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EXHIBIT 99.1
[VERITAS LETTERHEAD] NEWS
VERITAS Software
1600 Plymouth Street
Mountain View, CA 94043
650.335.8000
FOR IMMEDIATE RELEASE
VERITAS(R) SOFTWARE REPORTS RECORD THIRD QUARTER RESULTS;
REVENUE UP 73% TO $317.2 MILLION FOR THE QUARTER
Earnings Increase by 81%, Sequential Revenue Grows by 15%
MOUNTAIN VIEW, CALIF. -- OCTOBER 12, 2000 -- VERITAS Software Corporation
(Nasdaq: VRTS), the Data Availability Company, today announced record financial
results for its third quarter ended September 30, 2000. The Company achieved
third quarter revenue of $317.2 million, an increase of 73% over last year's
third quarter revenue of $183.4 million. Pro forma net income, which excludes
purchase accounting adjustments, increased to $70.3 million in the third quarter
from $38.9 million for the same period in the prior year, an 81% increase.
Diluted pro forma net income per share for the third quarter was a record $0.16,
up 78% from $0.09 for the same period last year.
For the third quarter, on an as-reported basis, VERITAS Software reported a net
loss of $148.1 million, or $0.37 per share, compared with a net loss of $183.6
million, or $0.48 per share for the prior year. Included in the current period's
net loss is $235.3 million of purchase accounting amortization. Included in the
prior period's net loss is $234.9 million of purchase accounting amortization
and a one-time charge of $1.1 million for the write-off of in-process research
and development.
"Third quarter 2000 has been another landmark quarter for VERITAS Software,"
said Mark Leslie, chairman and CEO of VERITAS Software. "We continue to see
strong product demand across all channels and geographies for all of our data
availability product lines including data protection, file and volume
management, clustering and replication. As a result, VERITAS Software is now
operating at an annualized revenue run-rate in excess of $1.2 billion and has
generated over $1 billion in revenue in the trailing four quarters."
On a pro forma basis for the nine-month periods ended September 30, 2000 and
1999, VERITAS Software had revenue of $837.2 million and $473.9 million,
respectively, a 77% year-over-year increase. Net income increased to $179.2
million from pro forma net income of $96.0 million in the prior period, an 87%
increase. Pro forma diluted net income per share was $0.41, compared with $0.23
for the same period last year, a 78% increase.
The Company's as-reported revenue for the nine-month period ended September 30,
2000 was $837.2 million, compared with $370.0 million for the same period last
year. For the nine-month period, VERITAS Software
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VERITAS Software Q3'00 Earnings Release
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reported a net loss of $494.8 million, or $1.24 per share, compared with a net
loss of $332.3 million, or $1.14 per share for the same period in the prior
year.
"Our third quarter results were exceptional by all financial measures," said Ken
Lonchar, senior vice president and CFO, VERITAS Software. "Along with the
continued strength in our international regions, this quarter has been marked by
the expansion of our UNIX business as well as steady revenue and market share
growth in the Windows NT space. Moving into next quarter, we are continuing to
see a sound ramp-up in our Hewlett-Packard business and the rising adoption of
storage area network (SAN) technology that should continue to drive the market's
acceptance of our innovative products and strategies."
The Company has added an additional financial table to its earnings releases:
"Pro forma Statements of Operations." These pro forma statements are intended to
present the Company's operating results excluding purchase accounting
adjustments. For 1999, the Company's operating results include the results of
Seagate Software NSMG and TeleBackup Systems effective at the beginning of the
period.
The Company will host a conference call on Friday, October 13 at 5:30 a.m.
Pacific Time, 8:30 a.m. Eastern Time, to discuss its results. The conference
call will be broadcast live via the Internet at www.nasdaq.com. The replay
number for the call is 800-633-8284 or 858-812-6440 (#16485732).
ABOUT VERITAS SOFTWARE THE DATA AVAILABILITY COMPANY(TM)
VERITAS Software Corporation (Nasdaq:VRTS) provides essential data availability
software solutions that enable customers to protect and access their
business-critical data for Business Without Interruption(TM). 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 Exchange Act of 1934. These forward-looking statements involve a
number of risks and uncertainties, including the timely development and market
acceptance of our products and services, our ability to maintain the quality of
our end-user customer and partnering relationships, and our ability to manage
our business effectively, that could cause the actual results we achieve to
differ materially from such forward-looking statements. For more information
regarding potential risks, see the "Factors That May Affect Future Results"
section of our most recent reports on Form 10-K and Form 10-Q on file with the
SEC.
