The PRWIRE Press Releases https:// 2006-08-11T16:14:00Z IBM to acquire FileNet to advance information on demand strategy 2006-08-11T16:14:00Z ibm-to-acquire-filenet-to-advance-information-on-demand-strategy IBM (NYSE: IBM) and FileNet Corporation (NASDAQ: FILE) today announced that the two companies have entered into a definitive agreement for IBM to acquire FileNet, a publicly held company based in Costa Mesa, Calif., in an all-cash transaction at a price of approximately U$1.6 billion, or U$35 per share. The acquisition is subject to FileNet shareholder approval, regulatory reviews and other customary closing conditions. It is expected to close in the fourth quarter of 2006. FileNet is a leading provider of business process and content management solutions. This acquisition builds upon IBM's Information on Demand initiative, launched in February 2006, to address the growing market opportunity around combining IBM's software, services, partners and industry consulting expertise to improve clients business performance. The Information on Demand strategy aims to provide clients with data exactly when and how they need it to improve their business processes, quickly respond to market needs and rapidly identify new business opportunities. A convergence of challenges facing businesses today - including globalisation, mergers and acquisitions, information overload and regulatory compliance -- are driving companies to find new ways to gain insight from their information so they can use it to grow their business. IBM's acquisition of FileNet aims to further the company's Information on Demand initiative, IBM's strategy for addressing this growing market opportunity. With information volumes growing and customers facing greater competitive pressures to be more responsive and efficient, enterprise content management (ECM) and business process management (BPM) are becoming more critical for improving business performance. IBMs acquisition of FileNet will allow customers to benefit from the combined capabilities of both companies from ensuring content is delivered and utilised in context of their business processes to achieving effective compliance, archiving and document retention. IBM plans to build upon the advanced Content Management technologies of both companies to provide customers and partners with industry-focused, high value solutions that are able to proactively capture and deliver content as part of a business process. These technologies can be integrated into IBM's service oriented architecture (SOA)-based capabilities, including business process management and information lifecycle management. "Freeing up information contained in content management systems is critical to unlocking the potential of information to improve business processes and performance," said Ambuj Goyal, general manager, IBM Information Management. "The combination of IBM and FileNet will provide our customers and partners with industry-focused content management solutions that offer a new level of business value. Customers are making platform standardisation decisions for ECM and are buying solutions that help build their core enterprise infrastructures. This requires open standards, a broader, integrated set of content management capabilities, and better integration with business applications, which reduces total cost of ownership. The growth in enterprise deployments of ECM and BPM technologies is fueling a global market expansion, said Lee Roberts, chairman and CEO of FileNet. The combination of IBM and FileNet will deliver increased innovation and industry-focused content management solutions, enabling our clients, Systems Integrators, ISVs and other partners to create enhanced and more competitive solutions. At the same time, this transaction offers FileNet shareholders a solid premium over historical trading prices of our stock. Following completion of the acquisition, IBM intends to: Combine FileNet's operations with IBM's Content Management business in the Information Management unit led by General Manager Ambuj Goyal. Preserve and enhance customer investments in both FileNet and IBM Content Management platforms, leveraging IBMs market-leading Information Integration technology to develop broader ECM solutions. Integrate IBM's BPM and Service Oriented Architecture technologies with the FileNet platform. Train IBM and FileNet partner and services teams on both IBM and FileNet technology. Through this acquisition, the thousands of customers using IBM and FileNet solutions will now have a more powerful base of industry-leading content management products to build upon as they explore next-generation information management solutions. Information On Demand The desire by businesses to access, manage and deliver information more efficiently is driving rapid change in the information technology marketplace. Companies grappling with government mandates and business demands are striving to capture and integrate information in a more seamless, real-time fashion across their enterprises. IBM's Information on Demand approach combines industry-specific expertise with advanced software, open standards and storage technology -- integrated via a services oriented architecture -- to manage, secure and deliver information as a service to solve business challenges. About IBM For more information about IBM, go to http://www-306.ibm.com/software/data/ondemandbusiness/ About FileNet FileNet Corp. offers enterprise software and services that help customers make better decisions, faster. A leader and innovator in Enterprise Content Management (ECM), Business Process Management (BPM) and Compliance solutions, FileNet simplifies critical and everyday decision-making processes, giving organisations a competitive advantage. Since the companys founding in 1982, more than 4,300 organisations including more than three quarters of the FORTUNE 100 have taken advantage of FileNet solutions for help in managing their mission-critical content and processes. For more information, visit the FileNet Website at http://www.filenet.com. # # # Merrill Lynch & Co. is serving as financial advisor to FileNet and Latham & Watkins LLP is acting as legal counsel to FileNet on the transaction. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements that are based on IBMs and FileNets current expectations, estimates and projections relating to the proposed acquisition of FileNet by IBM, including the expected closing of the transaction and the benefits thereof. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for FileNet include, but are not limited to, the possible failure to satisfy necessary conditions to closing and difficulties in integrating the two businesses. Additional Information about the Acquisition and Where to Find It A special stockholder meeting will be announced soon to obtain stockholder approval. FileNet Corporation intends to file with the Securities and Exchange Commission a proxy statement and other relevant documents in connection with the proposed transaction. Investors of FileNet Corporation are urged to read the definitive proxy statement and other relevant materials when they become available because they will contain important information about FileNet Corporation, buyer and the proposed transaction. Investors may obtain a free copy of these materials (when they are available) and other documents filed by FileNet Corporation with the Securities and Exchange Commission at the SEC's website at www.sec.gov, at FileNet Corporation's website at www.filenet.com or by sending a written request to FileNet Corporation at 3565 Harbor Blvd., Costa Mesa, California 92626, attention: Chief Legal Officer. FileNet Corporation and its directors, executive officers and certain other members of management and employees may be deemed to be participants in soliciting proxies from its stockholders in favor of the proposed merger. Information regarding the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of FileNet Corporation's stockholders in connection with the proposed transaction will be set forth in FileNet Corporation's proxy statement for its special meeting. Additional information regarding these individuals and any interest they have in the proposed transaction will be set forth in the definitive proxy statement when it is filed with the SEC. IBM and the IBM e-business logo are trademarks or registered trademarks of International Business Machines Corporation. For a list of additional IBM trademarks, please see www.ibm.com/legal/copytrade.shtml All other company, product or service names may be trademarks or registered trademarks of others. Statements concerning IBM's future development plans and schedules are made for planning purposes only, and are subject to change or withdrawal without notice. Reseller prices may vary. FileNet Reports Second Quarter 2006 Results 2006-08-07T14:55:00Z filenet-reports-second-quarter-2006-results FileNet Corporation (Nasdaq: FILE), the leading provider of Enterprise Content and Business Process Management solutions, today announced financial results for its second quarter ended June 30, 2006. Total revenues for the second quarter of 2006 were US$117.1 million compared to total revenues of US$104.6 million for the same period in 2005. Software revenues for the second quarter of 2006 were US$48.3 million compared to US$40.6 million for the same period in 2005. Net income was US$11.1 million in the second quarter of 2006 and includes equity-based compensation expense, net of tax, of US$3.4 million. Net income for the second quarter of 2005 was US$8.7 million and includes equity-based compensation expense for non-vested stock grants, net of tax, of US$0.3 million. Earnings per basic and diluted share were US$0.26 for the second quarter of 2006 and include all equity-based compensation expense (for stock options and non-vested shares) of US$0.07 per share. This compares to earnings per basic and diluted share of US$0.21, for the second quarter of 2005. Net income prior to 2006 did not include employee equity-based compensation expense for stock options, but did include compensation expense for non-vested shares. In addition to GAAP results, FileNet is reporting net income and net income per share excluding equity-based compensation expense, referred to respectively as non-GAAP net income and non-GAAP net income per share. A further discussion of these non-GAAP financial measures and reconciliations to comparable GAAP measures for the three months ended June 30, 2006 and 2005 appear in the GAAP to Non-GAAP reconciliation found below. Non-GAAP net income for the second quarter of 2006 was US$14.5 million, or US$0.33 per diluted share. Non-GAAP net income for the second quarter of 2005 was US$9.0 million, or US$0.21 per diluted share. As of June 30, 2006, FileNet had cash and investments of US$451.8 million, compared to US$392.0 million at December 31, 2005. The company has no long-term debt. Our solid performance in the quarter - including record revenues and strong growth in non-GAAP operating income - was driven by global demand for our FileNet P8 offering, said Lee Roberts, chairman and CEO of FileNet. Looking forward, we remain focused on capitalising and delivering on our long-term strategy of expanded market leadership. Quarterly Conference Call with Management July 26, 2006 Lee Roberts, Chairman and Chief Executive Officer, and Sam Auriemma, Chief Financial Officer, will host a conference call for investors at 7:00 a.m. pacific time today. The call and presentation will be broadcast live over the Internet. To listen to the event via the Internet, please follow the instructions that are available on the investor relations section of FileNets Web site at http://www.filenet.com. A replay of the Web cast will be available for an extended period of time. Alternatively, to listen to the call live, dial (800) 591.6930. The conference call ID number for the call is 18036823. A replay of the call will be available from approximately 9:00 a.m. PT on July 26 through midnight PT on August 2. To listen to the replay, dial (888) 286-8010. The conference call ID number for the replay is 44818267. Use of Non-GAAP Financial Measures In our earnings release, conference call, slide presentation or webcast, we may use or discuss non-GAAP financial measures as defined by SEC Regulation G. These non-GAAP measures exclude charges for equity-based compensation on a pre-tax and after tax basis. The GAAP financial measure is most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included