Exhibit 99.1
SERENA Software Reports Third Quarter Results; Non GAAP EPS
of $0.19 and Software Licenses Revenue of $11.0 Million
SAN MATEO, Calif.--(BUSINESS WIRE)--Nov. 20, 2003--SERENA
Software, Inc. (Nasdaq: SRNA), an industry-leading supplier of
software that automates change to enterprise code and content,
announced today net income per diluted share, excluding amortization
of intangible assets, of $0.19 for the third fiscal quarter ending
October 31, 2003, up 6% over the same quarter a year ago and 12%
sequentially. In the third quarter of fiscal 2004, the Company
exceeded consensus expectations and posted sequential growth in all
revenue categories, and non GAAP operating income, net income and
earnings per share.
Total revenues of $26.7 million in the third quarter of fiscal
2004 represented an 8% increase over the third quarter of fiscal 2003,
and a 7% sequential increase over the second quarter. Software
licenses revenue was $11.0 million, maintenance revenue was $13.1
million, and services revenue was $2.6 million, all up sequentially.
License revenue from software change management was 72% of total
license revenue, with 36% of license revenues coming from distributed
systems platforms.
Excluding intangibles amortization, operating income for the third
quarter ended October 31, 2003 was $9.6 million and operating margin
excluding intangibles amortization was 36%, up from 35% in the prior
quarter.
Excluding intangibles amortization, net income and net income per
diluted share for the third quarter of fiscal 2004 increased 4% and
6%, respectively, to $7.5 million and $0.19 from $7.3 million and
$0.18 in the third quarter of fiscal 2003. Net income and net income
per diluted share computed in accordance with generally accepted
accounting principles decreased to $4.8 million and $0.12,
respectively, from $6.1 million and $0.15 in the same quarter a year
ago.
Cash flow from operations was $7.1 million in the quarter and
total cash and investments at October 31, 2003 was $163 million or
$4.07 per diluted share. Total deferred revenue at October 31, 2003
was $35.5 million and Days Sales Outstanding were 52 days in the third
quarter, an improvement of 6 days from the prior quarter. The Company
repurchased a total of 905,800 shares of common stock during the third
quarter.
"I am extremely pleased with our performance this quarter," said
President and CEO Mark Woodward. "We completed the first full quarter
after our successful acquisition of TeamShare, announced the Serena
Application Framework for Enterprise (SAFE(TM)) strategic initiative
and were able to exceed consensus expectations. We remain in
outstanding financial condition and look forward to the future."
The Company also announced guidance for the fourth quarter of
fiscal 2004. For the fourth quarter total revenues are expected to be
in the range of $27.5 million to $28.5 million and net income per
fully diluted share excluding intangibles amortization is expected to
be between $0.20 and $0.21.
Third Quarter Highlights
-- Announced the next-generation advanced framework for
Application Life Cycle Management. The SAFE(TM) framework
(Serena Application Framework for Enterprises) revolutionizes
enterprise operations by facilitating cross-process
integration.
-- Announced delivery of the new release of Serena's Distributed
Change Management Solution, including integration with Serena
TeamTrack, extended support for WebSphere Studio, the Eclipse
Platform and Mercury Interactive's TestDirector.
-- Announced that Dairy Farmers of America selected Serena to
provide a complete Enterprise Change Management solution,
providing seamless, cross-platform support across development
environments and enabling the DFA to satisfy stringent audit
requirements.
-- Announced momentum gains with the System Integrator channel
through partnership agreements with Parrus Technologies LLC,
Phoenix Business & Systems Process Consulting and Rebel Vision
Corporation.
-- Announced a new version of Application Performance Manager,
Serena StarTool APM 4.1, helping customers improve enterprise
productivity with extended platform support and enhanced
monitoring and reporting capabilities.
-- Announced that Serena ranked on Business 2.0 Magazine's "B2
100" list for the second consecutive year and remains the only
Enterprise Change Management company to make this list.
-- Announced customer satisfaction survey findings with global
customer data. Customer satisfaction levels remain high for
the eleventh consecutive quarter.
-- Announced that Serena ranked on Forbes' Annual "Hot Shots"
list for the second consecutive year and that the Company
remains the only Enterprise Change Management company to make
the list. With its 123 "Hot Shot" position overall, the
Company improved its ranking in both profitability and market
value.
Commentary Available
A conference call to discuss the preliminary results is scheduled
for 2:00 PM Pacific time today and may be accessed live via the
Internet at www.companyboardroom.com or www.serena.com/q3results.
Additionally investors can listen to the call by dialing 877-655-7651
or 706-679-5273 at least 5 minutes prior to the start time. A replay
of the call will be available through November 26, 2003 by dialing
706-645-9291, code #3942907.
About SERENA Software, Inc.
SERENA Software, Inc. is the Enterprise Change Management (ECM)
industry leader. For over twenty years Serena has focused exclusively
on providing solutions that help companies automate change to the
applications that run their businesses. Today its products are in use
at over 3,600 customer sites - including 46 of the Fortune 50.
Serena's Application Framework for Enterprises (SAFE(TM)) is the next
step in ECM, providing cross-platform, cross-process and
cross-organizational support across application life cycle processes.
This approach helps streamline development, improve productivity and
lower development costs, resulting in a highly efficient enterprise.
With headquarters in San Mateo, California, Serena serves customers
worldwide through local offices and an international network of
distributors. www.serena.com.
