Manugistics Announces Final Third Quarter Results
Rockville, MD - December 19, 2002 - Manugistics Group, Inc. (Nasdaq: MANU), the leading global provider of supply chain management (SCM) and pricing and revenue optimization (PRO) solutions, today announced results for its fiscal third quarter ended November 30, 2002. Total revenue in the third quarter decreased 11 percent sequentially to $62.4 million from $69.9 million for the Company`s second quarter. Software revenue decreased 22 percent sequentially to $14.1 million from $18.1 million for the Company`s second quarter. The Company reported an improved adjusted net loss of $12.5 million, or $.18 per basic and diluted share, compared to adjusted net loss of $13.1 million, or $.19 per basic and diluted share, in the Company`s second quarter.
Adjusted net loss per share excludes charges associated with amortization of acquired technology, amortization of intangibles, purchased research and development, non-cash stock compensation (benefit), restructuring and impairment charges, settlement of a lawsuit (prior year only), impairment of an investment (prior year only), and a charge to record valuation allowances against deferred tax assets, together with related income tax effects (prior year only).
For the quarter ended November 30, 2002, the company reported an actual net loss, as measured under generally accepted accounting principles (GAAP), of $26.0 million, or $.37 per basic and diluted share, compared to an actual net loss of $45.0 million, or $.66 per basic and diluted share, for the same period in the prior year. For the nine-month period ended November 30, 2002, the company reported an actual net loss of $100.8 million, or $1.45 per basic and diluted share, compared to an actual net loss of $90.1 million, or $1.33 per basic and diluted share, for the same period in the prior year.
"We are encouraged by our levels of sales activity as well as several recent CIO surveys indicating that supply chain management is a high priority, however, we have yet to see corresponding upswings in closure rates," said Greg Owens, Manugistics’ chairman and chief executive officer. "The cost reductions that we completed during our second and third quarters more closely align expenses with expected future revenue levels, which we believe will allow us to post improved operating performance in coming quarters. Given the critical importance of the supply chain and the efficiencies and benefits our solutions produce, we are confident that our market will rebound in due time."
Total revenue in the third quarter decreased 12 percent to $62.4 million from $71.0 million for the same period in the prior year. Software revenue decreased 36 percent to $14.1 million from $22.1 million for the same period in the prior year. The Company reported adjusted net loss of $12.5 million, or $.18 per basic and diluted share, compared to adjusted net loss of $7.6 million, or $.11 per basic and diluted share, for the same period in the prior year.
For the nine-month period ended November 30, 2002, total revenue decreased 13 percent to $206.9 million from $237.2 million for the same period in the prior year, and software revenue decreased 38 percent to $56.7 million from $92.0 million for the same period in the prior year. The company reported adjusted net loss of $44.1 million, or $.63 per basic and diluted share, compared to adjusted net loss of $16.1 million, or $.24 per basic and diluted share, for the same nine-month period in the prior year.
Third Quarter Highlights and Other Developments:
New Board Appointment: Manugistics welcomed William H. Janeway, vice-chairman of Warburg Pincus LLC, as a member of the Company`s Board of Directors.
Management Developments: Manugistics is announcing that, as of January 1, 2003, Jean-Claude Walravens, current head of Manugistics` Southern European operations, has been named corporate senior vice-president and president of European Operations reporting directly to Owens. "Jean-Claude has consistently achieved the sales goals for his region, and we are looking forward to his leadership throughout Europe," said Owens. Terrence A. Austin will be leaving his post as corporate executive vice president and president of the company`s European operations to pursue a new opportunity as president of world-wide field operations at a privately-held technology company.
Third Quarter Global Client Wins: Manugistics had significant software wins across a diverse group of key vertical industries and regions, with new significant deals including, among others: in the Americas - Alticor, BAE Systems, Lexmark, Mattel, Pechiney Plastic Packaging, Pleasant Company, TJX Companies, United States Navy and Xerox International Partners - in Asia-Pacific - Yum! Restaurants - in Europe –BMW, Eroski S. Coop, Great North Eastern Railways Ltd., Torrespapel SA, and Michelin.
Strength of Manugistics` Solutions Recognized: Manugistics` robust solutions continue to earn marketplace recognition. For the second consecutive year, Manugistics was named a finalist for the prestigious Automotive News PACE (Premier Automotive Suppliers` Contributions to Excellence) Awards in the Information Technology and Services category. The Company also announced unprecedented Retail fulfillment scalability in performance benchmark testing utilizing both IBM and Sun Microsystems platforms. In addition, top industry analysts continue to recognize the value of supply chain optimization and the strength of Manugistics` solutions.
