| << Back |
| Borland Announces Preliminary Financial Results for Second Quarter 2005; CEO Dale Fuller Steps Down; Scott Arnold, Executive VP and COO, Named Interim CEO |
CUPERTINO, Calif.--(BUSINESS WIRE)--July 7, 2005--Borland Software Corporation (NASDAQ NM: BORL) today announced preliminary financial results for the second quarter ended June 30, 2005 and the appointment of Scott Arnold, presently Executive Vice President and Chief Operating Officer, to the position of Interim CEO. Based on preliminary data, Borland expects to report total quarterly revenue in the range of $65 to $67 million, license revenue of $37 to $39 million, a GAAP net loss per share of ($0.24) to ($0.26), and a non-GAAP loss of ($0.01) to ($0.03) per share. The Company's previous guidance for the second quarter was for total revenue of $70 to $73 million, GAAP loss per share of ($0.19) to ($0.21) and non-GAAP earnings per share of $0.00 to $0.02. The company continued to experience a weaker than expected spending environment, particularly in Europe, where both exchange rate issues and poor closure rates resulted in lower than forecast top line performance. From a product standpoint, the deployment products fell short of expected license revenues. Further product performance analysis will be provided in the regularly scheduled earnings call on August 2, 2005. In addition, Borland announced that Dale L. Fuller has stepped down as President and Chief Executive Officer of the company, effective immediately. Mr. Fuller will continue to serve as a member of the company's Board of Directors. Scott J. Arnold, Borland's Executive Vice President and Chief Operating Officer, has been named by the Board as Interim Chief Executive Officer. The Board of Directors has formed an Executive Committee to assist in the transition and to begin the process of naming a CEO. The Board does not presently anticipate any additional changes in executive leadership. William K. Hooper, Chairman of the Board, commented, "I would like to thank Dale for his six years of service and his leadership during the initial stages of Borland's transition. While we are disappointed with the second quarter results, we continue to see positive developments in demand for the company's ALM products and customer success in Borland's largest ALM implementations. The Board of Directors has confidence in Scott Arnold and the executive team's ability to manage the near-term challenges in the business and better position Borland to realize the potential of the application lifecycle management market." Company to Host Conference Call. Borland will host a conference call today, July 7, 2005 at 2:30 p.m., Pacific Time, to discuss the preliminary results. To access the live Webcast, please visit the Investor Relations section of Borland's website. To participate by telephone, please dial 800-240-7305. A replay will be available approximately two hours after the conference call ends, and will be available through July 21, 2005. The replay number is 800-405-2236 or 303-590-3000, with passcode 11034463. The archived Webcast will also be available on our website. Borland intends to report final financial results for the quarter ended June 30, 2005 after the market closes on Tuesday, August 2, 2005. The following table shows our Non-GAAP anticipated results for the quarter ended June 30, 2005 reconciled to the GAAP anticipated results. Our Non-GAAP anticipated results exclude amortization of intangible assets, restructuring, acquisition-related expenses and a non-recurring tax benefit.
