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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: July 14, 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 July 14, 1998, the Registrant issued the press release attached as Exhibit
99.1 to announce its results of operations for the second 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 July 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: July 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 July 14, 1998
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Exhibit 99.1
PLATINUM technology Announces Eighth Consecutive Quarter of Meeting or Exceeding
Analyst Expectations at its PLATforum Customer Conference
Net Income Before Charges Increases 105%; Revenue Grows 32%
Oakbrook Terrace, IL, July 14, 1998 -- PLATINUM technology, inc. (Nasdaq: PLAT)
today announced that revenues for the second quarter ended June 30, 1998
increased 32% to $217.4 million from $164.2 million for the same period last
year. Excluding merger and acquired in-process technology charges, income from
continuing operations for the second quarter of 1998 grew 105% to $12.4 million,
or $0.14 per share, compared to $6.1 million, or $0.08 per share, for the second
quarter of 1997. The net loss for the second quarter of 1998 was $58.0 million,
or $0.70 per share, including after-tax charges for merger costs and acquired
in-process technology of $70.5 million, or $0.84 per share. This compares to a
net loss from continuing operations for the second quarter of 1997 of $75.3
million, or $0.97 per share, including after-tax charges for acquired in-process
technology, restructuring and other one-time charges of $81.4 million, or $1.05
per share.
Revenues for the six months ended June 30, 1998 increased 32% to $403.2 million
from $305.4 million for the same period last year. Excluding merger and acquired
in-process technology charges, net income from continuing operations for the
first six months of 1998 was $15.9 million, or $0.18 per share, compared with a
net loss from continuing operations of $3.1 million, or $0.04 per share, for the
comparable prior-year period. Including these charges, the net loss from
continuing operations for the six-month period ended June 30, 1998 was $54.5, or
$0.67 per share, as compared to a net loss of $98.6 million, or $1.28 per share,
for the same period last year.
"This quarter, more than any in our history, exemplifies the momentum that we
have gained," noted Andrew J. (Flip) Filipowski, president and chief executive
officer. "Successful execution of our operating plan has put us into an enviable
position as one of the largest independent software companies. Our ProVision
suite is consistently winning praise from the industry, and orders from our
customers. We continue to strengthen key strategic partnerships, and our product
development and integration strategy continues to deliver business-critical
product offerings for IT infrastructure management."
Filipowski continued, "Notably, second quarter revenue growth was robust, both
in domestic and international markets. In particular, we saw strong growth in
Systems Management, Database Management, Applications Management, Year 2000 and
Consulting Services. As expected, we continue to see customers placing emphasis
on getting their house in order for the millennium. As a result, our Data
Warehouse unit was relatively flat as expected. However, there are strong
indications that the data warehouse trend will reverse within the next three
quarters as more advanced customers move investments back into initiatives which
leverage data to drive competitive advantage."
Michael Cullinane, executive vice president and chief financial officer, added
"Although we were very much involved with the integration of three significant
acquisitions: Logic Works, Mastering and LBMS, we remained completely focused on
maintaining sales momentum in our existing business. The strong quarterly sales
reflect our success at achieving both goals. We were able to quickly find
synergies and initial cost savings. As we go forward, we anticipate that we will
be able to extract further savings out of our integrated operations. We believe
this will allow us to maintain our 30-10 objective for 1998; revenue growth in
excess of 30%, and operating margins of 10%. Additionally, our balance sheet
continues to strengthen with cash reserves of $313 million and days sales
outstanding declining to 88 days."
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"One of the most evident benefits of quickly integrating Logic Works into our
software operations was our ability to leverage existing relationships to form a
major strategic alliance between IBM and Logic Works within a month of closing
the transaction," Filipowski added. "In addition, we were able to quickly
leverage customer relationships and have already signed a number of significant
deals that positively impacted the second quarter."
"It is particularly significant to announce such positive results at PLATforum,
our annual customer conference, surrounded by a record 2,200 attendees. Because
customers are the core of our success, we focus on building and maintaining
strong relationships. This allows us to expand our business with existing
customers while forging partnerships with new customers. We see a business
environment in which our customers are becoming larger and more global and are
looking to partner with companies like PLATINUM for comprehensive software and
service solutions. This is evidenced by the thirty-one (31) million-dollar-plus
orders received during the quarter." Customers placing these orders included:
. EDS
. Bear Stearns
. Greentree Financial Corporation
. CNF Transportation, Inc.
. McCrory Stores
. Phoenix Newspapers, Inc.
