Exhibit 99.1
ASCENTIAL REPORTS FIRST QUARTER REVENUE OF $35.3 MILLION AND LICENSE REVENUE OF
$19.2 MILLION MARKING FOURTH CONSECUTIVE QUARTER OF SEQUENTIAL REVENUE GROWTH
RE-AFFIRMS GAAP PROFITABILITY GUIDANCE FOR 2003
WESTBORO, MASS., April 21, 2003 -- Ascential Software Corporation (NASDAQ:
ASCL), the enterprise integration leader, today announced results for the first
fiscal quarter ended March 31, 2003.
First quarter 2003 revenue was $35.3 million, up 70 percent from $20.8 million
in the first quarter of last year. License revenue was $19.2 million in the
first quarter of 2003, up 78% over $10.8 million in license revenue reported in
the first quarter of 2002. Net loss on a Generally Accepted Accounting
Principles (GAAP) basis was $0.5 million, or $0.00 per share, for the first
quarter, compared to a net loss of $16.5 million, or $0.06 per share, in the
first quarter of 2002.
On a pro forma basis, as described below, the company realized pro forma net
income of $1.3 million, or $0.01 per share, in the first quarter of 2003,
compared with a pro forma net loss of $10.9 million, or ($0.04) per share, in
the first quarter of 2002.
"Our first quarter results reflect the momentum and increasing market impact of
our company," said Peter Gyenes, chairman and chief executive officer.
"Increasingly, data integration issues are recognized as major barriers to the
successful deployment of enterprise applications. As the first and only vendor
of a highly differentiated, end-to-end enterprise data integration product
suite, we believe we are uniquely capable of addressing these issues and thereby
providing high and rapid return on investment. Our success in delivering this
value is driving our growth in the marketplace."
At March 31, 2003, the company had $616.5 million in cash, cash equivalents and
short-term investments. The major items affecting cash in the quarter were
receipt of the entire $100.0 million holdback and $9.3 million in accrued
interest from the 2001 sale of the Informix database assets to IBM.
Additionally, the company was cash flow positive from operations in the quarter.
Days sales outstanding (DSO) for the first quarter of 2003 was 69 days, down
from 72 days in the fourth quarter, and well ahead of 94 days in the first
quarter of last year.
In a separate release today, the company announced that its Board of Directors
has proposed a 1-for-4 reverse split of its common stock. For information on
that proposal, see the press release or the company's preliminary proxy
statement, both of which have been electronically filed with the SEC and are
available at www.sec.gov.
HIGHLIGHTS
DURING THE FIRST QUARTER OF 2003, ASCENTIAL:
- - Signed 55 new customers including: Booz, Allen and Hamilton, China Mobile
JiangXi, DHL Worldwide, Gallagher Group PLC, Gannett, Hyundai Capital,
Johnson Controls, Land's End, Massachusetts Department of Public Health,
mmO2, NDC Health, St. Jude Medical and TotalFinaElf.
- - Expanded business with 119 existing customers including: AG Edwards,
Airbus, American International Group, AT&T, Boeing, CIBC, Freddie Mac,
General Motors, Household International, ING, JP Morgan Chase, J-Phone,
Lexmark, Matshushita Electric, London Electricity, McKesson, Telecom
Italia and Verizon.
- - Continued growing the list of organizations using multiple components of
our Enterprise Integration Suite, confirming customers' preference for
single platform, single vendor solutions. Examples include Boeing, DHL,
the Federal Bureau of Investigation, General Motors, GMAC, Household
International, NDC Health, Neuilly Gestion, Royal Mail and Telecom Italia.
- - Continued to expand our business with IBM, closing joint transactions with
customers such as ASCAP, BNP Paribas, Bombardier Aerospace, Boots,
Cincinnati Financial, Krung Thai Bank, Ricoh, the State of New Jersey
Department of Transportation, The Children's Place and Woolworth's.
- - Expanded our relationship with SAP by announcing support for SAP NetWeaver
- SAP's cross company and cross technology integration platform - and
Ascential's planned support for the Web Services-enabled SAP Enterprise
Services Architecture, while further penetrating the SAP market, with
sales to customers such as AEM/E Utile, Imperial Tobacco, LAM Research and
McKesson based on Ascential's SAP BW and SAP R/3 related solutions.
