EX-99 3 a4561115_ex991.txt PEOPLESOFT EXHIBIT 99.1 Exhibit 99.1 This press release includes a modification of the press release issued on January 29, 2004 to correct for a typographical error in the tables which reconcile the non-GAAP financial measures used with GAAP to show Q3 '03 operating income as a percentage of pro forma revenue of 13.2% instead of 15.1% PeopleSoft Reports Strong Fourth Quarter 2003 Results; Company Posts Record Performance and Exceeds Guidance PLEASANTON, Calif.--(BUSINESS WIRE)--Jan. 29, 2004--PeopleSoft, Inc. (Nasdaq:PSFT) today announced its fourth quarter and full year 2003 financial results. For the fourth quarter ended December 31, 2003, the Company posted record license revenue of $185 million in addition to record total revenue of $685 million. Total revenue for the quarter was significantly above the Company's fourth quarter guidance of $625 - $640 million. Pro forma earnings per share for the quarter were $0.20, exceeding the Company's guidance of $0.18 - $0.19 per share. Fourth quarter earnings per share, based on generally accepted accounting principles (GAAP), was $0.05 per share, significantly better than the Company's GAAP fourth quarter earnings per share guidance of $0.01 - $0.02 per share. Pro forma operating income for the fourth quarter was $112 million, or 15.3% of revenues, up from $89 million, or 13.2% of revenues in the third quarter. GAAP operating income for the fourth quarter was $24 million, or 3.5% of revenues, up from a loss of $9 million, or (1.5)% of revenues in the third quarter. At December 31, 2003, the Company's cash and investment balances were $1.4 billion. The Company's cash flow from operations in the fourth quarter was $85 million. Days Sales Outstanding (DSO) for the quarter ended December 31, 2003 was 61 days. The fourth quarter 2003 GAAP results include charges for purchase accounting adjustments relating to the acquisition of J.D. Edwards & Company, including the revenue impact of the deferred maintenance write-down to fair value, amortization of capitalized software and intangible assets and other restructuring charges. Management Commentary "We started the year in an economic downturn and ended the year the second largest enterprise software company in the world," said Craig Conway, PeopleSoft President and CEO. "We couldn't be better positioned for 2004," added Conway. "The strength of our new company along with an improving economy sets the stage for even higher value for stockholders and customers." Customer Wins Leading organizations around the world continue to choose PeopleSoft applications to move their business process on line and operate in real time. During the quarter, organizations that purchased PeopleSoft's industry leading applications included: Arrow International, Baxter Healthcare, Bowling Green State University, Business Objects, Cargill, Countrywide Home Loans, District of Columbia Housing Authority, Documentum, EDS, Electrolux AB, Fairchild Semiconductor, General Motors, Hakuto, Hewlett-Packard, IBM, Kohl's Department Stores, Lafarge, Libbey Glass, Lincoln Sentry Group, 3M, Monster Cable, NEC Personal Products, Penn Engineering and Manufacturing Corp., Peugeot Citreon Automobiles and Verizon Directories. Non-GAAP Financial Measures The Company has used non-GAAP pro forma financial measures, which exclude adjustments related to purchase accounting and restructuring costs, 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 because they allow for greater transparency. Wherever non-GAAP financial measures have been included in this press release, the Company has reconciled them in the tables below 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. The following tables reconcile the non-GAAP financial measures used with GAAP: Q4'03 Q4'03 Actual Guidance --------- ------------ Pro Forma EPS $.20 $.18 - $.19 Revenue impact of deferred maintenance write-down ($.08) ($.09) Amortization of capitalized software and intangible assets ($.05) ($.06) Restructuring charges ($.02) ($.02) --------- ------------ GAAP EPS $0.05 $.01 - $.02 ========= ============ Q3'03 Q4'03 Operating Operating Income Income ------------ ------------ Pro Forma $89.4 $112.5 Revenue impact of deferred maintenance write-down $(50.9) $(50.1) In-process research & development write-off $(14.5) Amortization of capitalized software and intangible assets $(24.7) $(28.4) Restructuring charges $(8.8) $(10.0) ------------ ------------ GAAP $(9.5) $24.0 Pro Forma Revenue $675.0 $735.2 % of Pro Forma revenue 13.2% 15.3% Company to Host Conference Call PeopleSoft will host a conference call today, January 29, 2004, 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. 