EXHIBIT 99.1
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 REPORTS FIRST QUARTER FINANCIAL RESULTS
HOUSTON -- (July 27, 2004) -- BMC Software, Inc. [NYSE: BMC] today
announced financial results for its fiscal 2005 first quarter ended June 30,
2004.
BMC Software's net earnings excluding special items for the first quarter
of fiscal 2005 were $32.1 million, or $0.14 per diluted common share, which
compares to $0.03 a year ago and the Company's revised guidance range of $0.11
to $0.14 provided earlier this month. The fiscal 2005 first quarter net earnings
on a GAAP basis were $51.8 million, or $0.23 per share, which compares to a net
loss of $6.1 million, or a loss of $0.03 per share, in the first quarter of
fiscal 2004. Included in the financial tables is a reconciliation of results
excluding special items and GAAP results.
Total revenues in the first quarter of fiscal 2005 were $326.0 million, an
increase of 5 percent compared to the first quarter of fiscal 2004, and was
within the Company's revised guidance of $318.0 million to $328.0 million
provided earlier this month. Operating expenses, excluding special items, were
$299.0 million, compared to $321.5 million in the same quarter of fiscal 2004.
"The first quarter presented a challenging revenue environment for our
industry and for BMC. While disappointed with our revenue performance, which was
in part due to weakness in the United States, I was pleased with our expense
controls and improved operating margins in the quarter," said Bob Beauchamp,
president and CEO, BMC Software.
BMC Software maintained its strong financial position with cash flow from
operations in the quarter of $90.1 million. The cash and marketable securities
balance was $1.2 billion, and the total deferred revenue balance was $1.39
billion.
BMC Software continued its stock repurchase program by spending $20.0
million to repurchase approximately 1.2 million shares during the first fiscal
quarter. Approximately $287 million remains in this program.
License bookings in the first quarter of fiscal 2005 were $83.6 million, a
decrease of 20 percent compared to the first quarter of fiscal 2004. The
following table illustrates license bookings:
Software First Quarter Results /Page 2
FIRST QUARTER FY05 BUSINESS SEGMENT RESULTS
<Table>
<Caption>
NET CHANGE TO
DEFERRED LICENSE BOOKINGS
LICENSE LICENSE LICENSE PERCENT GROWTH
($ IN MILLIONS) REVENUES REVENUES BOOKINGS* VS. Q1FY04
------------ ------------- ------------ ----------------
Data Management - D/S 9.6 -- 9.6 2%
Data Management - MF 27.3 (10.8) 16.5 (28)%
------------ ------------ ------------
Enterprise Data Management 36.9 (10.8) 26.1 (20)%
------------ ------------ ------------
Scheduling & Output Mgmt 8.8 0.1 8.9 (44)%
MAINVIEW(R) 7.5 (2.1) 5.4 (50)%
PATROL(R) 17.9 (1.7) 16.2 (33)%
------------ ------------ ------------
Enterprise Systems Management 34.2 (3.7) 30.5 (40)%
------------ ------------ ------------
Remedy(R) 28.3 (1.6) 26.7 32%
------------ ------------ ------------
Security & Other 0.9 (0.6) 0.3 (63)%
------------ ------------ ------------
TOTAL BMC 100.3 (16.7) 83.6 (20)%
============ ============ ============
</Table>
*License bookings measure the value of new license contracts signed during the
quarter, including both the amount that goes to the income statement and the
amount that goes to the deferred license revenue account on the balance sheet.
License bookings can be calculated by adding license revenues to the net change
in the deferred license revenue balance.
SECOND QUARTER AND FISCAL 2005 GUIDANCE
The Company expects second quarter revenues to be in the $340 to $355
million range and expects second quarter earnings per share excluding special
items to be in the $0.12 to $0.16 range. These expectations include an estimated
$10 million in revenues and a negative earnings per share impact of one cent
related to the recent acquisition of Marimba. Second quarter estimates do not
include an estimated $0.05 per share of amortization of acquired technology and
intangibles, exclusive of the Marimba acquisition.
The Company expects fiscal 2005 revenues to be in the $1.46 to $1.49
billion range and expects fiscal 2005 earnings per share excluding special items
to be in the $0.64 to $0.74 range. These expectations include an estimated $30
million in revenues and a negative earnings per share impact of two cents
related to the recent acquisition of Marimba. Fiscal 2005 estimates do not
include an estimated $0.20 per share of amortization of acquired technology and
intangibles, exclusive of the Marimba acquisition.
