Contacts:
Yvette Gutierrez, Investor Relations Lisa Savino, Investor Relations
631-342-4078 631-342-2788
[email protected] [email protected]
Bob Gordon - Public Relations
631-342-2391
[email protected]
COMPUTER ASSOCIATES CONFIRMS
SECOND QUARTER FINANCIAL RESULTS
Company To Announce Changes in Business Model
At Wednesday Morning Conference
ISLANDIA, N.Y., October 24, 2000 - Confirming preliminary estimates, Computer
Associates International, Inc. (NYSE: CA) today reported final financial results
for its second fiscal quarter.
For the quarter ended September 30, 2000, total contract value was $1.681
billion, an increase of 5% over the $1.605 billion reported in the previous
year's second quarter. Net income for the September 30, 2000 quarter was $138
million, versus $334 million in the prior year. Second quarter earnings per
share (diluted), exclusive of amortization effect, was $.54 compared to $.75
last year. Inclusive of the acquisition amortization, earnings per share
(diluted) for the quarter was $.23, compared to $.60 for the prior year.
For the six months ended September 30, 2000, total contract value was $2.959
billion, up 5% compared to the $2.827 billion reported in the first half of last
year. EBITDA was $889 million compared to $1.295 billion for the prior year. Net
income, exclusive of acquisition amortization, was $405 million versus $688
million from the prior period, after excluding a special gain of $184 million
related to the 1995 Key Employee Stock Plan litigation settlement and a $31
million write-off related to the Inacom Corp Bankruptcy in the six month period
ended September 30, 2000 and the $646 million R&D charge in the six month period
ended September 30, 1999 related to the acquisition of Platinum technology.
Operating earnings per share (diluted) excluding acquisition related
amortization charges were $.68, compared to $1.24 a year ago.
"Given the current business climate, we are pleased with our performance this
past quarter," said CA President and CEO Sanjay Kumar. "CA software solutions-in
areas including security, storage management, portals and knowledge
tools-continue to deliver tremendous value to organizations around the globe.
These results, highlighted by continuing revenue growth, reflect the progress we
have made against our recovery plan. In addition, as part of our focused effort
to unlock shareholder value, we are very excited about the progressive new
business model that we will unveil on Wednesday morning. This new model promises
to deliver even greater long term sustainable value for shareholders, customers
and CA employees."
CA has scheduled a press and analyst conference on Wednesday, October 25 at 8AM
EDT at the Plaza Hotel in New York City to review financial results and the new
business model. The conference will also be Webcast to all interested parties at
www.ca.com/invest.
<PAGE>
Recent highlights include:
o CA named Sanjay Kumar president and CEO, and announced that Charles B.
Wang, CA's founder and most recently CEO, will continue as chairman. Wang
will devote his energies to new ventures that will unlock tremendous value
for shareholders, clients, strategic partners and employees.
o As the first step in a strategy to spin off technology that would thrive
and flourish on an independent basis, CA announced the formation of
iCan-ASP, Inc. to service the rapidly growing Application Service Provider
marketplace. iCan-ASP offers new and innovative technologies for providing
applications through the Internet, wireless and broadband communications.
o As part of its continuing effort to unlock shareholder value, CA announced
the sale of the former Sterling Federal Systems Group to the Logicon
division of Northrup Grumman.
o CA announced a robust suite of eBusiness management software for IBM's new
eServer zSeries 900 mainframes, underscoring the company's commitment to
help clients manage new eBusiness workloads.
o CA announced eTrust Internet Defense, the first integrated solution to
protect mission-critical eBusiness from potentially destructive cyber
attacks and security breaches. CA also released eTrust Directory, a highly
scalable and secure solution designed to meet critical eBusiness
infrastructure challenges, and eTrust OSCPro, which delivers real-time
validation of digital certificates.
o CA announced Neugentsii, a complete solution for building real-time
intelligent eBusiness applications.
o CA announced a comprehensive suite of eBusiness management software for
Linux on S/390 as part of a collaborative effort with IBM to promote Linux
on S/390 enterprise servers.
o CA and Red Hat, Inc. announced an agreement to ship a live trial version of
ARCServeIT with every copy of Red Hat Linux 7 Professional Edition.
