Ross Systems (NASDAQ:ROSS)
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Ross Systems 3rd Quarter Report
Company reports 56% increase in Software license revenue.
ATLANTA, May 5 /PRNewswire-FirstCall/ -- Ross Systems, Inc. , a leading
provider of enterprise software solutions for manufacturers, today announced
results for its second fiscal quarter, which ended March 31, 2004. The Company
reported net earnings of $1.2 million or $0.36 per share, after merger
transaction costs of $0.1 million. The merger transaction costs are associated
with the proposed merger with CDC Software, a subsidiary of chinadotcom
corporation . The proposed merger, which is subject to stockholder approval,
is expected to proceed during the second quarter of calendar 2004.
Revenues for the quarter at $13.7 million increased 20% from $11.4 million in
the prior year's same quarter. Software license revenue for the quarter at
$4.2 million increased 56% from $2.7 million in the prior year's same quarter.
Consulting service revenue at $4.2 million increased 20% from $3.5 million in
the prior year's same quarter. Maintenance revenue was $5.2 million in both
the current quarter and the prior year's same quarter. The net earnings for
the quarter of $1.2 million or $0.36 per diluted share, compared to net
earnings of $0.7 million or $0.22 per diluted share in the prior year's same
quarter.
Net cash of $8.8 million this quarter increased $2.2 million over the prior
year's same quarter and $1.4 million from the previous quarter. The Company's
cash position at the end of the previous quarter was affected by the previously
reported merger transaction and arbitration settlement costs incurred during
that quarter.
The Company has no long-term debt, and short-term debt decreased to $5.0
million from $5.3 million in the sequential quarter. Deferred revenues this
quarter increased to $11.9 million from $10.6 million in the sequential
quarter. Accounts receivable, at $15.0 million, increased from $13.9 million
in the sequential quarter.
For the most recent nine-month period, the Company reported revenue of $38.9
million or an 11% increase over the prior year's same period and net earnings
of $0.3 million or $0.12 per share after litigation settlement and prospective
merger transaction costs of $3.0 million. This compares to net earnings of
$2.8 million or $0.87 per share for the prior year's same period. Excluding the
$3.0 million of settlement and transaction costs noted above, earnings would
have been $3.3 million for an 18% improvement over the prior year's nine-month
performance.
"Contributing to this quarter's software license results were particularly
strong increases in new customer licenses of the iRenaissance Suite of
enterprise applications in North America as well as continued customer
purchases of Ross' Internet Application Framework (IAF) which provides browser
capabilities that increase user productivity. We are also very pleased with
the revenue growth of our Supply Chain Management products," said J. Patrick
Tinley, Ross' Chairman and CEO. "Our continued focus on the process industries
including life sciences, food and beverage, chemicals, metals, and natural
products has continued to generate our revenue growth. We have seen an
increase in demand from the food industry, driven by issues related to global
food safety, that we uniquely address with our iRenaissance Suite."
About Ross Systems
Ross Systems, Inc. (NASDAQ:ROSS) delivers innovative software solutions that
help manufacturers worldwide fulfill their business growth objectives through
increased operational efficiencies, improved profitability, strengthened
customer relationships and streamlined regulatory compliance. Focused on the
food and beverage, life sciences, chemicals, metals and natural products
industries and implemented by over 1,000 customer companies worldwide, the
company's family of Internet-architected solutions is a comprehensive, modular
suite that spans the enterprise, from manufacturing, financials and supply
chain management to customer relationship management, performance management
and regulatory compliance.
Publicly traded on the NASDAQ since 1991, Ross's global headquarters are based
in the U.S. in Atlanta, Georgia, with sales and support operations around the
world. http://www.rossinc.com/ .
