Sybase, Inc. (NYSE:SY), the largest enterprise software and
services company exclusively focused on managing and mobilizing
information, today reported financial results for the second
quarter ended June 30, 2008. Highlights: Total revenue of $282.7
million, up 15% year over year License revenue increased 17% year
over year Services revenue increased 8% year over year Database
license revenue increased 38% year over year Messaging revenue
increased 41% year over year GAAP operating margin of 18%, versus
15% a year ago; non-GAAP operating margin of 23%, versus 20% a year
ago GAAP net income of $32.4 million, up 24% year over year; GAAP
EPS up 31% year over year Non-GAAP net income of $43.0 million, up
26% year over year; non-GAAP EPS up 33% year over year Cash flow
from operations of $62.7 million, up 16% year over year Management
raises full-year guidance for revenue, earnings, and cash flow from
operations 2008 Second Quarter Results Total revenue for the second
quarter of 2008 increased 15% to $282.7 million from $245.0 million
in the second quarter of 2007. License revenue grew 17% to $90.5
million from $77.4 million in the second quarter of 2007. Services
revenue increased 8% to $146.6 million from $135.2 million a year
ago. Messaging revenue grew 41% to $45.6 million from $32.4 million
a year ago. For the second quarter, operating income calculated in
accordance with generally accepted accounting principles (GAAP)
increased 44% year over year to $51.1 million, representing an
operating margin of 18%. This compares with GAAP operating income
of $35.6 million and an operating margin of 15% a year ago. GAAP
net income increased 24% year over year to $32.4 million from $26.0
million a year ago. GAAP earnings per diluted share (EPS) increased
31% to $0.37 for the 2008 second quarter from $0.28 for the second
quarter of 2007. Non-GAAP operating income for the second quarter
increased 33% year over year to $63.7 million, representing a 23%
operating margin. This compares with non-GAAP operating income of
$47.8 million, representing a 20% operating margin, in the 2007
second quarter. Non-GAAP net income for the 2008 second quarter
increased 26% to $43.0 million from $34.3 million for the second
quarter of 2007. Non-GAAP EPS for the 2008 second quarter increased
33% to $0.49 from $0.37 for the second quarter of 2007. Non-GAAP
amounts exclude the amortization of certain purchased intangibles,
stock-based compensation, restructuring costs, charges related to
the impairment of auction rate securities, and the tax effect of
these and related items. Accompanying this release is a
reconciliation from GAAP to non-GAAP amounts for the second quarter
of 2008. �I am extremely pleased with our strong performance in the
second quarter of 2008,� stated John Chen, chairman, CEO and
president of Sybase. �We have now delivered three consecutive
record quarters, four consecutive quarters exceeding Street
consensus revenue, and 16 consecutive quarters exceeding consensus
earnings.� Added Mr. Chen, �Our ongoing success is attributable to
growing market acceptance of our Unwired Enterprise strategy. We
are excited about our prospects for continued growth, driven by our
flagship enterprise database, IQ analytics server, mobile
middleware, and mobile messaging. Additional growth catalysts
expected to enhance our momentum include new offerings such as risk
analytics, data clustering, Mobile Office, mobile banking, and
next-generation mobile messaging. �Notwithstanding the
macro-economic cross-currents, our business pipeline remains
healthy, and we are confident in our team�s ability to execute. As
a result, we are again raising our 2008 revenue, earnings, and cash
flow targets, which put us on track to deliver yet another record
full-year performance,� concluded Mr. Chen. Balance Sheet and Other
Data At June 30, 2008, Sybase reported $606.4 million in cash and
cash investments, including long-term cash investments of $22.7
million and restricted cash of $3.7 million. In the second quarter,
the company generated $62.7 million in cash flow from operations.
