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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) October 14, 1999
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VERITAS SOFTWARE CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 000-26247 77-0507675
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
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1600 Plymouth Street
Mountain View, California 94043
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(Address of principal executive offices including Zip Code)
Registrant's telephone number, including area code: (650) 335-8000
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Item 5: Other Events
On October 14, 1999, VERITAS Software Corporation announced financial
results for its third quarter ended September 30, 1999. The press release is
attached to this Current Report as Exhibit 99.1 and is incorporated herein by
this reference.
Item 7: Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated October 14, 1999.
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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.
Dated: October 14, 1999
VERITAS SOFTWARE CORPORATION
By: /s/ JAY A. JONES
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Jay A. Jones
Senior Vice President,
Chief Administrative Officer & Secretary
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EXHIBIT INDEX
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<S> <C>
99.1 Press release of the registrant dated October 14, 1999.
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EXHIBIT 99.1
[VERITAS LOGO] NEWS
VERITAS Software
1600 Plymouth Street
Mountain View, CA 94043
650.335.8000
For Immediate Release
VERITAS Software Reports Record Third-Quarter Results
Pro forma Net Income Exceeds 127% Growth and Revenue Expands 75%
MOUNTAIN VIEW, Calif. - October 14, 1999 - VERITAS(R) Software Corporation
(Nasdaq: VRTS), the industry's leading enterprise-class application storage
management software provider, today announced record financial results for its
third quarter ended September 30, 1999. On a pro forma basis, the Company
achieved third-quarter revenue of $183.4 million, an increase of 75% over last
year's third-quarter revenue of $105.1 million. Pro forma net income, excluding
one-time charges and purchase accounting adjustments, increased to $38.9 million
from $17.1 million for the prior year, a 127% increase. Diluted pro forma net
income per share for the third quarter was $0.21, a 133% increase from $0.09 for
the same period last year. VERITAS Software's pro forma operating margin
increased to 32% for the third quarter as compared with an operating margin of
24% for the same quarter last year.
The Company's as-reported revenue for the third quarter was $183.4 million,
compared with $56.5 million for the same period last year. For the third
quarter, VERITAS Software reported a net loss of $183.6 million, or $1.07 per
share, compared with net income of $12.6 million, or $0.12 per share on a
diluted basis for the prior year. Included in the current period's net loss is a
one-time charge of $1.1 million for the write-off of in-process research and
development related to the purchase of certain assets of NuView, Inc. Also
included was $234.9 million of purchase accounting amortization.
"Our results for the quarter further demonstrate VERITAS Software's position at
the lead of the storage management market segment," said Mark Leslie, chairman
and CEO of VERITAS Software. "We effectively accomplished our mission to deepen
penetration into the dynamic e-Business market with powerful, proven
enterprise-class application storage management solutions. We were successful
with all of our key product areas: foundation storage management, backup and
clustering, offering our customers a wide variety of solutions to best match
their needs. VERITAS Software is continuing to solidify its position as one of
the industry's top independent software providers."
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VERITAS Software Q3 Earnings Release
Page 2
On a pro forma basis for the nine-month periods ended September 30, 1999 and
1998, VERITAS Software had revenue of $473.9 million and $284.0 million,
respectively, a 67% year-over-year increase. Pro forma net income increased to
$96.0 million from $45.9 million in the prior period, a 109% increase. Pro forma
diluted net income per share was $0.52, compared with $0.25 for the same period
last year, a 108% increase.
The Company's as-reported revenue for the nine-month period ended September 30,
1999 was $370.0 million, compared with $143.7 million for the same period last
year. For the nine-month period, VERITAS Software reported a net loss of $332.3
million, or $2.56 per share, compared with net income of $30.2 million, or $0.29
per share on a diluted basis for the same period in the prior year.
To better facilitate the financial reporting, the Company has added an
additional financial table to this earnings release: "Pro forma Statements of
Operations." These pro forma statements are intended to present the Company's
operating results excluding purchase accounting adjustments but including the
results of Seagate Software NSMG and TeleBackup Systems assuming the companies
had been combined at the beginning of all periods presented.
