EXHIBIT 99
----------
MRO SOFTWARE (LOGO)
FOR IMMEDIATE RELEASE
INVESTOR CONTACT: MEDIA CONTACT:
Peter Rice Vaughn Harring
(781) 280-6550 (781) 280-6855
peter.rice@mro.com vaughn.harring@mro.com
MRO SOFTWARE REPORTS FOURTH QUARTER
AND FISCAL 2003 RESULTS
FINISHES YEAR WITH GROWTH IN SALES, EARNINGS,
OPERATING MARGINS AND CASH
BEDFORD, MASS., OCTOBER 30, 2003 - MRO Software, Inc. (Nasdaq: MROI), the
leading provider of strategic asset management solutions, today announced
revenues of $46.0 million for the Company's fourth quarter and $176.9 million
for the fiscal year ended September 30, 2003.
Total revenues for the fourth quarter were $46.0 million compared with $46.1
million for the fourth quarter last year. Revenues for the fiscal year ended
September 30, 2003 were $176.9 million, compared with $171.9 million for the
prior year, an increase of 3 percent.
On a GAAP basis, the Company reported net income for the fourth quarter of $2.6
million or $0.11 per diluted share, compared with a net loss of $2.0 million or
($0.08) per share for the same quarter last year. On a GAAP basis for the fiscal
year ended September 30, 2003, the Company reported net income of $4.9 million
or $0.20 per diluted share compared with a net loss of $10.6 million, or ($0.46)
per share for the prior year.
Pro forma net income (see Schedule A) for the fourth quarter was $3.3 million,
or $0.13 per diluted share compared with pro forma net income of $1.4 million or
$0.06 per diluted share for same quarter last year. For fiscal year ended
September 30, 2003, the Company reported pro forma net income of $7.9 million,
or $0.32 per diluted share compared with pro forma net income of $0.8 million,
or $0.03 per diluted share for the prior year. Pro forma results are adjusted
for the amortization of acquired technology, goodwill and other intangibles and
their related tax effects. As a result of the Company's implementation of FASB
No.142 on October 1, 2002, the Company no longer amortizes goodwill.
For the fourth quarter, revenues from software license sales were $14.2 million,
compared with $15.0 million for the same quarter last year, a decrease of 5
percent. Support and services revenues were $31.8 million for the fourth
quarter, compared with $31.0 million for the same quarter last year, an increase
of 3 percent.
For fiscal year ended September 30, 2003, software revenues were $49.9 million
compared with $49.0 million for the prior year, an increase of 2 percent.
Support and services revenues for the
fiscal year ended September 30, 2003, were $127.0 million compared with $122.9
million for the prior year, an increase of 3 percent.
During the fourth quarter, the Company sold more than 230 new licenses into a
broad range of industries. Customers that purchased MRO Software solutions
during the quarter included: Alcan, Aventis Pharmaceuticals, Cornell University,
Daimler Chrysler AG, Gillette, HP, Lockheed Martin, Nippon Oil Corporation, Penn
State University, Port of Seattle, Sara Lee Corporation, State Street Bank,
Siemens, U.S. Coast Guard, U.S. Customs, U.S. Department of Energy, U.S.
National Parks Service and the U.S. Navy.
The balance sheet as of September 30, 2003 contained $94.6 million in cash and
marketable securities and no long-term debt. This compares with $67.8 million in
cash and marketable securities as of September 30, 2002, and represents a 40
percent increase year-over-year. For the fourth quarter, deferred revenue was
$29.9 million, and days sales outstanding (DSO) improved to 57 days from 64 days
in the prior quarter.
"During this fiscal year we've improved every important metric with increases in
revenue, software sales, earnings and cash," said Chip Drapeau, president and
CEO, MRO Software. "This year's results were driven by the increased adoption of
MAXIMO's Web-architecture, increased sales of our IT Asset Management solution
and a continuation of our high customer retention rates delivered by our support
and services organizations. Based on the continuing trends in MAXIMO(R) and
MAXIMO MainControl(R) sales, our focus on vertical industry solutions, and the
Company's solid financial fundamentals, I believe we are well-positioned for the
future."
