Ross Systems Announces 1st Quarter Earnings
ATLANTA, Nov. 14 /PRNewswire/ -- Ross Systems, Inc. (Nasdaq: ROSS), a leading provider of enterprise management software and e-business solutions for mid-market process manufacturers, today reported results for its first quarter ended September 30, 2000. Revenues in the quarter were $14.2 million, down 39% from $23.3 million in the same quarter of the prior year. The net loss for the quarter was $4.2 million or ($0.17) per share, compared to a net profit of $0.3 million or $0.02 per share in the same quarter of the prior year. The loss for the quarter included a charge of $0.8 million for non- recurring severance costs.
Despite the loss, operating cash flow remained positive for the quarter, and overall borrowing remained unchanged. Long-term debt declined by $0.8 million to $1.8 million. Lower license revenues, attributable to a slowdown in new license contracts, resulted in lower consulting revenues and a slight decline in maintenance revenues, despite continuing demand for add on products by Ross Systems' customers. Operating expenses for the quarter were down 19% from the prior year. DSO at 75 days has continued to improve and is down 20 days from the previous quarter.
"The results are obviously very disappointing," said Pat Tinley, Ross' President and CEO. "However, we are determined to take the necessary steps required to return this business to profitability." As evidence of the company's bias for action, in mid September Ross Systems announced a major restructuring program aimed at significantly reducing the company's costs. The results of this program will be a reduction of expenses in excess of $12 million on an annualized basis. "The restructuring took place too late in Q1 to impact our results," said Robert Webster, Ross' Executive Vice President and CFO. "The effects of our strategic restructuring should begin to payoff in the 2nd Quarter of our fiscal year."
The company has made additional aggressive moves designed to return the company to profitability and increase shareholder value including:
* European operations have been the major contributing factor to
operating losses over the past three years. The company has
implemented an aggressive strategy to move to an indirect distribution
model in France and other smaller European markets. Ross Systems
believes that these new channels will minimize our European operational
exposure while maintaining a productive sales presence.
* Ross Systems will continue with a direct sales organization in North
America. This type of selling model allows the company to leverage the
eBusiness opportunities in our installed base while selectively
focusing on new business opportunities in our core markets. "Ross will
focus its new business selling efforts where we have a differentiated
offering that provides a measurable improvement to our prospects'
business," said Peter Fausel, Ross' Senior Vice President, North
American Sales and Marketing. "Focusing on these markets will provide
a more efficient and profitable sales and consulting organization."
* In September the company announced a partnership with Integris US to
provide IT outsourcing and ASP software solutions called "Ross
sourcing." Ross eSourcing is a flexible outsourcing service in which
customers select a solution tailored to their technology needs. This
bold move will provide Ross' customers a hosted, subscription based,
alternative for their enterprise software solutions. There is a high
demand for this type of solution as evidenced in recent contracts with
Chemetals Inc, LioChem, Elementis and Hussey Copper Ltd.
Additionally, the company is seeing evidence of a strong recovery in its core markets:
* Ross Systems recently announced major new deals with Bacardi & Company,
Nellson Nutraceutical and Boars Head Provisions. The Boars Head deal
is the first phase in a multi-year roll out and could potentially be
the company's biggest deal in more than three years. "The Boars Head
Provisions deal is an indication that our core market is beginning to
recover from the post Y2K rollover," said Peter Fausel. "Our prospect
activity level is the highest in more than a year."
* The installed base has also been active with eBusiness solutions and
product extensions. Ross Systems recently signed add on contracts with
Alcoa CSI, Mission Pharmacal, Moyer Packing, Nu-Gro Corp., Cititrust
Bahamas and Chemical Associates, to name a few.
* The rebound is also occurring outside of North America. The company
recently announced significant new orders in the UK, Spain, Japan,
Greece, Russia and Italy. Process Industry customers are looking to
invest in enterprise software solutions and many see the advantages at
working with Ross Systems.
The company believes the reduced operational costs combined with its improving market momentum will provide for balanced growth and more consistent profitability going forward. Ross Systems believes that these actions, along with continued technology-based productivity improvements, will move the company to profitability.
