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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: February 9, 1999
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PLATINUM technology International, 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 February 8, 1999, the Registrant issued the press release attached as Exhibit
99.1 to announce its unaudited results of operations for the quarter ended
December 31, 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 February 8, 1999
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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 International, inc.
Dated: February 9, 1999 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 February 8, 1999
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For Press Inquiries For Investor Inquiries
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Karen Andre Maria McAuslan
PLATINUM technology PLATINUM technology
(630) 691-0649 (630) 691-0771
[email protected] [email protected]
PLATINUM technology Achieves 64 Percent Earnings Growth for 1998
Annual operating margin grows to 10 percent, reflecting strong product sales
OAKBROOK TERRACE, IL - February 8, 1999 PLATINUM technology (NASDAQ: PLAT) today
announced that revenues for the fourth quarter ended December 31, 1998 increased
30 percent to $314.7 million from $242.7 million in the fourth quarter of 1997.
Net income for the fourth quarter of 1998, excluding charges, increased 7
percent to $38.1 million, or $0.40 per diluted share, as compared to $35.4
million, or $0.39 per diluted share, for the fourth quarter of 1997. Net income
for the fourth quarter of 1998 was $32.7 million, or $0.34 per diluted share,
including after-tax charges of $5.4 million, or $0.06 per diluted share, as
compared to a net loss of $20.3 million, or $0.25 per share, including after-tax
charges of $55.7 or $0.64 per share, in the fourth quarter of 1997.
For the year ended December 31, 1998, revenues increased 31 percent to $968.2
million from $738.9 million for 1997. Net income for 1998, excluding charges,
increased 64 percent to $75.5 million, or $0.82 per diluted share, as compared
to $46.1 million, or $0.56 per diluted share from continuing operations in 1997.
For 1998, the net loss was $2.5 million, or $0.03 per share, including after-tax
charges of $78.0 million, or $0.85 per share, as compared to a net loss of
$106.1 million, or $1.36 per share, including after-tax charges of $151.2
million, or $1.92 per share for 1997.
"We move into 1999 with a strong commitment to increase shareholder value by
streamlining our operations," noted Andrew J. (Flip) Filipowski, president and
chief executive officer. "After completing an in-depth review of our business,
we have determined the best course of action includes: consolidation of
investment and redeployment of resources to our most profitable product lines,
suspension of acquisitions as we focus on our existing business, and greater
focus on strengthening our relationship with our most valued customers. We will
move quickly to execute our plan in order to
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increase our momentum in the market, deliver sustainable growth, and increase
profitability and shareholder value."
Michael Cullinane, executive vice president and chief financial officer,
emphasized, "The company reached nearly a billion in revenue, achieved positive
cash flow from operations, and reported a strong balance sheet with over $300
million in cash. In addition, operating margins increased to 10 percent for
1998 from 6 percent in 1997."
Cullinane continued, "The company achieved important milestones with total
product revenue growing 32 percent for the year, and international contributing
to over one third of the company's total fourth quarter revenue. Although there
was a shortfall in our services margin, we are taking aggressive action to
strengthen our Global Consulting Organization and have already put in place a
number of changes. As we look toward 1999, we intend to streamline our
operations to deliver strong margins going forward."
PLATINUM noted the SEC has declared effective the company's registration
statement on Form S-4. The company expects this transaction will close by March
1999. Conclusion of this transaction is contingent upon final approval of MEMCO
shareholders and Israeli regulatory authorities.
Note: For purposes of this press release "charges" include any or all of the
following: merger costs, acquired in-process technology charges, restructuring
charges, and other one-time charges.
Fourth Quarter Highlights
Customer Wins
In 1998, PLATINUM secured 147 "million-plus" dollar license and service
agreements worldwide. Of these, 55 closed in the fourth quarter, up from 40 in
the same quarter last year. The deals executed this quarter include:
. ADP Financial Services
. Bear Stearns
. FT Mortgage
. KBC Bank en Verzekering
. West Group
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Industry Recognition
PLATINUM amassed more than 55 industry awards and achievements throughout 1998.
