Peregrine Systems(R) Confirms Fiscal Fourth Quarter and Year-End Results; Focus on Customer ROI Drives Record Revenue

Apr 26, 2001, 01:00 ET from Peregrine Systems, Inc.

    SAN DIEGO, April 26 /PRNewswire/ -- Peregrine Systems, Inc.
 (Nasdaq:   PRGN), one of the world's leading software companies, today released
 final results for the fiscal fourth quarter and year ended March 31,
 consistent with preliminary results announced April 4, 2001.  Revenue for the
 quarter was a record $171.0 million, an increase of 124 percent from the same
 quarter a year ago.  Net income, excluding non-cash acquisition and other
 acquisition related charges, increased 148 percent to $24.8 million, or
 $.16 per share.
     For the fiscal year, revenue increased 123 percent to $564.7 million from
 $253.3 million in the prior year.  Excluding non-cash acquisition charges, net
 income was $77.8 million, or $.53 per share, an increase of 128 percent
 compared with fiscal year 2000.
     "In the past year, Peregrine has clearly established itself as the leading
 global provider of integrated infrastructure management and e-Market
 solutions.  We are driven by our vision of creating a highly efficient,
 frictionless business environment for our customers.  Our results this quarter
 in the face of challenging economic conditions demonstrate the value of our
 solutions," said Steve Gardner, chairman and chief executive officer of
 Peregrine.  "As we enter fiscal 2002, we remain confident in our market
 position and the opportunity we address.  We believe our continued focus on
 our customers' return on investment, combined with the diversity of our
 revenue base and industry-wide partnerships, will allow us to build long-term
 shareholder value.  At the same time, we are realistic in our assessment of
 current corporate spending patterns, and we are aligning our business model to
 improve our productivity and leverage our strengths."
     "We were particularly pleased with the strength of our sales through
 managed service providers and our professional services partners.  As we
 continue to meet major milestones in our corporate development and build our
 solutions portfolio, these relationships become increasingly important to our
 ability to extend our reach to new customers and markets," Gardner added.
     During the quarter, Peregrine expanded its relationships with several
 global systems integrators and managed service providers, including IBM Global
 Services in the U.S. and Systematics in Germany.  In the fourth quarter,
 professional services partners influenced the purchases of approximately half
 of all license revenue.
 
     Additional highlights of the quarter included:
 
     --  The announcement of the acquisition of technology partner Extricity,
         Inc., a leader in business process and application integration
         software.
 
     --  New alliances with Tilion to deliver an XML-based eBusiness analytics
         solution to Get2Connect(SM) customers and ANXeBusiness Corporation to
         launch and jointly market ANXVelocity, a B2B transaction service that
         can replace value added networks and deliver traditional outsourced
         EDI (Electronic Data Interchange) translation services.
 
     --  New releases of several products, including ServiceCenter(R) 4 and
         Power.Enterprise!(TM) 2.0, and the launch of new products
         Power.Commerce!(TM) and AssetCenter(TM) Automated Inventory.
 
     --  The launch of Peregrine's new brand theme, frictionless business,
         accompanied by both television and print advertising to increase
         Peregrine's visibility in the market.
 
     --  Industry recognition of excellence for several of our products,
         including TeleCenter(TM), which was named Best Telemanagement Package
         of the Year by Teleconnect magazine.
 
     Business Organization Aligned with Market Opportunities
     To aggressively pursue new market opportunities, the company has organized
 into three business units, each with specific revenue and profitability goals.
 Andy Cahill, formerly head of worldwide sales, will assume the role of group
 president for the Infrastructure Management Group.  Louis Blatt, formerly
 senior vice president and general manager of the E-Markets Group will expand
 his role as group president.  Tom Lavey of Extricity will join him as vice
 president of sales, E-Markets Group.  Gary Lenz, formerly Peregrine president
 and chief operating officer, will take over the new role of group president
 for the Integrated Solutions Group, with responsibility for developing
 cross-business unit relationships with alliance partners and large customers,
 as well as incubating new business ventures.
     "This new organization will allow Peregrine to focus its efforts to
 maximize market coverage and reduce sales cycles in our two primary markets,
 while creating a business group with a mandate to evangelize the entire
 Peregrine value proposition," said Steve Gardner.  "The depth of our
 management team allows us to target our resources to effectively address the
 varied opportunities we see emerging in today's market."
 
