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Filed pursuant to Rule 425 under the
Securities Act of 1933 and deemed
filed pursuant to Rule 14a-6 of
the Securities Exchange Act of 1934
Subject Company: Active Software, Inc.
Commission File No.: 001-15681
webMethods, Inc. distributed the following press release on July 26, 2000.
FOR IMMEDIATE RELEASE
WEBMETHODS ANNOUNCES RECORD FIRST QUARTER REVENUE RESULTS
Quarterly Total Revenues Increase 412% Year-over-Year and 50% Sequentially,
Growth Driven by Rapid Adoption of B2Bi Initiatives by Global 2000 Companies
FAIRFAX, VA.--JULY 26, 2000--webMethods, Inc. (Nasdaq: WEBM), the leading
provider of business-to-business integration (B2Bi) solutions, today announced
record results for the first quarter ended June 30, 2000.
Total revenue for the first quarter of fiscal 2001 increased 412% to $15.6
million, compared to $3.0 million for the same period in the prior year. The net
loss for the first quarter 2001, excluding amortization of deferred stock
compensation, was $5.1 million or $0.16 per share, which beat the First Call
consensus estimate of a loss of $0.19 per share. For the corresponding period in
fiscal 2000, the net loss was $0.9 million or $0.15 per share. Including
amortization of deferred stock compensation and accrued dividends related to
preferred stock, webMethods' net loss attributable to common shareholders for
the first quarter 2001 was $6.6 million, or $0.20 per share, compared to a net
loss attributable to common shareholders of $1.2 million, or $0.21 per share in
the fiscal first quarter 2000.
The highlight of the quarter was the signing of a definitive agreement to
acquire Active Software, a leading provider of enterprise infrastructure
software. This acquisition brings together two software infrastructure leaders
whose solutions, when packaged together, fully address the B2Bi requirements of
Global 2000 companies and industry trading exchanges both within the enterprise
and across B2B trading networks. The acquisition is a strong strategic fit due
to webMethods' and Active Software's history of working together to develop
infrastructure solutions to meet the needs of shared Global 2000 customers such
as FedEx, Juniper Networks, Hewlett-Packard and AVNET. webMethods also recently
developed an out-of-box solution that bridges enterprise applications integrated
via ActiveWorks with webMethods-powered B2B trading networks and
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marketplaces. Since the announcement of the acquisition, webMethods and Active
Software have worked together to jointly close business with customers such as
Outpurchase.com, Grainger and Nonstop Solutions.
"Our quarterly results demonstrate momentum across the board," said Phillip
Merrick, president and CEO of webMethods, Inc. "Our B2Bi solution is in
production at more Global 2000 companies than any other B2Bi solution on the
market. This proven success coupled with significant partnerships, Global 2000
wins, and a growing global presence has strengthened webMethods' position as the
leader in the B2Bi market."
OPERATING HIGHLIGHTS:
Highlights of the quarter include:
- - GLOBAL 2000 COMPANIES SELECT WEBMETHODS FOR B2BI SOLUTIONS: During the first
quarter, webMethods added 49 new customers, bringing the total customer base
to more than 200. This included significant new Global 2000 customers such as
Pitney Bowes and Nortel Network.
During the quarter, the company also received orders from the following new
and existing customers: Airborne Express, AT&T, Capstan, e-Connections, Ellie
Mae, Envera, Grainger, Great Plains, Herman Miller, Hewlett-Packard, i2i.com,
Logitech, LSI Logic, Lucent, Network Associates, NTT Communications, Rohm and
Haas, Toshiba, U.S. Office Products, Viacore, Wall Street Systems and
Worldcrest. In addition, webMethods has secured significant deals with
international customers including W.H. Smith, Hoechst, Retevision,
steelscreen.com, PaperX.com, BNL Multiservizi, eCredible, GE Access and
United Microelectronics Corporation.
