================================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934 April 23, 2003 Date of Report (Date of earliest event reported) FILENET CORPORATION (Exact name of registrant as specified in its charter) Delaware 000-15997 95-3757924 (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification Number) 3565 Harbor Boulevard 92626 Costa Mesa, California (Zip Code) (Address of principal executive offices) (714) 327-3400 (Registrant's telephone number, including area code) N/A (Former Name or Former Address, if Changed Since Last Report) ================================================================================================Item 7. Financial Statements and Exhibits. (c) Exhibits Exhibits: Description of Document 99.1 Press Release dated April 23, 2003. Item 9. Regulation FD Disclosure (Information provided under Item 12--Disclosure of Results of Operations and Financial Condition). Pursuant to Securities and Exchange Commission Release No. 33-8216, dated March 27, 2003, the information provided herein is being furnished under Item 12 of Form 8-K. On April 23, 2003, we issued a press release, which sets forth our results of operations for the quarter ended March 31, 2003. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Such information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. 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. FILENET CORPORATION Date: April 23, 2003 By: /s/ Sam M. Auriemma Name: Sam M. Auriemma Title: Senior Vice President and Chief Financial Officer EXHIBIT INDEX Exhibits: Description of Document 99.1 Press Release dated April 23, 2003. EXHIBIT 99.1 FOR IMMEDIATE RELEASE [FileNet Logo] FileNet Reports First Quarter 2003 Results Company Achieves 14 Percent Year-Over-Year Software Growth COSTA MESA, Calif.-- April 23, 2003 -- FileNet Corporation (Nasdaq: FILE), the leading provider of Enterprise Content Management (ECM) solutions, today announced its financial results for its first quarter ended March 31, 2003. Total revenues for the first quarter of 2003 were $87.0 million compared to total revenues of $86.2 million for the same period in 2002 and $89.4 million for the fourth quarter of 2002. Software revenues for the first quarter of 2003 were $35.5 million compared to $31.2 million for the same period in 2002 and $36.4 million for the fourth quarter of 2002. Net income was $1.3 million in the first quarter of 2003, compared to net income of $1.4 million in the first quarter of 2002 and $3.8 million in the fourth quarter of 2002. Earnings per basic and diluted share were $0.04 for the first quarter of 2003 compared to earnings per basic and diluted share of $0.04 for the first quarter of 2002. For the fourth quarter of 2002 earnings per basic and diluted share were $0.11 and $0.10, respectively. As of March 31, 2003, FileNet had cash and investments of $209.5 million, up from $185.2 million at December 31, 2002. The company has no long-term debt. "During a tenuous quarter for the technology sector, we successfully launched our FileNet P8 ECM architecture and performed well financially, achieving results in line with our prior guidance and ahead of current First Call consensus," said Lee Roberts, Chairman and CEO of FileNet. "FileNet P8 is being well received by customers and partners and offers the market a fully integrated framework for addressing the full spectrum of customers' content management needs. We believe FileNet P8 positions us well in our strategy to lead the ECM market." Quarterly Conference Call with Management Lee Roberts, Chairman and Chief Executive Officer, and Sam Auriemma, Chief Financial Officer, will host a conference call for investors at 2:00 p.m. Pacific Time (5:00 pm Eastern) today. The call will be broadcast live over the Internet. To listen to the live audio Web cast via the Internet, please follow the instructions on FileNet's Web site at www.filenet.com. Alternatively, to listen to the call live, dial (888) 821-2773 or (706) 634-7555. To listen to the replay, dial (800) 642-1687 or (706) 645-9291. The conference call ID number is 9616303 for all calls. Supplemental financial and statistical information that will be discussed on the call is available on the Company's website within the investor relations' section. About FileNet FileNet Corporation (NASDAQ: FILE) helps organizations make better decisions by managing the content and processes that drive their business. FileNet's Enterprise Content Management (ECM) solutions allow customers to build and sustain competitive advantage by managing content throughout their organizations, automating and streamlining their business processes, and providing the full-spectrum of connectivity needed to simplify their critical and everyday decision-making. FileNet ECM solutions deliver a comprehensive set of capabilities that integrate with existing information systems to provide cost-effective solutions that solve real-world business problems. Since the Company's founding in 1982, more than 3,800 organizations, including 80 of the Fortune 100, have taken advantage of FileNet solutions for help in managing their mission-critical content and processes. Headquartered in Costa Mesa, Calif., the Company markets its innovative ECM solutions in more than 90 countries through its own global sales, professional services and support organizations, as well as via its ValueNet(R)Partner network of resellers, system integrators and application developers. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements that are based on our current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by us. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will" and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for FileNet include, but are not limited to, the volume of our sales and pricing concessions on volume sales; our ability to specify, develop or acquire, complete, introduce, market, distribute and gain market acceptance for new products and technologies in a timely manner; the mix of products and services sold by us; the timing, rescheduling or cancellation of significant customer orders; the loss of a key customer; our ability to control expenses; announcements of technological innovations, new products or product enhancements by the company or its competitors; the emerging nature of the Enterprise Content Management market; key management changes; changes in joint marketing and development programs; developments relating to patents or other intellectual property rights or disputes; changing relationships with customers, distributors, suppliers and strategic partners; potential contractual or employment issues; our ability to integrate acquired businesses; and general conditions in the worldwide economy and the software/technology sector and other factors. Our Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q, recent Current Reports on Forms 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Note to editors: FileNet, and ValueNet are registered trademarks of FileNet Corporation. FileNet P8 is a trademark of FileNet Corporation. All other company or product names referenced in this release may be trademarks or registered trademarks of their respective owners. # # # Investor Contact: Greg Witter, Director, Investor Relations FileNet Corporation Phone: 714-327-3405 Email: gwitter@filenet.com Media Contact: Tom Hennessey, Director, Corporate Communications FileNet Corporation Phone: 714-327-5050 Email: thennessey@filenet.com FILENET CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Quarter Ended March 31, 2003 2002 (Unaudited) (Unaudited) Revenue: Software $ 35,522 $ 31,240 Service 50,829 52,399 Hardware 698 2,602 Total revenue 87,049 86,241 Costs: Cost of software revenue 3,008 2,081 Cost of service revenue 20,849 23,543 Cost of hardware revenue 802 1,925 Total cost of revenue 24,659 27,549 Gross profit 62,390 58,692 Operating expenses: Sales and Marketing 34,399 32,289 Research and development 19,302 17,305 General and administrative 7,826 8,188 Total operating expenses 61,527 57,782 Operating income 863 910 Other income, net 1,045 908 Income before income taxes 1,908 1,818 Provision for income taxes 572 454 Net income $ 1,336 $ 1,364 Earnings per share: Basic $ 0.04 $ 0.04 Diluted $ 0.04 $ 0.04 Weighted average shares outstanding: Basic 35,942 35,362 Diluted 36,623 37,224 Note: Certain reclassifications have been made to the prior-year balances to conform to the current year's presentations. FILENET CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 31, 2003 2002 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 152,321 $ 130,154 Short-term investments 24,571 29,188 Accounts receivable, net 40,461 44,839 Inventories, net 2,547 2,568 Prepaid expenses and other assets 15,103 13,317 Deferred income taxes 802 802 Total current assets 235,805 220,868 Property, net 32,401 34,641 Long-term investments 32,633 25,864 Goodwill 17,146 16,907 Intangible assets, net 2,894 3,029 Deferred income taxes 21,799 21,792 Other assets 5,436 4,935 Total assets $ 348,114 $ 328,036 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,916 $ 7,706 Customer deposits/advances 4,016 2,962 Accrued compensation and benefits 23,955 20,729 Unearned maintenance revenue 55,291 38,945 Other accrued liabilities 12,897 15,224 Total current liabilities 102,075 85,566 Unearned maintenance revenue 3,281 3,565 Total liabilities 105,358 89,131 Stockholders' equity 242,758 238,905 Total liabilities and stockholders' equity $ 348,114 $ 328,036
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