Manugistics Announces Second Quarter Results; Operating Results Improve Significantly Over Prior Year
ROCKVILLE, Md.--(BUSINESS WIRE)--Sept. 25, 2003--Manugistics Group, Inc. (NASDAQ:MANU), a leading global provider of supply and demand chain management solutions, today reported results for its fiscal 2004 second quarter.
"We are pleased with a number of positive aspects in the second quarter, most importantly meeting our financial performance objectives," said Gregory J. Owens, Manugistics' chairman and chief executive officer. "Other positive aspects of the quarter include nearly doubling the number of software license transactions closed as compared to our first quarter, increased business with new customers, a significant contribution from our international operations and positive cash flows from operations."
For the second quarter ended August 31, 2003, total revenue was $59.7 million, down 15 percent from $69.9 million in the prior year quarter. Software revenue was $17.8 million, down 2 percent from $18.1 million in the prior year quarter.
For the second quarter, the Company reported a GAAP operating loss of $4.2 million compared to a GAAP operating loss of $25.5 million in the prior year quarter. The Company reported a GAAP net loss of $8.0 million, or $.11 per basic and diluted share, compared to a GAAP net loss of $47.7 million, or $0.68 per basic and diluted share, in the prior year quarter.
For the second quarter, the Company reported adjusted operating income of $1.2 million, compared to an adjusted operating loss of $11.2 million in the prior year quarter. The Company reported an adjusted net loss of $2.6 million, or $.04 per basic and diluted share, for the second quarter, compared to an adjusted net loss of $13.1 million, or $.19 per basic and diluted share, in the prior year quarter.
Adjusted net income or loss, adjusted operating income or loss and adjusted net income or loss per basic and diluted share referred to in this press release are non-GAAP measures and exclude the following items: amortization of intangibles and acquired technology, restructuring and other impairment charges, non-cash stock compensation charges and a valuation allowance on deferred tax assets (fiscal 2003 only). A reconciliation of GAAP results to adjusted results has been provided in the financial statement tables following the text of this press release. For further information, please refer to the section of the press release titled "Reasons for Presentation of Non-GAAP Financial Measures."
"Given that our summer quarter is traditionally our lowest seasonally from a sales perspective, we were pleased with the financial improvement this quarter. We continue to be optimistic about future quarters and, assuming the economy and competitive environment remain stable, we expect to see sequential increases for the remainder of the fiscal year," added Owens. "We have reduced our operating costs significantly over the last year, and believe we have the right personnel worldwide to drive revenue growth with improved sales execution, upgrades to our Web-based version 7 releases, rapidly emerging markets in Asia Pacific and increased awareness and selling of our revenue management solutions."
Additional August 2003 Quarterly Financial Highlights:
-- Closed 27 software license transactions greater than $100,000,
including 6 transactions of $1 million or greater.
-- 50 percent of software revenue from new customers.
-- 50 percent of software revenue from international sales.
-- Cash and marketable securities balance was approximately $144
million as of August 31, 2003.
-- Days Sales Outstanding (DSO) for receivables were 78 days.
-- Positive operating cash flows of $2.6 million.
The Company is continuing to adjust its cost structure and reallocate resources to align with near-term revenue and financial performance expectations. The Company expects adjusted net income to be approximately breakeven in the Company's third quarter, with further improvement expected in the fourth quarter. Projected adjusted net income for the third and fourth quarters excludes expected quarterly non-cash charges of $4.6 million for amortization of intangibles and acquired technology and $400,000 for non-cash stock compensation charges. The Company expects to end fiscal 2004 with total cash and marketable securities of approximately $145 million.
Other Highlights and Developments:
Second Quarter Global Client Wins: The Company signed significant software license transactions across key industries in the Americas, Europe and Asia, with second quarter global wins including, among others: Allied Domecq, Ajinomoto, Ayeca, Beringer Blass Wine Estates, Boeing, Campbell Soup, GlobalNetExchange, H.J. Heinz Company, L.L. Bean, McCormick & Company, Mitsubishi Motors Europe, O2, Pfizer, R. Twining and Company,Sanofi-Synthelabo, Sargent Fletcher and Television New Zealand.
Management and Corporate Governance Developments: Kevin C. Melia was appointed by the Company's Board of Directors to serve as a Class I director with a term expiring in 2005. Melia is currently Chairman of the Board of Lightbridge Corporation and Iona Technologies; and is the former chief financial officer of Sun Microsystems.
