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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: October 15, 1998
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PLATINUM technology, inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-19058 36-3509662
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1815 South Meyers Road, Oakbrook Terrace, Illinois 60181
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (630) 620-5000
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ITEM 5. OTHER EVENTS.
On October 15, 1998, the Registrant issued the press release attached as Exhibit
99.1 to announce its results of operations for the third quarter of 1998. The
information contained in the press release is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Press Release dated October 15, 1998.
2
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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.
PLATINUM technology, inc.
Dated: October 27, 1998 By: /s/ Larry S. Freedman
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Larry S. Freedman
Senior Vice President and General Counsel
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EXHIBIT INDEX
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EXHIBIT NO. EXHIBIT
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99.1 Press Release dated October 15, 1998
4
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Exhibit 99.1
PLATINUM Technology,
For Press Inquiries: For Investor Inquiries:
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Keith Reehl Laura Schonemann Maria McAuslan
PLATINUM technology, inc. Cunningham Communication PLATINUM technology, inc.
(630) 691-0681 (617) 494-8202, x. 4218 (630) 691-0771
[email protected] [email protected] [email protected]
- --------------------------- ------------------------ -------------------------
FOR IMMEDIATE RELEASE
PLATINUM TECHNOLOGY'S THIRD QUARTER REVENUES GROW 31%,
EARNINGS PER SHARE INCREASES 35% TO $0.23
OAKBROOK TERRACE, IL -- October 15, 1998 -- PLATINUM technology, inc. (Nasdaq:
PLAT) today announced its financial results for the third quarter ended
September 30, 1998. Revenues for the quarter reached $250.3 million, a 31%
increase over revenues of $190.8 million for the same period in 1997. Net
income for the quarter from continuing operations, excluding acquired in-process
technology charges, also increased to $21.6 million, or $0.23 per diluted share,
from $13.8 million, or $0.17 per diluted share for the same period last year.
Giving effect to these charges, net income for the quarter was $19.4 million, or
$0.21 per share. Acquired in-process technology charges for the third quarter
ended September 30, 1998 were $2.2 million, or $0.02 per share.
For the nine months ended September 30, 1998, PLATINUM posted revenues of $653.5
million, up 32% from revenues of $496.2 million for the same period in 1997.
Excluding charges for merger costs and acquired in-process technology, net
income from continuing operations for the first nine months of 1998 grew to
$37.4 million, or $0.41 per share, from $10.7 million, or $0.13 per share, for
the comparable prior-year period. Including these charges, the net loss from
continuing operations for the nine months ended September 30, 1998 was $35.2
million, or $0.42 per share, as compared to $84.8 million, or $1.10 per share,
for the same period last year.
"We are extremely pleased that we have been able to meet or exceed earnings
expectations for the ninth consecutive quarter," said Andrew J. "Flip"
Filipowski, president and chief executive officer. "Our performance is a direct
result of having built a global enterprise with a balanced product portfolio."
"We remain on course and have created an enduring, thriving independent software
company. PLATINUM is one of the few leaders in the industry able to anticipate
customer needs, acquire and integrate the necessary technology components, and
deliver complete product suites to a global market," Filipowski added.
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PLATINUM technology, inc.
1815 S. Meyers Road, Oakbrook Terrace, IL 60181
630.620.5000 800.442.6861 Fax 630.691.0710
www.platinum.com
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PLATINUM technology, inc. Page 2 of 7
"Having a broad product and services offering continues to be a key competitive
advantage to attracting new customers and maintaining strong long-term customer
relationships," said Filipowski. "Additionally, our global diversity and breadth
of products allows us to even out the ebb and flow of sales between
international and domestic markets and between product categories."
"Management remains focused on our stated goal of delivering operating margins
of over 10% for 1998," said Michael Cullinane, executive vice president and
chief financial officer. "Our performance this quarter demonstrated our ability
to maintain an aggressive posture while continuing to successfully control costs
in both existing and newly integrated businesses. As we enter the fourth
quarter, historically PLATINUM's strongest, we are confident about our
performance but are cognizant of the market's perception of the economic and
financial market vulnerabilities."
