Exhibit 99.1
Lawson Software Reports Q3 FY04 Results; Revenues Increase 17% over
Prior Year, Driven by Strong Software Licensing
ST. PAUL, Minn.--(BUSINESS WIRE)--March 18, 2004--Lawson Software,
Inc. (Nasdaq:LWSN), today reported revenues of $91.6 million for its
fiscal 2004 third quarter ended Feb. 29, 2004, compared with revenues
of $78.4 million in its fiscal 2003 third quarter, an increase of 17
percent. License fee revenues were $25.2 million in the third quarter,
compared with $14.2 million in the fiscal 2003 third quarter, an
increase of 77 percent. Services revenues increased 3 percent to $66.4
million in the quarter, compared with $64.2 million in the fiscal 2003
third quarter.
On a generally accepted accounting principles (GAAP) basis, the
company posted net income of $2.6 million, or $0.02 per diluted share,
compared with a net loss of $711,000, or a loss of $0.01 per diluted
share, in the fiscal 2003 third quarter.
Based on non-GAAP financial measures, the company posted non-GAAP
net income of $3.5 million, or $0.03 per diluted share, compared with
non-GAAP net income of $574,000 in the fiscal 2003 third quarter, or
$0.01 per diluted share. Fiscal 2004 third quarter non-GAAP operating
results exclude $1.6 million of items consisting of non-cash
stock-based compensation and amortization of acquired software and
intangibles.
For the nine months ended Feb. 29, 2004, on a GAAP basis, the
company posted net income of $4.5 million, or $0.04 per diluted share,
on total revenues of $263.9 million, compared with a net loss of $6.1
million, or a loss of $0.06 per diluted share, on total revenues of
$253.7 million in the comparable fiscal 2003 period.
For the nine months ended Feb. 29, 2004, using non-GAAP financial
measures, the company posted non-GAAP net income of $8.2 million, or
$0.08 per diluted share, compared with non-GAAP net income of
$935,000, or $0.01 per diluted share, in the comparable fiscal 2003
period. Fiscal 2004 nine-month non-GAAP operating results exclude $6.1
million of items consisting of a restructuring charge, non-cash
stock-based compensation, and amortization of acquired software and
intangibles.
For the details on the company's GAAP reported results and the
reconciliation of GAAP operating results to non-GAAP financial
measures of net income, see the financial table accompanying this news
release - "SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP OPERATING
RESULTS TO NON-GAAP NET INCOME."
The company's cash, cash equivalents and marketable securities
increased to $232.1 million at Feb. 29, 2004, from $228.9 million at
Nov. 30, 2003. During the third quarter, the company repurchased 1.3
million shares of common stock for a total of $11.3 million.
Days sales outstanding (DSO) were 64 during the third quarter,
compared with 64 in the fiscal 2004 second quarter.
Third Quarter Performance
"Our third quarter results were very good, reflecting successful
operational execution within the company as well as growing traction
in the markets we serve. The 27 percent growth in software license
fees on a year-to-date basis is proof of the value we bring to our
clients, and of our ability to effectively differentiate Lawson in
today's competitive environment," said Jay Coughlan, Lawson president
and chief executive officer. "The strong performance in our healthcare
business shows how our brand leadership and customer focus can drive
compelling financial results. Looking forward, we see substantial
opportunity to further differentiate ourselves from competitors, and
we intend to aggressively pursue the advantages our competitive
differentiation and momentum provide. Overall, we remain cautiously
optimistic for continued growth in Q4."
The company signed 136 deals in the quarter. Of total licensing
activity in the fiscal 2004 third quarter, 60 percent came from new
customers and 40 percent from existing customers. License fees were 27
percent of total revenue in the fiscal 2004 third quarter, up from 18
percent in the fiscal 2003 third quarter. At nine months, license fees
were 25 percent of total revenue, compared with 20 percent in the
prior year period.
During the quarter, the company signed 27 new customers at an
average selling price of $580,000, compared with 18 new customers at
an average selling price of $442,000 in the third quarter of fiscal
2003. The company signed six software licensing agreements valued at
more than $1 million. Significant or strategic wins included:
Healthcare - Sisters of Mercy Health System, Baptist Health Care,
BryanLGH Medical Center; Public Sector - Knox County (Tenn.); Emerging
Markets - PlatformOne.
