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FILED PURSUANT TO RULE 424(B)(3) AND RULE 424(C)
REGISTRATION NO. 333-87585
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 30, 1999)
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PROSPECTUS SUPPLEMENT
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VERITAS SOFTWARE CORPORATION
3,358,975 SHARES
COMMON STOCK
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This prospectus supplement supplements the prospectus dated September 30,
1999, as supplemented October 15, 1999 and November 12, 1999 (the "Prospectus"),
to which this prospectus supplement is attached. This prospectus supplement
should be read in conjunction with the Prospectus, which is to be delivered with
this prospectus supplement. This prospectus supplement is qualified by reference
to the Prospectus extent to the extent that the information in this prospectus
supplement supersedes the information contained in the Prospectus. All
capitalized terms used but not defined in this prospectus supplement have the
meanings given to them in the Prospectus.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SHARES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS OR THIS PROSPECTUS SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus supplement is January 28, 2000.
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STOCK SPLIT
On January 27, 2000, our board of directors declared a three-for-two stock
split of our outstanding common stock. The stock split will be effected in the
form of a stock dividend and will entitle each stockholder of record on February
18, 2000 to receive one additional share for every two shares held on the record
date. The payment date will be March 3, 2000. As of January 27, 2000, there are
approximately 261.5 million shares of VERITAS Software common stock outstanding,
and this number will increase to approximately 392.3 million following the stock
split. As of January 27, 2000, we have 500.0 million shares authorized.
To reflect the stock split discussed above, the number of shares that may
be offered through the Prospectus will increase to include two and one-quarter
times the number of shares described in the Prospectus that the selling
stockholders hold on February 18, 2000. For example, 100 shares in the
prospectus dated September 30, 1999 will represent 225 shares. This calculation
is based on the stock split discussed above and the three-for-two stock split
that was paid as a stock dividend in November 1999.
FINANCIAL RESULTS
Also, on January 27, 2000, we announced financial results for our fourth
quarter ended December 31, 1999.
We achieved fourth-quarter revenue of $226.2 million, an increase of 80%
over last year's pro forma fourth-quarter revenue of $126.0 million. Pro forma
net income, which excludes purchase accounting adjustments, increased to $50.7
million from $23.9 million for the prior year, a 112% increase. Diluted pro
forma net income per share for the fourth quarter was $0.18, a 100% increase
from $0.09 for the same period last year. Our pro forma operating margin
expanded to 34% for the fourth quarter.
Our as-reported revenue for the fourth quarter was $226.2 million, compared
with $67.1 million for the same period last year. For the fourth-quarter, we
reported a net loss of $170.6 million, or $0.66 per share, compared with net
income of $21.5 million, or $0.14 per share on a diluted basis for the prior
year. Included in the current period's net loss is $235.2 million of purchase
accounting amortization.
On a pro forma basis for the years ended December 31, 1999 and 1998, we had
revenue of $700.0 million and $410.0 million, respectively, a 71% year-over-year
increase. Pro forma net income increased to $146.7 million from $69.8 million in
the prior period, a 110% increase. Pro forma diluted net income per share was
$0.52, compared with $0.26 for the same period last year, a 100% increase.
Our as-reported revenue for the year ended December 31, 1999 was $596.1
million, compared with $210.9 million for the prior year. For the year, we
reported a net loss of $503.0 million, or $2.38 per share, compared with net
income of $51.6 million, or $0.33 per share on a diluted basis for the prior
year.
To better facilitate the financial reporting, we added the following
financial table to our earnings release: "Pro forma Statements of Operations."
These pro forma statements are intended to present our operating results
excluding purchase accounting adjustments but including the results of Seagate
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<PAGE> 3
Software NSMG and TeleBackup Systems assuming the companies had been combined at
the beginning of all periods presented.
VERITAS SOFTWARE CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenue:
User license fees.......................... $191,289 $108,764 $597,008 $355,775
Services................................. 34,870 17,228 103,019 54,223
-------- -------- -------- --------
Total net revenue................ 226,159 125,992 700,027 409,998
Cost of revenue:
User license fees........................ 10,062 3,994 26,373 20,991
Services................................. 12,593 6,920 39,606 23,925
-------- -------- -------- --------
Total cost of revenue............ 22,655 10,914 65,979 44,916
-------- -------- -------- --------
Gross profit............................... 203,504 115,078 634,048 365,082
Operating expenses:
Selling and marketing.................... 82,699 48,200 261,089 153,291
Research and development................. 31,187 22,174 109,539 74,739
General and administrative............... 12,754 8,888 43,250 32,556
-------- -------- -------- --------
Total operating expenses......... 126,640 79,262 413,878 260,586
-------- -------- -------- --------
Income from operations..................... 76,864 35,816 220,170 104,496
Interest and other income, net............. 9,883 3,645 24,723 12,245
Interest expense........................... (7,516) (1,492) (15,664) (6,006)
-------- -------- -------- --------
Income before income taxes................. 79,231 37,969 229,229 110,735
Provision for income taxes................. 28,523 14,049 82,523 40,973
-------- -------- -------- --------
Pro forma net income....................... $ 50,708 $ 23,920 $146,706 $ 69,762
======== ======== ======== ========
Pro forma net income per
share -- basic(1)........................ $ 0.20 $ 0.10 $ 0.57 $ 0.28
======== ======== ======== ========
Pro forma net income per
share -- diluted(1)...................... $ 0.18 $ 0.09 $ 0.52 $ 0.26
======== ======== ======== ========
Shares used in per share
calculation -- basic(1).................. 259,606 250,835 255,353 249,323
======== ======== ======== ========
Shares used in per share calculation --
diluted(1)............................... 288,290 271,198 281,624 271,121
======== ======== ======== ========
</TABLE>
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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 and a 3-for-2 stock split in the form of a
stock dividend effected in November 1999.
