BMC Software Announces Fiscal 2013 Third Quarter Results
BMC Software Announces Fiscal 2013 Third Quarter Results
* Record quarter for maintenance revenue, professional services revenue,
total revenue and non-GAAP diluted EPS
* Cloud-related license bookings up 44 percent year-over-year
* SaaS business grew to approximately 550 active customers; both SaaS
customers and revenue more than doubled year-over-year
* Professional services revenue rose 16 percent on a year-over-year basis,
and non-GAAP gross margin increased by 9 percentage points year-over-year
* Total revenue for the quarter was $580 million, up 6 percent
year-over-year
* Non-GAAP diluted EPS for the quarter was 99 cents, up 6 percent
year-over-year
Business Wire
HOUSTON -- January 28, 2013
BMC Software (NASDAQ: BMC), the recognized global leader in enterprise IT
management, today announced results for the third quarter of its fiscal 2013.
GAAP net earnings for the third quarter were $106 million, or $0.70 per
diluted share, versus $120 million and $0.71 per diluted share in the third
quarter of fiscal 2012.
Non-GAAP net earnings for the quarter were $151 million, or $0.99 per diluted
share, which reflects a non-GAAP effective tax rate for the quarter of 25
percent. Non-GAAP net earnings for the third quarter of fiscal 2012 were $157
million, or $0.93 per diluted share, which reflects a non-GAAP effective tax
rate of 25 percent. The financial tables include a reconciliation between
non-GAAP and GAAP results.
“BMC Software’s strategy, our target markets, our position in those markets,
and our product and technology leadership continue to present significant
opportunities for our company and our shareholders,” said Bob Beauchamp, BMC’s
chairman and chief executive officer. “Our overall win rate remains high, but
we need to be more consistent and disciplined in how we approach and secure
large, transformational deals, which are a big part of our go-forward
opportunity. In addition, we are scrutinizing the entire company to improve
our operational discipline. This review is currently underway, and it should
position us well as we enter fiscal year 2014.”
The Company posted the following key results for the third quarter of fiscal
2013:
* Active SaaS customers more than doubled year-over-year to approximately
550; SaaS revenue also more than doubled year-over-year;
* Cloud business continues to grow, with cloud-related license bookings up
44 percent year-over-year;
* Top 15 MSM deals once again saw an increase in the spend rate, largely due
to our success in selling more new products to some of our most strategic
customers;
* Expanded MSM customer relationships with 209 new product placements, up 31
percent year-over-year;
* MSM non-GAAP operating income rose by 2 percent year-over-year; non-GAAP
operating margin was 62 percent for the quarter; and
* Professional services revenue rose 16 percent on a year-over-year basis;
non-GAAP professional services gross margin improved substantially,
growing by 9 percentage points year-over-year.
During the third quarter, BMC repurchased a total of 14.3 million shares. As
part of the accelerated share repurchase agreement executed in November, the
Company received 13.1 million shares, which is in addition to 1.2 million
shares repurchased for $50 million earlier in the quarter. The current
remaining share repurchase authorization is $700 million.
“This quarter, BMC Software saw lower-than-expected bookings from our MSM and
ESM business units. Two large MSM renewal transactions slipped out of the
quarter. We believe they will close in the fourth quarter, as well as a number
of other key renewals. Even with this slippage, we were pleased that our
continued discipline yielded positive operating results for us,” said Steve
Solcher, BMC’s chief financial officer. “In the ESM business, we also
experienced slipped transactions, which were mainly larger and more
transformational in nature. We did, however, continue to generate double-digit
growth in ESM maintenance revenue, with renewal rates increasing during the
quarter. We saw solid increases in key ESM growth areas, such as cloud and
SaaS, as well as improved performance around the Remedy On–Premise product
line, and we were pleased with the performance of our professional services
business.”
