SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
CHEYENNE SOFTWARE, INC.
(Name of Subject Company)
CHEYENNE SOFTWARE, INC.
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
16688810
(CUSIP Number of Class of Securities)
MICHAEL B. ADLER
VICE PRESIDENT AND
GENERAL COUNSEL
CHEYENNE SOFTWARE, INC.
3 EXPRESSWAY PLAZA
ROSLYN HEIGHTS, NEW YORK 11577
(516) 465-4000
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person filing statement)
COPY TO:
BARRY A. BRYER
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019-6150
(212) 403-1000
<PAGE>
This Amendment No. 1 to Schedule 14D-9 Solicitation/
Recomendation Statement amends and supplements the Schedule
14D-9 Solicitation/Recomendation Statement (as amended or
supplemented from time to time, the "Schedule 14D-9") filed
with the Securities and Exchange Commission (the "Commission")
on October 11, 1996 by Cheyenne Software, Inc. (the "Company").
This Schedule 14D-9 relates to the tender offer described in
the Tender Offer Statement on Schedule 14D-1 dated October 11,
1996 (as amended or supplemented from time to time, the
"Schedule 14D-1"), filed by Tse-tsehese-staestse, Inc., a Dela-
ware corporation (the "Purchaser"), which is a wholly owned
subsidiary of Computer Associates International, Inc., a Dela-
ware corporation ("CA"), with the Commission relating to an
offer (the "Offer") by the Purchaser to purchase all the issued
and outstanding shares of common stock of the Company
("Shares") at a price of $30.50 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Purchaser's Offer to Purchase
dated October 11, 1996, as amended or supplemented, and the
related Letter of Transmittal.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
On October 18, 1996, an amendment was filed in the Court
of Chancery of the State of Delaware to a purported class
action complaint against the Company and members of the
Company's board of directors which had been filed in April
1996. The original complaint had alleged substantially, among
other things, that the Company's directors had breached their
fiduciary duties by rejecting an earlier request of McAfee
Associates, Inc. ("McAfee") to negotiate a merger of the Com-
pany and McAfee. The amended complaint alleges that the
Company's directors breached their fiduciary duties by agreeing
to the proposed transaction with CA pursuant to the merger
agreement between the Company, CA and the Purchaser described
in the Schedule 14D-9, allegedly in breach of their duties of
care, loyalty and disclosure. The amended class action
complaint also adds CA as a defendant and alleges that CA aided
and abetted such alleged breaches by the Company's directors of
their fiduciary duties. The plaintiffs seek, among other
things, a preliminary and permanent injunction against the
consummation of the proposed transaction with CA. The amended
complaint is filed as an exhibit to the Schedule 14D-9 and is
incorporated by reference herein; the foregoing description is
qualified in its entirety by reference to such exhibit.<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
1 Merger Agreement*
2 Rights Agreement Amendment*
3 Opinion of Lazard Freres, dated October 7, 1996
(Attached as Annex B to Schedule 14D-9 mailed to
stockholders)*
4 Press Release of the Company and CA, issued
October 7, 1996*
5 Confidentiality Agreement dated October 1, 1996
between CA and the Company*
6 Article Nine of the Restated Certificate of
Incorporation of the Company*
7 Section Seven of the Restated By-Laws of the Company*
8 Letter dated October 11, 1996 from ReiJane Huai to
the stockholders of the Company (Included with
Schedule 14D-9 mailed to stockholders)*
9 Amended Class Action Complaint in Lia Moskowitz v.
ReiJane Huai, et. al. and in Miles Tepper v. ReiJane
Huai et. al. filed in the Court of Chancery of the
State of Delaware
10 Press Release of the Company, issued
October 22, 1996
-2-
_____________________
* Previously filed.<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowl-
edge and belief, I certify that the information set forth in
this statement is true, complete and correct.
October 22, 1996
CHEYENNE SOFTWARE, INC.