There remains $82.9 million authorized under the company�s current
share repurchase program. Days sales outstanding (DSO) for the
second quarter was 75. Guidance For the third quarter ending
September 30, 2008, management anticipates total revenue in the
range of $270 million to $275 million. Management anticipates
non-GAAP fully diluted EPS in the range of $0.48 to $0.50 and GAAP
EPS in the range of $0.38 to $0.40. Management is raising guidance
for full-year 2008 revenue, earnings, and cash flow from operations
due to the company�s stronger-than-expected performance in the
second quarter of 2008. Management now anticipates total revenue of
approximately $1.11 billion. Non-GAAP EPS is now anticipated in the
range of $1.98 to $2.00, and GAAP EPS is anticipated in the range
of $1.53 to $1.55. Management now anticipates cash flow from
operations of approximately $250 million. A reconciliation from the
company�s previous full-year 2008 EPS guidance range to the current
guidance range is as follows: Reconciliation of 2008 EPS Guidance
Range � � � � GAAP Non-GAAP � 2008 EPS guidance range on April 24,
2008 $ 1.51 $ 1.56 $ 1.94 $ 1.99 � Increase due to operations 0.09
0.06 0.09 0.06 Decrease due to auction rate securities (0.03 )
(0.03 ) 0.00 0.00 Decrease due to convert dilution from higher
share price � (0.04 ) � (0.04 ) � (0.05 ) � (0.05 ) 2008 EPS
guidance range on July 23, 2008 $ 1.53 � $ 1.55 � $ 1.98 � $ 2.00 �
� � Please see "Note Regarding Non-GAAP Financial Measures" for
important information regarding Non-GAAP Financial Measures. �
Accompanying this release is a reconciliation from projected GAAP
to non-GAAP amounts for the estimated 2008 third quarter and full
year results. Conference Call and Webcast Information The Sybase
2008 second quarter conference call and simultaneous Webcast is
scheduled to begin at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time
on Wednesday, July 23, 2008. To access the live Webcast, please
visit www.fulldisclosure.com or Sybase�s Website at www.sybase.com
at least 20 minutes prior to the call to download any necessary
audio or plug-in software. A telephone replay will be available
approximately two hours after the conference call ends and will be
available until 10:00 p.m. Pacific Time on July 30, 2008. To access
the replay, please dial (888) 203-1112 for domestic access and
(719) 457-0820 for international callers; the access code for the
telephone replay is 2984621. Additionally, the archived Webcast
will be available through October 23, 2008 at
http://www.sybase.com/about_sybase/investorrelations. About Sybase,
Inc. Sybase is the largest enterprise software and services company
exclusively focused on managing and mobilizing information. With
our global solutions, enterprises can extend their information
securely and make it useful for people anywhere using any device.
The world�s most critical data in commerce, finance, government,
and healthcare runs on Sybase. For more information, visit the
Sybase Website at http://www.sybase.com. Forward-Looking Statements
Certain statements in this release concerning Sybase, Inc. and its
prospects and future growth are forward-looking and involve a
number of uncertainties and risks. Factors that could cause actual
events or results to differ materially from those suggested by
these forward-looking statements include, but are not limited to,
the performance of the global economy and growth in software
industry sales; market acceptance of the company�s products and
services; customer and industry analyst perception of the company
and its technology vision and future prospects; the success of
certain business combinations engaged in by the company or by
competitors; political unrest or acts of war; possible disruptive
effects of organizational or personnel changes; and other factors
described in Sybase, Inc.�s reports filed with the U.S. Securities
and Exchange Commission, including its annual report on Form 10-K
for the year ended December 31, 2007 and its quarterly report on
Form 10-Q for the period ended March 31, 2008. Note Regarding
Non-GAAP Financial Measures In addition to our GAAP results, Sybase
discloses adjusted operating income, net income and net income per
share, referred to respectively as �non-GAAP operating income�,
�non-GAAP net income�, and �non-GAAP net income per diluted share�.