Fiscal 2013 Expectations
For fiscal 2013, BMC expects non-GAAP diluted earnings per share in the range
of $3.35 to $3.45 per share. At the midpoint, this would represent a 5 percent
increase over fiscal 2012.
This range excludes an estimated $1.13 to $1.18 per share for non-GAAP
adjustments, including expenses related to share-based compensation expense;
the amortization of intangible assets; severance, exit costs and related
charges; proxy contest costs; as well as the related tax impacts of these
items.
The Company highlights certain risks, which could impact its ability to
achieve these expectations:
* Uncertainty surrounding the broader macroeconomic environment, especially
in Europe;
* Sales productivity related to the tenure of our ESM sales organization;
and
* Uncertainty related to press coverage surrounding our strategic review and
ongoing press coverage related to activist investor activity.
The current assumptions underlying our full year fiscal 2013 expectations
include:
* FX impact given today’s rates;
* Total bookings flat with the prior year, with growth on a constant
currency basis of low single digits;
* ESM license bookings decline in the mid to high single digits, and down
low to mid single digits in constant currency;
* MSM total bookings decline in the low to mid single digits, and flat to
down low single digits in constant currency;
* Revenue growth in the low single digits, with growth on a constant
currency basis in the low to mid single digits;
* Non-GAAP operating margin slightly lower than the prior year;
* Other income at a loss of around $40 million;
* Weighted shares outstanding down high single to low double digits from the
prior year; and
* A non-GAAP tax rate of 25 percent.
BMC expects full year fiscal 2013 cash flow from operations to be between $735
million and $785 million, which at the midpoint represents a 5 percent
decrease over fiscal 2012, including the adverse impact from foreign currency
exchange rates.
Conference Call
A conference call to discuss the fiscal 2013 third quarter is scheduled for
today, January 28, 2013 at 4:00 pm Central Time. Those interested in
participating may call (913) 312-0711 and use the pass code BMC. To access a
replay of the conference call that will be available for one week, dial (719)
457-0820 or (888) 203-1112 and use the pass code BMC. A live webcast of the
conference call will be available on the Company's website at
investors.bmc.com. A replay of the webcast will be available within 24 hours
and archived on the website.
Use of Non-GAAP Financial Measures
In an effort to provide investors with additional information regarding the
Company’s results as determined by U.S. generally accepted accounting
principles (GAAP), the Company has also disclosed in this press release and
the accompanying tables the following non-GAAP information: (a) non-GAAP
operating expenses, (b) non-GAAP operating income, (c) non-GAAP operating
margin, (d) non-GAAP net earnings and (e) non-GAAP diluted earnings per share.
Each of these financial measures excludes the impact of certain items and,
therefore, has not been calculated in accordance with GAAP. These non-GAAP
financial measures exclude share-based compensation expense; the amortization
of intangible assets; severance, exit costs and related charges; proxy contest
costs; as well as the related tax impacts of these items; and certain discrete
tax items. Each of the non-GAAP adjustments is described in more detail below.
This press release also contains a reconciliation of each of these non-GAAP
measures to its most comparable GAAP financial measure.
We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding our operating results because they exclude
amounts that BMC management and the board of directors do not consider part of
core operating results when assessing the performance of the organization. In
addition, we have historically reported similar non-GAAP financial measures
and we believe that inclusion of these non-GAAP financial measures provides
consistency and comparability with past reports of financial results.
Accordingly, we believe these non-GAAP financial measures are useful to
investors in allowing for greater transparency of supplemental information
used by management.
While we believe that these non-GAAP financial measures provide useful
supplemental information, there are limitations associated with the use of
these non-GAAP financial measures. These non-GAAP financial measures are not
prepared in accordance with GAAP, do not reflect a comprehensive system of
accounting and may not be completely comparable to similarly titled measures
of other companies due to potential differences in the exact method of
calculation between companies. Items such as share-based compensation expense;
the amortization of intangible assets; severance, exit costs and related
charges; proxy contest costs; as well as the related tax impacts of these
items; and certain discrete tax items that are excluded from our non-GAAP
financial measures can have a material impact on net earnings. As a result,
these non-GAAP financial measures have limitations and should not be
considered in isolation from, or as a substitute for, net earnings, cash flow
from operations or other measures of performance prepared in accordance with
GAAP. We compensate for these limitations by using these non-GAAP financial
measures as supplements to GAAP financial measures and by reconciling the
non-GAAP financial measures to their most comparable GAAP financial measure.
