BMC Software (NYSE:BMC) today announced that its fiscal 2008 first
quarter net earnings on a GAAP basis were $57 million, or $0.28 per
diluted share, compared to $31 million and $0.15 per diluted share
in the year-ago quarter. The Company�s non-GAAP net earnings for
the fiscal first quarter, which exclude special items, were $77
million, or $0.37 per diluted share, representing a 19 percent
increase in non-GAAP earnings per share over the year-ago period.
The first quarter of fiscal 2008 marks the ninth consecutive
quarter that BMC has met or exceeded revenue and non-GAAP earnings
per share guidance. Included in the financial tables is a complete
reconciliation between non-GAAP and GAAP results. �BMC Software
continued to extend its leadership in Business Service Management
during the first quarter, driving strong top line and bottom line
performance,� said Bob Beauchamp, BMC�s president and chief
executive officer. �We exceeded our non-GAAP EPS and revenue
guidance, and cash flow from operations significantly increased
over the year-ago period. These improved fundamentals, coupled with
our newly authorized $1 billion share repurchase program, position
us well to further increase shareholder value.� In addition, the
Company posted the following key results: Total bookings for the
quarter totaled $438 million, up 19 percent compared to the
year-ago period. Total bookings can be calculated by adding total
revenue to the net change in the deferred revenue balance for the
period. Total revenue for the first quarter was $385 million, a 7
percent increase over the year-ago period. GAAP operating margin
for the quarter was 16 percent compared to 5 percent in the
year-ago period. Non-GAAP operating margin for the quarter was 23
percent compared to 19 percent in the year-ago period. The Company
continues to maintain a strong balance sheet, ending the first
quarter with a record total of $1.78 billion in deferred revenue,
an increase of $53 million sequentially. The Company also ended the
quarter with a record $520 million in deferred license revenue and
a record $1.57 billion in cash and marketable securities. During
the first fiscal quarter, the Company continued its stock
repurchase program, spending $83 million to repurchase 2.6 million
outstanding shares. BMC announced a new $1 billion share repurchase
program on July 30, 2007. The Company now has $1.2 billion
remaining in its stock repurchase program. Steve Solcher, BMC�s
chief financial officer, said: �BMC produced excellent results in
the first fiscal quarter across all key performance areas. Strong
revenue growth, coupled with our continued financial discipline,
drove a significant improvement in our operating margin and
demonstrates the operating leverage in our business model. Our
growth in bookings positions us well for growth in cash flow from
operations for the balance of fiscal 2008. We are excited about the
opportunities ahead and are focused on delivering increased
profitability and value creation for shareholders during our 2008
fiscal year.� Fiscal 2008 Full Year and Second Quarter Guidance The
Company now expects fiscal 2008 non-GAAP earnings per share to be
in the range of $1.69 to $1.79, assuming an effective tax rate of
30 percent and excluding an estimated $0.36 of special items
related to expenses for amortization of acquired technology and
intangibles, in-process research and development, share-based
compensation and restructuring activity. The Company now expects
fiscal 2008 revenue growth in the mid-single digits. The Company
continues to anticipate non-GAAP operating margin improvement
throughout the balance of fiscal 2008. The Company now expects
fiscal 2008 cash flow from operations to be between $500 million
and $550 million, an increase of $25 million from prior guidance,
including an estimated $25 million in cash restructuring payments.
