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EXHIBIT 99.1
Infinium Reports Financial Results and Announces a New Stock Repurchase Plan
Hyannis, Mass. -- Nov. 1, 1999 -- Infinium Software, Inc. (NASDAQ:
INFM - news) today announced financial results for the fourth quarter and
fiscal year ended September 30, 1999. Infinium is pleased to report quarterly
earnings of $1.6 million or $0.13 per share before product discontinuance
charges taken during the quarter.
Overall revenue for the fourth quarter of fiscal year 1999 was $31.3
million versus $33.5 million, the prior year's fourth quarter revenue. Software
license fees for the fourth quarter were $7.6 million versus $12.7 million for
the same quarter of the prior year. For the year, software license fees totaled
$32.4 million compared to $40.7 million in fiscal year 1998. The Company
believes this decline in software license fees, for the fourth quarter and
fiscal year 1999, is primarily attributable to a market slowdown as companies
prepare for the approaching millennium.
Conversely, due to ongoing demand from Infinium's customer base,
consulting and maintenance revenue increased 22% and 5% respectively for the
quarter, resulting in total services revenue of $23.7 million compared to $20.8
million for the same quarter of the prior year. For the fiscal year, consulting
and maintenance revenues grew 36% and 9% respectively.
Included in Infinium's reported results for the quarter and fiscal
year, is a one-time product discontinuation charge of $14.7 million. The Company
decided to refocus its research and development investments in new strategic
Internet initiatives, and as part of this effort, certain, redundant
applications are being discontinued. These products are no longer considered to
be in line with the Company's strategic direction. Excluding this one-time
charge, earnings for the fourth quarter and fiscal year were $1.6 million, or
$0.13 per share and $3.7 million, or $0.29 per diluted share respectively.
Including this one-time charge, the loss for the fourth quarter is $7.8 million,
or $0.64 per share and for the fiscal year the loss was $5.7 million, or $0.46
per share. During the quarter ended September 30, 1999, the Company generated a
positive cash flow of $2.7 million, even after the expenditure of $2.0 million
to repurchase 412,500 shares of common stock. As of September 30, 1999, the
Company had $47.2 million, or $3.80 per share, in cash and marketable
securities.
"We are undergoing a dramatic transformation," said Bob Pemberton,
Chief Executive Officer of Infinium. "We are in the process of aligning our
business with the emerging 21st century virtual economy. We have taken the
necessary steps to focus on those solutions that will have a strong role to play
in the emerging marketplace. We are aggressively working to extend Infinium's
product portfolio into the front office and are shifting investments into
Internet-facing initiatives. We are excited about these
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new opportunities, and believe we have the financial strength and people to take
advantage of them."
In light of the recently issued SEC Guidance on Materiality, the
Company restated its balance sheets and income statements for fiscal years 1997
and 1998. This restatement is to deferred revenue, deferred income taxes,
retained earnings, maintenance revenue and net income. There is no adjustment to
the previously reported earnings for fiscal year 1999. The Company implemented a
new computer system this year that has the ability to track maintenance
contracts more precisely. Among several improvements provided by the new system
are the abilities to recognize revenue on a daily basis rather than a monthly
basis and the ability to more accurately track renewals and terminations. Upon
implementation of the new system, the Company noted a variance between the
deferred revenue balance calculated by the new system and the balance that had
been calculated by the former system. The result of this restatement is an
increase in deferred revenue of $4.7 million and $4.9 million for the periods
ended September 30, 1997 and 1998 respectively and a reduction of net income of
$244,000 or, $0.02 per share and $127,000 or, $0.01 per share in the fiscal
years ended September 30, 1997 and 1998.
New Stock Repurchase Program
Infinium also announced today that it is initiating a new program to
repurchase up to $10 million worth of its common stock in open market
transactions, subject to market conditions and other factors, on the NASDAQ
National Market or in negotiated transactions. Based on the current market
price, the shares subject to repurchase represent approximately 20% of the
current outstanding common stock. No minimum number, or value of shares to be
repurchased, has been fixed. The Company expects to use the repurchased stock to
meet requirements of its employee stock option and stock purchase plans. This
program is effective immediately and no time limit has been established for the
duration of the repurchase program.
This is the second repurchase program initiated by Infinium. The first
was approved and announced in February 1998, when the board authorized a
repurchase of up to $6 million worth of its common stock. Under this program,
Infinium purchased 813,096 shares at an average price per share of $7.27, for a
total of $5.9 million. Of this total, 412,500 shares were purchased in the
fourth fiscal quarter at an average purchase price of $4.92.
Fourth Quarter Highlights
The following highlights were announced or occurred since Infinium's
last earnings release:
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o New customer wins for the fourth quarter include: Cabela's, an
outfitter of hunting, fishing and outdoor gear; Carhartt, a
manufacturer of outdoor clothing; and Fantasy Springs, a gaming
company; among others.
o In addition, the following existing customers made additional
purchases: Allied Waste, a waste services company; Key Energy, a
well servicing firm; and Tenet Healthcare Corporation, a
nationwide provider of healthcare services; among others.
o The Infinium professional services group took more than 100
customer sites into production. Customer satisfaction remained
high with the Company's reliable and cost-effective implementation
services.
o Infinium announced the availability of e.ssential(TM) for
Infinium, a suite of Web-centric, business-to-business
applications that extend Internet and e-business initiatives into
the AS/400 market.