THIRD QUARTER HIGHLIGHTS:
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Customer Wins
During the third quarter, PLATINUM secured 32 "million-plus" dollar license and
service agreements worldwide up from 25 in the same quarter last year. The deals
executed in this quarter include:
. Canada Life Assurance
. PJM Interconnection
. Southern Company Services
. Total System Services, Inc.
. Republic Industries, Inc.
Industry Recognition
. Recognized by DM Review, the leading data warehouse publication, as one of
four top data warehousing vendors along with IBM, Oracle, and SAS Institute.
More than 600 DM Review readers ranked PLATINUM as a vendor of choice based
on product usage and vendor relationship.
. Recognized by the International Engineering Consortium with InfoVision Award
for excellence in 3D visualization, reinforcing PLATINUM's leadership in Web-
enabled 3D technology. PLATINUM's VRCreator was chosen based on its
innovation, uniqueness, market impact, customer benefits, and value to
society.
. Delivered CEO Keynote at COMDEX/Enterprise in San Francisco. Andrew "Flip"
Filipowski discussed his views on information technology, which has been
recognized as a driving force capable of powering organizations to
unparalleled global success.
Strategic Partnerships
Microsoft:
. Extended collaborative development agreement in enterprise metadata
management to deliver the next version of Microsoft Repository, representing
continued success in the PLATINUM/Microsoft alliance.
. Signed bundling agreement to ship PLATINUM ProVision's "quick start agent"
with each copy of Microsoft's Windows NT 5.0 operating system, maximizing
PLATINUM's access and visibility to millions of Microsoft NT users.
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PLATINUM technology, inc. Page 3 of 7
. Announced PLATINUM application lifecycle and data management tool support for
the Microsoft Visual Studio 6.0 development system for the creation and
management of enterprise applications. The alliance will dramatically speed
development and improve management of enterprise-wide applications for
millions of developers utilizing Visual Studio construction tools.
Symantec:
. Entered into a strategic business alliance that will benefit customers
through expanded product and service offerings in key IT areas, including
security and application development.
. PLATINUM will offer Symantec's Norton AntiVirus as an extension of its
enterprise information security and desktop management solutions.
. PLATINUM will also become a preferred consulting and education provider in
support of Visual Cafe for Java Enterprise Suite, Symantec's development tool
for building Java-based applications.
New Business Unit
Internet Commerce:
. Launched new Internet Commerce Division to deliver enterprise-class solutions
for electronic-business.
. PLATINUM is now positioned as a leading industry source for Internet
solutions to quickly exploit new market opportunities, streamline internal
business processes, and strengthen sales and distribution.
. The new division consolidates PLATINUM's comprehensive products, services,
and talent for building and managing enterprise-class Internet systems and
applications.
. Integrated the technology and talent from Cosmo Software and Intervista
Software into PLATINUM, accelerating plans to deliver powerful 3D-enabled
enterprise computing solutions and driving advances in Internet and
visualization technology.
. Announced the availability of PLATINUM Raveler, the industry's first Web
infrastructure management solution that addresses content creation,
deployment, production, and measurement.
. Forrester Research recently reported that the average number of pages for Web
sites in large organizations increased 280 percent within the last year while
Web site teams grew minimally. This challenge is exacerbated by the need to
integrate multiple data types, including audio and video, and perform rapid
content updates.
Acquisitions
. Signed definitive agreement to acquire MEMCO Software, Ltd., a leading
provider of information security software which will expand PLATINUM's
security product portfolio, professional service, and development expertise,
establishing PLATINUM as the dominant force in the enterprise security
market. Company expecting deal to close January, 1999.
. On September 9, 1998 MEMCO and PLATINUM filed Hart-Scott-Rodino Notification
and Report Forms for the proposed PLATINUM acquisition of MEMCO. On October
9, 1998, the Department of Justice issued a request for additional
information for documents related to the acquisition. This request extends
the waiting period until twenty days after PLATINUM and MEMCO have provided
the requested information, during which time the proposed acquisition may not
be consummated. PLATINUM and MEMCO are continuing to proceed based on their
original schedule, which provides for closing of the acquisition in the
beginning of 1999. The parties intend to promptly respond to the Department
of Justice and continue to be committed to the transaction.
