Ross Systems Announces 3rd Quarter Results
ATLANTA, April 22 /PRNewswire/ -- Ross Systems, Inc. (Nasdaq: ROSS), a
leading provider of enterprise software solutions for mid-market process
manufacturers, today reported results for its third quarter of Fiscal 1999
ended March 31, 1999. Revenues for the quarter increased slightly to
$24.4 million from $24.3 million in the same period of the prior year.
Operating expenses for the quarter increased to $26.5 million from
$22.2 million in the prior year. For the quarter, the company reported a net
loss of $2.4 million, or $0.11 per share, compared to net income of
$1.7 million, or $0.08 per share in the same period of the prior year.
For the nine-month period ended March 31, 1999, the company reported that
revenues increased 19% to $76.0 million from $64.2 million in the same period
of the prior year. Operating expense increased to $76.2 million from
$62.1 million in the same period of the prior year. The net loss for the
nine-month period was $1.4 million, or $0.07 per share, compared to net
earnings of $743,000, or $0.03 per share, in the same period of the prior
year.
"As we reported in our preliminary earnings announcement on April 1, 1999,
software product license revenues fell below the company's expectations. We
experienced a decline in the sense of urgency of prospective customers to
finalize agreements. Those prospects targeting Year 2000 implementations
shifted significantly as a percent of the prospective pipeline," said Dennis
Vohs, Ross' Chairman and CEO.
Growth in North American revenues has been the primary catalyst for growth
over the past two years. However, North American software license revenue
decreased 58% during the quarter ended March 31, 1999, and total North
American revenues declined 9%. In Europe, during the same period, software
license revenues increased 34%, while total revenues increased 31%. Asian
revenues, which represented less than 2% of the total revenues, were down 37%.
Worldwide consulting service revenues increased 43%, while maintenance
revenues increased 9%.
"Though the industry appears to have experienced similar issues, we are
disappointed with our results," said Vohs. "We are streamlining our expense
structure and expect to reduce annualized rates of expenditure by
approximately $8 million. Simultaneously, we have initiated a series of
strategies as incentive for prospective customers to conclude agreements on a
more timely basis."
Despite the decline in software license fees, the company was awarded a
number of agreements in its targeted markets. The primary platform for new
sales has been Microsoft's Windows NT operating system. The primary database
was again Oracle, but the first shipments of SQL servers were made at the end
of the quarter. Among the agreements completed during the quarter were the
following:
Food & Beverage
In the food & beverage sector, the company received contract awards from
Breiz Restauration, Scercat, Prolainat S.A., Seaforth Creamery, Colvaco, S.A.,
The Milnot Company, Kerry Foods Australia, Azucarerus Reunidas de Jaen S.A.
and Pick Szeged.
Chemical & Pharmaceutical
In the chemical & pharmaceutical sector, the company received contract
awards from Firmenich, SEH America, Mylan Labs, Perfumes y Diseno, PBI Home &
Garden, Menarini S.A. as well as one of Spain's leading ceramic producers.
Metals
In the metals sector, the company received contract awards from General
Aluminum, Ffhoenix Cuivre LLC, Deveux Wert Fonderies, Alucaprit Espana S.L.,
Southco as well as the U.S. operations of a German steel company.
Pulp, Paper & Building Products
In the pulp & paper and building products sector, the company received
contract awards from Tembec, Inc., Optiroc Premix SA and U.S. Playing Cards.
Public Sector
In the public sector, the company received contract awards from the County
of Missoula, Montana, Space Mark Inc., ARCUS, UK Ministry of Home Affairs, the
Metropolitan Washington Airport Authority, Via Metropolitan Transit and Los
Alamos Laboratory.
Healthcare
In the healthcare sector, the company received contract awards from Vassar
Brothers Hospital, Diagnostico Medico Integral, Baptist Memorial Hospital and
The Emory Clinic.
The following are selected key events of the company's third fiscal quarter:
* The company delivered its general release version of the Microsoft SQL
Server database management system. With more than 75% of its business
delivered on the Microsoft Windows NT platform, the addition of the SQL
Server database strengthens the company's ability to support the needs
of this growing market. As part of a re-seller agreement with
Microsoft, the company distributes SQL Server with its enterprise
resource planning system Renaissance CS(R).
