Exhibit 99.1
Lawson Software Reports Q4 and FY05 Results;
Q4 GAAP EPS Doubles Year over Year;
Company Exceeds Consensus EPS Estimates
ST. PAUL, Minn.--(BUSINESS WIRE)--June 30, 2005--Lawson Software, Inc.
(Nasdaq:LWSN), today reported revenues of $86.8 million for its fiscal 2005
fourth quarter ended May 31, 2005, compared with revenues of $99.7 million in
its fiscal 2004 fourth quarter. License fee revenues were $17.4 million in the
fourth quarter, compared with $27.2 million in the fiscal 2004 fourth quarter.
Services revenues were $69.4 million in the quarter, compared with $72.5 million
in the fiscal 2004 fourth quarter.
GAAP net income was $5.9 million, or $0.06 per diluted share, compared with
$3.5 million, or $0.03 per diluted share in the fiscal 2004 fourth quarter.
Operating income in the fiscal 2005 fourth quarter was $8.6 million, compared
with $7.1 million in the fiscal 2004 fourth quarter. Net income for the current
quarter benefited from increased interest income of $0.7 million and the absence
of a $1.2 million tax valuation allowance, which was recorded in Q4 of fiscal
2004.
Fiscal 2005 fourth quarter GAAP operating results include $3.0 million in
pre-tax items consisting of $1.0 million in amortization of acquired maintenance
contracts reflected in cost of services, $0.9 million of acquisition expenses
relating to the recently announced Intentia International merger, $0.8 million
in software amortization reflected in cost of license fees, $0.4 million in
intangible amortization related to acquisitions, $0.1 million in non-cash
stock-based compensation, and ($0.2) million in restructuring adjustments. The
company provides this list of items for financial analysts, who typically
exclude such items in developing their financial models and estimates of the
company's performance. If financial analysts adjust their models for these
items, the company believes it would have exceeded the consensus fourth quarter
estimate for the company's EPS performance. See the supplemental information at
the end of this news release for more details on these items.
For the 12 months ended May 31, 2005, GAAP net income was $5.3 million, or
$0.05 per diluted share, on total revenues of $335.2 million, compared with net
income of $8.0 million, or $0.07 per diluted share, on total revenues of $363.6
million in the comparable fiscal 2004 period.
Fiscal 2005 12-month GAAP operating results include $17.6 million in
pre-tax items consisting of $5.0 million in restructuring charges, $4.0 million
in amortization of acquired maintenance contracts reflected in cost of services,
$3.3 million in software amortization reflected in cost of license fees, $2.7
million in SEC investigation costs, $1.5 million in intangible amortization
related to acquisitions, $0.9 million of acquisition related expenses, and $0.3
million in non-cash stock-based compensation. There was also a ($0.1) million
tax-related adjustment. See the supplemental information at the end of this news
release for more details on these items.
The company's cash, cash equivalents and marketable securities increased to
$234.6 million at May 31, 2005, from $221.9 million at Feb. 28, 2005. Days sales
outstanding (DSO) were 45 during the fourth quarter, compared with 46 in the
fiscal 2005 third quarter.
Fourth Quarter Performance
"Throughout much of fiscal 2005, managing costs and expenses well helped us
achieve positive earnings, and our performance in the fourth quarter
demonstrated that we can turn the business in the right direction," said Harry
Debes, Lawson president and chief executive officer. "With our spending now at a
run rate that makes sense, we can focus more of our attention on growing
revenue. Looking forward, the acquisition of Intentia International will give us
a greater customer base into which we can cross and up-sell our applications,
while the larger critical mass and global scale of the combined company will
present us with opportunities to be more efficient and effective and thereby
improve our earnings."
The company signed 130 deals in the quarter, compared with 100 in the third
quarter. Of total contracting activity in the fiscal 2005 fourth quarter,
approximately 68 percent came from existing clients and approximately 32 percent
from new clients.
During the quarter, the company signed 21 new clients at an average selling
price of $258,000, compared with 10 new clients at an average selling price of
$478,000 in the third quarter of fiscal 2005. The company signed four software
licensing agreements valued at more than $1 million. Significant or strategic
wins included retailer Smart & Final; Los Angeles Universal Preschool; Sioux
Valley Hospitals and Health System; Gwinett Health System; and chemical
distributor Univar USA.
During the quarter, the company also released Lawson 8.1 business
applications on the IBM eServer iSeries platform, including upgrade programs and
services for existing Lawson customers. The release marked the latest in a line
of Lawson's 26 years of commitment to the iSeries, which is the platform favored
by many mid-sized clients. Lawson has more than 400 clients on the iSeries
platform.
Conference Call and Webcast
Lawson will host a conference call to discuss its results and future
outlook at 4:30 p.m. Eastern Time (3:30 p.m. Central Time) June 30, 2005.
Interested parties may listen to the call by dialing 888-560-8501 (passcode
Lawson 630) and international callers 1-210-234-0000. 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 Thursday, July 7. The replay number
is 866-505-6451 and international 1-203-369-1872. The webcast will remain on
www.lawson.com for approximately two weeks.
