Ascential Software (ASCL) Message Board

ASCENTIAL SOFTWARE CORPORATION
PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS (1)
(In thousands, except per share data)

Three Months Ended September 30, 2003

Total Transaction Other Pro
Consolidated & Transition Forma Pro Forma
GAAP Expense (2) Adjustments Adjusted (4)
(3)
NET REVENUES
Licenses $22,353 $-- $-- $22,353
Services 23,536 -- -- 23,536
45,889 -- -- 45,889

COSTS AND EXPENSES
Cost of licenses 3,874 -- (1,210) 2,664
Cost of services 10,331 (53) (160) 10,118
Sales and marketing 19,531 (732) (97) 18,702
Research and development 6,834 (349) -- 6,485
General and
administrative 6,472 (451) (88) 5,933
Merger, realignment and
other charges 1,654 (1,654) -- --
In-process research and
development 2,000 -- (2,000) --
50,696 (3,239) (3,555) 43,902

Operating income (loss) (4,807) 3,239 3,555 1,987

OTHER INCOME (EXPENSE)
Interest income 2,719 -- -- 2,719
Interest expense (58) -- -- (58)
Other, net 576 -- -- 576

INCOME (LOSS) BEFORE
INCOME TAXES (1,570) 3,239 3,555 5,224
Income tax expense
(benefit) 129 972 467 1,568

NET INCOME (LOSS) $(1,699) $2,267 $3,088 $3,656

NET INCOME (LOSS) PER
COMMON SHARE
Basic $(0.03) $0.06
Diluted $(0.03) $0.06

SHARES USED IN PER
SHARE CALCULATIONS
Basic 58,195 58,195
Diluted 58,195 59,946

(1) See Unaudited Consolidated Statements of Operations on a following
page of this release. Pro forma presentation is not intended to
replace GAAP presentation. Pro forma measures are calculated in the
manner described in this release.

(2) Pro forma adjustments in this column include a) $1.7 million of
merger, realignment and other charges consisting of severance and
adjustments to reserves for vacated real estate for the consolidation
of Ascential offices associated with the Mercator Acquisition, b)
$1.2 million of transition expenses related to the Mercator
Acquisition, and c) legacy expenses associated with divested business
operations. The adjustments in this column also include the effect of
an estimated associated tax benefit based on the effective tax rate.

(3) Other pro forma adjustments consist of a) the write off of in process
research and development costs related to the Mercator Acquisition,
and b) $1.2 million, $0.2 million, $0.1 million, and $0.1 million of
purchased intangible amortization recorded to cost of licenses, cost
of services, selling and marketing, and general and administrative
costs, respectively, and the estimated associated tax benefit of these
adjustments based on the effective tax rate.

(4) On September 12, 2003, we acquired Mercator Software. During the
third quarter, subsequent to the acquisition date, Mercator
contributed $2.2 million of license revenue, $2.7 million of services
revenue, $4.1 million of costs and expenses, resulting in $0.8 million
of operating income, $0.4 million of net income, and $0.01 of net
income per common share, diluted. These results are included in this
column.

ASCENTIAL SOFTWARE CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP)(1)
(In thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
NET REVENUES
Licenses $22,353 $14,897 $62,539 $40,764
Services 23,536 15,315 58,575 38,203
45,889 30,212 121,114 78,967

COSTS AND EXPENSES
Cost of licenses 3,874 3,675 10,828 14,745
Cost of services 10,331 9,064 26,406 25,641
Sales and marketing 19,531 18,298 53,075 57,229
Research and development 6,834 6,170 17,714 19,277
General and
administrative 6,472 8,773 19,843 31,307
Merger, realignment and
other charges (2) 1,654 7,704 2,086 19,370
Write-off of acquired
in-process research
and development 2,000 -- 2,000 1,170
50,696 53,684 131,952 168,739

Operating loss (4,807) (23,472) (10,838) (89,772)

OTHER INCOME (EXPENSE)
Interest income 2,719 4,100 8,934 15,561
Interest expense (58) (39) (88) (78)
Adjustment to gain on
sale of database
business -- (1,394) -- 6,240
Litigation settlement
income -- -- -- 3,127
Other, net 576 (872) 652 (3,070)