Doug Denlinger has been promoted to senior vice president, Engineering and Technology Solutions, with global responsibility for the strategic direction of the Company's industry leading supply and demand chain management solutions. Denlinger was previously group vice president of solutions management.
enVISION2003 Set for October 26-29 in Washington, DC: Manugistics' enVISION2003 conference will feature a keynote address from General Tommy R. Franks (Ret.) titled "Serving the Modern Day Warfighter: the Logistics Engine Necessary to Win the War Against Terrorism," and focusing on surmounting the logistical challenges during the war efforts in Afghanistan and Iraq.
Other featured presentations include keynote addresses from The Scotts Company - Wal-Mart's "Supplier of the Year" for 2002, ConAgra Foods and Nissan North America. Over 70 other Manugistics' client speakers will share their tangible successes using Manugistics' leading supply and demand chain management solutions. The conference assembles leading Fortune 1000 enterprises, government agencies, partners, media and analysts to share best practices.
enVISION2003 - Manugistics latest 7 Series Upgrade to Launch: Manugistics' 7 series continues to deliver measurable value to clients around the globe, offering innovative supply and demand chain management solutions. The unveiling of Manugistics 7.2 at the Company's enVISION2003 conference will provide a glimpse at the next generation solutions that the Company is delivering to help clients achieve desired business growth, get the maximum value of existing IT investments, and ensure the security and integrity of their global supply chains.
enVISION2003 - Alliance Partner Support: Returning as enVISION sponsors are important alliance partners - Accenture, BEA SYSTEMS, Inc., Cap Gemini Ernst & Young, Cognos, HP, IBM, Intel and Sun Microsystems. The Company continues to work with leading system integrators and technology vendors to deliver leading, vertically-aligned supply and demand chain management solutions to organizations around the globe.
Conference Call Information: Manugistics will conduct a simultaneous conference call and audio Webcast on Thursday, September 25th at 5:00 PM ET to discuss the Company's financial performance for its second quarter. Interested parties may listen to the Webcast by going to manugistics.com.
A recording of the call will be available from 7:00 PM ET September 25, 2003 through 7:00 PM ET September 29, 2003. To listen to the recording, callers within North America may call 800-633-8284. Callers outside North America may call 402-977-9140. Callers to the recording will be required to enter the access number for this call, which is 21159959. In addition, a recording of the Webcast will be archived at manugistics.com from 7:00 PM ET September 25, 2003 through 7:00 PM ET December 18, 2003.
About Manugistics Group, Inc.
Manugistics is a leader in delivering supply chain and demand chain management solutions. Today, more than 1,200 clients trust Manugistics to help them reduce costs, increase revenues and enhance margins. The Company provides comprehensive solutions for supply chain management, demand and revenue management, service and parts management, and supplier relationship management. Its clients include industry leaders such as AT&T, Amazon.com, BMW, Boeing, Brown & Williamson, Caterpillar, Cisco Systems, Circuit City, Coca-Cola Bottling, Continental Airlines, DaimlerChrysler, Diageo, DuPont, Fairchild Semiconductor, Ford Motor Company, Harley-Davidson, Nestle, RadioShack and Unilever. For more information, go to manugistics.com.
FOR ADDITIONAL INFORMATION REGARDING THIS ANNOUNCEMENT, CONTACT THE MANUGISTICS NEWSBUREAU HOTLINE AT 301-255-5330.
Reasons for Presentation of Non-GAAP Financial Measures
The non-GAAP financial measures presented in the text of this press release and accompanying supplementary financial information (also referred to as "adjusted") represent the financial measures used by the Company's management to evaluate the quarterly operating performance of the Company and to conduct its business operations. These non-GAAP financial measures are also used by management to evaluate return on investment, income contribution and future impact to operating results of potential mergers and acquisitions. In addition, these non-GAAP financial measures facilitate management's internal comparisons to competitors' operating results and the software industry in general. This non-GAAP financial information is provided as additional information for investors and is not in accordance with, or an alternative to, GAAP. In addition, the non-GAAP financial information provided may be different than similar measures used by other companies. However, the Company's management believes these non-GAAP measures provide useful information to investors, potential investors, securities analysts and others so each group can evaluate the Company's current and future prospects in the same manner as management if they so choose. The Company believes its non-GAAP measure of operating performance better reflects the underlying economics of its business and better aligns with the cash flow performance of the Company as measured under GAAP than it does with operating results as presented under GAAP, which includes or may include, from time to time, non-cash charges for amortization expense and purchased research and development related to acquisitions, impairment losses on long-lived assets and non-cash stock compensation charges. A reconciliation of GAAP results to adjusted results has been provided in the financial statement tables that accompany this press release. |
