EXHIBIT 99 ASPECT TELECOMMUNICATIONS ANNOUNCES FINANCIAL RESULTS FOR FOURTH QUARTER AND FULL YEAR 1998 SAN JOSE, CA, Jan. 20, 1999--Aspect Telecommunications Corporation (Nasdaq:ASPT) today reported financial results for its fourth quarter and fiscal year ended December 31, 1998. Revenues for fiscal year 1998 were $512.3 million, a 31 percent increase over fiscal year 1997. For the fourth quarter, revenues were $134.8 million, a 27 percent increase over the same quarter last year and a two percent decline from the previous quarter. Diluted earnings per share for the quarter were $0.11 compared to $0.08 in the same quarter last year and $0.21 in the previous quarter. Diluted earnings per share for all of 1998 were $0.61 compared to $0.67 in the previous year. The diluted earnings per share figures for 1998 and the attached condensed consolidated financial statements reflect the results of applying new SEC guidance regarding in-process research and development charges related to the acquisition of Voicetek in May 1998. Excluding non-recurring items, diluted earnings per share for all of 1998 were $0.80 compared to $0.91 in the previous year. Excluding the impact of amortization expenses resulting from the Voicetek acquisition as well as non-recurring items, diluted earnings per share were $0.16 in the fourth quarter of 1998 compared with $0.25 in the same quarter last year and $0.26 in the prior quarter. Calculated on the same basis, diluted earnings per share for fiscal year 1998 were $0.93 compared with $0.91 in fiscal year 1997. In the fourth quarter, Aspect's Board of Directors authorized a share repurchase program of up to five million shares of the company's common stock. During the quarter ended December 31, 1998, the company repurchased approximately two million shares through this program, utilizing cash of approximately $31.6 million. "As previously announced, our North American region did not perform at expected levels in the most recent quarter," noted James R. Carreker, Aspect's chairman, president and chief executive officer. "Although there were some bright spots in the region, we are evaluating the challenges we face in North America and strategies to improve execution in this region." As part of the sales channel restructuring, Mr. Carreker has assumed the role of interim executive vice president, Channels, until a search is completed for a replacement for Dennis L. Haar, who has left the company. Also, as previously announced, Lin F. Johnstone, a ten-year company employee and currently vice president of Aspect's Europe, Middle East and Africa (EMEA) region, has been appointed interim vice president, North America, succeeding Larry S. Miller, who has also left the company. Carreker stated, "I am very pleased that Lin Johnstone, a well-admired and proven channel leader, is now driving our North American sales organization. During the last two years, Lin has assembled a self-sufficient team in Europe, which will enable her to focus her time on implementing in North America those best practices that have contributed to the success in the EMEA region." Mr. Carreker continued, "We are committed to shifting the company's focus from telecommunications equipment to becoming a leading supplier of enterprise software and solutions. As part of our commitment to make this transformation rapidly, we have begun to put in place a new management team of seasoned executive talent to lead the company during our next phase of business expansion. For example, Beatriz V. Infante, who joined the company in October 1998 as executive vice president, Products, is establishing a new market and product direction designed to position Aspect as an innovative provider of customer relationship solutions. While implementing this shift in focus, we are committed to making the investments in our product development and sales organizations necessary to achieve these objectives." Aspect also stated that, based on limited information currently available, the company anticipates that its revenue for the first quarter of 1999 is likely to be approximately $115 million, plus or minus $10 million, and that revenue growth rates will begin to return to their historical range in the second half of 1999. At such revenue levels, again based on currently available information, the company is likely to report an operating loss for the first quarter of 1999 and may experience losses for an additional one to two quarters. About Aspect Telecommunications Aspect Telecommunications provides comprehensive business solutions