- - CUSTOMERS MOVE INTO PRODUCTION: During the quarter, customers including
Grainger, Inc., GE Power Systems, ChemConnect, Ventro, Staples.com, Dell
Computer Corporation, Apple, Installation, Inc., Hewlett-Packard, 3COM and
Avnet completed their webMethods B2B implementations and began to see returns
on their B2B investments.
- - NEW PRODUCTS AND SERVICES DRIVE THE FUTURE OF B2BI: During the B2Bi
Leadership Forum, the company's first user conference, webMethods outlined
its vision for the future of B2B e-commerce for the conferences more than 400
attendees. To provide customers with cost-effective rapid solutions for
integrating trading networks, webMethods launched several product and service
initiatives such as B2B.com, the webMethods B2B Rapid Integration Team and
the webMethods Value Added Services Program.
B2B.COM REVOLUTIONIZES RAPID TRADING PARTNER INTEGRATION, BY LEVERAGING
WEBMETHODS' UNMATCHED EXPERIENCE IN DEVELOPING AND DEPLOYING B2B TRADING
NETWORKS TO BUILD THE INDUSTRY'S FIRST COMPREHENSIVE "BEST PRACTICES"
SOLUTION
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FOR GUIDING COMPANIES THROUGH THE ENTIRE TRADING PARTNER INTEGRATION
PROCESS. B2B.COM PROVIDES THE SOFTWARE, METHODOLOGY AND SERVICES NEEDED TO
RAPIDLY ENABLE, DEPLOY AND MAINTAIN B2B TRADING NETWORKS WITH HUNDREDS OR
EVEN THOUSANDS OF PARTICIPANTS. MORE THAN A DOZEN TOP B2B COMPANIES,
INCLUDING GRAINGER, INC., E-STEEL AND CHEMCONNECT, SUPPORT THIS INNOVATIVE
EFFORT. AS PART OF B2B.COM WEBMETHODS WILL OFFER VALUE ADDED SERVICES FROM
PARTNERS SUCH AS DUN & BRADSTREETT, FEDEX, SLAMDUNK NETWORKS AND VERISIGN.
B2B.COM WILL BE GENERALLY AVAILABLE DURING THE THIRD CALENDAR QUARTER OF
2000.
- - NEW AND EXPANDED PARTNERSHIPS CONTINUE TO DRIVE GROWTH: Through additional
partnerships with i2 and Oracle, along with Ariba, Commerce One and SAP
webMethods became the B2Bi solution provider of choice for the industry's
largest B2B platform providers. In addition, webMethods expanded its
strategic partnership with SAP to provide the B2Bi solution to connect
third-party systems, such as Baan, Oracle and PeopleSoft, with mySAP.com.
- - WEBMETHODS EXPANDING OPERATIONS TO THE PACIFIC RIM: To meet the global demand
for B2Bi solutions, webMethods has established a presence in the Pacific Rim
with operations in both Asia and Australia. In addition to focusing on sales
for the region, these operations will handle customer care for our newly
introduced "Follow-the-Sun" 24 hour services program.
ABOUT WEBMETHODS, INC.
webMethods, Inc. (Nasdaq: WEBM) is the leading provider of software solutions
for business-to-business integration (B2Bi). Leveraging the open standards of
the Internet, the award-winning webMethods B2B(TM) family of products provides
the B2Bi infrastructure enabling Global 2000 companies and B2B marketplaces to
connect customers, suppliers and partners to form real-time B2B trading
networks. webMethods B2B allows companies to create new revenue opportunities,
strengthen relationships with customers and substantially reduce supply chain
inefficiencies.
Founded in 1996, webMethods is based in Fairfax, Va., with offices across the
U.S. and Europe. webMethods has more than 200 customers worldwide--from Global
2000 leaders such as Dell, Eastman Chemical Company, Lucent and Grainger, Inc.
to major B2B marketplaces like ChemConnect, e-STEEL and Ventro. webMethods'
strategic partners include Ariba, Deloitte Consulting, EDS, KPMG, Microsoft,
Sterling Commerce and SAP AG. More information about the company can be found at
www.webMethods.com.
