Ross Systems Reports Second Quarter Results
ATLANTA, Jan. 27 /PRNewswire/ -- Ross Systems, Inc. (Nasdaq: ROSS), a
leading supplier of enterprise systems, today announced financial results for
its second quarter of Fiscal Year 2000, ended December 31, 1999. Revenue for
the quarter declined 16% to $21.8 million from the same quarter in the prior
year. Operating expenses for the quarter declined 12% to $22.5 million from
the same quarter in the prior year. The net loss for the quarter was
$1.1 million or $(0.05) share, compared to net earnings of $157,000 or
$0.01 per share in the prior year.
For the six month period ending December 31, 1999, revenue declined 13% to
$45.1 million, while operating expenses declined 10% to $44.9 million. The
net loss for the period was $728,000 or $(0.03) per share, compared to net
earnings of $968,000 or $0.05 per share in the prior year.
The company's international revenues and expenses were impacted by an
8% decline in currencies in the second quarter and a 7% decline in the six-
month period.
"The second quarter of the fiscal year continued to show the effects of
the Y2K slowdown in new enterprise application software licensing as we had
previously announced," said Dennis Vohs, Ross' Chairman and CEO. "Though many
prospects have delayed their decisions into calendar year 2000 for enterprise
systems, we have seen the interest swell within our customer base for our new
e-commerce sell side website, CustomerLink, and our internet connection
architecture, iRenaissance.Portal. Since early November, we have presented
iRenaissance.Portal to 176 customers, while we have presented CustomerLink,
our e-commerce sell side website, to 120 customers. Interest is much higher
than we had anticipated. We expect to meet with an additional 85 customers by
mid February.
"We have established a new subsidiary, Resynt.com (previously
octaveHigher) to develop and deliver our e-commerce solutions," said Vohs.
"We expect to make the first shipments of CustomerLink this quarter and will
begin to recognize revenue in Resynt.com at that time. Though we have
accelerated our investment in Resynt.com, we believe the opportunity warrants
a greater investment; and thus, we are considering various alternatives in
which we would separate Resynt.com and then raise capital through a venture
capital investment or possibly an initial public offering. Ross has held
discussions with various investment firms to explore these alternatives."
During the quarter, the company initiated actions to strengthen its
position in the food & beverage industry. In addition to positioning
Resynt.com's focus on this market, Ross expanded its enterprise systems group
offering in this area. In order to broaden its ERP offering to a full
Enterprise Relationship Management (ERM) solution, the company is introducing
iRenaissance.PriceLink, a pricing system for managing complex, extended
trading partner investments that are inherent in the food & beverage industry.
In addition, the company expanded its advanced planning and scheduling system,
iRenaissance.APS, with the addition of a forecasting, replenishment and vendor
managed inventory through an agreement with Prescient Systems. The
integration of this component into the iRenaissance suite is being completed
and will be rolled out during the first half of this calendar year.
This quarter was the inaugural quarter of the company's new Enterprise
Solution Center. During the quarter, 47 companies subscribed for the service.
The subscription delivers an on demand consulting response service, dial-in
technology management services, a business solution hotline and access to the
ESC's advanced information services and advisory personnel.
In order to round out the company's e-commerce offering in the enterprise
systems group, the company has begun discussion with various providers of
e-commerce procurement solutions to distribute their products. The company
believes its 3,400 customers and position in the mid-tier process
manufacturing market provide a unique opportunity for such a distribution
agreement.
"Although the last four quarters were difficult due to the Y2K slowdown,
we are pleased to report that the extensive preparations made by our staff
allowed our customers to smoothly transition into the new millennium," said
Pat Tinley, Ross' President and COO. "We are very pleased about how we have
positioned Ross for the new e-world and excited about our future
opportunities."
Statements in this announcement which express that the company "believes,"
"anticipates," "plans to..." or "should begin to ... " as well as other
statements which are not historical fact, are forward looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Actual events or results may differ materially as a result of the risks and
uncertainties, including quarterly fluctuation of software product license
revenue, weakening of customer demand, the company's maintenance of a minimal
backlog, and other risks and uncertainties described in reports filed by the
company with the SEC, including the annual report on Form 10-K filed for the
year ended June 30, 1999, and the quarterly report on Form 10-Q for the
quarter ended September 30, 1999.