Software First Quarter Results /Page 3
BMC Software expects cash flow from operations for fiscal 2005 to be over
$400 million, which is unchanged from prior expectations.
A CONFERENCE CALL TO DISCUSS FIRST QUARTER RESULTS IS SCHEDULED FOR JULY
27, 2004 AT 11:00 A.M. CENTRAL TIME. THOSE INTERESTED IN PARTICIPATING MAY CALL
(719) 457-2633 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
Software First Quarter Results /Page 4
fiscal 2004 revenues of more than $1.4 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," "estimate" 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) 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, that make estimation of operating results prior to the end of a quarter
extremely uncertain; 2) BMC Software's operating costs and expenses are
relatively fixed over the short term; 3) increased competition and pricing
pressures could adversely affect BMC Software's earnings; 4) growth in BMC
Software's mainframe revenues is dependent on demand for significant additional
mainframe MIPS capacity; 5) BMC Software's maintenance revenue could decline if
maintenance renewal rates decline or if license revenues do not grow; 6) new
software products and product strategies may not be timely introduced or
successfully adopted; 7) 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; 8) BMC Software's effective tax rate is subject
to quarterly fluctuation and any change in such tax rate could affect the
Company's earnings; and 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, 2004 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) 2004, BMC Software, Inc. All rights reserved.
BMC Software Reports First Quarter Results
Page 5
BMC SOFTWARE, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(UNAUDITED)
<Table>
<Caption>
Three Months Ended
June 30,
------------------
Fiscal Fiscal Percentage Fiscal Fiscal
2004 2005 Change 2004 2005
------- ------- ---------- ------ ------
In millions, except Percentage
per share data) of Sales
Revenues:
License $ 107.6 $ 100.3 -7% 34.7% 30.8%
Maintenance 183.5 204.8 12% 59.2% 62.8%
Professional services 18.8 20.9 11% 6.1% 6.4%
------- ------- ----- -----
Total revenues 309.9 326.0 5% 100.0% 100.0%
------- ------- ----- -----
Selling and marketing expenses 137.9 124.7 -10% 44.5% 38.3%
Research and development expenses 127.3 109.3 -14% 41.1% 33.5%
Cost of professional services 19.0 20.5 8% 6.1% 6.3%
General and administrative expenses 37.3 42.7 14% 12.0% 13.1%
Amortization of acquired technology & intangibles 15.6 16.1 3% 5.0% 4.9%
------- ------- ----- -----
Total operating expenses 337.1 313.3 -7% 108.8% 96.1%
------- ------- ----- -----
Operating loss (27.2) 12.7 n/m -8.8% 3.9%
Other income, net 20.8 17.6 -15% 6.7% 5.4%
------- ------- ----- -----
Earnings (loss) before income taxes (6.4) 30.3 n/m -2.1% 9.3%
Income tax provision (benefit) (0.3) (21.5) n/m -0.1% -6.6%
------- ------- ----- -----
Net earnings (loss) $ (6.1) $ 51.8 n/m -2.0% 15.9%
======= ======= ===== =====
Diluted earnings (loss) per share $ (0.03) $ 0.23 n/m
======= =======
Shares used in computing diluted earnings (loss)
per share 229.6 225.1 -2%
======= =======
</Table>
BMC Software Reports First Quarter Results
Page 6
BMC SOFTWARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
March 31, June 30,
2004 2004
------------ ------------
(Unaudited)
(in millions)
Current Assets:
Cash and cash equivalents $ 612.3 $ 789.2 (a)
Marketable securities 296.6 169.8 (a)
Trade accounts receivable, net 172.6 120.7
Current trade finance receivables, net 175.5 146.0
Other current assets 167.9 169.5
------------ ------------
Total current assets 1,424.9 1,395.2
Property and equipment, net 396.0 399.9
Software development costs and related assets, net 138.9 133.7
Long-term marketable securities 304.1 277.4 (a)
Long-term finance receivables, net 158.7 122.8
Acquired technology, goodwill and intangibles, net 520.1 507.8
Other long-term assets 102.1 105.3
------------ ------------
$ 3,044.8 $ 2,942.1
============ ============
Current liabilities:
Accounts payable and accrued liabilities $ 318.5 $ 204.1
Current portion of deferred revenue 668.4 663.1
------------ ------------
Total current liabilities 986.9 867.2
Long-term deferred revenue 733.2 731.5
Other long-term liabilities 109.5 97.5
Total stockholders' equity 1,215.2 1,245.9
------------ ------------
$ 3,044.8 $ 2,942.1
============ ============
</Table>
(a) Total cash and marketable securities are $1,236.4 at June 30, 2004.