"I'm pleased with the continued improvement of the Company's financial metrics,"
said Peter Rice, executive vice president and CFO, MRO Software. "Our focus on
profitability, improved operating margins and cash generation is reflected in
the strong results we reported today."
Rice continued, "For fiscal year 2004, the Company expects total revenues will
grow by approximately 5 percent above fiscal 2003 results. We believe that our
operating margins will continue to increase and that will result in improved
earnings that are expected to be in the range of $0.30-$0.40 per share on a GAAP
basis and $0.40-$0.50 per share on a pro forma basis. As consistent with our
prior performance, the Company expects a majority of the anticipated revenue
growth to occur in the second half of the fiscal year. Specifically, in the
first quarter of fiscal 2004 we expect revenues to be in the range of $43 to $45
million, GAAP earnings to be in the range of $0.03 to $0.05 per share, and pro
forma earnings to be in the range of $0.05 to $0.07 per share."
Expected results on a pro forma basis are adjusted for the amortization of
acquired technology and other intangibles and their related tax effects (see
Schedule A).
The Company will conduct its regularly scheduled fiscal fourth quarter and year
end 2003 conference call on Thursday, October 30, at 4:30 p.m. EST. For
participants in the U.S. and Canada, the phone number is (800) 932-9896.
International participants should use the phone number (706) 634-5804.
A webcast of the call is available at: www.mro.com/investor
--------------------
A digital recording will be made available beginning two hours after the
completion of the conference call and will be available through November 6,
2003. Participants in the U.S. and Canada should call (800) 642-1687.
International participants should call (706) 645-9291. All participants should
use the Conference ID 3402121.
A transcript of the call will be promptly archived on the Investor Relations
portion of the Company's website, and may be found at: www.mro.com/investor
ABOUT MRO SOFTWARE, INC.
MRO Software is the leading provider of strategic asset management solutions.
The Company's integrated suite of applications optimizes performance, improves
productivity and service levels and enables asset-related sourcing and
procurement across the entire spectrum of strategic assets.
The Company's asset management solutions allow customers to manage the complete
lifecycle of strategic assets including: planning, procurement, deployment,
tracking, maintenance and retirement. Using MRO Software's solutions customers
improve production reliability, labor efficiency, material optimization,
software license compliance, lease management, warranty and service management
and provisioning across the asset base.
MRO Software (Nasdaq: MROI) is a global company based in Bedford, Mass., with
approximately 900 employees, 10,000 customers and more than 260,000 end-users.
The Company markets its products through a direct sales organization in
combination with a network of international distributors. MRO Software has sales
offices throughout North America, Europe, Asia/Pacific and Latin America.
Additional information on MRO Software can be found at http://www.mro.com.
FORWARD-LOOKING STATEMENTS.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include, among other things, continued sluggishness in
IT spending and stagnation in the market for our products, difficulties or
delays in the development or deployment of our industry-specific offerings,
delayed sales of our MainControl products in anticipation of new releases, lower
than expected benefits from our alliance partner program, and those factors
discussed in the Section entitled "Factors Affecting Future Performance" in our
Quarterly Report on Form 10-Q for the third quarter of fiscal 2003.
# # #
MAXIMO(R) and MAXIMO MainControl(R) are registered trademarks, and MRO
SoftwareTM is a trademark, of MRO Software, Inc.
