SSA Global Reports First Quarter Fiscal Year 2006 Operating Results
Record Organic License Growth Drives Earnings
CHICAGO – December 8, 2005 – SSA Global™ (NASDAQ: SSAG), a leading provider of extended enterprise solutions and services, today announced financial results for the first quarter ended October 31, 2005.
“We are pleased to report another strong performance in fiscal 2006 Q1, our 14th consecutive quarter of profitability with continuing strong license revenue,” said Mike Greenough, chairman, president and CEO of SSA Global. “We believe our product strategy and laser focus on solutions are being very well received by our customers.”
First quarter total revenue increased 7% to $177.5 million compared to $166.5 million in the prior year.
License revenue for the quarter was $52.0 million, an increase of 26% from the first quarter last year. On an organic basis, license revenue grew 21% for the quarter and represented 29% of total revenue compared to 25% last year.
The acquisition of Epiphany, which closed on September 29, 2005, contributed $6.4 million to total revenue and $2.4 million to license revenue in the first quarter.
During the first quarter, North America contributed 49% of total revenue; Europe, Middle East and Africa (EMEA) contributed 35%; and Asia-Pacific/Japan (APJ) and Latin America contributed the remaining 16%. For the quarter ended October 31, 2005, 982 contracts were signed, including 58 new customers that represented 8% of the total license value associated with software contracts signed in the quarter.
On an adjusted basis, net income for the quarter grew 19% to $17.8 million or $0.24 per diluted share up from $15.0 million or $0.21 per diluted share last year. (Adjusted net income and earnings per diluted share includes deferred license revenue associated with acquisitions and an assumed 34% tax rate and excludes amortization of acquired intangibles, in-process research and development charges, stock-based compensation expense, restructuring charges and benefits and loss on early extinguishment of debt). For the quarter, adjusted operating income grew 20% to $30.9 million representing 17% of revenue which was up from 15% of revenue last year.
For the first quarter, the Company reported GAAP operating income of $10.3 million compared to $13.7 million last year and GAAP net income of $1.0 million compared to $6.4 million last year. Earnings per diluted common share, under GAAP, were $0.01 for the current fiscal year quarter.
Cash and cash equivalents as of October 31, 2005 totaled $90.0 million and net cash used in operations for the quarter totaled $8.5 million. Days Sales Outstanding (DSO) were 75 and down from 78 days at the end of the first quarter of 2005.
The Company will hold a conference call following the release after the close of market at 5:00 p.m. EST. A live, audio-only webcast of the call will be made available to the public on the Company’s website at http://investor.ssaglobal.com and will be archived for approximately three months following the call. In addition, a replay of the call will be available approximately one hour after the conference call concludes and will remain available through Thursday, December 15th. To access the replay, dial 1-888-286-8010 in the U.S. and Canada, or 1-617-801-6888 outside U.S. and Canada, passcode 70534692.
About SSA Global
SSA Global™ (NASDAQ: SSAG) is a leading provider of extended ERP solutions for manufacturing, distribution, retail, services and public organizations worldwide. In addition to core ERP applications, SSA Global offers a full range of integrated extension solutions including corporate performance management, customer relationship management, product lifecycle management, supply chain management and supplier relationship management. For additional information, visit the SSA Global web site at www.ssaglobal.com.
SSA Global™ is the corporate brand for product lines and subsidiaries of SSA Global Technologies, Inc. SSA Global, SSA Global Technologies and SSA GT are trademarks of SSA Global Technologies, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.
Presentation of Non-GAAP Financial Measures
The non-GAAP financial measures presented in the text of this press release and accompanying supplementary financial information (also referred to as “adjusted”) represent the financial measures used by the Company’s management to evaluate the quarterly operating and cash flows performance of the Company and to conduct its business operations. These non-GAAP financial measures are also used by management to evaluate return on investment, income contribution and future impact to operating results of potential mergers and acquisitions. In addition, these non-GAAP financial measures facilitate management’s internal comparisons to competitors’ operating results and the software industry in general. This non-GAAP financial information is provided as additional information for investors and is not in accordance with, or an alternative to, GAAP. In addition, the non-GAAP financial information provided may be different than similar measures used by other companies. However, the Company’s management believes these non-GAAP measures provide useful information to investors, potential investors, securities analysts and others so each group can evaluate the Company’s current and future prospects in the same manner as management if they so chose. A reconciliation of GAAP financial information to adjusted results and EBITDA has been provided in the financial statement tables that accompany this press release.
Forward-Looking Statements
These materials may contain “forward-looking statements.” Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result,” or words or phrases with similar meaning. All of these forward-looking statements are based on estimates and assumptions made by our management that, although we believe to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy or actual results to differ materially from those contained in forward-looking statements. Factors you should consider that could cause these differences include, among other things:
• General economic and business conditions, including exchange rate fluctuations;
• Our ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions;
• Our ability to maintain effective internal control over financial reporting;
• Our ability to attract and retain personnel, including key personnel;
• Our success in developing and introducing new services and products; and
• Competition in the software industry, as it relates to both our existing and potential new customers.
For inquiries, contact:
Press:
Maria Diecidue
SSA Global
(312) 258-6000
maria.diecidue@ssaglobal.com
Scott Goldberg
Edelman
(312) 297-7414
scott.goldberg@edelman.com
Investor:
Dawn Drella
SSA Global
(312) 474-7694
dawn.drella@ssaglobal.com
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