Exhibit 99.1
Lawson Software Files Fiscal 2006 Form 10-K
ST. PAUL, Minn.--(BUSINESS WIRE)--Aug. 30, 2006--Lawson Software,
Inc. (Nasdaq:LWSN) yesterday filed its Form 10-K and related audited
financial statements for the fiscal year ended May 31, 2006, with the
U.S. Securities and Exchange Commission. The company has completed the
consolidation of results of operations for the former Intentia
International AB, which Lawson acquired on April 25, 2006. As
previously announced, the company used the SEC's 15-day extension
period for filing its Form 10-K due to the complexity of adopting U.S.
GAAP (generally accepted accounting principles) for the former
Intentia operations and the limited time between the closing date of
the acquisition and Lawson's fiscal year end.
On July 27, 2006, the company reported preliminary financial
results for its fiscal fourth quarter ended May 31, 2006, which
included unaudited results for the legacy Lawson operations and
preliminary estimated ranges for the results of consolidated
operations including Intentia. Lawson's final consolidated GAAP net
loss for its fiscal fourth quarter of $4.8 million, or $0.03 per
share, was more favorable than the preliminary net loss range of $9.3
to $12.8 million, or $0.07 to $0.09 per share, driven primarily by
lower-than-anticipated income taxes for Intentia's operations. All
other final results fall within the range of preliminary results
provided.
To access Lawson's final fiscal 2006 financial statements and Form
10-K, please go to www.sec.gov.
Also included in this press release are new supplemental financial
schedules to provide a reconciliation of GAAP results to non-GAAP
measures. Lawson intends to continue to provide these supplemental
schedules in our fiscal 2007 financial releases for the convenience of
analysts who research our company and the software industry.
About Lawson Software
Lawson Software provides software and service solutions to 4,000
customers in manufacturing, distribution, maintenance and service
sector industries across 40 countries. Lawson's solutions include
Enterprise Performance Management, Supply Chain Management, Enterprise
Resource Planning, Customer Relationship Management, Manufacturing
Resource Planning, Enterprise Asset Management and industry-tailored
applications. Lawson solutions assist customers in simplifying their
businesses or organizations by helping them streamline processes,
reduce costs and enhance business or operational performance. Lawson
is headquartered in St. Paul, Minn., and has offices around the world.
Visit Lawson online at www.lawson.com.
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 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 Lawson's ability to realize synergies and
revenue opportunities anticipated from the Intentia International
acquisition; uncertainties in the software industry; global military
conflicts; terrorist attacks; pandemics, and any future events in
response to these developments; changes in conditions in the company's
targeted industries; increased competition and other risk factors
listed in the company's most recent Annual Report on Form 10-K filed
with the Securities and Exchange Commission and as included in Lawson
Holding's Form S-4 Proxy Statement/Prospectus filed with the
Commission. Lawson assumes no obligation to update any forward-looking
information contained in this press release.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson Software
reports non-GAAP financial results. These non-GAAP results exclude
amortization of all acquisition-related intangibles, Intentia
integration costs, restructuring charges, certain stock-based
compensation expenses and other expenses. In addition, Lawson's
non-GAAP financial results include pro forma revenue for maintenance
contracts acquired in the Intentia acquisition for which the deferred
revenue on Intentia's balance sheet has been eliminated from GAAP
results as part of the purchase accounting for the acquisition.
Lawson's management believes the non-GAAP measures used in this press
release are useful to investors because they provide supplemental
information that research analysts frequently use to analyze software
companies that have recently made significant acquisitions. Management
uses these non-GAAP measures to evaluate its financial results,
develop budgets and manage expenditures. The method Lawson uses to
produce non-GAAP results is not computed according to GAAP, may differ
from the methods used by other companies, and should not be regarded
as a replacement for corresponding GAAP measures. Investors are
encouraged to review the reconciliation of these non-GAAP financial
measures to the comparable GAAP results, which is attached to this
release. Additional information can be found on the investor relations
page of Lawson's Web site at www.lawson.com/investor.
LAWSON SOFTWARE, INC.