for mission- critical call centers worldwide. Aspect integrated call center products and services help a diverse array of businesses such as airlines, catalog retailing, financial services and communications enhance productivity, increase revenues and provide superior customer service. Aspect products include automatic call distributors, computer-telephony integration solutions, call center management and reporting software, interactive voice response and automation solutions and planning and forecasting packages. The company also provides business applications consulting and systems integration services and around-the-clock support. Aspect is based in San Jose, California, with offices in North America, Europe and Asia-Pacific. For more information about Aspect Telecommunications, call 1-800-226-8441. Except for historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and are made under the safe-harbor provisions thereof. Included among other forward looking statements are statements concerning future revenues, revenue growth rates and operating results. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected including the following: the ability of the company to successfully shift its emphasis from telecommunications equipment to enterprise software and solutions; the ability to improve performance in the company's North American region in a timely manner; the ability to attract and retain personnel in key sales, technical and management positions; the impact of intense competition in the company's product and service markets; customer acceptance and technical performance of new products and services; the ability to manage the company's consulting and systems integration business unit in a profitable manner; and the impact of general macroeconomic uncertainties leading to lower capital spending, as well as the potential impact of the Year 2000 problem. Other risks that could cause actual results to differ materially from those projected are discussed in Aspect's Form 10-K and Annual Report for the fiscal year ended December 31, 1997 and Forms 10-Q for the fiscal quarters ended March 31, 1998, June 30, 1998 and September 30, 1998, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. Aspect undertakes no obligation to publicly release the results of any revision to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Aspect and the Aspect logo are trademarks or registered trademarks of Aspect Telecommunications Corporation in the United States and/or other countries. All other product or service names mentioned in this document may be trademarks of the companies with which they are associated. ASPECT TELECOMMUNICATIONS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data - unaudited) Three Months Ended Twelve Months Ended ------------------ ------------------- December 31, December 31, 1998 1997 1998 1997 ---- ---- ---- ---- Net revenues: Product $ 86,921 $ 74,429 $342,903 $276,471 Customer support 47,895 31,861 169,413 114,171 -------- -------- -------- -------- Total net revenues 134,816 106,290 512,316 390,642 -------- -------- -------- -------- Cost of revenues: Cost of product revenues 26,564 24,314 108,397 89,529 Cost of customer support revenues 36,612 21,094 119,787 79,444 -------- -------- -------- -------- Total cost of revenues 63,176 45,408 228,184 168,973 -------- -------- -------- -------- Gross margin 71,640 60,882 284,132 221,669 Operating expenses: Research and development 19,457 11,759 67,877 45,723 Selling, general and administrative 43,011 29,224 150,118 104,431 Purchased in-process technology - - 9,899 4,910 Intellectual property settlement - 14,000 - 14,000 -------- -------- -------- -------- Total operating expenses 62,468 54,983 227,894 169,064 -------- -------- -------- -------- Income from operations 9,172 5,899 56,238 52,605 Interest and other income, net 72 1,207 3,011 7,673 -------- -------- -------- -------- Income before income taxes 9,244 7,106 59,249 60,278 Provision for income taxes 3,582 2,735 26,759 25,096 -------- -------- -------- -------- Net income $ 5,662 $ 4,371 $ 32,490 $ 35,182 ======== ======== ======== ======== Basic earnings per share $0.11 $0.09 $0.64 $0.71 Weighted average shares outstanding 50,046 49,801 50,459 49,302 Diluted earnings per share $0.11 $0.08 $0.61 $0.67 Weighted average shares outstanding- assuming dilution 51,704 52,549 53,146 52,307 ASPECT TELECOMMUNICATIONS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 1998 1997 ---- ---- Assets Current assets: Cash, cash equivalents and short-term investments $196,111 $146,216 Accounts receivable, net 132,818 86,896 Inventories 18,916 12,306 Other current assets 14,820 20,413 -------- -------- Total current assets 362,665 265,831 Property and equipment, net 69,192 58,704 Intangible assets, net 119,052 42,654 Other assets 9,750 3,154 -------- -------- Total assets $560,659 $370,343 ======== ======== Liabilities and shareholders' equity Current liabilities: Accounts payable $ 18,239 $ 9,401 Current portion of notes payable 3,300 6,399 Accrued liabilities 55,778 64,591 Customer deposits and deferred revenue 27,171 15,626 -------- -------- Total current liabilities 104,488 96,017 -------- -------- Notes payable - 6,531 Deferred taxes 4,270 - Convertible subordinated debentures 153,744 - Shareholders' equity 298,157 267,795 -------- -------- Total liabilities and shareholders' equity $560,659 $370,343 ======== ======== ASPECT TELECOMMUNICATIONS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data - unaudited) Year Three Months Ended Ended ------------------------------------------ ------- March 31, June 30, Sept. 30, Dec. 31, Dec. 31, 1998 1998 (a) 1998 (a) 1998 1998 --------- -------- --------- -------- -------- Net revenues: Product $77,332 $86,654 $91,996 $ 86,921 $342,903 Customer support 36,125 39,437 45,956 47,895 169,413 ------- ------- ------- -------- -------- Total net revenues 113,457 126,091 137,952 134,816 512,316 ------- ------- ------- ------- ------- Cost of revenues: Cost of product revenues 24,372 27,944 29,517 26,564 108,397 Cost of customer support revenues 24,170 28,379 30,626 36,612 119,787 ------- ------- ------- ------- ------- Total cost of revenues 48,542 56,323 60,143 63,176 228,184 ------- ------- ------- ------- ------- Gross margin 64,915 69,768 77,809 71,640 284,132 Operating expenses: Research and development 12,830 16,125 19,465 19,457 67,877 Selling, general and administrative 31,084 35,617 40,406 43,011 150,118 Purchased in-process technology - 9,899 - - 9,899 ------- ------- ------- ------- ------- Total operating expenses 43,914 61,641 59,871 62,468 227,894 ------- ------- ------- ------- ------- Income from operations 21,001 8,127 17,938 9,172 56,238 Interest and other income, net 1,413 1,091 435 72 3,011 ------- ------- ------- ------- ------- Income before income taxes 22,414 9,218 18,373 9,244 59,249 Provision for income taxes 8,517 7,529 7,131 3,582 26,759 ------- ------- ------- ------- ------- Net income $ 13,897 $ 1,689 $ 11,242 $ 5,662 $ 32,490 ======= ======= ======= ======= ======= Basic earnings per share $0.28 $0.03 $0.22 $0.11 $0.64 Weighted average shares outstanding 50,146 50,437 50,946 50,046 50,459 Diluted earnings per share $0.26 $0.03 $0.21 $0.11 $0.61 Weighted average shares outstanding-assuming dilution 53,071 53,584 54,130 51,704 53,146 (a) Restated for the revised purchase price allocation and amortization of intangible assets related to the Voicetek acquisition completed in May 1998. ASPECT TELECOMMUNICATIONS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) March 31, June 30, Sept. 30, Dec. 31, 1998 1998 (a) 1998 (a) 1998 ---- -------- -------- ---- Assets Current assets: Cash, cash equivalents and short-term investments $146,806 $ 82,941 $205,764 $196,111 Accounts receivable, net 94,866 106,590 141,407 132,818 Inventories 13,265 12,283 14,221 18,916 Other current assets 16,152 14,715 17,467 14,820 -------- -------- -------- -------- Total current assets 271,089 216,529 378,859 362,665 Property and equipment, net 62,161 67,598 69,430 69,192 Intangible assets, net 41,022 127,425 125,523 119,052 Other assets 3,138 4,302 9,682 9,750 -------- -------- -------- -------- Total assets $377,410 $415,854 $583,494 $560,659 ======== ======== ======== ======== Liabilities and shareholders' equity Current liabilities: Accounts payable $ 12,120 $ 16,496 $ 16,162 $ 18,239 Current portion of notes payable 6,149 6,799 4,500 3,300 Accrued liabilities 45,706 51,199 51,998 55,778 Customer deposits and deferred revenue 22,637 24,681 28,734 27,171 -------- -------- -------- -------- Total current liabilities 86,612 99,175 101,394 104,488 Notes payable 6,607 5,782 - - Deferred taxes - 8,798 8,187 4,270 Convertible subordinated debentures - - 151,491 153,744 Shareholders' equity 284,191 302,099 322,422 298,157 -------- -------- -------- -------- Total liabilities and shareholders' equity $377,410 $415,854 $583,494 $560,659 ======== ======== ======== ======== (a) Restated for the revised purchase price allocation and amortization of intangible assets related to the Voicetek acquisition completed in May 1998.