Investors are encouraged to review the reconciliations of the non-GAAP
financial measures to their most comparable GAAP financial measures that are
included elsewhere in this press release.
The following discusses the reconciliations of our non-GAAP financial measures
to the most comparable GAAP financial measures:
* Share-based compensation expense. Our non-GAAP financial measures exclude
the compensation expenses required to be recorded by GAAP for equity
awards to employees and directors. Management and the board of directors
believe it is useful in evaluating corporate performance during a
particular time period to review the supplemental non-GAAP financial
measures, excluding expenses related to share-based compensation, because
these costs are generally fixed at the time an award is granted, are then
expensed over several years and generally cannot be changed or influenced
by management once granted.
* Amortization of intangible assets. Our non-GAAP financial measures exclude
costs associated with the amortization of intangible assets. Management
and the board of directors believe it is useful in evaluating corporate
performance during a particular time period to review the supplemental
non-GAAP financial measures, excluding amortization of intangible assets,
because these costs are fixed at the time of an acquisition, are then
amortized over a period of several years after the acquisition and
generally cannot be changed or influenced by management after the
acquisition.
* Severance, exit costs and related charges. Our non-GAAP financial measures
exclude severance, exit costs and related charges, and any subsequent
changes in estimates, as they relate to our corporate restructuring and
exit activities. Management and the board of directors believe it is
useful in evaluating corporate performance during a particular time period
to review the supplemental non-GAAP financial measures, excluding
severance, exit costs and related charges, in order to provide
comparability and consistency with historical operating results.
* Proxy contest costs. During the first quarter of fiscal 2013, the Company
became engaged in a proxy contest initiated by a shareholder of the
Company. The Company recorded a charge of approximately $6 million for
unplanned proxy contest expenses during the first quarter of fiscal 2013,
consisting primarily of outside financial advisory, legal, solicitation
and consulting fees. During the third quarter of fiscal 2013, we
renegotiated certain of these fees and recorded a corresponding reduction
to proxy contest costs. Management and the board of directors believe it
is useful in evaluating corporate performance during a particular time
period to review the supplemental non-GAAP financial measures, excluding
such costs, in order to provide comparability and consistency with
historical operating results.
* Provision for income taxes on above pre-tax non-GAAP adjustments. Our
non-GAAP financial measures exclude the tax impact of the above pre-tax
non-GAAP adjustments. This amount is calculated using the tax rates of
each country to which these pre-tax non-GAAP adjustments relate.
Management excludes the non-GAAP adjustments on a net-of-tax basis in
evaluating our performance. Therefore, we exclude the tax impact of these
charges when presenting non-GAAP financial measures.
* Certain discrete tax items. Our non-GAAP financial measures exclude net
tax benefits of $6 million for the nine months ended December 31, 2011,
associated with tax authority settlements related to prior years’ tax
matters. Management excludes the impact of these items in evaluating our
performance. Therefore, we exclude these items when presenting non-GAAP
financial measures.
In this press release we refer to certain bookings information. Bookings
represent the transactional value of new contracts closed and recorded in our
financial statements, including amounts recorded to both revenue and deferred
revenue. We also refer to growth rates for revenue and bookings at constant
currency or adjusting for currency so that the business results can be viewed
without the impact of fluctuations in foreign currency exchange rates, thereby
facilitating period-to-period comparisons of the Company’s business
performance. Generally, when the U.S. dollar either strengthens or weakens
against other currencies, the growth at constant currency rates or adjusting
for currency will be higher or lower than growth reported at actual exchange
rates.