Those achieved in the fourth quarter include:
. Selected as one of the top four data warehousing providers by DM Review
readers, reinforcing PLATINUM's leadership in the data warehousing space.
. Secured Intelligent Enterprise's Readers' Choice award for PLATINUM ERwin,
representing the tool's seventh consecutive win.
. Earned PeopleSoft certification for PLATINUM AutoSys, the first job scheduler
to become recognized by PeopleSoft for full compatibility with one of the
industry's fastest-growing ERP applications.
. Recognized by Hewlett-Packard for PLATINUM AutoSys and PLATINUM TSreorg as
key tools supporting the HP Rapid/IT infrastructure service for PeopleSoft
environments
Strategic Partnerships
In 1998, PLATINUM struck more than 15 strategic partnerships with some of the
information technology industry's largest players, such as Intel, Lucent, James
Martin & Company, and Symantec. Alliances struck in the fourth quarter include:
. Microsoft: Launched a partner program for independent software vendors to
license Microsoft Repository on leading non-Microsoft platforms and
databases. PLATINUM will port the Microsoft Repository engine to non-
Microsoft platforms and promote the Open Information Model, co-developed by
PLATINUM and Microsoft, as the industry standard.
. Compaq: Signed an agreement through which PLATINUM is providing enterprise
management solutions for the OpenVMS operating system from Compaq. PLATINUM
will deliver market-proven systems and database management tools to OpenVMS
customers.
. IONA Technologies: Paired PLATINUM's enterprise computing expertise and
global services with IONA's industry-leading middleware for enabling
mainframe applications to communicate with applications on other platforms.
This software and services combination is enabling organizations to more
quickly integrate their existing mainframe applications with other IT
systems, extending the life of critical applications.
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Products and Services
Application Development:
. Enhanced PLATINUM ADvantage, PLATINUM's suite of integrated application
development management tools that enables development managers to more easily
automate and accelerate their processes to deliver applications on time and
within budget. Enhancements included:
. integration with LogicWorks' ERwin and BPwin;
. integration of LBMS' process management tools with PLATINUM's project
management solution, Process Continuum; and
. Web enablement for PLATINUM ADvisor, the market-leading information and work
management "dashboard" for better monitoring the pulse of application
development environments.
. Delivered PLATINUM SQL-Compass, a first-of-its-kind solution that enables
application developers to visualize and understand the interaction between
applications and databases. PLATINUM SQL-Compass reduces database application
maintenance, minimizes the risk of implementing erroneous changes to
databases, and eliminates the need to re-code database applications manually.
Database and Systems Management:
. Launched PLATINUM's Database Vitality for PeopleSoft program at the
PeopleSoft Users' Conference to help customers ensure maximum availability
and performance of the DB2 databases supporting PeopleSoft applications and
aid administrators in recovering and managing DB2 databases more quickly and
easily.
. Announced PLATINUM ProVision for Oracle, the industry's only modular
enterprise management suite addressing applications, databases, desktops,
networks, and servers.
Data Warehousing:
. Reinforced leadership in enterprise metadata management with the introduction
of the next generation of PLATINUM Repository, providing end users with
extended navigation capabilities and access to more types of metadata for
easier access. As part of the key enhancements, PLATINUM successfully
integrated powerful features of Universal Director, recently acquired from
LogicWorks.
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. Announced Forest & Trees 6.0, the industry's first web-enabled rapid decision
support development solution with powerful true 3D data visualization
technology. The solution represented PLATINUM's first 3D enterprise computing
solution and the realization of the first phase of the company's visual
computing strategy.
Global Consulting Organization:
. Strengthened the foundation of the Global Consulting Organization by aligning
it more closely with the product business and bringing on new seasoned senior
management, including Hal Carr as Executive Vice President of GCO.
Internet Commerce:
. Secured significant new business wins for this newly founded and rapidly
growing business unit. Customer wins for PLATINUM and its vivid studios
subsidiary included Lycos, FinAid, American Century, HealthAxis, and the
International Academy of Digital Arts and Sciences: The Webby Awards.
About PLATINUM technology International, inc.
PLATINUM technology International, inc., headquartered in Oakbrook Terrace,
Illinois, had 1998 revenues of $968 million. PLATINUM provides software and
services that help IT organizations manage and improve the IT infrastructure.
