NEWS - Quest Software

Editorial and Financial contact: Nicole Makos
Quest Software, Inc.
949.754.8536
nicole.makos@quest.com
QUEST SOFTWARE REPORTS RECORD FOURTH QUARTER AND 2000 RESULTS
Revenues Increase 131% to $56.1 Million for the Quarter
IRVINE, Calif., January 30, 2001 – Quest Software, Inc. (Nasdaq: QSFT), a leading
provider of application management solutions, today announced record financial results for its
fourth quarter and year ended December 31, 2000. The company achieved fourth quarter
revenues of $56.1 million, an increase of 131% over last year’s fourth quarter revenues of
$24.3 million. Pro forma net income, excluding the amortization of goodwill and purchased
intangible assets and other compensation costs, increased 242% to $6.3 million from $1.8
million year over year. Diluted pro forma net income per share for the fourth quarter was
$0.07, up 250% from $0.02 for the same period last year.
(in thousands, except per share data) Three Months ended December 30,
2000 1999
Revenues $56,085 $24,271
Pro forma income from operations (a) $7,222 $1,935
Pro forma net income (b) $6,302 $1,843
Pro forma net income per share $0.07 $0.02
Pro forma diluted shares outstanding 92,970 84,038
(a) For the quarter ended December 31,
2000, excludes $15.2 million for
amortization of goodwill and other
compensation costs; and $2.0 million
for amortization of purchased intangible
assets. For the quarter ended
December 31, 1999, excludes $0.3
million of other compensation costs.
(b) For 2000, assumes a pro forma tax
rate
of 40%.
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NEWS
For Immediate Release

For the fourth quarter of 2000, on an as reported basis without adjustments for the
amortization of goodwill and purchased intangible assets and other compensation costs,
Quest Software reported a net loss of $8.7 million or $(0.10) per share, compared with net
income of $1.6 million and $0.02 per diluted share.
“We completed the year with record revenues and we are very optimistic about our
growth potential for 2001,” said Vinny Smith, chairman and chief executive officer, Quest
Software. We also saw record pro forma operating margins of 13%, an increase of 500 basis
points over the fourth quarter last year, as we obtained operating efficiencies at higher
revenue levels. We continue to strengthen our position in our core markets as we gain share
in Oracle development, administration and high availability areas. We have built out our IBM
UDB, Microsoft and application monitoring product portfolios and expect them to contribute
significantly to our 2001 results. Our value proposition to customers has always been to
manage their most critical applications from an availability and performance perspective. We
are taking this orientation to these new markets.”
For the years ended December 31, 2000 and 1999, Quest Software had revenue of
$165.6 million and $70.9 million, respectively, a 134% year over year increase. Pro forma net
income in 2000 increased 304% to $16.7 million from pro forma net income of $4.1 million in
1999. Pro forma diluted net income per share for 2000 increased 260% to $0.18 from $0.05
for the prior year.
For the year, Quest Software reported a loss of $25.1 million, or $(0.29) per share,
compared with net income of $2.8 million or $0.03 per diluted share for the prior year.
The company is also announcing the appointment of Brinkley Morse as vice president
of finance and operations. In this capacity Morse will be replacing chief financial officer John
Laskey. “John had indicated to me his desire to leave Quest and we began work on an orderly
transition plan. We wish John well and thank him for his contributions to Quest,” said Smith.
“I am delighted to welcome Brinkley to our management team, “ said Smith. “His
decade in our industry and his experience with larger and high growth operations will be a
great asset to Quest as we continue to grow our business. With this hire, we have completed
the build out of our executive team and enter 2001 with everyone on board.”
Conference Call Information
Quest Software will host a conference call today on Tuesday, January 30, 2001 at 2:00
p.m. Pacific Time to discuss its results. A simultaneous Web cast of the conference call will
be available on Quest Software’s website at www.quest.com in the ``Investor Relations''
section and will also be available at StreetFusion’s website at www.Streetfusion.com. The
Web cast will remain archived until February 23, 2001 for replay.
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Forward Looking Statements
This release may include predictions, estimates and other information that might be
considered forward-looking statements. These statements are based on current expectations
and assumptions that are subject to risks and uncertainties. Actual results could differ from
those anticipated as a result of various factors, including the impact of economic conditions on
our customers, variations in the size and timing of customer orders; competitive products and
pricing; dependence on Oracle’s technologies; vulnerability to direct competition with Oracle
and other providers of database and database management products; rapid technological
change; risks associated with the development and market acceptance of new products;
disruptions caused by acquisitions of companies and/or technologies; the exposure to risk
from international operations; and the need to attract and retain qualified personnel.
For a discussion of these and other related risks, please refer to our recent SEC
filings, including our Annual Report on Form 10-K for the year ended December 31, 1999 and
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2000. Readers are
cautioned not to place undue reliance on these forward-looking statements, which speak only
as of the date hereof. We undertake no obligation to update forward-looking statements to
reflect events or circumstances after the date hereof.
About Quest Software, Inc.
Quest Software is a leading provider of application management solutions designed to
maintain the integrity of mission-critical business transactions and maximize the performance
of enterprise applications. Businesses and consumers alike have come to expect instant
access to information and Quest Software provides solutions to ensure this availability. Based
in Irvine, Calif., Quest Software has offices worldwide and over 1,400 employees. For more
information, visit www.quest.com.
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