VERITAS(R) Software Reports Record First Quarter Results; Revenue Up 58% to $387 Million for the Quarter

Pro forma Earnings Per Share up 75%



Apr 17, 2001, 01:00 ET from VERITAS Software Corporation

    MOUNTAIN VIEW, Calif., April 17 /PRNewswire/ --
 VERITAS Software Corporation (Nasdaq:   VRTS), The Data Availability Company,
 today announced record financial results for its first quarter ended March 31,
 2001. The Company achieved first quarter revenue of $387 million, an increase
 of 58% over last year's first quarter revenue of $245 million. Pro forma net
 income, excluding purchase accounting adjustments, increased to $87 million in
 the first quarter from $52 million for the same period in the prior year, a
 68% increase.  Diluted pro forma net income per share for the first quarter
 was $0.21, up 75% from $0.12 for the same period last year.
     For the first quarter, on an as-reported basis with purchase accounting
 adjustments for acquisitions, VERITAS Software reported a net loss of $156
 million, or $0.40 per share, compared with a net loss of $174 million, or
 $0.44 per share for the prior period.  Purchase accounting amortization
 amounted to $237 million in the current quarter and $235 million in last
 year's first quarter.
     "Data availability continues to increase in importance for our customers
 as they maximize the business value of their key corporate asset: data. Our
 continued market share gains and rapid product delivery allowed us to deliver
 outstanding financial results for the first quarter of 2001," said Gary Bloom,
 chief executive officer and president, VERITAS Software.  "Going forward, we
 believe our prior guidance of 45-50% annual revenue growth continues to be an
 attainable goal, but the weakness in the economic environment is leading us to
 broaden our revenue guidance range by reducing the low end of the range to
 35%, setting the new range at 35-50% growth for the year."
     "Our results for the quarter were exceptional by all financial measures.
 We demonstrated balanced growth, with significant contributions coming from
 all channels, regions and product lines," said Ken Lonchar, senior vice
 president and chief financial officer, VERITAS Software. "In addition to
 record profitability, we also demonstrated great cash flow during the quarter,
 with our cash position increasing to $1.36 billion, an increase of over $100
 million for the quarter.  Financially we are extremely well positioned,
 allowing us to continue investing to increase our market penetration and to
 gain share from our competitors."
     The Company has added an additional financial table to its earnings
 release: "Pro forma Statements of Operations."  These pro forma statements are
 intended to present the Company's operating results excluding purchase
 accounting adjustments.
     The Company will host a conference call on Tuesday, April 17 at 2:00 p.m.
 Pacific Time, 5:00 p.m. Eastern Time, to discuss its results. The conference
 call will be broadcast live via the Internet at www.veritas.com and
 www.nasdaq.com.  The conference call will also be available live in a listen-
 only format at 913-981-4900.  A replay will be available until April 24, 2001
 at 719-457-0820, replay code: 524528.
 
     About VERITAS Software The Data Availability Company(TM)
     VERITAS Software Corporation provides essential data availability software
 solutions that enable customers to protect and access their business-critical
 data for Business Without Interruption(TM). The Company's corporate
 headquarters is located at 1600 Plymouth Street, Mountain View, CA 94043.
 Telephone: 650-527-8000. Fax: 650-527-8050. Email: vx-sales@veritas.com. WWW
 site: http://www.veritas.com.
 
      For Further Information Contact:
      Ken Lonchar, Senior Vice President and CFO, VERITAS Software
      650-527-2501, ken.lonchar@veritas.com
 
      Dave Galiotto, Vice President of Finance/Investor Relations, VERITAS
       Software
      650-527-4047, dave.galiotto@veritas.com
 
      Erin Jones, Public Relations Director, VERITAS Software
      805-783-4528, erin.jones@veritas.com
 
     This press release may include estimates and forward-looking statements
 within the meaning of the Securities Act of 1933 and the Securities Exchange
 Act of 1934.  These forward-looking statements involve a number of risks and
 uncertainties, including the risk that we may not gain market acceptance of
 our products and services, the risk that we will not be able to maintain the
 quality of our end-user customer and partnering relationships, and the risk
 that will not be able to manage our business effectively, that could cause the
 actual results we achieve to differ materially from such forward-looking
 statements. For more information regarding potential risks, see the "Factors
 That May Affect Future Results" section of our most recent report on Form 10-K
 on file with the SEC.  We undertake no obligation to update any forward-
 looking statement to reflect events or circumstances after the date hereof.
 