o CA announced a new release of the Unicenter TNG Software Delivery Option
that accelerates and automates the delivery of software and other digital
content to resources across the extended enterprise.
o CA announced COOL: Joe1.1, which empowers Java developers to build robust
eBusiness solutions, and COOL: Plex 4.5, which accelerates eBusiness
application development.
o CA and Softbank S.A. established a joint venture designed to accelerate
eBusiness deployment in Central and Eastern Europe
<PAGE>
o CA and Hitachi Data Systems, a wholly owned subsidiary of Hitachi Ltd.,
announced a strategic reseller agreement under which Hitachi Data Systems
will resell Unicenter TNG.
o CA and Cable & Wireless HKT launched SOLAR, the first full-service ASP in
Hong Kong to deliver integrated eBusiness solutions via broadband network
access.
o CA and Chia Heir Group of Taiwan announced eFashion, a groundbreaking B2B
platform for the textile industry that is based on CA's Jasmineii.
o For the third consecutive year, IndustryWeek selected CA as one of the
world's 100 best-managed companies.
Computer Associates International, Inc. (NYSE: CA) the world's leading business
software company, delivers the end-to-end infrastructure to enable eBusiness
through innovative technology, services and education. CA has 20,000 employees
worldwide and had revenue in excess of $6 billion for the fiscal year ended
March 31, 2000. For more information, visit www.ca.com.
# # #
(c) 2000 Computer Associates International, Inc. One Computer Associates Plaza,
Islandia, N.Y. 11749. All trademarks, trade names, service marks, and logos
referenced herein belong to their respective companies.
Statements in this release concerning the Company's future prospects are
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. There can be no assurances that future results will be achieved, and
actual results could differ materially from forecasts and estimates. Important
factors that could cause actual results to differ materially include: the
significant percentage of CA's quarterly sales consummated in the last few days
of the quarter making financial predictions especially difficult and raising a
substantial risk of variance in actual results; changes in industry accounting
guidance; the risks of potential litigation arising from the year 2000 date
change for computer programs; the emergence of new competitive initiatives
resulting from rapid technological advances or changes in pricing in the market;
the risks associated with new product introductions as well as the uncertainty
of customer acceptance of these new or enhanced products from either CA or its
competition; risks associated with the entry into new markets such as
professional services; the risks associated with integrating newly acquired
businesses and technologies; increasing dependency on large dollar licensing
transactions; delays in product delivery; reliance on mainframe capacity growth;
the ability to recruit and retain qualified personnel; business conditions in
the distributed systems and mainframe software and hardware markets; uncertainty
and volatility associated with Internet and eBusiness related activities; use of
software patent rights to attempt to limit competition; fluctuations in foreign
currency exchange rates and interest rates; the volatility of the international
marketplace; and other risks described in filings with the Securities and
Exchange Commission.
<PAGE>
Table 1
COMPUTER ASSOCIATES INTERNATIONAL, INC.
Earnings Before Amortization Charges, Including Special Items
(In millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Sept. 30 Ended Sept. 30
2000 1999 2000(A) 1999(B)
<S> <C> <C> <C> <C>
License $1,095 $1,127 $1,808 $1,916
Maintenance Fees 274 215 532 411
Professional Services 154 140 295 259
Financing Fees 158 123 324 241
Total Contract Value 1,681 1,605 2,959 2,827
Expanded Contract Costs (136) (140) (277) (305)
Net Revenue 1,545 1,465 2,682 2,522
SG&A 781 597 1,571 1,131
Expanded Contract Costs (136) (140) (277) (305)
R&D 179 141 349 262
Comm/Royalties 85 79 150 139
CA Depr/Amort 33 25 64 47
Interest Expense, net 89 97 177 147
Net Special Items 0 0 (153) 646
Total Costs 1,031 799 1,881 2,067
Income before taxes (C) 514 666 801 455
Taxes (C) 193 250 300 413
Net Income (C) 321 416 501 42
Diluted Earnings per share (C) $.54 $.75 $.84 $.08
Shares used in computation 592.420 555.487 599.387 553.717
<FN>
(A) Includes special gain of $184 million related to the 1995 Key Employee
Stock Plan litigation settlement and a $31 million write-off related to the
bankruptcy filing of Inacom Corporation.