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webMethods and webMethods B2B are trademarks of webMethods, Inc. All other
company and product names are property of their respective owners.
This press release contains various remarks about the future expectations, plans
and prospects of webMethods that constitute forward-looking statements for
purposes of the safe harbor provisions under The Private Securities Litigation
Reform Act of 1995. The actual results of webMethods may differ materially from
those indicated by these forward-looking statements as a result of various
important factors, including those discussed in the Risk Factors section of the
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Company's recent Registration Statements on Form S-1 and Form S-4, both of which
are on file with the Securities and Exchange Commission.
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On July 26, 2000, Phillip Merrick, President and Chief Executive Officer of
WebMethods, Inc. and Mary Dridi, Chief Financial Officer of webMethods, Inc.
participated in a conference call regarding first quarter earnings of the
Company. In addition, certain matters regarding the integration of Active
Software, Inc. with webMethods, Inc. pursuant to the merger agreement, dated as
of May 20, 2000, by and among webMethods, Inc., Wolf Acquisition, Inc. and
Active Software, Inc. were discussed. Following is a talking-points script that
was relied upon by Mr. Merrick for relevant portions of the conference call. See
below to find out where you can find additional information.
Thank you Dave. As you all know, we've just released our first quarter earnings.
We will be reviewing these results in more detail, and we'll also provide you
with an update on the progress we made over the quarter. I will review overall
operating highlights for the quarter, then Mary will give you a detailed
financial overview.
We are extremely pleased with the record financial results we are reporting
today. But this has also been our most exciting quarter right across the board.
We broadened and strengthened our position as the leader in
business-to-business integration (or B2Bi), with major new customer wins and
new and expanded partnerships with leading B2B platform companies such as i2,
Oracle and SAP. We expanded our global presence with the commencement of
operations in the Asia/Pacific region and further growth in our European
business. We held a very successful first ever user conference, at which we
announced several new products. And, most significantly, we announced our
acquisition of Active Software on May 22, which positions us as the only
integration software vendor able to deliver full end-to-end application
integration across the complete extended enterprise and the emerging digital
marketplaces.
Looking first at the results, our first quarter TOTAL revenues were $15.6
million, representing a 412% year over year increase and a 50% increase over the
prior quarter. LICENSE revenues for the quarter were $9.7 million, representing
a 350% year over year increase and a 45% sequential increase. Over the quarter
we added 49 new customers, bringing our total customer base to over 200. Three
deals were in excess of $1 million, and several other repeat customers increased
their total outlay on webMethods products and services to a figure in excess of
a million dollars. Our net loss for the period, excluding amortization of
deferred stock compensation, was ($5.1) million or a loss of ($0.16) per share,
which exceeds Analyst expectations of a loss of ($0.19) per share. Cash flow
from operations was positive for the second quarter in a row, which together
with our low DSOs is a great indicator of the health of our business and our
leadership position in the B2Bi space. Mary will of course be providing more
detail later in the call.
We see this continued strong momentum as yet further validation of our strategy.
Global 2000 companies and major B2B marketplaces see us as the vendor of choice
for business-
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to-business integration software. We believe our software is in production at
more Global 2000 companies and B2B marketplaces than for any other vendor. And
our viral selling model continued to help drive our growth, as our customers
deployed webMethods partner servers to their trading partners.
It's no longer new news, but major companies across many industries are working
quickly to develop and deploy B2B e-commerce initiatives. Our software provides
the integration platform for a lot of those initiatives, so we are a major
beneficiary of this growth. Interestingly, we see customers using our software
in one or more of three different ways: to integrate directly with their larger
customers and suppliers, with no marketplace intermediary; or, to integrate with
one or more of the emerging digital marketplaces, be they horizontal or vertical
in focus; or, to develop their own digital marketplace. Because our integration
platform is fundamental if these companies want to avoid manual exchange of
business documents, or want to avoid costly one-off systems integration efforts,
we tend to benefit regardless of the B2B business model a company chooses to
pursue.
