Manugistics Announces First Quarter Fiscal 2005 Results
ROCKVILLE, Md.--June 24, 2004--Manugistics Group, Inc. (NASDAQ:MANU), a leading global provider of demand and supply chain management solutions, today reported results for its fiscal 2005 first quarter ended May 31, 2004.
For the first quarter, total revenue was $51.6 million, down 21 percent from $65.6 million in the prior year quarter. Software revenue was $10.4 million, down 48 percent from $19.9 million in the prior year quarter. Support revenue was $21.4 million compared to $21.5 million in the prior year quarter. Product revenue, which is composed of software and support revenue, was 62 percent of total revenue, down slightly from 63 percent of total revenue in the prior year quarter. Services revenue was $17.6 million, down 18 percent from $21.5 million in the prior year quarter.
For the first quarter, the Company reported a GAAP operating loss of $5.2 million compared to a GAAP operating loss of $15.0 million in the prior year quarter. The Company reported a GAAP net loss of $7.7 million, or $0.09 per basic and diluted share, compared to a GAAP net loss of $18.5 million, or $0.26 per basic and diluted share, in the prior year quarter.
For the first quarter, the Company reported adjusted operating loss of $2.3 million, compared to adjusted operating income of $0.5 million in the prior year quarter. The Company reported adjusted net loss of $4.9 million, or $0.06 per basic and diluted share, for the first quarter, compared to adjusted net loss of $3.0 million, or $0.04 per basic and diluted share, in the prior year quarter.
Adjusted operating income or loss, adjusted net income or loss and adjusted net income or loss per basic and diluted share referred to in this press release are non-GAAP measures and exclude the following items: amortization of intangibles and acquired technology, restructuring and lease abandonment benefits and charges and non-cash stock option compensation charges. A reconciliation of GAAP results to adjusted results has been provided in the financial statement tables following the text of this press release. For further information, please refer to the section of the press release titled "Reasons for Presentation of Non-GAAP Financial Measures."
The Company is continuing to determine the underlying reasons for the shortfall in software revenue for its fiscal 2005 first quarter. The Company believes that a significant cause of the shortfall resulted from delayed decisions to purchase its software that occurred unexpectedly at the end of the quarter, and not from losses to competition. The Company is continuing the process of determining steps to take to improve performance.
Business Metrics - Quarter Ended May 31, 2004
-- The Company closed 13 significant software license
transactions - software license transactions of $100,000 or
greater.
-- The Company closed 1 software license transaction of $1
million or greater.
-- The average selling price for significant software
transactions was $695,000.
-- 84 percent of software revenue came from new clients.
-- 16 percent of software revenue came from international sales.
-- Employee headcount was 865 as of May 31, 2004.
-- Cash flows from operations were a negative $1.0 million.
-- Cash, marketable securities and investments were approximately
$148.7 million as of May 31, 2004, down from $155.3 million as
of February 29, 2004.
-- Days Sales Outstanding (DSO) for receivables were 81 days
compared to 87 days in the fourth quarter.
-- Deferred revenue decreased slightly to $42.3 million on May
31, 2004 from $43.7 million on February 29, 2004, reflecting
typical seasonality.
Other Highlights and Developments:
First Quarter Global Client Wins: The Company signed significant software license transactions across key industries in the Americas, Europe and Asia, with first quarter global wins including, among others: AEON Co., Ltd., Associated Wholesale Grocers, Coty International BV, Phoenix Pharmahandel AG, Schick Asia Ltd., Schnuck Markets, Sears, Roebuck & Co., and TJX Companies, Inc.
RFID Summit: On April 1, 2004 Manugistics hosted a Summit focused on RFID technology, standards and business best practices for prospects and clients. Industry professionals congregated to participate in discussions and network with thought leaders, industry practitioners, and solution providers. Speakers included RFID experts from Accenture, Acsis, Alien Technology, the Department of Defense, ePC Global, Forrester Research, Georgia Pacific, IBM, Tibbett & Britten, and Traxus Technology.
Manugistics Client Steering Committee: In May, approximately 300 clients of Manugistics participated in its semi-annual Manugistics Client Steering Committee meeting in Orlando, Florida. Participating clients play an integral role in influencing strategic product direction and get a first look at new product development. The meeting provides a forum for objective discussions and client-to-client networking regarding all aspects of Manugistics` solutions. Topics included best demonstrated practices, products, services, technology, communication and forward thinking business discussions.
Conference Call Information: Manugistics will conduct a simultaneous conference call and audio Webcast on Thursday, June 24, 2004 at 5:00 PM ET to discuss the Company`s financial performance for its first quarter. Interested parties may listen to the Webcast by going to www.manugistics.com/ir/.
A recording of the call will be available from 7:00 PM ET Thursday, June 24, 2004 through 7:00 PM ET on Monday, June 28, 2004. 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 21197491. In addition, a recording of the Webcast will be archived for approximately three months on the Manugistics Web site at www.manugistics.com/ir/.
About Manugistics Group, Inc.
Manugistics is a leading global provider of demand and supply chain management solutions. Today, more than 1,200 clients trust Manugistics to help them drive profitable growth, unlock the value of their existing IT investments, and ensure the security and integrity of their global supply chains. Its clients include industry leaders such as AT&T, BMW, Boeing, Brown & Williamson, Cingular, Circuit City, Coca-Cola Bottling, Continental Airlines, Diageo, DuPont, Harley-Davidson, John Deere, McCormick, Nestle, Nissan, RadioShack, Sanmina-SCI, and Unilever. For more information, go to www.manugistics.com.
FOR ADDITIONAL INFORMATION REGARDING THIS ANNOUNCEMENT, CONTACT THE MANUGISTICS NEWSBUREAU HOTLINE AT 301-255-5330.
Reasons for 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 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 choose. The Company believes its non-GAAP measures of operating performance better reflect the underlying economics of its business and better aligns with the cash flow performance of the Company as measured under GAAP than it does with operating results as presented under GAAP, which includes or may include, from time to time, non-cash charges for amortization expense and purchased research and development related to acquisitions, impairment losses on long-lived assets and non-cash stock option compensation charges. A reconciliation of GAAP results to adjusted results has been provided in the financial statement tables that accompany this press release.
Forward-Looking Statements
Information in this release relating to Manugistics` prospects that are forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the following: (1) Our ability to close customer deals that we believe slipped from our first quarter of fiscal 2005; (2) Economic, political and other uncertainties that may continue to adversely affect purchasing decisions for enterprise application software and services throughout our markets, such as decisions to delay closing of software license transactions or to reduce the size of individual transactions, which could result in quarterly revenues and income falling significantly short of anticipated levels; (3) Manugistics` management ability to accurately forecast revenue or to adjust the Company`s cost structure, most of which is fixed in the short-term, quickly enough to align it with revenue; (4) Manugistics` ability to maintain its competitive place in the markets for its products and services, to keep pace with the rapid technological advances or to introduce new products or product versions that satisfy customer demand, achieve market acceptance or meet competitive challenges.
Forward looking statements may be identified by the use of words such as "ability," "achieve," "adjust," "align," "always," "anticipate," "assuming," "believe," "continue," "demand," "determine," "expect," "forecast," "future," "gain," "improve," "keep pace," "looking forward," "maintain," "meet," "plan," "position," "predict," "remain," "see," "should," 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 29, 2004. Manugistics assumes no obligation to update the forward-looking information contained in this announcement.
Manugistics is a registered trademark, the Manugistics logo, 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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