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended % Increase
-------------------------
May 31, 2006 May 31, 2005 (Decrease)
------------ ------------ ----------
Revenues:
License fees $19,253 $17,373 11%
Maintenance 54,565 43,864 24%
Consulting 52,312 25,549 105%
------------ ------------
Total revenues 126,130 86,786 45%
------------ ------------
Cost of revenues:
Cost of license fees 5,422 2,450 121%
Cost of maintenance and
consulting 58,985 32,859 80%
------------ ------------
Total cost of revenues 64,407 35,309 82%
------------ ------------
Gross profit 61,723 51,477 20%
------------ ------------
Operating expenses:
Research and development 17,836 15,330 16%
Sales and marketing 27,101 17,421 56%
General and administrative 18,272 9,957 84%
Restructuring 1,820 (209) ---
Amortization of acquired
intangibles 1,045 385 171%
------------ ------------
Total operating expenses 66,074 42,884 54%
------------ ------------
Operating income (loss) (4,351) 8,593 ---
------------ ------------
Other income:
Interest income 3,283 1,532 114%
Interest expense (27) (10) 170%
Other income 395 - +++
------------ ------------
Total other income 3,651 1,522 140%
------------ ------------
Income (loss) before income taxes (700) 10,115 ---
Provision for income taxes 4,081 4,176 (2%)
------------ ------------
Net income (loss) $(4,781) $5,939 ---
============ ============
Net income (loss) per share:
Basic $(0.03) $0.06 ---
============ ============
Diluted $(0.03) $0.06 ---
============ ============
Shares used in computing net
income (loss) per share:
Basic 136,829 100,319 36%
============ ============
Diluted 136,829 104,931 30%
============ ============
LAWSON SOFTWARE, INC.
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Twelve Months Ended % Increase
-------------------------
May 31, 2006 May 31, 2005 (Decrease)
------------ ------------ ----------
Revenues:
License fees $71,076 $57,743 23%
Maintenance 188,155 170,723 10%
Consulting 131,545 106,718 23%
------------ ------------
Total revenues 390,776 335,184 17%
------------ ------------
Cost of revenues:
Cost of license fees 13,344 9,961 34%
Cost of maintenance and
consulting 158,198 140,623 12%
------------ ------------
Total cost of revenues 171,542 150,584 14%
------------ ------------
Gross profit 219,234 184,600 19%
------------ ------------
Operating expenses:
Research and development 60,711 62,158 (2%)
Sales and marketing 83,193 75,637 10%
General and administrative 54,827 36,443 50%
Restructuring 1,825 5,028 (64%)
Amortization of acquired
intangibles 2,122 1,545 37%
------------ ------------
Total operating expenses 202,678 180,811 12%
------------ ------------
Operating income (loss) 16,556 3,789 337%
------------ ------------
Other income:
Interest income 10,769 4,377 146%
Interest expense (53) (49) 8%
Other income 395 - +++
------------ ------------
Total other income 11,111 4,328 157%
------------ ------------
Income (loss) before income taxes 27,667 8,117 241%
Provision for income taxes 11,708 2,855 310%
------------ ------------
Net income (loss) $15,959 $5,262 203%
============ ============
Net income (loss) per share:
Basic $0.14 $0.05 180%
============ ============
Diluted $0.14 $0.05 180%
============ ============
Shares used in computing net
income (loss) per share:
Basic 110,995 99,068 12%
============ ============
Diluted 115,350 104,623 10%
============ ============
LAWSON SOFTWARE, INC.
LEGACY LAWSON STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
Three Months Ended % Increase
-------------------------
May 31, 2006 May 31, 2005 (Decrease)
------------ ------------ ----------
Revenues:
License fees $18,380 $17,373 6%
Maintenance 47,245 43,864 8%
Consulting 29,015 25,549 14%
------------ ------------
Total revenues 94,640 86,786 9%
------------ ------------
Cost of revenues:
Cost of license fees 4,199 2,450 71%
Cost of maintenance and
consulting 34,633 32,859 5%
------------ ------------
Total cost of revenues 38,832 35,309 10%
------------ ------------
Gross profit 55,808 51,477 8%
------------ ------------
Operating expenses:
Research and development 14,285 15,330 (7%)
Sales and marketing 18,905 17,421 9%
General and administrative 12,541 9,957 26%
Restructuring 1,820 (209) ---
Amortization of acquired
intangibles 350 385 (9%)
------------ ------------
Total operating expenses 47,901 42,884 12%
------------ ------------
Operating income 7,907 8,593 (8%)
------------ ------------
Other income:
Interest income 3,178 1,532 107%
Interest expense 1 (10) ---
Other income - -
------------ ------------
Total other income 3,179 1,522 109%
------------ ------------
Income before income taxes 11,086 10,115 10%
Provision for income taxes 4,081 4,176 (2%)
------------ ------------
Net income $7,005 $5,939 ---
============ ============
Note: These results represent Legacy Lawson operations only which
exclude Legacy Intentia operations for the 5 weeks ended May 31,
2006
LAWSON SOFTWARE, INC.