By /s/ Elliott Levine
Name: Elliot Levine
Title: Executive Vice
President,
Senior Financial
Officer
and Treasurer
-3-
Exhibit 9
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
------------------------------------x
LIA MOSKOWITZ, :
:
Plaintiff, :
:
- against - : Civil Action No. 14941
:
REIJANE HUAI, RINO BERGONZI, :
RICHARD F. KRAMER, BERNARD RUBIEN, :
GINETTE WACHTEL, CHEYENNE :
SOFTWARE, INC. and COMPUTER :
ASSOCIATES INTERNATIONAL, INC., :
:
Defendants. :
------------------------------------x
MILES TEPPER, :
:
Plaintiff, :
:
- against - : Civil Action No. 14942
:
REIJANE HUAI, RINO BERGONZI, :
RICHARD F. KRAMER, BERNARD RUBIEN, :
GINETTE WACHTEL, CHEYENNE :
SOFTWARE, INC. and COMPUTER :
ASSOCIATES INTERNATIONAL, INC., :
:
Defendants. :
------------------------------------x
AMENDED CLASS ACTION COMPLAINT
Plaintiffs, by their attorneys, allege upon informa-
tion and belief, except for paragraph 5 hereof which is alleged
upon knowledge, as follows:
1. Plaintiffs bring this action on their own behalf
and on behalf of all other public stockholders of Cheyenne
Software, Inc. ("Cheyenne" or the "Company") seeking, inter<PAGE>
alia, to enjoin the proposed acquisition of all of the out-
standing shares of Cheyenne common stock by defendant Computer
Associates International, Inc. ("Computer Associates") for
$30.50 cash per share. The individual defendants, constituting
the Board of Directors of Cheyenne, have breached their fidu-
ciary duties of loyalty, candor and care in connection with the
proposed acquisition of Cheyenne, and Computer Associates has
aided and abetted such breaches.
2. As set forth below, the individual defendants
have placed their own interests above those of the public
shareholders of Cheyenne by agreeing to the proposed transac-
tion by reason of Computer Associates' special relationship
with Cheyenne's senior management and assurances that Computer
Associates would maintain Cheyenne's current management after
the transaction is consummated. The Cheyenne Board recently
rebuffed a financially superior unsolicited proposal to acquire
Cheyenne where such personal relationships and assurances were
not present, to the detriment of Cheyenne's public stockhold-
ers.
3. The individual defendants have agreed to the sale
of Cheyenne without having taken any affirmative steps to maxi-
mize shareholder value, having conducted no auction or market-
check, having failed to contact any potential bidders, and even
having failed to pursue discussions with parties who expressed
-2-<PAGE>
interest in acquiring Cheyenne. In order to discourage any
third party from interfering with the individual defendants'
friendly deal with Computer Associates, the individual defen-
dants have caused Cheyenne to agree to pay a termination fee
plus expenses to Computer Associates of $42.5 million in case
any third party tries to acquire Cheyenne in a superior trans-
action.
4. In an effort to obtain shareholder approval of
the merger and/or to effectively absolve themselves of their
breaches of fiduciary duty, the individual defendants have
sought to portray the transaction as "fair" to Cheyenne share-
holders while withholding vital information needed by the
shareholders to properly assess and consider the transaction.
Specifically, the individual defendants have withheld essential
information concerning contacts by other potential acquirors
which Cheyenne received over the last several months and which
the individual defendants intentionally failed to pursue. Fur-
ther, the individual defendants have withheld entirely the
bases for the so-called "fairness opinion" obtained by Cheyenne
from an investment banker to induce Cheyenne shareholders to
accept the Computer Associates proposal. The public share-
holders, therefore, will be forced, without full or accurate
disclosure by the individual defendants, who are themselves
receiving favored treatment from Computer Associates, to make
-3-<PAGE>
material, irrevocable decisions regarding their investment in
Cheyenne to their detriment.
PARTIES
5. Plaintiffs have owned shares of the common stock
of the Company since prior to the transaction herein complained
of and continuously to date.
6. Defendant Cheyenne is a corporation duly orga-
nized and existing under the laws of the State of Delaware.
The Company develops and sells software for use in micro-
computers and computer systems.