- - Announced a Basel II initiative to enable the world's largest banks and
major global financial institutions to comply with the New Capital Accord
(BASEL II) global financial risk management regulations. Ascential
provides software and services necessary to integrate, standardize and
transform critical risk-related data. SpareBank 1, NyKredit, Standard
Chartered Bank and Bank of China have already embarked on this effort with
Ascential Software.
- - Significantly expanded our relationships with global and regional system
integration and consulting partners, including AE Business Solutions,
Bearing Point, EDS, Greenbrier and Russell, IBM BCS, IBM IGS and Idea
Integration, among others. Educated over 250 partners and trained over 90
developers and consultants from partner organizations. Launched market
offerings with Bearing Point on SAP Instance Consolidation and with IBM
IGS in their Financial Services Data Migration Practice.
- - Received continued recognition by industry leading research organizations
as a global leader in enterprise integration. This quarter, Yphise, the
prestigious French software consultancy, cited Ascential Software as the
industry's best data movement, transformation and metadata solution.
Additionally, the prestigious market research institute, the Fuji Chimera
Research Institute, recognized Ascential as the market share leader in
Japan for data integration, based on Ascential's 32 percent share of the
Japanese market for ETL (Extract, Transform and Load).
- - Expanded our strategic market leadership by forming the Ascential Customer
Advisory Board (CAB), a forum of senior IT level customer representatives
to provide strategic input on important technology and market trends. The
CAB emphasized the trend toward "right-time" integration that allows
selection of the precise integration processing times needed to achieve
business goals and objectives, and validated the Ascential Enterprise
Integration Suite as a foundation element.
- - Received full certification from Siebel Systems for Ascential's data
quality and integration solution for Siebel eBusiness Applications version
7.5. Using Ascential(TM) INTEGRITY(TM) 6.0 with Siebel's eBusiness
Applications, companies can improve the quality of data and timeliness of
projects for both initial Siebel deployments and on-going Siebel
application solutions.
OUTLOOK AND COMPANY GUIDANCE
"We continue to be pleased with our rate of progress," said Pete Fiore,
president. "The unique differentiation of our Enterprise Integration Suite,
strong execution of our field operations, positive results from our strategic
alliance programs and growing industry recognition of our company are driving
our results. Integration infrastructure remains a top priority of our customers,
and a growing market opportunity, and we believe our recent track record
demonstrates that we have the ingredients to further extend our market
leadership and differentiation in the enterprise integration arena."
The company is currently projecting revenue growth of 20%-25% for 2003. Given
the continuing uncertainty surrounding IT spending in worldwide markets, revenue
in the second quarter may be flat to slightly higher sequentially. The company
continues to plan to achieve GAAP profitability during 2003, while pro forma
profitability is projected for each quarter of the year, barring unforeseen
circumstances. Pro forma profitability is calculated as fully described in the
following paragraph, with the predominant factors being the exclusion of
amortization of purchased intangibles and of legacy expenses. Amortization of
purchased intangibles is estimated to be approximately $1.3 million per quarter
during 2003. Legacy expenses, which are costs remaining from previously
announced discontinued business operations, were $1.2 million in the first
quarter, and are projected to be at approximately that level in the second
quarter, then diminish through the remainder of the year.
The company believes that the pro forma results described in this release are
useful for an understanding of its ongoing operations because GAAP results
include products and businesses that are no longer part of the company's ongoing
data integration business, as well as the non-cash charge associated with the
amortization of purchased intangibles, that have consistently been excluded in
prior pro forma presentations; however, pro forma results are not intended as a
substitute for GAAP results. Relative to GAAP, all pro forma results described
in this release exclude the following items, net of associated taxes:
amortization of purchased intangibles, such as developed technology and customer
lists; merger, realignment and other costs primarily related to employee
severance and the closure of idle facilities; revenue, expenses and other items
related to the Informix database assets sold to IBM during the third quarter of
2001, as well as adjustments to the gain associated with the sale of the
database assets; and revenue and expenses associated with the company's content
management product line that was terminated during the second quarter of 2002.
CONFERENCE CALL
Management will host a conference call at 5:00 PM (EST) today to discuss the
company's operating performance and results. The conference call will be
broadcast live through a link on the Investor Relations page on the Ascential
web site at www.ascential.com/investors. Please go to the web site at least
fifteen minutes prior to the call to register, download and install any
necessary audio software.
For those who cannot attend the live broadcast, a replay will be available on
the web site at www.ascential.com/investors or by calling (800) 947-6520
beginning about two hours after the call ends.