     Impact of Non-Cash Charges
     Including non-cash acquisition and other acquisition related charges for
 the fiscal fourth quarter, the Company posted a loss of $590.4 million, or
 $3.72 loss per share, compared with $18.1 million, or $.16 loss per share, for
 the fourth quarter of 2000.  For the fiscal year 2001, the Company reported a
 loss of $852.2 million, or $5.80 loss per share, compared with a loss of
 $25.1 million, or $.23 loss per share, in fiscal 2000.
 
     Fourth Quarter Conference Call
     Management has scheduled a conference call for 2:00 pm Pacific Daylight
 Time (5:00 pm Eastern Daylight Time) today to discuss the results for the
 fiscal fourth quarter and year.  Participants should call (212) 896-6013 and
 reference ID number 18533980.  A replay of the call will be available through
 May 10, 2001 by dialing (800) 633-8284, passcode 18533980.  Additionally, a
 live Webcast will be broadcast from the Company's website at www.peregrine.com
 and will be available in archive through May 26, 2001.
 
     About Peregrine
     Founded in 1981, Peregrine has matured into one of the largest software
 companies worldwide.  Peregrine supports companies with solutions that remove
 friction points in managing infrastructure assets, empowering employees and
 enabling collaborative electronic commerce.  Peregrine's Infrastructure
 Management Group (IMG) provides solutions to manage the entire life cycle of
 an organization's assets, from IT equipment and fleets of vehicles to a
 company's intangible knowledge assets.  Peregrine's Employee Relationship
 Management solutions give employees real-time tools to secure knowledge,
 services and resources from a portal accessed at a desktop computer or an
 array of mobile devices.  Peregrine's E-Markets Group (EMG) takes to market a
 digital business offering that provides a full range of software products and
 managed Internet services using Peregrine's Get2Connect(SM) global trading
 network.  Peregrine EMG processes nearly 1.2 million e-Commerce transactions
 every business day and annually transacts $280 billion in e-Business.
 Peregrine is headquartered in San Diego, California and has offices throughout
 the world.  For more information on Peregrine, visit http://www.peregrine.com.
     Peregrine Systems and ServiceCenter are registered trademarks,
 AssetCenter, TeleCenter, PowerEnterprise! and PowerCommerce! are trademarks
 and Get2Connect is a service mark of Peregrine Systems, Inc.  All other
 trademarks are the property of their respective owners.
 
     The foregoing press release contains "forward-looking" statements about
 the expectations, beliefs, plans, intentions and strategies of Peregrine.  The
 ability of Peregrine to achieve its planned business objectives involves many
 risks and uncertainties.  Forward-looking statements relating to expectations
 about future events or results are based upon information available to
 Peregrine as of today's date.  Peregrine assumes no obligation to update any
 of these statements and these statements are not guarantees of Peregrine.  The
 actual results of Peregrine could differ materially from current expectations.
 The revenues and earnings of Peregrine are subject to a number of factors that
 make estimation of its future operating results extremely uncertain.  These
 factors include competition; increased competition due to Peregrine's expanded
 product offerings; the ability of Peregrine to successfully integrate the
 personnel and products obtained through acquisition; risks associated with the
 evolving and varying demand for Peregrine's software products; the ability of
 Peregrine to expand its operations; litigation, including litigation over
 intellectual property rights; and general technological and economic factors.
 The risks associated with Peregrine's business are discussed in Peregrine's
 Annual Report on Form 10-K for the year ended March 31, 2000, which was filed
 with the Securities and Exchange Commission in May 2000, and in Peregrine's
 subsequent quarterly reports on Form 10-Q and its 8-Ks and other filings filed
 with the SEC.  You are encouraged to read this information carefully.
 