7. Defendant Computer Associates is a corporation
duly organized and existing under the laws of the State of
Delaware. Computer Associates designs and markets standardized
computer software products for mainframe, midrange and desktop
computers.
8. The individual defendants constitute the entire
Board of Directors of Cheyenne. In addition, defendant Reijane
Huai is Chairman of the Board, President and Chief Executive
Officer.
9. The individual defendants are in a fiduciary
relationship with plaintiffs and the other public stockholders
-4-<PAGE>
of Cheyenne and owe them the highest obligations of good faith,
due care, candor and fair dealing.
CLASS ACTION ALLEGATIONS
10. Plaintiffs bring this action on their own behalf
and as a class action, pursuant to Rule 23 of the Rules of the
Court of Chancery, on behalf of all holders of common stock of
the Company (except the defendants herein and any person, firm,
trust, corporation, or other entity related to or affiliated
with any of the defendants) and their successors in interest,
who are or will be threatened with injury arising from defen-
dants' actions as more fully described herein.
11. This action is properly maintainable as a class
action because.
(a) The class is so numerous that joinder of
all members is impracticable. There are approximately
37,538,688 shares of Cheyenne common stock outstanding, owned
by over 870 record shareholders scattered throughout the coun-
try.
(b) There are questions of law and fact which
are common to the class including, inter alia, the following:
(i) whether the individual defendants have breached their fidu-
ciary and other common law duties owed by them to plaintiff and
-5-<PAGE>
the members of the class; (ii) whether the individual defen-
dants have failed to maintain a level playing field and to max-
imize shareholder value in a sale of the Company; and (iii)
whether the class is entitled to injunctive relief as a result
of the individual defendants' wrongful conduct, aided and abet-
ted by Computer Associates.
(c) Plaintiffs are committed to prosecuting
this action and have retained competent counsel experienced in
litigation of this nature. Plaintiffs' claims are typical of
the claims of other members of the class and plaintiffs have
the same interests as the other members of the class. Plain-
tiffs will fairly and adequately represent the class.
(d) The prosecution of separate actions by
individual members of the Class would create the risk of incon-
sistent or varying adjudications with respect to individual
members of the Class which would establish incompatible stan-
dards of conduct for defendants, or adjudications with respect
to individual members of the Class which would as a practical
matter be dispositive of the interests of the other members not
parties to the adjudications or substantially impair or impede
their ability to protect their interests.
(e) Defendants have acted, or refused to act,
on grounds generally applicable to, and causing injury to, the
-6-<PAGE>
Class and, therefore, preliminary and final injunctive relief
on behalf of the Class as a whole is appropriate.
A. Cheyenne Thwarts McAfee's
Unsolicited Proposal
12. On April 15, 1996, Cheyenne announced that it
had rejected an unsolicited offer from McAfee Associates, Inc.
("McAfee") to merge with Cheyenne in a stock-for-stock business
combination. Under the terms of the transaction as then pro-
posed, Cheyenne shareholders would have received approximately
$27.50 in McAfee common stock for each share of Cheyenne common
stock. This consideration represented a premium of approxi-
mately 75% over the April 12, 1996 closing price of Cheyenne
common stock.
13. In response to McAfee's unsolicited merger pro-
posal, Cheyenne adopted a shareholder rights plan to thwart any
takeover attempt unfavored by the individual defendants. The
plan provided, among other things, for an amendment to the by-
laws governing consent solicitations to make an unsolicited
merger more difficult to accomplish.
14. On April 16, 1996, McAfee confirmed that it had
made a bid for Cheyenne. McAfee also stated that it had been
in talks with Cheyenne since November 1995, talks it charac-
terized as "previously friendly merger discussions." McAfee
-7-<PAGE>
also said that it had made a similar proposal to Cheyenne in
February 1996.
15. On April 16, 1996, the Wall Street Journal
reported that McAfee had stated it intended to marshall share-
holder pressure to force Cheyenne to accept its takeover offer.