Solutions include application lifecycle, database and systems management, data
warehousing, Internet commerce, and Year 2000 reengineering. For information
visit http://www.platinum.com.
Safe Harbor Provision:
This press release contains certain "forward-looking statements" including the
statements regarding plans to streamline operations, that reflect PLATINUM's
expectations regarding its future growth, results of operations, performance,
and business prospects and opportunities. Words such as "intends," "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; 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 damage claims and costs
resulting from product defects; 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 changed circumstances.
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PLATINUM technology International, Inc.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
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Three Months Ended Twelve Months Ended
December 31, December 31,
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1998 1997 1998 1997
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Revenues:
Software products $198,924 $149,950 $542,578 $ 410,369
Maintenance 48,929 37,751 171,711 139,912
Professional services 68,874 54,997 253,917 188,599
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Total revenues 314,727 242,698 968,206 738,880
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Costs and expenses:
Professional services 69,386 48,837 235,914 170,847
Product development and support 68,182 53,059 242,641 203,497
Sales and marketing 101,481 79,182 318,453 263,986
General and administrative 16,670 15,844 60,959 50,158
Amortization of excess cost over net assets acquired 3,156 1,680 11,939 6,360
Restructuring and special general and administrative charges - (234) - 69,342
Merger costs 100 5,222 40,065 8,927
Acquired in-process technology 5,303 50,740 37,918 67,904
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Total costs and expenses 264,278 254,330 947,889 841,021
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Operating income (loss) 50,449 (11,632) 20,317 (102,141)
Other income (loss), net (1,476) 5,776 10,253 20,497
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Income (loss) from continuing operations before
income taxes 48,973 (5,856) 30,570 (81,644)
Income taxes 16,285 14,428 33,038 18,389
Income taxes - one-time adjustment
of deferred taxes - - - 5,070
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Income (loss) from continuing operations 32,688 (20,284) (2,468) (105,103)
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Discontinued Operations:
Loss from continuing operations, net of
tax benefit - - - (1,858)
Gain on disposal, net of taxes - - - 833
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Net income (loss) $ 32,688 $(20,284) $ (2,468) $(106,128)
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Net income (loss) per share - basic $ 0.38 $ (0.25) $ (0.03) $ (1.36)
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Net income (loss) per share - diluted $ 0.34 $ (0.25) $ (0.03) $ (1.36)
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Shares used in computing per share amounts - basic 86,499 79,932 83,856 78,072
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Shares used in computing per share amounts - diluted 99,054* 79,932 83,856 78,072
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* The diluted weighted average shares outstanding for the three months ended
December 31, 1998 reflect common stock equivalents, including the
convertible subordinated notes due 2001. 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 International, inc.
CONDENSED BALANCE SHEETS
(In thousands)
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December 31, December 31,
1998 1997
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ASSETS
Current assets:
Cash and cash equivalents $ 189,925 $233,024
Short-term investment securities 76,981 79,699
Trade accounts receivable 304,177 227,964
Installment accounts receivable 45,568 30,043
Other current assets 55,674 37,843
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Total current assets 672,325 608,573
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Non-current investment securities 35,166 45,481
Property and equipment 99,197 92,165
Purchased and developed software 182,259 117,213
Excess of cost over net assets acquired 69,045 52,759
Non-current installment receivables 68,210 21,912
Other assets 24,068 34,804
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Total assets $1,150,270 $972,907
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Acquisition-related payables $ 33,245 $ 15,717
Accounts payable 36,854 23,294
Accrued restructuring costs 2,390 7,391
Other current liabilities 107,910 81,182
Deferred revenue 163,982 128,326
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Total current liabilities 344,381 255,910
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Acquisition-related payables 6,388 18,320
Deferred revenue 95,959 60,435
Deferred rent 6,762 6,197
Accrued restructuring costs 5,285 21,930
Deferred income taxes 5,261 -
Long-term obligations 266,421 267,239
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Total liabilities 730,457 630,031
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Stockholders' equity 419,813 342,876
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Total liabilities & stockholders' equity $1,150,270 $972,907
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