 
                              PEREGRINE SYSTEMS, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share amounts)
 
 
                           Three Months Ended         Twelve Months Ended
                                March 31                   March 31
                        Fiscal    Fiscal     %     Fiscal    Fiscal      %
                         2001      2000     Chg     2001      2000      Chg
 
 
     Revenues:
      Licenses         $105,230  $52,749    100% $354,610  $168,467     110%
      Services           65,807   23,595    179%  210,073    84,833     148%
       Total revenues   171,037   76,344    124%  564,683   253,300     123%
 
     Costs and expenses:
      Cost of licenses    1,137      663     72%    2,582     1,426      81%
      Cost of services   33,386   13,973    139%  111,165    51,441     116%
      Sales and
       marketing         66,992   32,526    106%  223,966   101,443     121%
      Research and
       development       18,155    8,104    124%   61,957    28,517     117%
      General and
       administrative    13,497    6,270    115%   48,420    19,871     144%
       Total costs and
        expenses        133,167   61,536    116%  448,090   202,698     121%
 
     Income from operations
      excluding acquisition
      and other non-cash
      charges, interest
      (net) and other
      income, and income
      taxes              37,870   14,808    156%  116,593    50,602     130%
 
     Acquisition and other
      non-cash charges  615,252   28,088          930,000    59,258
     Income (loss) from
      operations before
      interest (net) and
      other income, and
      income taxes     (577,382)  (13,280)       (813,407)   (8,656)
 
     Interest income
      (expense), net
      and other            (845)     (60)            (538)       38
     Income (loss) from
      operations before
      income taxes     (578,227)  (13,340)        (813,945)   (8,618)
 
     Income taxes        12,218     4,788           38,296    16,452
      Net income
       (loss)         $(590,445) $(18,128)       $(852,241)  $(25,070)
 
     Net income (loss)
      per share-basic:
      Excluding acquisition
       costs              $0.16   $ 0.09     78%     $.56      $.33      70%
      Acquisition costs
      (net of taxes)     (4.05)    (0.26)           (6.72)    (0.57)
      Net loss per
       share-basic      $(3.89)   $(0.17)          $(6.16)   $(0.24)
      Shares used in
       computing earnings
       per share        151,688  106,005          138,447   102,332
 
     Net income (loss)
      per share-diluted:
      Excluding acquisition
       costs              $0.16    $0.09     78%     $.53      $.32      66%
      Acquisition costs
       (net of taxes)    (3.88)    (0.25)           (6.33)    (0.55)
      Net loss per
       share-diluted    $(3.72)   $(0.16)          $(5.80)   $(0.23)
      Shares used in
       computing earnings
       per share        158,900  115,216          146,945   108,426
 
 
     Note 1 --Excluding acquisition and other non-cash charges, net income for
               the three and twelve months ended March 31 for fiscal years 2001
               and 2000 is $24.8 million, $10.0 million, $77.8 million, and
               $34.2 million, respectively. Refer to additional disclosure on
               following page.
     Note 2 --Acquisition and other non-cash charges are comprised of acquired
               in process research and development costs, goodwill, other
               intangible assets and deferred compensation amortization and
               other "purchase" acquisition costs.
     Note 3 --On a pro forma basis, the diluted shares outstanding under the
               if-converted method would be anti-dilutive.  Therefore,
               outstanding shares are presented on a fully diluted basis.
 
 
                              PEREGRINE SYSTEMS, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share amounts)
 
        The impact of acquisition and other non-cash charges per share, on a
                           diluted basis, are as follows:
 
 
 
                             Three Months Ended        Twelve Months Ended
                                  March 31                   March 31
                                 Fiscal 2001               Fiscal 2001
 
                          As Adjusted*  Unadjusted   As Adjusted*  Unadjusted
     Income (loss) from
      operations before
      income taxes          $37,025     $(578,227)    $116,055     $(813,945)
     Income taxes            12,218        12,218       38,296        38,296
     Net Income (loss)      $24,807     $(590,445)     $77,759     $(852,241)
 
     Net income (loss) per
      share-diluted           $0.16        $(3.72)       $0.53        $(5.80)
     Shares used in computing
      diluted earnings per
      share                 158,900       158,900      146,945       146,945
 