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PLATINUM technology, inc. Page 4 of 7
PRODUCTS AND SERVICES
Global Consulting and Education:
. Announced IT training for Microsoft Certified Systems Engineer (MCSE) exam
preparation, addressing the industry-wide shortage for IT expertise,
including Internet and Microsoft Windows NT skills.
. Announced that Unisys Corporation selected PLATINUM to provide MCSE
certification training through 1999 to existing field personnel and new
hires.
Application Lifecycle:
. Entered a strategic alliance with james martin + co, a worldwide IT
management and consulting firm, to offer the industry's premier process and
project management solution. Gartner Group rates PLATINUM and james martin +
co as the leaders in application development process management. PLATINUM
will become the primary provider of james martin + co's acclaimed library of
application development processes, to provide customers with a unique
collection--in breadth, depth, and quality--of process guidance for IT
projects.
. Announced PLATINUM's ERwin Link for PeopleSoft to help customers streamline
PeopleSoft integration with other enterprise resource planner systems,
accelerate customization, and minimize risks of modifying PeopleSoft
implementations. The new tool satisfies a major PeopleSoft and ERwin user
demand for a solution that provides accurate, detailed documentation in a
widely accepted format.
Data Warehousing and Year 2000:
. Announced DecisionBase for SAP, PLATINUM's complete data transformation and
movement solution. Reinforced leadership in providing open, end-to-end data
warehousing for the enterprise.
. Delivered industry's only desktop Year 2000 solution enabling users to
automatically fix files and prevent errors on multiple desktop applications.
TransCentury Office also enables IT to control Year 2000 desktop efforts
through intranet deployment. With more than 60 million PCs currently in use
by corporate and government enterprises, the risk of Year 2000 errors in
critical desktop applications could result in millions of dollars of lost
revenue and opportunity for organizations worldwide.
Systems Management:
. Announced additional offerings to be included in ProVision, PLATINUM's
integrated solution for Enterprise Management. ProVision now enables
organizations to effectively manage: desktops, applications, networks,
databases, and servers. Also announced integration with key third-party
environments, including the Tivoli Management Framework and SAP R/3
applications.
ABOUT PLATINUM TECHNOLOGY
PLATINUM technology, headquartered in Oakbrook Terrace, Illinois, had 1997
revenues of $739 million. PLATINUM provides software and services that help IT
organizations manage and improve the IT infrastructure. Solutions include
database and systems management, data warehousing and decision support,
application lifecycle, Internet commerce, and Year 2000 reengineering. For
information, visit www.platinum.com.
# # #
All PLATINUM technology, inc. product names and product category names are
trademarks of PLATINUM technology, inc. Other company names and product names
referenced herein may be trademarks or registered trademarks of the respective
corporation.
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PLATINUM technology, inc. Page 5 of 7
SAFE HARBOR PROVISION:
This press release contains certain "forward-looking statements," including the
statement regarding revenue growth and operating margin objectives for 1998,
that reflect PLATINUM's expectations regarding its future growth, results of
operations, performance, and business prospects and opportunities. Words such
as, "estimates," "believes," "anticipates," "plans" and similar expressions have
been used to identify these forward-looking statements, but are not the
exclusive means of identifying these statements. These statements reflect
PLATINUM's current beliefs and are based on information currently available to
PLATINUM. Accordingly, these statements are subject to known and unknown risks,
uncertainties and other factors that could cause PLATINUM's actual growth,
results, performance and business prospects and opportunities to differ from
those expressed in, or implied by, these statements. These risks, uncertainties
and other factors include PLATINUM's ability to develop and market existing and
acquired products for the IT infrastructure market; PLATINUM's ability to
successfully integrate its acquired products, services and businesses and
continue its acquisition strategy; risks related to the Year 2000 challenge;
PLATINUM's ability to adjust to changes in technology, customer preferences,
enhanced competition and new competitors in the IT infrastructure and
professional services markets; currency exchange rate fluctuations, collection
of receivables, compliance with foreign laws and other risks inherent in
conducting international business; risks associated with conducting a consulting
services business; the risk of product bugs; general economic and business
conditions, which may reduce or delay customers' purchases of PLATINUM's
products and services; charges and costs related to acquisitions; and PLATINUM's
ability to protect its proprietary software rights from infringement or
misappropriation, to maintain or enhance its relationships with relational
database vendors, and to attract and retain key employees. PLATINUM is not
obligated to update or revise these forward-looking statements to reflect new
events or circumstances or otherwise.
