| [July 23, 2008] |
 |
Sybase Reports Record Second Quarter Results, Driven by 15% Revenue Growth
DUBLIN, Calif. --(Business Wire)-- Sybase, Inc. (NYSE:SY), the largest enterprise software and services company exclusively focused on managing and mobilizing information, today reported financial results for the second quarter ended June 30, 2008.
Highlights:
-- Total revenue of $282.7 million, up 15% year over year
-- License revenue increased 17% year over year
-- Services revenue increased 8% year over year
-- Database license revenue increased 38% year over year
-- Messaging revenue increased 41% year over year
-- GAAP operating margin of 18%, versus 15% a year ago; non-GAAP operating margin of 23%, versus 20% a year ago
-- GAAP net income of $32.4 million, up 24% year over year; GAAP EPS up 31% year over year
-- Non-GAAP net income of $43.0 million, up 26% year over year; non-GAAP EPS up 33% year over year
-- Cash flow from operations of $62.7 million, up 16% year over year
-- Management raises full-year guidance for revenue, earnings, and cash flow from operations
2008 Second Quarter Results
Total revenue for the second quarter of 2008 increased 15% to $282.7 million from $245.0 million in the second quarter of 2007. License revenue grew 17% to $90.5 million from $77.4 million in the second quarter of 2007. Services revenue increased 8% to $146.6 million from $135.2 million a year ago. Messaging revenue grew 41% to $45.6 million from $32.4 million a year ago.
For the second quarter, operating income calculated in accordance with generally accepted accounting principles (GAAP) increased 44% year over year to $51.1 million, representing an operating margin of 18%. This compares with GAAP operating income of $35.6 million and an operating margin of 15% a year ago.
GAAP net income increased 24% year over year to $32.4 million from $26.0 million a year ago. GAAP earnings per diluted share (EPS) increased 31% to $0.37 for the 2008 second quarter from $0.28 for the second quarter of 2007.
Non-GAAP operating income for the second quarter increased 33% year over year to $63.7 million, representing a 23% operating margin. This compares with non-GAAP operating income of $47.8 million, representing a 20% operating margin, in the 2007 second quarter.
Non-GAAP net income for the 2008 second quarter increased 26% to $43.0 million from $34.3 million for the second quarter of 2007. Non-GAAP EPS for the 2008 second quarter increased 33% to $0.49 from $0.37 for the second quarter of 2007.
Non-GAAP amounts exclude the amortization of certain purchased intangibles, stock-based compensation, restructuring costs, charges related to the impairment of auction rate securities, and the tax effect of these and related items. Accompanying this release is a reconciliation from GAAP to non-GAAP amounts for the second quarter of 2008.
"I am extremely pleased with our strong performance in the second quarter of 2008," stated John Chen, chairman, CEO and president of Sybase. "We have now delivered three consecutive record quarters, four consecutive quarters exceeding Street consensus revenue, and 16 consecutive quarters exceeding consensus earnings."
Added Mr. Chen, "Our ongoing success is attributable to growing market acceptance of our Unwired Enterprise strategy. We are excited about our prospects for continued growth, driven by our flagship enterprise database, IQ analytics server, mobile middleware, and mobile messaging. Additional growth catalysts expected to enhance our momentum include new offerings such as risk analytics, data clustering, Mobile Office, mobile banking, and next-generation mobile messaging.
"Notwithstanding the macro-economic cross-currents, our business pipeline remains healthy, and we are confident in our team's ability to execute. As a result, we are again raising our 2008 revenue, earnings, and cash flow targets, which put us on track to deliver yet another record full-year performance," concluded Mr. Chen.
Balance Sheet and Other Data
At June 30, 2008, Sybase reported $606.4 million in cash and cash investments, including long-term cash investments of $22.7 million and restricted cash of $3.7 million. In the second quarter, the company generated $62.7 million in cash flow from operations.
There remains $82.9 million authorized under the company's current share repurchase program.
Days sales outstanding (DSO) for the second quarter was 75.