LEGACY LAWSON STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
Twelve Months Ended % Increase
-------------------------
May 31, 2006 May 31, 2005 (Decrease)
------------ ------------ ----------
Revenues:
License fees $70,203 $57,743 22%
Maintenance 180,835 170,723 6%
Consulting 108,248 106,718 1%
------------ ------------
Total revenues 359,286 335,184 7%
------------ ------------
Cost of revenues:
Cost of license fees 12,121 9,961 22%
Cost of maintenance and
consulting 133,846 140,623 (5%)
------------ ------------
Total cost of revenues 145,967 150,584 (3%)
------------ ------------
Gross profit 213,319 184,600 16%
------------ ------------
Operating expenses:
Research and development 57,160 62,158 (8%)
Sales and marketing 74,997 75,637 (1%)
General and administrative 49,096 36,443 35%
Restructuring 1,825 5,028 (64%)
Amortization of acquired
intangibles 1,427 1,545 (8%)
------------ ------------
Total operating expenses 184,505 180,811 2%
------------ ------------
Operating income 28,814 3,789 660%
------------ ------------
Other income:
Interest income 10,664 4,377 144%
Interest expense (25) (49) (49%)
Other income - -
------------ ------------
Total other income 10,639 4,328 146%
------------ ------------
Income before income taxes 39,453 8,117 386%
Provision for income taxes 11,708 2,855 310%
------------ ------------
Net income $27,745 $5,262 427%
============ ============
Note: These results represent Legacy Lawson operations only which
exclude Legacy Intentia operations for the 5 weeks ended May 31,
2006
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
ASSETS May 31, 2006 May 31, 2005
- ------ ------------ ------------
Current assets:
Cash and cash equivalents $210,154 $187,744
Marketable securities 90,348 43,099
Trade accounts receivable, net 141,001 42,907
Income taxes receivable 4,577 8,507
Deferred income taxes 21,465 9,314
Prepaid expenses and other current assets 47,017 10,753
------------ ------------
Total current assets 514,562 302,324
------------ ------------
Long-term marketable securities 6,079 3,770
Property and equipment, net 26,189 13,574
Goodwill 454,550 43,407
Other intangibles assets, net 154,695 31,939
Deferred income taxes 9,294 21,385
Other assets 5,283 4,319
------------ ------------
Total assets $1,170,652 $420,718
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- -------------------------------------
Current liabilities:
Current portion of long-term debt $3,475 $1,836
Accounts payable 26,137 8,280
Accrued compensation and benefits 84,564 20,969
Income taxes payable 3,195 1,418
Deferred income taxes 4,221 -
Deferred revenue 146,206 76,571
Other current liabilities 78,563 14,840
------------ ------------
Total current liabilities 346,361 123,914
------------ ------------
Long-term debt, less current portion 4,275 -
Deferred income taxes 9,039 -
Deferred revenue - non-current 10,840 1,284
Other long-term liabilities 8,478 2,465
------------ ------------
Total liabilities 378,993 127,663
------------ ------------
Stockholders' equity:
Common stock 1,961 1,124
Additional paid-in capital 800,168 338,666
Treasury stock, at cost (69,237) (72,348)
Deferred stock-based compensation (131) (41)
Retained earnings 38,692 22,733
Accumulated other comprehensive income 20,206 2,921
------------ ------------
Total stockholders' equity 791,659 293,055
------------ ------------
Total liabilities and stockholders' equity $1,170,652 $420,718
============ ============
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
-------------------------
May 31, 2006 May 31, 2005
------------ ------------
Cash flows from operating activities:
Net income (loss) $(4,781) $5,939
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Minority Interest (176) -
Write-off of intangible assets 268 -
Depreciation and amortization 5,658 3,807
Deferred income taxes (500) (6,872)
Provision for doubtful accounts, net of
recoveries 149 728
Loss on the disposal of assets - 103
Tax benefit from stockholder transactions (239) 1,260
Amortization of stock-based compensation 99 91
Stock-based compensation - -
Amortization of discounts on notes
payable (4) 21
Amortization of discount and accretion of
premium on marketable securities (279) 26
Changes in operating assets and
liabilities, net of effect from
acquisitions:
Trade accounts receivable 15,852 (1,336)
Prepaid expenses and other assets 18,414 7,666
Accounts payable (355) (1,358)
Accrued and other liabilities (5,375) 2,339
Income taxes payable (3,281) 1,418
Deferred revenue 12,411 1,979
------------ ------------
Net cash provided by operating activities 37,861 15,811
------------ ------------
Cash flows from investing activities:
Cash received (paid) in conjunction with
acquisitions, net of cash acquired 33,066 (3,654)
Purchases of marketable securities (40,701) (88,853)
Maturities of marketable securities 35,028 190,709
Sale of marketable securities 337 -
Purchases of property and equipment (1,940) (623)
------------ ------------
Net cash provided (used in) by investing
activities 25,790 97,579
------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt (41,501) (35)
