SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


SCHEDULE 14D-9

(RULE 14d-101)

SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.    )


STELLENT, INC.

(Name of Subject Company)

STELLENT, INC.

(Name of Person Filing Statement)

COMMON STOCK, PAR VALUE $0.01 PER SHARE

(Title of Class of Securities)

85856W 10 5

(CUSIP Number of Class of Securities)

Robert F. Olson

President and Chief Executive Officer

7500 Flying Cloud Drive, Suite 500

Eden Prairie, Minnesota 55344

(952) 903-2000

(Name, address and telephone number of person authorized to receive
notice and communications on behalf of the person filing statement)

Copies to:

Gordon S. Weber

 

 

Michael A. Stanchfield

 

William Kelly

Faegre & Benson LLP

 

Samuel Kelso

2200 Wells Fargo Center

 

Davis Polk & Wardwell

90 South Seventh Street

 

600 El Camino Real

Minneapolis, Minnesota 55402

 

Menlo Park, California 94025

(612) 766-7000

 

(650) 752-2000

 


x  Check the box if the filing relates to preliminary communications made
before the commencement date of a tender offer.

 




NEWS RELEASE

For Immediate Release

 

For More Information:

 

 

INVESTORS

 

 

Darin McAreavey, Stellent, Inc.

 

 

(952) 903-2049

 

 

darin.mcareavey@stellent.com

 

 

MEDIA

 

 

Amanda Arens

 

 

Haberman & Associates, Inc.

 

 

(612) 338-3900

 

 

amanda@habermaninc.com

ORACLE TO ACQUIRE STELLENT; STELLENT REPORTS SECOND QUARTER FISCAL 2007 FINANCIAL RESULTS

EDEN PRAIRIE, MN, Nov. 2, 2006 Stellent, Inc. (Nasdaq: STEL), a global provider of content management solutions, today announced a definitive agreement for Oracle to acquire Stellent through a cash tender offer for $13.50 per share, or approximately $440 million.

The acquisition of Stellent will complement and extend Oracle’s existing content management solution portfolio. Oracle Content Database enables enterprises to store and centrally manage unstructured content in Oracle Databases. Stellent’s Universal Content Management solution works with Oracle Content Database and offers a variety of best-of-breed solutions for document management; Web content management; information rights management; digital asset management; records and retention management; imaging; and governance, risk and compliance.

“Oracle’s acquisition of Stellent will be a positive milestone for all of our stakeholders — shareholders, employees, customers and partners,” said Robert Olson, president and chief executive officer for Stellent. “Our leading product suite will have the dedicated resources and broad distribution networks of the largest enterprise software company in the world, which will elevate our award-winning solutions to new levels within the enterprise content management industry.”

“The amount of electronic content, unstructured data and documents is growing very rapidly, and organizations are seeking advanced and automated content and process management solutions to manage this information to meet regulatory requirements,” said Thomas Kurian, senior vice president, Oracle Corp. “Stellent’s enterprise content management solutions enable a variety of people within an organization to create, capture, store, manage, publish, view, search and archive all types of documents across their entire lifecycle.”

The transaction is subject to customary conditions and is expected to close by the end of the year or early 2007.

Shareholders of Stellent are strongly encouraged to read the Solicitation/Recommendation Statement on Schedule 14D-9 to be filed by Stellent when it becomes available because it will contain important information about the tender offer. Investors may obtain the Solicitation/Recommendation Statement on Schedule 14D-9, and any other documents filed with the SEC for free at the SEC’s Web site, www.sec.gov.  Materials filed by Stellent may be obtained for free at Stellent’s Web site, www.stellent.com.




Second Quarter Financial Results

Stellent’s second quarter fiscal 2007 revenues were $33.7 million, an increase of 12% over the $30.1 million reported for the same period last year. Revenues for the six-month period ended Sept. 30, 2006 were $66.1 million, a 13% increase over revenues of $58.7 million for the comparable period of fiscal 2006.