These items, which are collectively referred to as �Non-GAAP
Measures�, exclude the impact of stock-based compensation, the
amortization of acquisition-related intangible assets,
restructuring costs, non-cash charges related to the impairment of
auction rate securities (�ARS�), and the tax effect of these and
related items. From time to time, subject to the review and
approval of the audit committee of the Board of Directors, we may
make other adjustments for expenses and gains that we do not
consider reflective of core operating performance in a particular
period and may modify the Non-GAAP Measures by excluding these
expenses and gains. The Non-GAAP Measures for our Q2 2008 results
and full-year 2008 guidance exclude impairment charges for
reductions in the carrying value of our auction rate securities. We
define our core operating performance to be the revenues recorded
in a particular period and the expenses incurred within that period
which management has the capability of directly affecting in order
to drive operating income. Non-cash stock-based compensation,
amortization of acquisition-related intangible assets,
restructuring charges and impairment charges to our ARS are
excluded from our core operating performance because the decisions
which gave rise to these expenses were not made to drive revenue in
a particular period, but rather were made for our long-term benefit
over multiple periods. While strategic decisions, such as the
decisions to issue stock-based compensation, to acquire a company
or to restructure the organization, are made to further our
long-term strategic objectives and do impact our income statement
under GAAP, these items affect multiple periods and management is
not able to change or affect these items within any particular
period. As such, supplementing GAAP disclosure with non-GAAP
disclosure using the Non-GAAP Measures provides management with an
additional view of operational performance by excluding expenses
that are not directly related to performance in any particular
period. Therefore, we exclude these impacts in our planning,
monitoring, evaluation and reporting of our underlying
revenue-generating operations for a particular period. Prior to the
adoption of Financial Accounting Standards Board Statement 123
Revised �Share-based Payment� (�FAS 123R�) on January 1, 2006, our
practice was to exclude stock-based compensation internally to
evaluate performance and we presented investors with certain
Non-GAAP Measures. With the adoption of FAS 123R, we continue to
believe that Non-GAAP Measures can provide relevant disclosure to
investors as contemplated by Staff Accounting Bulletin 107 (�SAB
107�) and we have presented Non-GAAP Measures that exclude
stock-based compensation, amortization of acquisition-related
intangible assets, impairment charges to ARS, restructuring costs
and the related tax effects. While these items (other than
restructuring) are recurring and affect GAAP net income, we do not
use them to assess our operational performance for any particular
period because (a) these items affect multiple periods and are
unrelated to business performance in a particular period; (b) we
are not able to change these items in any particular period; and
(c) these items do not contribute to the operational performance of
our business for any particular period. We also use Non-GAAP
Measures to operate the business because the excluded expenses are
not under the control of, and accordingly are not used in
evaluating the performance of, operations personnel within their
respective areas of responsibility. In the case of stock-based
compensation expense, the award of stock options is governed by the
stock committee of the Board of Directors and, in the case of
acquisition-related intangible assets; acquisitions arise from
strategic decisions which are not the responsibility of most levels
of operational management. The restructuring charges, like our
stock-based compensation charges, amortization of
acquisition-related intangible assets and write-downs to ARS, are
excluded in management�s internal evaluations of our operating
results and are not considered for management compensation
purposes. In the case of stock-based compensation, our compensation
strategy is to use stock-based compensation to attract and retain
key employees and executives. It is principally aimed at long term
employee retention, rather than to motivate or reward operational
performance for any particular period. Thus, stock-based
compensation expense varies for reasons that are generally
unrelated to operational performance in any particular period. We
use annual cash incentive payouts for executives and other
employees to motivate and reward the achievement of short-term
operational objectives. We view amortization of acquisition-related
intangible assets, such as the amortization of an acquired
company�s research and development efforts, customer lists and
customer relationships, as items arising from pre-acquisition
activities. These are costs that are determined at the time of an
acquisition. While it is continually viewed for impairment,
amortization of the cost is a static expense, one that is typically
not affected by operations during any particular period and does
not contribute to operational performance for any particular
period. The cost of restructure charges are excluded in our
Non-GAAP Measures because they are significantly different in
magnitude and character from routine personnel and facility
adjustments that management makes when monitoring and conducting
the Company�s core operations during any particular period.�We have
not undertaken restructuring since 2004 and amounts included in
cost of restructure in 2006 and subsequently reflect lease
termination costs from previously announced restructuring efforts.
