SY Sybase, Inc.

- Mobile & Wireless Business Grows 12% DUBLIN, Calif., Oct. 20 /PRNewswire-FirstCall/ -- Sybase, Inc. (NYSE:SY), a leading provider of enterprise infrastructure and wireless software, today reported financial results for the 2005 third quarter ended September 30, 2005. Pro forma net income for the third quarter reached $30.1 million, or earnings of $0.33 per share on a diluted basis (EPS). This compares with pro forma net income of $27.4 million, or EPS of $0.29 for the 2004 third quarter. GAAP net income for the 2005 third quarter was $28.0 million, or EPS of $0.30. This compares with GAAP net income of $17.8 million, or EPS of $0.19 for the third quarter of 2004. Pro forma amounts exclude amortization of certain expenses including certain purchased intangibles, unearned stock-based compensation, and restructuring costs. Accompanying this release is a reconciliation of pro forma and GAAP amounts for the 2005 third quarter. Total revenues for the third quarter were $199.3 million compared with $198.7 million for the third quarter of 2004. License revenues were $69.7 million for the 2005 third quarter compared with $70.4 million for the same quarter a year ago. Pro forma operating income for the 2005 third quarter was $36.2 million, representing 18% operating margin, compared with pro forma operating income of $36.3 million, or 18% operating margin, for the third quarter of 2004. Operating income for the 2005 third quarter calculated in accordance with generally accepted accounting principles (GAAP) was $30.2 million, representing 15% operating margin, compared with operating income of $21.5 million, or 11% operating margin for the third quarter of 2004. "We're pleased with our performance this quarter, as we delivered solid results against tough comparables from the third quarter of last year. We beat our expectations on the bottom line, generated solid cash flow from operations, and increased mobile and wireless revenues by 12% year-over-year," said John Chen, chairman, CEO and president of Sybase. "Additionally, we successfully launched a major upgrade to our flagship database, Adaptive Server Enterprise 15.0, which will drive future revenue growth. "We are confident in the strength of Sybase's business fundamentals and our ability to achieve year-end targets. Based on our progress to date, we are revising upward our full-year pro forma EPS from around $1.11 to a range of $1.16 to $1.20 on a fully diluted basis. We're also raising our GAAP EPS from around $0.76 to a range of $0.89 to $0.93 on a fully diluted basis," concluded Mr. Chen. Balance Sheet and Other Data At September 30, 2005, Sybase reported $926.5 million in cash and cash investments, including restricted cash of $7.7 million. The company generated $14.7 million in cash flow from operations in the third quarter. Sybase repurchased approximately $9.6 million worth of its stock during the 2005 third quarter. Approximately $84.1 million remains authorized in the company's current share repurchase program. Days sales outstanding for the second quarter was 52 days. Conference Call and Webcast Information The Sybase 2005 third quarter conference call and simultaneous Webcast is scheduled to begin at 7:30 a.m., Pacific Time/10:30 a.m. Eastern Time, on Thursday, October 20, 2005. To access the live Webcast, please visit http://www.fulldisclosure.com/ or Sybase's Website at http://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 p.m. Pacific Time on October 27, 2005. 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 #4904033. Additionally, the archived Webcast will be available for 60 days, through December 20, 2005. About Sybase, Inc. Sybase is the largest global enterprise software company exclusively focused on managing and mobilizing information from the data center to the point of action. Sybase provides open, cross-platform solutions that securely deliver information anytime, anywhere, enabling customers to create an information edge. The world's most critical data in commerce, finance, government, healthcare, and defense runs on Sybase. For more information, visit the Sybase Website: 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; possible disruptive effects of organizational or personnel changes; the success of certain