                            Three Months Ended          Twelve Months Ended
                                 March 31                     March 31
                                Fiscal 2000                 Fiscal 2000
 
                          As Adjusted*  Unadjusted   As Adjusted*  Unadjusted
     Income (loss) from
      operations before
      income taxes          $14,748      $(13,340)     $50,640       $(8,618)
     Income taxes             4,788         4,788       16,452        16,452
     Net Income (loss)       $9,960      $(18,128)     $34,188      $(25,070)
 
     Net income (loss) per
      share-diluted           $0.09        $(0.16)       $0.32        $(0.23)
     Shares used in computing
      diluted earnings per
      share                 115,216       115,216      108,426       108,426
 
 
     *As adjusted-- Presented as net income before acquisition and other
     non-cash charges.
 
 
                              PEREGRINE SYSTEMS, INC.
                            CONSOLIDATED BALANCE SHEETS
                                   (in thousands)
 
                                                    March 31,       March 31,
                                                      2001            2000
 
                                     ASSETS
 
 
     Current assets:
      Cash, cash equivalents, and short-term
       investments                                   $286,658        $33,511
      Accounts receivable, net of allowance for
       doubtful accounts of $11,511 and $2,179,
       respectively                                   180,372         69,940
      Other current assets                             54,191         22,826
       Total current assets                           521,221        126,277
 
     Property and equipment, net                       82,717         29,537
     Intangible assets and other, net               1,399,828        367,616
     Total assets                                  $2,003,766       $523,430
 
 
 
                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
     Current Liabilities:
      Accounts payable                                $53,221        $19,850
      Accrued expenses                                198,805         49,064
      Deferred revenue                                 86,653         36,779
      Current portion of long-term debt                    --             74
       Total current liabilities                      338,679        105,767
     Long-term debt, net of current portion           267,023          1,257
     Deferred revenue, net of current portion           8,299          4,556
       Total liabilities                              614,001        111,580
 
     Stockholders' equity                           1,389,765        411,850
     Total liabilities and stockholders' equity    $2,003,766       $523,430
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X02011022
 
 

SOURCE Peregrine Systems, Inc.
    SAN DIEGO, April 26 /PRNewswire/ -- Peregrine Systems, Inc.
 (Nasdaq:   PRGN), one of the world's leading software companies, today released
 final results for the fiscal fourth quarter and year ended March 31,
 consistent with preliminary results announced April 4, 2001.  Revenue for the
 quarter was a record $171.0 million, an increase of 124 percent from the same
 quarter a year ago.  Net income, excluding non-cash acquisition and other
 acquisition related charges, increased 148 percent to $24.8 million, or
 $.16 per share.
     For the fiscal year, revenue increased 123 percent to $564.7 million from
 $253.3 million in the prior year.  Excluding non-cash acquisition charges, net
 income was $77.8 million, or $.53 per share, an increase of 128 percent
 compared with fiscal year 2000.
     "In the past year, Peregrine has clearly established itself as the leading
 global provider of integrated infrastructure management and e-Market
 solutions.  We are driven by our vision of creating a highly efficient,
 frictionless business environment for our customers.  Our results this quarter
 in the face of challenging economic conditions demonstrate the value of our
 solutions," said Steve Gardner, chairman and chief executive officer of
 Peregrine.  "As we enter fiscal 2002, we remain confident in our market
 position and the opportunity we address.  We believe our continued focus on
 our customers' return on investment, combined with the diversity of our
 revenue base and industry-wide partnerships, will allow us to build long-term
 shareholder value.  At the same time, we are realistic in our assessment of
 current corporate spending patterns, and we are aligning our business model to
 improve our productivity and leverage our strengths."
     "We were particularly pleased with the strength of our sales through
 managed service providers and our professional services partners.  As we
 continue to meet major milestones in our corporate development and build our
 solutions portfolio, these relationships become increasingly important to our
 ability to extend our reach to new customers and markets," Gardner added.
     During the quarter, Peregrine expanded its relationships with several
 global systems integrators and managed service providers, including IBM Global
 Services in the U.S. and Systematics in Germany.  In the fourth quarter,
 professional services partners influenced the purchases of approximately half
 of all license revenue.
 