BALANCE SHEET AND STATEMENT OF OPERATIONS FOLLOW
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PLATINUM technology, inc.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Revenues:
Software products $ 138,793 $ 107,050 $ 343,654 $ 260,419
Maintenance 43,165 35,095 124,782 102,159
Professional services 68,368 48,665 185,043 133,604
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Total revenues 250,326 190,810 653,479 496,182
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Costs and expenses:
Professional services 61,376 42,853 166,529 122,019
Product development and support 61,048 51,520 178,018 150,439
Sales and marketing 82,240 67,212 217,054 184,805
General and administrative 16,617 14,699 49,430 38,983
Restructuring and other one-time charges - - - 69,576
Merger costs - - 39,965 3,706
Acquired in-process technology 2,150 - 32,615 17,164
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Total costs and expenses 223,431 176,284 683,611 586,692
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Operating income (loss) 26,895 14,526 (30,132) (90,510)
Other income, net 1,710 5,534 11,729 14,721
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Income (loss) from continuing operations before
income taxes 28,605 20,060 (18,403) (75,789)
Income taxes 9,220 6,295 16,754 3,962
Income taxes- one-time adjustment
of deferred taxes - - - 5,070
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Income (loss) from continuing operations 19,385 13,765 (35,157) (84,821)
---------- ---------- ---------- ----------
Discontinued Operations:
Loss from continuing operations, net of
tax benefit - (580) - (1,858)
Gain on disposal, net of taxes - 833 - 833
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Net income (loss) $ 19,385 $ 14,018 $ (35,157) $ (85,846)
========== ========== ========== ==========
Net income (loss) per share - basic $ 0.23 $ 0.18 $ (0.42) $ (1.11)
========== ========== ========== ==========
Net income (loss) per share - diluted $ 0.21 $ 0.17 $ (0.42) $ (1.11)
========== ========== ========== ==========
Shares used in computing per share amounts - basic 85,568 78,253 82,965 77,457
========== ========== ========== ==========
Shares used in computing per share amounts - diluted 101,093* 82,437 82,965 77,457
========== ========== ========== ==========
</TABLE>
* The diluted weighted average shares outstanding for the three months ended
September 30, 1998 reflect common stock equivalents, including the
convertible subordinated notes due 2002. In computing diluted earnings per
share for this period, tax-effected interest expense of $1,358 was added back
to net income to reflect the assumed conversion of these notes.
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PLATINUM technology, inc.
CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 110,809 $ 233,024
Short-term investment securities 144,567 79,699
Trade accounts receivable 248,753 227,964
Installment accounts receivable 31,685 30,043
Other current assets 52,052 37,843
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Total current assets 587,866 608,573
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Non-current investment securities 28,290 45,481
Property and equipment 90,179 92,165
Purchased and developed software 152,258 117,213
Excess of cost over net assets acquired 62,338 52,759
Non-current installment receivables 66,419 21,912
Other assets 29,784 34,804
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Total assets $ 1,017,134 $ 972,907
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Acquisition-related payables $ 20,470 $ 15,717
Accounts payable 22,547 23,294
Accrued restructuring costs 3,761 7,391
Other current liabilities 94,708 81,182
Deferred revenue 128,580 128,326
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Total current liabilities 270,066 255,910
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Acquisition-related payables 8,044 18,320
Deferred revenue 76,089 60,435
Deferred rent 6,553 6,197
Accrued restructuring costs 10,463 21,930
Long-term obligations 268,668 267,239
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Total liabilities 639,883 630,031
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Stockholders' equity 377,251 342,876
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Total liabilities & stockholders' equity $ 1,017,134 $ 972,907
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</TABLE>