On a Generally Accepted Accounting Principles (GAAP) basis, net income for the quarter ended Sept. 30, 2006 increased approximately 139% year-over-year to $1.3 million, or $0.04 per share on a basic and diluted share basis, compared with net income of $0.6 million, or $0.02 per share on a basic and diluted share basis, for the quarter ended Sept. 30, 2005. GAAP net income for the six months ended Sept. 30, 2006 was $3.4 million, or $0.12 per share on a basic share basis and $0.11 per share on a diluted share basis, compared with net income of $1.6 million, or $0.06 per share on a basic and diluted share basis, for the same period of fiscal 2006.

Included in Stellent’s second quarter fiscal 2007 GAAP net income are non-cash charges and integration charges totaling $2.4 million. The expenses consist of $1.3 million in stock-based compensation due to Stellent’s adoption of FAS 123R at the beginning of this fiscal year; $0.6 million of integration costs related to the SealedMedia acquisition announced during the quarter; and $0.5 million for amortization of capitalized software, acquired intangible assets and other. Included in Stellent’s fiscal 2007 GAAP net income for the six months ended Sept. 30, 2006 are non-cash charges and integration charges totaling $3.9 million. The expenses consist of $2.4 million in stock-based compensation due to Stellent’s adoption of FAS 123R at the beginning of this fiscal year; $0.9 million for amortization of capitalized software, acquired intangible assets and other; and $0.6 million of integration costs related to the SealedMedia acquisition announced during the second quarter.

Conference Call

Stellent will host a conference call and Webcast for investors on Thursday, Nov. 2, 2006 at 4:00 p.m. Central Time. Callers in the United States can dial 1-877-282-0523, and international callers can dial 1-303-542-7976. Access to the live Webcast will be available via the investor relations area of Stellent’s Web site (www.stellent.com) on the day of the event. Investors unable to participate in the live conference call and Webcast may access a replay of the event via the investor relations area of Stellent’s Web site.

About Stellent, Inc.

Stellent, Inc. (www.stellent.com) is a global provider of content management software solutions that drive rapid success for customers by enabling fast implementations and generating quick, broad user adoption. With Stellent Universal Content Management, customers can easily deploy multiple line-of-business applications — such as public Web sites, secure intranets and extranets, compliance processes, and marketing brand management — and also scale the technology to support multi-site management and enterprise-wide content management needs.

More than 4,700 customers worldwide — including Procter & Gamble, Merrill Lynch, Los Angeles County, The Home Depot, British Red Cross, ING, Vodafone, Georgia Pacific, Bayer Corp., Coca-Cola FEMSA and Genzyme Corp. — have selected Stellent solutions to power their content-centric business applications. Stellent is headquartered in Eden Prairie, Minn. and maintains offices throughout the United States, Europe and Asia-Pacific.

###

Except for historical information contained herein, the statements contained in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these forward-looking statements involve risk and uncertainties that may cause Stellent’s actual results to differ materially, including, without limitation, risks of integration of acquired businesses, risks of intellectual property litigation, risks in technology development and commercialization, risks in product development and market acceptance of and demand for the Company’s products, risks of downturns in economic conditions generally and in the enterprise content management and unstructured information management markets specifically, risks associated with competition and competitive pricing pressures, risks associated with foreign sales and higher customer concentration and other risks detailed in the




Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended March 31, 2006. In addition to those risks, there are risks and uncertainties associated with the tender offer made by Oracle Corporation for Stellent’s common stock. Those risks include risks that the transaction will not be consummated on the terms or timeline first announced. Further information concerning those risks will be included in the Company’s filings with the Securities and Exchange Commission in response to the tender offer. Subject thereto, Stellent disclaims any intent or obligation to update these forward-looking statements.

Stellent and the Stellent logo are registered trademarks or trademarks of Stellent, Inc. in the USA and other countries. Outside In is a registered trademark of Stellent Chicago, Inc. in the USA and other countries. All other trade names are the property of their respective owner.




STELLENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended
September 30,

 

Six Months Ended
September 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

Revenues:

 

 

 

 

 

 

 

 

 

Product licenses

 

$

14,491

 

$

13,321

 

$

28,844

 

$

27,049

 

Services

 

8,527

 

6,938

 

16,206

 

12,098

 

Post contract support

 

10,710

 

9,888

 

21,020

 

19,561

 

Total revenues

 

33,728

 

30,147

 

66,070

 

58,708

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

Product licenses

 

783

 

815

 

1,611

 

1,975

 

Services

 

7,368

 

6,484

 

14,271

 

11,509

 

Post contract support

 

1,813

 

1,956

 

3,538

 

3,806

 

Amortization of capitalized software from acquisitions

 

339

 

443

 

646

 

859

 

Total cost of revenues

 

10,303

 

9,698

 

20,066

 

18,149

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

23,425

 

20,449

 

46,004

 

40,559

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

13,063

 

11,712

 

25,421

 

23,148

 

General and administrative

 

3,753

 

2,812

 

6,949

 

5,982

 

Research and development

 

5,832

 

4,895

 

11,350

 

9,551

 

Amortization of acquired intangible assets

 

116

 

210

 

209

 

374

 

Restructuring charges

 

 

648

 

 

665

 

Total operating expenses

 

22,764

 

20,277

 

43,929

 

39,720

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

661

 

172

 

2,075

 

839

 

 

 

 

 

 

 

 

 

 

 

Other:

 

 

 

 

 

 

 

 

 

Interest income, net

 

741

 

478

 

1,490

 

893

 

 

 

 

 

 

 

 

 

 

 

Net income before income taxes

 

1,402

 

650

 

3,565

 

1,732

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

69

 

93

 

132

 

93

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,333

 

$

557

 

$

3,433

 

$

1,639

 

 

 

 

 

 

 

 

 

 

 

Net income per common share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

$

0.02

 

$

0.12

 

$

0.06

 

Diluted

 

$

0.04

 

$

0.02

 

$

0.11

 

$

0.06

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

29,844

 

28,101

 

29,626

 

27,815

 

Diluted

 

31,006

 

29,264

 

31,093

 

28,848

 

 




STELLENT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

September 30,

 

March 31,

 

 

 

2006

 

2006

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash, cash equivalents and short-term marketable securities

 

$

62,076

 

$

64,641

 

Accounts receivable, net

 

33,928

 

31,320

 

Prepaid royalties, current portion

 

1,458

 

941

 

Prepaid expenses and other current assets

 

4,862

 

4,512

 

Total current assets

 

102,324

 

101,414

 

 

 

 

 

 

 

Long-term marketable securities

 

8,296

 

17,112

 

Property and equipment, net

 

7,288

 

7,822

 

Prepaid royalties, net of current portion

 

602

 

923

 

Goodwill

 

87,652

 

74,409

 

Other intangible assets, net

 

5,209

 

4,003

 

Other

 

964

 

866

 

 

 

 

 

 

 

Total assets

 

$

212,335

 

$

206,549

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

2,664

 

$

3,072

 

Deferred revenue, current portion

 

20,517

 

20,143

 

Commissions payable

 

3,045

 

3,839

 

Accrued expenses and other

 

7,136

 

7,442

 

Current portion of obligations under capital leases

 

189

 

473

 

Total current liabilities

 

33,551

 

34,969

 

Deferred revenue, net of current portion

 

876

 

1,079

 

Deferred rent, net of current portion

 

1,157

 

1,264

 

Obligations under capital leases, net of current portion

 

185

 

281

 

Total liabilities

 

35,769

 

37,593

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Common stock

 

299

 

294

 

Additional paid-in capital

 

259,862

 

254,381

 

Deferred stock-based compensation

 

 

(123

)

Accumulated deficit

 

(84,144

)

(85,793

)

Accumulated other comprehensive income

 

549

 

197

 

Total shareholders’ equity

 

176,566

 

168,956

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

212,335

 

$

206,549