For the second quarter of fiscal 2008, the Company expects non-GAAP
earnings per share in the range of $0.39 to $0.44, assuming an
effective tax rate of 30 percent and excluding an estimated $0.09
of special items related to expenses for amortization of acquired
technology and intangibles, in-process research and development,
share-based compensation and restructuring activity. The Company
expects second quarter fiscal 2008 revenue to be in the $395
million to $410 million range. Conference Call A conference call to
discuss first quarter fiscal 2008 results is scheduled for today,
August 6, 2007 at 4:00 pm Central Time. Those interested in
participating may call (719) 457-2727 and use the pass code BMC. To
access a replay of the conference call, that will be available for
one week, dial (719) 457-0820 or (888) 203-1112 and use the pass
code BMC. A live web cast of the conference call will be available
on the company's website at www.bmc.com/investors. A replay of the
web cast will be available within 24 hours and archived on the
website. Use of Non-GAAP Financial Measures This press release and
the accompanying tables include the following non-GAAP financial
measures: (a) non-GAAP operating expenses, (b) non-GAAP operating
income, (c) non-GAAP net earnings and (d) non-GAAP diluted net
earnings per share. Each of these financial measures excludes the
impact of certain items and therefore has not been calculated in
accordance with U.S. generally accepted accounting principles, or
GAAP. Each of these non-GAAP financial measures excludes
restructuring charges, amortization of acquired technology and
intangibles, share-based compensation expenses and, for fiscal
2008, charges related to in-process research and development. Each
of the adjustments is described in more detail below. This press
release also contains a reconciliation of each of these non-GAAP
measures to its most comparable GAAP financial measure. We believe
that these non-GAAP financial measures provide meaningful
supplemental information regarding our operating results because
they exclude amounts that BMC management and the Board of Directors
do not consider part of operating results when assessing the
performance of the organization and measuring the results of the
Company�s performance. In addition, we have historically reported
similar non-GAAP financial measures. We believe that inclusion of
these non-GAAP financial measures provides consistency and
comparability with past reports of financial results. BMC
Management and the Board of Directors use these non-GAAP financial
measures to evaluate the Company�s performance and for forecasting
purposes, as well as the allocation of future capital investments,
and they are key variables in determining management incentive
compensation. Accordingly, we believe these non-GAAP financial
measures are useful to investors in allowing for greater
transparency of supplemental information used by management in its
financial and operational decision-making. While we believe that
these non-GAAP financial measures provide useful supplemental
information, there are limitations associated with the use of these
non-GAAP financial measures. These non-GAAP financial measures are
not prepared in accordance with GAAP, do not reflect a
comprehensive system of accounting and may not be completely
comparable to similarly titled measures of other companies due to
potential differences in the exact method of calculation between
companies. Items such as restructuring charges, amortization of
acquired technology and intangibles, in-process research and
development, and share-based compensation expenses that are
excluded from our non-GAAP financial measures can have a material
impact on net earnings. As a result, these non-GAAP financial
measures have limitations and should not be considered in isolation
from, or as a substitute for, net earnings, cash flow from
operations or other measures of performance prepared in accordance
with GAAP. We compensate for these limitations by using these
non-GAAP financial measures as supplements to GAAP financial
measures and by reviewing the reconciliations of the non-GAAP
financial measures to their most comparable GAAP financial measure.
Investors are encouraged to review the reconciliations of these
non-GAAP financial measures to their most comparable GAAP financial
measures that are included elsewhere in this press release. The
following discusses the reconciliations of our non-GAAP financial
measures to the most comparable GAAP financial measures:
Restructuring charges. Our non-GAAP financial measures exclude exit
costs and related charges, primarily consisting of severance costs
and lease abandonment costs, and any subsequent changes in
estimates related to exit activities as they relate to our
restructurings, which involved significant layoffs. Management and
the Board of Directors believe it is useful in evaluating the
Company�s and its management teams� and business units� performance
during a particular time period to review the supplemental non-GAAP
financial measures, which exclude restructuring costs, because our
operational managers are evaluated based on the operating expenses
exclusive of restructuring charges and including the restructuring
charges would hinder investors� ability to evaluate the performance
of our management in the manner in which the Company�s management
evaluates performance. Accordingly, management and the Board of
Directors do not consider these costs for purposes of evaluating
the performance of the business, and they exclude such costs when
evaluating the performance of the Company, its business units and
its management teams. Additionally, management uses the non-GAAP
measures to assist in its determinations regarding the allocation
of resources, such as capital investment, among the Company�s
business units and as part of its forecasting and budgeting.
