PeopleSoft Announces Results For The First Quarter Of 2002
Announcement posted by PeopleSoft 26 Apr 2002
Income from Recurring Operations Increases 28 Percent
PeopleSoft, Inc. (Nasdaq: PSFT) today announced its first quarter 2002 results. For the first quarter ended March 31, 2002, income from recurring operations increased 28 percent to US$46 million, or US$0.14 per share, up from US$36 million, or US$0.11 per share in the same quarter of 2001.
Software license revenue was negatively impacted by the slowdown in technology spending, declining 13 percent to US$133 million, from US$153 million in the first quarter of 2001. Service revenue was US$342 million, an increase of 4 percent from US$330 million in the first quarter of 2001. Total revenue for the first quarter of 2002 was US$483 million, a decline of 6 percent from US$514 million in the first quarter of 2001.
Total operating expenses from recurring operations were US$420 million, a 10 percent reduction from the first quarter of 2001. As a result, operating margin from recurring operations increased significantly to US$63 million, an increase of US$17 million, or 37 percent, from US$46 million in the first quarter of 2001. Operating margins from recurring operations, as a percentage of revenue, also improved to 13.1 percent, from 9.0 percent in the same quarter of last year.
The Company's cash and investment balances at March 31, 2002 were US$1.82 billion, an increase of US$149 million during the first quarter. Days Sales Outstanding (DSO) at March 31, 2002 declined to 58 days, an improvement from 63 days at December 31, 2001.
Management Commentary
"PeopleSoft was not immune to the slowdown in technology spending in the first quarter," said PeopleSoft President and CEO Craig Conway. "However, our financial results were generally positive and were comparatively the strongest in the industry. We increased our income from recurring operations 28 percent over the same period last year. We grew service revenues. We met our EPS guidance of 14 cents. We increased cash and investments by US$149 million. We also improved our operating margins and we further reduced our industry-low DSO.
"PeopleSoft remains uniquely positioned in the industry," Conway added. "PeopleSoft's best-of-breed applications built on our Pure Internet ArchitectureTM give us a competitive advantage as companies around the world continue to move their business processes online and operate in real time. PeopleSoft is clearly an extremely strong, financially stable company with a focused, high calibre management team, and we are poised for continued success as the tech spending environment improves," Conway concluded.
Customer Wins
PeopleSoft won significant deals against its competitors in the first quarter in all product lines and across all geographies. Organisations buying PeopleSoft enterprise applications included: Applied Materials, California State University, Capital One Services Group, Children's Hospital of Los Angeles, CIT Group, Duke Energy, EDS, Ford Motor Company, Hewlett-Packard Company, HSBC, Merrill Lynch, Michelin, Mitsui, New York State Teachers Retirement System, New Zealand Post, Nextel, NTT Comware Corp., Sears Roebuck & Company, Siemens, Societe Generale, and Time Warner Cable.
Income Including Non-Recurring Items
The results for the first quarter of 2002 include a non-recurring acquisition-related charge of US$2.8 million (US$1.7 million after-tax). Including this non-recurring item, net income for the first quarter of 2002 was US$45 million, or US$0.14 per share, equal to the per share results from recurring operations.
Results for the first quarter of 2001 do not include any non-recurring items.
PeopleSoft Asia Pacific Performance
In Asia Pacific, PeopleSoft's total revenue for the quarter ended March 31, 2002 increased 12 percent over the same quarter last year, assuming constant currency exchange rates.
"In a difficult economic climate, organisations across Asia continue to turn to PeopleSoft for solutions that deliver rapid benefit and tangible returns on their investment," said Andrew Barkla, Vice President of PeopleSoft Asia Pacific.
Region Expansion
PeopleSoft accelerated its expansion into Asia Pacific, launching its mainland China operations in early April. The company will deliver further localised and translated PeopleSoft 8 pure Internet solutions to the region throughout the year. "With the recent appointment of industry veteran Angus McDougall as general manager of PeopleSoft South Asia, we expect to continue to expand our presence in this important market," Barkla said.
Customers in Asia Pacific
Customers that purchased PeopleSoft solutions in the first quarter include: New Zealand Post Limited, The Wellington City Council, Vanenburg Business IT-Solutions Private Limited, American International Assurance Company Limited, DSQ Software Limited, Aventis Pharma Limited, Beijing GKI Electronics Co Ltd and Shenzhen GKI Electronics Co Ltd.
About PeopleSoft
PeopleSoft (Nasdaq: PSFT) is the world's leading provider of business enterprise software. PeopleSoft pure Internet software enables organisations to reduce costs and increase productivity through real-time collaboration with their customers, suppliers, and employees. PeopleSoft's integrated, best-of-breed applications include Customer Relationship Management, Supply Chain Management, Human Resource Management, Financial Management, and Application Infrastructure. More than 4,700 organisations in 107 countries run on PeopleSoft software. For more information, visit us at www.peoplesoft.com.
# # #
PeopleSoft and the PeopleSoft logo are registered trademarks and Pure Internet Architecture is a trademark of PeopleSoft, Inc. All other company and product names may be trademarks of their respective owners. Copyright 2002 PeopleSoft, Inc. All rights reserved.
# # #
Statements made in this press release that state the Company's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. The specific forward-looking statements relate to such matters as the current and expected technology spending and marco-economic environment, the Company's competitive position and the market acceptance of existing products and services, as well as those under development. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected. These risks, assumptions and uncertainties include: economic conditions in the U.S. and abroad; the ability to
complete and deliver products and services within currently estimated time frames and budgets; the ability to achieve revenues from products and services that are completed or are currently under development; competitive and pricing pressures; and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission. Please refer to the
Company's annual report to shareholders (Form 10-K) for more information on the risk factors that could cause actual results to differ.
