PeopleSoft Reports Strong Fourth Q. 2003 Results
PeopleSoft Reports Strong Fourth Quarter 2003 Results
Company Posts Record Performance and Exceeds Guidance
PeopleSoft, Inc. (Nasdaq: PSFT) today announced its fourth quarter and full year 2003 financial results. For the fourth quarter ended December 31, 2003, the Company posted record license revenue of US$185 million in addition to record total revenue of $685 million. Total revenue for the quarter was significantly above the Company’s fourth quarter guidance of $625 - $640 million.
Pro forma earnings per share for the quarter were $0.20, exceeding the Company’s guidance of $0.18 - $0.19 per share. Fourth quarter earnings per share, based on generally accepted accounting principles (GAAP) was $0.05 per share, significantly better than the Company’s GAAP fourth quarter earnings per share guidance of $0.01 – $0.02 per share.
Pro forma operating income for the fourth quarter was $112 million, or 15.3 percent of revenues, up from $89 million, or 13.2 percent of revenues in the third quarter. GAAP operating income for the fourth quarter was $24 million, or 3.5 percent of revenues, up from a loss of $9 million, or (1.5) percent of revenues in the third quarter.
At December 31, 2003, the Company’s cash and investment balances were $1.4 billion. The Company’s cash flow from operations in the fourth quarter was $85 million. Days Sales Outstanding (DSO) for the quarter ended December 31, 2003 was 61 days.
The fourth quarter 2003 GAAP results include charges for purchase accounting adjustments relating to the acquisition of J.D. Edwards & Company, including the revenue impact of the deferred maintenance write-down to fair value, amortisation of capitalised software and intangible assets and other restructuring charges.
“We started the year in an economic downturn and ended the year the second largest enterprise software company in the world,” said Craig Conway, PeopleSoft President and CEO.
“We couldn’t be better positioned for 2004,” added Conway. “The strength of our new company along with an improving economy sets the stage for even higher value for stockholders and customers.”
Leading organisations worldwide continue to choose PeopleSoft applications to move their business processes on line and operate in real time. During the quarter, organisations that purchased PeopleSoft’s industry leading applications included: Arrow International, Baxter Healthcare, Bowling Green State University, Business Objects, Cargill, Countrywide Home Loans, District of Columbia Housing Authority, Documentum, EDS, Electrolux AB, Fairchild Semiconductor, General Motors, Hakuto, Hewlett-Packard, IBM, Kohl’s Department Stores, Lafarge, Libbey Glass, Lincoln Sentry Group, 3M, Monster Cable, NEC Personal Products, Penn Engineering and Manufacturing Corp., Peugeot Citreon Automobiles and Verizon Directories.
Non-GAAP Financial Measures
The Company has used non-GAAP pro forma financial measures, which exclude adjustments related to purchase accounting and restructuring costs, in analysing financial results because they provide meaningful information regarding the Company’s operational performance and facilitate management’s internal comparisons to the Company’s historical operating results and comparisons to competitors’ operating results.
The Company believes that these non-GAAP financial measures are useful to investors because they allow for greater transparency. Wherever non-GAAP financial measures have been included in this press release, the Company has reconciled them in the tables below to their GAAP counterparts.
These 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. 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 tables reconcile the non-GAAP financial measure used with GAAP:
Pro Forma EPS $.20 $.18 - $.19
Revenue impact of deferred
write-down ($.08) ($.09)
and intangible assets ($.05) ($.06)
Restructuring charges ($.02) ($.02)
GAAP EPS $0.05 $.01 - $.02
Company to Host Conference Call
PeopleSoft will host a conference call today, January 29, 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.
PeopleSoft (Nasdaq: PSFT) is the world’s second largest provider of enterprise application software with 12,100 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 © 2004 PeopleSoft, Inc. All rights reserved.
Statements made in this press release that state the Company’s or management’s intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Readers 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 the Company’s combination with J.D. Edwards 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 Company’s actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include: 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 revenues from products and services that are under development; competitive and pricing pressures; and other risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission. Please refer to the Company's current annual report on Form 10-K and quarterly report on Form 10-Q for more information on the risk factors that could cause actual results to differ.
The Board of Directors of PeopleSoft (“Board of Directors”) will be soliciting proxies for use at the 2004 Annual Meeting of Stockholders, or at any adjournment or postponement thereof, to vote in favour of a slate of directors to be nominated by the Board of Directors and to vote on any other matters that properly come before the 2004 Annual Meeting. PeopleSoft will be filing a proxy statement on Schedule 14A with the Securities and Exchange Commission (“SEC”) in connection with this solicitation of proxies for the 2004 Annual Meeting (the “2004 Proxy Statement”). Promptly after filing the definitive 2004 Proxy Statement with the SEC, PeopleSoft will mail the 2004 Proxy Statement and a WHITE Proxy Card to each PeopleSoft stockholder entitled to vote at the Annual Meeting. PeopleSoft has engaged Georgeson Shareholder Communications Inc. (“Georgeson”) to assist it in soliciting proxies from its stockholders. PeopleSoft has agreed to pay customary compensation to Georgeson for such services and to indemnify Georgeson and certain related persons against certain liabilities relating to or arising out of the engagement. Certain representatives of Citigroup Global Markets Inc. and Goldman, Sachs & Co., financial advisors to PeopleSoft, may also solicit proxies, although no additional consideration will be paid in connection with any such solicitation. In addition, directors, officers and employees of PeopleSoft, may solicit proxies although no additional compensation will be paid to directors, officers or employees for such services.
PeopleSoft has filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) and amendments thereto regarding Oracle’s tender offer that contain information regarding members of the Board of Director’s and members of management’s potential interests in the tender offer. Information regarding securities ownership by certain members of the Board of Directors and certain members of management as of April 1, 2003 is contained in PeopleSoft’s proxy statement for its 2003 Annual Meeting of Stockholders, dated as of April 28, 2003 (the “2003 Proxy Statement”). PeopleSoft stockholders should read the Schedule 14D-9 and the 2004 Proxy Statement when it is filed with the SEC (including any amendments to such documents) because these documents contain (or will contain) important information. The 2004 Proxy Statement (when filed), the 2003 Proxy Statement, 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.