Great results:
AremisSoft 1Q01 Revenue Increases 82% to $39.2 Million; Y/Y Pro forma EPS
Increases 108% to $0.21; 9th
Consecutive Quarter of Solid Performance
Business Editors
NEW YORK--(BUSINESS WIRE)--April 25, 2001--AremisSoft Corporation
(Nasdaq:AREM) an international supplier of enterprise-wide software
and Internet-enabled solutions for the manufacturing, hospitality,
healthcare and construction industries, today announced its financial
results for the first quarter ended March 31, 2001.
The Company reported revenue of $39.2 million, an 82.3% increase
from $21.5 million reported for the first quarter of 2000. Pro forma
operating margin in the first quarter of 2001 was 23.0% as compared to
19.2% in the same period of 2000. On a pro forma basis, net income for
the 2001 first quarter increased 140.2% year-over-year to $8.2 million
compared to $3.4 million, and pro forma diluted earnings per share
increased 108.1% to $0.21 from $0.10 in the year-ago quarter,
exceeding the consensus estimate of $0.16.
Pro forma net income and diluted earnings per share for the stated
periods exclude amortization of goodwill and other intangible assets
and transition related expenses.
As reported net income and earnings per share on a fully diluted
basis for the 2001 first quarter were $4.5 million and $0.11,
respectively, compared to as reported net income and earnings per
share of $2.5 million and $0.07, respectively, for the same period
last year.
Software license revenue increased 74.8% to $19.5 million for the
three months ended March 31, 2001, from $11.1 million in the first
quarter of 2000. Maintenance and services revenue was $17.4 million, a
90.8% increase from $9.1 million in the year-ago quarter. Hardware
sales for the quarter were $2.3 million as compared to $1.2 million in
the prior year period.
Roys Poyiadjis, AremisSoft's Co-CEO and President of the US Group,
stated, "AremisSoft has now demonstrated nine consecutive quarters of
excellent financial performance. Our strong results demonstrate that
our business remains solid and has not been negatively affected by
current market conditions -- conditions that are proving to be
challenging for many technology companies who heavily participated in
the technology hyper cycle of the past few years in the US and Western
Europe. We have not experienced a slow down in business activity in
the emerging markets where we participate and our US and UK based
businesses achieved plan. Moreover, our pipelines in the US remain
strong.
"Our strong, consistent growth is a direct result of the soundness
of our business model. Our fundamental strategy is based upon
diversification of business and a balanced approach to risk, which has
enabled us to successfully sell multiple products into multiple
markets. We look to continue expanding our geographic presence and
product portfolio in emerging markets as well as moving forward our
business in the US and Western Europe. Overall, we are very pleased
with our performance and remain confident in our outlook."
Dr. Lycourgos Kyprianou, AremisSoft's Founder, Chairman, and
Co-CEO, stated, "We continue to see tremendous opportunities in
emerging markets as many enterprises in these countries are
modernizing their infrastructure. Our pipelines have remained
consistently strong throughout this whole period of change and orders
have progressed along the lines of our expectations. We believe
AremisSoft has unparalleled opportunities for growth due to the unique
requirements of many emerging markets and our business expertise in
serving such customers, developed over a period of over 20 years."
"We have had great success with our healthcare contract with the
Bulgarian Ministry of Health in 2000 and Q1: 2001, delivering
substantial functionality on an exacting schedule," stated MC Mathews,
President of the Emerging Markets Group. "We plan to make substantial
additional progress this year and have a team of approximately 90
people working on the project. Moreover, we are hopeful about winning
additional healthcare contracts, like the one in Bulgaria, in other
countries, helping to revolutionize their healthcare administrative
and delivery systems. We feel that the healthcare system currently
under construction represents an ideal state-of-the-art blending of
modern healthcare management systems and communications networks,
including the Internet. Additionally, business in manufacturing and
healthcare was particularly strong during the first quarter.