in this press release after the condensed consolidated financial statements. Equity-based compensation expense relates primarily to restricted stock, restricted stock units (collectively called non-vested shares) and stock options issued by FileNet. Equity-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by market forces that are difficult to predict and are not within the control of management, such as the price of our common stock. We utilise certain non-GAAP financial measures to evaluate our performance. FileNet believes the presentation of non-GAAP net income and non-GAAP net income per share provides important supplemental information to investors in order to assess FileNets financial performance. Management believes that availability of these non-GAAP measures will assist investors with comparing and contrasting FileNets financial performance with its performance in prior periods and with comparing and contrasting FileNets performance with other companies in its industry, many of which management believes use similar non-GAAP measures to supplement their financial results. Non-GAAP net income and non-GAAP net income per share are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of FileNets business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of FileNets results as reported under GAAP. FileNet expects to continue to incur expenses similar to the non-GAAP adjustments described above and exclusion of these items from its non-GAAP net income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. About FileNet FileNet Corp. offers enterprise software and services that help customers make better decisions, faster. A leader and innovator in Enterprise Content Management (ECM), Business Process Management (BPM) and Compliance solutions, FileNet simplifies critical and everyday decision-making processes giving organisations a competitive advantage. Since the companys founding in 1982, more than 4,300 organisations including more than three quarters of the FORTUNE 100 have taken advantage of FileNet solutions for help in managing their mission-critical content and processes. For more information, visit the FileNet Website at http://www.filenet.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements that are based on our current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by us. Words such as anticipates, expects, intends, plans, believes, seeks, estimates, may, will and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterisations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for FileNet include, but are not limited to, the volume of our sales and pricing concessions on volume sales; our ability to specify, develop or acquire, complete, introduce, market, distribute and gain market acceptance for new products and technologies in a timely manner; the mix of products and services sold by us; the timing, rescheduling or cancellation of significant customer orders; the loss of a key customer; our ability to control expenses; announcements of technological innovations, new products or product enhancements by the company or its competitors; the emerging nature of the Enterprise Content Management market; key management changes; changes in joint marketing and development programs; developments relating to patents or other intellectual property rights or disputes; changing relationships with customers, distributors, suppliers and strategic partners; potential contractual or employment issues; our ability to integrate acquired businesses; and general conditions in the worldwide economy and the software/technology sector and other factors. Our Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q, recent Current Reports on Forms 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Note to editors: FileNet and ValueNet are registered trademarks of FileNet Corporation. All other company or product names referenced in this release may be trademarks or registered trademarks of their respective owners. # # # FileNet Selects Porter Novelli as Communications Agency 2006-08-07T14:44:00Z filenet-selects-porter-novelli-as-communications-agency Porter Novelli Sydney is pleased to announce that it has been selected by FileNet as its Public Relations agency of record in Australia. We selected Porter Novelli based on their professionalism, expertise and knowledge of the ICT industry, said Fiona Sims, Marketing Manager, FileNet. We are looking forward to working closely with Porter Novelli to increase our brand awareness in Australia and to promote our comprehensive enterprise software portfolio. FileNet Corporation helps organisations make better decisions by managing their mission-critical content and processes. FileNet's Enterprise Content Management (ECM) solutions allow customers to build and sustain competitive advantage by automating, streamlining and simplifying every-day decision making processes. I am confident that Porter Novelli will be a strong extension to our team, Sims added Porter Novelli has an in-depth understanding of the marketplace, our business and our competitors, and their communications approach will help us meet our short and long-term business goals. David Lumb, General Manager, Porter Novelli, Sydney said, We have a great team here at Porter Novelli with particular experience in technology. We are delighted to have been selected to work with FileNet in Australia and look forward to helping the company achieve its communications goals. FileNet joins Porter Novellis growing list of technology clients, which include, InFocus Corporation, Polycom, BigAir Group, HP Calculators and SGI. About FileNet FileNet Corp. offers enterprise software and services that help customers make better decisions, faster. A leader and innovator in Enterprise Content Management (ECM), Business Process Management (BPM) and Compliance solutions, FileNet simplifies critical and everyday decision-making processes, giving organizations a competitive advantage. Since the companys founding in 1982, more than 4,300 organizations - including more than three quarters of the FORTUNE 100 - have taken advantage of FileNet solutions for help in managing their mission-critical content and processes. For more information, visit the FileNet Website at http://www.filenet.com.