Financial: PeopleSoft, Inc. Reports Sales and Earnings for the Quarter and Nine Months Ended September 30, 1998 - Company Financial Information

Edge: Work-Group Computing Report, Oct 26, 1998

PeopleSoft, Inc. (Nasdaq: PSFT) announced Tuesday the financial results for the quarter and nine months ended September 30, 1998.

Revenues, net income and net income per share for the third quarter of 1998 were $351.3 million, $44.2 million, and $0.17, respectively. This compares with revenues, net income and net income per share for the third quarter of 1997 of $217.1 million, $28.7 million and $0.11, respectively. Diluted common shares outstanding were 257,518,000 and 253,830,000 for the quarters ended September 30, 1998 and 1997, respectively.

Revenues for the nine months ended September 30, 1998 increased 71% to $949.5 million from $555.1 million for the corresponding period in 1997. Net income was $117.1 million, or 12% of revenues for the first nine months of 1998, while earnings for the same period in 1997 were $68.8 million, or 12% of revenues. Net income per share was $0.45 compared to net income per share of $0.27 for the same nine-month period of the prior year.

Revenues from license fees for the third quarter of 1998 increased 30% over the comparable period of the prior year. Revenue from services for the third quarter increased 96% over the comparable period of the prior year and accounted for 58% and 48% of total revenues for the third quarters of 1998 and 1997, respectively. Revenues from international operations increased by 58% to $55.0 million or 16% of total revenues for the third quarter of 1998, compared to $34.8 million or 16% of total revenues for the same quarter of the prior year.

Quarterly Highlights The following highlights in the Company's Commercial segments were announced or occurred since PeopleSoft's last earnings release:

o PeopleSoft announced the PeopleSoft Certified Outsourcing Partner Program, providing large and medium-sized companies with new ways to utilize PeopleSoft applications and business process expertise. To initiate the program, PeopleSoft has signed agreements with IT service providers CIBER, Inc.; Computer Sciences Corporation (CSC); Corio; KPMG Peat Marwick; reSOURCE PARTNER; and USinternetworking. Together with PeopleSoft, these Certified Outsourcing Partners will offer industry-specific outsourcing solutions encompassing software implementation and management services.

o PeopleSoft signed agreements with Siebel Systems, Inc. and The Vantive Corporation, the world's leading front-office software vendors, to integrate their sales force automation, marketing automation, customer service and field service applications with PeopleSoft's enterprise software. Both Siebel and Vantive solutions will complement PeopleSoft's existing customer-focused modules, such as Remote Order Entry, Product Configurator, Order Management, Order Promising, and Demand Planning. These front-office software vendors plan to deliver to customers their respective integrated solutions for use with PeopleSoft applications in the first half of 1999.

o Per-Se Technologies and OmniCell Technologies will integrate their software packages with PeopleSoft's applications, providing a common platform for managing the entire healthcare supply chain from the supplier to the patient. In addition, PeopleSoft and Shared Medical Systems, Inc. mutually terminated their systems integration agreement, effectively removing contractual limitations which prevented PeopleSoft from marketing and selling to certain healthcare customers, and from forming other alliance relationships in the healthcare industry.

o PeopleSoft and Cisco Systems, Inc. forged an alliance to speed the flow of critical PeopleSoft business information on Cisco networks. The companies are spearheading an effort to make PeopleSoft applications more "network-aware" to improve business-critical functionality on the network. The companies are initially collaborating in three core areas: product integration, technology development, and customer support.

o The completion, on October 1, 1998, of the acquisition of Intrepid Systems, Inc. for approximately $45 million in cash and other consideration. This acquisition further extends PeopleSoft's coverage of the supply chain by incorporating retail merchandise management software applications into PeopleSoft's application set. In addition, it brings key capabilities to PeopleSoft in the areas of data warehousing and decision support.

The addition of the Intrepid personnel adds significant retail experience and knowledge. The acquisition will be accounted for under the purchase method of accounting in the fourth quarter of 1998.

The following highlights in the Company's Education and Government segment were announced or occurred since PeopleSoft's last earnings release:

o The licensing of PeopleSoft's software solution for higher education by the California State University system. By standardizing all 23 campus of the CSU system on the PeopleSoft solution, CSU seeks to significantly reduce its current costs and the complexities of maintaining and integrating varied homegrown and commercial systems.

o The release of PeopleSoft Financials Release 7 for the Public Sector, which provides state and local governments and agencies, higher education institutions and not for profit entities with a robust three tier solution and a choice of a java or windows based client along with significant functional enhancements.