     Additional highlights of the quarter included:
 
     --  The announcement of the acquisition of technology partner Extricity,
         Inc., a leader in business process and application integration
         software.
 
     --  New alliances with Tilion to deliver an XML-based eBusiness analytics
         solution to Get2Connect(SM) customers and ANXeBusiness Corporation to
         launch and jointly market ANXVelocity, a B2B transaction service that
         can replace value added networks and deliver traditional outsourced
         EDI (Electronic Data Interchange) translation services.
 
     --  New releases of several products, including ServiceCenter(R) 4 and
         Power.Enterprise!(TM) 2.0, and the launch of new products
         Power.Commerce!(TM) and AssetCenter(TM) Automated Inventory.
 
     --  The launch of Peregrine's new brand theme, frictionless business,
         accompanied by both television and print advertising to increase
         Peregrine's visibility in the market.
 
     --  Industry recognition of excellence for several of our products,
         including TeleCenter(TM), which was named Best Telemanagement Package
         of the Year by Teleconnect magazine.
 
     Business Organization Aligned with Market Opportunities
     To aggressively pursue new market opportunities, the company has organized
 into three business units, each with specific revenue and profitability goals.
 Andy Cahill, formerly head of worldwide sales, will assume the role of group
 president for the Infrastructure Management Group.  Louis Blatt, formerly
 senior vice president and general manager of the E-Markets Group will expand
 his role as group president.  Tom Lavey of Extricity will join him as vice
 president of sales, E-Markets Group.  Gary Lenz, formerly Peregrine president
 and chief operating officer, will take over the new role of group president
 for the Integrated Solutions Group, with responsibility for developing
 cross-business unit relationships with alliance partners and large customers,
 as well as incubating new business ventures.
     "This new organization will allow Peregrine to focus its efforts to
 maximize market coverage and reduce sales cycles in our two primary markets,
 while creating a business group with a mandate to evangelize the entire
 Peregrine value proposition," said Steve Gardner.  "The depth of our
 management team allows us to target our resources to effectively address the
 varied opportunities we see emerging in today's market."
 
     Impact of Non-Cash Charges
     Including non-cash acquisition and other acquisition related charges for
 the fiscal fourth quarter, the Company posted a loss of $590.4 million, or
 $3.72 loss per share, compared with $18.1 million, or $.16 loss per share, for
 the fourth quarter of 2000.  For the fiscal year 2001, the Company reported a
 loss of $852.2 million, or $5.80 loss per share, compared with a loss of
 $25.1 million, or $.23 loss per share, in fiscal 2000.
 
     Fourth Quarter Conference Call
     Management has scheduled a conference call for 2:00 pm Pacific Daylight
 Time (5:00 pm Eastern Daylight Time) today to discuss the results for the
 fiscal fourth quarter and year.  Participants should call (212) 896-6013 and
 reference ID number 18533980.  A replay of the call will be available through
 May 10, 2001 by dialing (800) 633-8284, passcode 18533980.  Additionally, a
 live Webcast will be broadcast from the Company's website at www.peregrine.com
 and will be available in archive through May 26, 2001.
 
     About Peregrine
     Founded in 1981, Peregrine has matured into one of the largest software
 companies worldwide.  Peregrine supports companies with solutions that remove
 friction points in managing infrastructure assets, empowering employees and
 enabling collaborative electronic commerce.  Peregrine's Infrastructure
 Management Group (IMG) provides solutions to manage the entire life cycle of
 an organization's assets, from IT equipment and fleets of vehicles to a
 company's intangible knowledge assets.  Peregrine's Employee Relationship
 Management solutions give employees real-time tools to secure knowledge,
 services and resources from a portal accessed at a desktop computer or an
 array of mobile devices.  Peregrine's E-Markets Group (EMG) takes to market a
 digital business offering that provides a full range of software products and
 managed Internet services using Peregrine's Get2Connect(SM) global trading
 network.  Peregrine EMG processes nearly 1.2 million e-Commerce transactions
 every business day and annually transacts $280 billion in e-Business.
 Peregrine is headquartered in San Diego, California and has offices throughout
 the world.  For more information on Peregrine, visit http://www.peregrine.com.
     Peregrine Systems and ServiceCenter are registered trademarks,
 AssetCenter, TeleCenter, PowerEnterprise! and PowerCommerce! are trademarks
 and Get2Connect is a service mark of Peregrine Systems, Inc.  All other
 trademarks are the property of their respective owners.
 