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. About PeopleSoft PeopleSoft (Nasdaq:PSFT) is the world's second largest provider of enterprise application software with 12,100 customers in more than 25 industries and 150 countries. For more information, visit us at www.peoplesoft.com. PeopleSoft and the PeopleSoft logo are registered trademarks of PeopleSoft, Inc. All other company and product names may be trademarks of their respective owners. Forward-Looking Statements Statements made in this press release that state the Company's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. All forward looking-statements are only as of the date they are made and PeopleSoft undertakes no obligation to update or revise them. The specific forward-looking statements relate to such matters as the impact of the Company's combination with J.D. Edwards and the combined Company's projected financial performance. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include: our ability to successfully complete the integration of J.D. Edwards into PeopleSoft and to achieve anticipated synergies, economic and political conditions in the U.S. and abroad; the ability to complete and deliver products and services within currently estimated time frames and budgets; the ability to manage expenses effectively; the ability to achieve revenues from products and services that are under development; competitive and pricing pressures; and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission. Please refer to the Company's current annual report on Form 10-K and quarterly report on Form 10-Q for more information on the risk factors that could cause actual results to differ. Important Additional Information The Board of Directors of PeopleSoft ("Board of Directors") will be soliciting proxies for use at the 2004 Annual Meeting of Stockholders, or at any adjournment or postponement thereof, to vote in favor of a slate of directors to be nominated by the Board of Directors and to vote on any other matters that properly come before the 2004 Annual Meeting. PeopleSoft will be filing a proxy statement on Schedule 14A with the Securities and Exchange Commission ("SEC") in connection with this solicitation of proxies for the 2004 Annual Meeting (the "2004 Proxy Statement"). Promptly after filing the definitive 2004 Proxy Statement with the SEC, PeopleSoft will mail the 2004 Proxy Statement and a WHITE Proxy Card to each PeopleSoft stockholder entitled to vote at the Annual Meeting. PeopleSoft has engaged Georgeson Shareholder Communications Inc. ("Georgeson") to assist it in soliciting proxies from its stockholders. PeopleSoft has agreed to pay customary compensation to Georgeson for such services and to indemnify Georgeson and certain related persons against certain liabilities relating to or arising out of the engagement. Certain representatives of Citigroup Global Markets Inc. and Goldman, Sachs & Co., financial advisors to PeopleSoft, may also solicit proxies, although no additional consideration will be paid in connection with any such solicitation. In addition, directors, officers and employees of PeopleSoft, may solicit proxies although no additional compensation will be paid to directors, officers or employees for such services. PeopleSoft has filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") and amendments thereto regarding Oracle's tender offer that contain information regarding members of the Board of Director's and members of management's potential interests in the tender offer. Information regarding securities ownership by certain members of the Board of Directors and certain members of management as of April 1, 2003 is contained in PeopleSoft's proxy statement for its 2003 Annual Meeting of Stockholders, dated as of April 28, 2003 (the "2003 Proxy Statement"). PeopleSoft stockholders should read the Schedule 14D-9 and the 2004 Proxy Statement when it is filed with the SEC (including any amendments to such documents) because these documents contain (or will contain) important information. The 2004 Proxy Statement (when filed), the 2003 Proxy Statement, the Schedule 14D-9 and other public filings made by PeopleSoft with the SEC are available without charge from the SEC's website at www.sec.gov and from PeopleSoft at www.peoplesoft.com. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) (unaudited) THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, ------------------- ----------------------- 2003 2002 2003 2002 --------- --------- ----------- ----------- Revenues: License fees $185,373 $143,242 $ 538,400 $ 530,077 Services 499,852 369,014 1,728,618 1,411,341 Development and other services - - - 7,530 --------- --------- ----------- ----------- Total revenues 685,225 512,256 2,267,018 1,948,948 Costs and expenses: Cost of license fees 25,581 12,039 65,810 45,142 Cost of services 241,169 166,025 801,525 661,083 Cost of development and other services - - - 6,755 Sales and marketing expense 189,843 136,427 609,447 514,800 Product development expense 136,949 88,305 433,011 341,187 General and