Borland Reports Third Quarter 2008 Financial Results

Business Wire, Nov 6, 2008

Company Exceeds Non-GAAP Operating Income Goal, Takes $106.9 Million Non-Cash Goodwill Impairment Charge

AUSTIN, Texas -- Borland Software Corporation (NASDAQ:BORL), the global leader in Open Application Lifecycle Management (ALM), today announced preliminary financial results for the third quarter ended September 30, 2008.

For the third quarter of 2008, Borland reported total revenue of $44.3 million, GAAP net loss of $106.8 million or $1.47 per share, which included a $106.9 million non-cash goodwill impairment charge, and non-GAAP net loss of $0.5 million, or $0.01 per share. GAAP net loss included $1.0 million in stock-based compensation, $85,000 credit to restructuring expenses and $2.2 million in amortization of intangible assets. In addition to the impairment charge, Borland recorded a GAAP net gain of $4.4 million from the early retirement of debt and a $0.6 million loss from discontinued operations associated with the CodeGear divestiture.

For the third quarter of 2008, revenue for ALM products and services was $35.5 million and revenue for Deployment (DPG) products and services was $8.8 million.

"Borland continues to make progress and achieve milestones in our transformation to an innovative, profitable leader in the ALM sector," said Tod Nielsen, president and CEO of Borland. "We are encouraged by early customer feedback that our newly released Borland Management Solutions can help solve their most challenging problems."

Business Outlook

Management previously set expectations for ALM and DPG revenue to be in the lower end of the range of $180 to $200 million projected for 2008. Despite current economic conditions, management is not changing guidance but acknowledges that quarterly performance is dependent on their ability to close a number of pending large transactions.

Conference Call

Borland will host a conference call and live webcast at 7:00 a.m., Central Daylight Time, today, November 6, 2008. To access the conference call, dial 800-257-6607 for the US or Canada and 303-262-2053 for international callers. The webcast will be available live on the Investor Relations section of the Company's corporate website at www.borland.com. Listeners are reminded to access the webcast at least 30 minutes prior to the scheduled time to download any necessary audio or plug-in software. An audio replay of the call will also be available beginning at approximately 9:00 a.m. Central Standard Time on November 6, 2008 until 11:59 p.m. Central Standard Time on December 6, 2008, by dialing 800-405-2236, or 303-590-3000 for international callers, and entering pass code 11121523#.

About Borland

Founded in 1983, Borland (NASDAQ:BORL) is the leading vendor of Open Application Lifecycle Management (ALM) solutions - open to customers' processes, tools and platforms - providing the flexibility to manage, measure and improve the software delivery process. To learn more about maximizing the business value of software, visit http://www.borland.com.

Borland and all other Borland brand and product names are service marks, trademarks or registered trademarks of Borland Software Corporation or its subsidiaries in the United States and other countries. All other marks are the property of their respective owners.

Forward-Looking Statements

Statements made in this release that are not historical facts are "forward-looking statements" and accordingly involve risk and uncertainties that could cause actual results to differ materially from those described in this release. Forward-looking statements include, for example, all statements relating to projected financial performance (including statements involving projection of revenue, income including income (loss), earnings including earnings (loss) per share, capital expenditures, dividends, capital structure, or other financial items), adjustments to financial statements for prior periods, the plans and objectives of management for future operations, products or services; and future performance in economic terms or other any other measures.

The potential risks and uncertainties that could cause results to differ materially include, among others, our ability to predict revenue and control expenses, and our ability to grow our ALM business or achieve profitability as planned. These and other risks are detailed in Borland's periodic reports filed with the Securities and Exchange Commission, including, its latest Annual Report on Form 10-K, and its latest quarterly report on Form 10-Q, copies of which may be obtained from www.sec.gov. Borland does not intend to update this information to reflect future events or circumstances unless required by law.

Non-GAAP Financial Measures

The attached press release and tables include non-GAAP financial measures. Borland's management uses non-GAAP financial measures in assessing the performance of Borland's ability to develop, sell and market products and services ("Ongoing Operations"). They are also used for planning and forecasting in future periods. Non-GAAP financial measures also facilitate internal comparisons to Borland's historical operating results. Borland has historically reported similar non-GAAP financial measures and believes that the inclusion of comparative results provides consistency in its financial reporting that benefits investors. Non-GAAP financial measures are computed using consistent methods from quarter to quarter and year to year. These non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. They should be viewed in conjunction with the consolidated financial statements prepared in accordance with GAAP.