Exhibit 99.1
Lawson Software Reports Third Quarter
Fiscal 2007 Financial Results
ST. PAUL, Minn.--(BUSINESS WIRE)--April 9, 2007--Lawson Software,
Inc. (Nasdaq:LWSN) today reported financial results for its third
quarter of fiscal 2007, the third full quarter of post-combination
results after its acquisition of Intentia International AB in April
2006. In the third quarter, Lawson substantially completed the
purchase accounting review associated with its acquisition of
Intentia. As a result of this review, Lawson increased the goodwill
associated with the acquisition by $21.4 million, primarily related to
adjustments for accrued liabilities. Lawson may have subsequent
purchase accounting adjustments in the fiscal fourth quarter ending
May 31, 2007, related to Value Added Taxes (VAT) items in Europe and
refinement to reserves for pre-acquisition customer claims.
Lawson reported GAAP (generally accepted accounting principles)
revenues of $191.2 million for its fiscal 2007 third quarter. This was
an increase of 118 percent from revenues of $87.7 million in its
fiscal 2006 third quarter, primarily attributed to the consolidation
of revenues of the former Intentia. Excluded from these results is
$1.8 million of deferred maintenance and services revenue that was
written down under purchase accounting in the acquisition of Intentia.
GAAP net loss was $9.8 million, or $0.05 per share, compared with
GAAP net income of $10 million, or $0.09 per diluted share, in the
same period last year. This decline is primarily attributed to the
consolidation of the former Intentia's costs and operating expenses
and a restructuring charge. The company incurred a restructuring
charge of $11.5 million in the quarter for severance and related
benefits for approximately 350 positions in the United States and
Europe that will be eliminated over the next five quarters ending in
May 2008 as work is shifted to a global support center in the
Philippines.
Included in these GAAP results are pre-tax expenses totaling $9.9
million for amortization of acquired intangible assets, acquisition
related costs, purchase accounting impact on consulting costs and
amortization of purchased maintenance contracts, and $1.8 million of
non-cash stock-based compensation as a result of adopting FAS 123(R)
in the year. Under FAS 123(R), stock-based employee compensation cost
is recognized using the fair-value based method for all unvested stock
options after June 1, 2006. Excluding these expenses and the $11.5
million restructuring charge taken in the quarter, and including the
$1.8 million of maintenance and services revenue written down under
purchase accounting, non-GAAP net income would have been $11.4
million, or $0.06 per diluted share. Lower than expected effective tax
rates favorably impacted the non-GAAP earnings per share by $0.02.
"We executed well on many levels during the third quarter," said
Harry Debes, president and CEO. "We met or exceeded our financial
commitments for revenues, expenses and non-GAAP earnings per share. In
addition, our maintenance renewals came in strong from our Lawson M3
(Make, Move, Maintain) customer base, our cash flow from operations
improved, our consulting services margin improved, we outlined our
transformation plans for our new global operations and began to
execute those plans, and our sales pipeline grew for the fourth
consecutive quarter. Although we still have more to work to do, we
made strong progress on our customer commitments and company goals
during the third quarter."
Results for the Nine-month Period
For the nine months ended Feb. 28, 2007, GAAP net loss was $29.1
million, or $0.16 per share, on total revenues of $537.5 million,
compared with GAAP net income of $20.7 million, or $0.19 per diluted
share, on total revenues of $264.6 million, in the comparable fiscal
2006 period. Excluded from these results is $10.3 million of deferred
maintenance and services revenue that was written down under purchase
accounting in the acquisition of Intentia.
Included in the nine-month GAAP results are pre-tax expenses
totaling $47 million for amortization of acquired intangible assets,
acquisition related costs, purchase accounting impact on consulting
costs, amortization of purchased maintenance contracts, restructuring
charges, and $5.5 million of non-cash stock-based compensation as a
result of adopting FAS 123(R) in this year. Excluding these costs and
including the $10.3 million of maintenance and services revenue
written down under purchase accounting, nine-month non-GAAP net income
would have been $21.5 million, or $0.11 per diluted share.
Financial Guidance
For the fourth quarter of fiscal year 2007 ending May 31, 2007,
the company is estimating GAAP revenues of $187 million to $195
million, excluding approximately $1 million of deferred maintenance
and services revenue written down under the purchase accounting method
used for the Intentia acquisition. Including this amount, the company
estimates non-GAAP revenues of $188 million to $196 million. License
revenues are estimated to be between $24 million and $28 million.
Maintenance revenues are estimated to be between $74 million and $75
million, and consulting revenues are estimated to be between $90
million and $93 million. The company anticipates GAAP per share
results to be in the range of a net loss of $0.02 to net earnings of
$0.03 per fully diluted share. Non-GAAP fully diluted earnings per
share is forecasted between $0.03 and $0.05, excluding approximately
$8.8 million of pre-tax expenses related to the amortization of
acquisition-related intangibles, amortization of purchased maintenance
contracts, stock-based compensation charges, and integration costs.
The non-GAAP effective tax rate in the fourth quarter is anticipated
to be 51 percent.