Conference Call and Webcast
The company will conduct a conference call and webcast for
investors beginning at 3:30 p.m. Central Time on March 18.
Interested parties may listen to the call by dialing 888-592-9602
(passcode Lawson 318) and international callers 1-773-756-4621. A live
webcast will also be available on www.lawson.com. Interested parties
should dial into the conference call or access the webcast
approximately 10-15 minutes before the scheduled start time.
A replay will be available approximately one hour after the
conference call concludes and will remain available through Friday,
March 26. The replay number is 800-767-6745 and international
1-402-220-0375. The webcast will remain on www.lawson.com for
approximately two weeks.
About Lawson Software
Lawson Software provides business process software solutions that
help services organizations in the healthcare, retail, professional
services, public sector, financial services, and other strategic
markets achieve competitive advantage. Lawson's solutions include
enterprise performance management, distribution, financials, human
resources, procurement, retail operations and service process
optimization. Headquartered in St. Paul, Minn., Lawson has offices and
affiliates serving North and South America, Europe, Asia, Africa and
Australia. Additional information about Lawson is available at
www.lawson.com.
Forward-Looking Statements
This press release contains forward-looking statements. These
forward-looking statements contain statements of intent, belief or
current expectations of Lawson Software, Inc., and its management.
Such forward-looking statements are not guarantees of future results
and involve risks and uncertainties that may cause actual results to
differ materially from the potential results discussed in the
forward-looking statements. The company is not obligated to update
forward-looking statements based on circumstances or events which
occur in the future. In addition to factors discussed above, risks and
uncertainties that may cause such differences include but are not
limited to: uncertainties in the software industry; global military
conflicts; terrorist attacks in the United States, and any future
events in response to these developments; changes in conditions in the
company's targeted service industries; increased competition and other
risk factors listed in the company's most recent Annual Report on Form
10-K and 10-Q filed with the Securities and Exchange Commission and as
included in other documents the company files from time to time with
the Commission.
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in thousands)
February 29, May 31,
2004 2003
------------ ---------
ASSETS
Current assets:
Cash and cash equivalents $145,903 $153,071
Marketable securities 80,564 102,266
Trade accounts receivable, net 64,894 62,433
Other current assets 42,096 34,122
------------ ---------
Total current assets 333,457 351,892
Long-term marketable securities 5,665 5,175
Property and equipment, net 18,211 21,364
Goodwill and other intangible assets, net 61,735 43,943
Other assets 8,644 9,835
------------ ---------
Total assets $427,712 $432,209
============ =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $739 $896
Accounts payable and other accrued liabilities 50,883 51,096
Deferred revenue and customer deposits 83,168 86,642
------------ ---------
Total current liabilities 134,790 138,634
Long-term debt, less current portion 966 255
Other long-term liabilities 4,146 3,921
------------ ---------
Total liabilities 139,902 142,810
------------ ---------
Stockholders' equity:
Preferred stock - -
Common stock 1,095 1,058
Additional paid-in capital 326,272 309,637
Treasury stock, at cost (55,719) (28,824)
Deferred stock-based compensation (1,147) (3,117)
Retained earnings 14,013 9,480
Accumulated other comprehensive gain 3,296 1,165
------------ ---------
Total stockholders' equity 287,810 289,399
------------ ---------
Total liabilities and stockholders' equity $427,712 $432,209
============ =========
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(in thousands, except per share data)
Three Months Ended Nine Months Ended
------------------ -----------------
Feb 29, Feb 28, Feb 29, Feb 28,
2004 2003 2004 2003