This press release contains "forward-looking statements" under the
Private Securities Reform Act of 1995. There can be no assurance that
future results will be achieved, and actual results could differ
materially from forecasts and estimates. Factors that could cause or
contribute to such differences include, but are not limited to, our
reliance on our mainframe products for revenue; the percentage of
license revenue typically closed at the end of each quarter making
estimation of operating results prior to the end of the quarter
extremely uncertain; weak economic conditions worldwide which may
continue to affect the overall demand for software and services, which
has resulted in and could continue to result in decreased revenues or
lower revenue growth rates; changes in revenue mix and seasonality;
our ability to deliver our products on the distributed systems
platform; dependence on revenues from our installed base; continued
demand for additional mainframe MIPS capacity; successful integration
of our recent acquisition; expansion of our international
organizations; and our ability to manage our growth. Information about
potential factors that could affect the Company's financial results is
included in the Company's Form 10K filed on April 29, 2003 and Form
10Q filed on September 12, 2003. SERENA assumes no obligation to
update the forward-looking information contained in this press
release.
Trademarks
Serena, ChangeMan, Comparex and StarTool are registered trademarks
of SERENA Software Inc. All other products or company names mentioned
are used for identification purposes only, and may be trademarks of
their respective owners.
(C) 2003 SERENA Software, Inc. All Rights Reserved.
SERENA Software, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------- ---------------------
2003 2002 2003 2002
--------- --------- ---------- ----------
Revenue:
Software licenses $10,963 $11,502 $31,862 $31,458
Maintenance 13,121 11,165 37,481 32,957
Professional services 2,571 1,966 6,593 5,262
--------- --------- ---------- ----------
Total revenue 26,655 24,633 75,936 69,677
--------- --------- ---------- ----------
Cost of revenue:
Software licenses 129 363 512 946
Maintenance 1,606 1,405 4,715 4,192
Professional services 2,462 1,794 6,506 4,715
--------- --------- ---------- ----------
Total cost of revenue 4,197 3,562 11,733 9,853
--------- --------- ---------- ----------
Gross profit 22,458 21,071 64,203 59,824
--------- --------- ---------- ----------
Operating expenses:
Sales and marketing 7,341 6,487 21,008 19,487
Research and development 3,671 2,981 10,130 8,873
General and administrative 1,881 1,811 5,349 5,200
Stock-based compensation - 5 - 22
Amortization of intangible
assets 2,664 1,113 5,881 3,405
--------- --------- ---------- ----------
Total operating expenses 15,557 12,397 42,368 36,987
--------- --------- ---------- ----------
Operating income 6,901 8,674 21,835 22,837
Interest and other income,
net 677 1,237 2,495 3,633
--------- --------- ---------- ----------
Income before income taxes 7,578 9,911 24,330 26,470
Income taxes 2,728 3,766 8,946 10,059
--------- --------- ---------- ----------
Net income $4,850 $6,145 $15,384 $16,411
========= ========= ========== ==========
Net income, excluding
intangibles amortization $ 7,514 $ 7,258 $ 21,265 $ 19,816
========= ========= ========== ==========
Net income per share:
Basic $0.12 $0.15 $0.38 $0.41
========= ========= ========== ==========
Diluted $0.12 $0.15 $0.38 $0.40
========= ========= ========== ==========
Diluted, excluding
intangibles amortization $0.19 $0.18 $0.53 $0.49
========= ========= ========== ==========
Weighted average shares used
in per share calculations:
Basic 39,545 40,420 40,032 40,292
========= ========= ========== ==========
Diluted 40,173 41,000 40,706 40,772
========= ========= ========== ==========
Reconciliation of U.S. GAAP
to Non-U.S. GAAP Financial
Information:
U.S. GAAP operating income $6,901 $8,674 $21,835 $22,837
Add back: Amortization of
intangible assets 2,664 1,113 5,881 3,405
--------- --------- ---------- ----------
Non-U.S. GAAP operating
income $9,565 $9,787 $27,716 $26,242
========= ========= ========== ==========
U.S. GAAP net income $4,850 $6,145 $15,384 $16,411
Add back: Amortization of
intangible assets 2,664 1,113 5,881 3,405
--------- --------- ---------- ----------
Non-U.S. GAAP net income $7,514 $7,258 $21,265 $19,816
========= ========= ========== ==========
SERENA Software Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
October January
31, 31,
2003 2003
--------- ---------
Assets
Current assets
Cash and cash equivalents $105,297 $105,402
Short-term investments 18,392 37,672
Accounts receivable, net 15,296 16,514
Deferred taxes, net 4,862 6,549
Prepaid expenses and other current assets 965 744
--------- ---------
Total current assets 144,812 166,881
Long-term investments 39,753 48,374
Property and equipment, net 3,269 3,078
Deferred taxes, net 259 103
Goodwill and other intangible assets, net 61,632 45,360
Other assets 280 269
--------- ---------
Total assets $250,005 $264,065
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,251 $533
Income taxes payable 4,014 7,921
Accrued expenses 7,020 8,266
Deferred revenue 26,294 26,010
--------- ---------
Total current liabilities 38,579 42,730
Deferred revenue, net of current portion 9,254 8,373
--------- ---------
Total liabilities 47,833 51,103
Stockholders' equity:
Total stockholders' equity 202,172 212,962
--------- ---------
Total liabilities and stockholders' equity $250,005 $264,065
========= =========
CONTACT: SERENA Software, Inc.
Robert I. Pender, Jr., 650-522-6604