Quest Software Reports Record First Quarter Results; Revenues Increase 120% and Pro Forma Net Income Increases 211% Over Q1 2000

Apr 25, 2001, 01:00 ET from Quest Software, Inc.

    IRVINE, Calif., April 25 /PRNewswire/ --
 Quest Software, Inc. (Nasdaq:   QSFT), a leading provider of application and
 database management solutions, today announced record financial results for
 its first quarter ended March 31, 2001. The Company achieved first quarter
 revenue of $63.1 million, an increase of 120% over last year's first quarter
 revenue of $28.7 million. Pro forma net income, excluding the amortization of
 intangible assets and other compensation costs, increased 211% to $5.3 million
 in the first quarter from $1.7 million for the same period in the prior year.
 Diluted pro forma net income per share for the first quarter was $0.06, a 200%
 increase from $0.02 for the same period last year.
 
 
      (in thousands,
      except per share data)                     Three Months ended March 31,
                                                        2001          2000
 
      Revenues                                        $63,112        $28,725
      Pro forma income from operations (a)             $7,002         $1,843
      Pro forma net income (b)                         $5,267         $1,693
      Pro forma net income per share                    $0.06          $0.02
      Pro forma diluted shares outstanding             91,001         87,540
 
 
     (a)  For the quarter ended March 31, 2001, excludes $16.0 million for
          amortization of intangible assets and other compensation costs; and
          $2.0 million for amortization of purchased intangible assets.  For
          the quarter ended March 31, 2000, excludes $7.4 million of
          amortization of intangible assets and other compensation costs; and
          $0.7 million of amortization of purchased intangible assets.
     (b)  For both 2001 and 2000, assumes a pro forma tax rate of 40%.
 
 
     "Managing critical applications continues to be a priority for our
 customers as they look to increase their ROI on past and current information
 technology spending.  As a result, Quest continued to enjoy success in our
 markets, even in a difficult economic climate.  In the first quarter we built
 on our strength in the Oracle market while expanding our position in new
 markets including Windows, DB/2 and key packaged applications," said Vinny
 Smith, chief executive officer and chairman, Quest Software.
     For the first quarter of 2001, including adjustments for the amortization
 of intangible assets and other compensation costs, Quest Software reported a
 net loss of $14.8 million or $(0.17) per share, compared with a net loss of
 $5.7 million or $(0.07) per share for the first quarter of 2000.
     Quest Software will host a conference call today, Wednesday, April 25,
 2001, at 2:00 p.m. Pacific Time to discuss its results.  A simultaneous Web
 cast of the conference call will be available on Quest Software's Web site at
 www.quest.com in the "Investor Relations" section and will also be available
 at StreetFusion's Web site at www.Streetfusion.com.
 
     About Quest Software, Inc.
     Based in Irvine, Calif., Quest Software is a leading provider of
 application and database management solutions designed to maximize the
 performance and availability of enterprise applications.  Businesses and
 consumers alike have come to expect immediate access to information and Quest
 Software provides solutions to ensure this availability.  For more
 information, visit www.quest.com.
 
     Forward Looking Statements
     This release may include predictions, estimates and other information that
 might be considered forward-looking statements.  These statements are based on
 current expectations and assumptions that are subject to risks and
 uncertainties.  Actual results could differ from those anticipated as a result
 of various factors, including the impact of economic conditions on our
 customers, variations in the size and timing of customer orders; competitive
 products and pricing; rapid technological change; risks associated with the
 development and market acceptance of new products; disruptions caused by
 acquisitions of companies and/or technologies; risks associated with
 international operations; and the need to attract and retain qualified
 personnel.
     For a discussion of these and other related risks, please refer to our
 recent SEC filings, including the "Risk Factors" section of our Annual Report
 on Form 10-K for the year ended December 31, 2000.  Readers are cautioned not
 to place undue reliance on these forward-looking statements, which speak only
 as of the date hereof.  We undertake no obligation to update forward-looking
 statements to reflect events or circumstances after the date hereof.
 
 
                              QUEST SOFTWARE, INC.
                PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                  Three Months Ended March 31,
                                                         2001           2000
     Revenues:
       Licenses                                       $48,429        $21,895
       Services                                        14,683          6,830
         Total revenues                                63,112         28,725
     Cost of revenues:
       Licenses                                           889            635
       Services                                         4,078          1,870
         Total cost of revenues                         4,967          2,505
     Gross profit                                      58,145         26,220
     Operating expenses:
       Sales and marketing                             30,860         13,914
       Research and development                        13,930          7,366
       General and administrative                       6,353          3,097
         Total operating expenses                      51,143         24,377
     Pro forma income from operations                   7,002          1,843
     Other income, net                                  1,777            979
     Pro forma income before income tax provision       8,779          2,822
     Pro forma income tax provision                     3,512          1,129
     Pro forma net income                              $5,267         $1,693
 
     Pro forma net income per share:
       Basic                                            $0.06          $0.02
       Diluted                                          $0.06          $0.02
 
     Pro forma weighted average shares:
       Basic                                           87,016         81,371
       Diluted                                         91,001         87,540
 
