7/19/2002 - Rational Software Corporation (Nasdaq: RATL) today announced results for the fiscal quarter ended June 30, 2002.
Revenue for the first quarter of fiscal 2003 decreased to $152.5 million from $175.8 million for the same quarter last year or a decrease of 13 percent.
Rational reported pro forma net income and earnings per share on a diluted basis for the first quarter of fiscal 2003 of $7.3 million and $0.04, respectively, compared to pro forma net income and earnings per share of $16.2 million and $0.08, respectively, for the same period last year. This reflects a decrease in pro forma net income of 55 percent compared to the same period last year.
Pro forma net income and earnings per share for the periods reported exclude amortization of goodwill and purchased intangibles, amortization of stock-based compensation related to recent acquisitions, and restructuring charges.
As reported net loss and loss per share on a diluted basis for the first quarter ended June 30, 2002 was $6.5 million and $0.03, respectively, compared to as reported net loss and loss per share on a diluted basis of $24.8 million and $0.13, respectively, for the same period last year. As a consequence of adopting the Statement of Financial Accounting Standards 142 as of April 1, 2002, the non-cash charges related to amortization of goodwill and intangibles, net of tax, dropped from $19.6 million in the quarter ended June 30, 2001 to $2.9 million in the quarter ended June 30, 2002.
For the quarter ending September 30, 2002, management currently expects revenue to be in the range of between $145 and $155 million, and pro forma earnings per share on a diluted basis to be in the range of $0.03 to $0.04. For the full fiscal year ending March 31, 2003, management currently expects revenue to be in the range of between $625 million and $660 million, and pro forma earnings per share on a diluted basis to be in the range of $0.20 to $0.25. In addition, management currently expects the company to record a restructuring charge in the range of $5 million to $15 million in the quarter ending September 30, 2002, as a result of the cessation of selected development activities associated with the company's hosted development service. The effect of this anticipated charge is not reflected in the expected pro forma results for the quarter ending September 30, 2002 or the year ending March 31, 2003, provided above. Expected pro forma earnings per share for the future periods discussed excludes amortization of goodwill and purchased intangibles, amortization of stock-based compensation related to recent acquisitions, and restructuring charges. Management will host the quarterly conference call today to discuss the results beginning at 2:00 p.m. Pacific Time, 5:00 p.m. Eastern Time.
Interested parties may listen to the conference call via live broadcast on Rational's Investor Relations Web site (http://investor.rational.com). Domestic callers can dial in to the conference call at 1-888-276-0010 and international callers can listen at 1-612-332-0226 or 1-612-288-0337. The password is Rational.
For those unable to participate in the live call, replays will be available approximately two hours after the earnings call ends. The replay numbers are 1-800-475-6701 for domestic callers and 1-320-365-3844 for international callers. The access code for the replay is 644557, and it will be available to callers until approximately 11:00 p.m. Pacific Time on Thursday, July 25, 2002. The conference call will also be archived on Rational's Investor Relations Web site.
About Rational Software Corporation
Rational Software provides a software development platform that improves the speed, quality, and predictability of software projects. This integrated, full lifecycle solution combines software engineering best practices, market-leading tools, and professional services. Ninety-eight of the Fortune 100 rely on Rational tools and services to build better software, faster. This open platform is extended by partners who provide more than 500 complementary products and services. Founded in 1981, Rational is one of the world's largest software companies, with revenues of $666.4 million in its twelve months ended June 30, 2002, and over 3,500 employees worldwide. Rational is a member of the S&P 500 Index and a component of the Nasdaq-100 Index®. Additional information is available at www.rational.com and www.therationaledge.com, the monthly e-zine for the Rational community.
This press release contains certain "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements contained herein include statements relating to future revenue and pro forma earnings per share on a diluted basis, future restructuring charges and discontinued development activities associated with the company's hosted development service. Factors that could cause actual results to differ materially from those described herein include, among other factors, adverse changes in general economic conditions, increased competition, adverse changes in the market for sophisticated development tools and the company's ability to manage expenses associated with the cessation of its development activities associated with the company's hosted development service. More detailed information about these factors is set forth in the reports filed by Rational Software with the Securities and Exchange Commission. Rational Software is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
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