"During Q1: 2001, AremisSoft was successful in expanding its
emerging market business with new contracts in the following areas:
Poland-manufacturing, Russia-manufacturing, Slovania-manufacturing,
India-healthcare, United Arab Emirates-healthcare. In addition we
received substantial follow-on orders from many of our current
customers as they extended their implementations of AremisSoft
enterprise applications. AremisSoft has a strong pipeline of
healthcare prospects, ranging from state/region wide systems to
numerous local hospitals and clinics. In addition, we have been
developing a strong prospect base for our new Denon based retailing
systems in the Middle East. Currently there are over 110 people
resident in our emerging market operations in Bulgaria (48) and the
Middle East (65)."
Mr. Poyiadjis concluded, "During the first quarter, the days sales
outstanding (DSO) was 85 days, as compared with 82 days in the first
quarter of 2000, which is well within the 80-90 day range we have
expected. Receivables did decrease $1.5 million from the fourth
quarter and helped contribute to our strong positive operating cash
flow, which amounted to $3.8 million in the first quarter after
inclusion of a $4.5 million reduction in accrued taxes. The Company
has cash and equivalents of $103.3 million (approximately $40.5
million of this cash is earmarked for the Fourth Shift acquisition,
which is anticipated to close on April 30, 2001) and negligible debt
at the end of the first quarter of 2001. This solid financial position
will help us to move forward despite current market conditions."
Recent Highlights
Acquisition of Fourth Shift. AremisSoft expanded its worldwide
manufacturing software market presence with a definitive agreement to
acquire Fourth Shift Corp. (Nasdaq: FSFT), a worldwide supplier of ERP
and e-business software. The acquisition will expand AremisSoft's
customer base with approximately 1600 additional customers in North
America, Europe, the Middle East, and Asia, as well as its sales
presence in the US and other key markets. Once completed, the
acquisition is projected to add over $30 million to revenue and $0.04
to pro forma earnings per share in 2001.
Acquisition of Rio Systems International. The Company broadened
its enterprise hospitality offering with the acquisition of Rio
Systems, a supplier of an integrated hospitality suite of applications
that serve the spa, resort, and premium hotel and restaurant markets.
AremisSoft also gained over 100 customers, primarily located in the
United States, including prestigious hotels, such as the Boca Raton
Club and Resort and Ritz Carlton Hotels. The Company projects the
acquisition to add approximately $4.0 million in revenue and $0.01 to
pro forma earnings per share in 2001.
Contracts with Indian Army. AremisSoft won two contracts with the
Indian Army with total potential revenue of $6.25 million. AremisSoft
(India) signed an initial 300 license contract for its Account-21
accounting system. The total application requirement is expected to be
approximately 3000 licenses. The Indian Army plans to procure the
remaining licenses in stages over a one year period. The total
contract value is expected to be approximately $2.5 million.
AremisSoft (India) also signed a contract with the Indian Army to
implement the AREMIS workflow and document management suite --
Cascade-Active-File-Cabinet (CAFC). The present order is a 4-server
license with the total requirement of 100-servers expected to be
purchased within one year. Projected revenue from the total contract
is $3.75 million. As a result of the functionality and utility of
these products, the Indian Army is evaluating other products from the
AremisSoft product portfolio.
Contract with Paramount Hotels. Paramount Hotels selected AREMIS
Hotel PMS (Property Management Solution) and CRS (Central Reservation
System) solutions to upgrade its IT system for a total contract value
of over $500,000. The AERMIS solution was chosen for its proven
product functionality as well as its ability to integrate with
existing solutions.
Investor Day in Sofia, Bulgaria. The Investor Day included
presentations regarding AremisSoft's operations in Bulgaria, which has
48 employees, its $37.5 million healthcare contract with the Bulgarian
Ministry of Health and additional growth opportunities in Bulgaria and
other emerging markets. The Investor Day presentation is available via
the Internet by accessing the AremisSoft web site.