Ross Systems, Inc. is a leading provider of enterprise software solutions
for the process manufacturing, healthcare, and public sector markets. Ross
Systems solutions are differentiated by their strong fit to specific
industries, their strong product functionality and integration, the strong
technology architecture found in the RNA architecture and the firm's ability
to produce rapid results and ROI for its mid-market clients. iRenaissance.ERP
comprises a broad range of applications including financials, manufacturing,
supply chain management, maintenance management, transportation management,
materials management, and human resources/payroll. iRenaissance.APS comprises
a complete advanced planning system for process manufacturers.
iRenaissance.CMS is a customer management system that allows process
manufacturers to optimize their order management and relationship management
with their customers. More than 3200 companies around the world use
iRenaissance.ERP in open systems environments including NT and UNIX. Ross
Systems has more than 60 offices around the world to serve its customers.
Ross Systems, Inc, Two Concourse Parkway, Suite 800, Atlanta, Georgia 30328,
770-351-9600, 1-877-ROSS-INC, www.rossinc.com .
Renaissance and GEMBASE are registered trademarks of Ross Systems, Inc.
All other trademarks are the property of their respective holders.
ROSS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended Six months ended
December 31, December 31,
1999 1998 1999 1998
Revenues:
Software product
licenses $5,077 $8,799 $11,047 $19,061
Consulting and other
services 9,834 10,335 20,035 18,634
Maintenance 6,931 7,020 14,023 13,978
Total revenues 21,842 26,154 45,105 51,673
Operating expenses:
Costs of software
product licenses 781 834 1,933 2,190
Costs of consulting,
maintenance and
other services 11,025 11,051 21,905 20,913
Sales and marketing 5,426 8,019 10,640 14,933
Product development 2,311 2,985 4,765 6,317
General and
administrative 1,870 2,124 3,867 4,199
Provision for
uncollectible accounts 835 244 1,236 527
Litigation settlement --- --- --- ---
Amortization of other
assets 260 329 520 649
Total operating
expenses 22,508 25,586 44,866 49,728
Operating earnings (loss) (666) 568 239 1,945
Other expenses, net (324) (171) (676) (332)
Earnings (loss) before
extraordinary item (990) 397 (437) 1,613
Extraordinary expense,
net of tax effect 0 213 --- 213
Income tax expense 83 27 291 432
Net earnings (loss) $(1,073) $157 $(728) $968
Net earnings (loss) per share
Basic $ (0.05) $0.01 $(0.03) $0.04
Diluted* $ (0.05) $0.01 $(0.03) $0.05
Shares used in per share computation - diluted
Basic 23,336 22,190 23,155 21,845
Diluted 23,336 23,640 23,155 23,824
* Diluted earnings per share exclude convertible debt interest expense of
69 and $173 for the three and six month periods ended December 31,
1998, respectively.
ROSS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share related data)
December 31, June 30
1999 1999
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $2,139 $6,294
Accounts receivable,
less allowance for doubtful
accounts and returns 31,834 37,593
Prepaids and other current
assets 1,358 2,591
Total current assets 35,331 46,478
Property and equipment 3,957 5,172
Computer software costs 30,087 27,261
Other assets 3,627 4,274
Total assets $73,002 $83,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of debt $9,857 $12,536
Accounts payable 8,968 10,232
Accrued expenses 6,948 8,743
Income taxes payable 18 145
Deferred revenues 14,869 18,567
Total current liabilities 40,660 50,223
Long-term debt, less
current installments 3,027 3,705
Shareholders' equity:
Common stock 23 23
Additional paid-in capital 85,262 84,261
Accumulated deficit (54,100) (53,372)
Accumulated comprehensive
income (deficit) (1,870) (1,655)
Total shareholders' equity 29,315 29,257
Total liabilities and
shareholders' equity $73,002 $83,185
ROSS SYSTEMS, INC. AND SUBSIDIARIES
SELECTED UNAUDITED QUARTERLY INFORMATION
(In thousands, except for per share data)
Rolling
12 Month
Total Quarter Ended
Dec. 31, Sept. 30, June 30, March 31,
1999 1999 1999 1999
Total revenues $95,223 $21,842 $23,263 $25,747 $24,371
Total operating
expenses 100,866 22,508 22,358 29,503 26,497
Operating earnings (5,643) (666) 905 (3,756) (2,126)
Net earnings $(7,321) $(1,073) $346 $(4,180) $(2,414)
Net earnings per
common share -
diluted $(0.32) $(0.05) $0.02 $(0.18) $(0.11)
Common and common
equivalent shares
used in computing
diluted earnings
per share 23,039 23,336 23,532 22,637 22,650
SOURCE Ross Systems, Inc.
CO: Ross Systems, Inc.
ST: Georgia
IN: CPR MLM
SU: ERN
01/27/2000 16:05 EST prnewswire.com |