Our previous restructuring activities and related expenses were not
related to operating performance for any particular period, and
were not subject to change by management in any particular
period.�Instead, the prior restructuring was intended to align our
business model and expense structure to our position in the market.
The liquidity and fair value of our investments in marketable
securities, including auction rate securities, have been negatively
impacted by the uncertainty in the credit markets and failed
auctions due to a lack of marketability of these securities. As a
result, we recorded impairment charges to reduce the carrying value
of our ARS investments. The impairment charges related to our ARS
investments have been excluded from our non-GAAP results of
operations. These impairment charges are excluded from management�s
assessment of our operating performance because management believes
that they are not indicative of our ongoing business operations. We
believe that the exclusion of these unique charges provide
investors an enhanced view of our operations and facilitates
comparisons with the results of other periods that do not reflect
such charges. Our historical non-GAAP effective tax rates differ
from our GAAP effective tax rates because of (i) the exclusion of
the amortization of acquisition-related intangible assets,
stock-based compensation expenses and restructuring costs described
above, (ii) the exclusion of certain acquired tax attributes, and
(iii) the resulting impact on the realization of the Company�s
other tax assets. We exclude the impact of these discrete tax items
from our non-GAAP income tax provision or benefit because
management believes that they are not indicative of our ongoing
business operations. Because the Non-GAAP Measures are not
calculated in accordance with GAAP, they are used by our management
as a supplement to, and not an alternative to, or superior to,
financial measures calculated in accordance with GAAP. There are a
number of limitations on the Non-GAAP Measures, including the
following: These Non-GAAP Measures do not have standardized
meanings and may not be comparable to similar non-GAAP measures
used or reported by other software or technology companies. The
Non-GAAP Measures do not reflect all costs associated with our
operations determined in accordance with GAAP. For example:
Non-GAAP operating margin performance and non-GAAP net income do
not include stock compensation expense related to equity awards
granted to our workforce. Our stock incentive plans are important
components of our employee incentive compensation arrangements and
are reflected as expenses in our GAAP results under FAS 123R. While
we include the dilutive impact of such equity awards in weighted
average shares outstanding, the expense associated with stock-based
awards is excluded from our non-GAAP measures. � Although
amortization of acquisition-related intangible assets does not
directly impact our current cash position, such expense represents
the declining value of the technology or other intangible assets
that we have acquired. These assets are amortized over their
respective expected economic lives or impaired, if appropriate. The
expense associated with this decline in value is excluded from our
non-GAAP measures and therefore non-GAAP measures do not include
the costs of acquired intangible assets that supplement our
research and development. � Restructuring charges in 2006 and
subsequently primarily represent lease termination costs associated
with restructuring activities that commenced in 2004 and before.
Most of the charges are cash expenditures, which are excluded from
our Non-GAAP Measures. Excluded expenses for stock-based
compensation and amortization of acquisition-related intangible
assets will continue to recur and impact the Company�s GAAP
results. While restructuring costs are non-recurring activities,
their occasional occurrence will impact GAAP results. As such, the
Non-GAAP Measures should not be construed as an inference that the
excluded items are unusual, infrequent or non-recurring. Management
compensates for these limitations by relying on these Non-GAAP
Measures only as a supplement to the Company�s GAAP results.