According to the AMR Research Alert, "Semiconductor and High Tech: Getting Ready for 2003, December 12, 2002," leading organizations have been evidencing "increased interest" in Supply Chain Management applications. In another AMR Research Report, "TMS is Logistics Differentiator for Enhanced Customer Service and Competitiveness," May 2002, Jerry McNerney of AMR Research specifically highlighted Manugistics as one of the "market leaders in terms of revenue and market share." McNerney also emphasized that transportation managers need to use logistics as a "strategic weapon by employing business processes and technology for performance improvement and cost savings."
December 19, 2002 Conference Call Information: Manugistics has scheduled a simultaneous conference call and audio Web-cast for Thursday, December 19th at 5:00 PM Eastern Standard Time (EST) to discuss the company`s financial performance for its third quarter of fiscal 2003 in more detail. Interested parties may listen to the Web-cast by going to .
A recording of the call will be available from 7:00 PM EST December 19th, 2002 through 7:00 PM EST December 23rd, 2002. To listen to the recording, callers within North America may call 800-633-8284. Callers outside North America may call 402-977-9140. Callers to the recording will be required to enter the access number for this call, which is 21070081. In addition, a recording of the Web-cast will be archived at from 7:00 PM EST December 19th, 2002 through 7:00 PM EST December 23rd, 2002.
About Manugistics Group, Inc.
Manugistics is a leader in delivering innovative pricing and supply chain software solutions. Today, more than 1,200 clients trust Manugistics to help them reduce costs, increase revenues and enhance margins. The company provides comprehensive solutions for supply chain management, service and parts management, pricing and revenue optimization, and supplier relationship management. Its clients include industry leaders such as 3Com, AT&T, Amazon.com, BMW, Boeing, Brown & Williamson, Caterpillar, Cisco Systems, Circuit City, Coca-Cola Bottling, Continental Airlines, DaimlerChrysler, Diageo, DuPont, Fairchild Semiconductor, Ford Motor Company, Harley-Davidson, Nestle, RadioShack and Unilever. For more information, go to .
FOR ADDITIONAL INFORMATION REGARDING THIS ANNOUNCEMENT, CONTACT THE MANUGISTICS NEWSBUREAU HOTLINE AT 301-255-5330.
Investor Contacts:
Nate Wallace
Manugistics Group, Inc.
Investor Relations
301-255-5059
Raj Rajaji
Manugistics Group, Inc.
Chief Financial Officer
301-255-5087
Press Contacts:
Didi Blackwood
Manugistics Group, Inc.
dblackwo@manu.com
301-255-5330
John Conley
Ogilvy PR (For Manugistics)
john.conley@dc.ogilvypr.com
202-452-9524
Forward Looking Statement
Information in this release relating to Manugistics` future prospects which are forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the following: (1). Continuing economic, political and other uncertainties may continue to adversely affect purchasing decisions for application software and services throughout our markets. Delays in closing licensing transactions or reductions in the size of individual transactions, without a corresponding increase in the number of transactions, can result in quarterly revenues and income falling significantly short of anticipated levels. (2) The markets for our products and services are highly competitive and involve rapid advances in technology and frequent introductions of new products and product versions. Manugistics may not be able to keep pace with the rapid technological advances or introduce new products or product versions which satisfy customer demand or achieve market acceptance. (3) Most of Manugistics` expenses are fixed in the short-term. Because of the continuing economic, political and other uncertainties, managements` ability to accurately forecast revenue has proved difficult. As a result, management has been unable to adjust the Company`s cost structure quickly enough to align its cost structure with its revenue. Manugistics has recently instituted cost reductions and cost containment initiatives which include, among other things, a significant decrease in its employee workforce. There can be no assurances as to the effectiveness of these initiatives on the Company`s overall financial performance and condition or that these initiatives will not have an adverse impact on Manugistics` ability to successfully operate its business. (4) Manugistics has introduced and will continue to introduce new and revised versions of software application products and services, such as its web-based architecture in Manugistics 7.0 (released in May 2002) and its expected releases of Manugistics 7.1 and 7.2. There can be no assurance as to the market acceptance or contribution to revenue of these products and services.
Forward looking statements may be identified by the use of words such as "anticipate," "believe," "building," "confident," "encouraged," "expect," "feel," "forecast," "focus," "future," "guidance," "improve," "intend," "looking forward," "must," "optimistic," "plans," "predict," "see," "target," "well positioned" or "will." 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, 2002 and Quarterly Report on Form 10-Q for the quarter ended August 31, 2002. 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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