business combinations engaged in by the company or by competitors; political unrest or acts of war; market acceptance of the company's products and services; customer and industry analyst perception of the company and its technology vision and future prospects; 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, 2004 and its most recent quarterly report on Form 10-Q for the three-month period ended June 30, 2005. Sybase Third Quarter 2005 Selected Highlights Sybase announcements during the third quarter of 2005 expanded upon the company's leadership in the relational database market with the launch of ASE 15 and the mobile enterprise computing market, with particular focus on the extension of new product offerings. Additionally, Sybase continued to increase its leadership in the mobile applications market with the proposed acquisition of Extended Systems. Mobile Enterprise Computing: * Announced Unwired Accelerator 7.0 and Unwired Orchestrator 5.0 to further enhance enterprise customers' ability to quickly create composite applications and then easily extend them to their mobile workforce: http://www.sybase.com/detail?id=1037147 * Unveiled the Carrier Edition of Sybase(R) mFolio, a dynamic Web content mobilization data service offering: http://www.sybase.com/detail?id=1037689 * Launched the next generation of iAnywhere's RFID software platform, RFID Anywhere(TM) 2.0, enabling the development and management of robust, highly distributed, scalable RFID solutions: http://www.ianywhere.com/press_releases/rfid_anywhere_2_0.html * Introduced iAnywhere's Sales Anywhere(R) for Salesforce.com, spotlighting leadership in providing easily deployable and maintainable hosted-service offerings for the mobile CRM community: http://www.sybase.com/detail?id=1037451 * Signed an agreement to acquire Extended Systems, a pioneer in mobile application software for the enterprise, which will be integrated into Sybase's iAnywhere subsidiary: http://www.sybase.com/detail?id=1036884 * Announced that Sybase and Xiamen Xiangtone will pioneer a mobile search service on Answers Anywhere(TM) software, enabling cell phone users to access information via SMS or WAP: http://www.sybase.com/detail?id=1036905 * Unveiled Trade Lifecycle Monitor Solution for next-generation, real-time business process tracking: http://www.sybase.com/detail?id=1037383 * Showcased Unwired Enterprise Success at Annual Sybase Techwave Conference: http://www.sybase.com/detail?id=1037149 * Announced product support for Palm's future Windows Mobile-Based Treo Smartphones, enabling companies to effectively manage and move critical data and content from the data center out to the front lines of business and back: http://www.ianywhere.com/press_releases/palm_treo_smartphones.html Data Management Initiatives: * Globally launched Sybase ASE 15 to meet the increasing demands of large databases and high transaction volumes, while providing a cost-effective RDBMS: http://www.sybase.com/detail?id=1037440 * Announced Sybase and IBM are bundling Sybase ASE with IBM OpenPower servers to provide customers with reduced cost and risk for managing their data on a Linux platform; also announced Sybase(R) IQ on OpenPower: http://www.sybase.com/detail?id=1036906 * Announced a new partnership between Sybase and Charles River Development (Charles River), which will enable Charles River to develop its award- winning software suite for the institutional investment managers on Sybase's high-performance ASE: http://www.sybase.com/detail?id=1037703 * Introduced early beta registration for iAnywhere's SQL Anywhere(R) Jasper and revealed a few key product details: http://www.ianywhere.com/press_releases/sql_anywhere_beta.html * Revealed new data management solutions customers, including ELMO ICT Solutions, Security Applications, Inc. (SAI), and Servoy BV, who have selected iAnywhere's SQL Anywhere Studio(R) as the data management solution for applications utilizing the Linux platform: http://www.ianywhere.com/press_releases/sql_anywhere_linux.html Developer Initiatives: * Announced beta availability for PowerBuilder(R) 10.5, PowerDesigner(R) 12, PocketBuilder(TM) 2.0.3 and DataWindow(R) .NET 2.0 to enable customers to successfully initiate rapid design, development, and deployment for the types of applications