About Infinium
Infinium is a leading developer of enterprise software solutions
designed to optimize business performance. Infinium Solutions are designed to
automate critical business operations: human resources, financials, and supply
management. Infinium also offers Infinium Process Manufacturing, a comprehensive
solution for formula and recipe-based manufacturers, and Infinium Advantage,
efficient, cost-effective software and services for smaller-but-growing
enterprises. Infinium has more than 1,800 customers around the world
representing a variety of industries including business and professional
services, healthcare, hospitality, retail and process manufacturing. Founded in
1981, Infinium has offices worldwide, with headquarters in Hyannis,
Massachusetts. Infinium's Web site can be found at www.infinium.com.
Forward-looking statements are subject to change based on various
important factors, including, among others, competitive actions in the
marketplace, development risks involved with new products and technologies, the
size and timing of individual license transactions and the variability of
quarterly operating results. Further information about factors which could
affect Infinium Software's future performance and financial results are included
in the Company's Form 10-K for its 1998 fiscal year ended September 30, 1998,
filed with the SEC.
Infinium is a registered trademark of Infinium Software, Inc. Other
trademarks referenced are the servicemarks, trademarks, or registered trademarks
of their respective manufacturers.
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($000's, except per share amounts)
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Income Statement Data for the Quarters and Years Ended September 30, 1998
(Restated) and 1999
--------------------- ---------------------
Q4 FY '99 YTD FY '99 Q4 FY '98 YTD FY '98
---------------------- ---------------------
Revenue:
Software license fees $ 7,626 $ 32,437 $ 12,699 $ 40,704
Maintenance and service revenue 23,690 89,568 20,812 73,490
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Total revenue 31,316 122,005 33,511 114,194
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Operating costs and expenses:
Cost of software license fees 2,076 8,180 2,160 7,210
Cost of maintenance and service revenue 10,425 40,389 9,391 32,330
Research and development 3,908 19,140 5,259 19,071
Sales and marketing 9,836 40,135 10,236 36,632
General and administrative 3,142 11,402 2,875 9,351
Write-off of in-process research
and development acquired - - - 7,796
Write-off of purchased software - - - 3,400
Write-off of discontinued product lines 14,687 14,687 - -
------------------- -------------------
Total operating costs and expenses 44,074 133,933 29,921 115,790
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Income (loss) from operations (12,758) (11,928) 3,590 (1,596)
Other income, net 407 2,633 427 1,744
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Income (loss) before provision (benefit)
for income taxes (12,351) (9,295) 4,017 148
Provision (benefit) for income taxes (4,552) (3,574) 1,285 47
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Net Income (loss) $ (7,799) $ (5,721) $ 2,732 $ 101
=================== ===================
Basic earnings (loss) per share $ (0.64) $ (0.46) $ 0.22 $ 0.01
=================== ===================
Diluted earnings (loss) per share $ (0.64) $ (0.46) $ 0.20 $ 0.01
=================== ===================
Weighted average shares outstanding -
basic 12,242 12,421 12,513 12,399
=================== ===================
Weighted average shares outstanding -
diluted 12,242 12,421 13,738 13,808
=================== ===================
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Pro forma Income Statement(a)
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Q4 FY '99 YTD FY '99 Q4 FY '98 YTD FY '98
--------------------- ---------------------
Revenue $ 31,316 $122,005 $ 33,511 $ 114,194
Operating costs and expenses 29,387 119,246 29,921 104,594
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Income from operations 1,929 2,759 3,590 9,600
Other income, net 407 2,633 427 1,744
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Income before provision for income taxes 2,336 5,392 4,017 11,344
Provision for income taxes 748 1,725 1,285 3,630
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Net Income $ 1,588 $ 3,667 $ 2,732 $ 7,714
=================== =====================
Basic earnings per share $ 0.13 $ 0.30 $ 0.22 $ 0.62
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Diluted earnings per share $ 0.13 $ 0.29 $ 0.20 $ 0.56
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Weighted average shares outstanding -
basic 12,242 12,421 12,513 12,399
=================== ======================
Weighted average shares outstanding -
diluted 12,375 12,601 13,738 13,808
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(a) Excludes write-off of in-process research and development acquired,
write-off of purchased software and write-off of discontinued product lines.
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Balance Sheet Data as of September 30, 1998 9/30/99 9/30/98
(restated) and 1999: ---------- ---------
Assets:
Cash, cash equivalents and marketable securities $ 47,212 $ 46,293
Accounts receivable, net 18,769 27,383
Deferred income taxes 5,466 4,049
Prepaid expenses and other current assets 4,142 6,103
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Total current assets 75,589 83,828
Property and equipment, net 10,593 7,442
Capitalized software development costs, net 5,406 9,643
Goodwill and other intangible assets, net 755 2,245
Deferred income taxes 3,477 1,731
Other assets 2,196 3,093
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Total assets 98,016 107,982
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Liabilities and Stockholders' Equity:
Accounts payable 7,775 8,136
Accrued expenses 19,314 14,672
Income taxes payable 795 3,068
Deferred revenue 35,744 40,889
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Total current liabilities 63,628 66,765
Deferred revenue 2,063 1,586
Lease obligation, long term 343 -
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Total liabilities 66,034 68,351
Common stock 126 126
Additional paid-in capital 36,306 36,644
Retained earnings (accumulated deficit) (2,173) 4,473
Unrealized gain on marketable equity securities 74 -
Cumulative translation adjustment (331) (319)
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34,002 40,924
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Less: Treasury stock at cost (2,020) (1,293)
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Total stockholders' equity 31,982 39,631
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Total liabilities and stockholders' equity $98,016 $107,982
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Contact:
Infinium
Investor Contacts
Dan Kossmann, CFO
(508) 778-2000
dan_kossmann@infinium.com
or
Alisha Simmons, Corporate Communications Manager
(508) 778-2000
alisha_simmons@infinium.com