EXHIBIT 99
INVESTOR RELATIONS CONTACT: MEDIA RELATIONS CONTACT:
Neil Yekell Arch Currid
(713) 918-4233 (713) 918-3236
neil_yekell@bmc.com arch_currid@bmc.com
BMC SOFTWARE EXCEEDS SECOND QUARTER EARNINGS AND REVENUE ESTIMATES
Remedy(R) and Key Distributed Systems Businesses Report Strong Results
HOUSTON -- (October 30, 2003) -- BMC Software, Inc. [NYSE: BMC] today
announced financial results for its fiscal 2004 second quarter ended September
30, 2003.
BMC Software's net earnings excluding special items for the second
quarter of fiscal 2004 were $22.2 million, or $0.10 per diluted common share,
which compares to net earnings excluding special items of $19.3 million, or
$0.08 per share in the second quarter of fiscal 2003. This exceeds the $0.04 to
$0.06 per share range that the company provided in July and the current analyst
consensus estimate of $0.05 per share. The fiscal 2004 second quarter net loss
on a GAAP basis was $13.2 million, or a loss of $0.06 per share, which compares
to net earnings of $10.1 million, or $0.04 per share, in the second quarter of
fiscal 2003. Included in the financial tables is a reconciliation of results
excluding special items and GAAP results.
"I am pleased with our results in the second quarter as we exceeded our
earnings per share and revenue estimates. Our PATROL(R) and Distributed Systems
Data Management product lines both reported sequential and year-over-year
license revenue growth," said Bob Beauchamp, president and CEO, BMC Software.
"Our Remedy business is outperforming our revenue and earnings expectations
quarter after quarter and has been a significant contributor to our bottom line.
Remedy is an integral piece of our Business Service Management (BSM) strategy
that is continuing to gain momentum as customers and partners alike recognize
its value."
Total revenues in the second quarter of fiscal 2004 were $333.8
million, an increase of 15 percent compared to the same quarter of fiscal 2003.
Total license revenues in the quarter were $124.7 million, an increase of 4
percent compared to the same quarter of fiscal 2003. Maintenance revenues were
$188.2 million, an increase of 25 percent, compared to the same quarter of
fiscal 2003. Professional services revenues were $20.9 million, an increase of 5
percent compared to the same quarter last year. Operating expenses, excluding
$15.3 million of amortization of intangibles and $34.4 million related to
restructuring efforts, were $320.8 million, compared to $281.5 million in the
same quarter of fiscal 2003. These results include Remedy's operations in the
second quarter of fiscal 2004. Total revenues for Remedy in the second quarter
were $60.3 million and expenses were $39.2 million, excluding $12.0 million of
amortization of intangibles.
BMC Software maintained its strong financial position with cash flow
from operations in the quarter of $34.1 million, including $18.5 million in
restructuring charges. At quarter-end, the cash and marketable securities
balance was $1.04 billion and the total deferred revenue balance was $1.14
billion.
BMC Software continued its stock repurchase program by spending $30
million to repurchase 2.1 million shares during the second fiscal quarter.
Approximately $387 million remains in this program.
BMC SOFTWARE EXCEEDS SECOND QUARTER EARNINGS AND REVENUE ESTIMATES /PAGE 2
SECOND QUARTER FY04 BUSINESS SEGMENT RESULTS
<Table>
<Caption>
Q2 LICENSE PERCENT GROWTH PERCENT GROWTH
REVENUES VS. Q2FY03 VS. Q1FY04
(IN MILLIONS) (Y/Y) (SEQUENTIAL)
------------ ------------ --------------
Data Management - D/S $ 11.6 7% 24%
Data Management - Mainframe 34.5 (20)% 34%
------------ ------------ ------------
Enterprise Data Management 46.1 (15)% 31%
------------ ------------ ------------
Scheduling & Output Mgmt 12.5 (18)% (5)%
MAINVIEW(R) 10.8 (47)% 10%
PATROL 30.1 9% 19%
------------ ------------ ------------
Enterprise Systems Management 53.4 (16)% 11%
------------ ------------ ------------
Remedy 23.1 N/A* 11%
------------ ------------ ------------
Security & Other 2.1 (30)% (40)%
============ ============ ============
TOTAL LICENSE REVENUES $ 124.7 4% 16%
============ ============ ============
</Table>
*Remedy was acquired in November 2002.