ABOUT ASCENTIAL
Ascential Software Corporation is the leading provider of enterprise integration
solutions to the Global 2000. Customers use the Ascential Enterprise Integration
Suite and products to turn vast amounts of disparate, unrefined data into
reusable information that drives business success. Ascential's unique
comprehensive data integration suite enables customers to easily collect,
validate, organize, administer and deliver information to realize more value
from their enterprise data, reduce costs and increase profitability.
Headquartered in Westboro, Mass., Ascential has offices worldwide and supports
more than 2,200 customers in such industries as financial services,
telecommunications, healthcare, life sciences, manufacturing, consumer goods and
retail. More information on Ascential can be found on the Web at
www.ascential.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: This public announcement contains forward-looking statements that are
subject to numerous risks and uncertainties. These forward-looking statements
address a variety of subjects including, for example, the usefulness of pro
forma results; GAAP and pro forma profitability; momentum and increasing market
impact; data integration issues as a barrier to deployment of enterprise
applications; return on investment; growth in the marketplace, market leadership
and differentiation; improvement in data quality and project timeliness;
customer priorities; and the ability of Ascential's customers to easily collect,
validate, organize, administer and deliver information to realize more value
from their enterprise data, reduce costs and increase profitability. Any
statements contained in this public announcement, including without limitation
statements to the effect that the company or its management "believes,"
"expects," "anticipates," "plans," "may," "will," "projects," "continues,"
"intends" or "estimates," or statements concerning "potential" or "opportunity"
or other variations thereof or comparable terminology or the negative thereof
that are not statements of historical fact should be considered forward-looking
statements as a result of certain risks and uncertainties. The financial
measures
discussed in this press release also involve risks and uncertainties and are
subject to final audited results for the period or periods covered. These risks
and uncertainties could cause actual results and events materially to differ for
historical or anticipated results and events. The following factors, among
others, could cause actual results to differ materially from those described in
these forward-looking statements: the ability of Ascential to expand its market
share; growth rates for the enterprise data integration software market; general
business conditions in the software industry, the technology sector, and in the
domestic and international economies; rapid technological change in the markets
served by Ascential; dependence on international operations; global and
geopolitical instability; and difficulties that Ascential may experience
integrating technologies, operations and personnel of completed or future
acquisitions. Investors and potential investors should review carefully the
description of risks and uncertainties that, together with other detailed
information about the company, is contained in the periodic reports that the
company files from time to time with the Securities and Exchange Commission,
including the company's most recent Form 10-K. The forward-looking statements
and financial measures contained herein represent the judgment of Ascential, as
of the date of this release, and Ascential disclaims any intent or obligation to
update such forward-looking statements to reflect any change in Ascential's
expectations with regard thereto or any change in events, conditions,
circumstances on which such statements are based.
(C) 2003 Ascential Software Corporation. All rights reserved. Ascential and
INTEGRITY are trademarks of Ascential Software Corporation or its affiliates and
may be registered in the United States or other jurisdictions. Other marks are
the property of the owners of those marks.
FOR MORE INFORMATION, CONTACT:
Paul LaBelle David Roy
Ascential Software Corporation Ascential Software Corporation
(508) 366-3888 x3256 (508) 366-3888 x3290
paul.labelle@ascential.com david.roy@ascential.com
Darby Johnson Stephanie Prince
Beaupre Public Relations FD Morgen-Walke
(603) 559-5809 (212) 850-5712
djohnson@beaupre.com sprince@morgenwalke.com
ASCENTIAL SOFTWARE CORPORATION
PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS (1)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three months ended March 31, 2003
---------------------------------
Total GAAP Pro Forma Pro Forma
Consolidated Adjustments (2) Adjusted
------------ --------------- --------
NET REVENUES
Licenses $ 19,170 $ -- $ 19,170
Services 16,126 (95) 16,031
--------- --------- --------
35,296 (95) 35,201
COSTS AND EXPENSES
Cost of licenses 3,601 (1,113) 2,488
Cost of services 7,247 (254) 6,993
Sales and marketing 16,695 -- 16,695
Research and development 5,370 -- 5,370
General and administrative 6,409 (1,325) 5,084
--------- --------- --------
39,322 (2,692) 36,630
Operating income (loss) (4,026) 2,597 (1,429)
OTHER INCOME (EXPENSE)
Interest income 3,312 -- 3,312
Interest expense (23) -- (23)
Other, net (26) -- (26)
--------- --------- --------
INCOME (LOSS) BEFORE INCOME TAXES (763) 2,597 1,834
Income tax expense(benefit) (229) 780 551
--------- --------- --------
NET INCOME (LOSS) $ (534) $ 1,817 $ 1,283
========= ========= ========
NET INCOME (LOSS) PER COMMON SHARE
Basic $ 0.00 $ 0.01
========= ========
Diluted $ 0.00 $ 0.01
========= ========
SHARES USED IN PER SHARE CALCULATIONS
Basic 231,504 231,504
======= =======
Diluted 231,504 233,096
======= =======
(1) See Unaudited Consolidated Statements of Operations in GAAP format on the
next page of this release. Note that pro forma presentation is not
intended to replace GAAP presentation. Pro forma measures are calculated
in the manner described in this release.