The news story also reported Cheyenne's response: "We're not
for sale," said Reijane Huai, Cheyenne's president and chief
executive officer. Besides, he said, "McAfee's offer is 'abso-
lutely inadequate from a valuations point of view, from the
point of view of strategic business.'"
16. Additionally, the Wall Street Journal reported
on April 18, 1996 that Cheyenne was refusing to negotiate or to
even talk to McAfee's president and chief executive officer
Bill Larson. The news story stated:
Mr. Larson said he asked Mr. Huai Monday night if he
should still fly to New York to meet Mr. Huai yesterday.
Mr. Huai said he would call back by Tuesday but didn't,
according to Mr. Larson. Yesterday, Mr. Larson called two
outside Cheyenne board members, Richard F. Kramer, CEO of
FAXplus Inc., and Rino Bergonzi, an information-systems
executive at AT&T Corp. Mr. Larson claims these members
were "shocked that Rei wasn't returning my calls," and
would instruct him to do so....
Mr. Larson maintains that he is still open to doing a
friendly deal with Cheyenne. "We're serious about bagging
this bear," he said.
17. Besides refusing to negotiate, Cheyenne also
took active measures to scuttle McAfee's offer. On April 18,
-8-<PAGE>
1996, Cheyenne filed suit against McAfee and Larson for securi-
ties fraud. An April 19, 1996 Wall Street Journal article re-
porting on Cheyenne's lawsuit against McAfee stated that
Cheyenne's chairman and chief executive officer Haui denied
that he had spoken with Larson at any time during the year and
indicated that Larson's statements that the two companies had
been in merger negotiations since November 1995 were a "'sys-
tematic and cynical campaign' to promote the company's unsolic-
ited bid." Cheyenne's lawsuit sought to enjoin McAfee from
"making further false and misleading public statements concern-
ing Cheyenne and from soliciting proxies from shareholders."
18. On or about May 1, 1996, McAfee announced that
it was withdrawing its proposal for the acquisition of Chey-
enne. In a May 2, 1996 article, the New York Times reported
that Larson stated that "'[t]he Cheyenne board's continuing
refusal to discuss our merger proposal has made the combination
impossible to effect on a friendly basis." However, the news
story continued, "Mr. Larson said he would still consider a
'friendly business combination' between the two companies."
(emphasis added).
-9-<PAGE>
B. Cheyenne Agrees To Merge With
Computer Associates Without
Seeking Any Alternatives To
Maximize Shareholder Value
19. On or about October 7, 1996, Cheyenne announced
that it had entered into a merger agreement with Computer
Associates for Computer Associates to acquire Cheyenne through
a cash tender offer followed by a merger for untendered shares,
both steps at a price of $30.50 per share. The merger was
unanimously approved by the Boards of Directors of both Chey-
enne and Computer Associates.
20. The transaction also provides for payment to
Computer Associates of a $37.5 million termination fee and up
to $5 million in expenses if the transaction is not consummated
because the Company is acquired by another party. These
actions were taken to discourage any competing bidders, par-
ticularly McAfee, who might otherwise seek to acquire Cheyenne
at a better price and upon better terms.
21. Additionally, on October 8, 1996, the Wall
Street Journal commented on Computer Associates' agreement to
acquire Cheyenne. The news story noted that "since early May,
McAfee stock is up nearly 80%, while Cheyenne's stock has lan-
guished until recently," causing some analysts to "wonder if
McAfee's overture was a missed opportunity for Cheyenne."
Indeed, Melissa Eisenstat, an investment analyst at Oppenheimer
-10-<PAGE>
& Co. stated "[t]here's no question that this was the wrong
decision from a financial standpoint."
22. In breach of their fiduciary duties to the pub-
lic stockholders of Cheyenne, all of Cheyenne's directors have
voted in favor of the merger. This was done by the individual
defendants primarily to protect the compensation and positions
of Cheyenne's senior management, including director Huai, for,
as reported by the Business Wire on October 7, 1996, all of
Cheyenne's management and employees will be retained by Com-
puter Associates. Charles B. Wang, Computer Associates' chair-
man and chief executive, said that "Cheyenne's employees are an
integral part of the value in this acquisition. In recognition
of their skills and talents, CA intends to retain all of
Cheyenne's employees." Cheyenne's president Huai also stated:
"Equally exciting is the fact that all of us at Cheyenne will
have the opportunity to participate in the next chapter of
Cheyenne's growth."