Amortization of acquired technology and intangibles. Our non-GAAP
financial measures exclude costs associated with the amortization
of acquired technology and intangibles. Management and the Board of
Directors believe it is useful in evaluating the Company�s and its
management teams� and business units� performance during a
particular time period to review the supplemental non-GAAP
financial measures, which exclude amortization of acquired
technology and intangibles, because these costs are fixed at the
time of an acquisition, are then amortized over a period of several
years after the acquisition and generally cannot be changed or
influenced by management after the acquisition. Accordingly,
management and the Board of Directors do not consider these costs
for purposes of evaluating the performance of the business during
the applicable time period after the acquisition, and they exclude
such costs when evaluating the performance of the Company, its
business units and its management teams and when making decisions
to allocate resources among the Company�s business units.
Share-based compensation expenses. Our non-GAAP financial measures
exclude the compensation expenses required to be recorded by FAS
123R for equity awards to employees and directors. Management and
the Board of Directors believe it is useful in evaluating the
Company�s and its management teams� and business units� performance
during a particular time period to review the supplemental non-GAAP
financial measures, which excludes expenses related to share-based
compensation, because these costs are generally fixed at the time
an award is granted, are then expensed over several years and
generally cannot be changed or influenced by management once
granted. Accordingly, our operational managers are evaluated based
on the operating expenses exclusive of share-based compensation
expenses and including such charges would hamper investors� ability
to evaluate the performance of our management in the manner in
which the Company�s management evaluates performance. Additionally,
we believe it is useful in measuring the Company�s performance to
exclude expenses related to FAS 123R equity expense because it
enables comparability with prior period information. Accordingly,
management and the Board of Directors do not consider these costs
for purposes of evaluating the performance of the business, and
they exclude such costs when evaluating the performance of the
Company, its business units and its management teams and when
making decisions to allocate resources among the Company�s business
units. Write-offs of in-process research and development. Our
non-GAAP financial measures exclude write-offs of in-process
research and development. This amount is the estimated fair value
related to incomplete research and development projects from
acquired companies which have no alternative future uses. Such
amounts are required to be expensed by us as of the date of the
respective acquisition. Because the costs are fixed at the time of
acquisition and are not subject to management influence, management
does not consider the costs in evaluating the performance of the
Company and its business units nor when it allocates resources
among the business units. We believe excluding these items is
useful to investors because it facilitates comparisons to our
historical operating results without being affected by our
acquisition history and the results of other companies in our
industry, which have their own unique acquisition histories. About
BMC Software BMC Software is a leading global provider of
enterprise management solutions that empower companies to automate
their IT and align it to the needs of the business. Delivering
Business Service Management, BMC solutions span enterprise systems,
applications, databases and service management. For the four fiscal
quarters ended June 30, 2007, BMC revenue was approximately $1.6
billion. For more information, visit www.bmc.com. This news release
contains both historical information and forward-looking
information. Statements of plans, objectives, strategies and
expectations for future operations and results, identified by words
such as �believe,� �anticipate,� �expect,� �estimate� and
�guidance� are forward-looking statements. Numerous important
factors affect BMC Software's operating results and could cause BMC
Software's actual results to differ materially from the forecasts
and estimates indicated by this press release or by any other
forward-looking statements made by, or on behalf of, BMC Software,
and there can be no assurance that future results will meet
expectations, estimates or projections. These factors include, but
are not limited to, the following: 1) the possibility that general
economic conditions or uncertainty cause information technology
spending to be reduced or purchasing decisions to be delayed; 2)
competition in our markets can result in pricing pressures and
competition for new customers as well as potential displacements of
our existing customers; 3) the adoption rate for BSM may be slower
than we expect and customers may not increase their purchases of
our products if they do not adopt a BSM strategy; 4) a significant
percentage of our license transactions are completed during the
final weeks and days of each quarter, which creates a level of
uncertainty as to whether revenue, license bookings and/or earnings
will have met expectations until after the end of the quarter; 5)
our operating costs and expenses are relatively fixed over the
short term, so if we have a shortfall in revenue in any given
quarter, our ability to off-set revenue shortfalls in the near-term
is limited; 6) our effective tax rate is subject to quarterly
fluctuation and any change in such tax rate could affect our
earnings; and 7) the additional risks and important factors
described in BMC Software's Annual Report on Form 10-K filed with
the U.S. Securities and Exchange Commission. This filing is
available on our website at www.bmc.com/investors. We undertake no
obligation to update information contained in this release. BMC,
BMC Software, and the BMC Software logo are the exclusive
properties of BMC Software Inc., are registered with the U.S.