Notice of Conference Call
As a reminder, AremisSoft will be hosting a conference call to
discuss earnings on Wednesday, April 25, at 4:45 p.m. EST. To
participate in the conference call, local and international callers
can dial 212-676-5408. Callers from the United States and Canada can
dial 888-391-0237. A replay is available approximately one hour after
the call until 11:59 p.m. EST on May 2, 2001. The replay number is
858-812-6440, passcode: 18559249. The conference call will also be
available via the Internet by accessing the AremisSoft web site:
www.aremissoft.com. Follow the directions on the main page to link to
the audio. The call will also be available on the Vcall web site:
www.vcall.com.
About AremisSoft Corporation
AremisSoft develops, markets, implements and supports
enterprise-wide applications software targeted at mid-sized
organizations in the manufacturing, healthcare, hospitality and
construction industries. The Company's software products help
streamline and enhance an organization's ability to manage and execute
mission-critical functions such as accounting, purchasing,
manufacturing, customer service and sales and marketing. AremisSoft
reported total revenue of $123.6 million for the twelve months ended
December 31, 2000 and pro forma net income of $29.2 million for the
same period. AremisSoft has over 850 employees, with sales in over 20
countries and a customer base in excess of 6,500. The Company also
operates a software development and support facility in India, with
over 325 employees, which provides significant organizational
efficiencies and cost advantages in software development and support.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995: All
statements, other than historical facts, included in the foregoing
press release regarding the Company's financial position, business
strategy, and plans of management for future operations are "forward
looking statements." These statements are based on management's
beliefs and assumptions, and on information currently available to
management. Forward looking statements include, but are not limited
to, statements in which words such as "expect," "see," "anticipate,"
"intend," "plan," "believe," "estimate," "consider," or similar
expressions are used. Forward looking statements are not guarantees of
future performance. They involve risks, uncertainties, and
assumptions, including risks discussed under "Risk Factors" in the
Company's annual report on Form 10-K, SEC File No. 0-25713, all of
which are incorporated herein by reference. The Company's actual
results and stockholder values may differ materially from those
anticipated or expressed in these forward looking statements. Many of
the factors that will determine these results and values are beyond
the Company's ability to control or predict. Readers of this press
release are cautioned not to put undue reliance on any forward looking
statement. The Company undertakes no obligation to publicly update
these forward looking statements, whether as a result of new
information, future events or otherwise.
-0-
*T
AremisSoft Corporation
Pro Forma Statements of Operations
(Excludes, amortization of goodwill and other intangible assets, and
transition related expenses)
(In thousands, except per share data)
Three Months Ended
March 31,
-----------------------------
2001 2000
-----------------------------
Revenues
Software licenses $19,472 $11,137
Maintenance and services 17,422 9,132
Hardware and other 2,338 1,248
----------- -------------
Total revenues 39,232 21,517
----------- -------------
Cost of revenues
Software licenses 2,211 1,192
Maintenance and services 5,601 2,822
Hardware and other 1,639 988
Amortization of purchased software and
capitalized software development costs 88 74
----------- -------------
Total cost of revenues 9,539 5,076
----------- -------------
Gross profit 29,693 16,441
----------- -------------
Operating expenses:
Sales and marketing 12,479 8,053
Research and development 2,785 1,853
General and administrative 5,400 2,396
----------- -------------
Total operating expenses 20,664 12,302
----------- -------------
Profit from operations 9,029 4,139