Guidance
For the third quarter ending September 30, 2008, management anticipates total revenue in the range of $270 million to $275 million. Management anticipates non-GAAP fully diluted EPS in the range of $0.48 to $0.50 and GAAP EPS in the range of $0.38 to $0.40.
Management is raising guidance for full-year 2008 revenue, earnings, and cash flow from operations due to the company's stronger-than-expected performance in the second quarter of 2008. Management now anticipates total revenue of approximately $1.11 billion. Non-GAAP EPS is now anticipated in the range of $1.98 to $2.00, and GAAP EPS is anticipated in the range of $1.53 to $1.55. Management now anticipates cash flow from operations of approximately $250 million.
A reconciliation from the company's previous full-year 2008 EPS guidance range to the current guidance range is as follows:
Reconciliation of 2008 EPS Guidance Range
GAAP Non-GAAP
--------------- ---------------
2008 EPS guidance range on April 24,
2008 $ 1.51 $ 1.56 $ 1.94 $ 1.99
Increase due to operations 0.09 0.06 0.09 0.06
Decrease due to auction rate
securities (0.03) (0.03) 0.00 0.00
Decrease due to convert dilution from
higher share price (0.04) (0.04) (0.05) (0.05)
------- ------- ------- -------
2008 EPS guidance range on July 23,
2008 $ 1.53 $ 1.55 $ 1.98 $ 2.00
======= ======= ======= =======
Please see "Note Regarding Non-GAAP Financial Measures" for important
information regarding Non-GAAP Financial Measures.
Accompanying this release is a reconciliation from projected GAAP to non-GAAP amounts for the estimated 2008 third quarter and full year results.
Conference Call and Webcast Information
The Sybase 2008 second quarter conference call and simultaneous Webcast is scheduled to begin at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time on Wednesday, July 23, 2008. To access the live Webcast, please visit www.fulldisclosure.com or Sybase's Website at www.sybase.com at least 20 minutes prior to the call to download any necessary audio or plug-in software. A telephone replay will be available approximately two hours after the conference call ends and will be available until 10:00 p.m. Pacific Time on July 30, 2008. To access the replay, please dial (888) 203-1112 for domestic access and (719) 457-0820 for international callers; the access code for the telephone replay is 2984621. Additionally, the archived Webcast will be available through October 23, 2008 at http://www.sybase.com/about_sybase/investorrelations.
About Sybase, Inc.
Sybase is the largest enterprise software and services company exclusively focused on managing and mobilizing information. With our global solutions, enterprises can extend their information securely and make it useful for people anywhere using any device. The world's most critical data in commerce, finance, government, and healthcare runs on Sybase. For more information, visit the Sybase Website at http://www.sybase.com.
Forward-Looking Statements
Certain statements in this release concerning Sybase, Inc. and its prospects and future growth are forward-looking and involve a number of uncertainties and risks. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to, the performance of the global economy and growth in software industry sales; market acceptance of the company's products and services; customer and industry analyst perception of the company and its technology vision and future prospects; the success of certain business combinations engaged in by the company or by competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; and other factors described in Sybase, Inc.'s reports filed with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2007 and its quarterly report on Form 10-Q for the period ended March 31, 2008.
Note Regarding Non-GAAP Financial Measures
In addition to our GAAP results, Sybase discloses adjusted operating income, net income and net income per share, referred to respectively as "non-GAAP operating income", "non-GAAP net income", and "non-GAAP net income per diluted share". These items, which are collectively referred to as "Non-GAAP Measures", exclude the impact of stock-based compensation, the amortization of acquisition-related intangible assets, restructuring costs, non-cash charges related to the impairment of auction rate securities ("ARS"), and the tax effect of these and related items. From time to time, subject to the review and approval of the audit committee of the Board of Directors, we may make other adjustments for expenses and gains that we do not consider reflective of core operating performance in a particular period and may modify the Non-GAAP Measures by excluding these expenses and gains. The Non-GAAP Measures for our Q2 2008 results and full-year 2008 guidance exclude impairment charges for reductions in the carrying value of our auction rate securities.