Patent and Trademark Office, and may be registered or pending
registration in other countries. All other BMC trademarks, service
marks, and logos may be registered or pending registration in the
U.S. or in other countries. All other trademarks or registered
trademarks are the property of their respective owners. � 2007 BMC
Software Inc. BMC SOFTWARE, INC. STATEMENTS OF OPERATIONS �
(Unaudited) � � Quarter Ended Incr/(Decr) June 30, June 30,
Percentage Fiscal 2007 Fiscal 2008 Change � � (In millions, except
per share data) � � Revenue: License $ 111.0 $ 125.9 13.4 %
Maintenance 229.0 235.5 2.8 % Professional services � 21.4 � 23.6
10.3 % Total revenue � 361.4 � 385.0 6.5 % � Cost of license
revenue 23.6 23.2 (1.7 )% Cost of maintenance revenue 40.4 41.9 3.7
% Cost of professional services revenue 23.0 27.5 19.6 % Selling
and marketing expenses 121.3 127.9 5.4 % Research and development
expenses 50.9 45.6 (10.4 )% General and administrative expenses
50.9 50.7 (0.4 )% Amortization of intangible assets 6.4 3.1 (51.6
)% Severance, exit costs and related charges 25.8 1.8 (93.0 )%
In-process research and development � - � 2.1 n/m Total operating
expenses � 342.3 � 323.8 (5.4 )% Operating income 19.1 61.2 220.4 %
Other income, net � 22.2 � 20.6 (7.2 )% Earnings before income
taxes 41.3 81.8 98.1 % Provision for income taxes � 10.3 � 24.6
138.8 % Net earnings $ 31.0 $ 57.2 84.5 % � Diluted earnings per
share $ 0.15 $ 0.28 86.7 % � Shares used in computing diluted
earnings per share � 211.2 � 204.8 (3.0 )% BMC SOFTWARE, INC.
BALANCE SHEETS � � � � � (Audited) (Unaudited) (Audited)
(Unaudited) March 31, June 30, September 30, December 31, March 31,
June 30, 2006 2006 2006 2006 2007 2007 � (In millions) � Current
assets: Cash and cash equivalents $ 905.9 $ 724.0 $ 681.4 $ 791.6 $
883.5 $ 1,141.6 (a) Marketable securities 157.5 443.9 432.5 376.8
412.5 238.8 (a) Trade accounts receivable, net 167.8 128.0 142.0
185.0 185.9 129.1 Current trade finance receivables, net 123.2
102.6 109.2 107.5 130.0 102.3 Other current assets � 152.0 � 158.8
� 126.3 � 127.6 � 177.6 � 178.1 Total current assets 1,506.4
1,557.3 1,491.4 1,588.5 1,789.5 1,789.9 � Property and equipment,
net 352.1 90.9 86.4 85.0 88.3 93.8 Software development costs, net
110.8 112.3 107.4 107.2 104.1 106.9 Long-term marketable securities
280.3 235.1 261.9 247.0 211.1 186.3 (a) Long-term trade finance
receivables, net 81.9 64.0 62.7 84.9 124.4 91.2 Goodwill and
intangible assets, net 614.9 753.4 744.4 735.5 714.8 749.7 Other
long-term assets � 264.5 � 258.1 � 254.5 � 256.6 � 227.8 � 224.2 �
Total Assets $ 3,210.9 $ 3,071.1 $ 3,008.7 $ 3,104.7 $ 3,260.0 $
3,242.0 � Current liabilities: Accounts payable and accrued
liabilities $ 393.6 $ 300.8 $ 284.5 $ 334.0 $ 365.2 $ 270.8 Current