     The foregoing press release contains "forward-looking" statements about
 the expectations, beliefs, plans, intentions and strategies of Peregrine.  The
 ability of Peregrine to achieve its planned business objectives involves many
 risks and uncertainties.  Forward-looking statements relating to expectations
 about future events or results are based upon information available to
 Peregrine as of today's date.  Peregrine assumes no obligation to update any
 of these statements and these statements are not guarantees of Peregrine.  The
 actual results of Peregrine could differ materially from current expectations.
 The revenues and earnings of Peregrine are subject to a number of factors that
 make estimation of its future operating results extremely uncertain.  These
 factors include competition; increased competition due to Peregrine's expanded
 product offerings; the ability of Peregrine to successfully integrate the
 personnel and products obtained through acquisition; risks associated with the
 evolving and varying demand for Peregrine's software products; the ability of
 Peregrine to expand its operations; litigation, including litigation over
 intellectual property rights; and general technological and economic factors.
 The risks associated with Peregrine's business are discussed in Peregrine's
 Annual Report on Form 10-K for the year ended March 31, 2000, which was filed
 with the Securities and Exchange Commission in May 2000, and in Peregrine's
 subsequent quarterly reports on Form 10-Q and its 8-Ks and other filings filed
 with the SEC.  You are encouraged to read this information carefully.
 
 
                              PEREGRINE SYSTEMS, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share amounts)
 
 
                           Three Months Ended         Twelve Months Ended
                                March 31                   March 31
                        Fiscal    Fiscal     %     Fiscal    Fiscal      %
                         2001      2000     Chg     2001      2000      Chg
 
 
     Revenues:
      Licenses         $105,230  $52,749    100% $354,610  $168,467     110%
      Services           65,807   23,595    179%  210,073    84,833     148%
       Total revenues   171,037   76,344    124%  564,683   253,300     123%
 
     Costs and expenses:
      Cost of licenses    1,137      663     72%    2,582     1,426      81%
      Cost of services   33,386   13,973    139%  111,165    51,441     116%
      Sales and
       marketing         66,992   32,526    106%  223,966   101,443     121%
      Research and
       development       18,155    8,104    124%   61,957    28,517     117%
      General and
       administrative    13,497    6,270    115%   48,420    19,871     144%
       Total costs and
        expenses        133,167   61,536    116%  448,090   202,698     121%
 
     Income from operations
      excluding acquisition
      and other non-cash
      charges, interest
      (net) and other
      income, and income
      taxes              37,870   14,808    156%  116,593    50,602     130%
 
     Acquisition and other
      non-cash charges  615,252   28,088          930,000    59,258
     Income (loss) from
      operations before
      interest (net) and
      other income, and
      income taxes     (577,382)  (13,280)       (813,407)   (8,656)
 
     Interest income
      (expense), net
      and other            (845)     (60)            (538)       38
     Income (loss) from
      operations before
      income taxes     (578,227)  (13,340)        (813,945)   (8,618)
 
     Income taxes        12,218     4,788           38,296    16,452
      Net income
       (loss)         $(590,445) $(18,128)       $(852,241)  $(25,070)
 
     Net income (loss)
      per share-basic:
      Excluding acquisition
       costs              $0.16   $ 0.09     78%     $.56      $.33      70%
      Acquisition costs
      (net of taxes)     (4.05)    (0.26)           (6.72)    (0.57)
      Net loss per
       share-basic      $(3.89)   $(0.17)          $(6.16)   $(0.24)
      Shares used in
       computing earnings
       per share        151,688  106,005          138,447   102,332
 