We define our core operating performance to be the revenues recorded in a particular period and the expenses incurred within that period which management has the capability of directly affecting in order to drive operating income. Non-cash stock-based compensation, amortization of acquisition-related intangible assets, restructuring charges and impairment charges to our ARS are excluded from our core operating performance because the decisions which gave rise to these expenses were not made to drive revenue in a particular period, but rather were made for our long-term benefit over multiple periods. While strategic decisions, such as the decisions to issue stock-based compensation, to acquire a company or to restructure the organization, are made to further our long-term strategic objectives and do impact our income statement under GAAP, these items affect multiple periods and management is not able to change or affect these items within any particular period. As such, supplementing GAAP disclosure with non-GAAP disclosure using the Non-GAAP Measures provides management with an additional view of operational performance by excluding expenses that are not directly related to performance in any particular period. Therefore, we exclude these impacts in our planning, monitoring, evaluation and reporting of our underlying revenue-generating operations for a particular period.
Prior to the adoption of Financial Accounting Standards Board Statement 123 Revised "Share-based Payment" ("FAS 123R") on January 1, 2006, our practice was to exclude stock-based compensation internally to evaluate performance and we presented investors with certain Non-GAAP Measures. With the adoption of FAS 123R, we continue to believe that Non-GAAP Measures can provide relevant disclosure to investors as contemplated by Staff Accounting Bulletin 107 ("SAB 107") and we have presented Non-GAAP Measures that exclude stock-based compensation, amortization of acquisition-related intangible assets, impairment charges to ARS, restructuring costs and the related tax effects. While these items (other than restructuring) are recurring and affect GAAP net income, we do not use them to assess our operational performance for any particular period because (a) these items affect multiple periods and are unrelated to business performance in a particular period; (b) we are not able to change these items in any particular period; and (c) these items do not contribute to the operational performance of our business for any particular period.
We also use Non-GAAP Measures to operate the business because the excluded expenses are not under the control of, and accordingly are not used in evaluating the performance of, operations personnel within their respective areas of responsibility. In the case of stock-based compensation expense, the award of stock options is governed by the stock committee of the Board of Directors and, in the case of acquisition-related intangible assets; acquisitions arise from strategic decisions which are not the responsibility of most levels of operational management. The restructuring charges, like our stock-based compensation charges, amortization of acquisition-related intangible assets and write-downs to ARS, are excluded in management's internal evaluations of our operating results and are not considered for management compensation purposes.
In the case of stock-based compensation, our compensation strategy is to use stock-based compensation to attract and retain key employees and executives. It is principally aimed at long term employee retention, rather than to motivate or reward operational performance for any particular period. Thus, stock-based compensation expense varies for reasons that are generally unrelated to operational performance in any particular period. We use annual cash incentive payouts for executives and other employees to motivate and reward the achievement of short-term operational objectives.
We view amortization of acquisition-related intangible assets, such as the amortization of an acquired company's research and development efforts, customer lists and customer relationships, as items arising from pre-acquisition activities. These are costs that are determined at the time of an acquisition. While it is continually viewed for impairment, amortization of the cost is a static expense, one that is typically not affected by operations during any particular period and does not contribute to operational performance for any particular period.
The cost of restructure charges are excluded in our Non-GAAP Measures because they are significantly different in magnitude and character from routine personnel and facility adjustments that management makes when monitoring and conducting the Company's core operations during any particular period. We have not undertaken restructuring since 2004 and amounts included in cost of restructure in 2006 and subsequently reflect lease termination costs from previously announced restructuring efforts. Our previous restructuring activities and related expenses were not related to operating performance for any particular period, and were not subject to change by management in any particular period. Instead, the prior restructuring was intended to align our business model and expense structure to our position in the market.