needed to achieve an application edge over competitors: http://www.sybase.com/detail?id=1037148 * Launched Sybase's iAnywhere RFID Insider Developer Program, a new Web- based resource center for RFID developers, demonstrating continued support of the developer community: http://www.sybase.com/detail?id=1037683 * Unveiled iAnywhere's Answers Anywhere 4.0, a scalable middleware platform for building easy-to-use application interfaces that feature powerful context understanding and natural language capabilities, spotlighting leadership in the mobile middleware market: http://www.ianywhere.com/press_releases/answers_anywhere_4_0.html * Announced approval of the Sybase new Data Tools Platform (DTP) project proposal in conjunction with The Eclipse Foundation: http://www.sybase.com/detail?id=1037271 Industry Accolades: * Presented iAnywhere's fifth annual Innovator Awards to American Technology Corporation, ELMO ICT Solutions and Eleven Technology: http://www.sybase.com/detail?id=1037156 * Announced that Sybase ASE and Sybase IQ customers - including, Citadel, comScore Networks, GuangDong Telecom Co.Ltd., Health Insurance Review Agency and Nielsen Media Research - received a total of 26 Winter Corp. 2005 TopTen awards: http://www.sybase.com/detail?id=1037607 NOTE: Sybase, Answers Anywhere, mFolio, Sales Anywhere, RFID Anywhere, SQL Anywhere Studio, PowerBuilder, Power Designer, PocketBuilder, and DataWindow are trademarks of Sybase, Inc. or its subsidiaries. All other names may be trademarks of the companies with which they are associated. SYBASE, INC. RECONCILIATION TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1) (UNAUDITED) Three Months Ended Three Months Ended September 30, 2005 September 30, 2004 (In thousands, except per share data) Pro forma Pro forma Adjustments Adjustments GAAP (2) Pro forma GAAP (2) Pro forma Revenues: License fees $69,739 -- $69,739 $70,380 -- $70,380 Services 129,588 -- 129,588 128,338 -- 128,338 Total revenues 199,327 -- 199,327 198,718 -- 198,718 Costs and expenses: Cost of license fees 10,993 (2,046)a 8,947 15,566 (4,710)a 10,856 Cost of services 37,980 (126)b 37,854 39,757 (16)b 39,741 Sales and marketing 59,655 17 b 59,672 59,254 (83)b 59,171 Product development and engineering 34,932 (10)b 34,922 29,114 (19)b 29,095 General and administrative 23,873 (2,152)b 21,721 24,034 (508)b 23,526 Amortization of other purchased intangibles 1,677 (1,677)a -- 1,677 (1,677)a -- Reversal of purchase accounting accrual -- -- c -- (2,677) 2,677 c -- Cost of restructure 21 (21)d -- 10,479 (10,479)d -- Total costs and expenses 169,131 (6,015) 163,116 177,204 (14,815) 162,389 Operating income 30,196 6,015 36,211 21,514 14,815 36,329 Interest income and expense and other, net 3,881 -- 3,881 2,518 -- 2,518 Income before income taxes 34,077 6,015 40,092 24,032 14,815 38,847 Provision for income taxes 6,090 3,856 e 9,946 6,201 5,186 e 11,387 Net income $27,987 $2,159 $30,146 $17,831 $9,629 $27,460 Basic net income per share $0.31 $0.03 $0.34 $0.19 $0.10 $0.29 Shares used in computing basic net income per share 89,634 89,634 89,634 94,500 94,500 94,500 Diluted net income per share $0.30 $0.03 $0.33 $0.19 $0.10 $0.29 Shares used in computing diluted net income per share 92,431 92,431 92,431 95,961 95,961 95,961 (1) Use of Pro Forma Financial Information To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions, and the cost of restructuring because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP. (2) Proforma adjustments Proforma adjustments include the following: (a) amortization of purchased intangibles; (b) amortization of unearned stock compensation; (c) reversal of purchase accounting accrual; (d) cost of restructuring charges; (e) income tax effect of proforma adjustments. SYBASE, INC. RECONCILIATION TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1) (UNAUDITED) Nine Months Ended Nine Months Ended September 30, 2005 September 30, 2004 (In thousands, except per share data) Pro forma Pro forma Adjustments Adjustments GAAP (2) Pro forma GAAP (2) Pro forma Revenues: License fees $200,362 -- $200,362 $188,713 -- $188,713 Services 395,284 -- 395,284 381,195 -- 381,195 Total revenues 595,646 -- 595,646 569,908 -- 569,908 Costs and expenses: Cost of license fees 36,973 (9,097)a 27,876 44,704 (13,108)a 31,596 Cost of services 118,248 (292)b 117,956 122,903 (123)b 122,780 Sales and marketing 184,593 (207)b 184,386 179,688 (279)b 179,409 Product development and engineering 102,764 (26)b 102,738 88,922 (58)b 88,864 General and administrative 69,183 (5,143)b 64,040 67,612 (3,012)b 64,600 Amortization of other purchased intangibles 5,031 (5,031)a -- 3,462 (3,462)a -- Reversal of purchase accounting accrual -- -- c -- (2,677) 2,677 c -- Cost of restructure 302 (302)d -- 10,351 (10,351)d -- Total costs and expenses 517,094 (20,098) 496,996 514,965 (27,716) 487,249 Operating income 78,552 20,098 98,650 54,943 27,716 82,659 Interest income and expense and other, net 10,620 -- 10,620 8,495 -- 8,495 Income before income taxes 89,172 20,098 109,270 63,438 27,716 91,154 Provision for income taxes 31,984 1,483 e 33,467 19,599 8,526 e 28,125 Net income $57,188 $18,615 $75,803 $43,839 $19,190 $63,029 Basic net income per share $0.63 $0.21 $0.84 $0.46 $0.20 $0.66 Shares used in computing basic net income per share 90,403 90,403 90,403 95,973 95,973 95,973 Diluted net income per share $0.62 $0.20 $0.82 $0.44 $0.20 $0.64 Shares used in computing diluted net income per share 92,961 92,961 92,961 98,522 98,522 98,522 (1) Use of Pro Forma Financial Information To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions, and the cost of restructuring because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP. (2) Proforma adjustments Proforma adjustments include the following: (a) amortization of purchased intangibles; (b) amortization of unearned stock compensation; (c) reversal of purchase accounting accrual; (d) cost of restructuring charges; (e) income tax effect of proforma adjustments. SYBASE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, (In thousands, except share and 2005 2004 per share data) (Unaudited) Current assets: Cash and cash equivalents $412,463 $321,417 Short-term investments 371,261 158,217 Total cash, cash equivalents and short-term cash investments 783,724 479,634 Restricted cash 5,073 5,356 Accounts receivable, net 116,189 157,897 Deferred income taxes 8,697 11,205 Other current assets 18,762 14,790 Total current assets 932,445 668,882 Long-term cash investments 135,125 33,998 Restricted long-term cash investments 2,600 2,600 Property, equipment and improvements, net 56,787 64,371 Deferred income taxes 44,660 39,440 Capitalized software, net 66,909 61,771 Goodwill, net 208,412 214,110 Other purchased intangibles, net 60,660 67,208 Other assets 37,698 31,142 Total assets $1,545,296 $1,183,522 Current liabilities: Accounts payable $9,750 $11,962 Accrued compensation and related expenses 43,882 43,632 Accrued income taxes 49,966 32,595 Other accrued liabilities 69,270 81,715 Deferred revenue 181,244 208,741 Total current liabilities 354,112 378,645 Other liabilities 34,874 33,121 Long-term deferred revenue 4,959 10,170 Minority interest 5,030 5,030 Long-term convertible debt 460,000 -- Stockholders' equity: Preferred stock, $0.001 par value, 8,000,000 shares authorized; none issued or outstanding -- -- Common stock, $0.001 par value, 200,000,000 shares authorized; 105,337,362 shares issued (2004 - 105,337,362) 105 105 Additional paid-in capital 955,421 940,806 Accumulated deficit (10,873) (66,690) Other comprehensive income 20,469 49,356 Less: Cost of treasury stock (14,232,638 shares and 2004 - 9,818,385) (262,551) (159,617) Unearned compensation (16,250) (7,404) Total stockholders' equity 686,321 756,556 Total liabilities and stockholders' equity $1,545,296 $1,183,522 SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except per share data) 2005 2004 2005 2004 Revenues: License fees $69,739 $70,380 $200,362 $188,713 Services 129,588 128,338 395,284 381,195 Total revenues 199,327 198,718 595,646 569,908 Costs and expenses: Cost of license fees 8,947 10,856 27,876 31,596 Cost of services 37,854 39,741 117,956 122,780 Sales and marketing 59,672 59,171 184,386 179,409 Product development and engineering 34,922 29,095 102,738 88,864 General and administrative 21,721 23,526 64,040 64,600 Total costs and expenses 163,116 162,389 496,996 487,249 Operating income 36,211 36,329 98,650 82,659 Interest income and expense and other, net 3,881 2,518 10,620 8,495 Income before income taxes 40,092 38,847 