About VERITAS Software
For enterprise customers who demand the continuous availability of
business-critical information, VERITAS Software Corporation (Nasdaq:VRTS), the
industry's leading enterprise-class application storage management software
provider, ensures information availability from business-critical applications
by delivering integrated, cross-platform storage management software solutions.
The Company's products enable Business Without Interruption(TM) and are designed
to protect, access and manage business-critical application information. VERITAS
Software products are delivered through a global end user sales force and a
worldwide network of enterprise VARs, resellers and OEM partners. The Company's
corporate headquarters is located at 1600 Plymouth Street, Mountain View, CA
94043. Telephone: (650) 335-8000. Fax: (650) 335-8050. Email:
[email protected]. WWW site: http://www.veritas.com/.
###
For Further Information Contact:
Ken Lonchar, Senior Vice President and CFO, VERITAS Software (650) 526-2501,
[email protected] Dave Galiotto, Vice President of Finance/Investor
Relations, VERITAS Software, (650) 318-4047, [email protected] Erin
Jones, Public Relations Director, VERITAS Software (805) 783-4528,
[email protected]
This press release may include estimates and forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and 21E of the
Securities and Exchange Act of 1934. These forward-looking statements involve a
number of risks and uncertainties, including the timely development and market
acceptance of products and VERITAS' ability to appropriately distribute its
products, that could cause actual results the Company achieves to differ
materially from such forward-looking statements. For more information regarding
potential risks see the "Risk Factors" section of our most recent reports on
Form 10-K and Form 10-Q on file with the SEC.
VERITAS is a registered trademark of VERITAS Software Corporation in the US and
other countries. The VERITAS logo and Business Without Interruption are
trademarks of VERITAS Software Corporation in the US and other countries. Other
product names mentioned herein may be trademarks and/or registered trademarks of
their respective companies.
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VERITAS SOFTWARE CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
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THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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1999 1998 1999 1998
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NET REVENUE:
User license fees $157,643 $ 91,386 $405,719 $247,011
Services 25,758 13,692 68,149 36,995
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TOTAL NET REVENUE 183,401 105,078 473,868 284,006
COST OF REVENUE:
User license fees 5,891 5,217 16,311 16,997
Services 10,787 6,314 27,013 17,005
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TOTAL COST OF REVENUE 16,678 11,531 43,324 34,002
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GROSS PROFIT 166,723 93,547 430,544 250,004
OPERATING EXPENSES:
Selling and marketing 67,895 39,732 178,390 105,091
Research and development 28,924 19,930 78,352 52,565
General and administrative 11,020 8,205 30,496 23,668
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TOTAL OPERATING EXPENSES 107,839 67,867 287,238 181,324
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Income from operations 58,884 25,680 143,306 68,680
Interest and other income, net 7,266 2,928 14,840 8,600
Interest expense (5,301) (1,435) (8,148) (4,514)
-------- -------- -------- --------
Income before income taxes 60,849 27,173 149,998 72,766
Provision for income taxes 21,906 10,054 54,000 26,924
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PRO FORMA NET INCOME $ 38,943 $ 17,119 $ 95,998 $ 45,842
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PRO FORMA NET INCOME PER SHARE - BASIC (1) $ 0.23 $ 0.10 $ 0.57 $ 0.28
======== ======== ======== ========
PRO FORMA NET INCOME PER SHARE - DILUTED (1) $ 0.21 $ 0.09 $ 0.52 $ 0.25
======== ======== ======== ========
SHARES USED IN PER SHARE CALCULATION - BASIC (1) 171,043 166,647 169,273 165,884
======== ======== ======== ========
SHARES USED IN PER SHARE CALCULATION - DILUTED (1) 187,570 181,697 185,266 180,481
======== ======== ======== ========
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(1) Share and per share data applicable to prior periods has been restated to
give retroactive effect to a 2-for-1 stock split in the form of a stock
dividend effected in July 1999.
These pro forma historical financial statements contain certain immaterial
reclassifications. The reclassifications have no impact on previously reported
total net revenue or income from operations. On a year-to-date basis, pro forma
user license fees and services revenue have been adjusted to reflect a
reclassification between the two categories. This reclassification represents
the NSMG services revenue, and was previously classified as pro forma user
license fees. A corresponding reclassification was made to cost of services
revenue, which was previously classified as user license fees cost of revenue.
Reclassifications have also been made within the various pro forma operating
expense categories to reflect the operating expenses of the acquired companies
in a consistent manner with the historical VERITAS presentation.
The pro forma statement of operations is intended to present the Company's
operating results excluding purchase accounting adjustments but including the
results of NSMG and TeleBackup assuming the companies had been combined at the
beginning of the three and nine month period end September 30, 1999 and 1998,
respectively. Such purchase accounting adjustments would include amortization of
developed technology, amortization of goodwill and intangibles, restructuring
and other merger costs, in-process research and development costs, and related
adjustments for income tax provision.
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VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
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THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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1999 1998 1999 1998
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NET REVENUE:
User license fees $ 157,643 $ 45,807 $ 306,725 $ 114,833
Services 25,758 10,738 63,228 28,907
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TOTAL NET REVENUE 183,401 56,545 369,953 143,740
COST OF REVENUE:
User license fees 5,891 2,516 10,673 7,612
Services 10,787 5,327 25,568 14,619
Amortization of developed technology 15,258 - 20,264 -
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TOTAL COST OF REVENUE 31,936 7,843 56,505 22,231
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GROSS PROFIT 151,465 48,702 313,448 121,509
OPERATING EXPENSES:
Selling and marketing 67,895 20,406 139,290 50,415
Research and development 28,924 10,859 63,290 27,356
General and administrative 11,020 2,663 21,431 7,075
Amortization of goodwill and other intangibles 219,626 - 291,183 -
In-process research and development 1,100 - 104,200 2,250
Merger and restructuring costs - - 11,000 -
--------- --------- --------- ---------
TOTAL OPERATING EXPENSES 328,565 33,928 630,394 87,096
--------- --------- --------- ---------
Income (loss) from operations (177,100) 14,774 (316,946) 34,413
Interest and other income, net 7,266 3,001 13,445 8,552
Interest expense (5,301) (1,420) (8,143) (4,268)
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Income (loss) before income taxes (175,135) 16,355 (311,644) 38,697
Provision for income taxes 8,441 3,762 20,678 8,508
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NET INCOME (LOSS) $(183,576) $ 12,593 $(332,322) $ 30,189
========= ========= ========= =========
NET INCOME (LOSS) PER SHARE - BASIC (1) $ (1.07) $ 0.13 $ (2.56) $ 0.32
========= ========= ========= =========
NET INCOME (LOSS) PER SHARE - DILUTED (1) $ (1.07) $ 0.12 $ (2.56) $ 0.29
========= ========= ========= =========
SHARES USED IN PER SHARE CALCULATION - BASIC (1) 171,043 94,458 129,829 93,695
========= ========= ========= =========
SHARES USED IN PER SHARE CALCULATION - DILUTED (1) 171,043 104,652 129,829 103,099
========= ========= ========= =========
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(1) Share and per share data applicable to prior periods has been restated to
give retroactive effect to a 2-for-1 stock split in the form of a stock
dividend effected in July 1999.
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VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
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(UNAUDITED)
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ASSETS
CURRENT ASSETS:
Cash and short-term investments $ 643,391 $ 211,126
Accounts receivable, net 73,030 52,697
Deferred income taxes 18,362 4,272
Other current assets 16,523 9,237
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TOTAL CURRENT ASSETS 751,306 277,332
Long-term investments 65,036 31,925
Property and equipment 60,681 26,518
Goodwill and other intangibles 3,458,512 4,005
Deferred income taxes - 7,928
Other assets 1,625 1,409
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TOTAL ASSETS $4,337,160 $ 349,117
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 12,231 $ 4,958
Accrued compensation and benefits 36,780 11,267
Accrued acquisition and restructuring costs 25,213 478
Other accrued liabilities 43,769 10,718
Income taxes payable 4,265 13,424
Customer advances 9,946 -
Deferred revenue 67,619 37,645
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TOTAL CURRENT LIABILITIES 199,823 78,490
NON-CURRENT LIABILITIES:
Convertible subordinated notes 447,531 100,000
Deferred income taxes 171,230 -
Other non-current liabilities 657 773
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TOTAL NON-CURRENT LIABILITIES 619,418 100,773
Stockholders' equity 3,517,919 169,854
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,337,160 $ 349,117
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