portion of deferred revenue � 808.8 � 825.9 � 809.5 � 810.4 � 867.7
� 900.3 Total current liabilities 1,202.4 1,126.7 1,094.0 1,144.4
1,232.9 1,171.1 � Long-term deferred revenue 819.5 808.7 753.6
773.2 861.3 881.9 Other long-term liabilities and deferred credits
� 90.2 � 109.2 � 105.8 � 109.0 � 116.7 � 101.7 Total long-term
liabilities 909.7 917.9 859.4 882.2 978.0 983.6 � Total
stockholders' equity � 1,098.8 � 1,026.5 � 1,055.3 � 1,078.1 �
1,049.1 � 1,087.3 � Total Liabilities and Stockholders' Equity $
3,210.9 $ 3,071.1 $ 3,008.7 $ 3,104.7 $ 3,260.0 $ 3,242.0 � � � � �
� � � � � � � � � � � � (a) Total cash and marketable securities �
$ 1,343.7 � $ 1,403.0 � $ 1,375.8 � $ 1,415.4 � $ 1,507.1 � $
1,566.7 BMC SOFTWARE, INC. STATEMENTS OF CASH FLOWS � (Unaudited) �
Quarter Ended June 30, June 30, Fiscal 2007 Fiscal 2008 � � (In
millions) Cash flows from operating activities: Net earnings $ 31.0
$ 57.2 Adjustments to reconcile net earnings to net cash provided
by operating activities: � Depreciation and amortization 39.7 35.6
Share-based compensation expense 10.8 15.2 In-process research and
development - 2.1 Gain on sale of marketable securities and other
investments - (1.0 ) Change in operating assets and liabilities,
net of acquisitions: Trade finance receivables 38.8 60.9 Finance
payables (59.5 ) (35.8 ) Deferred revenue 2.9 51.5 Other operating
assets and liabilities � (9.1 ) � (20.7 ) Net cash provided by
operating activities � 54.6 � � 165.0 � � Cash flows from investing
activities: Cash paid for acquisitions, net of cash acquired, and
other investments (143.7 ) (38.6 ) Purchases of marketable
securities (310.8 ) (105.5 ) Proceeds from maturities /sales of
marketable securities 69.3 303.3 Purchases of property and
equipment (4.7 ) (6.9 ) Capitalization of software development
costs (15.8 ) (18.0 ) Other investing activities � - � � 0.4 � Net
cash provided by (used in) investing activities � (405.7 ) � 134.7
� � Cash flows from financing activities: Payments on capital
leases (1.5 ) (1.6 ) Proceeds from stock options exercised and
other 29.7 31.6 Proceeds from sale leaseback transaction 291.9 -
Repayment of debt assumed (5.0 ) - Excess tax benefit from
share-based compensation 2.2 7.3 Treasury stock acquired � (150.0 )
� (83.4 ) Net cash provided by (used in) financing activities �
167.3 � � (46.1 ) � Effect of exchange rate changes on cash � 1.9 �
� 4.5 � Net change in cash and cash equivalents (181.9 ) 258.1 Cash
and cash equivalents, beginning of period � 905.9 � � 883.5 � Cash
and cash equivalents, end of period $ 724.0 � $ 1,141.6 � BMC
SOFTWARE, INC. Table of Reconciliation from GAAP Operating Expenses
to Non-GAAP Operating Expenses (In millions) (Unaudited) � �
Quarter Ended June 30, June 30, Fiscal 2007 Fiscal 2008 � GAAP
operating expenses $ 342.3 � $ 323.8 � � Severance, exit costs and