23. Additionally, an October 8, 1996, a Wall Street
Journal article noted further conflicts between the individual
defendants and the interests of Cheyenne's public shareholders.
The news story stated: "Mr. Wang also took pains yesterday to
clarify the friendly nature of the deal -- a sharp contrast to
the acrimonious feud between Cheyenne and McAfee -- and called
Reijane. Huai, Cheyenne's Chairman and CEO, a "dear friend"
-11-<PAGE>
(emphasis added). The news story also stated that: "Cheyenne
said it didn't contact McAfee to see if it would beat Computer
Associates offer," (emphasis added) despite the fact that
McAfee had earlier indicated that it would be interested in a
"friendly business combination." It is clear that the indi-
vidual defendants have allowed the friendship between Wang and
Huai to supersede the interests of the public shareholders of
Cheyenne.
24. The individual defendants have agreed to the
sale of Cheyenne without having fulfilled their Revlon obliga-
tions to seek to maximize shareholder value.
25. Specifically, despite the expressed interest of
McAfee in pursuing a friendly merger transaction with Cheyenne,
the individual defendants caused Cheyenne to enter into the
merger agreement with Computer Associates without having even
responded to McAfee's continuing expression of interest.
26. Indeed, the individual defendants failed to take
any affirmative steps to seek to maximize shareholder value
through any sort of auction or market-check, in addition to
failing and/or refusing to respond to parties who expressed
interest in acquiring Cheyenne.
-12-<PAGE>
27. The consideration to be paid to Class members in
the proposed acquisition is unfair and grossly inadequate be-
cause, among other things:
a. The intrinsic value of Cheyenne's common
stock is materially in excess of the amount offered for those
securities in the acquisition, giving due consideration to the
anticipated operating results, net asset value, cash flow, and
profitability of the Company; and
b. the consideration to be paid to Class mem-
bers is not the result of an appropriate consideration of the
value of Cheyenne because the Cheyenne Board approved the pro-
posed transaction without undertaking steps to reliably ascer-
tain Cheyenne's value through open bidding or at least a
"market check" mechanism. Indeed, the Cheyenne Board has
failed to even solicit an offer from McAfee, which has publicly
expressed its interest in acquiring Cheyenne.
C. Cheyenne's Public Shareholders Are Misled
28. On or about October 11, 1996, Cheyenne mailed a
Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") to its shareholders recommending and seeking
shareholder acceptance of the transaction.
29. The Schedule 14D-9, in violation of the indi-
vidual defendants' disclosure obligations and duty of candor,
-13-<PAGE>
misrepresents and/or omits to state material information neces-
sary for shareholders to make an informed decision. Specifi-
cally, the Schedule 14D-9 states that Cheyenne did not receive
"any substantial expressions of interest from any [other] par-
ties" about a possible acquisition of the Company at or about
the time of the McAfee proposal, but fails to disclose what
expressions of interest, substantial or otherwise, were made,
or, what efforts, if any, were made to encourage or stimulate
an "insubstantial" expression of interest so that it might be-
come "substantial" in the context of a sale of the Company
which obligates fiduciaries to maximize value.
30. Moreover, the Schedule 14D-9 "discloses" by ob-
vious omission that defendants failed to conduct any sort of
auction or market-check before agreeing to sell the Company.
The Schedule 14D-9 fails to disclose, however, that McAfee, at
the time of withdrawing its April 1996 offer, openly stated
that it remained willing to consider an acquisition on a
friendly basis.
