Group 1 Software Reports First Quarter Results
Revenue $20.7 Million vs. $20.1 Million
Date: Wednesday, August 01, 2001
Contact: Mark Funston
Phone: (301) 731-2300
Email: mark_funston@g1.com
Lanham, MD - Group 1 Software (Nasdaq: GSOF) today reported results for its first fiscal quarter ended June 30, 2001. The Company reported record first quarter revenue of $20.7 million vs. the prior year`s first quarter revenue of $20.1 million. Net income available to common stockholders was $0.1 million compared with $1.1 million reported for the prior year`s first quarter. Diluted earnings per share were $0.01 per share vs. $0.16 per share the prior year.
Net income available to common shareholders for the quarter included approximately $440,000 in net costs ($0.06 per share) from operations and interest expense associated with the Company`s recent acquisitions of assets of HotData, Inc. and TriSense Software, Ltd. The results for the quarter also reflect the early adoption of Financial Accounting Standards Board Statement 142, "Goodwill and Other Intangible Assets."
Revenue for the quarter from Enterprise Solutions software and services rose to $14.5 million from $13.3 million in the same quarter of the prior year. Revenue from Customer Relationship Communications software and services was $6.2 million compared with $6.8 million reported in the prior year`s first quarter. Demand for the Enterprise Solutions division`s data quality solutions, particularly the GeoTAX tax jurisdiction assignment system, was strong. The Customer Relationship Communications division experienced delays in closing several sizeable transactions in the U.S. and Latin America.
Non-operating income remained essentially flat excluding the impact in the prior year of a $250,000 net currency gain and the current-year impact of the interest accrual on the note issued in relation to the TriSense acquisition.
Group 1`s cash position remained strong. After disbursing approximately $4.6 million related to the TriSense and HotData acquisitions, cash and short-term investments totaled $40.2 million (approximately $5.84 per diluted share) at June 30, 2001 compared with $44.1 million at March 31, 2001 and $32.0 million at March 31, 2000.
"Although our revenue for the first quarter, traditionally our weakest quarter, set a new record for the Company, it was clearly not what we planned," said Group 1 CEO, Bob Bowen. "The result, after 10 consecutive quarters of all-time record revenue and earnings, was the earnings shortfall we reported. I am pleased that our Enterprise Solutions division performed strongly; our disappointment came from the Customer Relationship Communications division, one of our strongest operations. That division experienced in the first quarter the kinds of purchasing delays that many other software companies have reported in recent quarters. Our best judgement is that these were only delays, however, and not cancellations or losses to competition. Nonetheless, we continue to watch economic trends carefully, and are reducing expenses and curtailing certain spending initiatives until we see market conditions strengthen."
Added Group 1 CFO Mark Funston, "With the first quarter performance and the continued uncertainty of the economy, the company expects revenue for fiscal year 2002 to be up 10% to 13% over fiscal year 2001 and net income available to common shareholders for fiscal year 2002 to be in the range of $1.05 to $1.08 per share."
Group 1 Software is a leading provider of software for data quality, marketing automation, customer relationship communications, and direct marketing applications. Group 1 supports MVS, VSE, AS/400, UNIX (including Linux), Windows NT, Windows 2000 and other operating systems and various computers. Group 1 has offices throughout the United States and in Canada, the United Kingdom, continental Europe, and Latin America. The Company is also represented in Asia and Australia.
Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation reform Act of 1995. Words like "our best judgement" and "expects" are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Readers are cautioned not to place undue reliance of these forward-looking statements, which address the conditions as they are found on the date of this press release. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances that arise after the date of this press release or to reflect the occurrence of unanticipated events. For additional information regarding these and other risks and uncertainties associated with the Company`s business, reference is made to the Company`s reports filed from time to time with the Securities and Exchange Commission. Group 1 Software, HotData, GeoTAX, and TriSense are registered trademarks of Group 1 Software, Inc.
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