Software license revenue was negatively impacted by the slowdown in technology spending, declining 13 percent to US$133 million, from US$153 million in the first quarter of 2001. Service revenue was US$342 million, an increase of 4 percent from US$330 million in the first quarter of 2001. Total revenue for the first quarter of 2002 was US$483 million, a decline of 6 percent from US$514 million in the first quarter of 2001.
Total operating expenses from recurring operations were US$420 million, a 10 percent reduction from the first quarter of 2001. As a result, operating margin from recurring operations increased significantly to US$63 million, an increase of US$17 million, or 37 percent, from US$46 million in the first quarter of 2001. Operating margins from recurring operations, as a percentage of revenue, also improved to 13.1 percent, from 9.0 percent in the same quarter of last year.
The Company's cash and investment balances at March 31, 2002 were US$1.82 billion, an increase of US$149 million during the first quarter. Days Sales Outstanding (DSO) at March 31, 2002 declined to 58 days, an improvement from 63 days at December 31, 2001.
Management Commentary
"PeopleSoft was not immune to the slowdown in technology spending in the first quarter," said PeopleSoft President and CEO Craig Conway. "However, our financial results were generally positive and were comparatively the strongest in the industry. We increased our income from recurring operations 28 percent over the same period last year. We grew service revenues. We met our EPS guidance of 14 cents. We increased cash and investments by US$149 million. We also improved our operating margins and we further reduced our industry-low DSO.
"PeopleSoft remains uniquely positioned in the industry," Conway added. "PeopleSoft's best-of-breed applications built on our Pure Internet ArchitectureTM give us a competitive advantage as companies around the world continue to move their business processes online and operate in real time. PeopleSoft is clearly an extremely strong, financially stable company with a focused, high calibre management team, and we are poised for continued success as the tech spending environment improves," Conway concluded.
Customer Wins
PeopleSoft won significant deals against its competitors in the first quarter in all product lines and across all geographies. Organisations buying PeopleSoft enterprise applications included: Applied Materials, California State University, Capital One Services Group, Children's Hospital of Los Angeles, CIT Group, Duke Energy, EDS, Ford Motor Company, Hewlett-Packard Company, HSBC, Merrill Lynch, Michelin, Mitsui, New York State Teachers Retirement System, New Zealand Post, Nextel, NTT Comware Corp., Sears Roebuck & Company, Siemens, Societe Generale, and Time Warner Cable.
Income Including Non-Recurring Items
The results for the first quarter of 2002 include a non-recurring acquisition-related charge of US$2.8 million (US$1.7 million after-tax). Including this non-recurring item, net income for the first quarter of 2002 was US$45 million, or US$0.14 per share, equal to the per share results from recurring operations.
Results for the first quarter of 2001 do not include any non-recurring items.
PeopleSoft Asia Pacific Performance
In Asia Pacific, PeopleSoft's total revenue for the quarter ended March 31, 2002 increased 12 percent over the same quarter last year, assuming constant currency exchange rates.
"In a difficult economic climate, organisations across Asia continue to turn to PeopleSoft for solutions that deliver rapid benefit and tangible returns on their investment," said Andrew Barkla, Vice President of PeopleSoft Asia Pacific.
Region Expansion
PeopleSoft accelerated its expansion into Asia Pacific, launching its mainland China operations in early April. The company will deliver further localised and translated PeopleSoft 8 pure Internet solutions to the region throughout the year. "With the recent appointment of industry veteran Angus McDougall as general manager of PeopleSoft South Asia, we expect to continue to expand our presence in this important market," Barkla said.
Customers in Asia Pacific
Customers that purchased PeopleSoft solutions in the first quarter include: New Zealand Post Limited, The Wellington City Council, Vanenburg Business IT-Solutions Private Limited, American International Assurance Company Limited, DSQ Software Limited, Aventis Pharma Limited, Beijing GKI Electronics Co Ltd and Shenzhen GKI Electronics Co Ltd.
About PeopleSoft
PeopleSoft (Nasdaq: PSFT) is the world's leading provider of business enterprise software. PeopleSoft pure Internet software enables organisations to reduce costs and increase productivity through real-time collaboration with their customers, suppliers, and employees. PeopleSoft's integrated, best-of-breed applications include Customer Relationship Management, Supply Chain Management, Human Resource Management, Financial Management, and Application Infrastructure. More than 4,700 organisations in 107 countries run on PeopleSoft software. For more information, visit us at www.peoplesoft.com.
# # #
PeopleSoft and the PeopleSoft logo are registered trademarks and Pure Internet Architecture is a trademark of PeopleSoft, Inc. All other company and product names may be trademarks of their respective owners. Copyright 2002 PeopleSoft, Inc. All rights reserved.
# # #
Statements made in this press release that state the Company's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. The specific forward-looking statements relate to such matters as the current and expected technology spending and marco-economic environment, the Company's competitive position and the market acceptance of existing products and services, as well as those under development. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected. These risks, assumptions and uncertainties include: economic conditions in the U.S. and abroad; the ability to
complete and deliver products and services within currently estimated time frames and budgets; the ability to achieve revenues from products and services that are completed or are currently under development; competitive and pricing pressures; and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission. Please refer to the
Company's annual report to shareholders (Form 10-K) for more information on the risk factors that could cause actual results to differ.