--------- -------- -------- --------
Revenues:
License fees $25,195 $14,219 $65,169 $51,343
Services 66,411 64,187 198,704 202,316
--------- -------- -------- --------
Total revenues 91,606 78,406 263,873 253,659
Cost of revenues:
Cost of license fees 3,911 3,110 11,990 9,888
Cost of services 34,258 33,956 100,090 107,696
--------- -------- -------- --------
Total cost of revenues 38,169 37,066 112,080 117,584
Gross profit 53,437 41,340 151,793 136,075
Operating expenses:
Research and development 16,940 14,298 47,132 43,888
Sales and marketing 23,615 23,950 68,111 77,266
General and administrative 9,090 4,691 28,400 21,194
Restructuring charges - 470 2,210 6,293
Amortization of acquired
intangibles 346 225 912 654
--------- -------- -------- --------
Total operating expenses 49,991 43,634 146,765 149,295
--------- -------- -------- --------
Operating income (loss) 3,446 (2,294) 5,028 (13,220)
Other income (expense):
Interest income 797 1,163 2,459 3,397
Interest expense (18) (34) (56) (111)
--------- -------- -------- --------
Total other income (expense) 779 1,129 2,403 3,286
Income (loss) before income taxes 4,225 (1,165) 7,431 (9,934)
Provision (benefit) for income
taxes 1,648 (454) 2,898 (3,874)
--------- -------- -------- --------
Net income (loss) $2,577 $(711) $4,533 $(6,060)
========= ======== ======== ========
Net income (loss) per share:
Basic $0.03 $(0.01) $0.05 $(0.06)
========= ======== ======== ========
Diluted $0.02 $(0.01) $0.04 $(0.06)
========= ======== ======== ========
Shares used in computing net
income (loss) per share:
Basic 98,650 99,239 98,472 98,179
========= ======== ======== ========
Diluted 107,510 99,239 107,339 98,179
========= ======== ======== ========
SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP OPERATING INCOME
(LOSS) TO NON-GAAP NET INCOME (UNAUDITED)
Lawson provides non-GAAP results as supplemental information to its
GAAP operating results. These non-GAAP results exclude certain
expenses and non-cash charges such as stock-based compensation,
restructuring and lease abandonment expenses, and amortization of
acquired intangibles. Lawson believes that this presentation helps
investors, analysts and others compare the company's operating results
with other companies in Lawson's peer group and with Lawson's
historical operating results. Management uses non-GAAP operating
results to evaluate short-term and long-term operating trends in
Lawson's core software operations. Non-GAAP operating results are not
prepared in accordance with GAAP and should not be considered a
substitute for or an alternative to operating results determined in
accordance with GAAP. Further, these non-GAAP financial measures may
not be comparable to similarly titled measures used by other
companies. The following table reconciles the non-GAAP measures used
with GAAP.
Three Months Ended Nine Months Ended
------------------ ------------------
Feb 29, Feb 28, Feb 29, Feb 28,
2004 2003 2004 2003
--------- -------- -------- ---------
GAAP operating income (loss): $3,446 $(2,294) $5,028 $(13,220)
Adjustments for non-GAAP
measures:
Restructuring charges - 470 2,210 6,293
Non-cash stock-based
compensation 422 1,029 1,046 2,730
Lease abandonment expense - - - 676
Software and intangible
amortization related to
acquisitions 1,155 607 2,812 1,768
--------- -------- -------- ---------
Non-GAAP operating income (loss) 5,023 (188) 11,096 (1,753)
Total other income (expense) 779 1,129 2,403 3,286
--------- -------- -------- ---------
Non-GAAP income before income
taxes 5,802 941 13,499 1,533
Provision for income taxes 2,263 367 5,264 598
--------- -------- -------- ---------
Non-GAAP net income $3,539 $574 $8,235 $935
========= ======== ======== =========
Non-GAAP net income per share:
Basic $0.04 $0.01 $0.08 $0.01
========= ======== ======== =========
Diluted $0.03 $0.01 $0.08 $0.01
========= ======== ======== =========
Shares used in computing non-GAAP
net income per share:
Basic 98,650 99,239 98,472 98,179
========= ======== ======== =========
Diluted 107,510 105,949 107,339 103,779
========= ======== ======== =========
CONTACT: Lawson Software, Inc., St. Paul
Media contact:
Terry Blake, 651-767-4766
terry.blake@lawson.com
or
Investors and analysts contact:
Barbara Doyle, 651-767-4385
barbara.doyle@lawson.com