31. The Schedule 14D-9 also fails to disclose that
Computer Associates repeatedly emphasized during its negotia-
tions with Cheyenne that Computer Associates intended that a
merger of the companies would involve no fundamental change in
Cheyenne's management and that all of Cheyenne's employees
would be maintained (though this is disclosed by Computer
-14-<PAGE>
Associates in its Offer To Purchase, addressed to Cheyenne
shareholders, dated October 11, 1996).
32. In order to induce Cheyenne shareholders to
accept the terms of the transaction, the individual defendants
caused Cheyenne to retain an investment banker, Lazard Freres &
Co. LLC ("Lazard Freres") to render a fairness opinion. The
Schedule 14D-9 prominently emphasizes that Lazard Freres deter-
mined that the proposed merger consideration is fair from a
financial point of view. The Schedule 14D-9 fails to disclose,
however, any specific information about how Lazard Freres made
its determination. Thus, completely lacking from the Schedule
14D-9 is any disclosure whatsoever of the criteria, methodology
or results of Lazard Freres' work, including a complete failure
to disclose what range of values Lazard Freres calculated for
Cheyenne.
33. The individual defendants' failure to disclose
the above described information denies Cheyenne's shareholders
critical information necessary to make an informed evaluation
of the fairness opinion and of the fairness of the proposed
merger in its entirety.
34. Computer Associates knowingly aided and abetted
the breaches of fiduciary duty committed by the individual
defendants. Indeed, the proposed transaction could not take
place without the knowing participation of Computer Associates.
-15-<PAGE>
35. Plaintiffs have no adequate remedy at law.
WHEREFORE, plaintiffs demand judgment as follows:
A. declaring this to be a proper class action;
B. enjoining, preliminarily and permanently, the
proposed transaction complained of herein;
C. requiring the individual defendants to make full
and fair disclosure of all material facts to the Class;
D. to the extent, if any, that the transaction com-
plained of is consummated prior to the entry of this Court's
final judgment, rescinding the same or awarding rescissory dam-
ages to the Class;
E. directing that defendants account to plaintiffs
and the Class for all damages caused to them and account for
all profits and any special benefits obtained by defendants as
a result of their unlawful conduct;
F. awarding to plaintiffs the costs and disburse-
ments of this action, including a reasonable allowance for the
fees and expenses of plaintiffs' attorneys and experts; and
-16-<PAGE>
G. granting such other and further relief as the
Court deems appropriate.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By: /s/ Joseph A. Rosenthal
P.O. Box 1070
Suite 1401, Mellon Bank Center
Wilmington, Delaware 19801
Attorneys for Plaintiffs
OF COUNSEL:
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, New York 10016
(212) 779-1414
GOODKIND LABATON RUDOFF
& SUCHAROW, LLP
100 Park Avenue
New York, NY 10017
(212) 907-0700
-17-<PAGE>
CERTIFICATE OF SERVICE
I, JOSEPH A. ROSENTHAL, hereby certify that on October
18, 1996, I caused copies of the foregoing Notice of Filing
Amended Class Action Complaint to be served by hand delivery on:
Kenneth J. Nachbar, Esquire
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street
Wilmington, DE 19801
/s/ Joseph A. Rosenthal
Joseph A. Rosenthal
Exhibit 10
[LETTERHEAD OF CHEYENNE SOFTWARE, INC.]
NEWS RELEASE
Contacts:
ReiJane Huai, President and CEO
Elliot Levine, EVP/CFO
CHEYENNE SOFTWARE, INC.
(516) 465-4000
FOR IMMEDIATE RELEASE
CHEYENNE SOFTWARE, INC. REPORTS FIRST QUARTER
SALES AND EARNINGS RESULTS
--SALES FOR THE FIRST-QUARTER ENDED SEPTEMBER 30, 1996 INCREASED 36%
TO $52.2 MILLION FROM LAST YEAR'S COMPARABLE QUARTER--
--NET INCOME FOR THE FIRST QUARTER WAS 4 CENTS PER SHARE INCLUDING WRITE-OFFS
OF PURCHASED R&D OF ABOUT 20 CENTS PER SHARE, NET OF INCOME TAXES,
VERSUS LAST YEAR'S 19 CENTS PER SHARE THAT INCLUDED A 3 CENTER PER SHARE,
NET OF INCOME TAXES, WRITE-OFF OF PURCHASED R&D --
-- EXCLUDING ONE-TIME FACTORS, EPS FOR FQ197 WERE 24 CENTS
VERSUS 22 CENTS IN LAST YEAR'S COMPARABLE QUARTER --
ROSLYN HEIGHTS, N.Y., October 22, 1996 -- Cheyenne Software, Inc.
