Income from Recurring Operations Increases 28 Percent
PLEASANTON, Calif. - April 25, 2002 - PeopleSoft, Inc. (Nasdaq: PSFT) today announced its first quarter 2002 results. For the first quarter ended March 31, 2002, income from recurring operations increased 28 percent to $46 million, or $0.14 per share, up from $36 million, or $0.11 per share in the same quarter of 2001.
Software license revenue was negatively impacted by the slowdown in technology spending, declining 13 percent to $133 million, from $153 million in the first quarter of 2001. Service revenue was $342 million, an increase of 4 percent from $330 million in the first quarter of 2001. Total revenue for the first quarter of 2002 was $483 million, a decline of 6 percent from $514 million in the first quarter of 2001.
Total operating expenses from recurring operations were $420 million, a 10 percent reduction from the first quarter of 2001. As a result, operating margin from recurring operations increased significantly to $63 million, an increase of $17 million, or 37 percent, from $46 million in the first quarter of 2001. Operating margins from recurring operations, as a percentage of revenue, also improved to 13.1 percent, from 9.0 percent in the same quarter of last year.
The Company's cash and investment balances at March 31, 2002 were $1.82 billion, an increase of $149 million during the first quarter. Days Sales Outstanding (DSO) at March 31, 2002 declined to 58 days, an improvement from 63 days at December 31, 2001.
"PeopleSoft was not immune to the slowdown in technology spending in the first quarter," said PeopleSoft President and CEO Craig Conway. "However, our financial results were generally positive and were comparatively the strongest in the industry. We increased our income from recurring operations 28 percent over the same period last year. We grew service revenues. We met our EPS guidance of 14 cents. We increased cash and investments by $149 million. We also improved our operating margins and we further reduced our industry-low DSO.
"PeopleSoft remains uniquely positioned in the industry," Conway added. "PeopleSoft's best-of-breed applications built on our Pure Internet ArchitectureTM give us a competitive advantage as companies around the world continue to move their business processes online and operate in real time. PeopleSoft is clearly an extremely strong, financially stable company with a focused, high caliber management team, and we are poised for continued success as the tech spending environment improves," Conway concluded.
PeopleSoft won significant deals against its competitors in the first quarter in all product lines and across all geographies. Organizations buying PeopleSoft enterprise applications included: Applied Materials, California State University, Capital One Services Group, Children's Hospital of Los Angeles, CIT Group, Duke Energy, EDS, Ford Motor Company, Hewlett-Packard Company, HSBC, Merrill Lynch, Michelin, Mitsui, New York State Teachers Retirement System, New Zealand Post, Nextel, NTT Comware Corp., Sears Roebuck & Company, Siemens, Societe Generale, and Time Warner Cable.
Income Including Non-Recurring Items
The results for the first quarter of 2002 include a non-recurring acquisition-related charge of $2.8 million ($1.7 million after-tax). Including this non-recurring item, net income for the first quarter of 2002 was $45 million, or $0.14 per share, equal to the per share results from recurring operations.
Results for the first quarter of 2001 do not include any non-recurring items.
PeopleSoft EMEA Performance
In Europe, the Middle East and Africa (EMEA), PeopleSoft's total revenue for the quarter ended March 31, 2002 increased 3 percent over the same quarter last year, assuming constant currency exchange rates.
Steve Rowley, senior vice president and general manager EMEA, commented: "In Europe we were not immune to global market conditions. However, PeopleSoft EMEA signed a number of blue-chip customers, reaffirming our leadership and the strength of our solutions in the enterprise applications market."
The following organizations signed PeopleSoft license agreements during the first quarter: HSBC, DNB, Lufthansa, BDO Stoy Hayward, Belgacom SA, Societe Generale Group, SA, Deutsche Bahn and Etat de Vaud.
PeopleSoft (Nasdaq: PSFT) is the world's leading provider of business enterprise software. PeopleSoft pure Internet software enables organizations to reduce costs and increase productivity through real-time collaboration with their customers, suppliers, and employees. PeopleSoft's integrated, best-of-breed applications include Customer Relationship Management, Supply Chain Management, Human Resource Management, Financial Management, and Application Infrastructure. More than 4,700 organizations in 107 countries run on PeopleSoft software. For more information, visit us at www.peoplesoft.com.