(2) Pro forma adjustments represent:
-revenue and expenses associated with the remaining service obligations
under content management customer contracts including $95 in maintenance
revenue, $94 in cost of services and $24 of general and administrative
costs. The content management product line was terminated during the
second quarter of 2002.
-amortization of purchased intangibles including technology and customer
lists consisting of $1,113 in cost of licenses, $160 in cost of services
and $72 in general and administrative .
-general and administrative costs totaling $1,229 associated with the
Informix database business sold to IBM in the third quarter of 2001;
comprised primarily of dispute resolution costs and administrative costs
associated with the closure of idle database operations.
-the estimated tax benefit of $780 associated with the above adjustments
based on the overall effective tax rate.
ASCENTIAL SOFTWARE CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(1)
Three Months Ended
March 31,
2003 2002
---- ----
NET REVENUES
Licenses $ 19,170 $ 10,751
Services 16,126 10,042
------ ------
35,296 20,793
COSTS AND EXPENSES
Cost of licenses 3,601 3,149
Cost of services 7,247 8,010
Sales and marketing 16,695 18,684
Research and development 5,370 6,433
General and administrative 6,409 14,545
Merger, realignment and other charges (2) -- 4,679
------ ------
39,322 55,500
Operating loss (4,026) (34,707)
OTHER INCOME (EXPENSE)
Interest income 3,312 6,233
Interest expense (23) (21)
Adjustment to gain on sale of database business -- 7,634
Other, net (26) (1,166)
------ ------
LOSS BEFORE INCOME TAXES (763) (22,027)
Income tax benefit (229) (5,507)
------ ------
NET LOSS $ (534) $ (16,520)
========= =========
NET LOSS PER COMMON SHARE
Basic and Diluted $ 0.00 $ (0.06)
========= =========
SHARES USED IN PER SHARE CALCULATIONS
Basic and Diluted 231,504 256,530
========= =========
(1) See pro forma results of operations, which are discussed in the text of this
press release, and related reconciliation between GAAP and pro forma results for
the three months ended March 31, 2003 and 2002, on subsequent pages of this
release.
(2) Merger, realignment and other charges include principally severance, real
estate costs resulting from realignment of the business, sales or terminations
of businesses or product lines or consolidation and elimination and offices.