The liquidity and fair value of our investments in marketable securities, including auction rate securities, have been negatively impacted by the uncertainty in the credit markets and failed auctions due to a lack of marketability of these securities. As a result, we recorded impairment charges to reduce the carrying value of our ARS investments. The impairment charges related to our ARS investments have been excluded from our non-GAAP results of operations. These impairment charges are excluded from management's assessment of our operating performance because management believes that they are not indicative of our ongoing business operations. We believe that the exclusion of these unique charges provide investors an enhanced view of our operations and facilitates comparisons with the results of other periods that do not reflect such charges.
Our historical non-GAAP effective tax rates differ from our GAAP effective tax rates because of (i) the exclusion of the amortization of acquisition-related intangible assets, stock-based compensation expenses and restructuring costs described above, (ii) the exclusion of certain acquired tax attributes, and (iii) the resulting impact on the realization of the Company's other tax assets. We exclude the impact of these discrete tax items from our non-GAAP income tax provision or benefit because management believes that they are not indicative of our ongoing business operations.
Because the Non-GAAP Measures are not calculated in accordance with GAAP, they are used by our management as a supplement to, and not an alternative to, or superior to, financial measures calculated in accordance with GAAP. There are a number of limitations on the Non-GAAP Measures, including the following:
-- These Non-GAAP Measures do not have standardized meanings and may not be comparable to similar non-GAAP measures used or reported by other software or technology companies.
-- The Non-GAAP Measures do not reflect all costs associated with our operations determined in accordance with GAAP. For example:
Non-GAAP operating margin performance and non-GAAP net
income do not include stock compensation expense related
to equity awards granted to our workforce. Our stock
incentive plans are important components of our employee
incentive compensation arrangements and are reflected as
expenses in our GAAP results under FAS 123R. While we
include the dilutive impact of such equity awards in
weighted average shares outstanding, the expense
associated with stock-based awards is excluded from our
non-GAAP measures.
Although amortization of acquisition-related intangible
assets does not directly impact our current cash
position, such expense represents the declining value of
the technology or other intangible assets that we have
acquired. These assets are amortized over their
respective expected economic lives or impaired, if
appropriate. The expense associated with this decline in
value is excluded from our non-GAAP measures and
therefore non-GAAP measures do not include the costs of
acquired intangible assets that supplement our research
and development.
Restructuring charges in 2006 and subsequently primarily
represent lease termination costs associated with
restructuring activities that commenced in 2004 and
before. Most of the charges are cash expenditures, which
are excluded from our Non-GAAP Measures.
-- Excluded expenses for stock-based compensation and amortization of acquisition-related intangible assets will continue to recur and impact the Company's GAAP results. While restructuring costs are non-recurring activities, their occasional occurrence will impact GAAP results. As such, the Non-GAAP Measures should not be construed as an inference that the excluded items are unusual, infrequent or non-recurring.
Management compensates for these limitations by relying on these Non-GAAP Measures only as a supplement to the Company's GAAP results.
SYBASE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share June 30, December 31,
data) 2008 2007
----------- ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 575,148 $ 604,808
Short-term investments 4,815 93,462
----------- ------------
Total cash, cash equivalents and short-
