056 4,581,692 Purchases of property and equipment (213,801) (50,859) Acquisitions, net of cash acquired -- (117,758) ------------------------ Net cash used in investing activities (304,129) (319,990) Financing activities: Proceeds from employee stock transactions 49,145 78,113 ------------------------ Net cash provided by financing activities 49,145 78,113 Effect of foreign exchange rate changes on cash and cash equivalents 15,241 12,066 ------------------------ Net decrease in cash and cash equivalents (46,484) (15,424) Cash and cash equivalents at beginning of period 319,344 433,700 ------------------------ Cash and cash equivalents at end of period $272,860 $418,276 ======================== CONTACT: PeopleSoft Lori Varlas, 877-528-7413 (Investor Relations) lori_varlas@peoplesoft.com Steve Swasey, 925-694-5230 (Public Relations) steve_swasey@peoplesoft.com Dee Anna McPherson, 925/694-4112 (Public Relations) deeanna_mcpherson@peoplesoft.com