RESTRUCTURING UPDATE
The restructuring effort that the company announced in July is
proceeding as planned. The company continues to expect that the restructuring
will result in annual cost savings of $100 million to $120 million. The charges
related to the restructuring were $34.4 million in the second quarter and were
primarily associated with personnel related actions. BMC Software expects a $68
million to $73 million charge in the third quarter as downsizing and disposition
of its facilities worldwide are completed.
THIRD QUARTER AND FISCAL 2004 GUIDANCE
BMC Software expects high single digit revenue growth in the third
quarter compared to the second quarter and earnings per share excluding special
items to be in the $0.15 to $0.20 range. For fiscal 2004, the company is raising
its guidance for earnings per share excluding special items to be in the $0.48
to $0.53 range.
Third quarter estimates do not include an estimated $0.05 per share of
amortization of acquired technology and intangibles, and an estimated $0.20 to
$0.21 per share related to restructuring charges.
Fiscal 2004 estimates do not include an estimated $0.19 of amortization
of acquired technology and intangibles, and an estimated $0.30 to $0.31 per
share related to restructuring charges.
BMC Software maintains its cash flow from operations guidance for
fiscal 2004 to be in the $340 million to $390 million range.
BMC SOFTWARE EXCEEDS SECOND QUARTER EARNINGS AND REVENUE ESTIMATES /PAGE 3
A CONFERENCE CALL TO DISCUSS SECOND QUARTER RESULTS IS SCHEDULED FOR
TODAY AT 11:00 A.M. CST. THOSE INTERESTED IN PARTICIPATING MAY CALL (719)
457-2641 AND USE THE PASSCODE BMC. TO ACCESS A REPLAY OF THE CONFERENCE CALL,
WHICH WILL BE AVAILABLE FOR ONE WEEK, DIAL (719) 457-0820 AND USE THE PASSCODE
BMC. A LIVE WEBCAST OF THE CONFERENCE CALL AND PRESENTATION WILL BE AVAILABLE ON
THE COMPANY'S WEBSITE AT WWW.BMC.COM/INVESTORS. A REPLAY OF THE WEBCAST WILL BE
AVAILABLE WITHIN 24 HOURS AND ARCHIVED ON THE WEBSITE FOR 90 DAYS.
NON-GAAP FINANCIAL MEASURES
This press release includes financial measures for net earnings,
earnings per share (EPS) and operating expenses that exclude certain charges and
therefore have not been calculated in accordance with U.S. generally accepted
accounting principles (GAAP). A detailed reconciliation between the GAAP results
and results excluding special items (non-GAAP) is included with the financial
tables accompanying this press release. BMC Software has provided these non-GAAP
measures in its press releases reporting historical financial results because
the company believes these measures provide a consistent basis for comparison
between quarters, as they are not influenced by certain non-cash or
non-recurring expenses and are therefore useful to investors in helping them
understand the financial condition of BMC Software by focusing on the
performance of its core operations. Management uses these non-GAAP financial
measures internally to evaluate the company's performance and as a key variable
in determining management compensation. These non-GAAP measures should not be
considered an alternative to GAAP, and these non-GAAP measures may not be
comparable to information provided by other companies.
ABOUT BMC SOFTWARE
BMC Software, Inc. [NYSE:BMC], is a leading provider of enterprise
management solutions that empower companies to manage their IT infrastructure
from a business perspective. Delivering Business Service Management, BMC
Software solutions span enterprise systems, applications, databases and service
management. Founded in 1980, BMC Software has offices worldwide and fiscal 2003
revenues of more than $1.3 billion. For more information about BMC Software,
visit www.bmc.com.
This news release contains both historical information and
forward-looking information. Statements of plans, objectives, strategies and
expectations for future operations and results, identified by words such as
"believe," "anticipate," "expect" and "guidance" are forward-looking statements.