SYBASE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS � � � (In
thousands, except share and per share data) June 30,2008 December
31,2007 (Unaudited) � Current assets: Cash and cash equivalents $
575,148 $ 604,808 Short-term investments � 4,815 � 93,462 Total
cash, cash equivalents and short-term cash investments 579,963
698,270 � Restricted cash 3,733 3,424 Accounts receivable, net
234,447 245,267 Deferred income taxes 42,088 37,979 Prepaid income
taxes - 17,604 Other current assets � 32,145 � 25,182 � Total
current assets 892,376 1,027,726 � Long-term cash investments
22,674 36,637 Property, equipment and improvements, net 66,186
64,841 Deferred income taxes 5,475 10,038 Capitalized software, net
81,496 74,278 Goodwill, net 534,110 533,339 Other purchased
intangibles, net 119,606 130,608 Other assets � 35,648 � 36,016 �
Total assets $ 1,757,571 $ 1,913,483 � � Current liabilities:
Accounts payable $ 33,947 $ 30,290 Accrued compensation and related
expenses 58,338 63,852 Accrued income taxes 7,284 273 Other accrued
liabilities 118,654 124,849 Deferred revenue � 225,944 � 203,734 �
Total current liabilities 444,167 422,998 � Other liabilities
46,471 44,669 Deferred income taxes 13,920 14,115 Long-term tax
liability 30,807 30,807 Long-term deferred revenue 4,716 4,937
Minority interest 5,119 5,147 Convertible subordinated notes
460,000 460,000 � Total stockholders' equity � 752,371 � 930,810 �
Total liabilities and stockholders' equity $ 1,757,571 $ 1,913,483
� SYBASE, INC.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(UNAUDITED) � � � � � Three Months Ended June 30, � Six
Months Ended June 30, (In thousands, except per share data) 2008
2007 2008 2007 � Revenues: License fees $ 90,515 $ 77,435 $ 168,639
$ 146,800 Services 146,594 135,230 285,991 264,881 Messaging �
45,604 � � 32,358 � � 88,231 � 63,379 � � Total revenues 282,713
245,023 542,861 475,060 � Costs and expenses: Cost of license fees
15,129 13,083 29,666 25,836 Cost of services 41,080 39,539 81,960
78,281 Cost of messaging 27,403 18,906 52,511 37,795 Sales and
marketing 74,272 64,916 142,565 129,491 Product development and
engineering 36,046 36,920 71,608 75,673 General and administrative
34,077 32,680 70,138 64,176 Amortization of other purchased
intangibles 3,573 3,436 7,089 6,846 Cost (Reversal) of restructure
� (8 ) � (51 ) � 19 � (47 ) � Total costs and expenses � 231,572 �
� 209,429 � � 455,556 � 418,051 � � Operating income 51,141 35,594
87,305 57,009 � Interest income and expense and other, net (876 )
5,142 2,639 10,146 Minority interest � 37 � � - � � 28 � (20 ) �
Income before income taxes 50,302 40,736 89,972 67,135 � Provision
for income taxes � 17,948 � � 14,708 � � 33,427 � 25,959 � � Net
income $ 32,354 � $ 26,028 � $ 56,545 $ 41,176 � � � Basic net
income per share $ 0.40 � $ 0.29 � $ 0.67 $ 0.45 � � Shares used in
computing basic net income per share � 81,688 � � 90,891 � � 84,680
� 91,020 � � Diluted net income per share $ 0.37 � $ 0.28 � $ 0.62
$ 0.44 � � Shares used in computing diluted net income per share �
88,033 � � 92,972 � � 90,977 � 93,294 � � NON-GAAP RESULTS
RECONCILED TO GAAP RESULTS � � � � The following tables reflect
selected Sybase non-GAAP results reconciled to GAAP results (in
000s except percentage and per share amounts): � Three Months Ended
Six Months Ended � � June 30, � June 30, � � 2008 � � 2007 � � 2008
� � 2007 � � Operating Income � GAAP operating income 51,141 35,594
87,305 57,009 Plus: Amortization of acquisition-related intangible
assets 7,162 6,773 14,225 13,504 Stock-based compensation expense
