CUPERTINO, Calif., April 17 /PRNewswire/ -- Rational Software Corporation
(Nasdaq: RATL), the e-development company, today announced results for the
fourth fiscal quarter and fiscal year ended March 31, 2001.
Revenue for the fourth quarter and fiscal year ended March 31, 2001 was
$241.7 million and $814.9 million, respectively, compared to $180.4 million
and $572.2 million respectively, for the same periods last year. This
reflects an increase in fourth quarter and fiscal year revenues of 34% and
42%, respectively, compared to the same periods last year.
The company reported pro forma net income and earnings per share on a
diluted basis for the fourth quarter ended March 31, 2001 of $45.9 million and
$0.22, respectively, compared to pro forma net income and earnings per share
of $34.9 million and $0.18, respectively, for the same period last year. This
reflects an increase in fourth quarter pro forma net income of 32% compared to
the same period last year.
"Rational's fourth quarter caps off a remarkable year for the company,
with year-to-year growth of more than 40%," said Paul Levy, chairman and co-
founder of Rational Software. "The recent macroeconomic environment, however,
did present us with a challenging fourth quarter. Even in this tough economic
environment, we saw excellent focus and tactical execution from all parts of
the company, and in particular from our field sales teams around the world."
"Our mission remains the same: help customers build software better and
faster," said Levy. "We believe that companies who depend on software for
their success will continue to depend on Rational."
The company reported pro forma net income and earnings per share on a
diluted basis for the year ended March 31, 2001 of $147.6 million and $0.72,
respectively, compared to pro forma net income and earnings per share of $94.5
million and $0.49, respectively, for fiscal 2000. This reflects an increase
in fiscal year net income of 56% compared to fiscal 2000.
Pro forma net income and earnings per share for the periods reported
exclude one-time charges for purchased in-process R&D, amortization of
goodwill and purchased intangibles and amortization of stock-based
compensation related to recent acquisitions, as well as the net activity
(operating expenses and interest income less portion allocated to minority
interest) incurred by Catapulse, Inc. prior to the completion of the Catapulse
acquisition on February 5, 2001.
As reported net income and earnings per share on a diluted basis for the
fourth quarter ended March 31, 2001 was $6.6 million and $0.03, respectively,
compared to as reported net income and earnings per share of $25.9 million and
$0.13, respectively, for the same period last year.
As reported net income and earnings per share on a diluted basis for the
year ended March 31, 2001 was $72.1 million and $0.35, respectively, compared
to as reported net income and earnings per share of $85.3 million and $0.45,
respectively, for fiscal 2000.
Statements contained in this press release may include "forward looking"
statements within the meaning of the Private Securities Litigation Reform
Act of 1995, particularly statements in this press release relating to
continued dependence on the company. The actual future results of the
company could differ materially from those described herein. Certain risks
which could cause actual results to differ materially include competition in
the marketplace and dependence by the company on the growth of the market
for sophisticated software development tools. For a more complete list of
risk factors, see our recent filings with the Securities and Exchange
Commission.
About Rational Software Corporation
Rational Software Corporation (Nasdaq: RATL), the e-development company,
helps organizations develop and deploy software for e-business,
infrastructure, and devices and embedded systems through a combination of
tools, services and software engineering best practices. Rational's e-
development solution helps organizations overcome the software development
paradox by accelerating time to market while improving quality. Rational's
integrated solution simplifies the process of acquiring, deploying and
supporting a comprehensive software development platform, reducing total cost
of ownership. IDC has recognized Rational as the revenue leader in multiple
application development and deployment markets for four years in a row.
Founded in 1981, Rational, one of the world's largest software companies, had
revenues of $815 million in its fiscal year ended March, 2001 and employs more
than 3,700 people around the world. Rational is a component of the Nasdaq-100
Index(R). Additional information is available on the Internet at
http://www.rational.com .