Business runs better when IT runs at its best.
Tens of thousands of IT organizations around the world -- from small and
mid-market businesses to the Global 100 -- rely on BMC Software (NASDAQ: BMC)
to manage their business services and applications across distributed,
mainframe, virtual and cloud environments. BMC helps customers cut costs,
reduce risk and achieve business objectives with the broadest choice of IT
management solutions, including industry-leading Business Service Management
and Cloud Management offerings. For the four fiscal quarters ended December
31, 2012, BMC revenue was approximately $2.2 billion. www.bmc.com
This news release and other related public statements we make contain both
historical information and forward-looking statements. Forward-looking
statements can be identified by words such as “believes,” “anticipates,”
“intends,” “expects,” “estimates,” “guidance,” “outlook,” “view” and similar
references to future periods. Examples of forward-looking statements include,
but are not limited to, statements we make regarding our expectations and
guidance for fiscal 2013 non-GAAP diluted earnings per share and cash flow
from operations, including the underlying assumptions, as well as statements
we make regarding our plans, objectives, strategies and expectations for
future operations and results. Forward-looking statements are based on our
current expectations and assumptions regarding our business, the economy and
other future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Our actual results may differ
materially from those contemplated by the forward-looking statements. We
caution you therefore against relying on any of these forward-looking
statements. They are neither statements of historical fact nor guarantees or
assurances of future performance. Important factors that could cause actual
results to differ materially from those in the forward-looking statements
include, but are not limited to, the following: 1) the possibility that
general economic conditions or uncertainty cause information technology
spending to be reduced or purchasing decisions to be delayed; 2) competition
in our markets and market entrants utilizing alternative business models can
result in pricing pressures and competition for new customers as well as
potential displacements of our existing customers; 3) our cash flow from
operations could be affected by many factors, including, but not limited to,
lengthening sales cycles, the size and timing of bookings, customer payment
terms, the timing of collections, increased expenses, reduced net earnings and
movement in foreign currency exchange rates; 4) a significant percentage of
our license transactions are completed during the final weeks and days of each
quarter, which creates a level of uncertainty as to whether revenue, license
bookings and/or earnings will have met expectations until after the end of the
quarter; 5) our operating costs and expenses are relatively fixed over the
short term, so if we have a shortfall in revenue in any given quarter, our
ability to offset revenue shortfalls in the near-term is limited; 6) software
product development is highly technical and inherently complex and delays in
the timing and feasibility of product releases could have a material adverse
effect on expectations and actual results for bookings, revenue, margins and
cash flow from operations; 7) changes to our sales organization, including
personnel, compensation practices and organizational and process changes, may
be disruptive and negatively impact our results of operations; 8) our
expectations for revenue and earnings are based on assumptions of the
percentage of license revenue which will be recognized upfront versus deferred
and the percentage of customer renewals for maintenance contracts; if our
actual results do not match our assumptions, our recognized revenue and
resultant earnings could fall short of expectations; 9) our effective tax rate
is subject to quarterly fluctuation and any change in such tax rate could
affect our earnings; 10) we conduct significant transactions in currencies
other than the United States dollar and changes in the value of major foreign
currencies relative to the U.S. dollar can significantly affect our reported
revenue and operating results; 11) customers may not require, or may delay,
additional capacity upgrades of our software, particularly our mainframe
management software, due to the existence of sufficient hardware capacity, the
uncertain timing of hardware upgrades or other reasons, and the timing of
renewals of existing license agreements may be different than we expect; and
12) the additional risks and important factors described in BMC Software's
Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the
U.S. Securities and Exchange Commission. These filings are available on our
website at http://investors.bmc.com. Any forward-looking statement made by us
in this news release speaks only as of the date on which it is made. Factors
or events that could cause our actual results to differ may emerge from time
to time, and it is not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement, whether as a
result of new information, future developments or otherwise, except as may be
required by law.
