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): September 2, 1999
STERLING SOFTWARE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8465 75-1873956
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
300 CRESCENT COURT, SUITE 1200, DALLAS, TEXAS 75201
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (214) 981-1000
ITEM 5. OTHER EVENTS.
On September 2, 1999, the Executive Committee of the Board of
Directors of Sterling Software, Inc. (the "Company") approved a stock
repurchase program authorizing the repurchase by the Company of up to five
million shares of its outstanding common stock. Purchases will be made
from time to time as market and business conditions warrant, in open
market, negotiated or block transactions. The Company has approximately
84.3 million shares of common stock outstanding.
On September 3, 1999, the Company issued a press release disclosing
the stock repurchase program and certain anticipated financial implications
of the Company's recent acquisition of Information Advantage, Inc. and
related reorganization activities. That press release is filed as an
Exhibit to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits:
Exhibit
Number Exhibit
------- -------
99.1 Press release, dated September 3, 1999, issued by Sterling
Software, Inc.*
--------------------
* Filed herewith.
SIGNATURES
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.
STERLING SOFTWARE, INC.
By: /s/ Don J. McDermett, Jr.
--------------------------------
Don J. McDermett, Jr.
Senior Vice President, General
Counsel and Secretary
Dated: September 7, 1999
INDEX TO EXHIBITS
Exhibit
Number Exhibit
99.1 Press release, dated September 3, 1999, issued by Sterling
Software, Inc.*
____________________
* Filed herewith.
EXHIBIT 99.1
STERLING SOFTWARE ANNOUNCES STOCK REPURCHASE PROGRAM
AND ISSUES FOURTH QUARTER GUIDANCE
DALLAS, TX (SEPTEMBER 3, 1999) - Sterling Software, Inc. (SSW-NYSE)
today announced that the company has initiated a stock repurchase program
under which the company may buy back up to five million shares of its
outstanding common stock, and has issued guidance for the company's fourth
quarter ending September 30, 1999.
"We've been using our cash to make a series of great acquisitions
this year - in systems management, network management, and most recently,
in business intelligence," said Sterling L. Williams, president and chief
executive officer of Sterling Software. "Today we're announcing another
strategic use of our cash in what we believe is a vastly undervalued asset
- - Sterling Software stock."
The timing and total number of shares repurchased will depend on
market conditions, and purchases may be made in open market, negotiated or
block transactions, the company said. Sterling Software currently has
approximately 84.3 million shares of common stock outstanding.
"Just this week, we announced the completion of our acquisition of
Information Advantage, Inc., a leader in business intelligence, and we
think the synergy between our two product lines is superb - in fact, the
merging of the companies has gone extraordinarily well," Mr. Williams said.
"Because we disrupted their quarter with several weeks of intensive
planning, however, we don't expect significant revenue from the former
Information Advantage business in the month of September." Mr. Williams
added that the company expects the acquisition to be dilutive to earnings
per share in September, but accretive thereafter.
Also earlier this week, the company announced changes in its
application development business. "We did a thorough review of our
application development business and completely realigned it to address the
mushrooming market for enterprise e-business solutions, including both
software tools and supporting services," said Geno P. Tolari, Sterling
Software's chief operating officer. "This was absolutely the right thing to
do for this business, but the realignment will impact our fourth quarter
due to the changes we made." Mr. Tolari added that the company is executing
an aggressive enterprise application integration strategy to enable the use
of its COOL products to build web-enabled solutions.
As a result of both the Information Advantage acquisition and the
realignment of the application development business, Sterling Software
issued guidance for the fourth quarter ending September 30, 1999. The net
impact to the quarter is that the company currently expects the fourth
quarter application management segment revenue to be down slightly from the
third quarter of 1999, with operating profit margins for the segment in the
low 20's. Current First Call consensus for earnings per share, before
one-time acquisition-related charges, is $.52 for the fourth quarter ending
September 30, 1999. The company currently expects EPS, before one-time
acquisition-related charges, of approximately $.47 for the fourth quarter,
or EPS before one-time acquisition-related charges and before amortization
charges for intangibles associated with acquisitions, of approximately
$.53.
"We currently expect to be within the range of First Call EPS
estimates for fiscal 2000, with bottom line growth over fiscal 1999
approaching 20 percent, or in excess of 20 percent when calculated before
amortization charges for intangibles associated with acquisitions," Mr.
Williams said. "We also currently expect top line growth in fiscal 2000 in
excess of 20 percent."
Sterling Software is a leading provider of software and services for
the application development, business intelligence, information management,
storage management, network management, VM systems management, and federal
systems markets. The company is one of the 20 largest independent software
companies in the world. Headquartered in Dallas, Sterling Software has a
worldwide installed base of more than 20,000 customer sites and 3,700
employees in 90 offices worldwide. For more information on Sterling
Software, visit the company's Web site at www.sterling.com.
This news release contains certain forward-looking statements
regarding Sterling Software's future results of operations. These
statements -- which are identified by the use of the words "believes,"
"expects," "anticipates," "will," and similar expressions contemplating
future events -- are subject to a number of significant assumptions and
reflect the current views and expectations of the Company based on
currently available information. Numerous factors, risks and uncertainties
may affect the Company's operating results and could cause the Company's
actual results to differ materially from the results included in or implied
by the forward-looking statements contained in this news release. These
factors, risks and uncertainties include, among other things, the size and
timing of software purchases by customers, market acceptance of new and
enhanced versions of the Company's product and service offerings, and
uncertainties associated with Sterling Software's recent acquisition of
Information Advantage, Inc. and the recent realignment of the Company's
application development business. Moreover, the timing and amount of the
Company's product revenues are subject to a number of factors that make
estimation of operating results prior to the end of a quarter extremely
uncertain. In view of all of the foregoing, there can be no assurance that
the Company's future results will meet expectations. Investors should pay
particular attention to the important risk factors and cautionary
statements described above, in the section of the Company's Annual Report
on Form 10-K entitled "Certain Considerations Relative to the Company," and
in the other documents the Company files from time to time with the
Securities and Exchange Commission.
CONTACTS:
FINANCIAL ANALYSTS: MEDIA:
Julie Kupp Cindy Foor
Sterling Software Sterling Software
(214) 981-1000 (214) 981-1000
[email protected] [email protected]