(Photo: http://www.newscom.com/cgi-bin/prnh/20010417/RATLLOGO )
Rational Software Corporation
Pro Forma Statements of Operations
(in thousands, except percentage figures and per share data)
Three months ended March 31
(unaudited)
2001 % 2000 %
Net product revenue $141,565 59 $114,393 63
Consulting and
support revenue 100,115 41 66,026 37
Total revenue 241,680 100 180,419 100
Cost of product
revenue 7,531 3 7,851 4
Cost of consulting and
support revenue 25,907 11 19,797 11
Total cost of
revenue 33,438 14 27,648 15
Gross margin 208,242 86 152,771 85
Product research and
development expenses 47,741 20 28,674 16
Sales and marketing
expenses 92,623 38 65,476 36
General and
administrative
expenses 11,914 5 13,535 8
Total operating
expenses 152,278 63 107,685 60
Operating income 55,964 23 45,086 25
Other income, net 9,606 4 3,358 2
Income before income
taxes 65,570 27 48,444 27
Provision for income
taxes 19,671 8 13,564 8
Net income $45,899 19 $34,880 19
NOTE: PRO FORMA ONLY
Net income per
common share - basic $0.23 $0.19
Shares used in
computing per share
amounts - basic 195,336 179,394
Net income per
common share - diluted $0.22 $0.18
Shares used in
computing per share
amounts - diluted 211,923 197,816
Year ended March 31
2001 % 2000 %
Net product revenue $477,726 59 $354,497 62
Consulting and
support revenue 337,209 41 217,693 38
Total revenue 814,935 100 572,190 100
Cost of product
revenue 28,514 3 26,629 5
Cost of consulting and
support revenue 89,227 11 59,607 10
Total cost of
revenue 117,741 14 86,236 15
Gross margin 697,194 86 485,954 85
Product research and
development expenses 151,655 19 98,627 17
Sales and marketing
expenses 321,311 39 220,529 39
General and
administrative
expenses 45,171 6 47,124 8
Total operating
expenses 518,137 64 366,280 64
Operating income 179,057 22 119,674 21
Other income, net 31,827 4 11,628 2
Income before income
taxes 210,884 26 131,302 23
Provision for income
taxes 63,251 8 36,765 6
Net income $147,633 18 $94,537 17
NOTE: PRO FORMA ONLY
Net income per
common share - basic $0.78 $0.54
Shares used in
computing per share
amounts - basic 188,566 175,458
Net income per
common share - diluted $0.72 $0.49
Shares used in
computing per share
amounts - diluted 206,211 191,274
The above pro forma statements of operations for the quarter and year
ended March 31, 2001 have been adjusted to present the Company's operating
results excluding acquisition costs related to recent acquisitions, (including
amortization of goodwill and purchased intangibles, amortization of stock
based compensation and purchased in-process R&D) operating expenses incurred
by Catapulse Inc., and related adjustments for income taxes.
The following table reflects the differences between pro forma and as-
reported net income (in thousands):
Three months ended Fiscal year ended
March 31 March 31
(unaudited)
2001 2000 2001 2000
As reported net income $6,561 $25,916 $72,144 $85,314
Activity relating
to Catapulse:
Deferred compensation 389 281 1,989 281
Research and
development expenses 4,281 3,424 31,853 3,938
Sales and marketing
expenses 794 - 8,817 -
General and
administrative expenses 436 - 3,396 -
Interest earned on
cash and cash
equivalents (151) (974) (2,882) (1,229)
Minority interest (1,888) (1,084) (15,323) (1,084)
Total Catapulse
activity, net of
minority interest 3,861 1,647 27,850 1,906
Amortization of
goodwill and purchased
intangibles, net of
tax, relating to
recent acquisitions 12,436 3,788 24,598 3,788
Amortization of
stock based
compensation,
net of tax 7,219 - 7,219 -
Purchased in-process
R&D relating to
recent acquisitions 15,822 3,529 15,822 3,529
Pro forma net income $45,899 $34,880 $147,633 $94,537
Rational Software Corporation
Condensed Consolidated Statements of Operations
(in thousands, except percentage figures and per share data)
Three months ended March 31
(unaudited)
2001 % 2000 %
Net product revenue $141,565 59 $114,393 63
Consulting and
support revenue 100,115 41 66,026 37
Total revenue 241,680 100 180,419 100
Cost of product
revenue 9,838 4 8,519 5
Cost of consulting and
support revenue 25,907 11 19,797 11
Total cost of
revenue 35,745 15 28,316 16
Gross margin 205,935 85 152,103 84
Product research and
development expenses 52,411 22 32,379 18
Sales and marketing
expenses 93,417 39 65,476 36
General and