BMC, BMC Software, and the BMC Software logo are the exclusive properties of
BMC Software Inc., are registered with the U.S. Patent and Trademark Office,
and may be registered or pending registration in other countries. All other
BMC trademarks, service marks, and logos may be registered or pending
registration in the U.S. or in other countries. All other trademarks or
registered trademarks are the property of their respective owners. © Copyright
2013 BMC Software, Inc.
BMC SOFTWARE, INC.
STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Incr/(Decr)
Quarter Ended December 31, Percentage
2011 2012 Change
Revenue:
License $ 225.0 $ 232.3 3.2 %
Maintenance 272.3 288.7 6.0 %
Professional services 50.9 59.2 16.3 %
Total revenue 548.2 580.2 5.8 %
Operating expenses:
Cost of license revenue 38.6 41.1 6.5 %
Cost of maintenance revenue 46.2 51.3 11.0 %
Cost of professional services 52.8 56.3 6.6 %
revenue
Selling and marketing expenses 154.1 175.8 14.1 %
Research and development expenses 38.5 41.9 8.8 %
General and administrative 50.4 56.2 11.5 %
expenses
Amortization of intangible assets 5.8 10.0 72.4 %
Total operating expenses 386.4 432.6 12.0 %
Operating income 161.8 147.6 (8.8 )%
Other loss, net (3.5 ) (10.6 ) 202.9 %
Earnings before income taxes 158.3 137.0 (13.5 )%
Provision for income taxes 38.4 30.7 (20.1 )%
Net earnings $ 119.9 $ 106.3 (11.3 )%
Diluted earnings per share $ 0.71 $ 0.70 (1.4 )%
Shares used in computing diluted 169.5 152.6 (10.0 )%
earnings per share
BMC SOFTWARE, INC.
STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Incr/(Decr)
Nine Months Ended December 31, Percentage
2011 2012 Change
Revenue:
License $ 644.2 $ 613.1 (4.8 )%
Maintenance 807.4 853.0 5.6 %
Professional services 155.7 166.7 7.1 %
Total revenue 1,607.3 1,632.8 1.6 %
Operating expenses:
Cost of license revenue 116.2 120.8 4.0 %
Cost of maintenance revenue 139.5 155.1 11.2 %
Cost of professional services 153.4 168.5 9.8 %
revenue
Selling and marketing 452.3 503.7 11.4 %
expenses
Research and development 121.5 116.5 (4.1 )%
expenses
General and administrative 160.0 175.1 9.4 %
expenses
Amortization of intangible 26.5 33.5 26.4 %
assets
Total operating expenses 1,169.4 1,273.2 8.9 %
Operating income 437.9 359.6 (17.9 )%
Other loss, net (9.9 ) (25.4 ) 156.6 %
Earnings before income taxes 428.0 334.2 (21.9 )%
Provision for income taxes 97.7 75.9 (22.3 )%
Net earnings $ 330.3 $ 258.3 (21.8 )%
Diluted earnings per share $ 1.88 $ 1.63 (13.3 )%
Shares used in computing 175.2 158.9 (9.3 )%
diluted earnings per share
BMC SOFTWARE, INC.