term cash investments 579,963 698,270
Restricted cash 3,733 3,424
Accounts receivable, net 234,447 245,267
Deferred income taxes 42,088 37,979
Prepaid income taxes - 17,604
Other current assets 32,145 25,182
----------- ------------
Total current assets 892,376 1,027,726
Long-term cash investments 22,674 36,637
Property, equipment and improvements, net 66,186 64,841
Deferred income taxes 5,475 10,038
Capitalized software, net 81,496 74,278
Goodwill, net 534,110 533,339
Other purchased intangibles, net 119,606 130,608
Other assets 35,648 36,016
----------- ------------
Total assets $1,757,571 $1,913,483
=========== ============
Current liabilities:
Accounts payable $ 33,947 $ 30,290
Accrued compensation and related expenses 58,338 63,852
Accrued income taxes 7,284 273
Other accrued liabilities 118,654 124,849
Deferred revenue 225,944 203,734
----------- ------------
Total current liabilities 444,167 422,998
Other liabilities 46,471 44,669
Deferred income taxes 13,920 14,115
Long-term tax liability 30,807 30,807
Long-term deferred revenue 4,716 4,937
Minority interest 5,119 5,147
Convertible subordinated notes 460,000 460,000
Total stockholders' equity 752,371 930,810
----------- ------------
Total liabilities and stockholders' equity $1,757,571 $1,913,483
=========== ============
SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------
(In thousands, except per
share data) 2008 2007 2008 2007
--------- --------- -------- ---------
Revenues:
License fees $ 90,515 $ 77,435 $168,639 $146,800
Services 146,594 135,230 285,991 264,881
Messaging 45,604 32,358 88,231 63,379
--------- --------- -------- ---------
Total revenues 282,713 245,023 542,861 475,060
Costs and expenses:
Cost of license fees 15,129 13,083 29,666 25,836
Cost of services 41,080 39,539 81,960 78,281
Cost of messaging 27,403 18,906 52,511 37,795
Sales and marketing 74,272 64,916 142,565 129,491
Product development and
engineering 36,046 36,920 71,608 75,673
General and administrative 34,077 32,680 70,138 64,176
Amortization of other
purchased intangibles 3,573 3,436 7,089 6,846
Cost (Reversal) of
restructure (8) (51) 19 (47)
--------- --------- -------- ---------
Total costs and expenses 231,572 209,429 455,556 418,051
--------- --------- -------- ---------
Operating income 51,141 35,594 87,305 57,009
Interest income and expense and
other, net (876) 5,142 2,639 10,146
Minority interest 37 - 28 (20)
--------- --------- -------- ---------
Income before income taxes 50,302 40,736 89,972 67,135
Provision for income taxes 17,948 14,708 33,427 25,959
--------- --------- -------- ---------
Net income $ 32,354 $ 26,028 $ 56,545 $ 41,176
========= ========= ======== =========
Basic net income per share $ 0.40 $ 0.29 $ 0.67 $ 0.45
========= ========= ======== =========
Shares used in computing basic
net income per share 81,688 90,891 84,680 91,020
========= ========= ======== =========
Diluted net income per share $ 0.37 $ 0.28 $ 0.62 $ 0.44
========= ========= ======== =========
Shares used in computing
diluted net income per share 88,033 92,972 90,977 93,294
========= ========= ======== =========
NON-GAAP RESULTS RECONCILED TO GAAP RESULTS
The following tables reflect selected Sybase non-GAAP results
reconciled to GAAP results (in 000s except percentage and per share
amounts):
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------------------
----
2008 2007 2008 2007
-----------------------------------------------------------------
-----
Operating Income
GAAP operating income 51,141 35,594 87,305 57,009
Plus:
Amortization of acquisition-
related intangible assets 7,162 6,773 14,225 13,504
Stock-based compensation
expense 5,382 5,483 11,093 11,233
Cost (Reversal) of restructure (8) (51) 19 (47)
-----------------------------------------------------------------
-----
Non-GAAP operating income $63,677 $47,799 $112,642 $81,699
--------------------------------------------------------------
--------
Net Income
GAAP net income 32,354 26,028 56,545 41,176
Plus:
Amortization of acquisition-
related intangible assets 7,162 6,773 14,225 13,504
Stock-based compensation
expense 5,382 5,483 11,093 11,233
Cost (Reversal) of restructure (8) (51) 19 (47)
