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Technology Stocks : Manugistics, Inc. (MANU) -- Ignore unavailable to you. Want to Upgrade?

To: LaVerne E. Olney who wrote (1466)	6/21/2000 9:07:00 PM
From: LaVerne E. Olney	Respond to of 1670

Wednesday June 21, 8:22 pm Eastern Time Morningstar.com Manugistics Delivers the Goods, As Promised By Todd P. Bernier If Manugistics' (Nasdaq: MANU - news) fiscal first quarter is any indication of the company's future, the software vendor is in the midst of a huge turnaround. Investors who want to participate in the burgeoning world of business-to-business (B2B) electronic commerce would be wise to take a long, hard look at this company. Manugistics reported after the market closed Wednesday that it lost $0.04 per share during the fiscal first quarter, in line with First Call estimates. Although meeting expectations is no major feat, the company improved on virtually every performance metric. Quarterly revenues increased 29% from the same period a year ago, on the strength of a 98% growth in license revenues. What's truly impressive is the fact that the firm increased revenues sequentially by almost 16% -- tough to do, since the fourth quarter is typically the strongest for most software companies. Software license revenues were spread across 26 transactions, with about a third of these deals valued in excess of $1 million. A very positive sign for the company is that the average deal sign \226 a key metric in the software industry \226 increased 141% from the May quarter a year ago, to $955,000. As further proof that the firm is neatly transforming into a B2B software company, 40% of revenues were generated by e-commerce trade exchanges. The single smear on an otherwise strong quarter was the significant increase in sales and marketing expenses, which grew to 46% of revenues from only 40% in the previous quarter. Management attributed the increase to hiring and training new sales reps, and that this number would level off as revenues increase, to around 37% of sales. As an indication that its strategy of investing in sales personnel is indeed working, management stated that new customers accounted for 55% of revenues. The firm's management is convinced that investors will soon see better days, as the company finally regains profitability. In fact, it predicted that the company would move into the black in the current fiscal year \226 the first time since 1997 \226 as revenues approach $220 million for the year. Investors are surely hoping these sunny days are not too far off either, because they have had precious little to cheer about of late. The unfortunate souls that bought Manugistics' stock back in March have seen their investment vaporize to the tune of about 65%, as the stock has drifted into the mid-$20s. Manugistics is currently under-appreciated by Wall Street, as evidenced by the relatively low valuation multiple that its shares receive. Although a comparison to the pure-play B2B firms such as Commerce One (Nasdaq: CMRC - news) and Ariba (Nasdaq: ARBA - news) is unfair, Manugistics shares are valued at only a fraction of the multiple of the company's chief rival, i2 Technologies (Nasdaq: ITWO - news). Manugistics shares trade hands at roughly four times sales, which pales in comparison to i2's price-to-sales multiple of about 35 times. Although Manugistics' stock may well deserve to trade at some discount to i2's shares, Manugistics is probably worth more than one-tenth of the value of i2. Todd P. Bernier can be reached at todd_bernier@morningstar.com. biz.yahoo.com

To: LaVerne E. Olney who wrote (1466)	6/22/2000 1:19:00 AM
From: bob zagorin	Read Replies (1) \| Respond to of 1670

This is from last month but I'm posting it here for future reference. Amazon, Manugistics Make Deal by Rob Garretson Washington Post Staff Writer Wednesday, May 24, 2000; Page E03 Amazon.com is buying more than $1 million worth of software from Rockville-based Manugistics Group Inc., in the hope of gaining operating efficiencies that will help the Internet retail giant turn a profit. Under an agreement announced yesterday, Manugistics will supply Amazon with its software that automates functions known as "supply chain management." The software will enable Amazon to better match customer orders from its Web site with inventory in its distribution centers as well as its own orders to its suppliers, officials at both companies explained. "We have to turn products around quickly," said Girish Lakshman, Amazon's manager of global logistics systems. Amazon will use Manugistics' Networks Transport software to help manage the flow of products from its suppliers to its warehouses and distribution centers and then on to customers. It will be using a separate application, Networks Strategy, to help analyze costs and plan its global expansion, Lakshman said. The Manugistics software will help Amazon get orders into customers' hands faster and help cut the company's costs by helping it minimize its inventory and tailor it better to demand from customers, he added. "This is a very significant deal for us," said Manugistics chief executive Greg Owens, declining to disclose financial details of the deal, aside from confirming that its value was more than $1 million. "It's one of our bigger deals and those have been in seven figures. Frank Dzubeck, president of Communications Network Architects, a consulting firm in Washington, said, "Amazon is turning into a giant order processor and distributor. In order to do this correctly, you have to have links to all the entities in your supply chain." Amazon started out with very simple supply chains, selling books that were available directly from publishers or large distributors, Dzubeck noted. As Amazon has broadened its product lines, it has made its supply chain--the various companies that supply the products that Amazon sells to consumers--vastly more complex, he added. "It's not a good move. It's a necessity," Dzubeck said of Amazon's investment in Manugistics' software. Bolstering its supply chain-management capabilities will help Amazon meet its previously stated goal of cutting product delivery costs, known as fulfillment, agreed Mark Rowen, a senior e-commerce analyst at Prudential Securities in New York. Amazon's fulfillment costs were 16 percent of revenue in the fourth quarter of 1999 and rose to 17 percent in the first quarter of this year, Rowen noted. Amazon has told analysts that it will get those costs into the "low double digits," meaning about 11 percent or 12 percent, by the upcoming fourth quarter, he added.