5,382 5,483 11,093 11,233 Cost (Reversal) of restructure (8 ) (51 )
19 (47 ) � � � � � � � � � Non-GAAP operating income � $ 63,677 � �
$ 47,799 � � $ 112,642 � � $ 81,699 � � Net Income � GAAP net
income 32,354 26,028 56,545 41,176 Plus: Amortization of
acquisition-related intangible assets 7,162 6,773 14,225 13,504
Stock-based compensation expense 5,382 5,483 11,093 11,233 Cost
(Reversal) of restructure (8 ) (51 ) 19 (47 ) Impairment loss on
auction rate securities 3,015 - 6,285 - Less: Incremental income
taxes associated with certain Non-GAAP items (4,868 ) (3,983 )
(9,792 ) (6,731 ) � � � � � � � � � Non-GAAP net income � $ 43,037
� � $ 34,250 � � $ 78,375 � � $ 59,135 � � Net Income Per Diluted
Share � GAAP net income per diluted share $ 0.37 $ 0.28 $ 0.62 $
0.44 Plus: Amortization of acquisition-related intangible assets $
0.08 0.07 0.16 0.14 Stock-based compensation expense $ 0.06 0.06
0.12 0.12 Cost (Reversal) of restructure ($0.00 ) (0.00 ) 0.00
(0.00 ) Impairment loss on auction rate securities $ 0.03 - 0.07 -
Less: Incremental income taxes associated with certain Non-GAAP
items ($0.06 ) (0.04 ) (0.11 ) (0.07 ) � � � � � � � � � Non-GAAP
net income per diluted share � $ 0.49 � � $ 0.37 � � $ 0.86 � � $
0.63 � � Shares used in computing diluted net income per share
88,033 92,972 90,977 93,294 � � CLASSIFICATION OF STOCK-BASED
COMPENSATION EXPENSE � The following table shows the classification
of stock-based compensation expense: � Three Months Ended Six
Months Ended � � June 30, � June 30, � � 2008 � � 2007 � � 2008 � �
2007 � � ($000) ($000) � Cost of services 306 376 665 715 Cost of
messaging 127 124 218 310 Sales and marketing 1,360 1,206 2,716
2,472 Product development and engineering 733 656 1,397 1,342
General and administrative 2,856 3,121 6,097 6,394 � � � � � � � �
� � Total $ 5,382 $ 5,483 $ 11,093 $ 11,233 � � CLASSIFICATION OF
AMORTIZATION OF PURCHASED INTANGIBLES � The following table shows
the classification of amortization of purchased intangibles
expense: � Three Months Ended Six Months Ended � � June 30, � June
30, � � 2008 � � 2007 � � 2008 � � 2007 � � ($000) ($000) � Cost of
license fees 2,562 2,406 5,116 4,811 Cost of messaging 1,027 931
2,020 1,847 Amortization of other purchased intangibles 3,573 3,436
7,089 6,846 � � � � � � � � � � Total $ 7,162 $ 6,773 $ 14,225 $
13,504 � SYBASE, INC. � CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) � � Six Months Ended June 30, (Dollars in
thousands) 2008 � 2007 Cash flows from operating activities: Net
income $ 56,545 $ 41,176 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 48,859 43,238 Minority interest in income of
subsidiaries (28 ) 20 (Gain) Loss on disposal of assets (18 ) 45
Impairment of investment in auction rate securities 6,285 �
Deferred income taxes 259 (2,262 ) Stock-based compensation �
restricted stock 4,835 4,185 Stock-based compensation � all other
6,258 7,048 Excess tax benefit from stock-based compensation plans
(6,233 ) (2,855 ) Amortization of note issuance costs 985 985
Changes in assets and liabilities: Accounts receivable 6,315 22,522
Prepaid income taxes 17,604 � Other current assets (6,960 ) (5,258
) Other assets - operating (696 ) 2,572 Accounts payable 3,657 (669
) Accrued compensation and related expenses (5,514 ) (9,360 )
Accrued income taxes 6,429 8,510 Other accrued liabilities (5,704 )
(7,786 ) Deferred revenues 21,989 21,902 Other liabilities � 2,385
� � (552 ) Net cash provided by operating activities � 157,252 � �
123,461 � Cash flows from investing activities: Increase in
restricted cash (309 ) (10 ) Purchases of available-for-sale cash