* The company also announced support of the Microsoft DNA architecture
for manufacturing. This dynamic application platform consists of a
multi-tiered distributed application model and a comprehensive set of
infrastructure and application services.
* One of the leading industry analysts, Aberdeen Group, summarized their
view of Ross Systems in their report "The 'Process of Process': EBA in
the Process Manufacturing Industries:"
"Ross' Renaissance CS is focused on process -- one of the few
companies that address the needs of that market. The product set includes
some of Aberdeen's hot buttons: embedded supply chain, embedded decision
support and enterprise modeling. Componentization and support for
graphical development environment (future) also are seen as pluses.
Ross is actively working together with its customers in determining
future product features -- a user-driven development approach Aberdeen
supports. With a small but stable market niche, Ross has been able to
dedicate the resources necessary to stay a step ahead in process
solutions."
* Ross completed testing of its newest version of the Strategic
Application Modeler (SAM), version 4.3. This powerful knowledge
management system helps companies plan and document its complete
business processes. This version of SAM is web enabled.
* The company conducted a series of seminars in combination with partners
Microsoft and PricewaterhouseCoopers as well as with Deloitte & Touche
in North America. The seminar series focused on the importance of
establishing a solid enterprise backbone in planning for the new
millennium information environment.
* Traffic to the company's web site www.rossinc.com more than doubled
since the beginning of the fiscal year. This increase in traffic is
due in part to the investments the company made in promotional
campaigns as well as a recent revitalization of the site. The
company's web site now includes local language versions for European
countries.
* Ross World, the company's international user conference, will be held
in Orlando from April 25-28, 1999. More than 110 sessions covering the
company's products and services will be conducted including executive
forums, special interest groups, product direction and education
sessions.
The company will hold a conference call on Friday, April 23, 1999, at
10:00AM EST. The conference call-in number is 212/896-6009.
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 the risks and
uncertainties, including quarterly fluctuation of software product license
revenue, weakening of customer demand, the Company's maintenance of a minimal
backlog, intense competition, 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, 1998 and the quarterly report on Form
10-Q for the quarter ended September 30, 1998, and December 31, 1998, as well
as risks and uncertainties described in the Company's registration statements
on Form S-3 filed with the SEC in April 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, and the firm's
ability to produce rapid results and ROI for its mid-market clients. The
flagship product, Renaissance CS(R), comprises a broad range of applications
including financials, manufacturing, supply chain management, maintenance
management, transportation management, materials management, and human
resources/payroll. More than 3200 companies around the world use Renaissance
CS in open systems environments including NT and UNIX. Ross Systems employs
over 650 professionals in 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. Investors
looking for Ross Systems press releases, SEC filings, current price quotes and
other information may visit www.hawkassociates.com, or contact Frank N.
Hawkins, Jr. or Julie Marshall at Hawk Associates, Inc, 305-852-2383.
Renaissance CS is a registered trademark and GEMBASE is a trademark of
Ross Systems, Inc. Microsoft, Microsoft Windows NT, Windows, and Windows NT
are either registered trademarks of Microsoft Corp. in the United States
and/or other countries. Solaris is a trademark of Sun Microsystems, Inc. All
other trademarks are the property of their respective holders.
ROSS SYSTEMS, INC. AND SUBSIDIARIES
SELECTED UNAUDITED QUARTERLY INFORMATION
(In thousands, except for per share data)
Rolling
12 Month
Total Quarter Ended
March 31, Dec. 31, Sept. 30, June 30,
1999 1998 1998 1998
Total revenues $103,570 $24,371 $26,154 $25,519 $27,526
Total operating expenses 101,702 26,497 25,586 24,142 25,477
Operating earnings 1,868 (2,126) 568 1,377 2,049
Net earnings $406 $(2,414) $157 $811 $1,852
Net earnings per common share
- diluted $0.02 $(0.11) $ 0.01 $ 0.04 $ 0.09
Common and common equivalent
shares used in computing
diluted earnings per share 23,212 22,650 23,640 24,306 22,253
SOURCE Ross Systems, Inc. |