(AMEX; CYE) reported that, for the first quarter ended September 30,
1996 (FQ197), revenues were $52,246,000 versus $38,464,000 in last
year's comparable quarter, a 36% increase. Net income for the
quarter was $1,637,000 or 4 cents per share, after a charge for
purchased R&D of 20 cents per share, net of income taxes, for the
previously announced acquisitions of IQ International, Ltd.,
Mediatrends, Inc. and Moniker, Inc. In last year's comparable
quarter, net income was $7,396,000 or 19 cents per share.
Excluding one-time factors, EPS for FQ197 were 24 cents per share
versus 22 cents per share in last year's comparable quarter.
Cheyenne's cash, cash equivalents and investments as of September
30, 1996 were $77,975,000, a $7,048,000 decrease from June 30, 1996
due to the payment of cash consideration in FQ197 in connection with
the previously disclosed acquisitions, as well as the repurchase of
308,900 Cheyenne shares during the quarter.
(more)<PAGE>
CHEYENNE ANNOUNCES FIRST QUARTER RESULTS PAGE 2
ReiJane Huai, Chairman, President and Chief Executive Officer of
Cheyenne, said: "Despite the normal summer seasonality of our
business, we achieved record quarterly sales and strong POS results
(about 15% growth in North America versus FQ496) and reduced
inventories in our global distribution channels. Our NetWare-
related sales remain good, while our NT and desktop sales expanded
significantly."
Pursuant to the October 7, 1996 Merger Agreement among Cheyenne,
Computer Associates International, Inc. ("CA") and a wholly-owned
subsidiary of CA, CA commenced a tender offer on October 11, 1996 to
acquire all of the outstanding shares of Cheyenne's common stock
(with associated rights) for a price of $30.50 per share net to the
seller in cash. The Cheyenne Board of Directors recommends that
Cheyenne stockholders accept the offer and tender their shares to
CA.
About Cheyenne Software
Cheyenne Software, Inc. is an international developer of essential
software solutions for NetWare, Windows NT, UNIX, Macintosh, OS/2,
Windows 3.1 and Windows 95 operating systems. Its enterprise-wide
offerings include an array of storage management, security, and
communications products, including Cheyenne [Registered Mark] HSM,
JETserve [Trademark], InocuLAN [Registered Mark], FAXserve
[Trademark], and its flagship product line, the ARCserve [Registered
Mark] family of network backup software. Cheyenne can be contacted
at (800)243-9462 (U.S. or Canada) or (516) 465-4000, or by visiting
its WWW home page at: http://www.cheyenne.com.
[table follows]<PAGE>
CHEYENNE ANNOUNCES FIRST QUARTER RESULTS PAGE 3
CHEYENNE SOFTWARE, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
Three Months Ended September 30, 1996 and 1995
(Unaudited)
Three Months Ended
Sept. 30,
1996 1995
(In thousands, except per share data)
Revenues $52,246 $38,464
Cost of sales 9,732 6,693
Gross profit 42,512 31,771
Operating expenses:
Research and development 7,476 5,166
Selling and marketing 16,623 11,126
General and administrative 5,441 3,277
Charge for purchased research
and development* 11,061 1,636
Total operating expenses 40,601 21,205
Operating income 1,913 10,566
Non-operating income:
Interest income and other 553 726
Other (losses) gains, net (59) --
Income before income taxes 2,407 11,292
Provision for income taxes 770 3,896
Net income 1,637 7,396
Net income per share 0.04 0.19
Weighted average number of common
shares and equivalents outstanding 38,679 38,829
*acquisition related charges
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