EXHIBIT 99
----------
MRO SOFTWARE
FOR IMMEDIATE RELEASE
MEDIA CONTACT: INVESTOR CONTACT:
Vaughn Harring Peter Rice
(781) 280-6855 (781) 280-6550
vaughn.harring@mro.com peter.rice@mro.com
MRO SOFTWARE REPORTS THIRD QUARTER RESULTS
SOLID MAXIMO SALES DRIVE REVENUE,
IMPROVED OPERATING MARGINS, INCREASED EPS AND CASH
BEDFORD, MASS., JULY 15, 2004 - MRO Software, Inc. (Nasdaq: MROI), the leading
provider of strategic asset management solutions, today announced results for
the Company's third fiscal quarter ended June 30, 2004.
Total revenues for the third quarter were $46.3 million compared with $47.6
million for the third quarter of the prior year, a decrease of 3 percent. On a
GAAP basis, the Company reported net income for the quarter of $3.1 million or
$0.12 per diluted share, compared with net income of $2.0 million or $0.08 per
diluted share for the same quarter last year, an increase in EPS of 50 percent.
Pro forma net income (see Schedule A) for the third quarter was $3.6 million, or
$0.14 per diluted share compared with pro forma net income of $2.8 million or
$0.12 per diluted share for same quarter last year, an increase in EPS of 17
percent. Pro forma results are adjusted for the amortization of acquired
technology and other intangibles and their related tax effects.
Revenue from software license sales was $13.0 million, compared with $15.3
million in the same quarter last year, a decrease of 15 percent. Support and
services revenue was $33.3 million, compared with $32.3 million in the same
quarter last year, an increase of 3 percent.
As of June 30, 2004, the balance sheet contained $99.4 million in cash and
marketable securities, an increase of $2.9 million from the second quarter, and
no long-term debt. Deferred revenue was $31.6 million, and days sales
outstanding (DSO) was 65 days.
There were a total of 232 software license sales for the quarter, including
three transactions of approximately $1 million or more. Customers for the
quarter included: Cummins Engine Co., Computer Sciences Raytheon, Grubb & Ellis
Management Services, Inc., Honeywell Technology Solutions, Inc., Iraq Coalition
Provisional Authority Program Management Office, JB Hunt Transport Services,
Inc., Johnson Controls, Inc., Lower Colorado River Authority, National Institute
of Health, PPG Industries, Southwest Ohio Regional Transit Authority and Vestas
Wind Systems A/S.
"We were able to deliver solid results for the quarter. Our focus on vertical
solutions continues to produce results with several significant wins in the
nuclear, transportation and federal sectors during the quarter," said Chip
Drapeau, president and CEO, MRO Software. "With our healthy balance sheet we are
able to continue investing in solutions and activities that will help to grow
the Company."
"The Company's earnings, operating margins and cash balances continued to
improve this quarter," said Peter Rice, CFO, MRO Software. "For the fourth
quarter of fiscal 2004, we expect revenues to be in the range of $47 to $49
million, and we expect earnings to be in the range of $0.12 to $0.16 per share
on a GAAP basis, and between $0.14 to $0.18 per share on a pro forma basis.
Based on these expectations, the Company reaffirms its guidance for fiscal year
2004 total revenue growth of approximately 5 percent and pro forma earnings
growth of approximately 50 percent above fiscal 2003 results. Looking ahead for
fiscal year 2005, we expect total revenue growth of five percent and pro forma
earnings growth in the range of 10 to 15 percent for the full fiscal year."
Expected results on a pro forma basis are adjusted for the amortization of
acquired technology and other intangibles and the related tax effects.
The Company will hold a conference call to discuss these results on Thursday,
July 15, 2004 beginning at 4:30 p.m. EDT.
To participate in this call within the U.S. and Canada, dial (800) 932-9896,
international callers should dial (706) 634-5804. A digital recording of the
call will be available beginning two hours after the call and will be available
until July 22, 2004. To access the replay within the U.S. and Canada, dial (800)
642-1687, international callers should dial (706) 645-9291, all participants
should use conference ID: 8494359.
A webcast of the call is available at: www.mro.com/investor. 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.
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,
volatility in results as a function of a small number of large license
transactions, and those factors discussed in the Section entitled "Factors
Affecting Future Performance" in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2004.