STATEMENTS IN THIS ANNOUNCEMENT, WHICH EXPRESS THAT THE COMPANY "BELIEVES,"
"ANTICIPATES," "EXPECTS," "PLANS TO..." OR "SHOULD BEGIN TO... " AS WELL AS
OTHER STATEMENTS, WHICH ARE NOT HISTORICAL FACT, ARE FORWARD LOOKING STATEMENTS
WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
FORWARD LOOKING STATEMENTS IN THIS ANNOUNCEMENT INCLUDE STATEMENTS ABOUT THE
PROPOSED MERGER. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY AS A RESULT OF
RISKS AND UNCERTAINTIES, INCLUDING THE RISK THAT THE MERGER IS NOT APPROVED
BY ROSS SHAREHOLDERS OR IS OTHERWISE NOT COMPLETED, THE RISK THAT THE
ANTICIPATED BENEFITS OF THE MERGER ARE NOT REALIZED, QUARTERLY FLUCTUATION OF
SOFTWARE PRODUCT LICENSE REVENUE, WEAKENING OF CUSTOMER DEMAND FOR ENTERPRISE
SYSTEMS, THE COMPANY'S MAINTENANCE OF A MINIMAL BACKLOG, THE UNCERTAINTY OF
DEMAND FOR NEW PRODUCT OFFERINGS AND OTHER RISKS AND UNCERTAINTIES DESCRIBED IN
REPORTS FILED BY THE COMPANY WITH THE SEC, INCLUDING THE ANNUAL REPORT ON FORM
10-K FILED FOR THE YEAR ENDED JUNE 30, 2003. YOU ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE
DATE OF THIS ANNOUNCEMENT. WE DO NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY
UPDATE OR RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT
EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS ANNOUNCEMENT OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS, EXCEPT AS REQUIRED BY LAW.
ROSS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
March 31, March 31,
2004 2003 2004 2003
Revenues:
Software product licenses $4,244 $2,696 $11,594 $9,903
Consulting and other services 4,237 3,489 11,815 9,794
Maintenance 5,191 5,235 15,538 15,323
Total revenues 13,672 11,420 38,947 35,020
Operating expenses:
Costs of software product
licenses 1,764 1,660 5,090 4,786
Costs of consulting and
maintenance 5,313 4,229 15,491 12,784
Sales and marketing 3,272 2,864 9,021 8,193
Product development net of
capitalized computer software
costs 778 605 2,417 1,893
General and administrative 812 1,016 2,807 3,420
Litigation settlement cost - - 1,896 -
Provision for uncollectible
accounts 188 197 418 711
Total operating expenses 12,127 10,571 37,140 31,787
Operating earnings 1,545 849 1,807 3,233
Prospective merger transaction
costs (139) - (1,133) -
Other financial, net expense (113) (29) (144) (152)
Earnings before taxes 1,293 820 530 3,081
Income tax expense 22 63 105 217
Net earnings $1,271 $757 $425 $2,864
Preferred stock dividend (38) (38) (113) (113)
Net earnings available to common
shareholders $1,233 $719 $312 $2,751
Net earnings per common share -
basic $0.45 $0.27 $0.12 $1.05
Net earnings per common share -
diluted $0.36 $0.22 $0.12 $0.87
Shares for basic calculation 2,728 2,638 2,707 2,616
Shares for diluted calculation 3,513 3,387 3,477 3,292
ROSS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share related data)
March 31 June 30
2004 2003
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $8,751 $8,628
Accounts receivable, less allowance for
doubtful accounts and returns 14,967 12,880
Prepaids and other current assets 805 731
Total current assets 24,523 22,239
Property and equipment 1,208 1,406
Computer software costs 12,617 13,573
Other assets 2,993 2,993
Total assets $41,341 $40,211
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of debt $5,049 $2,800
Accounts payable 1,436 2,978
Accrued expenses 5,055 4,940
Income taxes payable 177 261
Deferred revenues 11,944 12,203
Total current liabilities 23,661 23,182
Shareholders' equity:
Common stock 28 28
Preferred Stock 2,000 2,000
Additional paid-in capital 87,275 87,189
Accumulated deficit (68,669) (69,094)
Accumulated comprehensive income (deficit) (1,834) (1,749)
Treasury Stock (1,120) (1,345)
Total shareholders' equity 17,680 17,029
Total liabilities and shareholders' equity $41,341 $40,211
DATASOURCE: Ross Systems, Inc.
CONTACT: Robert B. Webster of Ross Systems, +1-770-351-9600, or
Web site: http://www.rossinc.com/