EXHIBIT 99.1
(DOCUCORP LETTERHEAD) NEWS RELEASE
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Contact:
John H. Gray
Chief Financial Officer
(214) 891-6450
jgray@docucorp.com
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For Release:
FOR IMMEDIATE RELEASE
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DOCUCORP ANNOUNCES THIRD QUARTER RESULTS
COMPANY REPORTS RECORD REVENUES FOR THIRD QUARTER
DALLAS - MAY 21, 2003 - Docucorp(R) International (Nasdaq: DOCC), a leading
provider of enterprise information solutions, today announced record revenues of
$20.1 million for the third quarter of fiscal year 2003, which represents a 9
percent increase from $18.4 million for the third quarter of the prior year. The
company reported earnings of $1 million, or $0.07 per diluted share, for the
quarter compared to $1.6 million, or $0.10 per diluted share, for the same
period a year ago.
For the nine months ended April 30, 2003, revenues were $55.6 million,
up 4 percent from the same period in fiscal year 2002. Net income for the first
nine months of fiscal year 2003 was $2.9 million, or $0.20 per diluted share,
compared to $4.2 million, or $0.29 per diluted share, for the same period a year
ago.
Revenue growth for the current quarter reflects significant growth in
Docucorp's professional services and ASP operations. When compared to the same
quarter of fiscal year 2002, professional services revenue increased 29 percent
to $6.8 million and ASP revenue increased 20 percent to $6.1 million. The
increase in professional services revenue resulted from increased utilization
rates and the recognition of revenue previously deferred related to one large
consulting contract. Growth in ASP revenue for the quarter is the result of new
hosting agreements that went into production during the quarter, as well as
growth from existing customers. Software license revenue was $2.3 million for
the third quarter of fiscal year 2003
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DOCUCORP, THIRD QUARTER 2003 RESULTS ADD #1
compared to $1.0 million in the prior quarter of this fiscal year, and $3.3
million for the third quarter of fiscal year 2002.
"One of the benefits to Docucorp's business model is its diversified
revenue streams, which played a key role in the company's ability to deliver
record revenues this quarter," said Michael D. Andereck, president and chief
executive officer of Docucorp. "While software license revenue remained less
than robust, it more than doubled when compared to the second quarter.
Considering the difficult business environment, I am very pleased with the
financial results for the quarter."
The decrease in earnings per share was primarily the result of the
revenue mix and an increased effective tax rate. Revenues for the three and nine
months ended April 30, 2003 included significantly less high-margin software
license revenue than in the prior year. The effective tax rate increased to 51
percent in the current quarter, primarily as a result of European losses, for
which the company does not recognize a tax benefit.
During May, Docucorp implemented organizational changes that resulted
in the elimination of approximately 5 percent of the company's total staffing.
The organizational changes will make the company more profitable and efficient,
and will not impact service levels or product delivery schedules. The financial
impact for the fourth quarter and the year ending July 31, 2003 is not expected
to be material because much of the cost savings will be offset by a one-time
charge for severance costs. However, on an ongoing basis, the organizational
changes are expected to save the company approximately $2 million annually.
"I believe these organizational changes are prudent in the current
environment, and they position us well for the future. Docucorp has been, and
will continue to be, a company responsive to the needs of our clients,
stockholders and employees," said Andereck.
ABOUT DOCUCORP
Docucorp is the authority in providing dynamic solutions for acquiring,
managing, personalizing and presenting enterprise information. Servicing the
entire enterprise information lifecycle,
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DOCUCORP, THIRD QUARTER 2003 RESULTS ADD #2
Docucorp's information software, application service provider (ASP) hosting and
professional consulting services enable companies to implement solutions
in-house or fully outsource to Docucorp. The company has an installed base of
more than 1,200 customers, including many of the largest insurance, utility and
financial services organizations. Headquartered in Dallas, Docucorp has
facilities in Atlanta GA, Silver Spring MD, Portland ME, Bedford NH and London.
Certain information contained in this news release may include "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act of
1995. All statements, other than historical facts, included herein are
forward-looking statements. These statements involve risks and uncertainties,
such as competition, technological developments, loss of significant customers
and the other factors discussed in the Company's periodic reports filed with the
Securities and Exchange Commission, that could cause the Company's actual
results to differ materially from those expressed or implied by these
forward-looking statements. Docucorp is a registered trademark of Docucorp
International.
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CONSOLIDATED STATEMENTS OF OPERATIONS AND BALANCE SHEET DATA FOLLOW.
DOCUCORP INTERNATIONAL
FISCAL QUARTERS ENDED APRIL 30, 2003 AND 2002
STATEMENTS OF OPERATIONS DATA:
<Table>
<Caption>
(in thousands except per share amounts)
(unaudited)
Three Months Nine Months
Ended April 30, Ended April 30,
---------------------------- ---------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenues
ASP hosting $ 6,069 $ 5,074 $ 17,017 $ 14,947
Professional services 6,755 5,222 17,956 15,623
License 2,268 3,304 5,381 8,990
Maintenance 4,976 4,780 15,223 14,124
------------ ------------ ------------ ------------
Total revenues 20,068 18,380 55,577 53,684
------------ ------------ ------------ ------------
Cost of revenues
ASP hosting 5,135 4,065 14,449 12,383
Professional services 4,914 4,677 13,530 13,160
License 841 661 2,434 1,946
Maintenance 484 425 1,421 1,237
------------ ------------ ------------ ------------
Total cost of revenues 11,374 9,828 31,834 28,726
------------ ------------ ------------ ------------
Gross profit 8,694 8,552 23,743 24,958
------------ ------------ ------------ ------------
Operating expenses
Product development 2,031 1,771 5,687 5,366
Sales and marketing 3,031 2,720 8,277 7,972
General and administrative 1,598 1,654 4,710 4,910
------------ ------------ ------------ ------------
Total operating expenses 6,660 6,145 18,674 18,248
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Operating income 2,034 2,407 5,069 6,710
Other income (expense), net (14) 227 164 258
------------ ------------ ------------ ------------
Income before income taxes 2,020 2,634 5,233 6,968
Provision for income taxes 1,036 1,083 2,371 2,733
------------ ------------ ------------ ------------
Net income $ 984 $ 1,551 $ 2,862 $ 4,235
============ ============ ============ ============
Basic net income per share $ 0.07 $ 0.12 $ 0.21 $ 0.31
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Weighted average basic shares outstanding 13,232 13,382 13,391 13,483
============ ============ ============ ============
Diluted net income per share $ 0.07 $ 0.10 $ 0.20 $ 0.29
============ ============ ============ ============
Weighted average diluted shares outstanding 13,753 14,996 14,571 14,773
============ ============ ============ ============
</Table>
BALANCE SHEET DATA:
<Table>
<Caption>
April 30, July 31,
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2003 2002
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(in thousands)
Current assets $ 31,483 $ 33,410
Current liabilities 21,024 20,260
Working capital 10,459 13,150
Stockholders' equity 31,475 33,064
Total assets $ 54,542 $ 55,750
</Table>