ROCKVILLE, Md.--June 25, 2003--Manugistics Group, Inc. (Nasdaq:MANU), a leading global provider of supply chain and demand chain solutions, today reported results for its fiscal first quarter ended May 31, 2003. Total revenue for the first quarter was up slightly sequentially to $65.6 million compared to $65.5 million in the fourth quarter of fiscal 2003. Total revenue decreased 12 percent from the prior year quarter. Software revenue increased 9 percent sequentially to $19.9 million from $18.2 million in the Company`s fourth quarter of fiscal 2003, and decreased 19 percent from the prior year quarter.
For the quarter ended May 31, 2003, the Company reported a net loss, as measured under generally accepted accounting principles (GAAP), of $18.5 million, or $.26 per basic and diluted share, compared to $111.4 million, or $1.59 per basic and diluted share, in the fourth quarter of fiscal 2003 and $27.1 million, or $.39 per basic and diluted share, in the prior year quarter. The Company reported an operating loss of $15.0 million in the first quarter as compared to an operating loss of $108.9 million in the fourth quarter of fiscal 2003 and operating loss of $24.8 million in the prior year quarter.
For the first quarter, the Company reported a sequentially narrowed adjusted net loss of $3.0 million, or $.04 per basic and diluted share, as compared to adjusted net loss of $7.6 million, or $.11 per basic and diluted share, in the Company`s fourth quarter of fiscal 2003. Adjusted net loss was $18.4 million, or $.27 per basic and diluted share, in the prior year quarter. The Company reported adjusted operating income of $462,000 for the first quarter as compared to adjusted operating loss of $5.0 million in the Company`s fourth quarter of fiscal 2003 and adjusted operating loss of $16.2 million in the prior year quarter.
Adjusted net loss, adjusted operating income or loss and adjusted net loss per basic and diluted share referred to in this press release exclude the following items: amortization of intangibles and acquired technology, goodwill impairment charge (fourth quarter of fiscal 2003 only), restructuring and impairment charges, purchased research and development charges related to acquisitions (first quarter of fiscal 2003 only) and non-cash stock compensation charges. A reconciliation of GAAP results to adjusted results has been provided in the financial statement tables following the text of this press release.
"Manugistics is a clear leader in supply chain and demand chain solutions, and we are pleased to report two sequential quarters of revenue growth. And while we are seeing some improvement in our business, we will continue to manage our cost structure over our summer quarter," said Greg Owens, Manugistics` chairman and chief executive officer. "We believe we are in a strong position to capitalize on new business opportunities as the market for information technology recovers, and the enterprise applications market stabilizes in the coming months. We will maintain our sharp focus on business execution, to improve our bottom line performance as we continue to expand business across our global client base."
"I am pleased that Jeremy Coote has joined us as president of Manugistics, furthering a distinguished career with Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) software companies - SAP and Siebel, respectively. I am confident that Jeremy`s proven leadership, expertise and reputation for execution will benefit Manugistics` global client base," continued Owens. "Our team, our powerful alliances, and the state-of-the-market functionality being delivered in the Manugistics 7 releases have positioned us well for long-term success as a leading software vendor."
For the quarter ending August 31, 2003, the Company expects total revenue to range from $61 to $62 million and to report an operating loss of approximately $5.0 million on a GAAP basis. The Company expects to report adjusted operating income in its second quarter similar to its first quarter. The Company expects total revenue to increase sequentially in its third and fourth quarters of fiscal 2004 and expects to report an operating loss on a GAAP basis. The Company expects to report adjusted net income in its third and fourth quarter of fiscal 2004. Projected quarterly adjusted operating income and adjusted net income exclude expected quarterly non-cash charges of $4.6 million of amortization of intangibles and acquired technology and $700,000 for non-cash stock compensation expense.
The Company incurred restructuring and impairment charges of approximately $10.1 million during the first quarter. The restructuring and impairment charge in the first quarter related primarily to the Company vacating and expected sublease of approximately 30 percent of its office space at its corporate headquarters in Rockville, MD - for an amount less than its current lease obligation - along with severance and other benefits associated with the previously announced reduction of employees. Employee headcount stood at 1,039 as of May 31, 2003, down from 1,133 as of February 28, 2003.
During the first quarter, the Company`s aggregate cash and marketable securities increased by $5.6 million to $143.4 million. The Company`s total cash position, including restricted cash, was $147.4 million as of May 31, 2003, a decrease of $3.3 million from February 28, 2003. Cash used by operating activities was $229,000, which included a $6.25 million semi-annual interest payment on the Company`s convertible debt. Days sales outstanding in receivables improved to 72 days in the first quarter - a record low for the Company - from 88 days in the fourth quarter of fiscal 2003. Deferred revenue decreased 6 percent sequentially in the first quarter to $40.8 million as of May 31, 2003. "Our cash position has stabilized over the last six months as we`ve improved both our operating performance and collections," said Raj Rajaji, Manugistics` chief financial officer. "We expect our financial condition to remain stable for the remainder of fiscal 2004, ending the year with total cash and marketable securities of approximately $145 million," added Rajaji.
First Quarter Highlights and Other Developments: