<PAGE> 1
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) June 15, 1999
------------------------------
VERITAS SOFTWARE CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 000-26247 77-0507675
- ---------------------------- ------------ ------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1600 Plymouth St.
Mountain View, California 94043
--------------------------------------------------------
(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 July 15, 1999, VERITAS Software Corporation announced
financial results for its second quarter ended June 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 July 15, 1999.
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: July 26, 1999
VERITAS SOFTWARE CORPORATION
By: /s/ Jay A. Jones
-------------------------------------
Jay A. Jones
Senior Vice President, Chief
Administrative Officer & Secretary
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EXHIBIT INDEX
99.1 Press release of the Company dated July 15, 1999.
<PAGE> 1
EXHIBIT 99.1
NEWS
[LOGO]
VERITAS Software
1600 Plymouth Street
Mountain View, CA 94043
650.335.8000
FOR IMMEDIATE RELEASE
VERITAS SOFTWARE REPORTS RECORD SECOND QUARTER RESULTS
Pro forma earnings exceed 100% growth and revenue expands 70%
MOUNTAIN VIEW, CALIF. -- JULY 15, 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
second quarter ended June 30, 1999. During the quarter, the Company successfully
completed its mergers with Seagate Software NSMG and TeleBackup Systems. On a
pro forma basis, which includes the operating results of Seagate Software NSMG
and TeleBackup Systems for the full quarter in both periods, the Company
achieved second quarter revenue of $155.7 million, an increase of 70% over last
year's second quarter revenue of $91.6 million. Pro forma net earnings,
excluding one-time charges and purchase accounting amortization, increased to
$29.2 million from $14.5 million for the prior year, a 102% increase. Diluted
pro forma earnings per share for the second quarter was $0.16, reflecting the
two-for-one stock split effected July 9, 1999, a 100% increase from $0.08 for
the same period last year. The Company's pro forma operating margin increased to
28% for the second quarter as compared with an operating margin of 24% for the
same quarter last year. All prior share and per share amounts have been restated
to reflect the two-for-one stock split.
The Company's as-reported revenue for the second quarter, including one month of
operating results for Seagate Software NSMG and TeleBackup Systems, was $114.6
million, compared with $48.1 million for the same period last year. For the
second quarter, the Company reported a net loss of $162.3 million, or $1.33 per
share, compared with net income of $8.5 million, or $0.08 per share on a diluted
basis, for the prior year. Included in the current period's net loss are
one-time charges of $103.1 million for the write-off of in-process research and
development and $11.0 million for merger and restructuring costs. Also included
was $76.6 million for purchase accounting amortization.
"With the successful completion of the Seagate Software NSMG and TeleBackup
Systems mergers VERITAS emerges as the largest and most potent force in the
storage management and
<PAGE> 2
high availability software sectors," said Mark Leslie, chairman and CEO of
VERITAS Software. "I am pleased with the results for the second quarter which
were outstanding by any financial measure and, most importantly, the pro forma
results proved accretive right out-of-the-box."
On a pro forma basis for the six-month periods ended June 30, 1999 and 1998, the
Company had revenue of $290.5 million and $178.9 million, respectively, a 62%
year-over-year increase. Pro forma net earnings increased to $56.2 million from
$28.7 million in the prior period, a 96% increase. Pro forma diluted earnings
per share was $0.31, compared with $0.16 for the same period last year, a 94%
increase.
To better facilitate the financial reporting, the Company has added an
additional financial table to this earnings release: "Pro forma Statements of
Operations."
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/.
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)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenue:
User license fees $134,572 $ 79,308 $253,183 $155,625
Services 21,166 12,312 37,284 23,303
-------- -------- -------- --------
Total net revenue 155,738 91,620 290,467 178,928
Cost of revenue:
User license fees 7,212 5,971 13,456 11,995
Services 6,568 5,480 13,192 10,476
-------- -------- -------- --------
Total cost of revenue 13,780 11,451 26,648 22,471
-------- -------- -------- --------
Gross profit 141,958 80,169 263,819 156,457
Operating expenses:
Selling and marketing 60,539 33,899 110,036 64,939
Research and development 27,099 17,261 50,554 33,374
General and administrative 10,408 7,407 18,809 15,087
-------- -------- -------- --------
Total operating
expenses 98,046 58,567 179,399 113,400
-------- -------- -------- --------
Income from operations 43,912 21,602 84,420 43,057
Other income, net 1,757 1,411 3,388 2,535
-------- -------- -------- --------
Income before income taxes 45,669 23,013 87,808 45,592
Provision for income taxes 16,441 8,515 31,611 16,869
-------- -------- -------- --------
Pro forma net income $ 29,228 $ 14,498 $ 56,197 $ 28,723
======== ======== ======== ========
Pro forma net income
per share \226 basic(1) $ 0.17 $ 0.09 $ 0.33 $ 0.17
======== ======== ======== ========
Pro forma net income
per share \226 diluted(1) $ 0.16 $ 0.08 $ 0.31 $ 0.16
======== ======== ======== ========
Shares used in per
share calculation \226
basic(1) 168,932 165,913 168,383 165,482
======== ======== ======== ========
Shares used in per
share calculation \226
diluted(1) 184,113 179,937 183,606 179,305
======== ======== ======== ========
</TABLE>
(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.