Impairment loss on auction
rate securities 3,015 - 6,285 -
Less:
Incremental income taxes
associated with certain Non-
GAAP items (4,868) (3,983) (9,792) (6,731)
--------------------------------------------------------------
--------
Non-GAAP net income $43,037 $34,250 $ 78,375 $59,135
--------------------------------------------------------------
--------
Net Income Per Diluted Share
GAAP net income per diluted
share $ 0.37 $ 0.28 $ 0.62 $ 0.44
Plus:
Amortization of acquisition-
related intangible assets $ 0.08 0.07 0.16 0.14
Stock-based compensation
expense $ 0.06 0.06 0.12 0.12
Cost (Reversal) of restructure ($0.00) (0.00) 0.00 (0.00)
Impairment loss on auction
rate securities $ 0.03 - 0.07 -
Less:
Incremental income taxes
associated with certain Non-
GAAP items ($0.06) (0.04) (0.11) (0.07)
---------------------------------------------------------------
-------
Non-GAAP net income per diluted
share $ 0.49 $ 0.37 $ 0.86 $ 0.63
-----------------------------------------------------------------
-----
Shares used in computing diluted
net income per share 88,033 92,972 90,977 93,294
CLASSIFICATION OF STOCK-BASED COMPENSATION EXPENSE
The following table shows the classification of stock-based
compensation expense:
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------------------
----
2008 2007 2008 2007
-----------------------------------------------------------------
-----
($000) ($000)
Cost of services 306 376 665 715
Cost of messaging 127 124 218 310
Sales and marketing 1,360 1,206 2,716 2,472
Product development and
engineering 733 656 1,397 1,342
General and administrative 2,856 3,121 6,097 6,394
----------------------------------------------------------------
------
Total $ 5,382 $ 5,483 $ 11,093 $11,233
CLASSIFICATION OF AMORTIZATION OF PURCHASED INTANGIBLES
The following table shows the classification of amortization of
purchased intangibles expense:
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------------------
----
2008 2007 2008 2007
-----------------------------------------------------------------
-----
($000) ($000)
Cost of license fees 2,562 2,406 5,116 4,811
Cost of messaging 1,027 931 2,020 1,847
Amortization of other purchased
intangibles 3,573 3,436 7,089 6,846
----------------------------------------------------------------
------
Total $ 7,162 $ 6,773 $ 14,225 $13,504
SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
---------------------
(Dollars in thousands) 2008 2007
------------------------------------------------ ---------- ----------
Cash flows from operating activities:
Net income $ 56,545 $ 41,176
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 48,859 43,238
Minority interest in income of subsidiaries (28) 20
(Gain) Loss on disposal of assets (18) 45
Impairment of investment in auction rate
securities 6,285 --
Deferred income taxes 259 (2,262)
Stock-based compensation - restricted stock 4,835 4,185
Stock-based compensation - all other 6,258 7,048
Excess tax benefit from stock-based
compensation plans (6,233) (2,855)
Amortization of note issuance costs 985 985
Changes in assets and liabilities:
Accounts receivable 6,315 22,522
Prepaid income taxes 17,604 --
Other current assets (6,960) (5,258)
Other assets - operating (696) 2,572
Accounts payable 3,657 (669)
Accrued compensation and related expenses (5,514) (9,360)
Accrued income taxes 6,429 8,510
Other accrued liabilities (5,704) (7,786)
Deferred revenues 21,989 21,902
Other liabilities 2,385 (552)
---------- ----------
Net cash provided by operating activities 157,252 123,461
---------- ----------
Cash flows from investing activities:
Increase in restricted cash (309) (10)
Purchases of available-for-sale cash
investments (14,767) (165,136)
Maturities of available-for-sale cash
investments 32,027 99,487
Sales of available-for-sale cash investments 80,982 81,984
Business combinations, net of cash acquired -- (1,531)
Purchases of property, equipment and
improvements (16,123) (11,225)
Proceeds from sale of property, equipment, and
improvements 7 40
Capitalized software development costs (27,219) (17,228)
(Increase) Decrease in other assets -
investing 75 (61)
---------- ----------
Net cash provided by (used for) investing
