Mercury Interactive Reports Strong First Quarter Results

Revenue Grows 50 Percent, Net Income Increases 65 Percent



Apr 11, 2001, 01:00 ET from Mercury Interactive Corporation

    SUNNYVALE, Calif., April 11 /PRNewswire/ --
 Mercury Interactive Corporation (Nasdaq: MERQ), the leader in enterprise
 testing and performance management solutions, today reported results for the
 first quarter ended
 March 31, 2001.
     Revenue for the first quarter of 2001 was $90.7 million, an increase of
 50 percent over the $60.4 million reported in the first quarter of 2000. Net
 income was $16.1 million, an increase of 65 percent compared to net income of
 $9.8 million in the first quarter of 2000. Earnings per diluted share
 increased to $0.18, up 64 percent from $0.11 for the first quarter of 2000.
     "Mercury Interactive's strong first quarter results, despite a difficult
 economic environment, demonstrate the value of our testing and performance
 management solutions and the viability of our business model," said
 Amnon Landan, chairman, CEO and president of Mercury Interactive. "As
 companies focus on maximizing the return from their IT investments, they are
 selecting our products and services to optimize their infrastructure, minimize
 capital and operational expenses and deliver reliable, high performance
 applications."
     During the first quarter, Mercury Interactive announced version 7.0 of its
 flagship load and functional testing products, LoadRunner and WinRunner, with
 enhanced ease-of-use, additional transaction breakdown capabilities and
 Enterprise Java Bean support. Additionally, the company's customer support
 organization received awards during the quarter for both consistently
 excellent customer services and innovative, superior web-based support.
     Mercury Interactive (www.mercuryinteractive.com) is the leading provider
 of enterprise testing and application performance management solutions that
 help businesses deliver a positive user experience. Mercury Interactive
 solutions enable its customers to turn application performance, scalability
 and user experience into competitive advantage. The Company's performance
 management products and hosted services are open and integrated to best test
 and monitor enterprise applications.
     Mercury Interactive is headquartered in Sunnyvale, California and has more
 than 40 offices worldwide. The company's common stock trades on the Nasdaq
 National Market under the symbol MERQ.
     The statements concerning Mercury Interactive's future business prospects
 contained in this press release are "forward-looking statements" under the
 Private Securities Litigation Reform Act of 1995.  Numerous important factors
 affect Mercury Interactive's operating results and could cause Mercury
 Interactive's actual results to differ materially from forecasts and estimates
 or from any other forward-looking statements made by, or on behalf of, Mercury
 Interactive, and there can be no assurance that future results will meet
 expectations, estimates or projections.  These factors include, but are not
 limited to, the following:  1) a weakening of economic factors may affect the
 overall demand for software and services which could result in decreased
 revenues or lower revenue growth rates; 2) Mercury Interactive's financial
 growth depends on the continued success and acceptance of its existing and new
 software products and services and the ability to increase international
 sales; 3) competition for Mercury Interactive's products and services is
 intense; 4) Mercury Interactive has historically received a substantial
 portion of its orders at the end of the quarter and if an order shortfall
 occurs at the end of a quarter it could negatively impact the company's
 operating results for that quarter; and 5) the additional risks and important
 factors described in Mercury Interactive's SEC reports, including the Annual
 Report to Stockholders on Form 10-K for the fiscal year ended
 December 31, 2000 and other filings with the SEC. Mercury Interactive
 undertakes no obligation to update information contained in this release to
 reflect events or circumstances after the date hereof.
 
     NOTE:  WinRunner, LoadRunner, TestDirector and Astra are registered
 trademarks and QuickTest, Topaz, ActiveWatch and ActiveTest are trademarks of
 Mercury Interactive Corporation, Sunnyvale, California.  Product and company
 names are used herein for identification purposes only, and may be trademarks
 of their respective companies.
 
