Manugistics Announces Second Quarter Fiscal 2002 Final Results
ROCKVILLE, Md. -- October 3, 2001 -- Manugistics Group, Inc. (Nasdaq: MANU), the leading global provider of Enterprise Profit Optimization[TM] (EPO) solutions -- the market`s first solutions to simultaneously optimize a company`s supply- and demand-side business processes -- today announced final results for its fiscal second quarter ended August 31, 2001. Total revenue in the second quarter increased 22 percent to $71.0 million from $58.2 million for the same period in the prior year. Software revenue in the second quarter decreased 13 percent to $24.8 million from $28.5 million for the same period in the prior year.
The company reported adjusted net loss of $10.7 million, or $.16 per basic and diluted share in the second quarter, compared to adjusted net income of $1.4 million, or $.02 per basic and diluted share, for the same period in the prior year. Adjusted net income or loss per basic and diluted share excludes amortization of intangibles and acquired technology, non-cash stock compensation charges or benefits, and restructuring charges, together with the related income tax effects.
"While Manugistics maintained market momentum and strong revenue growth during our prior seven quarters, general market conditions and economic uncertainty adversely impacted our second quarter financial performance," said Greg Owens, Manugistics chairman and chief executive officer. "As we recently stated, late in the quarter, companies across many of our market segments, including segments that had appeared robust, became even more cautious and deliberate regarding commitments to capital expenditures, resulting in lengthened sales cycles and unanticipated order delays."
"The tragedy of September 11th created additional challenges in the economic environment which are adversely impacting many different industries and sectors. These added uncertainties make it difficult to provide specific financial guidance until the economic climate stabilizes," said Owens. "However, in order to manage for the near-term, we have established an internal target of $60-65 million of total revenue for the third quarter and a corresponding reduction in our cost structure -- targeting an adjusted operating loss in our third quarter similar to our second quarter."
Since the end of its second quarter, Manugistics has been implementing aggressive cost-cutting measures, including a reduction of approximately 12 percent of its current workforce. In addition, Manugistics is instituting further cost reduction initiatives, including a mandatory unpaid leave program, a reduction in the use of outside contractors and in professional services fees and reduced travel expenses. The company expects its workforce reductions and other initiatives to reduce its cost structure by approximately 12 percent or more in its third quarter, and the company will record a charge against third quarter earnings as a result of these actions.
"We are confident that the strength of our business strategy, management leadership and strong financial condition will allow us to weather these current conditions, and position us for faster and stronger recovery when the economic climate improves. Nonetheless, due to the current economic uncertainty, we feel it is prudent to align our cost structure closer to current revenue levels," added Owens. "We will continue to monitor economic and market conditions on an ongoing basis and assess the status of our cost reduction initiatives. We are prepared to implement additional cost reduction measures as necessary."
For the six-month period ended August 31, 2001, total revenue increased 48 percent to $160.8 million from $108.7 million for the same period in the prior year, and software revenue increased 28 percent to $69.9 million from $54.5 million for the same period in the prior year. The company reported adjusted net loss of $8.5 million, or $.13 per basic and diluted share, compared to adjusted net income of $608,000, or $.01 per basic and diluted share, for the same six-month period in the prior year.
For the quarter ended August 31, 2001, the company reported an actual net loss of $21.7 million, or $.32 per basic and diluted share, compared to an actual net loss of $19.7 million, or $.34 per basic and diluted share, for the same period in the prior year. For the six-month period ended August 31, 2001, the company reported an actual net loss of $45.1 million, or $.67 per basic and diluted share, compared to an actual net loss of $20.8 million, or $.37 per basic and diluted share, for the same period in the prior year.
Second Quarter and Other Recent Highlights:
Second Quarter Global Client Wins: The company signed significant software license agreements across key vertical industries in the Americas, Europe and Asia, with new global wins including, among others: Allied Domecq plc, Axcelis Technologies, Inc., Exel Europe Limited, Gunze Ltd., J.M. Huber Corporation, Kraft Foods UK Ltd., Matthew Clark plc, Nissan North America, Inc., NMS Communications Corporation, NTT DoCoMo, Inc., Suntory Ltd., Technicolor Videocassette, Inc., Thomson Travel Group plc, and Winn Dixie Stores Inc.
Technology Innovations: In July, Manugistics launched the market`s first fully-integrated Enterprise Profit Optimization solutions -- Manugistics Profitable Order Management and Manugistics Profitable Promotions Management. Profitable Order Management is designed to help a company more profitably manage and fulfill customer orders -- from initial customer inquiry through delivery. Profitable Promotions Management is designed to help enterprises create promotional campaigns that enhance profitability consistent with corporate objectives such as sales volume and market share, while ensuring that product supply matches promotion-influenced demand. Both solutions are configurable for industry-specific applications, and are designed for fast implementation, strong return on investment, scalability and security.
Manugistics also launched its Supplier Relationship Management (SRM) solutions which focus on high-impact material life cycle processes to help enterprises, and their raw material suppliers, finished goods suppliers, outsourced manufacturers and transportation and logistics providers improve visibility to supply conditions, reduce inefficiencies and shrink cycle times. Manugistics SRM solutions help automate design, sourcing, planning, purchasing, shipment, and payment processes at each level of the material life cycle and help track supplier performance based on benchmarks, historical and contractual specifications.
enVISION2001 Orlando: The company`s award-winning conference enVISION2001 -- held in Orlando, Fla. -- proved to be its most successful to date, drawing more customers, sponsors, exhibitors and total attendees than previous years. More than 100 sessions and exhibitors showcased solutions across key markets, including apparel-footwear-textiles, automotive, consumer packaged goods, communications & high technology, food & beverage, life sciences, chemical & energy, government, retail, third party logistics, and travel, transportation & hospitality. In addition, leading companies such as ACCO Brands, Archstone Communities, ChemLogix, Elemica, Georgia Pacific, Hershey Foods, Instill, Multistrata, Rohm & Haas, Tronicus, and Vulcan Chemicals made dynamic presentations, sharing their experiences, and ideas for success in today`s economy.