administrative
expenses 12,350 4 13,535 7
Amortization of
goodwill and
purchased intangibles 12,204 5 3,120 2
Amortization of
stock based
compensation 12,032 5 - -
Purchased
in-process R&D 15,822 7 3,529 2
Total operating
expenses 198,236 82 118,039 65
Operating income 7,699 3 34,064 19
Other income, net 9,757 4 4,332 2
Income before
income taxes 17,456 7 38,396 21
Provision for
income taxes 12,783 5 13,564 7
Minority interest (1,888) (1) (1,084) (1)
Net income $6,561 3 $25,916 15
Net income per
common share - basic $0.03 $0.14
Shares used in
computing per share
amounts - basic 195,336 179,394
Net income per
common share - diluted $0.03 $0.13
Shares used in
computing per share
amounts - diluted 211,923 197,816
Year ended March 31
2001 % 2000 %
Net product revenue $477,726 59 $354,497 62
Consulting and
support revenue 337,209 41 217,693 38
Total revenue 814,935 100 572,190 100
Cost of product
revenue 32,817 4 27,297 5
Cost of consulting and
support revenue 89,227 11 59,607 10
Total cost of
revenue 122,044 15 86,904 15
Gross margin 692,891 85 485,286 85
Product research and
development expenses 185,497 23 102,846 18
Sales and marketing
expenses 330,128 41 220,529 38
General and
administrative
expenses 48,567 5 47,124 8
Amortization of
goodwill and
purchased intangibles 22,370 3 3,120 1
Amortization of
stock based
Compensation 12,032 1 - -
Purchased
in-process R&D 15,822 2 3,529 1
Total operating
expenses 614,416 75 377,148 66
Operating income 78,475 10 108,138 19
Other income, net 34,709 4 12,857 2
Income before
income taxes 113,184 14 120,995 21
Provision for
income taxes 56,363 7 36,765 6
Minority interest (15,323) (2) (1,084) -
Net income $72,144 9 $85,314 15
Net income per
common share - basic $0.38 $0.49
Shares used in
computing per share
amounts - basic 188,566 175,458
Net income per
common share - diluted $0.35 $0.45
Shares used in
computing per share
amounts - diluted 206,211 191,274
Rational Software Corporation
Condensed Consolidated Balance Sheets
(in thousands)
March 31,March 31,
2001 2000
Assets
Current assets:
Cash and cash equivalents and short-term
investments $1,040,821 $906,311
Accounts receivable, net 206,099 148,818
Prepaid expenses and other assets 21,902 10,671
Deferred tax asset 16,727 9,384
Total current assets 1,285,549 1,075,184
Property and equipment, net 103,239 52,440
Goodwill and purchased intangibles 294,824 54,064
Long term deferred tax assets 142,608 26,292
Other assets, net 25,711 17,796
Total assets $1,851,931 $1,225,776
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $23,909 $8,496
Accrued employee benefits 68,624 49,290
Income taxes payable 30,788 24,323
Other accrued expenses 49,753 33,257
Accrued merger and integration expenses 44,854 5,147
Deferred revenue 166,531 122,813
Total current liabilities 384,459 243,326
Convertible subordinated notes 500,000 500,000
Long term deferred tax liabilities 200,508 -
Other noncurrent liabilities 710 1,668
Total liabilities 1,085,677 744,994
Minority interest - 24,475
Stockholders' equity:
Common stock 754,809 517,006
Retained earnings/(Accumulated deficit) 11,445 (60,699)
Total stockholders' equity 766,254 456,307
Total liabilities and stockholders' equity $1,851,931 $1,225,776
The word "Rational" and Rational's products are trademarks of Rational
Software Corporation. References to other companies and their products use
trademarks owned by the respective companies and are for reference purposes
only.
For more information contact:
Rational Software Corporation, 18880 Homestead Road, Cupertino, CA 95014
Tel. (408) 863-9900 or (800) 728-1212; Fax (408) 863-4133
Fax-on-demand: 1-800-758-5804 Pin: 113375
E-mail: info@rational.com; Web: http://www.rational.com
SOURCE Rational Software Corporation
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Related links:
http://www.rational.com
Photo Notes:Newscom:
http://www.newscom.com/cgi-bin/prnh/20010417/RATLLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 201-369-3467
CONTACT:
Bill Durling, Director of Corporate
Communications, 781-372- 5886, bdurling@rational.com, or
Financial: Timothy A. Brennan, Chief Financial Officer,
408-863-4500, or David Henshall, Treasurer, 408-863-4261,
ir@rational.com, all of Rational Software Corporation
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