 
                              QUEST SOFTWARE, INC.
                          CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                     ASSETS
 
                                                    (Unaudited)
                                                     March 31,    December 31,
                                                       2001           2000
     Current assets:
       Cash and cash equivalents                      $35,169        $25,155
       Short-term marketable securities                 9,873          8,587
       Accounts receivable, net                        36,347         38,443
       Prepaid expenses and other current assets       11,456         11,390
       Income taxes receivable                          1,582          1,558
       Deferred income taxes                           14,786         14,833
         Total current assets                         109,213         99,966
     Property and equipment, net                       56,816         46,840
     Long-term marketable securities                  115,717        118,084
     Goodwill and purchased intangible assets, net    238,807        255,858
     Deferred income taxes                              3,002          3,001
     Other assets                                      10,308         10,423
         Total assets                                $533,863       $534,172
 
                        LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                                $5,122         $5,503
       Accrued compensation                            10,111          9,350
       Other accrued expenses                          18,468         22,491
       Deferred revenue                                40,299         32,052
         Total current liabilities                     74,000         69,396
 
     Long-term liabilities and other                    6,305          6,422
 
     Shareholders' equity                             453,558        458,354
         Total liabilities and
          shareholders' equity                       $533,863       $534,172
 
 
                              QUEST SOFTWARE, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                  Three Months Ended March 31,
                                                        2001           2000
     Revenues:
       Licenses                                       $48,429        $21,895
       Services                                        14,683          6,830
         Total revenues                                63,112         28,725
     Cost of revenues:
       Licenses                                           889            635
       Services                                         4,078          1,870
       Amortization of purchased intangible assets      2,035            657
         Total cost of revenues                         7,002          3,162
     Gross profit                                      56,110         25,563
     Operating expenses:
       Sales and marketing                             30,860         13,914
       Research and development                        13,930          7,366
       General and administrative                       6,353          3,097
       Other compensation costs and
        intangible amortization                        15,982          7,378
         Total operating expenses                      67,125         31,755
     Loss from operations                             (11,015)        (6,192)
     Other income, net                                  1,777            979
     Loss before income tax provision                  (9,238)        (5,213)
     Income tax provision                               5,543            472
     Net loss                                        $(14,781)       $(5,685)
 
     Net loss per share:
       Basic                                          $(0.17)        $(0.07)
       Diluted                                        $(0.17)        $(0.07)
 
     Weighted average shares:
       Basic                                           87,016         81,371
       Diluted                                         87,016         81,371
 
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000920/QSFTLOGO )
 
     For further information please contact:  Nicole Makos of Quest Software,
 Inc., 949-754-8536, nicole.makos@quest.com
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X37740370
 
 

SOURCE Quest Software, Inc.
    IRVINE, Calif., April 25 /PRNewswire/ --
 Quest Software, Inc. (Nasdaq:   QSFT), a leading provider of application and
 database management solutions, today announced record financial results for
 its first quarter ended March 31, 2001. The Company achieved first quarter
 revenue of $63.1 million, an increase of 120% over last year's first quarter
 revenue of $28.7 million. Pro forma net income, excluding the amortization of
 intangible assets and other compensation costs, increased 211% to $5.3 million
 in the first quarter from $1.7 million for the same period in the prior year.
 Diluted pro forma net income per share for the first quarter was $0.06, a 200%
 increase from $0.02 for the same period last year.
 
 
      (in thousands,
      except per share data)                     Three Months ended March 31,
                                                        2001          2000
 
      Revenues                                        $63,112        $28,725
      Pro forma income from operations (a)             $7,002         $1,843
      Pro forma net income (b)                         $5,267         $1,693
      Pro forma net income per share                    $0.06          $0.02
      Pro forma diluted shares outstanding             91,001         87,540
 
 
     (a)  For the quarter ended March 31, 2001, excludes $16.0 million for
          amortization of intangible assets and other compensation costs; and
          $2.0 million for amortization of purchased intangible assets.  For
          the quarter ended March 31, 2000, excludes $7.4 million of
          amortization of intangible assets and other compensation costs; and
          $0.7 million of amortization of purchased intangible assets.
     (b)  For both 2001 and 2000, assumes a pro forma tax rate of 40%.
 
 
     "Managing critical applications continues to be a priority for our
 customers as they look to increase their ROI on past and current information
 technology spending.  As a result, Quest continued to enjoy success in our
 markets, even in a difficult economic climate.  In the first quarter we built
 on our strength in the Oracle market while expanding our position in new
 markets including Windows, DB/2 and key packaged applications," said Vinny
 Smith, chief executive officer and chairman, Quest Software.
     For the first quarter of 2001, including adjustments for the amortization
 of intangible assets and other compensation costs, Quest Software reported a
 net loss of $14.8 million or $(0.17) per share, compared with a net loss of
 $5.7 million or $(0.07) per share for the first quarter of 2000.
     Quest Software will host a conference call today, Wednesday, April 25,
 2001, at 2:00 p.m. Pacific Time to discuss its results.  A simultaneous Web
 cast of the conference call will be available on Quest Software's Web site at
 www.quest.com in the "Investor Relations" section and will also be available
 at StreetFusion's Web site at www.Streetfusion.com.
 