                        MERCURY INTERACTIVE CORPORATION
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
                                                         Three months ended
                                                             March 31,
                                                            (unaudited)
 
                                                         2001          2000
     Revenue:
       License                                        $61,200        $42,000
       Service                                         29,500         18,400
         Total revenue                                 90,700         60,400
     Cost of revenue:
       License                                          6,159          2,906
       Service                                          7,597          4,828
         Total cost of revenue                         13,756          7,734
     Gross profit                                      76,944         52,666
     Operating expenses:
       Research and development                         9,309          7,100
       Marketing and selling                           47,716         32,538
       General and administrative                       5,017          3,397
         Total operating expenses                      62,042         43,035
     Income from operations                            14,902          9,631
     Other income, net                                  5,284          2,608
     Income before provision for income taxes          20,186         12,239
     Provision for income taxes                         4,037          2,448
     Net income                                       $16,149         $9,791
     Net income per share (basic)                       $0.20          $0.12
     Net income per share (diluted)                     $0.18          $0.11
 
     Weighted average common shares (basic)            81,408         78,943
     Weighted average common shares
      and equivalents (diluted)                        90,941         91,208
 
 
                        MERCURY INTERACTIVE CORPORATION
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
 
                                                    March 31,    December 31,
                                                      2001           2000
                                                  (unaudited)      (audited)
 
     ASSETS
     Current assets:
         Cash and short-term investments             $636,781       $628,743
         Trade accounts receivable, net                56,803         62,989
         Other receivables                             12,379         13,233
         Prepaid expenses and other assets             21,945         21,316
           Total current assets                       727,908        726,281
 
     Long-term investments                            160,642        153,623
     Property and equipment, net                       86,958         82,895
     Other assets, net                                 18,055         13,576
                                                     $993,563       $976,375
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
         Accounts payable                             $11,768        $12,931
         Accrued liabilities                           42,994         58,942
         Income taxes payable                          26,869         23,797
         Deferred revenue                              82,102         77,673
           Total current liabilities                  163,733        173,343
 
     Convertible subordinated notes                   500,000        500,000
           Total liabilities                          663,733        673,343
 
     Stockholders' equity:
         Common stock                                     163            162
         Capital in excess of par value               200,200        190,232
         Notes receivable from issuance of stock      (7,276)        (7,528)
         Accumulated other comprehensive loss           (987)        (1,415)
         Retained earnings                            137,730        121,581
           Total stockholders' equity                 329,830        303,032
                                                     $993,563       $976,375
 
 

SOURCE Mercury Interactive Corporation
    SUNNYVALE, Calif., April 11 /PRNewswire/ --
 Mercury Interactive Corporation (Nasdaq: MERQ), the leader in enterprise
 testing and performance management solutions, today reported results for the
 first quarter ended
 March 31, 2001.
     Revenue for the first quarter of 2001 was $90.7 million, an increase of
 50 percent over the $60.4 million reported in the first quarter of 2000. Net
 income was $16.1 million, an increase of 65 percent compared to net income of
 $9.8 million in the first quarter of 2000. Earnings per diluted share
 increased to $0.18, up 64 percent from $0.11 for the first quarter of 2000.
     "Mercury Interactive's strong first quarter results, despite a difficult
 economic environment, demonstrate the value of our testing and performance
 management solutions and the viability of our business model," said
 Amnon Landan, chairman, CEO and president of Mercury Interactive. "As
 companies focus on maximizing the return from their IT investments, they are
 selecting our products and services to optimize their infrastructure, minimize
 capital and operational expenses and deliver reliable, high performance
 applications."
     During the first quarter, Mercury Interactive announced version 7.0 of its
 flagship load and functional testing products, LoadRunner and WinRunner, with
 enhanced ease-of-use, additional transaction breakdown capabilities and
 Enterprise Java Bean support. Additionally, the company's customer support
 organization received awards during the quarter for both consistently
 excellent customer services and innovative, superior web-based support.
     Mercury Interactive (www.mercuryinteractive.com) is the leading provider
 of enterprise testing and application performance management solutions that
 help businesses deliver a positive user experience. Mercury Interactive
 solutions enable its customers to turn application performance, scalability
 and user experience into competitive advantage. The Company's performance
 management products and hosted services are open and integrated to best test
 and monitor enterprise applications.
     Mercury Interactive is headquartered in Sunnyvale, California and has more
 than 40 offices worldwide. The company's common stock trades on the Nasdaq
 National Market under the symbol MERQ.
     The statements concerning Mercury Interactive's future business prospects
 contained in this press release are "forward-looking statements" under the
 Private Securities Litigation Reform Act of 1995.  Numerous important factors
 affect Mercury Interactive's operating results and could cause Mercury
 Interactive's actual results to differ materially from forecasts and estimates
 or from any other forward-looking statements made by, or on behalf of, Mercury
 Interactive, and there can be no assurance that future results will meet
 expectations, estimates or projections.  These factors include, but are not
 limited to, the following:  1) a weakening of economic factors may affect the
 overall demand for software and services which could result in decreased
 revenues or lower revenue growth rates; 2) Mercury Interactive's financial
 growth depends on the continued success and acceptance of its existing and new
 software products and services and the ability to increase international
 sales; 3) competition for Mercury Interactive's products and services is
 intense; 4) Mercury Interactive has historically received a substantial
 portion of its orders at the end of the quarter and if an order shortfall
 occurs at the end of a quarter it could negatively impact the company's
 operating results for that quarter; and 5) the additional risks and important
 factors described in Mercury Interactive's SEC reports, including the Annual
 Report to Stockholders on Form 10-K for the fiscal year ended
 December 31, 2000 and other filings with the SEC. Mercury Interactive
 undertakes no obligation to update information contained in this release to
 reflect events or circumstances after the date hereof.
 