About Ross Systems
Ross Systems Inc. is a leading supplier of enterprise resource planning (ERP) and management software and e-business solutions for process manufacturing industries including food, beverage, chemical, pharmaceutical, paper and metals. The Ross Systems family of solutions includes the award- winning iRenaissance, a broad range of Internet-enabled enterprise resource planning and management applications for financials, manufacturing, advanced planning, supply-chain management, maintenance management, transportation management, materials management and human resources/payroll. Ross Systems' Resynt e-business product family includes digital marketplace applications spanning procurement, sales, Internet trading exchange connectivity, collaboration and employee productivity. More than 3,400 companies around the world use Ross Systems solutions 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, Ga. 30328, 770-351-9600, 1-877-ROSS-INC rossinc.com .
STATEMENTS IN THIS ANNOUNCEMENT WHICH EXPRESS THAT THE COMPANY "BELIEVES", "ANTICIPATES," "EXPECTS," "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 RISKS AND UNCERTAINTIES, INCLUDING QUARTERLY FLUCTUATION OF SOFTWARE PRODUCT LICENSE REVENUE, WEAKENING OF CUSTOMER DEMAND FOR ENTERPRISE SYSTEMS, THE COMPANY'S MAINTENANCE OF A MINIMAL BACKLOG, THE UNCERTAINTY OF DEMAND FOR NEW PRODUCT OFFERINGS 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, 2000.
Resynt and "The business of e-Commerce" are trademarks of Ross systems, Inc. Renaissance and GEMBASE are registered trademarks of Ross Systems, Inc. Throughout this release, software and hardware products are mentioned by name. In most, if not all, cases, these product names are claimed as trademarks by the companies that manufacture the products. It is not our intention to claim these names or trademarks as our own.
ROSS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended
September 30,
2000 1999
Revenues:
Software product licenses $2,417 $5,970
Consulting and other services 4,967 10,201
Maintenance 6,768 7,092
Total revenues 14,152 23,263
Operating expenses:
Costs of software product licenses 483 1,001
Costs of consulting,
maintenance and other services 6,518 11,030
Sales and marketing 5,043 5,214
Product development 3,045 2,454
General and administrative 1,537 1,998
Provision for uncollectible accounts 552 401
Amortization of other assets 225 260
Non-recurring costs 790 ---
Total operating expenses 18,193 22,358
Operating loss (4,041) 905
Other expenses, net (337) (351)
Loss before taxes (4,378) 554
Income tax expense (benefit) (183) 208
Net loss $(4,195) $346
Net earnings (loss) per share
Basic $ (0.17) $0.02
Diluted $ (0.17) $0.02
Shares used in per share computation - diluted
Basic 24,119 22,973
Diluted 24,119 23,532
ROSS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share related data)
September 30, June 30,
2000 2000
(audited)
ASSETS
Current assets:
Cash and cash equivalents $1,055 $2,010
Accounts receivable, less allowance
for doubtful accounts 15,443 21,927
Prepaids and other current assets 1,899 1,501
Total current assets 18,397 25,438
Property and equipment 2,748 3,009
Computer software costs 33,109 32,637
Other assets 2,996 3,211
Total assets $57,250 $64,295
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of debt $10,367 $10,148
Accounts payable 7,708 6,949
Accrued expenses 4,479 5,459
Income taxes payable 198 248
Deferred revenues 14,691 17,974
Total current liabilities 37,443 40,778
Long-term debt, less current installments 1,798 2,627
Shareholders' equity:
Common stock 24 24
Additional paid-in capital 86,316 85,780
Accumulated deficit (67,228) (63,034)
Accumulated comprehensive (deficit) (1,103) (1,880)
Total shareholders' equity 18,009 20,890
Total liabilities and shareholders' equity $57,250 $64,295
ROSS SYSTEMS, INC. AND SUBSIDIARIES
SELECTED UNAUDITED QUARTERLY INFORMATION
(In thousands, except for per share data)
Rolling
12 Month
Total Quarter Ended
Sept. 30, June 30, March 31, Dec. 31,
2000 2000 2000 1999
Total
revenues $70,892 $14,152 $16,421 $18,477 $21,842
Total operating
expenses 83,798 18,193 21,130 21,967 22,508
Operating
earnings (12,906) (4,041) (4,709) (3,490) (666)
Net
earnings $(14,201) $(4,195) $(5,080) $(3,853) $(1,073)
Net earnings
per common
share -
diluted $(0.60) $(0.17) $(0.22) $(0.16) $(0.05)
Common and
common
equivalent
shares used
in computing
diluted
earnings
per share 23,588 24,119 23,480 23,416 23,336
SOURCE Ross Systems, Inc.
CO: Ross Systems, Inc.
ST: Georgia
IN: CPR MLM
SU: ERN
11/14/2000 16:05 EST prnewswire.com |
