EX-99.1 3 a4622845ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 PeopleSoft Reports First Quarter 2004 Results PLEASANTON, Calif.--(BUSINESS WIRE)--April 22, 2004--PeopleSoft, Inc. (Nasdaq:PSFT) today announced its first quarter 2004 financial results. For the first quarter ended March 31, 2004, the Company reported total revenue of $643 million, exceeding the company's guidance of $625 million to $635 million. License revenue for the quarter was $131 million, consistent with the Company's guidance. Pro forma net income for the first quarter of 2004 was $62 million, an increase of 62% when compared to pro forma net income of $38 million in the first quarter of 2003. First quarter pro forma earnings per share rose 42% to $0.17, meeting the Company's guidance. On a GAAP basis first quarter 2004 earnings per share was $0.07, meeting the Company's guidance. GAAP net income for the quarter was $24 million compared with $38 million in the same period last year. GAAP results include charges for purchase accounting adjustments related to the acquisition of J.D. Edwards. At March 31, 2004, the Company's cash and investment balances were $1.6 billion. First quarter cash flow from operations was $116 million, a 55% increase from the first quarter of 2003. Days Sales Outstanding for the quarter was an industry leading 53 days, an improvement from 61 days in the fourth quarter of 2003. The first quarter 2004 pro forma results exclude charges for purchase accounting adjustments related to the acquisition of J.D. Edwards, including the revenue impact of the deferred maintenance write-down to fair value, amortization of capitalized software and other restructuring charges. A reconciliation of GAAP to non-GAAP financial results is included in this press release and is available on our website at www.peoplesoft.com. Management Commentary "We announced a growth objective for 2004 that was by far the most aggressive in the enterprise application software business, and we are delivering to that plan," said President and CEO Craig Conway. "With most of the extraordinary distractions now behind us, we can return our full attention to our business," continued Conway. 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, organizations that purchased PeopleSoft's industry leading applications included: AGCO, Amersham Biosciences UK, Asia Optical, British Telecommunications, Cincinnati Children's Hospital Medical Center, CR Bard, Ecolab, Edens & Avant, FedEx, Hovnanian Enterprises, NYU Hospitals Center, RR Donnelley & Sons, Saint-Gobain Distribution Batiment, Sodisco-Howden Group, Sony Global Solutions, Staples and the U.S. Department of Defense. Non-GAAP Financial Measures The Company uses 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. Reconciliation of these GAAP to non-GAAP financial measures is also included on our web site at www.peoplesoft.com. 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 to GAAP: Q1 04 Q1 04 Net Income* EPS* ----------- --------- Pro forma $ 62,422 $ 0.17 Revenue impact of deferred maintenance write-down (16,572) (0.05) Restructuring charges (5,090) (0.01) Amortization of capitalized software and intangible assets (16,555) (0.04) ----------- --------- GAAP $ 24,205 $ 0.07 =========== ========= * There are no reconciling items between pro forma and GAAP relating to net income and EPS for the first quarter of 2003. Company to Host Conference Call PeopleSoft will host a conference call today, April 22, 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 12,200 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. Copyright (C) 2004 PeopleSoft, Inc. All rights reserved. Forward-Looking Statements This press release may contain forward-looking statements that state PeopleSoft's intentions, beliefs, expectations, or predictions for the future. You 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 PeopleSoft's combination with J.D. Edwards including the integration, the profitability of our international operations, 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 PeopleSoft'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; the costs and disruption to our business arising from the Oracle tender offer; 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 revenue from products and services that are under development; competitive and pricing pressures; and other risks referenced from time to time in PeopleSoft's filings with the Securities and Exchange Commission. Please refer to PeopleSoft's current annual report on Form 10-K for more information on the risk factors that could cause actual results to differ. Important Additional Information PeopleSoft has filed a Solicitation/Recommendation Statement on Schedule 14D-9 regarding Oracle's tender offer. PeopleSoft stockholders should read the Schedule 14D-9 (including any amendments) because these documents contain important information. 