Numerous important factors affect BMC Software's operating results and could
cause BMC Software's actual results to differ materially from the results
indicated by this press release or by any other forward-looking statements made
by, or on behalf of, BMC Software, and there can be no assurance that future
results will meet expectations, estimates or projections. These factors include,
but are not limited to, the following: 1) uncertainty regarding future economic
conditions worldwide may continue to affect the overall demand for software and
services and any worsening of significant economies could result in decreased
revenues or lower revenue growth rates; 2) BMC Software's revenues and earnings
are subject to a number of factors, including the significant percentage of
quarterly sales typically closed at the end of each quarter,
BMC SOFTWARE EXCEEDS SECOND QUARTER EARNINGS AND REVENUE ESTIMATES /PAGE 5
that make estimation of operating results prior to the end of a quarter
extremely uncertain; 3) BMC Software's operating costs and expenses are
relatively fixed over the short term; 4) increased competition and pricing
pressures could adversely affect BMC Software's earnings; 5) growth in BMC
Software's mainframe revenues is dependent on demand for significant additional
mainframe MIPS capacity; 6) BMC Software's maintenance revenue could decline if
maintenance renewal rates decline or if license revenues do not grow; 7) new
software products and product strategies may not be timely introduced or
successfully adopted; 8) BMC Software's quarterly cash flow from operations is
and has been volatile and is dependent upon a number of factors described in BMC
Software's filings with the SEC; 9) the additional risks and important factors
described in BMC Software's quarterly reports on Form 10-Q and in its Annual
Report to Stockholders on Form 10-K for the fiscal year ended March 31, 2003 and
other filings with the SEC. BMC Software undertakes no obligation to update
information contained in this release.
###
BMC Software, the BMC Software logos, and all other BMC Software product or
service names are registered trademarks or trademarks of BMC Software, Inc. All
other trademarks or registered trademarks belong to their respective companies.
(C) 2003, BMC Software, Inc. All rights reserved.
BMC Software Exceeds Second Quarter Earnings and Revenue Estimates
Page 5
BMC SOFTWARE, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(UNAUDITED)
<Table>
<Caption>
Three Months Ended
September 30,
----------------------------
Fiscal Fiscal %
2003 2004 Change
------------ ------------ -------------
(In millions, except
per share data)
Revenues:
License $ 120.4 $ 124.7 4%
Maintenance 150.9 188.2 25%
Professional services 19.9 20.9 5%
------------ ------------
Total revenues 291.2 333.8 15%
------------ ------------
Selling and marketing expenses 112.8 140.2 24%
Research, development and support expenses 112.4 147.1 31%
Cost of professional services 20.9 20.0 -4%
General and administrative expenses 35.4 47.9 35%
Amortization of acquired technology & intangibles 12.4 15.3 23%
Merger-related costs & compensation charges 0.3 -- -100%
------------ ------------
Total operating expenses 294.2 370.5 26%
------------ ------------
Operating loss (3.0) (36.7) n/m
Other income, net 17.1 17.8 4%
------------ ------------
Earnings (loss) before income taxes 14.1 (18.9) n/m
Income tax provision (benefit) 4.0 (5.7) n/m
------------ ------------
Net earnings (loss) $ 10.1 $ (13.2) n/m
============ ============
Diluted earnings (loss) per share $ 0.04 $ (0.06) n/m
============ ============
Shares used in computing diluted earnings (loss) per share 239.8 227.1 -5%
============ ============
</Table>
BMC Software Exceeds Second Quarter Earnings and Revenue Estimates
Page 6
BMC SOFTWARE, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(UNAUDITED)
<Table>
<Caption>
Six Months Ended
September 30,
------------------------------
Fiscal Fiscal %
2003 2004 Change
------------ ------------ ------------
(In millions, except
per share data)
Revenues:
License $ 256.4 $ 232.3 -9%