INCOME (LOSS) BEFORE
INCOME TAXES (1,570) (21,677) (1,340) (67,992)
Income tax expense
(benefit) 129 (5,420) 198 (14,587)

NET INCOME (LOSS) $(1,699) $(16,257) $(1,538) $(53,405)

NET INCOME (LOSS) PER
COMMON SHARE (3)
Basic $(0.03) $(0.27) $(0.03) $(0.85)
Diluted $(0.03) $(0.27) $(0.03) $(0.85)

SHARES USED IN PER SHARE
CALCULATIONS (3)
Basic 58,195 61,330 58,028 62,842
Diluted 58,195 61,330 58,028 62,842

(1) See pro forma results of operations and related reconciliations to
GAAP results for the three months ended September 30, 2003 on a prior
page of this release and reconciliation between GAAP and pro forma
results for the three months ended September 30, 2002 on a subsequent
page of this release

(2) Merger, realignment and other charges principally include severance
and real estate costs related to the consolidation or elimination of
offices. These costs are the result of a realignment of the business
due to business combinations, a sale of a business or the termination
of a product line.

(3) On June 17, 2003 the Company effected a 1-for-4 reverse stock split.
Accordingly, all share and earnings per share figures have been
restated as though the reverse split was in effect for all periods
presented.

ASCENTIAL SOFTWARE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

September 30, December 31,
2003 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents $303,344 $216,551
Short-term investments 221,383 288,199
Accounts receivable, net 38,767 27,112
Receivable on sale of database business -- 109,200
Other current assets 13,596 31,136

Total current assets 577,090 672,198

Property and equipment net 11,358 5,427
Software costs, net 14,502 14,124
Long-term investments 2,031 966
Goodwill and intangible assets, net 350,853 173,740
Deferred income taxes 29,789 28,515
Other assets 10,527 11,280

Total Assets $996,150 $906,250

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable $12,930 $8,136
Accrued expenses 69,379 23,137
Accrued employee compensation 19,904 14,861
Income taxes payable 79,313 98,916
Accrued merger, realignment and other charges 10,023 15,698
Deferred income taxes 32,235 33,171
Deferred revenue 43,021 17,666
Other current liabilities 14,483 479

Total current liabilities 281,288 212,064

Lease Obligations 665 --

Total Liabilities 281,953 212,064

Total Stockholders' Equity 714,197 694,186

Total Liabilities and Stockholders' Equity $996,150 $906,250

ASCENTIAL SOFTWARE CORPORATION
SELECTED UNAUDITED REVENUE HISTORY
(In millions)

Q1 Q2 Q3 Q4 Total Q1 Q2 (1)Q3
2002 2002 2002 2002 2002 2003 2003 2003
LICENSE
REVENUE:
Data
Integration $10.7 $15.1 $14.9 $18.8 $59.5 $19.2 $21.0 $22.3
Content
Management 0.1 -- -- 0.1 0.1 -- -- --
Total 10.8 15.1 14.9 18.9 59.6 19.2 21.0 22.3

SERVICES REVENUE:
Data
Integration 9.3 12.5 15.1 15.1 52.0 16.0 18.8 23.6
Content
Management 0.7 0.4 0.2 0.1 1.4 0.1 0.1 --
Total 10.0 12.9 15.3 15.2 53.4 16.1 18.9 23.6

TOTAL:
Data
Integration 20.0 27.6 30.0 33.9 111.5 35.2 39.8 45.9
Content
Management 0.8 0.4 0.2 0.2 1.5 0.1 0.1 --
Total $20.8 $28.0 $30.2 $34.1 $113.0 $35.3 $39.9 $45.9

% of revenue
from 10%
customers in
the period 11% -- 11% 16% 11% -- 13% --

(1) Includes Mercator license revenue of $2.2 million, and services
revenue of $2.7 million for the period from the date of acquisition,
September 12, 2003, through September 30, 2003.