     About Quest Software, Inc.
     Based in Irvine, Calif., Quest Software is a leading provider of
 application and database management solutions designed to maximize the
 performance and availability of enterprise applications.  Businesses and
 consumers alike have come to expect immediate access to information and Quest
 Software provides solutions to ensure this availability.  For more
 information, visit www.quest.com.
 
     Forward Looking Statements
     This release may include predictions, estimates and other information that
 might be considered forward-looking statements.  These statements are based on
 current expectations and assumptions that are subject to risks and
 uncertainties.  Actual results could differ from those anticipated as a result
 of various factors, including the impact of economic conditions on our
 customers, variations in the size and timing of customer orders; competitive
 products and pricing; rapid technological change; risks associated with the
 development and market acceptance of new products; disruptions caused by
 acquisitions of companies and/or technologies; risks associated with
 international operations; and the need to attract and retain qualified
 personnel.
     For a discussion of these and other related risks, please refer to our
 recent SEC filings, including the "Risk Factors" section of our Annual Report
 on Form 10-K for the year ended December 31, 2000.  Readers are cautioned not
 to place undue reliance on these forward-looking statements, which speak only
 as of the date hereof.  We undertake no obligation to update forward-looking
 statements to reflect events or circumstances after the date hereof.
 
 
                              QUEST SOFTWARE, INC.
                PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                  Three Months Ended March 31,
                                                         2001           2000
     Revenues:
       Licenses                                       $48,429        $21,895
       Services                                        14,683          6,830
         Total revenues                                63,112         28,725
     Cost of revenues:
       Licenses                                           889            635
       Services                                         4,078          1,870
         Total cost of revenues                         4,967          2,505
     Gross profit                                      58,145         26,220
     Operating expenses:
       Sales and marketing                             30,860         13,914
       Research and development                        13,930          7,366
       General and administrative                       6,353          3,097
         Total operating expenses                      51,143         24,377
     Pro forma income from operations                   7,002          1,843
     Other income, net                                  1,777            979
     Pro forma income before income tax provision       8,779          2,822
     Pro forma income tax provision                     3,512          1,129
     Pro forma net income                              $5,267         $1,693
 
     Pro forma net income per share:
       Basic                                            $0.06          $0.02
       Diluted                                          $0.06          $0.02
 
     Pro forma weighted average shares:
       Basic                                           87,016         81,371
       Diluted                                         91,001         87,540
 
 
                              QUEST SOFTWARE, INC.
                          CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                     ASSETS
 
                                                    (Unaudited)
                                                     March 31,    December 31,
                                                       2001           2000
     Current assets:
       Cash and cash equivalents                      $35,169        $25,155
       Short-term marketable securities                 9,873          8,587
       Accounts receivable, net                        36,347         38,443
       Prepaid expenses and other current assets       11,456         11,390
       Income taxes receivable                          1,582          1,558
       Deferred income taxes                           14,786         14,833
         Total current assets                         109,213         99,966
     Property and equipment, net                       56,816         46,840
     Long-term marketable securities                  115,717        118,084
     Goodwill and purchased intangible assets, net    238,807        255,858
     Deferred income taxes                              3,002          3,001
     Other assets                                      10,308         10,423
         Total assets                                $533,863       $534,172
 
                        LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                                $5,122         $5,503
       Accrued compensation                            10,111          9,350
       Other accrued expenses                          18,468         22,491
       Deferred revenue                                40,299         32,052
         Total current liabilities                     74,000         69,396
 
     Long-term liabilities and other                    6,305          6,422
 
     Shareholders' equity                             453,558        458,354
         Total liabilities and
          shareholders' equity                       $533,863       $534,172
 
 
                              QUEST SOFTWARE, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                  Three Months Ended March 31,
                                                        2001           2000
     Revenues:
       Licenses                                       $48,429        $21,895
       Services                                        14,683          6,830
         Total revenues                                63,112         28,725
     Cost of revenues:
       Licenses                                           889            635
       Services                                         4,078          1,870
       Amortization of purchased intangible assets      2,035            657
         Total cost of revenues                         7,002          3,162
     Gross profit                                      56,110         25,563
     Operating expenses:
       Sales and marketing                             30,860         13,914
       Research and development                        13,930          7,366
       General and administrative                       6,353          3,097
       Other compensation costs and
        intangible amortization                        15,982          7,378
         Total operating expenses                      67,125         31,755
     Loss from operations                             (11,015)        (6,192)
     Other income, net                                  1,777            979
     Loss before income tax provision                  (9,238)        (5,213)
     Income tax provision                               5,543            472
     Net loss                                        $(14,781)       $(5,685)
 
     Net loss per share:
       Basic                                          $(0.17)        $(0.07)
       Diluted                                        $(0.17)        $(0.07)
 
     Weighted average shares:
       Basic                                           87,016         81,371
       Diluted                                         87,016         81,371
 
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000920/QSFTLOGO )
 
     For further information please contact:  Nicole Makos of Quest Software,
 Inc., 949-754-8536, nicole.makos@quest.com
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X37740370
 
 SOURCE  Quest Software, Inc.