Maintenance 300.6 371.7 24%
Professional services 39.4 39.7 1%
------------ ------------
Total revenues 596.4 643.7 8%
------------ ------------
Selling and marketing expenses 232.3 278.1 20%
Research, development and support expenses 230.6 274.4 19%
Cost of professional services 42.3 39.0 -8%
General and administrative expenses 71.4 85.2 19%
Amortization of acquired technology & intangibles 24.8 30.9 25%
Merger-related costs, compensation and other 0.8 -- -100%
------------ ------------
Total operating expenses 602.2 707.6 18%
------------ ------------
Operating loss (5.8) (63.9) n/m
Other income, net 26.6 38.6 45%
------------ ------------
Earnings (loss) before income taxes 20.8 (25.3) n/m
Income tax provision (benefit) 5.5 (6.0) n/m
------------ ------------
Net earnings (loss) $ 15.3 $ (19.3) n/m
============ ============
Diluted earnings (loss) per share $ 0.06 $ (0.08) n/m
============ ============
Shares used in computing diluted earnings (loss) per share 241.2 228.3 -5%
============ ============
</Table>
BMC Software Exceeds Second Quarter Earnings and Revenue Estimates
Page 7
BMC SOFTWARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
March 31, September 30,
2003 2003
------------ -------------
(Unaudited)
(In millions)
Current Assets:
Cash and cash equivalents $ 500.1 $ 391.4(a)
Marketable securities 151.7 296.2(a)
Trade accounts receivable, net 186.4 144.0
Current trade finance receivables, net 154.4 103.0
Other current assets 105.6 110.2
------------ ------------
Total current assets 1,098.2 1,044.8
Property and equipment, net 408.4 400.5
Software development costs and related assets, net 192.7 169.6
Long-term marketable securities 363.5 351.9(a)
Long-term finance receivables, net 175.9 122.0
Acquired technology, goodwill and intangibles, net 527.9 499.6
Other long-term assets 78.9 98.8
------------ ------------
$ 2,845.5 $ 2,687.2
============ ============
Current liabilities:
Accounts payable and accrued liabilities $ 277.2 $ 236.9
Current portion of deferred revenue 561.6 582.3
------------ ------------
Total current liabilities 838.8 819.2
Long-term deferred revenue 607.1 555.2
Other long-term liabilities 16.2 23.9
Total stockholders' equity 1,383.4 1,288.9
------------ ------------
$ 2,845.5 $ 2,687.2
============ ============
</Table>
(a) Total cash and marketable securities are $1,039.5 at September 30, 2003.
BMC Software Exceeds Second Quarter Earnings and Revenue Estimates
Page 8
BMC SOFTWARE, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<Table>
<Caption>
Six Months Ended
September 30,
------------------------------
Fiscal Fiscal
2003 2004
------------ ------------
(In millions)
Cash flows from operating activities:
Net earnings (loss) $ 15.3 $ (19.3)
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:
Accrued restructuring and severance costs 0.5 9.1
Merger-related costs and compensation charges 0.6 --
Depreciation and amortization 101.2 127.9
Incremental depreciation on facilities to be exited -- 6.8
(Gain) loss on marketable securities 6.3 (0.2)
Earned portion of restricted stock compensation 1.3 1.0
Decrease in finance receivables 10.6 105.0
Increase (decrease) in payable to third-party financing institutions
for finance receivables 8.4 (34.2)
Net change in income taxes receivable 54.2 2.7
Net change in trade receivables, payables, deferred revenue and
other components of working capital 133.8 (40.7)
------------ ------------
Net cash provided by operating activities 332.2 158.1
------------ ------------
Cash flows from investing activities:
Debtor-in-possession financing provided to Peregrine Systems, Inc. (46.0) --
Cash paid for technology acquisitions and other investments,
net of cash acquired (3.0) (6.7)
Adjustment of cash paid for Remedy acquisition -- 7.2
Return of capital for cost-basis investments 0.7 0.1
Proceeds from sale of technology -- 2.0
Purchases of marketable securities (123.0) (267.2)
Maturities of/proceeds from sales of marketable securities 184.9 130.2
Purchases of property and equipment (9.0) (22.9)
Capitalization of software development costs and related assets (33.9) (31.8)