Payments on capital lease obligations (112) -
Exercise of stock options (2,168) 1,262
Issuance of treasury shares for employee
stock purchase plan 817 (1)
Repurchase of common stock - -
------------ ------------
Net cash provided by (used in) financing
activities (42,964) 1,226
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents 2,327 -
------------ ------------
Increase in cash and cash equivalents 23,014 114,616
Cash and cash equivalents at beginning of
period 187,140 73,128
------------ ------------
Cash and cash equivalents at end of period $210,154 $187,744
============ ============
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Twelve Months Ended
-------------------------
May 31, 2006 May 31, 2005
------------ ------------
Cash flows from operating activities:
Net income (loss) $15,959 $5,262
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Minority Interest (176) -
Write-off of intangible assets 268 -
Depreciation and amortization 16,231 16,065
Deferred income taxes (1,602) (3,044)
Provision for doubtful accounts, net of
recoveries (1,154) 1,141
Loss on the disposal of assets - 104
Tax benefit from stockholder transactions 4,016 4,215
Amortization of stock-based compensation 435 262
Stock-based compensation 6,368 -
Amortization of discounts on notes
payable 13 88
Amortization of discount and accretion of
premium on marketable securities (590) 145
Changes in operating assets and
liabilities, net of effect from
acquisitions:
Trade accounts receivable 10,215 21,188
Prepaid expenses and other assets 22,042 748
Accounts payable (1,290) (2,388)
Accrued and other liabilities (6,560) (4,371)
Income taxes payable 1,046 419
Deferred revenue 11,265 (6,936)
------------ ------------
Net cash provided by operating activities 76,486 32,898
------------ ------------
Cash flows from investing activities:
Cash received (paid) in conjunction with
acquisitions, net of cash acquired 30,137 (3,654)
Purchases of marketable securities (157,126) (536,717)
Maturities of marketable securities 107,801 590,562
Sale of marketable securities 337 35,755
Purchases of property and equipment (4,907) (3,724)
------------ ------------
Net cash provided (used in) by investing
activities (23,758) 82,222
------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt (43,185) (1,358)
Payments on capital lease obligations (112) -
Exercise of stock options 7,098 7,640
Issuance of treasury shares for employee
stock purchase plan 3,554 3,946
Repurchase of common stock - (10,000)
------------ ------------
Net cash provided by (used in) financing
activities (32,645) 228
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents 2,327 -
------------ ------------
Increase in cash and cash equivalents 22,410 115,348
Cash and cash equivalents at beginning of
period 187,744 72,396
------------ ------------
Cash and cash equivalents at end of period $210,154 $187,744
============ ============
LAWSON SOFTWARE, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
Three Months Ended May 31,
------------------------------
2006 Adj. 2006
GAAP Non-GAAP
---------- -------- ----------
Revenues:
License fees $19,253 $- $19,253
Maintenance 54,565 1,335 55,900
Consulting 52,312 1,007 53,319
---------- -------- ----------
Total revenues 126,130 2,342 128,472
Cost of revenues:
Cost of license fees 5,422 (1,468) 3,954
Cost of maintenance and consulting 58,985 (1,550) 57,435
---------- -------- ----------
Total cost of revenues 64,407 (3,018) 61,389
---------- -------- ----------
---------- -------- ----------
Gross profit 61,723 5,360 67,083
---------- -------- ----------
Operating expenses:
Research and development 17,836 (43) 17,793
Sales and marketing 27,101 (191) 26,910
General and administrative 18,272 (2,743) 15,529
Restructuring 1,820 (1,820) -
Amortization of acquired intangibles 1,045 (1,045) -
---------- -------- ----------
Total operating expenses 66,074 (5,842) 60,232
---------- -------- ----------
---------- -------- ----------
Operating Income (loss) (4,351) 11,202 6,851
---------- -------- ----------
Other income:
Interest income 3,283 - 3,283
Interest expense (27) - (27)
Other income (expense) 395 - 395
---------- -------- ----------
Total other income 3,651 - 3,651
---------- -------- ----------
Income (loss) before income taxes (700) 11,202 10,502
Provision (benefit) for income taxes 4,081 (653) 3,428
---------- -------- ----------
Net income (loss) $(4,781) $11,855 $7,074
========== ======== ==========
Weighted average shares 136,829 136,829
Earnings per share $(0.03) $0.05
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson Software
reports non-GAAP financial results. These non-GAAP results exclude
amortization of all acquisition-related intangibles, Intentia
integration costs, restructuring charges, certain stock-based
compensation expenses and other expenses. In addition, Lawson's
non-GAAP financial results include pro forma revenue for maintenance
contracts acquired in the Intentia acquisition for which the deferred
revenue on Intentia's balance sheet has been eliminated from GAAP
results as part of the purchase accounting for the acquisition.