related charges (25.8 ) (1.8 ) � Amortization of intangible assets
(12.1 ) (8.8 ) � Share-based compensation (10.8 ) (15.2 ) �
In-process research and development - (2.1 ) � � Non-GAAP operating
expenses $ 293.6 � $ 295.9 � BMC SOFTWARE, INC. Table of
Reconciliation from GAAP Operating Income to Non-GAAP Operating
Income (In millions) (Unaudited) � � Quarter Ended June 30, June
30, Fiscal 2007 Fiscal 2008 � GAAP operating income $ 19.1 $ 61.2 �
Severance, exit costs and related charges 25.8 1.8 � Amortization
of intangible assets 12.1 8.8 � Share-based compensation 10.8 15.2
� In-process research and development - 2.1 � � Non-GAAP operating
income $ 67.8 $ 89.1 BMC SOFTWARE, INC. Table of Reconciliation
from GAAP Operating Margin to Non-GAAP Operating Margin (In
millions) (Unaudited) � � Quarter Ended Quarter Ended Quarter Ended
June 30, June 30, June 30, June 30, June 30, June 30, Fiscal 2007
Fiscal 2008 Fiscal 2007 Fiscal 2008 Fiscal 2007 Fiscal 2008 � GAAP
Revenues: $ 361.4 $ 385.0 GAAP Operating Income: $ 19.1 $ 61.2 GAAP
Operating Margin: 5 % 16 % � Severance, exit costs and related
charges 25.8 1.8 � Amortization of intangible assets 12.1 8.8 �
Share-based compensation 10.8 15.2 � In-process research and
development - 2.1 � � � � � � GAAP Revenues: $ 361.4 $ 385.0
Non-GAAP Operating Income: $ 67.8 $ 89.1 Non-GAAP Operating Margin:
19 % 23 % BMC SOFTWARE, INC. Table of Reconciliation from GAAP Net
Earnings to Non-GAAP Net Earnings (In millions) (Unaudited) � �
Quarter Ended June 30, June 30, Fiscal 2007 Fiscal 2008 � GAAP net
earnings $ 31.0 � $ 57.2 � � Severance, exit costs and related
charges 25.8 1.8 � Amortization of intangible assets 12.1 8.8 �
Share-based compensation 10.8 15.2 � In-process research and
development - 2.1 � � Subtotal pretax reconciling items � 48.7 � �
27.9 � � Tax effect of reconciling items (14.4 ) (8.6 ) � �
Subtotal of tax impact � (14.4 ) � (8.6 ) � Non-GAAP net earnings $
65.3 � $ 76.5 � BMC SOFTWARE, INC. Table of Reconciliation from
GAAP Earnings Per Share to Non-GAAP Earnings Per Share (Unaudited)
� � Quarter Ended June 30, June 30, Fiscal 2007 Fiscal 2008 � GAAP
diluted earnings per share $ 0.15 � $ 0.28 � � Severance, exit
costs and related charges 0.12 0.01 � Amortization of intangible
assets 0.06 0.04 � Share-based compensation 0.05 0.07 � In-process
research and development - 0.01 � � Subtotal pretax reconciling
items $ 0.23 � $ 0.14 � � Tax effect of reconciling items (0.07 )
(0.04 ) � � Subtotal of tax impact � (0.07 ) � (0.04 ) � Non-GAAP
diluted net earnings per share $ 0.31 � $ 0.37 � � Shares used in
computing diluted earnings per share 211.2 204.8 (In millions)
BMC (NYSE:BMC)
Historical Stock Chart
From Jun 2024 to Jul 2024
BMC (NYSE:BMC)
Historical Stock Chart
From Jul 2023 to Jul 2024