     Net income (loss)
      per share-diluted:
      Excluding acquisition
       costs              $0.16    $0.09     78%     $.53      $.32      66%
      Acquisition costs
       (net of taxes)    (3.88)    (0.25)           (6.33)    (0.55)
      Net loss per
       share-diluted    $(3.72)   $(0.16)          $(5.80)   $(0.23)
      Shares used in
       computing earnings
       per share        158,900  115,216          146,945   108,426
 
 
     Note 1 --Excluding acquisition and other non-cash charges, net income for
               the three and twelve months ended March 31 for fiscal years 2001
               and 2000 is $24.8 million, $10.0 million, $77.8 million, and
               $34.2 million, respectively. Refer to additional disclosure on
               following page.
     Note 2 --Acquisition and other non-cash charges are comprised of acquired
               in process research and development costs, goodwill, other
               intangible assets and deferred compensation amortization and
               other "purchase" acquisition costs.
     Note 3 --On a pro forma basis, the diluted shares outstanding under the
               if-converted method would be anti-dilutive.  Therefore,
               outstanding shares are presented on a fully diluted basis.
 
 
                              PEREGRINE SYSTEMS, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share amounts)
 
        The impact of acquisition and other non-cash charges per share, on a
                           diluted basis, are as follows:
 
 
 
                             Three Months Ended        Twelve Months Ended
                                  March 31                   March 31
                                 Fiscal 2001               Fiscal 2001
 
                          As Adjusted*  Unadjusted   As Adjusted*  Unadjusted
     Income (loss) from
      operations before
      income taxes          $37,025     $(578,227)    $116,055     $(813,945)
     Income taxes            12,218        12,218       38,296        38,296
     Net Income (loss)      $24,807     $(590,445)     $77,759     $(852,241)
 
     Net income (loss) per
      share-diluted           $0.16        $(3.72)       $0.53        $(5.80)
     Shares used in computing
      diluted earnings per
      share                 158,900       158,900      146,945       146,945
 
                            Three Months Ended          Twelve Months Ended
                                 March 31                     March 31
                                Fiscal 2000                 Fiscal 2000
 
                          As Adjusted*  Unadjusted   As Adjusted*  Unadjusted
     Income (loss) from
      operations before
      income taxes          $14,748      $(13,340)     $50,640       $(8,618)
     Income taxes             4,788         4,788       16,452        16,452
     Net Income (loss)       $9,960      $(18,128)     $34,188      $(25,070)
 
     Net income (loss) per
      share-diluted           $0.09        $(0.16)       $0.32        $(0.23)
     Shares used in computing
      diluted earnings per
      share                 115,216       115,216      108,426       108,426
 
 
     *As adjusted-- Presented as net income before acquisition and other
     non-cash charges.
 
 
                              PEREGRINE SYSTEMS, INC.
                            CONSOLIDATED BALANCE SHEETS
                                   (in thousands)
 
                                                    March 31,       March 31,
                                                      2001            2000
 
                                     ASSETS
 
 
     Current assets:
      Cash, cash equivalents, and short-term
       investments                                   $286,658        $33,511
      Accounts receivable, net of allowance for
       doubtful accounts of $11,511 and $2,179,
       respectively                                   180,372         69,940
      Other current assets                             54,191         22,826
       Total current assets                           521,221        126,277
 
     Property and equipment, net                       82,717         29,537
     Intangible assets and other, net               1,399,828        367,616
     Total assets                                  $2,003,766       $523,430
 
 
 
                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
     Current Liabilities:
      Accounts payable                                $53,221        $19,850
      Accrued expenses                                198,805         49,064
      Deferred revenue                                 86,653         36,779
      Current portion of long-term debt                    --             74
       Total current liabilities                      338,679        105,767
     Long-term debt, net of current portion           267,023          1,257
     Deferred revenue, net of current portion           8,299          4,556
       Total liabilities                              614,001        111,580
 
     Stockholders' equity                           1,389,765        411,850
     Total liabilities and stockholders' equity    $2,003,766       $523,430
 
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 SOURCE  Peregrine Systems, Inc.