Second Quarter Highlights:
Strategic Partnerships
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Microsoft:
. Demonstrated Microsoft Repository 2.0 running on Sun Solaris supporting a
Sybase database, marking another milestone in the PLATINUM/Microsoft
repository collaboration.
IBM:
. Partnered with IBM to remarket and sell ERwin, the industry's most
advanced DB2 data modeling environment. This alliance will help IBM
customers more quickly build critical enterprise applications for IT
environments that are rapidly changing due to business trends like
mergers and acquisitions or e-business.
Hewlett-Packard:
. Partnered with HP to support HP customers in consolidation efforts,
enabling organizations to dramatically improve system performance while
decreasing downtime and management costs. According to a recent Gartner
Group report1, a growing number of organizations are consolidating non-
mainframe servers into their data centers, finding that the most
efficient and effective way to operate a server pool is to have fewer
large servers in select locations.
Network Management Forum (NMF):
. Selected by NMF to provide the first component modeling solution
customized for the telecommunications industry. (NMF is a consortium that
provides management and operational solutions to the global
telecommunications industry.) PLATINUM's Paradigm Plus solution will
enable NMF and its member companies to reuse components and accelerate
the application development process, ultimately delivering
telecommunications products and services to market more quickly.
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Acquisitions
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Logic Works:
. Completed merger with Logic Works, enabling PLATINUM to offer the
industry's best-selling data modeling solution. The acquisition
distinguishes PLATINUM as the leader in enterprise modeling, a market
expected to grow to $1.9 billion by 2001.
LBMS:
. Completed acquisition of 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 acquisition will strengthen PLATINUM's position in the
application infrastructure management market and establish clear
leadership in integrated process and project management.
Mastering:
. Completed merger with Mastering, Inc. The acquisition defines PLATINUM's
leadership in helping organizations address the costly and critical
shortage of skilled IT personnel by delivering effective certification
courses and training solutions for high-demand topics.
Industry Awards
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Delphi Award
. Won a Delphi Excellence in Knowledge Management Award for PLATINUM's
internal sales productivity application, which is designed to facilitate
information sharing throughout the company. The recognition exemplifies
PLATINUM's leadership in document management solutions and its ability
to drive internal efficiencies.
. Announced plans to relicense the award winning application to
DOCUMENTUM(R), Inc., the recognized leader in enterprise document
management solutions.
Products
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Data:
. Solidified PLATINUM's position as a single-source vendor for open,
end-to-end data warehousing for the enterprise with the following
milestones:
. Demonstrated the PLATINUM's second POEMS-enabled suite, an integrated
decision support infrastructure solution as well as a data visualization
technology for decision support.
. Demonstrated continued success in the Microsoft Repository
collaboration, and announced plans to extend the development
relationship with Microsoft.
. Introduced the next generation of DecisionBase, PLATINUM's data
transformation and movement solution, which now supports SAP systems.
Systems:
ProVision:
. Announced additional offerings to be included in ProVision, PLATINUM's
integrated solution for Enterprise Management. The expansion includes:
. Network management
. Systems management
. Database management
. Application management
. Integration with key third-party environments, including the Tivoli
Management Framework and SAP R/3 applications
<PAGE>
Security:
. Expanded AutoSecure security portfolio with the addition of solutions
for intranet and Windows NT security, risk assessment and policy
auditing, secure communications, and standards-based authentication.
InformationWeek recognized PLATINUM's UNIX security offering as the
"best of the products tested," in a March 30 comparative review, beating
tools from Computer Associates, IBM/Tivoli, and Bull HN Information
Systems.
Applications:
. Announced the availability of PLATINUM Raveler, the industry's first Web
infrastructure management solution that addresses content creation,
deployment, production, and measurement.
. The market for solutions like Raveler is increasing dramatically:
Companies are striving to leverage limited resources to turn their
increasingly complex and growing Web sites into strategic business
tools.
. 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.
Visual Computing/Data Visualization:
. Shipped PLATINUM WorldView 2.0 3D-visualization software with Microsoft's
Windows 98 and Internet Explorer3. PLATINUM's 3D software will help Windows
98 customers visualize complex processes and systems to easily manage vast
quantities of information.
. Demonstrated PLATINUM's interactive 3D-decision support software at Intel
Corporation's Pentium II launch to illustrate the power of the new Pentium
II processor. Intel's high-end performance processors, combined with
PLATINUM's advanced data and product visualization technology, enables
business users to power their advanced applications and make better
business decisions.
Year 2000:
. Delivered industry's only desktop Year 2000 solution enabling users to
automatically fix files and prevent errors on multiple desktop applications
and IT to control Year 2000 desktop efforts through intranet deployment.
With more than 60 million PCs currently in use by corporate and government
enterprises4, the risk of Year 2000 errors in critical desktop applications
could result in millions of dollars of lost revenue and opportunity for
organizations worldwide. Market research indicates strong demand for
TransCentury Office, positioning PLATINUM ahead of the competition in
providing Year 2000 tools addressing the desktop.
Industry Reports to Footnote:
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1. "IT Spending: A Barometer of Transition Pace and Direction," K. Dec,
Gartner Group, May 7, 1998
2. InformationWeek, "Best Policy: Consistency," December 22/29, 1997. By
Michael Barnes and Ellen Gottesdiener
3. PLATINUM WorldView technology is pre-installed in the OEM version of
Microsoft Windows 98 via Microsoft Internet Explorer. The WorldView
technology is available as an optional installation for the retail version
for Windows 98.
4. "The Year 2000 Desktop Problem and Training Solutions" GartnerGroup, March
20, 1998
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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; 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.
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PLATINUM technology, inc.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
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1998 1997* 1998 1997*
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<S> <C> <C> <C> <C>
Revenues:
Software products $ 113,408 $ 84,160 $ 204,861 $ 153,369
Maintenance 42,698 34,647 81,617 67,064
Professional services 61,329 45,375 116,675 84,939
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Total revenues 217,435 164,182 403,153 305,372
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Costs and expenses:
Professional services 54,660 41,178 105,153 79,166
Product development and support 59,299 51,161 116,970 98,919
Sales and marketing 73,834 58,437 134,814 117,593
General and administrative 16,510 10,907 32,813 24,284
General and administrative--other --
one-time charges -- 13,513 -- 13,513
Restructuring charges -- 56,063 -- 56,063
Merger costs 39,965 -- 39,965 3,706
Acquired in-process technology 30,465 6,747 30,465 17,164
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Total costs and expenses 274,733 238,006 460,180 410,408
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Operating loss (57,298) (73,824) (57,027) (105,036)
Other income, net 4,628 6,162 10,019 9,187
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Loss before income taxes (52,670) (67,662) (47,008) (95,849)
Income taxes 5,334 2,611 7,534 (2,333)
Income taxes--one-time adjustment
of deferred taxes -- 5,070 -- 5,070
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Loss from continuing operations (58,004) (75,343) (54,542) (98,586)
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Discontinued Operations:
Loss from continuing operations, net of
tax benefit -- (1,477) -- (1,278)
Gain on disposal, net of taxes -- -- -- --
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Net loss $ (58,004) $ (76,820) $ (54,542) $ (99,864)
========= ========== ========== ==========
Net loss per share $ (0.70) $ (0.99) $ ( 0.67) $ (1.30)
========= ========== ========== ==========
Shares used in computing net loss per share 82,331 77,404 81,642 77,003
========= ========== ========== ==========
</TABLE>
* Results for the three and six months ended June 30, 1997 are restated for
mergers accounted for using the pooling-of-interests method.
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PLATINUM technology, inc.
CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997*
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 176,620 $ 233,024
Short-term investment securities 124,221 79,699
Trade accounts receivable 212,873 227,964
Installment accounts receivable 28,946 30,043
Other current assets 56,301 42,508
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Total current assets 598,961 613,238
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Non-current investment securities 11,956 45,481
Property and equipment 86,255 92,165
Purchased and developed software 138,476 117,213
Excess of cost over net assets acquired 63,612 52,759
Non-current installment receivables 44,444 21,912
Other assets 37,611 30,139
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Total assets $ 981,315 $ 972,907
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Acquisition-related payables $ 20,470 $ 15,717
Accounts payable 19,365 23,294
Accrued restructuring costs 1,998 7,391
Other current liabilities 93,762 81,182
Deferred revenue 134,099 128,326
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Total current liabilities 269,694 255,910
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Acquisition-related payables 12,146 18,320
Deferred revenue 69,222 60,435
Deferred rent 6,500 6,197
Accrued restructuring costs 20,918 21,601
Long-term obligations 268,414 267,568
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Total liabilities 646,894 630,031
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Stockholders' equity 334,421 342,876
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Total liabilities & stockholders'
equity $ 981,315 $ 972,907
========= =========
</TABLE>
* The balance sheet as of December 31, 1997 has been restated to give
retroactive effect for mergers accounted for using the pooling-of-interests
method.