Manugistics Deepens Relationship with Department of Defense: The company signed a multi-million dollar software licensing and consulting contract with EDS in support of the Navy`s Supply and Maintenance Reengineering Team (SMART) project -- a joint effort sponsored by Naval Supply Systems Command (NAVSUP) and Naval Air Systems Command (NAVAIR). The SMART project -- which will include implementation of a broad suite of Manugistics NetWORKS[TM] advanced planning and scheduling solutions -- is designed to improve the level of readiness and combat effectiveness of military forces.
Global Leadership and Sales Execution: The company continues to make moves to increase global market penetration, and drive consistent global growth. Terry Austin, Manugistics` executive vice-president of communications and high technology, took on the additional role of president of Manugistics` European operations, and is coordinating Manugistics` industry-focused, pan-European growth plan from the company`s offices in Paris. In a related move, Michael Christensen, Manugistics vice-president, was named president of Manugistics` Asia-Pacific operations, responsible for Australia, China, Singapore, Southeast Asia and Taiwan. Operating out of Singapore, Christensen has moved quickly -- strengthening his management team, and overseeing the opening of a new office in Hong Kong.
Acquisitions and Alliances: Manugistics completed its acquisition of intellectual property and certain assets of SpaceWorks on July 25, 2001. In addition, the company initiated alliances with leading companies including Centric Software, Clarus, Frictionless Commerce and Spotlight Solutions.
Conference Call Information: Manugistics has scheduled a simultaneous conference call and audio Web-cast for Wednesday, October 3rd at 5:00 PM Eastern Daylight Time (EDT) to discuss the company`s financial performance for its second quarter of fiscal 2002. Interested parties may listen to the Web-cast by going to http://www.manugistics.com/ir/
A recording of the call will be available from 7:00 PM EDT October 3, 2001 through 7:00 PM EDT October 5, 2001. To listen to the recording, callers within North America may call 800-633-8284. Callers outside North America may call 858-812-6440. Callers to the recording will be required to enter the access number for this call, which is 19663138. In addition, the Web-cast will be archived from 7:00 PM EDT October 3, 2001 through 7:00 PM EDT October 5, 2001.
About Manugistics Group, Inc.
Manugistics pioneered the powerful new business discipline of Enterprise Profit Optimization, which helps enable a company`s ability to drive profitable growth through the simultaneous optimization of its supply-side and demand-side business processes. Made possible through innovative combinations of Supply Chain Management, Pricing and Revenue Optimization, and Supplier Relationship Management solutions, Manugistics EPO solutions help enterprises and their trading partners lower operating costs, enhance profitability and accelerate growth. The company`s list of clients includes industry leaders such as 3Com, Amazon.com, Boeing, BP, Brown & Williamson, Caterpillar, Cisco Systems, Coca-Cola Bottling, Compaq, DuPont, eConnections, Ford Motor Company, General Electric, Harley-Davidson, Hormel, Levi Strauss & Co., Marriott, Nestle, Texas Instruments, Timberland, Unilever, and United Airlines. For more information, please go to www.manugistics.com.
FOR ADDITIONAL INFORMATION REGARDING THIS ANNOUNCEMENT, CONTACT THE MANUGISTICS NEWSBUREAU HOTLINE AT 301-984-5330.
Investor Contacts:
Nate Wallace
Manugistics Group, Inc.
Investor Relations
301-984-5059
Raj Rajaji
Manugistics Group, Inc.
Chief Financial Officer
301-984-5087
Press Contacts:
Didi Blackwood
Manugistics Group, Inc.
dblackwo@manu.com
301-984-5330
John Conley
Ogilvy PR (For Manugistics)
john.conley@dc.ogilvypr.com
202-452-9524
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Forward Looking Statements:
This announcement contains forward-looking statements that involve risks and uncertainties that include, among others, anticipated losses, unpredictability of future revenues, potential fluctuations in quarterly operating results, competition, risks related to quarterly performance, risks of new business areas, international expansion, business combinations and strategic alliances, increased economic uncertainty following the tragedy of September 11, 2001, lengthening of sales cycles for software products and services, the effectiveness of the cost reduction efforts undertaken by Manugistics, and the timing and degree of any business recovery in light of the continuing economic downturn. A decreased demand for computer software due to weakening economic conditions could result in decreased revenues or lower revenue growth rates. Words such as "may", "will", "should", "estimates", "predicts", "potential", "continue", "strategy", "believes", "anticipates", "plans", "expects", "intends", and similar expressions referenced in this announcement are intended to identify forward-looking statements. More information about factors that potentially could affect Manugistics financial results is included in Manugistics filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended February 28, 2001, Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, Report on Form 8-K dated September 5, 2001, and Amendment No. 1 to pending Registration Statement on Form S-3 filed on October 1, 2001. Manugistics assumes no obligation to update the forward-looking information contained in this announcement.
Manugistics is a registered trademark, and the Manugistics logo, the phrase "Leveraged Intelligence," Enterprise Profit Optimization, and Manugistics NetWORKS are trademarks of Manugistics, Inc. All other product or company names mentioned are used for identification purposes only, and may be trademarks of their respective owners.
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