3
MRO SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Twelve Months Ended
September 30, September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
(in thousands, except per share data)
Revenues:
Software $ 14,219 $ 15,035 $ 49,904 $ 49,035
Support and services 31,747 31,039 126,973 122,846
---------- ---------- ---------- ----------
Total revenues 45,966 46,074 176,877 171,881
---------- ---------- ---------- ----------
Cost of revenues:
Software 1,669 1,335 4,938 4,016
Support and services 14,515 14,199 58,618 61,862
Amortization of acquired technology 844 835 3,376 2,996
---------- ---------- ---------- ----------
Total cost of revenues 17,028 16,369 66,932 68,874
---------- ---------- ---------- ----------
Gross profit 28,938 29,705 109,945 103,007
Operating expenses:
Sales and marketing 13,352 15,063 59,117 58,806
Product development 6,820 7,222 26,476 26,897
General and administrative 4,584 5,922 17,702 19,698
Amortization of goodwill and other intangibles 204 3,756 908 12,925
---------- ---------- ---------- ----------
Total operating expenses 24,960 31,963 104,203 118,326
---------- ---------- ---------- ----------
Income/(loss) from operations 3,978 (2,258) 5,742 (15,319)
Interest income 215 224 811 974
Other income/(expense), net 11 (539) 1,161 (94)
---------- ---------- ---------- ----------
Income/(loss) before income taxes 4,204 (2,573) 7,714 (14,439)
Provision/(benefit) for income taxes 1,568 (611) 2,844 (3,888)
---------- ---------- ---------- ----------
Net income/(loss) $ 2,636 $ (1,962) $ 4,870 $ (10,551)
========== ========== ========== ==========
Net income/(loss) per share, basic $ 0.11 $ (0.08) $ 0.20 $ (0.46)
---------- ---------- ---------- ----------
Net income/(loss) per share, diluted $ 0.11 $ (0.08) $ 0.20 $ (0.46)
---------- ---------- ---------- ----------
Shares used to calculate net income/(loss) per share
Basic 24,548 24,266 24,429 23,171
Diluted 24,985 24,266 24,653 23,171
4
MRO SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
PRO FORMA, AS ADJUSTED
Schedule A
(unaudited)
Three Months Ended Twelve Months Ended
September 30, September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
(in thousands, except per share data)
GAAP net income/(loss) $ 2,636 $ (1,962) $ 4,870 $ (10,551)
Pro forma adjustments
---------------------
Amortization of goodwill and other intangibles 204 3,756 3,376 12,925
Amortization of acquired technology 844 835 908 2,996
Related tax effects (350) (1,234) (1,277) (4,569)
---------- ---------- ---------- ----------
Total pro forma adjustments 698 3,357 3,007 11,352
Pro forma net income, as adjusted $ 3,334 $ 1,395 $ 7,877 $ 801
---------- ---------- ---------- ----------
Pro forma diluted net income per share,
as adjusted $ 0.13 $ 0.06 $ 0.32 $ 0.03
---------- ---------- ---------- ----------
Shares used to calculate pro forma net income
per share, as adjusted 24,985 24,330 24,653 23,888
NOTE:
In this press release, the Company announced its earnings per share (EPS) on a
GAAP and pro forma basis. Pro forma net income for fiscal year 2003 is adjusted
to exclude the amortization of acquired technology and other intangibles and
their related tax effects. Pro forma net loss for fiscal year 2002 is adjusted
to exclude the amortization of acquired technology, goodwill and other
intangibles and their related tax effects. The Company adopted FAS No. 142 on
October 1, 2002. In accordance with FAS No. 142, the Company no longer amortizes
goodwill.
Management believes that such pro forma EPS is useful to investors, first
because it is important for investors to receive information in a form that is
consistent with the Company's past practice, and second because the Company's
amortization of acquired technology and other intangibles is substantially
fixed, and is relatively large in comparison with the absolute value of the
Company's operating income. The Company believes that by focusing on the impact
of expenses that are to a greater extent subject to control by the Company's
management, pro forma EPS provides investors with a more direct perspective on
the performance of the Company and its management.
5
MRO SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, 2003 September 30, 2002
------------------ ------------------
(in thousands)
ASSETS
Cash and cash equivalents $ 73,662 $ 67,315
Marketable securities 1,102 --
Accounts receivable, net 28,833 35,433
Other current assets 6,419 9,042
---------- ----------
TOTAL CURRENT ASSETS 110,016 111,790
---------- ----------
Marketable securities 19,809 500
Property and equipment, net 8,239 10,156
Intangible assets, net 53,910 58,366
Other assets 13,287 11,341
---------- ----------
TOTAL ASSETS $ 205,261 $ 192,153
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 28,799 $ 26,192
Deferred revenue 28,734 27,536
---------- ----------
TOTAL CURRENT LIABILITIES 57,533 53,728
========== ==========
Other long term liabilities 1,216 405
---------- ----------
TOTAL LIABILITIES 58,749 54,133
========== ==========
STOCKHOLDERS' EQUITY 146,512 138,020
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 205,261 $ 192,153
========== ==========
6
# # #