Here is the press release:
Manugistics Announces First Quarter Results
PR Newswire - June 09, 1998 16:20
MANU %CPR %ERN V%PRN P%PRN
ROCKVILLE, Md., June 9 /PRNewswire/ -- Manugistics Group, Inc. (Nasdaq: MANU) today reported quarterly revenues and earnings for the three months ended May 31, 1998.
Total revenues increased 15% to $39.8 million in the first quarter from $34.5 million in the same
quarter of the prior year. Software license revenues decreased 17% to $16.7 million in the first quarter
from $20.1 million last year. The shortfall in revenues resulted in a net loss of $8.2 million, or $.32 per
diluted share for the quarter, compared to net income of $2.0 million, or $.09 per diluted share in the
same quarter of the prior year.
"Coming on the heels of a banner fourth quarter and fiscal year, we are particularly disappointed with
the first quarter results," said William M. Gibson, chairman and CEO of Manugistics. "It has become
clear to us that two factors primarily contributed to these results. We did not achieve an appropriate
balance between our longer-term initiatives and short-term sales execution, and we did not
successfully manage the rapid growth of our sales organization. However, we have put in place clear
action plans to effectively address these issues and regain momentum in this growing market."
"Despite our performance this quarter, we remain confident in the continued growth of the supply
chain management market, in the strength of our organization, in the superiority of our product
offerings and in our continued ability to provide leadership in the supply chain management market,"
added Gibson.
Key components of Manugistics' action plan to address its sales execution issues and financial
performance through the rest of its fiscal year include:
-- More intense management of the sales organization and its day-to-day activities. Joseph Broderick,
executive vice president of client sales and services, is now focused more directly on the field sales
organization. Broderick will concentrate his more than 20 years' experience on improving Manugistics'
sales processes and execution.
-- Increased focus on delivery of rapid results to clients through Manugistics' professional services
group and consulting partner relationships. Keith Enstice, senior vice president, who previously
reported to Broderick, is assigned to manage the professional services business on a global basis while
continuing to manage Manugistics' relationships with strategic consulting partners, reporting to CEO
William Gibson. Enstice helped develop the professional services organization and will bring valuable
experience in leveraging Manugistics' consulting and implementation expertise as a competitive
differentiator in sales cycles.
-- Effectively executing the sales and marketing initiatives which have been developed over the past
few months and rolled out over the past few weeks. These include Manugistics' vision of
customer-centric supply chain optimization, which enables clients to achieve significant, bottom-line
results in a short timeframe.
"The issues that we are dealing with are manageable and well within our control. We have learned
from our experience of the first quarter that we must not lose sight of the basics. We must and will
focus more strongly on execution during the remainder of the year," continued Gibson.
Headquartered in Rockville, Md., Manugistics Group, Inc. is the world's most recognized name in
supply chain management and has the largest global client base of any supply chain provider. The
company's solutions are used by more than 700 companies to improve the flow of product within and
among companies from raw materials or parts through manufacturing to delivery of product to the end
customer. Manugistics' solutions for customer-centric supply chain optimization uniquely allow its
clients to create and optimize their supply chains around their customers and are quick to implement,
adapt easily to change, and deliver rapid results. Its clients include leading companies such as Compaq,
Harley-Davidson, Nike, Frito-Lay, Wal-Mart, DuPont, and Nortel.
Forward Looking Statements
This press release contains forward looking statements that are subject to risks and uncertainties.
There are a number of important factors that could affect the Company's performance. Demand for
the Company's supply chain management software products and the Company's quarterly operating
results could be affected by business conditions or the general economy in domestic and international
markets, the timely availability and acceptance of the Company's products, technological change, the
timing and results of the Company's longer-term initiatives, the response of prospective customers to
announced or commercially available products or pricing, competitors' announcements and other
marketing activities, acquisitions or marketing relationships, the length of the Company's sales cycles,
or the Company's ability to integrate acquired operations and technologies rapidly and effectively. The
Company's expense levels are based largely on its expectations of future revenues, and if revenues
were to be below expectations, the Company's operating results would be and have been affected.
The timing of releases of the Company's software products can be affected by client needs,
marketplace demands, technological advances, and competitors' activities. The expansion of the
Company's operations into foreign markets, including the Asia/Pacific and South America regions,
might be affected by general economic conditions in foreign countries, difficulties in staffing and
managing international operations, changes in foreign currency exchange rates, and political and
economic instability. For further information, please refer to the Company's Form 10-K for the year
ended February 28, 1998, and other documents and reports filed with the Securities and Exchange
Commission which are publicly available, copies of which may also be obtained by contacting the
Company's Investor Relations department at 301-984-5409. The company assumes no obligation to
update the information contained in this press release.
MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
May 31, February 28,
1998 1998
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $8,211 $19,695
Marketable securities 57,078 62,246
Accounts receivable - net 45,135 58,217
Other current assets 5,872 4,882
Total current assets 116,296 145,040
PROPERTY AND EQUIPMENT - NET 24,674 20,909
NONCURRENT ASSETS:
Software development costs - net 22,553 22,100
Intangibles and other assets - net 15,831 16,529
Deferred tax asset 22,970 17,923
TOTAL $202,324 $222,501
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $5,116 $8,830
Accrued liabilities 12,349 22,571
Deferred revenue 18,344 17,974
Income taxes payable - 655
Total current liabilities 35,809 50,030
LONG-TERM LIABILITIES 344 392
STOCKHOLDERS' EQUITY 166,171 172,079
TOTAL $202,324 $222,501
MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended
May 31,
1998 1997
(Unaudited) (Unaudited)
REVENUES:
Software products $16,738 $20,119
Consulting, maintenance
and other services 23,096 14,340
Total revenues 39,834 34,459
OPERATING EXPENSES:
Cost of software sold 2,825 2,460
Cost of consulting, maintenance
and other services 11,417 6,571
Sales and marketing 22,812 13,152
Product development 11,380 6,225
General and administrative 5,564 3,054
Total operating expenses 53,998 31,462
(LOSS) INCOME FROM OPERATIONS (14,164) 2,997
OTHER INCOME-NET 1,051 324
NET (LOSS) INCOME BEFORE INCOME TAXES (13,113) 3,321
(BENEFIT) PROVISION FOR INCOME TAXES (4,867) 1,281
NET (LOSS) INCOME $(8,246) $2,040
NET (LOSS) INCOME PER SHARE-BASIC AND DILUTED ($0.32) $0.09
SHARES USED IN SHARE COMPUTATION
BASIC 25,920 21,753
DILUTED 25,920 23,297
Manugistics, the Manugistics logo, and working as one are registered trademarks of Manugistics, Inc.
All other products or company names mentioned are used for identification purposes only, and may be
trademarks of their respective owners. Additional information about Manugistics can be found at the
company's site on the World Wide Web, at manugistics.com.
SOURCE Manugistics
/CONTACT: Peter Q. Repetti, Chief Financial Officer, 301-984-5409 or Nate
Wallace Manager, Investor Relations, 301-984-5059, both of Manugistics/
(MANU) |
