Exhibit 99.1
PeopleSoft Reports Second Quarter 2004 Results
PLEASANTON, Calif.--(BUSINESS WIRE)--July 27, 2004--PeopleSoft,
Inc. (Nasdaq:PSFT) today announced its second quarter 2004 financial
results. For the quarter ended June 30, 2004, the Company reported
license revenue of $130 million and total revenue of $647 million.
Pro forma net income was $51 million for the second quarter of
2004, compared to $54 million in the same period last year. Pro forma
earnings per share were $0.14, compared with $0.17 in the same period
last year.
On a GAAP basis, net income for the second quarter of 2004 was $11
million compared with $37 million in the same period last year. GAAP
earnings per share were $0.03 for the second quarter compared with
$0.11 in the same period last year.
Cash flow from operations in the second quarter of 2004 was $89
million. At June 30, 2004, the Company's cash and investment balances
were $1.6 billion and Days Sales Outstanding for the quarter was 55
days.
Pro forma results exclude restructuring charges and purchase
accounting adjustments and other charges arising from the acquisition
of J.D. Edwards, including the revenue impact of the deferred
maintenance write-down to fair value, and the amortization of
capitalized software and intangibles. Pro forma results also exclude
costs directly associated with Oracle's hostile tender offer.
Historical pro forma results have been adjusted to reflect this
presentation. A reconciliation of the pro forma to GAAP financial
measures in this press release is incorporated below and is available
on our website at www.peoplesoft.com.
Management Commentary
"Our financial results in Q2 reflected the heavy media coverage of
the United States of America versus Oracle trial," said President and
CEO Craig Conway. "Clearly it was the elephant in the room for our
customers.
"Considering the extraordinary circumstances we were operating
under, our performance was still solid with more than 160 new
customers, and strong cash flow and bottom line earnings," Conway
added. "We believe these signs point to strong performance when a
decision is reached in this case and we are on a level playing field
again."
Customer Wins
Leading organizations that chose PeopleSoft's applications during
the quarter included: AmeriGas Propane, Blockbuster, Blue Cross Blue
Shield of Florida, Carrefour, Casio Computer, Federal Signal, FedEx,
Government of Puerto Rico Dept. of Treasury, ING Bank, Johnson
Matthey, Kaiser Foundation Hospitals, Leggett & Platt, Lehman
Brothers, Lennar, Medtronic, Nomura Holding America, Office of the
Deputy Chief of Staff (US Army), Talkline, Total Fina Elf, Toyota
Motor Manufacturing North America and the University of Vermont.
Non-GAAP Financial Measures
The Company utilizes non-GAAP financial measures in analyzing
financial results because they are useful to investors and management
in evaluating the Company's ongoing operational performance. These
financial measures facilitate making period-to-period comparisons
exclusive of the impact of certain events, such as the acquisition of
J.D. Edwards, other restructuring charges, and the costs directly
associated with responding to Oracle's hostile tender offer, which
events might otherwise obscure the results of our core business when
compared to our competitors or our own historical performance. In
addition, presentation of these non-GAAP financial measures enables
investors to evaluate the Company's performance under both the GAAP
and pro forma measures that management and the Board of Directors use
to evaluate the Company's performance.
Where non-GAAP financial measures have been included in this press
release, the Company has provided the comparable GAAP measure and, in
the table below, reconciled the GAAP to the non-GAAP measures. A
reconciliation of these GAAP to non-GAAP financial measures is also
available on our web site at www.peoplesoft.com.
PeopleSoft's non-GAAP financial measures are not prepared in
accordance with generally accepted accounting principles and may be
different from non-GAAP financial measures used by other companies.
PeopleSoft's non-GAAP financial measures should not be considered as a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP.
The following table reconciles the non-GAAP financial measures to
GAAP (in thousands except EPS):
Q2 2004 Q2 2003
----------------------- ----------------------
Net Income EPS Net Income EPS
--------------- ------- ----------------------
Pro forma $50,536 $0.14 $53,783 $0.17
Revenue impact of
deferred maintenance
write-down (10,252) (0.03)
Oracle costs (10,469) (0.03) (8,763) (0.03)
Restructuring charges (2,460) (0.01) (8,486) (0.03)
Amortization of
capitalized software
and intangible assets (16,377) (0.04)
--------------- ------- ----------------------
GAAP $10,978 $0.03 $36,534 $0.11
=============== ======= ======================
Company to Host Conference Call
PeopleSoft will host a conference call today, July 27, 2004, at
3:00 p.m. PT/6:00 p.m. ET to discuss the quarterly results. A live
audio-only web cast of the call will be made available in the Investor
Relations section of the Company's web site at www.peoplesoft.com. A
replay of the call will be made available for seven days following the
call and will be accessible on the Company's web site.