In the quarter, we furthered our penetration of the key vertical market segments
that we target. In high-tech manufacturing, we secured new deals with companies
such as LSI Logic, Toshiba, Hewlett-Packard, Logitech, and UMC in Taiwan, the
second largest semiconductor fab company. In telecommunications, we saw new
deals with AT&T, Lucent, Nortel Networks and NTT Communications. Wins in the
chemical industry included Rohm and Haas and Hoechst, and in financial services
we won business with Wall Street Systems, Ellie Mae and BNL, a large Italian
bank. B2B Marketplace wins included Envera, an industry-backed chemicals
exchange, e-Connections, a ___ hub for the electronics components industry,
Viacore, which was a competitive win-back from Vitria, and steelscreen.com and
paperX.com in Europe. It is worth noting that many of our customers went into
production this quarter.
webMethods further improved upon its global presence in the quarter. You may
have already noted that a number of the customer wins I have mentioned are in
fact international wins. A total of 10% of overall sales bookings came from
international, up from 4% of bookings last quarter. A further highlight was
commencement of operations in the Asia/Pacific region, with offices opened and
management hires made in Australia, Taiwan and Japan. Our team didn't waste any
time, and so we were delighted to see business close in this region within the
first quarter of operations. Establishing a presence in Asia/Pacific also allows
us to close the loop to provide 24x7 "follow-the-sun" global customer support.
Our strategic partnerships have always helped fuel our growth, and this quarter
we added or expanded partnerships with i2, Oracle and SAP, among others. We
jointly announced with i2 that webMethods technology will be incorporated into
the i2 TradeMatrix marketplace platform. We announced with Oracle a
collaboration where our webMethods B2B product is being deployed at exchanges
Oracle is building for its customers, such as the AutoExchange and RMX, and
Oracle is already introducing us to its exchange customers and the suppliers
connecting to them. And we expanded our already
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productive relationship with SAP to provide EAI capabilities on top of the SAP
Business Connector. Additionally SAP has announced its intent to resell some of
our products. J.D. Edwards will also be a substantial partner upon completion of
the Active Software acquisition, given that in the quarter J.D. Edwards
announced that it has adopted the ActiveWorks Integration System for application
integration within its OneWorld product line.
Partnerships with systems integrators were also further developed, in particular
Deloitte Consulting and EDS. We and our customers now routinely rely on SI
consultants for implementation and delivery. Training and certifying SI
consultants remains a top priority, and in FYQ1 we trained approximately 300 new
consultants.
In mid-May we held our first-ever user conference, the B2Bi Leadership Forum, in
Scottsdale Arizona. Over 400 attendees were present to see and hear about our
vision for B2B e-commerce and B2B integration in particular. We used this forum
to announce several important new product initiatives, b2b.com and webMethods
for Trading Networks. B2B.com is a web-based platform for building, managing and
deploying an extensive B2B trading network. It provides facilities for signing
up trading partners, providing them with digital certificates, and deploying
trading partner software that works with their own set of back-end systems.
webMethods for Trading Networks is a software product built on top of the
webMethods B2B platform and designed for operators of digital marketplaces. It
provides sophisticated document management and routing capabilities, as well as
business analytics that allow marketplace operators to monitor both the
technical and business aspects of their B2B trading networks. Both of these
products will be available by the end of calendar Q3.
On May 22, we announced our acquisition of Active Software. With this
acquisition, webMethods becomes the only integration software vendor able to
address all the internal and external integration requirements across the
extended enterprise and digital marketplaces. No other vendor can deliver
business process integration all the way from the mainframe, across the packaged
business applications, and out over the firewall to trading partners and digital
marketplaces. As industry analysts have pointed out, this gives webMethods the
capability - and the critical mass -- to address business-to-business
initiatives of any size and complexity. Uniquely we will be able to provide full
transactional integrity between companies, and with the marketplaces that serve
them. With the addition of business process modeling capabilities and the
broadest array of adapters for enterprise applications, we believe we have the
strongest possible solution for both enterprise and B2B integration projects.
