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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) January 27, 2000
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VERITAS SOFTWARE CORPORATION
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(Exact name of registrant as specified in its charter)
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<CAPTION>
Delaware 000-26247 77-0507675
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<S> <C> <C>
(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 January 27, 2000, VERITAS Software Corporation announced financial
results for its fourth quarter ended December 31, 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 January 27, 2000.
2
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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: January 27, 2000
VERITAS SOFTWARE CORPORATION
By: /s/ JAY A. JONES
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Jay A. Jones
Senior Vice President,
Chief Administrative Officer & Secretary
3
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EXHIBIT INDEX
99.1 Press release of the registrant dated January 27, 2000.
4
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EXHIBIT 99.1
[VERITAS SOFTWARE LETTERHEAD]
FOR IMMEDIATE RELEASE
VERITAS SOFTWARE REPORTS RECORD FOURTH-QUARTER RESULTS;
REVENUE UP 80% TO $226 MILLION FOR THE QUARTER
Pro forma Quarterly Net Income Grows 112% While
1999 Pro forma Annual Revenue Tops $700 Million
MOUNTAIN VIEW, CALIF. - JANUARY 27, 2000 - VERITAS(R) Software Corporation
(Nasdaq: VRTS), the industry's leading enterprise-class application storage
management software provider, today announced record financial results for its
fourth-quarter ended December 31, 1999. The Company 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. VERITAS Software's pro forma operating margin expanded to 34% for the
fourth-quarter.
The Company's 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, VERITAS Software 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.
"Clearly, we have emerged from 1999 as the leader in heterogeneous application
storage management software, with powerful solutions for both UNIX and Windows
NT platforms," said Mark Leslie, chairman and CEO of VERITAS Software. "Our
fourth-quarter results demonstrate our success in leveraging new, high-growth
markets, such as Internet businesses. Our dramatic quarterly results add to what
has been an excellent year in which we built the broadest roster of application
storage management technology, deepest strategic partnerships, strongest sales
channel infrastructure and most responsive global technical support organization
in the storage management software industry. The net result is a dynamic
organization equipped to efficiently deliver the advanced solutions today's
customers with mission-critical requirements demand."
<PAGE> 2
VERITAS Software Q4 Earnings Release
Page 2
On a pro forma basis for the years ended December 31, 1999 and 1998, VERITAS
Software 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.
The Company's 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,
VERITAS Software 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, 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 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 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.
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VERITAS SOFTWARE CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
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<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
1999 1998 1999 1998
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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
======== ======== ======== ========
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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)
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<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
1999 1998 1999 1998
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(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
========= ======== ========= ========
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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.
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VERITAS SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
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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
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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
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Total assets........................................... $4,233,277 $349,117
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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
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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
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Total non-current liabilities.......................... 609,507 100,773
Stockholders' equity........................................ 3,393,061 169,854
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Total liabilities and stockholders' equity............. $4,233,277 $349,117
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