Lawson's management believes the non-GAAP measures used in this
press release are useful to investors because they provide
supplemental information that research analysts frequently use to
analyze software companies that have recently made significant
acquisitions. Management uses these non-GAAP measures to evaluate its
financial results, develop budgets and manage expenditures. The
method Lawson uses to produce non-GAAP results is not computed
according to GAAP, may differ from the methods used by other
companies, and should not be regarded as a replacement for
corresponding GAAP measures. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to the comparable
GAAP results, which is attached to this release. Additional
information can be found on the investor relations page of Lawson's
Web site at www.lawson.com/investor.
LAWSON SOFTWARE, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
Three Months Ended May 31,
------------------------------
2005 Adj. 2005
GAAP Non-GAAP
---------- -------- ----------
Revenues:
License fees $17,373 $- $17,373
Maintenance 43,864 - 43,864
Consulting 25,549 - 25,549
---------- -------- ----------
Total revenues 86,786 - 86,786
Cost of revenues:
Cost of license fees 2,450 (820) 1,630
Cost of maintenance and consulting 32,859 (1,006) 31,853
---------- -------- ----------
Total cost of revenues 35,309 (1,826) 33,483
---------- -------- ----------
---------- -------- ----------
Gross profit 51,477 1,826 53,303
---------- -------- ----------
Operating expenses:
Research and development 15,330 (60) 15,270
Sales and marketing 17,421 (719) 16,702
General and administrative 9,957 (216) 9,741
Restructuring (209) 209 -
Amortization of acquired intangibles 385 (385) -
---------- -------- ----------
Total operating expenses 42,884 (1,171) 41,713
---------- -------- ----------
---------- -------- ----------
Operating Income (loss) 8,593 2,997 11,590
---------- -------- ----------
Other income:
Interest income 1,532 - 1,532
Interest expense (10) - (10)
Other income (expense) - - -
---------- -------- ----------
Total other income 1,522 - 1,522
---------- -------- ----------
Income (loss) before income taxes 10,115 2,997 13,112
Provision (benefit) for income taxes 4,176 274 4,450
---------- -------- ----------
Net income (loss) $5,939 $2,723 $8,662
========== ======== ==========
Weighted average shares 104,931 104,931
Earnings per share $0.06 $0.08
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson
Software reports non-GAAP financial results. These non-GAAP
results exclude amortization of all acquisition-related
intangibles, Intentia integration costs, restructuring charges,
certain stock-based compensation expenses and other expenses. In
addition, Lawson's non-GAAP financial results include pro forma
revenue for maintenance contracts acquired in the Intentia
acquisition for which the deferred revenue on Intentia's balance
sheet has been eliminated from GAAP results as part of the
purchase accounting for the acquisition. Lawson's management believes
the non-GAAP measures used in this press release are useful to
investors because they provide supplemental information that research
analysts frequently use to analyze software companies that have
recently made significant acquisitions. Management uses these non-GAAP
measures to evaluate its financial results, develop budgets and manage
expenditures. The method Lawson uses to produce non-GAAP results is
not computed according to GAAP, may differ from the methods used by
other companies, and should not be regarded as a replacement for
corresponding GAAP measures. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to the comparable
GAAP results, which is attached to this release. Additional
information can be found on the investor relations page of Lawson's
Web site at www.lawson.com/investor.
LAWSON SOFTWARE, INC.
