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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: April 16, 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, 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 April 14, 1998, the Registrant issued the press release attached as Exhibit
99.1 to announce its results of operations for the first 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 April 14, 1998.
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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: April 16, 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 April 14, 1998
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Analyst Contact: Investor Contact: Media Contact:
Michael Cullinane Maria Dalesandro Karen Andre
Chief Financial Officer IR Coordinator Public Relations Manager
(630) 620-5000 (800) 655-9985#5 (630) 691-0649
PLATINUM technology ACHIEVES FIRST QUARTER OPERATING
PROFITABILITY; EXCEEDS ANALYST CONSENSUS EXPECTATIONS
Company reports revenue increase of 37 percent, EPS of $0.05
OAKBROOK TERRACE, IL--April 14, 1998--PLATINUM technology, inc. (Nasdaq: PLAT)
reported an operating profit in what has historically been the company's most
challenging quarter. Net income for the first quarter of 1998 was $3.7 million,
or $0.05 per diluted share. This compares with a net loss of $11.1 million, or
$0.18 per diluted share, excluding charges for merger costs and acquired in-
process technology, for the first quarter of 1997. The net loss for the first
quarter of 1997 was $25.3 million, or $0.41 per diluted share, including after-
tax charges of $14.1 million, or $0.23 per diluted share, for merger costs and
acquired in-process technology. Revenues for the first quarter of 1998 grew by
37 percent, reaching $158.3 million compared with $115.6 million achieved in the
first quarter of the prior year.
"This was a momentous quarter for PLATINUM," said Andrew J. (Flip) Filipowski,
president and chief executive officer. "We have grown the business aggressively,
managed expense growth effectively, and achieved operating profitability in what
is typically our most difficult quarter. This is particularly impressive during
a period of intense acquisition activity for PLATINUM, as well as the industry.
Over the last three years, we have built exceptional distribution and
acquisition capabilities that we continue to leverage in order to maximize the
company's value. Most gratifying is that we have been able to accomplish this
while maintaining our business ethic and belief that true value creation can
only be accomplished by balancing the needs of all of our constituents:
shareholders, customers, and employees. We believe PLATINUM has taken a
leadership position in our consolidating industry and is emerging as one of the
handful of billion dollar software companies."
Filipowski noted that both license and services revenue grew over 40 percent,
demonstrating the strong acceptance of PLATINUM's products, services, and
overall strategy in the market. He added that international sales for the
quarter were strong, particularly in Europe, which benefited from an injection
of new, industry-seasoned management talent.
Within the individual business units, performance in the database and systems
management areas were especially impressive. Filipowski commented that he was
pleased with the market reception for ProVision, which was recently recognized
by Information Week magazine for its flexibility and return on customer
investment.
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PLATINUM technology, inc. Page 2 of 5
Michael Cullinane, executive vice president and chief financial officer, noted
that results for the quarter were stronger than expected. "We continued to focus
on the bottom line, delivering positive operating margins in a quarter in which
most analysts expected us to report an operating loss. We accomplished this by
growing revenues 37 percent and holding expense growth to 17 percent. PLATINUM's
management team is committed to increasing operating margins, which we expect to
be approximately 10 percent for 1998."
Cullinane added that, during the quarter, the company announced three strategic
acquisitions. "As we continue to grow our business, we expect to be selective
about the companies that we acquire and also expect every acquisition to be
accretive."
First Quarter Highlights:
Customer Wins
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During the first quarter, PLATINUM secured 29 "million-plus" dollar license and
service agreements worldwide. This is more than double the number of million-
plus dollar deals executed in the first quarter of 1997. The deals executed in
this quarter include:
. America West Airlines
. Hertz
. State of Nevada
Strategic Partnerships and Acquisitions
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Intel:
. Completed the first milestone of PLATINUM and Intel collaboration with the
development of a new version of LANDesk Configuration Manager, desktop
configuration software solution, which can be installed on new or existing
Intel-based servers. International Data Corporation (IDC) estimates there
will be more than five million Intel-based servers installed worldwide by
the end of 1998, and that 1998 shipments of new Intel-based desktop PCs
will exceed 63 million--indicating a significant market potential for
LANDesk Configuration Manager.
Logic Works:
. Signed an agreement to acquire Logic Works, Inc., which offers the
industry's best-selling data modeling solution. The acquisition will
distinguish PLATINUM as the leader in enterprise modeling, a market
expected to grow to $1.9 billion by 2001. Additionally, the combination of
PLATINUM and Logic Works will offer a number of synergies, spanning three
of PLATINUM's four business units, which will provide an unparalleled
solution for application developers, database administrators, and data
warehouse managers.
Learmonth and Burchett Management Systems (LBMS):
. Signed an agreement to acquire LBMS, a recognized leader of process
management solutions to Fortune 1000 organizations. In a recent Gartner
Group advisory, both PLATINUM and LBMS were singled out as leaders in
process management. The
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PLATINUM technology, inc. Page 3 of 5
acquisition will strengthen PLATINUM's position in the application
infrastructure management market and establish clear leadership in
integrated process and project management.