     VERITAS, VERITAS Software, the VERITAS logo, Business Without Interruption
 and other product names are trademarks or registered trademarks of VERITAS
 Software Corporation in the US and other countries. Other product names
 mentioned herein may be trademarks and/or registered trademarks of their
 respective companies.
 
 
                          VERITAS SOFTWARE CORPORATION
                       PRO FORMA STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                          2001       2000
     Net revenue:
       User license fees                                $309,017   $204,316
       Services                                           78,424     40,324
         Total net revenue                               387,441    244,640
     Cost of revenue:
       User license fees                                  10,668     11,778
       Services                                           31,670     18,299
         Total cost of revenue                            42,338     30,077
     Gross profit                                        345,103    214,563
     Operating expenses:
       Selling and marketing                             142,805     87,583
       Research and development                           56,225     35,113
       General and administrative                         25,904     14,911
         Total operating expenses                        224,934    137,607
     Income from operations                              120,169     76,956
     Interest and other income, net                       18,628     11,263
     Interest expense                                     (6,969)    (7,523)
     Income before income taxes                          131,828     80,696
     Provision for income taxes                           44,822     29,051
     Pro forma net income                                $87,006    $51,645
     Pro forma net income per share - basic                $0.22      $0.13
     Pro forma net income per share - diluted              $0.21      $0.12
     Shares used in per share calculation - basic        394,829    394,471
     Shares used in per share calculation - diluted      420,154    437,107
 
     The pro forma statements of operations are intended to present the
 Company's operating results excluding purchase accounting adjustments.
 Purchase accounting adjustments would include amortization of developed
 technology, amortization of goodwill and intangibles, in-process research and
 development costs, acquisition and restructuring costs, and related
 adjustments for income tax provisions.
 
 
                          VERITAS SOFTWARE CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                       Three Months Ended
                                                            March 31,
                                                        2001        2000
 
     Net revenue:
       User license fees                              $309,017    $204,316
       Services                                         78,424      40,324
         Total net revenue                             387,441     244,640
     Cost of revenue:
       User license fees                                10,668      11,778
       Services                                         31,670      18,299
       Amortization of developed technology             15,791      15,395
         Total cost of revenue                          58,129      45,472
     Gross profit                                      329,312     199,168
     Operating expenses:
       Selling and marketing                           142,805      87,583
       Research and development                         56,225      35,113
       General and administrative                       25,904      14,911
       Amortization of goodwill and other intangibles  221,226     219,759
         Total operating expenses                      446,160     357,366
     Loss from operations                             (116,848)   (158,198)
     Interest and other income, net                     18,628      11,263
     Interest expense                                   (6,969)     (7,523)
     Loss before income taxes                         (105,189)    (154,458)
     Provision for income taxes                         50,909       19,925
     Net loss                                        $(156,098)   $(174,383)
     Net loss per share - basic                         $(0.40)      $(0.44)
     Net loss per share - diluted                       $(0.40)      $(0.44)
     Shares used in per share calculation - basic      394,829      394,471
     Shares used in per share calculation - diluted    394,829      394,471
 
 
                          VERITAS SOFTWARE CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                      March 31,  December 31,
                                                        2001        2000
                                                     (Unaudited)
                                 ASSETS
 
     Current assets:
       Cash and short-term investments               $1,244,819  $1,119,449
       Accounts receivable, net                         163,551     186,863
       Deferred income taxes                             38,017      38,017
       Other current assets                              38,415      38,303
         Total current assets                         1,484,802   1,382,632
     Long-term investments                              119,816     136,111
     Property and equipment                             186,052     168,389
     Goodwill and other intangibles                   2,082,105   2,285,320
     Other non-current assets                           114,962     110,382
         Total assets                                $3,987,737  $4,082,834
 
                 LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                                 $44,515     $45,250
       Accrued compensation and benefits                 49,634      63,838
       Accrued acquisition and restructuring costs       18,353      44,123
       Other accrued liabilities                         69,818      69,289
       Income taxes payable                              33,926      34,454
       Deferred revenue                                 215,127     201,001
         Total current liabilities                      431,373     457,955
     Non-current liabilities:
       Convertible subordinated notes                   432,653     429,176
       Deferred and other income taxes                  198,252     213,132
         Total non-current liabilities                  630,905     642,308
     Stockholders' equity                             2,925,459   2,982,571
         Total liabilities and stockholders' equity  $3,987,737  $4,082,834
 