Given the market drivers however, we will continue to position ourselves
primarily as the leading B2B integration company.
The combined company will have over 600 employees, more than 425 customers
around the world, and an annualized revenue run-rate that is already in excess
of $135 million a year. Announcement of the acquisition has been extremely well
received by employees, customers, prospects, partners, and industry analysts.
The two companies have since the announcement participated in many joint sales
activities, which resulted in joint business in the quarter with customers such
as outpurchase.com, Grainger and Non-Stop
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Solutions. The Grainger deal in particular was significant - a multi-year,
multi-million enterprise license deal to deliver end-to-end integration across
Grainger and all of Grainger's digital initiatives. Of note is the fact that
Grainger was already one of webMethods' larger customers - indicating that the
acquisition brings with it significant upsell and cross-sell opportunities.
I can tell you that both the acquisition process itself along with our company
integration preparations are proceeding very well, and ahead of schedule. As you
may have seen, we were granted a Hart-Scott-Rodino waiting period waiver, and
our S-4 registration statement has been declared effective by the SEC.
Shareholder meetings for both companies are scheduled for August 15, and we
expect that the transaction will close within 5 business days of that date,
assuming it is approved by the Active Software shareholders. The directors and
management of both companies are confident that this approval will be received.
On the integration front, all organizational and management changes at all
levels have been decided and communicated, and a complete org chart for the
combined company is in place. Active Software brings an infusion of great
management talent to our already strong management team. Two weeks ago we
brought together almost the entire staffs of both companies for an already
scheduled webMethods bi-annual all company meeting. It provided a great
opportunity to communicate the changes, and the strategic value of the
acquisition, to the combined staffs. Within the sales forces, territory
allocation, quotas, and compensation plans have all been decided. Product
integration plans are going great, given the complementary nature of the
products, and the desire of our engineers to continue building market-leading
products. Parenthetically, I should point out that the product suites already
interoperate together extremely well. Integration of marketing collateral, PR,
advertising, and web sites are also coming together nicely with progress already
visible. We aim to be operating as a single company very shortly after the
close.
So to sum up, as you can see, there is a tremendous amount of momentum in every
aspect of our business. These results, and the developments I have just reported
to you, clearly demonstrate that we are strengthening our position as the leader
in business-to-business integration.
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Investors and security holders of both webMethods and Active Software are
advised to read the joint proxy statement/prospectus regarding the business
combination transaction referred to in the material below. webMethods and Active
Software have mailed a joint proxy statement/prospectus about the transaction to
their respective stockholders. This joint proxy statement/prospectus was filed
with the Securities and Exchange Commission by both companies. Investors and
security holders may obtain a free copy of the joint proxy statement/prospectus
and other documents filed by the companies at the Securities and Exchange
Commission's web site at http://www.sec.gov. The joint proxy
statement/prospectus and such other documents may also be obtained from
webMethods or Active Software by directing such requests to the companies.
webMethods and its officers and directors may be deemed to be participants in
the solicitation of proxies from webMethods' stockholders with respect to the
transactions contemplated by the agreement. Information regarding such officers
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and directors is included in webMethods' Registration Statements on Form S-1, as
amended, filed with the Securities and Exchange Commission on November 19, 1999
and declared effective by the Securities and Exchange Commission on February 10,
2000 and its Registration Statement on Form S-4, as amended, filed with the
Securities and Exchange Commission on June 16, 2000 and declared effective by
the Securities and Exchange Commission on July 14, 2000. These documents are
available free of charge at the Securities and Exchange Commission's web site at
http://www.sec.gov and from webMethods.
Active Software and its officers and directors may be deemed to be participants
in the solicitation of proxies from stockholders of Active Software with respect
to the transactions contemplated by the agreement. Information regarding such
officers and directors is included in Active Software's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 and in its proxy statement for
its 2000 annual meeting, filed with the Securities and Exchange Commission. This
document is available free of charge at the Securities and Exchange Commission's
web site at http://www.sec.gov and from Active Software.