About PeopleSoft
PeopleSoft (Nasdaq:PSFT) is the world's second largest provider
of enterprise application software with 12,200 customers in more than
25 industries and 150 countries. For more information, visit us at
www.peoplesoft.com.
PeopleSoft and the PeopleSoft logo are registered trademarks of
PeopleSoft, Inc. All other Company and product names may be trademarks
of their respective owners. Copyright (C) 2004 PeopleSoft, Inc. All
rights reserved.
Forward-Looking Statements
This press release may contain forward-looking statements that
state PeopleSoft's intentions, beliefs, expectations, or predictions
for the future. You are cautioned that these statements are only
predictions and may differ materially from actual future events or
results. All forward-looking statements are only as of the date they
are made and PeopleSoft undertakes no obligation to update or revise
them. The specific forward-looking statements relate to such matters
as the impact of PeopleSoft's combination with J.D. Edwards including
the integration, the profitability of our international operations,
and the combined Company's projected financial performance. Such
forward-looking statements are subject to a number of risks,
assumptions and uncertainties that could cause the PeopleSoft's actual
results to differ materially from those projected in such
forward-looking statements. These risks, assumptions and uncertainties
include: the costs and disruption to our business arising from the
Oracle hostile tender offer, the publicity surrounding the United
States Department of Justice lawsuit against Oracle and the unknown
outcome of that suit; our ability to successfully complete the
integration of J.D. Edwards into PeopleSoft and to achieve anticipated
synergies, economic and political conditions in the U.S. and abroad;
the ability to complete and deliver products and services within
currently estimated time frames and budgets; the ability to manage
expenses effectively; the ability to achieve revenue from products and
services that are under development; the competitive environment and
pricing pressures; and other risks referenced from time to time in
PeopleSoft's filings with the Securities and Exchange Commission.
Please refer to PeopleSoft's most recent reports on Form 10-Q and Form
10-K for more information on the risk factors that could cause actual
results to differ.
Important Additional Information
PeopleSoft has filed a Solicitation/Recommendation Statement on
Schedule 14D-9 regarding Oracle's tender offer. PeopleSoft
stockholders should read the Schedule 14D-9 (including any amendments)
because these documents contain important information. The Schedule
14D-9 and other public filings made by PeopleSoft with the SEC are
available without charge from the SEC's website at www.sec.gov and
from PeopleSoft at www.peoplesoft.com.
PEOPLESOFT, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenues:
License fees $130,016 $111,726 $260,902 $192,567
Maintenance revenue 302,248 205,563 599,098 405,484
Professional services
revenue 215,001 180,153 430,384 359,647
---------- ---------- ---------- ----------
Service revenues 517,249 385,716 1,029,482 765,131
---------- ---------- ---------- ----------
Total revenues 647,265 497,442 1,290,384 957,698
Costs and expenses:
Cost of license fees 24,773 9,563 48,147 18,289
Cost of services 226,442 166,698 449,408 330,167
Sales and marketing
expense 176,590 131,492 345,761 251,050
Product development
expense 137,938 84,646 265,312 168,351
General and
administrative expense 63,162 41,024 122,237 74,039
Restructuring,
acquisition and other
charges 4,043 13,799 12,272 13,799
---------- ---------- ---------- ----------
Total costs and
expenses 632,948 447,222 1,243,137 855,695
---------- ---------- ---------- ----------
Operating income 14,317 50,220 47,247 102,003
Other income, net 2,696 4,712 7,796 11,678
---------- ---------- ---------- ----------
Income before provision
for income taxes 17,013 54,932 55,043 113,681
Provision for income
taxes 6,035 18,398 19,860 38,668
---------- ---------- ---------- ----------
Net income $10,978 $36,534 $35,183 $75,013
========== ========== ========== ==========