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.
MAXIMO(R) is a registered trademark, and MRO SoftwareTM is a trademark of, MRO
Software, Inc.
# # #
MRO SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, 2004 September 30, 2003
------------- ------------------
(in thousands) ASSETS
Cash and cash equivalents $ 48,358 $ 73,662
Marketable securities 1,189 1,102
Accounts receivable, net 33,668 28,833
Other current assets 8,148 6,419
---------- ----------
TOTAL CURRENT ASSETS 91,363 110,016
---------- ----------
Marketable securities 49,857 19,809
Property and equipment, net 8,287 8,239
Intangible assets, net 51,451 53,910
Other assets 13,097 13,287
---------- ----------
TOTAL ASSETS $ 214,055 $ 205,261
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 24,963 $ 28,799
Deferred revenue 30,554 28,734
---------- ----------
TOTAL CURRENT LIABILITIES 55,517 57,533
---------- ----------
Other long term liabilities 2,137 1,216
---------- ----------
TOTAL LIABILITIES 57,654 58,749
---------- ----------
STOCKHOLDERS' EQUITY 156,401 146,512
---------- ----------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 214,055 $ 205,261
========== ==========
# # #
MRO SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------- -------------------------
2004 2003 2004 2003
(in thousands, except per share data)
Revenues:
Software $ 12,996 $ 15,348 $ 36,658 $ 35,685
Support and services 33,304 32,287 99,166 95,226
---------- ---------- ---------- ----------
Total revenues 46,300 47,635 135,824 130,911
---------- ---------- ---------- ----------
Cost of revenues:
Software 1,109 1,752 3,404 3,269
Support and services 14,960 14,662 45,140 44,103
Amortization of acquired technology 473 844 1,885 2,532
---------- ---------- ---------- ----------
Total cost of revenues 16,542 17,258 50,429 49,904
---------- ---------- ---------- ----------
Gross profit 29,758 30,377 85,395 81,007
Operating expenses:
Sales and marketing 13,941 16,074 41,486 45,765
Product development 7,001 6,512 21,104 19,656
General and administrative 4,280 4,764 13,134 13,118
Amortization of other intangibles 165 226 574 704
---------- ---------- ---------- ----------
Total operating expenses 25,387 27,576 76,298 79,243
---------- ---------- ---------- ----------
Income from operations 4,371 2,801 9,097 1,764
Interest income 313 205 761 596
Other income/(expense), net 35 169 (292) 1,150
---------- ---------- ---------- ----------
Income before income taxes 4,719 3,175 9,566 3,510
Provision for income taxes 1,631 1,158 3,327 1,276
---------- ---------- ---------- ----------
Net income $ 3,088 $ 2,017 $ 6,239 $ 2,234
========== ========== ========== ==========
Net income per share, basic $ 0.12 $ 0.08 $ 0.25 $ 0.09
---------- ---------- ---------- ----------
Net income per share, diluted $ 0.12 $ 0.08 $ 0.25 $ 0.09
---------- ---------- ---------- ----------
Shares used to calculate net income per share
Basic 24,873 24,457 24,766 24,390
Diluted 25,409 24,489 25,356 24,542
MRO SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
PRO FORMA, AS ADJUSTED
Schedule A
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------- -------------------------
2004 2003 2004 2003
(in thousands, except per share data)
GAAP net income $ 3,088 $ 2,017 $ 6,239 $ 2,234
Pro forma adjustments
Amortization of other intangibles 165 226 574 704
Amortization of acquired technology 473 844 1,885 2,532
Related tax effects (166) (266) (688) (927)
-------------------------------------------------------
Total pro forma adjustments 472 804 1,771 2,309
Pro forma net income, as adjusted $ 3,560 $ 2,821 $ 8,010 $ 4,543
---------- --------- ---------- ----------
Pro forma diluted net income per share,
as adjusted $ 0.14 $ 0.12 $ 0.32 $ 0.19
---------- --------- ---------- ----------
Shares used to calculate pro forma net income
per share, as adjusted 25,409 24,489 25,356 24,542
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 2004
and 2003 is adjusted to exclude the amortization of acquired technology and
other intangibles and their related tax effects.
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.