BMC Software Announces Fiscal Year 1999 Results

Business Wire, April 27, 1999

HOUSTON--(BUSINESS WIRE)--April 27, 1999--

Company Continues Strong Growth across Major Product Lines;

4th Quarter Highlighted by Execution of

Strategic Acquisitions

BMC Software Inc. (Nasdaq:BMCS) today announced financial results for its fourth quarter of fiscal 1999, ended March 31, 1999. Growth was strong across all geographies and lines of business. Very strong growth in both mainframe and distributed license systems revenues as well as strong growth in maintenance revenues yielded the seventh consecutive record breaking revenue quarter. The company also closed its acquisition of Boole & Babbage Inc. in the quarter, whose financial results are included in the financial results presented in this press release.

Total revenues for the fourth quarter of fiscal 1999 increased 37 percent to $386.5 million from $282.8 million in the same quarter of fiscal 1998. In the quarter, net earnings and diluted earnings per share, excluding nonrecurring costs and benefits in the quarter, increased 41 percent to $115.7 million and 42 percent to $.47, respectively, compared to net earnings of $81.9 million and diluted earnings per share of $.33 in the year-ago quarter, which excludes acquired research and development charges. Nonrecurring costs incurred in the quarter comprised a charge associated with BMC Software's acquisition of Boole & Babbage Inc. and the cumulative effect of BMC Software's early adoption of SFAS No. 133 (accounting for hedging related expenses). BMC Software received a one-time income tax benefit in the quarter. The amount of these charges and benefit are included in the attached quarterly financial statements. Net earnings and diluted earnings per share reflecting these costs and benefit were $100.4 million and $.40 for the fourth quarter of fiscal 1999, as compared to $75.7 million and $.31 in fiscal 1998, respectively.

Total revenues in fiscal 1999 were $1,303.9 million, a 32 percent increase from total revenues of $985.2 million in fiscal 1998. Fiscal 1999 earnings and diluted earnings per share, excluding one-time charges for acquired research and development in the year and the nonrecurring quarterly costs and benefit described above, were $389.3 million and $1.57, respectively. This represented growth of 48 percent and 45 percent, respectively, compared to earnings and diluted earnings per share in fiscal 1998 of $263.7 million and $1.08, excluding charges for acquired research and development in fiscal 1998. Net earnings and diluted earnings per share reflecting the quarterly nonrecurring costs and benefits discussed above and the charges in both years for acquired research and development were $362.8 million and $1.46 for the 1999 fiscal year, as compared to $188.5 million and $.77 in fiscal 1998.

"Fiscal 1999 was our most successful so far as we achieved $1 billion in annual revenues through internal growth, successfully integrated BGS Systems and, most importantly, sharpened our focus on our customers. We addressed critical customer needs by expanding our cross-platform application service assurance vision while growing our business in all geographies and across all of our lines of business. I am most pleased at the success we achieved this year from the product families that we inherited with BGS Systems. We took BGS Systems, which historically had a slow growth rate, set higher objectives for that business and even exceeded those objectives," said Max Watson, BMC Software chairman, president and CEO. "I believe this bodes well for our success in fiscal 2000 as we integrate Boole & Babbage and New Dimension Software. I strongly believe we have the necessary components for delivering the winning cross-platform systems management products that our customers require. We will put our energies into articulating our vision to a broader audience as we evolve into a more marketing-oriented company."

Total license revenue growth was 41 percent for the fourth quarter of fiscal 1999, with North American license revenues growing 40 percent and International license revenues growing 41 percent. Maintenance revenues increased 28 percent from the fourth quarter of fiscal 1998, in part because of customers' increasing implementation of the company's distributed systems products and, to a lesser extent, the company's growing services business. Total revenues in the company's core mainframe IMS and DB2 database tools and utilities increased 44 percent over the fourth quarter of fiscal 1998. Total mainframe revenues increased 34 percent over the fourth quarter of fiscal 1998 and increased 28 percent for the fiscal year. Total distributed systems revenues of $130.8 million in the fourth quarter represent an increase of 43 percent over the fourth quarter of fiscal 1998. Total distributed systems revenues of $390.4 million represent an increase of 45 percent for the fiscal year.

"We feel good about our future because our customers continue to expand their use of the heterogeneous technologies and platforms we support, from the mainframe to the Internet," Watson added. "This tells us enterprises will continue to require the solutions we deliver -- those that assure business availability."