The pro forma statement of operations is intended to present our 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 twelve month period ended December 31, 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
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
1999 1998 1999 1998
--------- -------- --------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net revenue:
User license fees........................... $ 191,289 $ 52,870 $ 498,014 $167,703
Services.................................. 34,870 14,255 98,098 43,162
--------- -------- --------- --------
Total net revenue...................... 226,159 67,125 596,112 210,865
Cost of revenue:
User license fees......................... 10,062 1,186 20,735 8,798
Services.................................. 12,593 6,044 38,161 20,663
Amortization of developed technology...... 15,395 -- 35,659 --
--------- -------- --------- --------
Total cost of revenue.................. 38,050 7,230 94,555 29,461
--------- -------- --------- --------
Gross profit................................ 188,109 59,895 501,557 181,404
Operating expenses:
Selling and marketing..................... 82,699 25,977 221,989 76,392
Research and development.................. 31,187 12,883 94,477 40,239
General and administrative................ 12,754 3,430 34,185 10,505
Amortization of goodwill and other
intangibles............................ 219,760 -- 510,943 --
In-process research and development....... -- (1,650) 104,200 600
Merger and restructuring costs............ -- -- 11,000 --
--------- -------- --------- --------
Total operating expenses............... 346,400 40,640 976,794 127,736
--------- -------- --------- --------
Income (loss) from operations............... (158,291) 19,255 (475,237) 53,668
Interest and other income, net.............. 9,883 3,269 23,328 11,822
Interest expense............................ (7,516) (1,432) (15,659) (5,701)
--------- -------- --------- --------
Income (loss) before income taxes........... (155,924) 21,092 (467,568) 59,789
Provision for income taxes.................. 14,712 (367) 35,390 8,141
--------- -------- --------- --------
Net income (loss)........................... $(170,636) $ 21,459 $(502,958) $ 51,648
========= ======== ========= ========
Net income (loss) per share -- basic(1)..... $ (0.66) $ 0.15 $ (2.38) $ 0.37
========= ======== ========= ========
Net income (loss) per share -- diluted(1)... $ (0.66) $ 0.14 $ (2.38) $ 0.33
========= ======== ========= ========
Shares used in per share
calculation -- basic(1)................... 259,606 142,551 211,261 141,039
========= ======== ========= ========
Shares used in per share
calculation -- diluted(1)................. 259,606 156,125 211,261 155,012
========= ======== ========= ========
</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 and a 3-for-2 stock split in the form of a
stock dividend effected in November 1999.
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VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and short-term investments........................... $ 692,381 $211,126
Accounts receivable, net.................................. 132,180 52,697
Deferred income taxes..................................... 23,803 4,272
Other current assets...................................... 13,381 9,237
---------- --------
Total current assets................................... 861,745 277,332
Long-term investments....................................... 65,036 31,925
Property and equipment...................................... 76,958 26,518
Goodwill and other intangibles.............................. 3,226,749 4,005
Deferred income taxes....................................... -- 7,928
Other assets................................................ 2,789 1,409
---------- --------
Total assets........................................... $4,233,277 $349,117
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 30,229 $ 4,958
Accrued compensation and benefits......................... 35,560 11,267
Accrued acquisition and restructuring costs............... 24,202 478
Other accrued liabilities................................. 41,727 10,718
Income taxes payable...................................... 6,804 13,424
Customer advances......................................... 5,208 --
Deferred revenue.......................................... 86,979 37,645
---------- --------
Total current liabilities.............................. 230,709 78,490
Non-current liabilities:
Convertible subordinated notes............................ 451,044 100,000
Deferred income taxes..................................... 157,867 --
Other non-current liabilities............................. 596 773
---------- --------
Total non-current liabilities.......................... 609,507 100,773
Stockholders' equity........................................ 3,393,061 169,854
---------- --------
Total liabilities and stockholders' equity............. $4,233,277 $349,117
========== ========
</TABLE>
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