ASCENTIAL SOFTWARE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS March 31, 2002 December 31, 2002
-------------- -----------------
CURRENT ASSETS
Cash and cash equivalents $358,435 $216,551
Short-term investments 258,102 288,199
Accounts receivable, net 26,887 27,112
Receivable on sale of database business -- 109,200
Other current assets 27,508 31,136
-------- --------
Total current assets 670,932 672,198
Property and equipment, net 5,485 5,427
Software costs, net 14,311 14,124
Long-term investments 979 966
Intangible assets, net 172,349 173,740
Deferred income taxes 28,437 28,515
Other assets 10,968 11,280
-------- --------
Total Assets $903,461 $906,250
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,249 $ 8,136
Accrued expenses 22,485 23,137
Accrued employee compensation 11,945 14,861
Income taxes payable 99,969 98,916
Deferred revenue 22,064 17,666
Accrued merger, realignment and other charges 11,392 15,698
Deferred income taxes 33,169 33,171
Other current liabilities 432 479
-------- --------
Total current liabilities 209,705 212,064
TOTAL STOCKHOLDERS' EQUITY 693,756 694,186
-------- --------
Total Liabilities and Stockholders' Equity $903,461 $906,250
======== ========
ASCENTIAL SOFTWARE CORPORATION
SELECTED UNAUDITED REVENUE HISTORY
(In millions)
Total
Q1 2002 Q2 2002 Q3 2002 Q4 2002 2002 Q1 2003
------- ------- ------- ------- ----- -------
LICENSE REVENUE:
Data Integration $ 10.7 $ 15.1 $ 14.9 $ 18.8 $ 59.5 $ 19.2
Content Management .1 -- -- .1 .1 --
------- ------- ------- ------- -------- -------
Total 10.8 15.1 14.9 18.9 59.6 19.2
SERVICES REVENUE:
Data Integration 9.3 12.5 15.1 15.1 52.0 16.0
Content Management .7 .4 .2 .1 1.4 .1
------- ------- ------- ------- -------- -------
Total 10.0 12.9 15.3 15.2 53.4 16.1
TOTAL:
Data Integration 20.0 27.6 30.0 33.9 111.5 35.2
Content Management .8 .4 .2 .2 1.5 .1
------- ------- ------- ------- -------- -------
Total $ 20.8 $ 28.0 $ 30.2 $ 34.1 $ 113.0 $ 35.3
======= ======= ======= ======= ======== =======
% of revenue from 10% customers in period
11% -- 11% 16% 11% --
======= ======= ======= ======= ======== =======
ASCENTIAL SOFTWARE CORPORATION
PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS (1)
(In thousands, except per share data)
Three Months Ended March 31, 2002
---------------------------------
Results Other
Total of Content Database Pro Forma
Consolidated Management Transaction Adjustments Pro Forma
GAAP Product Line (2) & Transition (3) (4) Adjusted
---- ---------------- ---------------- --- --------
NET REVENUES
Licenses $ 10,751 $ (26) -- -- $ 10,725
Services 10,042 (714) -- -- 9,328
------ ------ ------- ---- ------
20,793 (740) -- -- 20,053
COSTS AND EXPENSES
Cost of licenses 3,149 (264) (806) (433) 1,646
Cost of services 8,010 (1,483) -- (160) 6,367
Sales and marketing 18,684 (456) -- -- 18,228
Research and development 6,433 (1,770) -- -- 4,663
General and administrative 14,545 (305) (5,577) -- 8,663
Merger, realignment and other charges (5) 4,679 -- (4,379) (300) --
------ ------ ------- ---- ------
55,500 (4,278) (10,762) (893) 39,567
Operating income (loss) (34,707) 3,538 10,762 893 (19,514)
OTHER INCOME (EXPENSE)
Interest income 6,233 -- -- -- 6,233
Interest expense (21) -- -- -- (21)
Adjustment to gain on sale of database business 7,634 -- (7,634) -- --
Other, net (1,166) -- -- -- (1,166)
------ ------ ------- ---- ------
INCOME (LOSS) BEFORE INCOME TAXES (22,027) 3,538 3,128 893 (14,468)
Income tax expense (benefit) (5,507) 884 782 223 (3,618)
------ ------ ------- ---- ------
NET INCOME (LOSS) $ (16,520) $ 2,654 $ 2,346 $ 670 $(10,850)
========= ========= ========= ====== ========
NET LOSS PER COMMON SHARE
Basic and diluted $ (0.06) $ (0.04)
======== ========
SHARES USED IN PER SHARE CALCULATIONS 256,530 256,530
======= =======
(1) See Unaudited Consolidated Statements of Operations on a previous page of
this release. Pro forma presentation is not intended to replace GAAP
presentation. Pro forma measures are calculated in the manner described in this
release.
(2) Operating results in this column include revenue and expenses associated
with the content management product line which was in the process of being
divested during the first quarter of 2002 and was terminated during the second
quarter of 2002, and associated tax benefit.
(3) Operating results in this column include income and expenses associated with
the database assets sold to IBM, and is comprised primarily of litigation
settlements, adjustments to real estate reserves and adjustments to the gain
recorded on the sale of the database assets, and associated tax benefit.
(4) Other pro forma adjustments consist of $433 and $160 of purchased intangible
amortization recorded to cost of licenses and cost of services, respectively,
and $300 of merger, realignment and other charges relating to the consolidation
of Ascential offices, and associated tax benefit.
(5) Merger, realignment and other charges consist of adjustments to real estate
reserves and severance associated with the sale of the database business to IBM
as well as severance and costs associated with the consolidation of Ascential
offices