109,270 91,154 Provision for income taxes 9,946 11,387 33,467 28,125 Net income $30,146 $27,460 $75,803 $63,029 Basic net income per share $0.34 $0.29 $0.84 $0.66 Shares used in computing basic net income per share 89,634 94,500 90,403 95,973 Diluted net income per share $0.33 $0.29 $0.82 $0.64 Shares used in computing diluted net income per share 92,431 95,961 92,961 98,522 Note: The pro forma statement of operations is intended to present the Company's operating results excluding purchase accounting adjustments associated with the acquisitions of Home Financial Network, Inc., New Era of Networks, Inc., AvantGo Inc., Dejima, Inc., XcelleNet, Inc., Avaki, Inc., and ISDD Ltd. and other purchased intangibles. Such purchase accounting adjustments would include amortization of developed technology, amortization of intangibles, goodwill impairment loss, in-process research and development costs, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense, restructuring costs, and cumulative effect of an accounting change which we do not believe are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP. SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except per share data) 2005 2004 2005 2004 Revenues: License fees $69,739 $70,380 $200,362 $188,713 Services 129,588 128,338 395,284 381,195 Total revenues 199,327 198,718 595,646 569,908 Costs and expenses: Cost of license fees 10,993 15,566 36,973 44,704 Cost of services 37,980 39,757 118,248 122,903 Sales and marketing 59,655 59,254 184,593 179,688 Product development and engineering 34,932 29,114 102,764 88,922 General and administrative 23,873 24,034 69,183 67,612 Amortization of other purchased intangibles 1,677 1,677 5,031 3,462 Reversal of purchase accounting accrual -- (2,677) -- (2,677) Cost (Reversal) of restructure 21 10,479 302 10,351 Total costs and expenses 169,131 177,204 517,094 514,965 Operating income 30,196 21,514 78,552 54,943 Interest income and expense and other, net 3,881 2,518 10,620 8,495 Income before income taxes 34,077 24,032 89,172 63,438 Provision for income taxes 6,090 6,201 31,984 19,599 Net income $27,987 $17,831 $57,188 $43,839 Basic net income per share $0.31 $0.19 $0.63 $0.46 Shares used in computing basic net income per share 89,634 94,500 90,403 95,973 Diluted net income per share $0.30 $0.19 $0.62 $0.44 Shares used in computing diluted net income per share 92,431 95,961 92,961 98,522 SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, (Dollars in thousands) 2005 2004 Cash and cash equivalents, beginning of year $321,417 $315,404 Cash flows from operating activities: Net income 57,188 43,839 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 54,847 63,340 Write-off of assets in restructuring -- 6,908 Loss on disposal of assets 703 575 Reversal of purchase accounting accrual -- (2,677) Deferred income taxes (4,603) (4,208) Amortization of deferred stock-based compensation 5,667 3,472 Amortization of note issuance costs 1,180 -- Changes in assets and liabilities: Accounts receivable 39,628 24,308 Other current assets (3,968) 1,117 Other assets - operating 2,050 3,441 Accounts payable (2,215) 3,707 Accrued compensation and related expenses 253 (5,041) Accrued income taxes 24,636 (150) Other accrued liabilities (12,635) (27,984) Deferred revenues (32,917) (9,036) Other liabilities 1,664 6,481 Net cash provided by operating activities 131,478 108,092 Cash flows from investing activities: (Increase) Decrease in restricted cash 284 (65) Purchases of available-for-sale cash investments (704,001) (161,095) Maturities of available-for-sale cash investments 307,524 107,822 Sales of available-for-sale cash investments 81,381 108,738 Business combinations, net of cash acquired (6,928) (81,272) Purchases of property, equipment and improvements (12,007) (20,106) Proceeds from sale of fixed assets 25 193 Capitalized software development costs (26,336) (27,918) (Increase) Decrease in other assets - investing (5) 2 Net cash used for investing activities (360,063) (73,701) Cash flows from financing activities: Proceeds from the issuance of convertible subordinated notes, net of issuance costs 450,238 -- Repayments of long-term obligations (997) (22,173) Payments on capital lease (201) -- Net proceeds from the issuance of common stock and reissuance