     NOTE:  WinRunner, LoadRunner, TestDirector and Astra are registered
 trademarks and QuickTest, Topaz, ActiveWatch and ActiveTest are trademarks of
 Mercury Interactive Corporation, Sunnyvale, California.  Product and company
 names are used herein for identification purposes only, and may be trademarks
 of their respective companies.
 
                        MERCURY INTERACTIVE CORPORATION
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
                                                         Three months ended
                                                             March 31,
                                                            (unaudited)
 
                                                         2001          2000
     Revenue:
       License                                        $61,200        $42,000
       Service                                         29,500         18,400
         Total revenue                                 90,700         60,400
     Cost of revenue:
       License                                          6,159          2,906
       Service                                          7,597          4,828
         Total cost of revenue                         13,756          7,734
     Gross profit                                      76,944         52,666
     Operating expenses:
       Research and development                         9,309          7,100
       Marketing and selling                           47,716         32,538
       General and administrative                       5,017          3,397
         Total operating expenses                      62,042         43,035
     Income from operations                            14,902          9,631
     Other income, net                                  5,284          2,608
     Income before provision for income taxes          20,186         12,239
     Provision for income taxes                         4,037          2,448
     Net income                                       $16,149         $9,791
     Net income per share (basic)                       $0.20          $0.12
     Net income per share (diluted)                     $0.18          $0.11
 
     Weighted average common shares (basic)            81,408         78,943
     Weighted average common shares
      and equivalents (diluted)                        90,941         91,208
 
 
                        MERCURY INTERACTIVE CORPORATION
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
 
                                                    March 31,    December 31,
                                                      2001           2000
                                                  (unaudited)      (audited)
 
     ASSETS
     Current assets:
         Cash and short-term investments             $636,781       $628,743
         Trade accounts receivable, net                56,803         62,989
         Other receivables                             12,379         13,233
         Prepaid expenses and other assets             21,945         21,316
           Total current assets                       727,908        726,281
 
     Long-term investments                            160,642        153,623
     Property and equipment, net                       86,958         82,895
     Other assets, net                                 18,055         13,576
                                                     $993,563       $976,375
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
         Accounts payable                             $11,768        $12,931
         Accrued liabilities                           42,994         58,942
         Income taxes payable                          26,869         23,797
         Deferred revenue                              82,102         77,673
           Total current liabilities                  163,733        173,343
 
     Convertible subordinated notes                   500,000        500,000
           Total liabilities                          663,733        673,343
 
     Stockholders' equity:
         Common stock                                     163            162
         Capital in excess of par value               200,200        190,232
         Notes receivable from issuance of stock      (7,276)        (7,528)
         Accumulated other comprehensive loss           (987)        (1,415)
         Retained earnings                            137,730        121,581
           Total stockholders' equity                 329,830        303,032
                                                     $993,563       $976,375
 
 SOURCE  Mercury Interactive Corporation