BMC Software Reports First Quarter Results
Page 7
BMC SOFTWARE, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<Table>
<Caption>
Three Months Ended
June 30,
----------------------------
Fiscal Fiscal
2004 2005
------------ ------------
(In millions, except
per share data)
Cash flows from operating activities:
Net earnings (loss) $ (6.1) $ 51.8
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:
Depreciation and amortization 57.7 49.5
(Gain) loss on marketable securities 0.8 2.1
Earned portion of restricted stock compensation 0.6 0.3
Release of tax accrual -- (30.0)
(Increase) decrease in finance receivables 91.3 65.9
Increase (decrease) in payable to third-party financing institutions
for finance receivables (35.1) (18.3)
Net change in trade receivables, payables, deferred revenue and
other components of working capital 14.8 (31.2)
------------ ------------
Net cash provided by operating activities 124.0 90.1
------------ ------------
Cash flows from investing activities:
Cash paid for technology acquisitions and other investments,
net of cash acquired (6.1) (5.5)
Adjustment of cash paid for Remedy acquisition 7.2 --
Return of capital for cost-basis investments -- 0.7
Purchases of marketable securities (163.2) (5.1)
Maturities of/proceeds from sales of marketable securities 49.1 146.4
Purchases of property and equipment (12.7) (16.8)
Capitalization of software development costs and related assets (15.0) (14.2)
------------ ------------
Net cash used in investing activities (140.7) 105.5
------------ ------------
Cash flows from financing activities:
Payments on capital leases -- (1.0)
Stock options exercised and other 1.3 4.9
Treasury stock acquired (60.0) (20.0)
------------ ------------
Net cash used in financing activities (58.7) (16.1)
------------ ------------
Effect of exchange rate changes on cash 3.4 (2.6)
------------ ------------
Net change in cash and cash equivalents (72.0) 176.9
Cash and cash equivalents, beginning of period 500.1 612.3
------------ ------------
Cash and cash equivalents, end of period $ 428.1 $ 789.2
============ ============
</Table>
BMC Software Reports First Quarter Results
Page 8
BMC SOFTWARE, INC. AND SUBSIDIARIES
SUPPLEMENTAL ANALYSIS OF EFFECT OF SPECIAL ITEMS
FOR THE THREE MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
<Table>
<Caption>
Special Before
As Reported Items Special Items
------------ ------------ -------------
(In millions, except per share data)
Revenues:
License $ 100.3 $ -- $ 100.3
Maintenance 204.8 -- 204.8
Professional services 20.9 -- 20.9
------------ ------------ ------------
Total revenues 326.0 -- 326.0
------------ ------------ ------------
Selling and marketing expenses 124.7 (0.7) (a) 124.0
Research and development expenses 109.3 2.5 (a) 111.8
Cost of professional services 20.5 -- 20.5
General and administrative expenses 42.7 -- 42.7
Amortization of acquired technology & intangibles 16.1 (16.1) (b) --
------------ ------------ ------------
Total operating expenses 313.3 (14.3) 299.0
------------ ------------ ------------
Operating loss 12.7 14.3 27.0
Other income, net 17.6 -- 17.6
------------ ------------ ------------
Earnings (loss) before income taxes 30.3 14.3 44.6
Income tax provision (benefit) (21.5) 34.0 (c,d) 12.5
------------ ------------ ------------
Net earnings (loss) $ 51.8 $ (19.7) $ 32.1
============ ============ ============
Diluted earnings (loss) per share $ 0.23 $ (0.09) $ 0.14
============ ============ ============
Shares used in computing diluted earnings (loss) per share 225.1 225.1 225.1
============ ============ ============
(a) Changes in estimates related to real estate exit costs $ 1.8
(b) Amortization of acquired technology & intangibles $ (16.1)
(c) Release of tax accrual related to IRS settlement $ 30.0
(d) Tax effect of special items $ 4.0
</Table>