of treasury stock 40,326 26,761 Purchases of treasury stock (144,529) (109,491) Net cash provided by (used for) financing activities 344,837 (104,903) Effect of exchange rate changes on cash (25,206) (1,338) Net increase (decrease) in cash and cash equivalents 91,046 (71,850) Cash and cash equivalents, end of period 412,463 243,554 Cash investments, end of period 506,386 201,946 Total cash, cash equivalents and cash investments, end of period $918,849 $445,500 SYBASE, INC. CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED) (In thousands, except per share data) Infrastructure iAnywhere Elimi- Consolidated Revenues: Platform Group Solutions nations Total License fees Infrastructure $49,126 $21 $-- $49,147 Mobile and Embedded 9,869 9,849 -- 19,718 Financial Fusion products 874 -- -- 874 Subtotal license fees 59,869 9,870 -- 69,739 Intersegment license revenues 21 8,225 (8,246) -- Total license fees 59,890 18,095 (8,246) 69,739 Services Direct service revenue 114,547 8,963 -- 123,510 Financial Fusion services 6,078 -- -- 6,078 Intersegment service revenues 7 6,981 (6,988) -- Total services 120,632 15,944 (6,988) 129,588 Total revenues 180,522 34,039 (15,234) 199,327 Total allocated costs and expenses 153,844 26,846 (15,234) 165,456 Operating income before unallocated costs $26,678 $7,193 $-- $33,871 Other unallocated cost savings (2,340) Operating income after unallocated expenses 36,211 Interest income and expense and other, net 3,881 Income before income taxes 40,092 Provision for income taxes 9,946 Net income $30,146 Basic net income per share $0.34 Shares used in computing basic net income per share 89,634 Diluted net income per share $0.33 Shares used in computing diluted net income per share 92,431 Note: The pro forma statement of operations is intended to present the Company's operating results excluding purchase accounting adjustments associated with the acquisitions of Home Financial Network, Inc., New Era of Networks, Inc., AvantGo Inc., Dejima, Inc., XcelleNet, Inc., Avaki, Inc., and ISDD Ltd. and other purchased intangibles. Such purchase accounting adjustments would include amortization of developed technology, amortization of intangibles, goodwill impairment loss, in-process research and development costs, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense, restructuring costs, and cumulative effect of an accounting change which we do not believe are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP. SYBASE, INC. CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED) (In thousands, except per share data) Infrastructure iAnywhere Elimi- Consolidated Revenues: Platform Group Solutions nations Total License fees Infrastructure $142,598 $69 $-- $142,667 Mobile and Embedded 22,448 32,736 -- 55,184 Financial Fusion products 2,511 -- -- 2,511 Subtotal license fees 167,557 32,805 -- 200,362 Intersegment license revenues 64 18,691 (18,755) -- Total license fees 167,621 51,496 (18,755) 200,362 Services Direct service revenue 347,426 27,402 -- 374,828 Financial Fusion services 20,456 -- -- 20,456 Intersegment service revenues 13 20,269 (20,282) -- Total services 367,895 47,671 (20,282) 395,284 Total revenues 535,516 99,167 (39,037) 595,646 Total allocated costs and expenses 458,893 82,403 (39,037) 502,259 Operating income before unallocated costs $76,623 $16,764 $-- $93,387 Other unallocated cost savings (5,263) Operating income after unallocated expenses 98,650 Interest income and expense and other, net 10,620 Income before income taxes 109,270 Provision for income taxes 33,467 Net income $75,803 Basic net income per share $0.84 Shares used in computing basic net income per share 90,403 Diluted net income per share $0.82 Shares used in computing diluted net income per share 92,961 Note: The pro forma statement of operations is intended to present the Company's operating results excluding purchase accounting adjustments associated with the acquisitions of Home Financial Network, Inc., New Era of Networks, Inc., AvantGo Inc., Dejima, Inc., XcelleNet, Inc., Avaki, Inc., and ISDD Ltd. and other purchased intangibles. Such purchase accounting adjustments would include amortization of developed technology, amortization of intangibles, goodwill impairment loss, in- process research and development