Mastering, Inc.:
. Signed an agreement to acquire the training expert, Mastering, Inc.,
to help organizations address the costly and critical shortage of
skilled IT personnel. This transaction will enable PLATINUM to deliver
effective certification courses and training solutions for high-demand
topics, such as Windows NT, Windows 95, and Internet/intranet
technologies, thus reinforcing PLATINUM's position as a leading
provider of products and services to help manage and improve the IT
infrastructure.
Hewlett-Packard:
. Announced the acquisition of HP's Intelligent Warehouse family of
products, which includes Intelligent Warehouse and DataMart Manager.
The deal will enable PLATINUM to bring HP Intelligent Warehouse to the
enterprise and more closely link its data warehouse solutions with its
database and systems management solutions, thus building on its
strength in delivering software for managing data warehouses.
Lucent Technologies:
. Partnered with Lucent Technologies to deliver the industry's only data
visualization tool to speed Year 2000 analysis and decision making.
TransCentury Visualization will help organizations that are just
beginning Year 2000 reengineering to accelerate the project and meet
the approaching deadline. The tool can cut in half the time needed to
analyze the output from the impact analysis phase when assessing the
impact of Year 2000 date changes on an organization's mainframe
application portfolio.
Industry Awards
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Network Computing, Editors Choice Award for enterprise-level database tools:
. PLATINUM's Enterprise DBA, chosen for managing database administration
across an enterprise, beat out BMC Patrol and Tivoli TME 10 database
tools, and was deemed to "provide the greatest range of functions--
user administration, schema and content management, and, with its
DBVision add-on, database monitoring."
Application Development Trends, "Innovator Awards":
The following PLATINUM customers were nominated and recognized:
. Royal Bank of Canada--PLATINUM Repository delivered improved data
warehouse capabilities by bank personnel, improved time to market, and
reduced application support and maintenance costs.
. Cerner Corporation--PLATINUM Paradigm Plus enabled Cerner to save time
and costs in producing documentation required by FDA as part of
Cerner's regulatory responsibilities.
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PLATINUM technology, inc. Page 4 of 5
Products
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DecisionBase:
. Announced the release of DecisionBase, the first solution to help IT users
quickly build and deploy data marts and warehouses based on powerful data
movement technology and the market's best-selling enterprise repository.
DecisionBase demonstrates the first phase of integration of PLATINUM's data
warehousing tools with its enterprise repository and is the industry's only
solution to accelerate data warehousing creation and to build strong
enterprise information architecture.
About PLATINUM technology
PLATINUM technology, headquartered in Oakbrook Terrace, Illinois, with 1997
revenues of more than $600 million, 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 infrastructure management, and Year 2000 reengineering. For
information, visit www.platinum.com.
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All PLATINUM 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 5
Safe Harbor Provision:
This press release contains certain "forward-looking statements," including the
statement regarding expected operating margins for 1998, that reflect PLATINUM's
expectations regarding its future growth, results of operations, performance,
and business prospects and opportunities. Words such as, "expects," "estimates,"
"believes," "anticipates," "predicts," "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; 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.
FINANCIAL TABLES FOLLOW...
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<TABLE>
<CAPTION>
PLATINUM technology, inc.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
March 31,
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1998 1997
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<S> <C> <C>
Revenues:
Software products $ 81,344 $ 57,639
Maintenance 34,403 28,947
Professional services 42,514 29,037
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Total revenues 158,261 115,623
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Costs and expenses:
Professional services $ 37,504 $ 28,510
Product development and support 53,329 44,136
Sales and marketing 52,774 50,472
General and administrative 13,659 11,468
Merger costs - 3,706
Acquired in-process technology - 10,417
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Total costs and expenses 157,266 148,709
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Operating income (loss) 995 (33,086)
Other income 4,248 2,306
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Income (loss) before income taxes 5,243 (30,780)
Income taxes 1,578 (5,511)
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Net income (loss) $ 3,665 $ (25,269)
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Net income (loss) per share - basic $ 0.06 $ (0.41)
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Shares used in computing net income (loss)
per share - basic 64,249 60,947
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Net income (loss) per share - diluted $ 0.05 $ (0.41)
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Shares used in computing net income (loss)
per share - diluted 70,756 60,947
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PLATINUM technology, inc.
CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $130,241 $178,138
Short-term investment securities 133,271 57,597
Trade accounts receivable 197,750 212,731
Installment accounts receivable 25,432 30,043
Other current assets 46,303 32,679
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Total current assets 532,997 511,188
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Non-current investment securities 7,254 25,553
Property and equipment 76,311 77,842
Purchased and developed software 126,762 116,717
Excess of cost over net assets acquired 49,853 52,759
Non-current installment receivables 41,066 21,912
Other assets 25,641 28,206
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Total assets $859,884 $834,177
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Acquisition-related payables $ 16,654 $ 15,717
Accounts payable 20,869 16,091
Accrued restructuring costs 5,671 6,308
Other current liabilities 56,882 68,349
Deferred revenue 119,027 116,374
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Total current liabilities 219,103 222,839
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Acquisition-related payables 15,102 18,320
Deferred revenue 71,601 60,435
Deferred rent 6,379 6,197
Accrued restructuring costs 15,308 16,002
Long-term obligations 266,439 266,824
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Total liabilities 593,932 590,617
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Stockholders' equity 265,952 243,560
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Total liabilities & stockholders' equity $859,884 $834,177
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