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Technology Stocks : SDRC - Structural Dynamics Research Corp. -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Rush who wrote (945)	4/5/2001 9:32:17 PM
From: D. K. G.	Respond to of 946

Software Firm Defies Trends; Its Outlook Actually Improves By Murray Coleman Investor's Business Daily Don't tell Jeffrey Vorholt about the tech industry carnage. The chief financial officer for Structural Dynamics Research Corp. sees only boom times. "I wouldn't want to characterize any of the competition as dot-bombs," Vorholt said with a laugh. "But a software company that's been in business for 30 years, has no debt and has significant cash reserves is a bit of a rarity these days." That describes SDRC, though it's looking to use some of those reserves. The business-to-business software maker on Wednesday struck a deal to buy privately held Inovie Software Inc. Analysts say SDRC likely paid less than $10 million. But the relatively small transaction moves the company into a growing new segment of electronic commerce. "It gives them a bigger footprint in collaborative commerce, which is a very hot market," said William Broun, an analyst with A.G. Edwards & Sons. C-Commerce Gaining Collaborative commerce – or c-commerce – is one of B2B's brightest stars. While e-commerce hooks buyers and sellers into online marketplaces, c-commerce software connects both parties before and after the process. The idea is to help companies streamline production and cut costs for buyer and seller. SDRC's software applications focus on collaborative planning using the Internet. Its Metaphase line is the top seller to companies interested in sharing data as products are developed, says AMR Research Inc. Now, SDRC is grabbing Inovie to enter another segment of c-commerce, software that helps partners plan projects together. "It (project planning software) is a real fuzzy area because a lot of people are trying to get into it right now," said AMR analyst Kevin O'Marah. O'Marah says software industry heavyweights such as SAP AG, Oracle Corp. and i2 Technologies Inc. are moving into c-project planning. In a slow economy, O'Marah says working with e-commerce partners to plan big projects is a good way that companies can cut costs. "This segment is getting a lot of buzz in the collaborative area," he said. Within industry circles, so is SDRC, based in Milford, Ohio, near Cincinnati. Analysts say it was one of the earliest movers in c-commerce. Started in 1967 as an engineering consulting firm, SDRC started making computer-aided design software in the early 1980s. At first, the product was simply for in-house use. "Our clients decided they wanted to do the same thing," said SDRC spokeswoman Mary Ward. "So it was just a matter of time before we offered it commercially." By the early 1990s, SDRC was a CAD systems developer. But profit margins started slowing as the market matured. Had To Diversify "Programs that had sold for $25,000 by the mid-1990s were going for $5,000," said John Cregan, an analyst with Wit SoundView Corp. So SDRC had to diversify. In 1997, it started selling an early version of Metaphase, one of the first c-commerce programs. "That's where our real growth has been," said CFO Vorholt. "By the end of this year, when a majority of our revenues will be from B2B, we'll see even more growth." That growth is being noted. While the software market as a whole continues to sink, SDRC is on the rise. Its stock price has climbed from 8.25 in late December to near 15. And this is during a time when the great majority of tech stocks have fallen. The company this week said it will beat analysts' estimates when it releases results on April 18. The company says it expects it made 14 to 16 cents a share in the first quarter. It sees sales of $111 million to $112 million. Analysts were expecting about 10 cents a share and sales of $110 million. In the year-ago period, it reported a per-share profit of 14 cents on revenue of $108 million. "SDRC has a very interesting strategy," said Broun of A.G. Edwards. "It's just a matter of execution at this point. They've got to keep going out, knocking down the numbers." investors.com