activities 54,673 (13,680)
---------- ----------
Cash flows from financing activities:
Repayments of long-term obligations (378) (33)
Payments on capital lease (220) (879)
Net proceeds from the issuance of common stock
and reissuance of treasury stock 33,279 19,221
Purchases of treasury stock (300,601) (58,600)
Excess tax benefit from stock-based
compensation plans 6,233 2,855
---------- ----------
Net cash used for financing activities (261,687) (37,436)
---------- ----------
Effect of exchange rate changes on cash 20,102 9,155
---------- ----------
Net increase (decrease) in cash and cash
equivalents (29,660) 81,500
Cash and cash equivalents, beginning of year 604,808 355,303
---------- ----------
Cash and cash equivalents, end of period $ 575,148 $ 436,803
========== ==========
SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED JUNE 30, 2008
(UNAUDITED)
(In thousands,
except per
share data)
Infra-
structure
Platform iAnywhere Sybase Consolidated
Revenues: Group Solutions 365 Eliminations Total
---------- --------- ------ ------------ ------------
License fees
Infrastructure $64,228 $53 $54 $- $64,335
Mobile and
Embedded 7,920 18,260 - - 26,180
---------- --------- ------ ------------ ------------
Subtotal
license fees 72,148 18,313 54 - 90,515
Intersegment
license
revenues 103 6,600 - (6,703) -
---------- --------- ------ ------------ ------------
Total license
fees 72,251 24,913 54 (6,703) 90,515
Services
Direct service
revenue 135,469 10,619 506 - 146,594
Intersegment
service
revenues 58 8,600 - (8,658) -
---------- --------- ------ ------------ ------------
Total
services 135,527 19,219 506 (8,658) 146,594
Messaging
Direct
messaging
revenue 6 - 45,598 - 45,604
Intersegment
messaging
revenues - - 12 (12) -
---------- --------- ------ ------------ ------------
Total
messaging 6 - 45,610 (12) 45,604
---------- --------- ------ ------------ ------------
Total revenues 207,784 44,132 46,170 (15,373) 282,713
Total allocated
costs and
expenses before
cost of
restructure and
amortization of
other purchased
intangibles and
purchased
technology 158,429 34,634 41,346 (15,373) 219,036
---------- --------- ------ ------------ ------------
Operating income
before cost of
restructure and
amortization of
other purchased
intangibles and
purchased
technology 49,355 9,498 4,824 - 63,677
Cost of
restructure -
2008 Activity 33 - - - 33
Amortization of
other purchased
intangibles 527 1,023 2,023 - 3,573
Amortization of
purchased
technology 403 2,159 1,027 - 3,589
---------- --------- ------ ------------ ------------
Operating income
before
unallocated
costs $48,392 $6,316 $1,774 $- $56,482
Other
unallocated
costs 5,341
------------
Operating income
after
unallocated
costs 51,141
Interest income
and expense and
other, net (876)
Minority
interest 37
------------
Income before
income taxes 50,302
Provision for
income taxes 17,948
------------
Net income $32,354
============
Basic net income
per share $0.40
============
Shares used in
computing basic
net income per
share 81,688
============
Diluted net
income per
share $0.37
============
Shares used in
computing
diluted net
income per
share 88,033
============
SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE SIX MONTHS ENDED JUNE 30, 2008
(UNAUDITED)
(In thousands,
except per
share data)
Infra-
structure
Platform iAnywhere Sybase Consolidated
Revenues: Group Solutions 365 Eliminations Total
---------- --------- ------ ------------ ------------
License fees
Infrastructure $120,606 $111 $67 $- $120,784
Mobile and
Embedded 14,158 33,697 - - 47,855
---------- --------- ------ ------------ ------------
Subtotal
license fees 134,764 33,808 67 - 168,639
Intersegment
license
revenues 165 11,799 - (11,964) -
---------- --------- ------ ------------ ------------
Total license
fees 134,929 45,607 67 (11,964) 168,639
Services
Direct service
revenue 263,602 21,312 1,077 - 285,991
Intersegment
service
revenues 64 16,725 - (16,789) -
---------- --------- ------ ------------ ------------
Total
services 263,666 38,037 1,077 (16,789) 285,991
Messaging
Direct
messaging
revenue 14 - 88,217 - 88,231
Intersegment
messaging
revenues - - 12 (12) -
---------- --------- ------ ------------ ------------