BALANCE SHEETS
(In millions)
Unaudited Unaudited
June 30, September December March 31, June 30, September December
30, 31, 30, 31,
2011 2011 2011 2012 2012 2012 2012
Current
assets:
Cash and cash $ 1,582.9 $ 1,459.7 $ 1,319.5 $ 1,496.9 $ 1,465.5 $ 1,311.2 $ 1,057.9 (a)
equivalents
Short-term 31.9 30.9 37.1 86.1 138.1 128.2 123.6 (a)
investments
Trade
accounts 176.2 219.6 239.4 296.7 192.1 216.9 265.8
receivable,
net
Trade finance
receivables, 99.0 52.5 74.2 108.0 64.2 68.5 69.5
net
Other current 173.3 170.4 165.6 193.2 181.3 179.9 196.7
assets
Total current 2,063.3 1,933.1 1,835.8 2,180.9 2,041.2 1,904.7 1,713.5
assets
Property and
equipment, 90.9 86.3 84.4 87.8 88.0 92.3 89.6
net
Software
development 201.9 214.1 230.2 244.7 255.2 262.4 268.0
costs, net
Long-term 64.1 61.9 57.4 52.6 44.6 45.9 71.6 (a)
investments
Long-term
trade finance 132.8 59.0 55.7 80.1 51.4 56.2 42.9
receivables,
net
Goodwill and
intangible 1,648.2 1,612.4 1,606.2 1,978.1 1,944.7 1,938.0 1,929.9
assets, net
Other
long-term 236.5 222.8 218.5 240.2 239.7 236.2 213.3
assets
Total assets $ 4,437.7 $ 4,189.6 $ 4,088.2 $ 4,864.4 $ 4,664.8 $ 4,535.7 $ 4,328.8
Current
liabilities:
Trade
accounts $ 33.3 $ 32.1 $ 31.8 $ 31.5 $ 46.6 $ 44.5 $ 38.1
payable
Finance 1.0 0.4 2.2 1.2 1.9 7.7 10.7
payables
Accrued 204.0 256.6 248.5 321.4 221.8 249.0 270.4
liabilities
Deferred 1,065.8 990.5 1,001.9 1,059.5 1,060.6 1,004.7 979.2
revenue
Total current 1,304.1 1,279.6 1,284.4 1,413.6 1,330.9 1,305.9 1,298.4
liabilities
Long-term
deferred 1,002.7 903.7 868.5 934.4 899.2 837.3 796.9
revenue
Long-term 333.9 336.9 325.4 821.6 823.3 824.8 1,308.6
borrowings
Other
long-term 163.3 146.2 144.6 249.0 247.6 246.3 244.8
liabilities
Total
long-term 1,499.9 1,386.8 1,338.5 2,005.0 1,970.1 1,908.4 2,350.3
liabilities
Total
stockholders' 1,633.7 1,523.2 1,465.3 1,445.8 1,363.8 1,321.4 680.1
equity
Total
liabilities
and $ 4,437.7 $ 4,189.6 $ 4,088.2 $ 4,864.4 $ 4,664.8 $ 4,535.7 $ 4,328.8
stockholders'
equity
(a) Total
cash and $ 1,678.9 $ 1,552.5 $ 1,414.0 $ 1,635.6 $ 1,648.2 $ 1,485.3 $ 1,253.1
investments
BMC SOFTWARE, INC.
STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Quarter Ended December 31, Nine Months Ended December
31,
2011 2012 2011 2012
Cash flows
from operating
activities:
$ 119.9 $ 106.3 Net earnings $ 330.3 $ 258.3
Adjustments to
reconcile net
earnings to
net cash
provided by
operating
activities:
Depreciation
50.2 57.3 and 161.6 173.2
amortization
Deferred
1.0 (1.9 ) income tax (2.5 ) (5.7 )
provision
(benefit)
Share-based
31.1 41.5 compensation 92.7 115.9
expense
(1.5 ) 2.1 Other non-cash 2.4 2.9
items
Changes in
operating
assets and
liabilities,
net of
acquisitions:
(18.6 ) (51.0 ) Trade accounts 47.1 28.0
receivable
(17.8 ) 12.6 Trade finance 91.9 77.1
receivables
Prepaid and
5.6 6.4 other current 6.3 16.7
assets
Other
5.1 2.2 long-term 17.8 7.4
assets
Accrued and
