Earnings Press Releases
Oracle Reports $0.16 Cents Per Share in Q1, Net Income Increases 21%
Management Sees Strong Growth and Improved Margins for the Year
REDWOOD SHORES, Calif., September 14, 1999 -- Oracle
Corporation (Nasdaq: ORCL) today announced record first quarter results for
the period ended August 31, 1999. For the quarter, revenue grew 13% to $2.0
billion while net income increased 21% to $237 million, or $0.16 per share.
This compares to revenue of $1.7 billion and net income of $195 million, or
$0.13 per share, for the same period a year ago.
Overall, Q1 software license and other revenue grew 9% year-over-year.
Specifically, database software sales increased 8% to $443 million and
applications software sales increased 11%, to $109 million, versus Q1 last
year. Total services revenue increased 16% versus Q1 last year, to $1,352
million.
Oracle reported continued growth in Americas and EMEA (Europe, Middle East
and Africa) and significant improvement in Asia Pacific. Americas revenue was
up 12% (14% in local currencies) year-over-year and EMEA was up 9% (13% in
local currencies) year-over-year. Asia Pacific reported 34% growth (15% in
local currencies) year-over-year, reflecting improvement in economic
conditions in the Asia Pacific region.
"Based on our current pipelines the entire management team believes that
the overall year should be very strong," said Larry Ellison, CEO and Chairman,
Oracle Corporation. "Specifically we expect that Oracle's software sales will
grow faster this year than last. And margins should continue to improve as
well."
"Oracle is quickly turning into an e-business. We are using our own
software to improve the way we sell to and service our customers," said Jeff
Henley, Chief Financial Officer, Oracle Corporation. "This quarter we just
opened Oracle's new Internet store. Within 18 months we expect as much as 80%
of Oracle's revenue will go through our new web store. This is another
example of using our own technology and applications to become an e-business.
When we complete transforming our business into an e-business, we expect to
save $1 billion per year."
Oracle made a number of significant announcements during the quarter:
-- On July 28, 1999 -- Oracle announced the Oracle Exchange, the world's
first open business-to-business online marketplace. Oracle Exchange
will provide an e-business procurement community where any company can
buy business goods and services over the Internet, using any purchasing
technique. Unlike competitive offerings that can only link customers
with those suppliers who use the same proprietary software, Oracle
Exchange, similar to current online auction sites, will be available to
any company and does not require Oracle software.
-- On August 31, 1999 -- Oracle introduced the Oracle .com Suite, a
software and services offering designed to help early stage Internet
companies lay sophisticated technology foundations on day one. The
Oracle .com Suite is a bundled solution that includes Oracle8i, Oracle
Application Server, Oracle JServer, JDeveloper, and WebDB at a starting
price of $9,995. This brings together Oracle's Internet Platform
technology in an affordable package to smoothly carry start-ups through
the rapid growth stage into mature .com enterprise players.
-- On July 19, 1999 -- Oracle announced the general availability of
Oracle8i on Linux, after a successful early adopter's program. Since
Oracle announced Oracle8 on Linux, there have been over 50,000
downloads from Oracle Technology Network (http://technet.oracle.com/ ).
Now, after the announcement of Oracle8i, there have been nearly 20,000
registrants for early access in the first few weeks. Outside the
development community, Oracle has also seen overwhelming
customer adoption with an excess of 800 paying customers today -- over
half of these orders from enterprise accounts and the remainder from
small to mid-sized businesses and organizations.
-- On June 28, 1999 -- Oracle announced plans to deliver the first and
only Internet-based Advanced Planning and Scheduling (APS) solution to
optimize e-business processes for planning and scheduling across the
extended supply chain. The solution is expected to allow implementation
in as little as one day, enabling businesses to begin realizing return
on their APS investment immediately. APS is intended to enable
businesses to optimize their supply chains in order to maximize
revenues, minimize expenses and make full use of all assets.
Oracle Corporation is the world's second largest software company. With
annual revenues of more than $9.1 billion, Oracle offers its database, tools
and application products, along with related consulting, education, and
support services, in more than 145 countries around the world.
For more information about Oracle, please call Oracle Investor Relations
at 650-506-4073 or see Oracle's World Wide Web page: (URL) http://www.oracle.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act
1995:
Information in this release relating to Oracle's future prospects which
are "forward-looking statements" are subject to certain risks and
uncertainties that could cause actual results to differ materially, including,
but not necessarily limited to the following: (1)Management's ability to
manage growth, continuously hire and retain significant numbers of qualified
employees, forecast revenues and control expenses continues to be a challenge.