The pro forma statement of operations is intended to present the
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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 six month period end June 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.
<PAGE> 5
VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
1999 1998 1999 1998
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Net revenue:
User license fees $ 93,296 $ 38,337 $ 149,082 $ 69,026
Services 21,352 9,776 37,470 18,169
--------- -------- --------- --------
Total net revenue 114,648 48,113 186,552 87,195
Cost of revenue:
User license fees 2,827 3,130 4,782 5,096
Services 8,254 4,792 14,781 9,292
Amortization of
developed technology 5,006 -- 5,006 --
--------- -------- --------- --------
Total cost of
revenue 16,087 7,922 24,569 14,388
--------- -------- --------- --------
Gross profit 98,561 40,191 161,983 72,807
Operating expenses:
Selling and marketing 44,572 16,950 71,395 30,009
Research and
development 20,550 8,948 34,366 16,497
General and
administrative 7,122 2,242 10,411 4,412
Amortization of
goodwill and other
intangibles 71,557 -- 71,557 --
In-process research
and development 103,100 2,250 103,100 2,250
Merger and
restructuring costs 11,000 -- 11,000 --
--------- -------- --------- --------
Total operating
expenses 257,901 30,390 301,829 53,168
--------- -------- --------- --------
Income (loss) from
operations (159,340) 9,801 (139,846) 19,639
Other income, net 1,739 1,438 3,337 2,703
--------- -------- --------- --------
Income (loss) before
income taxes (157,601) 11,239 (136,509) 22,342
Provision for income
taxes 4,728 2,698 12,237 4,746
--------- -------- --------- --------
Net income (loss) $(162,329) $ 8,541 $(148,746) $ 17,596
========= ======== ========= ========
Net income (loss) per
share - basic(1) $ (1.33) $ 0.09 $ (1.36) $ 0.19
========= ======== ========= ========
Net income (loss) per
share - diluted(1) $ (1.33) $ 0.08 $ (1.36) $ 0.17
========= ======== ========= ========
</TABLE>
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<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
1999 1998 1999 1998
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Shares used in per
share calculation
- basic(1) 122,430 93,724 109,108 93,293
========= ======== ========= ========
Shares used in per
share calculation
- diluted(1) 122,430 102,709 109,108 102,302
========= ======== ========= ========
</TABLE>
(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)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and short-term investments $ 236,087 $211,126
Accounts receivable, net 59,487 52,697
Other receivable 20,975 --
Deferred income taxes 10,435 4,272
Other current assets 15,546 9,237
---------- --------
Total current assets 342,530 277,332
Long-term investments 52,234 31,925
Property and equipment 57,750 26,518
Goodwill and other intangibles 3,601,709 --
Deferred income taxes -- 7,928
Other assets 4,185 5,414
========== ========
Total assets $4,058,408 $349,117
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,211 $ 4,958
Accrued compensation and benefits 20,377 11,267
Accrued acquisition and restructuring costs 32,039 478
Other accrued liabilities 23,705 10,718
Income taxes payable 21,207 13,424
Customer advances 10,917 --
Deferred revenue 62,749 37,645
---------- --------
Total current liabilities 181,205 78,490
Non-current liabilities:
Convertible subordinated notes 100,000 100,000
Deferred income taxes 181,280 --
Other non-current liabilities 739 773
---------- --------
Total non-current liabilities 282,019 100,773
Stockholders' equity 3,595,184 169,854
========== ========
Total liabilities and stockholders'
equity $4,058,408 $349,117
========== ========
</TABLE>
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FOR FURTHER INFORMATION CONTACT:
Ken Lonchar
Senior Vice President and CFO
VERITAS Software
Telephone: (650) 526-2501
Email: [email protected]
Dave Galiotto
Vice President of Finance/Investor Relations
VERITAS Software
Telephone: (650) 318-4047
Email:[email protected]
Erin Jones
Public Relations Director
VERITAS Software
Telephone: (805) 783-4528
Email: [email protected]