administrative expense 57,592 32,219 193,511 117,070 Restructuring, acquisition and other charges 10,048 (1,204) 47,121 10,275 --------- --------- ----------- ----------- Total costs and expenses 661,182 433,811 2,150,425 1,696,312 --------- --------- ----------- ----------- Operating income 24,043 78,445 116,593 252,636 Other income, net 3,009 9,276 22,242 30,600 --------- --------- ----------- ----------- Income before provision for income taxes 27,052 87,721 138,835 283,236 Provision for income taxes 9,676 30,311 52,586 100,647 --------- --------- ----------- ----------- Income before minority interest 17,376 57,410 86,249 182,589 Minority interest - - 1,205 - --------- --------- ----------- ----------- Net income $ 17,376 $ 57,410 $ 85,044 $ 182,589 ========= ========= =========== =========== Basic income per share $ 0.05 $ 0.18 $ 0.25 $ 0.59 ========= ========= =========== =========== Shares used in basic per share computation 364,916 313,170 338,481 310,777 ========= ========= =========== =========== Diluted income per share $ 0.05 $ 0.18 $ 0.25 $ 0.57 ========= ========= =========== =========== Shares used in diluted per share computation 374,543 318,256 344,100 320,310 ========= ========= =========== =========== CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except employee count) (unaudited) DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ Assets: Current assets: Cash and cash equivalents $ 439,385 $ 319,344 Short-term investments 961,906 1,588,172 Accounts receivable, net 462,528 357,353 Income taxes receivable 18,749 - Deferred tax assets 58,630 40,559 Other current assets 69,997 45,448 ------------ ------------ Total current assets 2,011,195 2,350,876 Property and equipment, net 448,211 222,800 Investments 29,219 21,946 Deferred tax assets 42,049 172,255 Capitalized software, net 234,217 44,101 Other assets 1,459,837 59,653 ------------ ------------ $ 4,224,728 $ 2,871,631 ============ ============ Liabilities and Stockholders' Equity: Current liabilities: Accounts payable and accrued liabilities $ 287,800 $ 132,687 Accrued compensation and related expenses 224,983 172,566 Income taxes payable 106,355 71,163 Short-term deferred revenues 588,590 422,657 ------------ ------------ Total current liabilities 1,207,728 799,073 Long-term deferred revenues 119,896 95,460 Other liabilities 37,655 21,486 Stockholders' equity: Common stock 3,776 3,150 Additional paid-in capital 2,508,995 1,382,442 Retained earnings 684,847 599,803 Treasury stock (387,046) (35,563) Accumulated other comprehensive income 48,877 5,780 ------------ ------------ 2,859,449 1,955,612 ------------ ------------ $ 4,224,728 $ 2,871,631 ============ ============ Worldwide employee count 12,163 8,293 PEOPLESOFT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) TWELVE MONTHS ENDED DECEMBER 31, -------------------------- 2003 2002 ------------- ------------ Operating activities: Net income $ 85,044 $ 182,589 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 175,570 101,386 Provision for doubtful accounts 4,653 11,009 Tax benefits from employee stock transactions 29,368 30,710 Provision (benefit) for deferred income taxes (29,438) 71,953 Gain on sales of investments and disposition of property and equipment, net (4,987) (3,156) Non-cash stock compensation 11,342 7,689 Restructuring, acquisition and other charges 19,123 10,275 Changes in operating assets and liabilities, net of effects of acquisitions: Accounts receivable 75,070 9,986 Accounts payable and accrued liabilities (54,768) (47,513) Accrued compensation and related expenses 1,224 (12,635) Income taxes, net (20,449) (9,001) Deferred revenues 91,314 6,495 Other 14,359 29,355 ------------- ------------ Net cash provided by operating activities 397,425 389,142 Investing activities: Purchase of investments (10,070,468) (9,670,889) Proceeds from sales and maturities of investments 10,756,226 9,300,871 Purchases of property and equipment (250,382) (93,330) Acquisitions, net of cash acquired (519,934) (120,894) ------------- ------------ Net cash used in investing activities (84,558) (584,242) Financing activities: Retirement of convertible debt - (57,000) Repurchase of common stock (351,483) - Proceeds from employee stock transactions 122,961 115,713 ------------- ------------ Net cash provided (used in) by financing activities (228,522) 58,713 Effect of foreign exchange rate changes on cash and cash equivalents 35,696 22,031 ------------- ------------ Net increase (decrease) in cash and cash equivalents 120,041 (114,356) Cash and cash equivalents at beginning of period 319,344 433,700 ------------- ------------ Cash and cash equivalents at end of period $ 439,385 $ 319,344 ============= ============ CONTACT: PeopleSoft Bob Okunski, 877-528-7413 (Investor Relations) bob_okunski@peoplesoft.com Steve Swasey, 925-694-5230 (Public Relations) steve_swasey@peoplesoft.com