15.9 26.5 other current (47.8 ) (31.4 )
liabilities
(24.1 ) (63.7 ) Deferred (88.6 ) (212.7 )
revenue
Other
(0.1 ) (3.5 ) long-term (9.1 ) (5.5 )
liabilities
Other
(2.4 ) (3.0 ) operating (14.7 ) (6.3 )
assets and
liabilities
Net cash
164.3 131.8 provided by 587.4 417.9
operating
activities
Cash flows
from investing
activities:
Proceeds from
9.3 35.0 maturities of 24.8 69.0
investments
Proceeds from
1.1 3.7 sales of 4.4 13.3
investments
(11.1 ) (59.8 ) Purchases of (30.0 ) (139.2 )
investments
Cash paid for
acquisitions,
(14.1 ) - net of cash (163.0 ) (19.4 )
acquired, and
other
investments
Capitalization
(34.9 ) (30.9 ) of software (97.7 ) (94.2 )
development
costs
Purchases of
(7.6 ) (6.0 ) property and (17.6 ) (19.3 )
equipment
Other
- - investing - 1.9
activities
Net cash used
(57.3 ) (58.0 ) in investing (279.1 ) (187.9 )
activities
Cash flows
from financing
activities:
Purchases of
common stock,
(225.0 ) (800.0 ) including (630.5 ) (1,150.0 )
accelerated
share
repurchase
Repurchases of
stock to
(8.7 ) (18.1 ) satisfy (31.7 ) (38.1 )
employee tax
withholding
obligations
Proceeds from
4.8 11.8 stock options 41.9 50.7
exercised and
other
Excess tax
benefit from
1.0 2.4 share-based 13.6 5.8
compensation
expense
Repayments of
(16.0 ) (15.8 ) borrowings and (20.7 ) (21.4 )
capital lease
obligations
Proceeds from
- 494.7 borrowings, - 494.7
net of
issuance costs
Net cash used
(243.9 ) (325.0 ) in financing (627.4 ) (658.3 )
activities
Effect of
exchange rate
(3.3 ) (2.1 ) changes on (22.3 ) (10.7 )
cash and cash
equivalents
Net change in
(140.2 ) (253.3 ) cash and cash (341.4 ) (439.0 )
equivalents
Cash and cash
1,459.7 1,311.2 equivalents, 1,660.9 1,496.9
beginning of
period
Cash and cash
$ 1,319.5 $ 1,057.9 equivalents, $ 1,319.5 $ 1,057.9
end of period
BMC SOFTWARE, INC.
Table of Reconciliation from GAAP Operating Expenses to Non-GAAP Operating
Expenses
(In millions)
(Unaudited)
Quarter Ended December 31, Nine Months Ended December
31,
2011 2012 2011 2012
GAAP
operating $ 386.4 $ 432.6 $ 1,169.4 $ 1,273.2
expenses
Share-based
compensation (31.1 ) (41.5 ) (92.7 ) (115.9 )
expense
Amortization
of intangible (19.5 ) (20.5 ) (66.1 ) (67.4 )
assets
Severance,
exit costs (0.3 ) (1.9 ) (2.9 ) (8.8 )
and related
charges
Proxy contest - 1.3 - (4.9 )
costs
Non-GAAP
operating $ 335.5 $ 370.0 $ 1,007.7 $ 1,076.2
expenses
BMC SOFTWARE, INC.
Table of Reconciliation from GAAP Operating Income to Non-GAAP Operating
Income
(In millions)
(Unaudited)
Quarter Ended December 31, Nine Months Ended December
31,
2011 2012 2011 2012
GAAP operating $ 161.8 $ 147.6 $ 437.9 $ 359.6
income
Share-based
compensation 31.1 41.5 92.7 115.9
expense
Amortization of 19.5 20.5 66.1 67.4
intangible assets
Severance, exit
costs and related 0.3 1.9 2.9 8.8
charges
Proxy contest - (1.3 ) - 4.9
costs
Non-GAAP operating $ 212.7 $ 210.2 $ 599.6 $ 556.6
income
BMC SOFTWARE, INC.