SUPPLEMENTAL NON-GAAP MEASURES
INCREASE (DECREASE) IN GAAP AMOUNTS REPORTED
(in thousands)
(unaudited)
Three Months Ended May 31,
---------------------------
2006
---------------------------
Lawson Intentia Total
-------- --------- --------
Revenue items
Purchase accounting impact on maintenance $- $1,335 $1,335
Purchase accounting impact on consulting - 1,007 1,007
-------- --------- --------
Total revenue items - 2,342 2,342
Cost of license items
Amortization of software (810) (658) (1,468)
Cost of maintenance and consulting items
Amortization of purchased maintenance
contracts (1) (981) (475) (1,456)
Integration related (2) (30) (64) (94)
Non-cash stock-based compensation - - -
-------- --------- --------
Total cost of maintenance and
consulting items (1,011) (539) (1,550)
Research and development items
Integration related (2) (43) - (43)
Non-cash stock-based compensation - - -
-------- --------- --------
Total research and development items (43) - (43)
Sales and marketing items
Integration related (2) (117) (74) (191)
Non-cash stock-based compensation - - -
-------- --------- --------
Total sales and marketing items (117) (74) (191)
General and administrative items
Integration related (2) (1,135) (465) (1,600)
Numbercraft write-off (268) - (268)
Numbercraft settlement (875) (875)
SEC legal costs - - -
Non-cash stock-based compensation - - -
-------- --------- --------
Total general and administrative (2,278) (465) (2,743)
Restructuring (1,820) - (1,820)
Amortization of acquired intangibles (350) (695) (1,045)
Tax provision (653) - (653)
-------- --------- --------
Net income $7,082 $4,773 $11,855
======== ========= ========
(1) Service revenue from the acquired maintenance contracts for the
twelve months ended May 31, 2006 and May 31, 2005 was $11,807 and
$11,389, respectively.
(2) Represents integration related expenses relating to the merger
with Intentia International.
LAWSON SOFTWARE, INC.
SUPPLEMENTAL NON-GAAP MEASURES
INCREASE (DECREASE) IN GAAP AMOUNTS REPORTED
(in thousands)
(unaudited)
Three Months Ended May 31,
---------------------------
2005
---------------------------
Lawson Intentia Total
-------- --------- --------
Revenue items
Purchase accounting impact on maintenance $- $- $-
Purchase accounting impact on consulting -
-------- --------- --------
Total revenue items - - -
Cost of license items
Amortization of software (820) - (820)
Cost of maintenance and consulting items
Amortization of purchased maintenance
contracts (1) (1,001) - (1,001)
Integration related (2) - - -
Non-cash stock-based compensation (5) - (5)
-------- --------- --------
Total cost of maintenance and
consulting items (1,006) - (1,006)
Research and development items
Integration related (2) (44) - (44)
Non-cash stock-based compensation (16) - (16)
-------- --------- --------
Total research and development items (60) - (60)
Sales and marketing items
Integration related (2) (689) - (689)
Non-cash stock-based compensation (30) - (30)
-------- --------- --------
Total sales and marketing items (719) - (719)
General and administrative items
Integration related (2) (138) - (138)
Numbercraft write-off - - -
Numbercraft settlement - - -
SEC legal costs (39) - (39)
Non-cash stock-based compensation (39) - (39)
-------- --------- --------
Total general and administrative (216) - (216)
Restructuring 209 - 209
Amortization of acquired intangibles (385) - (385)
Tax provision 274 - 274
-------- --------- --------
Net income $2,723 $- $2,723
======== ========= ========
(1) Service revenue from the acquired maintenance contracts for the
twelve months ended May 31, 2006 and May 31, 2005 was $11,807 and
$11,389, respectively.
(2) Represents integration related expenses relating to the merger
with Intentia International.
LAWSON SOFTWARE, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
Twelve Months Ended May 31,
------------------------------
2006 Adj. 2006
GAAP Non-GAAP
---------- -------- ----------
Revenues:
License fees $71,076 $- $71,076
Maintenance 188,155 1,335 189,490
Consulting 131,545 1,007 132,552
---------- -------- ----------
Total revenues 390,776 2,342 393,118
Cost of revenues:
Cost of license fees 13,344 (3,891) 9,453
Cost of maintenance and consulting 158,198 (4,784) 153,414
---------- -------- ----------
Total cost of revenues 171,542 (8,675) 162,867
---------- -------- ----------
---------- -------- ----------
Gross profit 219,234 11,017 230,251
---------- -------- ----------
Operating expenses:
Research and development 60,711 (229) 60,482
Sales and marketing 83,193 (1,105) 82,088
General and administrative 54,827 (11,346) 43,481
Restructuring 1,825 (1,825) -
Amortization of acquired intangibles 2,122 (2,122) -
---------- -------- ----------
Total operating expenses 202,678 (16,627) 186,051
---------- -------- ----------
---------- -------- ----------
Operating Income 16,556 27,644 44,200
---------- -------- ----------
Other income:
Interest income 10,769 (357) 10,412
Interest expense (53) - (53)
Other income 395 - 395
---------- -------- ----------
Total other income 11,111 (357) 10,754
---------- -------- ----------
Income before income taxes 27,667 27,287 54,954
Provision for income taxes 11,708 9,228 20,936
---------- -------- ----------
Net income $15,959 $18,059 $34,018
========== ======== ==========
Weighted average shares 115,350 115,350
Earnings per share $0.14 $0.29
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson Software
reports non-GAAP financial results. These non-GAAP results exclude
amortization of all acquisition-related intangibles, Intentia
integration costs, restructuring charges, certain stock-based
compensation expenses and other expenses. In addition, Lawson's
non-GAAP financial results include pro forma revenue for maintenance
contracts acquired in the Intentia acquisition for which the deferred
revenue on Intentia's balance sheet has been eliminated from GAAP
results as part of the purchase accounting for the acquisition.