An unexpected decline in the growth rate of revenues without a corresponding
and timely slowdown in expense growth could have a material adverse effect on
results of operations. (2) The market for Oracle's products is intensely
competitive and is characterized by rapid technological advances and frequent
new product introductions. There can be no assurances that Oracle will
continue to introduce new products and new versions of existing products that
keep pace with technological developments, satisfy increasingly sophisticated
customer requirements and achieve market acceptance. (3) Intense competition
in the various markets in which Oracle competes may put pressure on Oracle to
reduce prices on certain products. (4) Delays in product delivery or closing
of sales can cause quarterly revenues and income to fall significantly short
of anticipated levels. (5) Oracle is introducing new products, such as
Internet computing software, customer relationship management applications and
application hosting services; the market acceptance and contribution to
Oracle's revenues of these products cannot be assured. (6) As the year 2000
approaches, many companies have been testing and modifying their systems to
ensure their ability to accommodate the change in date to the year 2000.
Oracle expects that many companies will postpone the purchase of new software
products until after the year 2000, in order to assure the continuing ability
of their information systems to handle the year 2000 date change. This could
cause the software industry and Oracle to experience a significant decrease in
the demand for new products. In prior quarters, demand for database and
applications software may have been generated by customers in the process of
replacing and upgrading their software in order to accommodate the change in
date to the year 2000. As customers complete such preparations, the software
industry and Oracle may experience a significant deceleration from the growth
rates previously experienced in the database and applications software
marketplace. In addition, Oracle may generally experience increased expenses
in addressing issues associated with the transition to software that is year
2000 compliant. Oracle undertakes no obligation to update information
contained in this release. For further information regarding risks and
uncertainties associated with Oracle's business, please refer to the "Risk
Factors" section of Oracle Corporation's SEC filings, including, but not
limited to, its annual report on Form 10-K, copies of which may be obtained by
contacting Oracle Corporation's Investor Relations Department at 650-506-4073
or Oracle's Investor Relations website at http://www.oracle.com/.
ORACLE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share data)
(unaudited)
1st Quarter Ended
August 31,
-----------------------
1999 1998
---- ----
REVENUES
Licenses and other $ 632,181 $ 582,464
Services 1,352,336 1,166,646
---------- ----------
Total Revenues 1,984,517 1,749,110
---------- ----------
OPERATING EXPENSES
Sales and marketing 538,426 510,076
Cost of services 756,750 679,290
Research and development (1) 235,941 187,623
General and administrative 107,537 94,284
---------- ----------
Total Operating Expenses 1,638,654 1,471,273
---------- ----------
OPERATING INCOME 345,863 277,837
Other income 18,347 22,166
---------- ----------
INCOME BEFORE TAXES 364,210 300,003
Provision for income taxes 127,474 105,001
---------- ----------
NET INCOME $ 236,736 $ 195,002
========== ==========
EARNINGS PER SHARE (2)
Basic $ 0.17 $ 0.13
Diluted $ 0.16 $ 0.13
Shares Outstanding
Basic 1,430,460 1,459,341
Diluted 1,491,201 1,483,724
(1) In accordance with Statement of Financial Accounting Standards No.
86, $3,807 and $7,140 were capitalized in the quarters ended August
31, 1999 and 1998, respectively. Amortization of capitalized software
costs was $3,485 and $7,321 in the quarters ended August 31, 1999 and
1998, respectively.
(2) All earnings per share and shares outstanding amounts have been
adjusted to reflect a 3:2 stock split during Q3 fiscal 1999.
ORACLE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
August 31, May 31,
1999 1999
---- ----
(unaudited)
ASSETS
Current Assets
Cash and short term investments $ 2,721,749 $ 2,562,764
Trade receivables, net 1,514,095 2,238,204
Prepaid and refundable income taxes 296,471 299,670
Other current assets 304,181 346,636
---------- ----------
Total Current Assets 4,836,496 5,447,274
---------- ----------
Long-term cash investments 208,475 249,547
Property and equipment, net 966,098 987,482
Computer software development costs, net 99,192 98,870
Other assets 469,138 476,481
---------- ----------
TOTAL ASSETS $ 6,579,399 $ 7,259,654
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable, including current maturities $ 3,580 $ 3,638
Accounts payable 255,369 283,896
Income taxes 157,267 277,700
Customer advances and unearned revenues 1,089,684 1,007,149
Other current liabilities 1,043,422 1,474,040
---------- ----------
Total Current Liabilities 2,549,322 3,046,423
---------- ----------
Long-term debt 300,806 304,140
Long-term liabilities 71,151 77,937
Deferred income taxes 157,645 135,887
Stockholders' equity 3,500,475 3,695,267
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,579,399 $ 7,259,654
============ ============
Web site: http://www.oracle.com
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