Other income
Interest income, net 625 --
Non-operating income -- 131
----------- -------------
Income before income taxes 9,654 4,270
Income tax expense 1,448 854
----------- -------------
Net income $8,206 $3,416
=========== =============
Pro forma basic earnings per share $0.22 $0.11
Pro forma diluted earnings per share $0.21 $0.10
Basic weighted average shares
outstanding 37,875 30,404
Diluted weighted average shares
outstanding 39,852 34,522
AremisSoft Corporation
Consolidated Statement of Operations
(In thousands, except per share data)
Three Months Ended
March 31,
----------------------
2001 2000
----------------------
Revenues
Software licenses $19,472 $11,137
Maintenance and services 17,422 9,132
Hardware and other 2,338 1,248
------- -------
Total revenues 39,232 21,517
------- -------
Cost of revenues
Software licenses 2,211 1,192
Maintenance and services 5,601 2,822
Hardware and other 1,639 988
Amortization of purchased software and
capitalized software development costs 88 74
------- -------
Total cost of revenues 9,539 5,076
------- -------
Gross profit 29,693 16,441
------- -------
Operating expenses:
Sales and marketing 12,479 8,053
Research and development 2,785 1,853
General and administrative 5,400 2,396
Amortization of intangible assets 3,464 1,151
Transition related expenses 240 --
------- -------
Total operating expenses 24,368 13,453
------- -------
Profit from operations 5,325 2,988
Other income
Interest income (expense), net 625 --
Non-operating income -- 131
------- -------
Income before income taxes 5,950 3,119
Income tax expense (benefit) 1,412 624
------- -------
Net Income $4,538 $2,495
======= =======
Basic earnings per share $0.12 $0.08
Diluted earnings per share $0.11 $0.07
Basic weighted average shares outstanding 37,875 30,404
Diluted weighted average shares outstanding 39,852 34,522
AremisSoft Corporation
Consolidated Balance Sheets
(In thousands, except per share data)
As of As of
March 31, December 31,
2001 2000
-----------------------
ASSETS
Current Assets
Cash and cash equivalents $103,267 $33,331
Accounts receivable, net of allowances for
doubtful accounts of $831 at March 31, 2001
and Dec. 31, 2000, respectively 37,107 38,660
Other receivables 1,925 2,229
Inventory 1,495 1,413
Deposits paid on services and
maintenance contracts 4,825 4,719
Prepaid expenses and other assets 4,390 3,885
-----------------------
Total Current Assets 153,009 84,237
Investments 1,863 1,803
Property and equipment, net 3,567 3,402
Purchased and developed software, net
of accumulated amortization of $6,282
and $6,194 at March 31, 2001
and Dec. 31, 2000, respectively 570 783
Intangible assets, net of accumulated
amortization of $20,413 and $16,949
and at March 31, 2001 and Dec. 31, 2000,
respectively 36,031 34,799
-----------------------
Total Assets $195,040 $125,024
=======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payables $3,906 $4,290
Accrued payroll taxes 1,414 1,479
Accrued value added taxes 640 1,181
Accrued income taxes 1,977 6,006
Current portion of capital lease obligations 24 34
Other accrued expenses 3,027 2,348
Bank loans and short term demand facility 9 --
Deferred revenue 12,176 12,056
-----------------------
Total Current Liabilities 23,173 27,394
Capital lease obligations, less current portion 38 45
Long-term debt 27 --
-----------------------
Total Liabilities $23,238 $27,439
=======================
Stockholders' equity:
Preferred stock, par value $0.001;
authorized 15,000 shares; and no
shares issued and outstanding -- --
Common stock, par value $0.001, authorized
85,000 shares; 39,245 and 35,198 shares
issued and outstanding at March 31, 2001
and Dec. 31, 2000, respectively 39 35
Additional paid-in capital 155,537 85,831
Accumulated earnings 18,319 13,781
Accumulated other comprehensive (loss) (2,093) (2,062)
-----------------------
Total stockholders' equity 171,802 97,585
-----------------------
Total Liabilities and Stockholders' Equity 195,040 125,024
=======================
Apr-25-2001 20:09 GMT
Symbols:
US;AREM
Source BW Business Wire
Categories:
MST/R/US/NY MST/I/NET MST/I/CMT MST/I/SOF MST/S/MET MST/S/ERN |