 

SOURCE VERITAS Software Corporation
    MOUNTAIN VIEW, Calif., April 17 /PRNewswire/ --
 VERITAS Software Corporation (Nasdaq:   VRTS), The Data Availability Company,
 today announced record financial results for its first quarter ended March 31,
 2001. The Company achieved first quarter revenue of $387 million, an increase
 of 58% over last year's first quarter revenue of $245 million. Pro forma net
 income, excluding purchase accounting adjustments, increased to $87 million in
 the first quarter from $52 million for the same period in the prior year, a
 68% increase.  Diluted pro forma net income per share for the first quarter
 was $0.21, up 75% from $0.12 for the same period last year.
     For the first quarter, on an as-reported basis with purchase accounting
 adjustments for acquisitions, VERITAS Software reported a net loss of $156
 million, or $0.40 per share, compared with a net loss of $174 million, or
 $0.44 per share for the prior period.  Purchase accounting amortization
 amounted to $237 million in the current quarter and $235 million in last
 year's first quarter.
     "Data availability continues to increase in importance for our customers
 as they maximize the business value of their key corporate asset: data. Our
 continued market share gains and rapid product delivery allowed us to deliver
 outstanding financial results for the first quarter of 2001," said Gary Bloom,
 chief executive officer and president, VERITAS Software.  "Going forward, we
 believe our prior guidance of 45-50% annual revenue growth continues to be an
 attainable goal, but the weakness in the economic environment is leading us to
 broaden our revenue guidance range by reducing the low end of the range to
 35%, setting the new range at 35-50% growth for the year."
     "Our results for the quarter were exceptional by all financial measures.
 We demonstrated balanced growth, with significant contributions coming from
 all channels, regions and product lines," said Ken Lonchar, senior vice
 president and chief financial officer, VERITAS Software. "In addition to
 record profitability, we also demonstrated great cash flow during the quarter,
 with our cash position increasing to $1.36 billion, an increase of over $100
 million for the quarter.  Financially we are extremely well positioned,
 allowing us to continue investing to increase our market penetration and to
 gain share from our competitors."
     The Company has added an additional financial table to its earnings
 release: "Pro forma Statements of Operations."  These pro forma statements are
 intended to present the Company's operating results excluding purchase
 accounting adjustments.
     The Company will host a conference call on Tuesday, April 17 at 2:00 p.m.
 Pacific Time, 5:00 p.m. Eastern Time, to discuss its results. The conference
 call will be broadcast live via the Internet at www.veritas.com and
 www.nasdaq.com.  The conference call will also be available live in a listen-
 only format at 913-981-4900.  A replay will be available until April 24, 2001
 at 719-457-0820, replay code: 524528.
 
     About VERITAS Software The Data Availability Company(TM)
     VERITAS Software Corporation provides essential data availability software
 solutions that enable customers to protect and access their business-critical
 data for Business Without Interruption(TM). The Company's corporate
 headquarters is located at 1600 Plymouth Street, Mountain View, CA 94043.
 Telephone: 650-527-8000. Fax: 650-527-8050. Email: vx-sales@veritas.com. WWW
 site: http://www.veritas.com.
 
      For Further Information Contact:
      Ken Lonchar, Senior Vice President and CFO, VERITAS Software
      650-527-2501, ken.lonchar@veritas.com
 
      Dave Galiotto, Vice President of Finance/Investor Relations, VERITAS
       Software
      650-527-4047, dave.galiotto@veritas.com
 
      Erin Jones, Public Relations Director, VERITAS Software
      805-783-4528, erin.jones@veritas.com
 
     This press release may include estimates and forward-looking statements
 within the meaning of the Securities Act of 1933 and the Securities Exchange
 Act of 1934.  These forward-looking statements involve a number of risks and
 uncertainties, including the risk that we may not gain market acceptance of
 our products and services, the risk that we will not be able to maintain the
 quality of our end-user customer and partnering relationships, and the risk
 that will not be able to manage our business effectively, that could cause the
 actual results we achieve to differ materially from such forward-looking
 statements. For more information regarding potential risks, see the "Factors
 That May Affect Future Results" section of our most recent report on Form 10-K
 on file with the SEC.  We undertake no obligation to update any forward-
 looking statement to reflect events or circumstances after the date hereof.
 