ASCENTIAL SOFTWARE CORPORATION PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF
OPERATIONS (1) (In thousands, except per share data)

Three months ended June 30, 2003

Total Pro Forma Pro Forma
GAAP Consolidated Adjusted
Adjustments (2)
NET REVENUES
Licenses $21,016 $ -- $21,016
Services 18,913 (81) 18,832
39,929 (81) 39,848
COSTS AND EXPENSES
Cost of licenses 3,353 (1,113) 2,240
Cost of services 8,828 (243) 8,585
Sales and marketing 16,849 -- 16,849
Research and development 5,510 -- 5,510
General and administrative 6,962 (1,583) 5,379
Merger, realignment and
other costs 432 (432) --
41,934 (3,371) 38,563
Operating income (loss) (2,005) 3,290 1,285
OTHER INCOME (EXPENSE)
Interest income 2,903 -- 2,903
Interest expense (7) -- (7)
Other, net 102 -- 102
INCOME BEFORE INCOME TAXES 993 3,290 4,283
Income tax expense 298 987 1,285
NET INCOME $695 $2,303 $2,998
NET INCOME PER COMMON
SHARE (3)
Basic $0.01 $0.05
Diluted $0.01 $0.05

SHARES USED IN PER SHARE
CALCULATIONS (3)
Basic 58,009 58,009
Diluted 59,059 59,059

(1) Pro forma presentation is not intended to replace GAAP presentation.
Pro forma measures are calculated in the manner described in this
release.

(2) Pro forma adjustments represent:
- revenue and expenses associated with the remaining service
obligations under content management customer contracts including
$81 in services revenue, $83 in cost of services and $24 of general
and administrative costs. The content management product line was
terminated during the second quarter of 2002.
- amortization of purchased intangibles including technology and
customer lists consisting of $1,113 in cost of software and $160 in
cost of services.
- general and administrative costs totaling $434 associated with the
Informix database business sold to IBM in the third quarter of 2001;
comprised primarily of dispute resolution costs and administrative
costs associated with the closure of idle database operations.
- general and administrative costs totaling $1,125 related to the
settlement of litigation during the quarter.
- merger, realignment and other costs totaling $432 for adjustments to
reserves for vacated real estate.
- the estimated tax benefit of $987 associated with the above
adjustments based upon the effective tax rate.

(3) On June 17, 2003 the Company effected a 1-for-4 reverse stock split.
Accordingly, all share and earnings per share figures have been
restated as though the reverse split was in effect for all periods
presented.

ASCENTIAL SOFTWARE CORPORATION
PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS (1)
(In thousands, except per share data)

Three Months Ended September 30, 2002
Results of
Content Database Adjustments
Total Management Transaction for GAAP Pro Forma
Consolidated Product Line & Transition Reporting Continuing
GAAP (2) (3) Purposes Operations
(4)
NET REVENUES
Licenses $14,897 $(34) $- $- $14,863
Services 15,315 (175) - - 15,140
30,212 (209) - - 30,003

COSTS AND EXPENSES
Cost of
software 3,675 (7) - (1,113) 2,555
Cost of
services 9,064 (725) - (160) 8,179
Sales and
marketing 18,298 - - - 18,298
Research and
development 6,170 (178) - - 5,992
General and
administrative 8,773 (370) (2,503) (72) 5,828
Merger,
realignment
and other
charges (5) 7,704 - - (7,704) -
53,684 (1,280) (2,503) (9,049) 40,852

Operating loss (23,472) 1,071 2,503 9,049 (10,849)

OTHER INCOME (EXPENSE)
Interest income 4,100 - - - 4,100
Interest expense (39) - - - (39)
Adjustment to gain on
sale of
database
business (1,394) - 1,394 - -
Other, net (872) - - - (872)

INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES,
excluding charges, related
tax benefit and
amortization of
purchased
intangibles (21,677) 1,071 3,897 9,049 (7,660)
Income tax
expense
(benefit) (5,420) 268 974 2,263 (1,915)

INCOME (LOSS) FROM OPERATIONS,
excluding charges and related tax benefit
and amortization of
purchased
intangibles $(16,257) $803 $2,923 $6,786 $(5,745)

LOSS PER COMMON SHARE: (6)
Excluding charges and
related tax benefit and
amortization of purchased
intangibles $(0.27) $(0.09)

NET LOSS PER COMMON SHARE (6)
Basic and Diluted
$(0.27) $(0.17)

SHARES USED IN
PER SHARE CALCULATIONS
Excluding
charges 61,330 61,330
Basic and
diluted 61,330 61,330