Basic income per share $0.03 $0.12 $0.10 $0.24
========== ========== ========== ==========
Shares used in basic per
share computation 363,566 315,707 362,664 315,302
========== ========== ========== ==========
Diluted income per share $0.03 $0.11 $0.10 $0.23
========== ========== ========== ==========
Shares used in diluted
per share computation 368,517 318,630 369,741 319,299
========== ========== ========== ==========
PEOPLESOFT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except employee count)
(unaudited)
JUNE 30, DECEMBER 31,
2004 2003
----------- -------------
Assets:
Current assets:
Cash and cash equivalents $542,467 $439,385
Short-term investments and restricted
cash 1,034,255 961,906
Accounts receivable, net 395,757 462,528
Income taxes receivable 11,671 18,749
Deferred tax assets 43,497 58,630
Prepaid expenses and other current assets 66,616 69,997
----------- -------------
Total current assets 2,094,263 2,011,195
Property and equipment, net 482,365 448,211
Long term investments 40,713 29,219
Deferred tax assets 56,698 42,049
Capitalized software, net 204,483 234,217
Goodwill 1,002,977 1,005,660
Other intangible assets, net 413,351 444,991
Other assets 10,291 9,186
----------- -------------
Total assets $4,305,141 $4,224,728
=========== =============
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $45,043 $51,190
Accrued liabilities 150,823 158,360
Restructuring reserves 50,622 78,250
Accrued compensation and related expenses 186,906 224,983
Income taxes payable 64,680 106,355
Short-term deferred revenues 669,692 588,590
----------- -------------
Total current liabilities 1,167,766 1,207,728
Long-term deferred revenues 118,081 119,896
Other liabilities 39,496 37,655
----------- -------------
Total liabilities 1,325,343 1,365,279
Stockholders' equity:
Common stock 3,828 3,776
Additional paid-in capital 2,600,103 2,508,995
Retained earnings 720,030 684,847
Treasury stock (387,714) (387,046)
Accumulated other comprehensive income 43,551 48,877
----------- -------------
Total stockholders' equity 2,979,798 2,859,449
----------- -------------
Total liabilities and
stockholders' equity $4,305,141 $4,224,728
=========== =============
Worldwide employee count 11,461 12,163
PEOPLESOFT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
SIX MONTHS ENDED
JUNE 30,
-----------------------
2004 2003
----------- -----------
Operating activities:
Net income $35,183 $75,013
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 111,790 56,710
Provision for doubtful accounts 3,606 5,544
Tax benefits from employee stock
transactions 8,652 3,585
Provision for deferred income taxes 688 7,739
Loss (gain) on sales of investments and
disposition of property and
equipment, net 81 (1,289)
Non-cash stock compensation 7,073 4,628
Non-cash restructuring, acquisition and
other charges 3,972 1,722
Changes in operating assets and liabilities:
Accounts receivable 56,977 45,350
Accounts payable and accrued liabilities (39,422) 10,735
Accrued compensation and related expenses (37,343) (26,157)
Income taxes, net (34,763) (23,529)
Deferred revenues 83,192 26,439
Other 5,066 6,769
----------- -----------
Net cash provided by operating activities 204,752 193,259
Investing activities:
Purchase of available-for-sale investments (3,301,158) (6,822,384)
Proceeds from sales and maturities of
investments 3,215,911 6,732,056
Purchases of property and equipment (88,938) (213,801)
----------- -----------
Net cash used in investing activities (174,185) (304,129)
Financing activities:
Net proceeds from employee stock transactions 74,509 49,145
----------- -----------
Net cash provided by financing activities 74,509 49,145
Effect of foreign exchange rate changes on
cash and cash equivalents (1,994) 15,241
----------- -----------
Net increase (decrease) in cash and cash
equivalents 103,082 (46,484)
Cash and cash equivalents at beginning of
period 439,385 319,344
----------- -----------
Cash and cash equivalents at end of period $542,467 $272,860
----------- -----------
CONTACT: PeopleSoft
Bob Okunski, 877-528-7413 (Investor Relations)
bob_okunski@peoplesoft.com
Steve Swasey, 925-694-5230 (Public Relations)
steve_swasey@peoplesoft.com