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Wednesday December 10, 4:27 pm Eastern Time
Company Press Release
System Software Associates Comments on Strong Performance in Fourth Quarter
CHICAGO--(BUSINESS WIRE)--Dec. 10, 1997--
Best Quarter Ever for SSA; Record Quarterly and Annual Revenues
And Strong Operating Income Reflect Growing Demand For BPCS
Client/Server V6; Implementations at More than 4,000 Sites
Worldwide
Marketplace Acceptance Hits New Levels
Company Wins 280 Major New Accounts in 1997
System Software Associates, Inc. (SSA) (NASDAQ:SSAX - news) announced its best-ever quarter, ended Oct. 31, 1997, which culminated the most successful year in the company's history. Strong global demand for SSA's BPCS Client/Server V6, the most advanced enterprise management system solution available today, accounted for SSA's emerging leadership position in the enterprise systems industry.
In a conference call with the financial community, Roger Covey, Chief Executive Officer and Chairman, said, ''By every measure: revenue, systems going live, new account wins, benefits brought to clients, 1997 was a record year. During the year, the marketplace committed to more than 150,000 enterprise seats of BPCS Client/Server V6, which was introduced into general release at the end of the last fiscal year. This was not only the most successful product introduction in SSA's history, it was one of the most successful in the history of the software industry. We are now one of the world's three largest companies in terms of sales of client/server manufacturing software to the industrial sector.''
Strong Financial Growth
SSA's fourth quarter revenue was a best-ever $125.6 million, up from $109.4 million in the same period the prior year. For the year, revenue totaled $430.5 million; significantly, software license fee revenues for the year totaled $303.0 million, a 34 percent increase over 1996 - growth that outpaced the ERP industry overall.
Operating income for the quarter, prior to one-time special charges associated with the company's recent financing, was $17.1 million, reflecting increasing productivity and efficiencies in the sale and implementation of SSA solutions in the global marketplace.
Covey said the strong finish to the company's best year validates SSA's strategic re-architecting of the BPCS Client/Server product line in 1996. ''By October 31, 1997, over 1,000 major industrial sector companies worldwide had chosen SSA and BPCS Client/Server Version 6.0 as the best way forward for their enterprise. The product provides an unmatched ability to address the ERP market's most pressing issues - implementability and reconfigurability. As a result, we deliver the best time-to-benefit in the market. This enabled SSA to win in head-to-head competition with the other leading industry players. Demand grew in every geographical region. For the quarter, we added 80 new-name accounts committed to BPCS Client/Server V6.''
Global Presence/Product Breadth
Covey said that for the year the firm had growth and performance in all geographies worldwide, particularly North America and Europe, along with China and Japan.
Covey noted that SSA solutions are being installed on a broad range of computing platforms, with up to 30 percent of BPCS Client/Server V6 implementations running on Unix operating systems.
''The marketplace is choosing SSA and BPCS Client/Server on all of our supported platforms and databases, including Unix, AS/400, Oracle, and Informix,'' said Covey. ''Our time-to-benefit continues to lead the industry. Almost all of our clients go live with full enterprise system implementations in less than a year, and many in less than six months. This is in stark contrast to our primary competitor, whose inability to install solutions on time and on budget is generating increased notoriety in the marketplace.''
Looking ahead, Covey said that the company is increasing its proactive marketing activities aimed at stepping up awareness of the company's uniquely powerful distributed object-based enterprise-wide solution. ''In head-to-head competition against the other leading industry players, we win more than 60 percent of the time,'' said Covey. ''When prospects see what SSA and the BPCS Client/Server product line can offer, they usually become clients.''
All in US $ Millions Except Earnings Per Share
Quarter Ended
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October 31 October 31 %
1997 1996 Change
---- ---- ------
-------------------------------------------------------------------
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Total Revenues 125.6 109.4 14.8
License Fees 89.6 81.5 9.9
Client Services
and Other 36.0 27.9 29.0
Operating Income Prior to
Special Charge 17.1 (14.7) N/A
Special Operating Charge 3.2 0 N/A
Operating Income (Loss) 13.9 (14.7) N/A
Income (Loss) Before
Income Taxes 4.2 (8.9) N/A
Net Income (Loss) 2.7 (5.7) N/A
Earnings (Loss) Per Share
for Common $ 0.01 $ (0.13) N/A
Fiscal Year Ended
-----------------------------------------
October 31 October 31 %
1997 1996 Change
---- ---- ------
-----------------------------------------
-----------------------------------------
Total Revenues 430.5 340.8 26.3
License Fees 303.0 226.7 33.7
Client Services
and Other 127.5 114.1 11.7
Operating Income Prior to
Special Charge 27.8 (58.8) N/A
Special Operating Charge 4.9 0 N/A
Operating Income (Loss) 22.9 (58.8) N/A
Income (Loss) Before
Income Taxes 1.6 (51.4) N/A
Net Income (Loss) 1.0 (32.8) N/A
Earnings (Loss) Per Share
for Common $ (0.03) $ (0.76) 96.1
About SSA
SSA has been chosen by the world's leading industrial sector firms as the best way forward. The Company's product line, BPCS Client/Server V6, is currently being implemented in more than 1000 industrial sector firms in over 4,000 sites worldwide. The BPCS Client/Server product line delivers unparalleled agility and re-configurability to meet changing market demands through a quantum leap forward in ERP technology that delivers significant business benefits, including century dating. The BPCS Client/Server product suite delivers competitive advantage by integrating all mission-critical operations from global financials to multi-mode manufacturing to management of the total supply chain, including Electronic Commerce and EDI. SSA's Distributed Object Computing Architecture (DOCA) provides the computing platform choice, whether IBM AS/400 or RS/6000, Digital, Hewlett-Packard, a combination of these or server access via the Internet. Database options include Oracle, Informix and DB2/400. Over 8,500 clients in over 25,000 sites in various vertical markets - automotive, chemical, consumer goods, electronics, fabrication and assembly, food/beverage, forest products, pharmaceuticals - have implemented an SSA BPCS ERP system. SSA and its strategic partners provide full implementation support for BPCS Client/Server in over 90 countries worldwide. Visit SSA's homepage at ssax.com. Safe Harbor The statements contained in this release regarding SSA's future operating results and performance and business prospects are ''forward-looking statements'' subject to the safe harbor created by the Private Securities Litigation act of 1995.
Editor's Note: BPCS is a registered trademark of SSA. BPCS Client/Server and DOCA are trademarks of SSA.
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Contact:
System Software Associates
Barbel French, 312/778-0740
BarbelF@classic.msn.com
or
Miller/Shandwick Technologies
Doug Black/Charles Spofford, 617/536-0470
dblack@miller.shandwick.com
cspofford@miller.shandwick.com
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