About Lawson Software
Lawson Software provides business application software and consulting
services that put time on the side of services organizations in the healthcare,
retail, government and education, banking and insurance and other markets.
Lawson's software suites 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, and Africa. For
more information, go to www.lawson.com. Lawson Software and Lawson are
registered trademarks of Lawson Software, Inc. All rights reserved.
Forward-Looking Statements
This press release contains forward-looking statements that contain risks
and uncertainties. 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 that occur in the future. Risks and
uncertainties that may cause such differences include but are not limited to:
uncertainties in the company's ability to realize synergies and revenue
opportunities anticipated from the Intentia International acquisition;
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 Quarterly Report on Form 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)
May 31, 2005 May 31, 2004
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $187,744 $72,396
Marketable securities 43,099 128,065
Trade accounts receivable, net 42,907 65,236
Other current assets 28,574 35,761
------------ ------------
Total current assets 302,324 301,458
Long-term marketable securities 3,770 8,521
Property and equipment, net 13,574 17,235
Goodwill and other intangible assets, net 75,346 83,809
Other assets 25,704 12,575
------------ ------------
Total assets $420,718 $423,598
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $1,836 $1,652
Accounts payable and other accrued
liabilities 45,507 51,375
Deferred revenue and client deposits 76,571 83,095
------------ ------------
Total current liabilities 123,914 136,122
Long-term debt, less current portion - 990
Other long-term liabilities 3,749 3,600
------------ ------------
Total liabilities 127,663 140,712
------------ ------------
Stockholders' equity:
Common stock 1,124 1,099
Additional paid-in capital 338,666 327,715
Treasury stock, at cost (72,348) (65,555)
Deferred stock-based compensation (41) (774)
Retained earnings 22,733 17,471
Accumulated other comprehensive income 2,921 2,930
------------ ------------
Total stockholders' equity 293,055 282,886
------------ ------------
Total liabilities and stockholders'
equity $420,718 $423,598
============ ============
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
--------------------- ---------------------
May 31, May 31, May 31, May 31,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues:
License fees $17,373 $27,169 $57,743 $92,338
Services 69,413 72,541 277,441 271,245
---------- ---------- ---------- ----------
Total revenues 86,786 99,710 335,184 363,583
Cost of revenues:
Cost of license fees 2,450 3,958 9,961 15,948
Cost of services 32,859 36,209 140,623 136,299
---------- ---------- ---------- ----------
Total cost of revenues 35,309 40,167 150,584 152,247
---------- ---------- ---------- ----------
Gross profit 51,477 59,543 184,600 211,336
Operating expenses:
Research and development 15,330 17,756 62,158 64,888
Sales and marketing 17,421 25,027 75,637 93,138
General and administrative 9,957 9,321 36,443 37,721
Restructuring (209) - 5,028 2,210
Amortization of acquired
intangibles 385 362 1,545 1,274
---------- ---------- ---------- ----------
Total operating
expenses 42,884 52,466 180,811 199,231
---------- ---------- ---------- ----------
Operating income 8,593 7,077 3,789 12,105
Other income:
Interest income 1,532 820 4,377 3,279
Interest expense (10) (14) (49) (70)
---------- ---------- ---------- ----------
Total other income 1,522 806 4,328 3,209
Income before income taxes 10,115 7,883 8,117 15,314
Provision for income taxes 4,176 4,425 2,855 7,323
---------- ---------- ---------- ----------
Net income $5,939 $3,458 $5,262 $7,991
========== ========== ========== ==========
Net income per share:
Basic $0.06 $0.04 $0.05 $0.08
========== ========== ========== ==========
Diluted $0.06 $0.03 $0.05 $0.07
========== ========== ========== ==========
Shares used in computing
net income per share:
Basic 100,319 98,433 99,068 98,462
========== ========== ========== ==========
Diluted 104,931 105,984 104,623 107,000
========== ========== ========== ==========
LAWSON SOFTWARE, INC.
SUPPLEMENTAL INFORMATION
UNAUDITED
(in thousands)
Three Months Twelve Months
Ended May 31, Ended May 31,
2005 2005
------------- -------------
Selected Pretax Expense (Income):
Restructuring $(209) $5,028
Amortization of acquired intangibles 385 1,545
Amortization of purchased maintenance
contracts (cost of service) (1) 1,001 3,992
Amortization of software (cost of
license fees) 820 3,268
Non-cash stock-based compensation 90 260
SEC investigation 39 2,679
Acquisition related (R&D) 44 44
Acquisition related (sales & marketing) 689 689
Acquisition related (G&A) 138 138
$2,997 $17,643
============= =============
Effective tax rate for financial
analysts' modeling 34% 36%
(1) Service revenue from the acquired maintenance contracts for the
three months and the 12 months ended May 31, 2005 was $2,942 and
$11,389 respectively.
CONTACT: Lawson Software, Inc.
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