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. PEOPLESOFT, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) THREE MONTHS ENDED MARCH 31, ------------------ 2004 2003 -------- -------- Revenues: License fees $130,886 $ 80,841 Maintenance revenue 296,850 199,921 Professional services revenue 215,383 179,494 -------- -------- Service revenues 512,233 379,415 -------- -------- Total revenues 643,119 460,256 Costs and expenses: Cost of license fees 23,374 8,726 Cost of services 222,966 163,469 Sales and marketing expense 169,171 119,558 Product development expense 127,374 83,705 General and administrative expense 59,075 33,015 Restructuring, acquisition and other charges 8,229 - -------- -------- Total costs and expenses 610,189 408,473 -------- -------- Operating income 32,930 51,783 Other income, net 5,100 6,966 -------- -------- Income before provision for income taxes 38,030 58,749 Provision for income taxes 13,825 20,270 -------- -------- Net income $ 24,205 $ 38,479 ======== ======== Basic income per share $ 0.07 $ 0.12 ======== ======== Shares used in basic per share computation 361,866 314,782 ======== ======== Diluted income per share $ 0.07 $ 0.12 ======== ======== Shares used in diluted per share computation 370,776 319,831 ======== ======== PEOPLESOFT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except employee count) (unaudited) MARCH 31, DECEMBER 31, 2004 2003 ---------- ---------- Assets: Current assets: Cash and cash equivalents $ 493,539 $ 439,385 Short-term investments and restricted cash 1,043,555 961,906 Accounts receivable, net 376,787 462,528 Income taxes receivable 19,125 18,749 Deferred tax assets 51,043 58,630 Other current assets 68,267 69,997 ---------- ---------- Total current assets 2,052,316 2,011,195 Property and equipment, net 435,147 448,211 Investments 44,945 29,219 Deferred tax assets 51,279 42,049 Capitalized software, net 219,132 234,217 Goodwill 1,005,970 1,005,660 Other intangible assets 429,141 444,767 Other assets 8,872 9,410 ---------- ---------- $4,246,802 $4,224,728 ========== ========== Liabilities and Stockholders' Equity: Current liabilities: Accounts payable and accrued liabilities $ 200,049 $ 211,389 Restructuring reserves 56,297 76,411 Accrued compensation and related expenses 154,740 224,983 Income taxes payable 78,290 106,355 Short-term deferred revenues 649,861 588,590 ---------- ---------- Total current liabilities 1,139,237 1,207,728 Long-term deferred revenues 115,435 119,896 Other liabilities 38,253 37,655 Stockholders' equity: Common stock 3,922 3,776 Additional paid-in capital 2,581,801 2,508,995 Retained earnings 709,052 684,847 Treasury stock (387,571) (387,046) Accumulated other comprehensive income 46,673 48,877 ---------- ---------- 2,953,877 2,859,449 ---------- ---------- $4,246,802 $4,224,728 ========== ========== Worldwide employee count 11,779 12,163 PEOPLESOFT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) THREE MONTHS ENDED MARCH 31, ------------------------ 2004 2003 ----------- ----------- Operating activities: Net income $ 24,205 $ 38,479 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 55,813 26,884 Provision for doubtful accounts 2,605 3,780 Tax benefits from employee stock transactions 7,955 1,956 Provision (benefit) for deferred income taxes (1,949) 6,562 Gain on sales of investments and disposition of property and equipment, net (100) (649) Non-cash stock compensation 3,396 2,304 Restructuring, acquisition and other charges 3,964 - Changes in operating assets and liabilities, net of effects of acquisitions: Accounts receivable 87,607 41,742 Accounts payable and accrued liabilities (32,667) (11,509) Accrued compensation and related expenses (71,014) (39,701) Income taxes, net (28,093) (16,698) Deferred revenues 59,217 21,015 Other 4,593 584 ----------- ----------- Net cash provided by operating activities 115,532 74,749 Investing activities: Purchase of investments (1,627,417) (3,226,843) Proceeds from sales and maturities of investments 1,529,144 3,123,799 Purchases of property and equipment (15,195) (86,695) ----------- ----------- Net cash used in investing activities (113,468) (189,739) Financing activities: Net proceeds from employee stock transactions 60,901 30,068 ----------- ----------- Net cash provided by financing activities 60,901 30,068 Effect of foreign exchange rate changes on cash and cash equivalents (8,811) 4,609 ----------- ----------- Net increase (decrease) in cash and cash equivalents 54,154 (80,313) Cash and cash equivalents at beginning of period 439,385 319,344 ----------- ----------- Cash and cash equivalents at end of period $ 493,539 $ 239,031 =========== =========== CONTACT: PeopleSoft Investor Relations: Bob Okunski, 877-528-7413 bob_okunski@peoplesoft.com Public Relations: Steve Swasey, 925-694-5230 steve_swasey@peoplesoft.com