Table of Reconciliation from GAAP Operating Margin to Non-GAAP Operating Margin
(In millions)
(Unaudited)
Quarter
Quarter Ended December Quarter Ended Ended
31, December 31, December
31,
2011 2012 2011 2012 2011 2012
GAAP GAAP GAAP
revenue: $ 548.2 $ 580.2 operating $ 161.8 $ 147.6 operating 30 % 25 %
income: margin:
Share-based
compensation 31.1 41.5
expense
Amortization
of 19.5 20.5
intangible
assets
Severance,
exit costs 0.3 1.9
and related
charges
Proxy
contest - (1.3 )
costs
GAAP Non-GAAP Non-GAAP
revenue: $ 548.2 $ 580.2 operating $ 212.7 $ 210.2 operating 39 % 36 %
income: margin:
Nine Months
Nine Months Ended Nine Months Ended Ended
December 31, December 31, December
31,
2011 2012 2011 2012 2011 2012
GAAP GAAP GAAP
revenue: $ 1,607.3 $ 1,632.8 operating $ 437.9 $ 359.6 operating 27 % 22 %
income: margin:
Share-based
compensation 92.7 115.9
expense
Amortization
of 66.1 67.4
intangible
assets
Severance,
exit costs 2.9 8.8
and related
charges
Proxy
contest - 4.9
costs
GAAP Non-GAAP Non-GAAP
revenue: $ 1,607.3 $ 1,632.8 operating $ 599.6 $ 556.6 operating 37 % 34 %
income: margin:
BMC SOFTWARE, INC.
Table of Reconciliation from GAAP Net Earnings to Non-GAAP Net Earnings
(In millions)
(Unaudited)
Quarter Ended December 31, Nine Months Ended December
31,
2011 2012 2011 2012
GAAP net $ 119.9 $ 106.3 $ 330.3 $ 258.3
earnings
Share-based
compensation 31.1 41.5 92.7 115.9
expense
Amortization of
intangible 19.5 20.5 66.1 67.4
assets
Severance, exit
costs and 0.3 1.9 2.9 8.8
related charges
Proxy contest - (1.3 ) - 4.9
costs
Subtotal pre-tax
reconciling 50.9 62.6 161.7 197.0
items
Tax effect of
above pre-tax (13.9 ) (18.4 ) (46.2 ) (58.1 )
items
Impact of
certain discrete - - (6.2 ) -
tax items
Non-GAAP net $ 156.9 $ 150.5 $ 439.6 $ 397.2
earnings
BMC SOFTWARE, INC.
Table of Reconciliation from GAAP Diluted Earnings Per Share to Non-GAAP
Diluted Earnings Per Share
(Unaudited)
Quarter Ended December 31, Nine Months Ended December
31,
2011 2012 2011 2012
GAAP diluted
earnings per $ 0.71 $ 0.70 $ 1.88 $ 1.63
share
Share-based
compensation 0.18 0.27 0.53 0.73
expense
Amortization of
intangible 0.12 0.13 0.38 0.42
assets
Severance, exit
costs and - 0.01 0.02 0.06
related charges
Proxy contest - (0.01 ) - 0.03
costs
Subtotal pre-tax
reconciling 0.30 0.41 0.92 1.24
items
Tax effect of
above pre-tax (0.08 ) (0.12 ) (0.26 ) (0.37 )
items
Impact of
certain discrete - - (0.04 ) -
tax items
Non-GAAP diluted
earnings per $ 0.93 $ 0.99 $ 2.51 $ 2.50
share
Shares used in
computing
diluted earnings 169.5 152.6 175.2 158.9
per share (in
millions)
Contact:
BMC Software
Global Communications:
Mark Stouse, 281-468-1608
Vice President, Global Connect
mark_stouse@bmc.com
or
Investor Relations:
Derrick Vializ, 713-918-1805
Vice President, Investor Relations
derrick_vializ@bmc.com
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