Lawson Software Reports Q4 and FY05 Results; Q4 GAAP EPS Doubles Year over Year
Company Exceeds Consensus EPS Estimates
ST. PAUL, Minn.--June 30, 2005--Lawson Software, Inc. (Nasdaq:LWSN), today reported revenues of $86.8 million for its fiscal 2005 fourth quarter ended May 31, 2005, compared with revenues of $99.7 million in its fiscal 2004 fourth quarter. License fee revenues were $17.4 million in the fourth quarter, compared with $27.2 million in the fiscal 2004 fourth quarter. Services revenues were $69.4 million in the quarter, compared with $72.5 million in the fiscal 2004 fourth quarter.
GAAP net income was $5.9 million, or $0.06 per diluted share, compared with $3.5 million, or $0.03 per diluted share in the fiscal 2004 fourth quarter. Operating income in the fiscal 2005 fourth quarter was $8.6 million, compared with $7.1 million in the fiscal 2004 fourth quarter. Net income for the current quarter benefited from increased interest income of $0.7 million and the absence of a $1.2 million tax valuation allowance, which was recorded in Q4 of fiscal 2004.
Fiscal 2005 fourth quarter GAAP operating results include $3.0 million in pre-tax items consisting of $1.0 million in amortization of acquired maintenance contracts reflected in cost of services, $0.9 million of acquisition expenses relating to the recently announced Intentia International merger, $0.8 million in software amortization reflected in cost of license fees, $0.4 million in intangible amortization related to acquisitions, $0.1 million in non-cash stock-based compensation, and ($0.2) million in restructuring adjustments. The company provides this list of items for financial analysts, who typically exclude such items in developing their financial models and estimates of the company`s performance. If financial analysts adjust their models for these items, the company believes it would have exceeded the consensus fourth quarter estimate for the company`s EPS performance. See the supplemental information at the end of this news release for more details on these items.
For the 12 months ended May 31, 2005, GAAP net income was $5.3 million, or $0.05 per diluted share, on total revenues of $335.2 million, compared with net income of $8.0 million, or $0.07 per diluted share, on total revenues of $363.6 million in the comparable fiscal 2004 period.
Fiscal 2005 12-month GAAP operating results include $17.6 million in pre-tax items consisting of $5.0 million in restructuring charges, $4.0 million in amortization of acquired maintenance contracts reflected in cost of services, $3.3 million in software amortization reflected in cost of license fees, $2.7 million in SEC investigation costs, $1.5 million in intangible amortization related to acquisitions, $0.9 million of acquisition related expenses, and $0.3 million in non-cash stock-based compensation. There was also a ($0.1) million tax-related adjustment. See the supplemental information at the end of this news release for more details on these items.
The company`s cash, cash equivalents and marketable securities increased to $234.6 million at May 31, 2005, from $221.9 million at Feb. 28, 2005. Days sales outstanding (DSO) were 45 during the fourth quarter, compared with 46 in the fiscal 2005 third quarter.
Fourth Quarter Performance
"Throughout much of fiscal 2005, managing costs and expenses well helped us achieve positive earnings, and our performance in the fourth quarter demonstrated that we can turn the business in the right direction," said Harry Debes, Lawson president and chief executive officer. "With our spending now at a run rate that makes sense, we can focus more of our attention on growing revenue. Looking forward, the acquisition of Intentia International will give us a greater customer base into which we can cross and up-sell our applications, while the larger critical mass and global scale of the combined company will present us with opportunities to be more efficient and effective and thereby improve our earnings."
The company signed 130 deals in the quarter, compared with 100 in the third quarter. Of total contracting activity in the fiscal 2005 fourth quarter, approximately 68 percent came from existing clients and approximately 32 percent from new clients.
During the quarter, the company signed 21 new clients at an average selling price of $258,000, compared with 10 new clients at an average selling price of $478,000 in the third quarter of fiscal 2005. The company signed four software licensing agreements valued at more than $1 million. Significant or strategic wins included retailer Smart & Final; Los Angeles Universal Preschool; Sioux Valley Hospitals and Health System; Gwinett Health System; and chemical distributor Univar USA.
During the quarter, the company also released Lawson 8.1 business applications on the IBM eServer iSeries platform, including upgrade programs and services for existing Lawson customers. The release marked the latest in a line of Lawson`s 26 years of commitment to the iSeries, which is the platform favored by many mid-sized clients. Lawson has more than 400 clients on the iSeries platform.
Conference Call and Webcast
A replay of a June 30 conference call on the company’s results will be available approximately one hour after the conference call concludes and will remain available through Thursday, July 7. The replay number is 866-505-6451 and international 1-203-369-1872. The webcast will remain on www.lawson.com for approximately two weeks.
About Lawson Software
Lawson Software provides business application software and consulting services that put time on the side of services organizations in the healthcare, retail, government and education, banking and insurance and other markets. Lawson`s software suites include enterprise performance management, distribution, financials, human resources, procurement, retail operations and service process optimization. Headquartered in St. Paul, Minn., Lawson has offices and affiliates serving North and South America, Europe, and Africa. For more information, go to www.lawson.com. Lawson Software and Lawson are registered trademarks of Lawson Software, Inc. All rights reserved.
Forward-Looking Statements
This press release contains forward-looking statements that contain risks and uncertainties. These forward-looking statements contain statements of intent, belief or current expectations of Lawson Software, Inc., and its management. Such forward-looking statements are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. The company is not obligated to update forward-looking statements based on circumstances or events that occur in the future. Risks and uncertainties that may cause such differences include but are not limited to: uncertainties in the company`s ability to realize synergies and revenue opportunities anticipated from the Intentia International acquisition; uncertainties in the software industry; global military conflicts; terrorist attacks in the United States, and any future events in response to these developments; changes in conditions in the company`s targeted service industries; increased competition and other risk factors listed in the company`s most recent Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission and as included in other documents the company files from time to time with the Commission.
CONTACT:
Lawson Software, Inc.
Media contact:
Terry Blake, 651-767-4766
terry.blake@lawson.com
or
Investors and analysts contact:
Barbara Doyle, 651-767-4385
barbara.doyle@lawson.com
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