investments (14,767 ) (165,136 ) Maturities of available-for-sale
cash investments 32,027 99,487 Sales of available-for-sale cash
investments 80,982 81,984 Business combinations, net of cash
acquired � (1,531 ) Purchases of property, equipment and
improvements (16,123 ) (11,225 ) Proceeds from sale of property,
equipment, and improvements 7 40 Capitalized software development
costs (27,219 ) (17,228 ) (Increase) Decrease in other assets -
investing � 75 � � (61 ) Net cash provided by (used for) investing
activities � 54,673 � � (13,680 ) Cash flows from financing
activities: Repayments of long-term obligations (378 ) (33 )
Payments on capital lease (220 ) (879 ) Net proceeds from the
issuance of common stock and reissuance of treasury stock 33,279
19,221 Purchases of treasury stock (300,601 ) (58,600 ) Excess tax
benefit from stock-based compensation plans � 6,233 � � 2,855 � Net
cash used for financing activities � (261,687 ) � (37,436 ) Effect
of exchange rate changes on cash � 20,102 � � 9,155 � Net increase
(decrease) in cash and cash equivalents (29,660 ) 81,500 Cash and
cash equivalents, beginning of year � 604,808 � � 355,303 � Cash
and cash equivalents, end of period $ 575,148 � $ 436,803 � �
SYBASE, INC.CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENTFOR THE
THREE MONTHS ENDED JUNE 30, 2008(UNAUDITED) � � � � � � (In
thousands, except per share data) Revenues: Infra-structurePlatform
Group iAnywhereSolutions Sybase 365 Eliminations ConsolidatedTotal
License fees Infrastructure $ 64,228 $ 53 $ 54 $ - $ 64,335 Mobile
and Embedded 7,920 18,260 - - 26,180 Subtotal license fees 72,148
18,313 54 - 90,515 Intersegment license revenues 103 6,600 -
(6,703) - Total license fees 72,251 24,913 54 (6,703) 90,515 �
Services Direct service revenue 135,469 10,619 506 - 146,594
Intersegment service revenues 58 8,600 - (8,658) - Total services
135,527 19,219 506 (8,658) 146,594 � Messaging Direct messaging
revenue 6 - 45,598 - 45,604 Intersegment messaging revenues - - 12
(12) - Total messaging 6 - 45,610 (12) 45,604 � � � � � Total
revenues 207,784 � 44,132 � 46,170 � (15,373) � 282,713 � Total
allocated costs and expenses before cost of restructure and
amortization of other purchased intangibles and purchased
technology 158,429 34,634 41,346 (15,373) 219,036 � Operating
income before cost of restructure and amortization of other
purchased intangibles and purchased technology 49,355 9,498 4,824 -
63,677 � Cost of restructure - 2008 Activity 33 - - - 33
Amortization of other purchased intangibles 527 1,023 2,023 - 3,573
Amortization of purchased technology 403 2,159 1,027 - 3,589 �
Operating income before unallocated costs $ 48,392 $ 6,316 $ 1,774
$ - $ 56,482 � Other unallocated costs 5,341 Operating income after
unallocated costs 51,141 � Interest income and expense and other,
net (876) Minority interest 37 � Income before income taxes 50,302
� Provision for income taxes 17,948 � Net income $ 32,354 � � Basic
net income per share $ 0.40 � Shares used in computing basic net
income per share 81,688 � Diluted net income per share $ 0.37 �
Shares used in computing diluted net income per share 88,033 �
SYBASE, INC.CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENTFOR THE
SIX MONTHS ENDED JUNE 30, 2008(UNAUDITED) � � � � � � (In
thousands, except per share data) Revenues: Infra-structurePlatform
Group iAnywhereSolutions Sybase 365 Eliminations ConsolidatedTotal
License fees Infrastructure $ 120,606 $ 111 $ 67 $ - $ 120,784
Mobile and Embedded 14,158 33,697 - - 47,855 Subtotal license fees
134,764 33,808 67 - 168,639 Intersegment license revenues 165
11,799 - (11,964) - Total license fees 134,929 45,607 67 (11,964)
168,639 � Services Direct service revenue 263,602 21,312 1,077 -
285,991 Intersegment service revenues 64 16,725 - (16,789) - Total
services 263,666 38,037 1,077 (16,789) 285,991 � Messaging Direct
messaging revenue 14 - 88,217 - 88,231 Intersegment messaging
revenues - - 12 (12) - Total messaging 14 - 88,229 (12) 88,231 � �
� � � Total revenues 398,609 � 83,644 � 89,373 � (28,765) � 542,861
� Total allocated costs and expenses before cost of restructure and
amortization of other purchased intangibles and purchased
technology 309,293 69,281 80,410 (28,765) 430,219 � Operating
income before cost of restructure and amortization of other
purchased intangibles and purchased technology 89,316 14,363 8,963
- 112,642 � Cost of restructure - 2008 Activity 60 - - - 60
Amortization of other purchased intangibles 1,054 2,046 3,989 -
7,089 Amortization of purchased technology 806 4,310 2,020 - 7,136
� Operating income before unallocated costs $ 87,396 $ 8,007 $
2,954 $ - $ 98,357 � Other unallocated costs 11,052 Operating
income after unallocated costs 87,305 � Interest income and expense
and other, net 2,639 Minority interest 28 � Income before income
taxes 89,972 � Provision for income taxes 33,427 � Net income $
56,545 � � Basic net income per share $ 0.67 � Shares used in
computing basic net income per share 84,680 � Diluted net income
per share $ 0.62 � Shares used in computing diluted net income per
share 90,977 � NON-GAAP RESULTS RECONCILED TO GAAP RESULTS -
SEGMENTSThe following table reflects non-GAAP operating income
before unallocated costs reconciled to GAAP results for each Sybase
segment (in 000s except percentage and per share amounts): � � � �
� � Three Months Ended Six Months Ended � � June 30, 2008 � June
30, 2008 � � Infrastructure Platform Group � iAnywhere Solutions �
Sybase 365 � Infrastructure Platform Group � iAnywhere Solutions �
Sybase 365 � Operating Income Before Unallocated Costs � GAAP
operating income before unallocated costs 48,392 6,316 1,774 87,396
8,007 2,954 Plus: Amortization of acquisition-related intangible
assets 930 3,182 3,050 1,860 6,356 6,009 Cost of restructure 33 - -
60 - - � � � � � � � � � � � � � Non-GAAP operating income before
unallocated costs � $49,355 � $9,498 � $4,824 � $89,316 � $14,363 �
$8,963 � SYBASE, INC.Reconciliation of GAAP-based EPS to Non-GAAP
EPSfor the three months ended September 30, 2008(unaudited) � � �
GAAP - based EPS $ 0.38 $ 0.40 � Amortization of purchased
intangibles 0.09 0.09 Amortization of stock compensation expense
0.06 0.06 Income tax effect of above adjustments (0.05 ) (0.05 )
Income tax effect due to differences between the GAAP and non-GAAP
effective tax rate 0.00 0.00 � � Non-GAAP EPS $ 0.48 � $ 0.50 � � �
Please see "Note Regarding Non-GAAP Financial Measures" for
important information regarding Non-GAAP Financial Measures. �
SYBASE, INC.Reconciliation of GAAP-based EPS to Non-GAAP EPSfor the
twelve months ended December 31, 2008(unaudited) � � � GAAP - based
EPS $ 1.53 $ 1.55 � Amortization of purchased intangibles 0.35 0.35
Amortization of stock compensation expense 0.25 0.25 Impairment of
Auction Rate Securities 0.07 0.07 Income tax effect of above
adjustments (0.20 ) (0.20 ) Income tax effect due to differences
between the GAAP and non-GAAP effective tax rate (0.02 ) (0.02 ) �
� Non-GAAP EPS $ 1.98 � $ 2.00 � � � Please see "Note Regarding
Non-GAAP Financial Measures" for important information regarding
Non-GAAP Financial Measures.
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