VERITAS, VERITAS Software, the VERITAS logo, Business Without Interruption and
other product names are trademarks or registered 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 Q3'00 Earnings Release
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VERITAS SOFTWARE CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET REVENUE:
User license fees .................................. $ 256,925 $ 157,643 $ 686,092 $ 405,719
Services ........................................... 60,246 25,758 151,155 68,149
--------- --------- --------- ---------
TOTAL NET REVENUE ............................... 317,171 183,401 837,247 473,868
COST OF REVENUE:
User license fees .................................. 9,270 5,891 29,247 16,311
Services ........................................... 21,707 10,787 60,171 27,013
--------- --------- --------- ---------
TOTAL COST OF REVENUE ........................... 30,977 16,678 89,418 43,324
--------- --------- --------- ---------
GROSS PROFIT ......................................... 286,194 166,723 747,829 430,544
OPERATING EXPENSES:
Selling and marketing .............................. 116,936 67,895 310,628 178,390
Research and development ........................... 46,328 28,924 120,646 78,352
General and administrative ......................... 20,465 11,020 52,971 30,496
--------- --------- --------- ---------
TOTAL OPERATING EXPENSES ........................ 183,729 107,839 484,245 287,238
--------- --------- --------- ---------
Income from operations ............................... 102,465 58,884 263,584 143,306
Interest and other income, net ....................... 15,648 7,266 39,688 14,840
Interest expense ..................................... (8,266) (5,301) (23,314) (8,148)
--------- --------- --------- ---------
Income before income taxes ........................... 109,847 60,849 279,958 149,998
Provision for income taxes ........................... 39,545 21,906 100,785 54,000
--------- --------- --------- ---------
PRO FORMA NET INCOME ................................. $ 70,302 $ 38,943 $ 179,173 $ 95,998
========= ========= ========= =========
PRO FORMA NET INCOME PER SHARE - BASIC ............... $ 0.17 $ 0.10 $ 0.45 $ 0.25
========= ========= ========= =========
PRO FORMA NET INCOME PER SHARE - DILUTED ............. $ 0.16 $ 0.09 $ 0.41 $ 0.23
========= ========= ========= =========
SHARES USED IN PER SHARE CALCULATION - BASIC ......... 403,613 384,847 399,655 380,864
========= ========= ========= =========
SHARES USED IN PER SHARE CALCULATION - DILUTED ....... 438,541 422,033 437,740 416,848
========= ========= ========= =========
</TABLE>
The pro forma statements of operations are intended to present the Company's
operating results excluding purchase accounting adjustments. For 1999, the
Company's operating results include the results of NSMG and TeleBackup assuming
the companies had been combined at the beginning of the period.
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 provisions.
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VERITAS Software Q3'00 Earnings Release
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VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET REVENUE:
User license fees ............................... $ 256,925 $ 157,643 $ 686,092 $ 306,725
Services ........................................ 60,246 25,758 151,155 63,228
----------- ----------- ----------- -----------
TOTAL NET REVENUE ............................ 317,171 183,401 837,247 369,953
COST OF REVENUE:
User license fees ............................... 9,270 5,891 29,247 10,673
Services ........................................ 21,707 10,787 60,171 25,568
Amortization of developed technology ............ 15,553 15,258 46,501 20,264
----------- ----------- ----------- -----------
TOTAL COST OF REVENUE ........................ 46,530 31,936 135,919 56,505
----------- ----------- ----------- -----------
GROSS PROFIT ...................................... 270,641 151,465 701,328 313,448
OPERATING EXPENSES:
Selling and marketing ........................... 116,936 67,895 310,628 139,290
Research and development ........................ 46,328 28,924 120,646 63,290
General and administrative ...................... 20,465 11,020 52,971 21,431
Amortization of goodwill and other intangible 219,758 219,626 659,275 291,183
In-Process research and development ............. -- 1,100 -- 104,200
Acquisition and restructuring costs ............. -- -- -- 11,000
----------- ----------- ----------- -----------
TOTAL OPERATING EXPENSES ..................... 403,487 328,565 1,143,520 630,394
----------- ----------- ----------- -----------
Loss from operations .............................. (132,846) (177,100) (442,192) (316,946)
Interest and other income, net .................... 15,648 7,266 39,688 13,445
Interest expense .................................. (8,266) (5,301) (23,314) (8,143)
----------- ----------- ----------- -----------
Loss before income taxes .......................... (125,464) (175,135) (425,818) (311,644)
Provision for income taxes ........................ 22,642 8,441 69,012 20,678
----------- ----------- ----------- -----------
NET LOSS .......................................... $ (148,106) $ (183,576) $ (494,830) $ (332,322)
=========== =========== =========== ===========
NET LOSS PER SHARE - BASIC ........................ $ (0.37) $ (0.48) $ (1.24) $ (1.14)
=========== =========== =========== ===========
NET LOSS PER SHARE - DILUTED ...................... $ (0.37) $ (0.48) $ (1.24) $ (1.14)
=========== =========== =========== ===========
SHARES USED IN PER SHARE CALCULATION - BASIC ...... 403,613 384,847 399,655 292,115
=========== =========== =========== ===========
SHARES USED IN PER SHARE CALCULATION - DILUTED .... 403,613 384,847 399,655 292,115
=========== =========== =========== ===========
</TABLE>
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VERITAS Software Q3'00 Earnings Release
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VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and short-term investments .................. $ 948,578 $ 692,381
Accounts receivable, net ......................... 169,115 132,180
Deferred income taxes ............................ 23,803 23,803
Other current assets ............................. 32,334 13,381
---------- ----------
TOTAL CURRENT ASSETS .......................... 1,173,830 861,745
Long-term investments .............................. 127,466 65,036
Property and equipment ............................. 130,163 76,958
Goodwill and other intangibles ..................... 2,521,759 3,226,749
Other non-current assets ........................... 45,513 2,789
---------- ----------
TOTAL ASSETS .................................. $3,998,731 $4,233,277
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ................................. $ 33,287 $ 30,229
Accrued compensation and benefits ................ 59,480 35,560
Accrued acquisition and restructuring costs ...... 18,087 24,202
Other accrued liabilities ........................ 57,655 47,531
Income taxes payable ............................. 8,433 6,804
Deferred revenue ................................. 138,456 86,979
---------- ----------
TOTAL CURRENT LIABILITIES ..................... 315,398 231,305
NON-CURRENT LIABILITIES:
Convertible subordinated notes ................... 459,812 451,044
Deferred income taxes ............................ 124,405 157,867
---------- ----------
TOTAL NON-CURRENT LIABILITIES ................. 584,217 608,911
Stockholders' equity ............................... 3,099,116 3,393,061
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .... $3,998,731 $4,233,277
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