Lawson's management believes the non-GAAP measures used in this press
release are useful to investors because they provide supplemental
information that research analysts frequently use to analyze software
companies that have recently made significant acquisitions. Management uses
these non-GAAP measures to evaluate its financial results, develop budgets
and manage expenditures. The method Lawson uses to produce non-GAAP results is
not computed according to GAAP, may differ from the methods used by
other companies, and should not be regarded as a replacement for
corresponding GAAP measures. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to the comparable
GAAP results, which is attached to this release. Additional
information can be found on the investor relations page of Lawson's
Web site at www.lawson.com/investor.
LAWSON SOFTWARE, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
Twelve Months Ended May 31,
------------------------------
2005 Adj. 2005
GAAP Non-GAAP
---------- -------- ----------
Revenues:
License fees $57,743 $- $57,743
Maintenance 170,723 - 170,723
Consulting 106,718 - 106,718
---------- -------- ----------
Total revenues 335,184 - 335,184
Cost of revenues:
Cost of license fees 9,961 (3,268) 6,693
Cost of maintenance and consulting 140,623 (4,007) 136,616
---------- -------- ----------
Total cost of revenues 150,584 (7,275) 143,309
---------- -------- ----------
---------- -------- ----------
Gross profit 184,600 7,275 191,875
---------- -------- ----------
Operating expenses:
Research and development 62,158 (91) 62,067
Sales and marketing 75,637 (776) 74,861
General and administrative 36,443 (2,928) 33,515
Restructuring 5,028 (5,028) -
Amortization of acquired intangibles 1,545 (1,545) -
---------- -------- ----------
Total operating expenses 180,811 (10,368) 170,443
---------- -------- ----------
---------- -------- ----------
Operating Income 3,789 17,643 21,432
---------- -------- ----------
Other income:
Interest income 4,377 - 4,377
Interest expense (49) - (49)
Other income - - -
---------- -------- ----------
Total other income 4,328 - 4,328
---------- -------- ----------
Income before income taxes 8,117 17,643 25,760
Provision for income taxes 2,855 6,463 9,318
---------- -------- ----------
Net income $5,262 $11,180 $16,442
========== ======== ==========
Weighted average shares 104,623 104,623
Earnings per share $0.05 $0.16
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson Software
reports non-GAAP financial results. These non-GAAP results exclude
amortization of all acquisition-related intangibles, Intentia
integration costs, restructuring charges, certain stock-based
compensation expenses and other expenses. In addition, Lawson's
non-GAAP financial results include pro forma revenue for maintenance
contracts acquired in the Intentia acquisition for which the deferred
revenue on Intentia's balance sheet has been eliminated from GAAP
results as part of the purchase accounting for the acquisition.
Lawson's management believes the non-GAAP measures used in this press
release are useful to investors because they provide supplemental
information that research analysts frequently use to analyze software
companies that have recently made significant acquisitions. Management uses
these non-GAAP measures to evaluate its financial results, develop budgets
and manage expenditures. The method Lawson uses to produce non-GAAP results is
not computed according to GAAP, may differ from the methods used by
other companies, and should not be regarded as a replacement for
corresponding GAAP measures. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to the comparable
GAAP results, which is attached to this release. Additional
information can be found on the investor relations page of Lawson's
Web site at www.lawson.com/investor.
LAWSON SOFTWARE, INC.