------------ ------------
Net cash used in investing activities (29.3) (189.1)
------------ ------------
Cash flows from financing activities:
Stock options exercised and other 17.9 9.0
Treasury stock acquired (120.6) (90.0)
------------ ------------
Net cash used in financing activities (102.7) (81.0)
------------ ------------
Effect of exchange rate changes on cash (11.6) 3.3
------------ ------------
Net change in cash and cash equivalents 188.6 (108.7)
Cash and cash equivalents, beginning of period 330.0 500.1
------------ ------------
Cash and cash equivalents, end of period $ 518.6 $ 391.4
============ ============
</Table>
BMC Software Exceeds Second Quarter Earnings and Revenue Estimates
Page 9
BMC SOFTWARE, INC. AND SUBSIDIARIES
SUPPLEMENTAL ANALYSIS OF EFFECT OF SPECIAL ITEMS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)
<Table>
<Caption>
Special Before
As Reported Items Special Items
------------ ------------ -------------
(In millions, except per share data)
Revenues:
License $ 124.7 $ -- $ 124.7
Maintenance 188.2 -- 188.2
Professional services 20.9 -- 20.9
------------ ------------ ------------
Total revenues 333.8 -- 333.8
------------ ------------ ------------
Selling and marketing expenses 140.2 (18.3)(a) 121.9
Research, development and support expenses 147.1 (11.6)(a) 135.5
Cost of professional services 20.0 (2.2)(a) 17.8
General and administrative expenses 47.9 (2.3)(a) 45.6
Amortization of acquired technology & intangibles 15.3 (15.3)(a) --
------------ ------------ ------------
Total operating expenses 370.5 (49.7) 320.8
------------ ------------ ------------
Operating income (loss) (36.7) 49.7 13.0
Other income, net 17.8 -- 17.8
------------ ------------ ------------
Earnings (loss) before income taxes (18.9) 49.7 30.8
Income tax provision (benefit) (5.7) 14.3 8.6
------------ ------------ ------------
Net earnings (loss) $ (13.2) $ 35.4 $ 22.2
============ ============ ============
Diluted earnings (loss) per share $ (0.06) $ 0.16 $ 0.10
============ ============ ============
Shares used in computing diluted earnings (loss) per share 227.1 227.1 227.9
============ ============ ============
(a) The net earnings effect of the individual special items is as follows (in millions):
Exit costs and related charges $ (22.4)
Amortization of acquired technology & intangibles $ (13.0)
</Table>
BMC Software Exceeds Second Quarter Earnings and Revenue Estimates
Page 10
BMC SOFTWARE, INC. AND SUBSIDIARIES
SUPPLEMENTAL ANALYSIS OF EFFECT OF SPECIAL ITEMS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)
<Table>
<Caption>
Special Before
As Reported Items Special Items
------------- ------------- -------------
(In millions, except per share data)
Revenues:
License $ 232.3 $ -- $ 232.3
Maintenance 371.7 -- 371.7
Professional services 39.7 -- 39.7
------------ ------------ ------------
Total revenues 643.7 -- 643.7
------------ ------------ ------------
Selling and marketing expenses 278.1 (18.3)(a) 259.8
Research, development and support expenses 274.4 (11.6)(a) 262.8
Cost of professional services 39.0 (2.2)(a) 36.8
General and administrative expenses 85.2 (2.3)(a) 82.9
Amortization of acquired technology & intangibles 30.9 (30.9)(a) --
------------ ------------ ------------
Total operating expenses 707.6 (65.3) 642.3
------------ ------------ ------------
Operating income (loss) (63.9) 65.3 1.4
Other income, net 38.6 -- 38.6
------------ ------------ ------------
Earnings (loss) before income taxes (25.3) 65.3 40.0
Income tax provision (benefit) (6.0) 17.2 11.2
------------ ------------ ------------
Net earnings (loss) $ (19.3) $ 48.1 $ 28.8
============ ============ ============
Diluted earnings (loss) per share $ (0.08) $ 0.21 $ 0.13
============ ============ ============
Shares used in computing diluted earnings (loss) per share 228.3 228.3 229.3
============ ============ ============
(a) The net earnings effect of the individual special items is as follows (in millions):
Exit costs and related charges $ (22.4)
Amortization of acquired technology & intangibles $ (25.7)
</Table>