Estimated per Share
--------------------
Low High
--------------------
(unaudited)
GAAP net loss $(0.26) $(0.24)
Aggregate amortization of intangible assets,
restructuring, acquisition-related expenses and
non-recurring tax benefit 0.23 0.23
--------------------
Non-GAAP net loss $(0.03) $(0.01)
====================
Non-GAAP Financial Measures Borland provides all information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult to understand if limited to reviewing only GAAP financial measures. Internally, Borland uses calculations of Non-GAAP net income and net income per share, which exclude as applicable restructuring, amortization of intangible assets, acquisition-related expenses, the related tax benefit for those items, and non-recurring tax benefits to evaluate its ongoing operations and to allocate resources within the organization. Borland's management does not itself, nor does it suggest that investors should, consider such Non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Borland presents such Non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Borland's operating results in a manner that focuses on what management believes to be Borland's ongoing business operations. Management believes that the inclusion of Non-GAAP financial measures provides consistency and comparability with past reports of financial results and historically provided comparability to similar companies in Borland's industry. Investors should note, however, that the Non-GAAP financial measures used by Borland may not be the same Non-GAAP financial measures as, and may not be calculated in the same manner as, that of other companies. Borland's management believes it is useful for the company and investors to review both GAAP information that includes the expenses, charges, gains, and losses mentioned below and the Non-GAAP financial measures of net income and net income per share that exclude such charges to have a better understanding of the overall performance of Borland's business and its ability to perform in subsequent periods. Whenever Borland uses such a Non-GAAP financial measure, it provides a reconciliation of Non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these Non-GAAP financial measures to their most directly comparable GAAP financial measure. Borland excludes restructuring charges, including (i) employee severance and other termination benefits, (ii) lease termination costs and other expenses associated with exiting a facility, (iii) disposition of fixed assets, and (iv) other costs associated with terminating contracts, from its Non-GAAP net income and net income per share calculations. Expenses related to restructuring have, in some cases, had a significant cash impact and effect on net income as measured in accordance with GAAP. However, Borland's management believes such restructuring charges are periodic costs incurred to realign its operating expenses with its anticipated future revenues and, consequently, does not consider these restructuring costs as a normal component of its expenses related to ongoing operations. As a result, Borland's management believes it is useful for itself and investors to review both GAAP information that includes such charges and Non-GAAP measures of net income that exclude these charges to have a better understanding of the overall performance of Borland's ongoing business operations and its performance in the periods presented. In addition, in accordance with GAAP, Borland regularly amortizes the remaining value of certain intangible assets over various periods. However, these amortization expenses result in no ongoing cash expenditures and otherwise have no material impact on Borland's ongoing business operations. Similarly, from time to time, Borland undertakes strategic acquisitions and investments. The expenses related to such acquisitions and investments may or may not result in a significant cash impact or effect on net income as measured in accordance with GAAP, but their impact is not directly related to Borland's ongoing business activities in such periods. Consequently, Borland excludes the amortization of intangible assets, acquisition-related expenses and in-process research and development expenses from its Non-GAAP financial measures. The company also recognizes the tax benefit of discreet items, which are non-recurring in nature. Borland believes that examination of both GAAP information that includes such charges and Non-GAAP financial measures that exclude such expenses provide management with information valuable to allocating available resources. Borland believes that if it did not provide such Non-GAAP financial information, investors would not have all the necessary data to analyze Borland's ongoing operations. About Borland Founded in 1983, Borland Software Corporation (NASDAQ:BORL) is a global leader in Software Delivery Optimization. The company provides the software and services that align the people, processes and technology required to maximize the business value of software. To learn more about delivering quality software, on time and within budget, visit: http://www.borland.com. Safe Harbor Statement This release contains "forward-looking statements" as defined under the Federal Securities Laws, including the Private Securities Litigation Reform Act of 1995 and is subject to the safe harbors created by such laws. The final results for the second quarter of 2005 may differ from the preliminary results discussed or forecasted in the forward-looking statements. Forward-looking statements may relate to, but are not limited to, Borland's preliminary financial guidance for the second quarter of 2005 and Borland's future financial and operating results. Such forward-looking statements are based on current expectations that involve a number of uncertainties and risks that may cause actual events or results to differ materially. Factors that could cause actual events or results to differ materially include, among others, risks associated with final review of the results and preparation of quarterly financial statements; the effects that altered spending priorities will have on our financial results; our ability to sell multi-product solutions for the application development lifecycle; the effects of a longer sales cycle as we increase our focus on larger enterprise customers; our ability to maintain revenue levels in our legacy product lines; market acceptance of our products and services including our enterprise software development platform/solution; and general industry trends, general economic factors and capital market conditions. These and other risks may be detailed from time to time in Borland's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its latest Annual Report on Form 10-K and its latest Quarterly Report on Form 10-Q, copies of which may be obtained from http://www.sec.gov. Borland is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. Information contained in our website is not incorporated by reference in, or made part of this press release.
CONTACT: Borland Software Corporation |
| Could not find file '\\us1p-ccsfs01a\Content3\IRXMLDATA\11\112793\Disclaimers.xml'. |