costs, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense, restructuring costs, and cumulative effect of an accounting change which we do not believe are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP. SYBASE, INC. CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED) (In thousands, except per share data) Infrastructure iAnywhere Elimi- Consolidated Revenues: Platform Group Solutions nations Total License fees Infrastructure $49,126 $21 $-- $49,147 Mobile and Embedded 9,869 9,849 -- 19,718 Financial Fusion products 874 -- -- 874 Subtotal license fees 59,869 9,870 -- 69,739 Intersegment license revenues 21 8,225 (8,246) -- Total license fees 59,890 18,095 (8,246) 69,739 Services Direct service revenue 114,547 8,963 -- 123,510 Financial Fusion services 6,078 -- -- 6,078 Intersegment service revenues 7 6,981 (6,988) -- Total services 120,632 15,944 (6,988) 129,588 Total revenues 180,522 34,039 (15,234) 199,327 Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology 153,844 26,846 (15,234) 165,456 Operating income before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology 26,678 7,193 -- 33,871 Cost of restructure - 2005 Activity 21 -- -- 21 Amortization of customer lists 500 711 -- 1,211 Amortization of covenant not to compete -- 466 -- 466 Amortization of purchased technology 1,067 979 -- 2,046 Operating income before unallocated costs $25,090 $5,037 $-- $30,127 Other unallocated cost savings (69) Operating income after unallocated expenses 30,196 Interest income and expense and other, net 3,881 Income before income taxes 34,077 Provision for income taxes 6,090 Net income $27,987 Basic net income per share $0.31 Shares used in computing basic net income per share 89,634 Diluted net income per share $0.30 Shares used in computing diluted net income per share 92,431 SYBASE, INC. CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED) (In thousands, except per share data) Infrastructure iAnywhere Elimi- Consolidated Revenues: Platform Group Solutions nations Total License fees Infrastructure $142,598 $69 $-- $142,667 Mobile and Embedded 22,448 32,736 -- 55,184 Financial Fusion products 2,511 -- -- 2,511 Subtotal license fees 167,557 32,805 -- 200,362 Intersegment license revenues 64 18,691 (18,755) -- Total license fees 167,621 51,496 (18,755) 200,362 Services Direct service revenue 347,426 27,402 -- 374,828 Financial Fusion services 20,456 -- -- 20,456 Intersegment service revenues 13 20,269 (20,282) -- Total services 367,895 47,671 (20,282) 395,284 Total revenues 535,516 99,167 (39,037) 595,646 Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology 458,893 82,403 (39,037) 502,259 Operating income before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology 76,623 16,764 -- 93,387 Cost of restructure - 2005 Activity 302 -- -- 302 Amortization of customer lists 1,500 2,133 -- 3,633 Amortization of covenant not to compete -- 1,398 -- 1,398 Amortization of purchased technology 6,160 2,937 -- 9,097 Operating income before unallocated costs $68,661 $10,296 $-- $78,957 Other unallocated costs 405 Operating income after unallocated expenses 78,552 Interest income and expense and other, net 10,620 Income before income taxes 89,172 Provision for income taxes 31,984 Net income $57,188 Basic net income per share $0.63 Shares used in computing basic net income per share 90,403 Diluted net income per share $0.62 Shares used in computing diluted net income per share 92,961 SYBASE, INC. Reconciliation of GAAP-based EPS to pro forma EPS for the twelve months ended December 31, 2005 (unaudited) Low end High end of range of range Pro forma EPS $1.16 $1.20 Amortization of purchased intangibles (0.19) (0.19) Amortization of unearned stock compensation (0.09) (0.09) Income tax effect of above adjustments 0.09 0.09 Income tax effect primarily from utilization of foreign tax credits (0.08) (0.08) GAAP - based EPS $0.89 $0.93 Use of Pro Forma Financial Information To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP. DATASOURCE: Sybase, Inc. CONTACT: For Financial Inquiries, Lynne Farris of Sybase Investor Relations, +1-925-236-8797, or , or for Press Inquiries, Heather Peterson of Sybase Public Relations, +1-925-236-6517, or Web site: http://www.sybase.com/

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