</FN>
<FN>
(B) Includes a $646 million charge for in-process R&D related to the
acquisition of PLATINUM technology International, inc.
</FN>
<FN>
(C) Excludes effect of $246 million for the quarter ending September 30, 2000
and $131 million for the September 30, 1999 prior year quarter for non-cash
intangible amortization charges. For the six months ended September 30,
2000 and September 30, 1999, the excluded intangible amortization was $488
million and $223 million, respectively.
</FN>
</TABLE>
<PAGE>
Table 2
COMPUTER ASSOCIATES INTERNATIONAL, INC.
Earnings Before Amortization Charges and Special Items
(In millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Sept. 30 Ended Sept. 30
2000 1999 2000(A) 1999(B)
<S> <C> <C> <C> <C>
License $1,095 $1,127 $1,808 $1,916
Maintenance Fees 274 215 532 411
Professional Services 154 140 295 259
Financing Fees 158 123 324 241
Total Contract Value 1,681 1,605 2,959 2,827
Expanded Contract Costs (136) (140) (277) (305)
Net Revenue 1,545 1,465 2,682 2,522
SG&A 781 597 1,571 1,131
Expanded Contract Costs (136) (140) (277) (305)
R&D 179 141 349 262
Comm/Royalties 85 79 150 139
CA Depr/Amort 33 25 64 47
Interest Expense, net 89 97 177 147
Total Costs 1,031 799 2,034 1,421
EBITDA 636 788 889 1,295
Income before taxes (C) 514 666 648 1,101
Taxes (C) 193 250 243 413
Net Income (C) 321 416 405 688
Diluted Earnings per share (C) $.54 $.75 $.68 $1.24
Shares used in computation 592.420 555.487 599.387 553.717
<FN>
(A) Excludes special gain of $184 million related to the 1995 Key Employee
Stock Plan litigation settlement and a $31 million write-off related to the
bankruptcy filing of Inacom Corporation.
</FN>
<FN>
(B) Excludes a $646 million charge for in-process R&D related to the
acquisition of PLATINUM technology International, inc.
</FN>
<FN>
(C) Excludes effect of $246 million for the quarter ending September 30, 2000
and $131 million for the September 30, 1999 prior year quarter for non-cash
intangible amortization charges. For the six months ended September 30,
2000 and September 30, 1999, the excluded intangible amortization was $488
million and $223 million, respectively.
</FN>
</TABLE>
<PAGE>
Table 3
Consolidated Condensed Statement of Operations
(In millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Sept., 30 Ended Sept. 30
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Total Contract Value $1,681 $1,605 $2,959 $2,827
Net Revenue 1,545 1,465 2,682 2,522
Income before taxes 268 535 313 232
Taxes 130 201 152 329
Net Income (Loss) 138 334 161 (97)
Basic Earnings (Loss) per Share $.24 $.62 $.27 $(.18)
Shares used in computation 585.152 538.093 587.809 537.324
Diluted Earnings (Loss) per Share $.23 $.60 $.27 $(.18)
Shares used in computation 592.420 555.487 599.387 537.324
</TABLE>
Table 4
Consolidated Condensed Balance Sheets
(In millions)
<TABLE>
<CAPTION>
Sept. 30 March 31
2000 2000
(unaudited)
<S> <C> <C>
Cash & Marketable Securities $ 454 $ 1,387
Accounts Receivable 2,059 2,175
Other Current Assets 158 430
Total Current Assets 2,671 3,992
Installment AR 3,864 3,812
Property & Equipment 822 829
Purchased Software 2,519 2,598
Goodwill 5,881 6,032
Other Assets 222 230
Total Assets $15,979 $17,493
Loans Payable & Current
Portion of Long Term Debt $ 1,319 $ 919
Other Current Liabilities 1,518 2,085
Long Term Debt 3,676 4,527
Deferred Income Taxes 2,266 2,365
Deferred Maintenance 500 560
Stockholders' Equity 6,700 7,037
Total Liabilities & Equity $15,979 $17,493
</TABLE>