SUPPLEMENTAL NON-GAAP MEASURES
INCREASE (DECREASE) IN GAAP AMOUNTS REPORTED
(in thousands)
(unaudited)
Twelve Months Ended May 31,
---------------------------
2006
---------------------------
Lawson Intentia Total
-------- --------- --------
Revenue items
Purchase accounting impact on maintenance $- $1,335 $1,335
Purchase accounting impact on consulting - 1,007 1,007
-------- --------- --------
Total revenue items - 2,342 2,342
Cost of license items
Amortization of software (3,233) (658) (3,891)
Cost of maintenance and consulting items
Amortization of purchased maintenance
contracts (1) (3,950) (475) (4,425)
Integration related (3) (292) (64) (356)
Non-cash stock-based compensation (3) - (3)
-------- --------- --------
Total cost of maintenance and
consulting items (4,245) (539) (4,784)
Research and development items
Integration related (3) (222) - (222)
Non-cash stock-based compensation (7) - (7)
-------- --------- --------
Total research and development items (229) - (229)
Sales and marketing items
Integration related (3) (1,017) (74) (1,091)
Non-cash stock-based compensation (14) - (14)
-------- --------- --------
Total sales and marketing items (1,031) (74) (1,105)
General and administrative items
Integration related (3) (3,459) (465) (3,924)
Non-cash stock-based compensation (2) (6,261) - (6,261)
Numbercraft write-off (268) - (268)
Numbercraft settlement (875) (875)
SEC legal costs - - -
Non-cash stock-based compensation (18) - (18)
-------- --------- --------
Total general and administrative (10,881) (465) (11,346)
Restructuring (1,825) - (1,825)
Amortization of acquired intangibles (1,427) (695) (2,122)
Interest income on tax refund (357) - (357)
Tax provision 8,851 377 9,228
-------- --------- --------
Net income $13,663 $4,396 $18,059
======== ========= ========
(1) Service revenue from the acquired maintenance contracts for the
twelve months ended May 31, 2006 and May 31, 2005 was $11,807 and
$11,389, respectively.
(2) Represents a non-cash charge for recording of option expense
resulting from a negotiated separation agreement with former
president and CEO in the first quarter of fiscal 2006.
(3) Represents integration related expenses relating to the merger
with Intentia International.
LAWSON SOFTWARE, INC.
SUPPLEMENTAL NON-GAAP MEASURES
INCREASE (DECREASE) IN GAAP AMOUNTS REPORTED
(in thousands)
(unaudited)
Twelve Months Ended May 31,
---------------------------
2005
---------------------------
Lawson Intentia Total
--------
Revenue items
Purchase accounting impact on maintenance $- $- $-
Purchase accounting impact on consulting - - -
-------- --------- --------
Total revenue items - - -
Cost of license items
Amortization of software (3,268) - (3,268)
Cost of maintenance and consulting items
Amortization of purchased maintenance
contracts (1) (3,992) - (3,992)
Integration related (3) - - -
Non-cash stock-based compensation (15) - (15)
-------- --------- --------
Total cost of maintenance and
consulting items (4,007) - (4,007)
Research and development items
Integration related (3) (44) - (44)
Non-cash stock-based compensation (47) - (47)
-------- --------- --------
Total research and development items (91) - (91)
Sales and marketing items
Integration related (3) (689) - (689)
Non-cash stock-based compensation (87) - (87)
-------- --------- --------
Total sales and marketing items (776) - (776)
General and administrative items
Integration related (3) (138) - (138)
Non-cash stock-based compensation (2) - - -
Numbercraft write-off - - -
Numbercraft settlement -
SEC legal costs (2,679) - (2,679)
Non-cash stock-based compensation (111) - (111)
-------- --------- --------
Total general and administrative (2,928) - (2,928)
Restructuring (5,028) - (5,028)
Amortization of acquired intangibles (1,545) - (1,545)
Interest income on tax refund - - -
Tax provision 6,463 - 6,463
-------- --------- --------
Net income $11,180 $- $11,180
======== ========= ========
(1) Service revenue from the acquired maintenance contracts for the
twelve months ended May 31, 2006 and May 31, 2005 was $11,807 and
$11,389, respectively.
(2) Represents a non-cash charge for recording of option expense
resulting from a negotiated separation agreement with former
president and CEO in the first quarter of fiscal 2006.
(3) Represents integration related expenses relating to the merger
with Intentia International.
CONTACT: Lawson Software, Inc.
Media:
Terry Blake, 651-767-4766
terry.blake@lawson.com
or
Investors and Analysts:
Barbara Doyle, 651-767-4385
barbara.doyle@lawson.com