Total
messaging 14 - 88,229 (12) 88,231
---------- --------- ------ ------------ ------------
Total revenues 398,609 83,644 89,373 (28,765) 542,861
Total allocated
costs and
expenses before
cost of
restructure and
amortization of
other purchased
intangibles and
purchased
technology 309,293 69,281 80,410 (28,765) 430,219
---------- --------- ------ ------------ ------------
Operating income
before cost of
restructure and
amortization of
other purchased
intangibles and
purchased
technology 89,316 14,363 8,963 - 112,642
Cost of
restructure -
2008 Activity 60 - - - 60
Amortization of
other purchased
intangibles 1,054 2,046 3,989 - 7,089
Amortization of
purchased
technology 806 4,310 2,020 - 7,136
---------- --------- ------ ------------ ------------
Operating income
before
unallocated
costs $87,396 $8,007 $2,954 $- $98,357
Other
unallocated
costs 11,052
------------
Operating income
after
unallocated
costs 87,305
Interest income
and expense and
other, net 2,639
Minority
interest 28
------------
Income before
income taxes 89,972
Provision for
income taxes 33,427
------------
Net income $56,545
============
Basic net income
per share $0.67
============
Shares used in
computing basic
net income per
share 84,680
============
Diluted net
income per
share $0.62
============
Shares used in
computing
diluted net
income per
share 90,977
============
NON-GAAP RESULTS RECONCILED TO GAAP RESULTS - SEGMENTS
The following table reflects non-GAAP operating income before
unallocated costs reconciled to GAAP results for each Sybase segment
(in 000s except percentage and per share amounts):
Three Months Ended
June 30, 2008
-----------------------------------------------------------------
-----
Infrastructure iAnywhere Sybase
Platform Group Solutions 365
------------------------------------------------------------------
----
Operating Income Before Unallocated
Costs
GAAP operating income before
unallocated costs 48,392 6,316 1,774
Plus:
Amortization of acquisition-
related intangible assets 930 3,182 3,050
Cost of restructure 33 - -
--------------------------------------------------------------------
--
Non-GAAP operating income before
unallocated costs $49,355 $9,498 $4,824
---------------------------------------------------------------
-------
Six Months Ended
June 30, 2008
-----------------------------------------------------------------
-----
Infrastructure iAnywhere Sybase
Platform Group Solutions 365
------------------------------------------------------------------
----
Operating Income Before Unallocated
Costs
GAAP operating income before
unallocated costs 87,396 8,007 2,954
Plus:
Amortization of acquisition-
related intangible assets 1,860 6,356 6,009
Cost of restructure 60 - -
--------------------------------------------------------------------
--
Non-GAAP operating income before
unallocated costs $89,316 $14,363 $8,963
---------------------------------------------------------------
-------
SYBASE, INC.
Reconciliation of GAAP-based EPS to Non-GAAP EPS
for the three months ended September 30, 2008
(unaudited)
GAAP - based EPS $ 0.38 $ 0.40
Amortization of purchased intangibles 0.09 0.09
Amortization of stock compensation expense 0.06 0.06
Income tax effect of above adjustments (0.05) (0.05)
Income tax effect due to differences between the GAAP
and non-GAAP effective tax rate 0.00 0.00
------- -------
Non-GAAP EPS $ 0.48 $ 0.50
======= =======
Please see "Note Regarding Non-GAAP Financial Measures" for important
information regarding Non-GAAP Financial Measures.
SYBASE, INC.
Reconciliation of GAAP-based EPS to Non-GAAP EPS
for the twelve months ended December 31, 2008
(unaudited)
GAAP - based EPS $ 1.53 $ 1.55
Amortization of purchased intangibles 0.35 0.35
Amortization of stock compensation expense 0.25 0.25
Impairment of Auction Rate Securities 0.07 0.07
Income tax effect of above adjustments (0.20) (0.20)
Income tax effect due to differences between the GAAP
and non-GAAP effective tax rate (0.02) (0.02)
------- -------
Non-GAAP EPS $ 1.98 $ 2.00
======= =======
Please see "Note Regarding Non-GAAP Financial Measures" for important
information regarding Non-GAAP Financial Measures.
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