     VERITAS, VERITAS Software, the VERITAS logo, Business Without Interruption
 and other product names are trademarks or registered trademarks of VERITAS
 Software Corporation in the US and other countries. Other product names
 mentioned herein may be trademarks and/or registered trademarks of their
 respective companies.
 
 
                          VERITAS SOFTWARE CORPORATION
                       PRO FORMA STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                          2001       2000
     Net revenue:
       User license fees                                $309,017   $204,316
       Services                                           78,424     40,324
         Total net revenue                               387,441    244,640
     Cost of revenue:
       User license fees                                  10,668     11,778
       Services                                           31,670     18,299
         Total cost of revenue                            42,338     30,077
     Gross profit                                        345,103    214,563
     Operating expenses:
       Selling and marketing                             142,805     87,583
       Research and development                           56,225     35,113
       General and administrative                         25,904     14,911
         Total operating expenses                        224,934    137,607
     Income from operations                              120,169     76,956
     Interest and other income, net                       18,628     11,263
     Interest expense                                     (6,969)    (7,523)
     Income before income taxes                          131,828     80,696
     Provision for income taxes                           44,822     29,051
     Pro forma net income                                $87,006    $51,645
     Pro forma net income per share - basic                $0.22      $0.13
     Pro forma net income per share - diluted              $0.21      $0.12
     Shares used in per share calculation - basic        394,829    394,471
     Shares used in per share calculation - diluted      420,154    437,107
 
     The pro forma statements of operations are intended to present the
 Company's operating results excluding purchase accounting adjustments.
 Purchase accounting adjustments would include amortization of developed
 technology, amortization of goodwill and intangibles, in-process research and
 development costs, acquisition and restructuring costs, and related
 adjustments for income tax provisions.
 
 
                          VERITAS SOFTWARE CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                       Three Months Ended
                                                            March 31,
                                                        2001        2000
 
     Net revenue:
       User license fees                              $309,017    $204,316
       Services                                         78,424      40,324
         Total net revenue                             387,441     244,640
     Cost of revenue:
       User license fees                                10,668      11,778
       Services                                         31,670      18,299
       Amortization of developed technology             15,791      15,395
         Total cost of revenue                          58,129      45,472
     Gross profit                                      329,312     199,168
     Operating expenses:
       Selling and marketing                           142,805      87,583
       Research and development                         56,225      35,113
       General and administrative                       25,904      14,911
       Amortization of goodwill and other intangibles  221,226     219,759
         Total operating expenses                      446,160     357,366
     Loss from operations                             (116,848)   (158,198)
     Interest and other income, net                     18,628      11,263
     Interest expense                                   (6,969)     (7,523)
     Loss before income taxes                         (105,189)    (154,458)
     Provision for income taxes                         50,909       19,925
     Net loss                                        $(156,098)   $(174,383)
     Net loss per share - basic                         $(0.40)      $(0.44)
     Net loss per share - diluted                       $(0.40)      $(0.44)
     Shares used in per share calculation - basic      394,829      394,471
     Shares used in per share calculation - diluted    394,829      394,471
 
 
                          VERITAS SOFTWARE CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                      March 31,  December 31,
                                                        2001        2000
                                                     (Unaudited)
                                 ASSETS
 
     Current assets:
       Cash and short-term investments               $1,244,819  $1,119,449
       Accounts receivable, net                         163,551     186,863
       Deferred income taxes                             38,017      38,017
       Other current assets                              38,415      38,303
         Total current assets                         1,484,802   1,382,632
     Long-term investments                              119,816     136,111
     Property and equipment                             186,052     168,389
     Goodwill and other intangibles                   2,082,105   2,285,320
     Other non-current assets                           114,962     110,382
         Total assets                                $3,987,737  $4,082,834
 
                 LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                                 $44,515     $45,250
       Accrued compensation and benefits                 49,634      63,838
       Accrued acquisition and restructuring costs       18,353      44,123
       Other accrued liabilities                         69,818      69,289
       Income taxes payable                              33,926      34,454
       Deferred revenue                                 215,127     201,001
         Total current liabilities                      431,373     457,955
     Non-current liabilities:
       Convertible subordinated notes                   432,653     429,176
       Deferred and other income taxes                  198,252     213,132
         Total non-current liabilities                  630,905     642,308
     Stockholders' equity                             2,925,459   2,982,571
         Total liabilities and stockholders' equity  $3,987,737  $4,082,834
 
 SOURCE  VERITAS Software Corporation