Third Quarter Fiscal 2007 Key Metrics and Highlights
-- Cash, cash equivalents and marketable securities in the
quarter were $286 million (including $15 million of restricted
cash) - increasing $7 million from the second quarter.
-- Total deferred revenues increased 24 percent from the second
quarter to $182.3 million.
-- Deferred license revenues increased 11 percent from the second
quarter to $32.7 million.
-- 354 total deals were signed at an average selling price of
$88,000, compared with 307 deals at an average selling price
of $105,000 in the second quarter.
-- 24 new customer deals were signed at an average selling price
of $373,000, compared with 27 at an average selling price of
$420,000 in the second quarter.
-- Five deals greater than $1 million and four deals between
$500,000 and $1 million were signed, compared to three deals
greater than $1 million and 13 deals in the $500,000 to $1
million range in the second quarter.
-- The Americas region represented 54 percent of total revenue;
the Europe, Middle East, and Africa region represented
approximately 43 percent of total revenue; and Asia-Pacific
represented 3 percent of total revenue.
-- Non-GAAP consulting services margin increased 240 basis points
to 17.7 percent.
-- Customer wins: Americas - Pinnacle Airlines, First National
Bank of Omaha, Tacoma Public Schools, Holland Community
Hospital, Wentworth Douglas Hospital, Things Remembered,
Orchard Supply Hardware Stores and Koramsa; EMEA - Bygma,
Johannes Fog and Bunzl Vending Services Ltd; Asia-Pacific -
Quiksilver Japan, Belle Footwear and Swan Hardware and Staff.
-- The company signed two new Lawson M3 deals with customers in
the Americas.
-- Lawson continued to see good customer adoption of Lawson
System Foundation 9 with 135 customers purchasing in the third
quarter.
-- The company repurchased 867,000 shares of common stock in the
quarter for $5.9 million at an average price of $6.80 per
share.
Conference Call and Webcast
The company will host a conference call and webcast to discuss its
third quarter results and future outlook at 4:30 p.m. Eastern Time
(3:30 p.m. Central Time) April 9, 2007. Interested parties should dial
1-888-677-1802 (passcode Lawson 49) and international callers
1-210-234-8402. A live webcast will be available on www.lawson.com.
Interested parties should access the conference call or 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 for one week. The
replay number is 1-866-446-5478 and international 1-203-369-1152. The
webcast will remain on www.lawson.com for approximately one week.
About Lawson Software
Lawson Software provides software and service solutions to
approximately 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; uncertainties as
to when and whether the conditions for the recognition of deferred
revenue will be satisfied; 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 Quarterly Report on Form 10-Q filed with the
Securities and Exchange 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, amortization of
purchased maintenance contracts, 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
website at www.lawson.com/investor.
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Nine Months
Ended Ended
----------------- ------------------
Feb 28, Feb 28, % Increase Feb 28, Feb 28, % Increase
2007 2006 (Decrease) 2007 2006 (Decrease)
-------- ------------------ --------- ------------------
Revenues:
License fees $26,434 $15,099 75% $65,243 $51,824 26%
Maintenance 73,308 45,423 61% 213,861 133,590 60%
Consulting 91,465 27,173 237% 258,433 79,232 226%
-------- -------- --------- --------
Total
revenues 191,207 87,695 118% 537,537 264,646 103%
-------- -------- --------- --------
Cost of
revenues:
Cost of
license fees 5,950 2,727 118% 16,842 7,922 113%
Cost of
maintenance 15,815 6,857 131% 44,500 21,563 106%
Cost of
consulting 77,956 25,719 203% 227,979 77,650 194%
-------- -------- --------- --------
Total cost
of
revenues 99,721 35,303 182% 289,321 107,135 170%
-------- -------- --------- --------
Gross profit 91,486 52,392 75% 248,216 157,511 58%
-------- -------- --------- --------
Operating
expenses:
Research and
development 20,380 14,325 42% 63,235 42,875 47%
Sales and
marketing 39,744 17,655 125% 116,534 56,092 108%
General and
admini-
strative 25,714 9,644 167% 73,919 36,555 102%
Restructuring 11,540 - +++ 14,900 5 +++
Amortization
of acquired
intangibles 2,465 346 +++ 7,254 1,077 +++
-------- -------- --------- --------
Total
operating
expenses 99,843 41,970 138% 275,842 136,604 102%
-------- -------- --------- --------
Operating
income (loss) (8,357) 10,422 --- (27,626) 20,907 ---
-------- -------- --------- --------
Other income:
Interest
income 3,279 2,814 17% 10,579 7,486 41%
Interest
expense (1,660) (1) --- (2,305) (26) ---
Other income (196) - --- (153) - ---
-------- -------- --------- --------
Total other
income 1,423 2,813 (49%) 8,121 7,460 9%
-------- -------- --------- --------
Income (loss)
before income
taxes (6,934) 13,235 --- (19,505) 28,367 ---
Provision for
income taxes 2,834 3,228 (12%) 9,564 7,627 25%
-------- -------- --------- --------
Net income
(loss) $(9,768) $10,007 --- $(29,069) $20,740 ---
======== ======== ========= ========
Net income
(loss) per
share:
Basic $(0.05) $0.10 --- $(0.16) $0.20 ---
======== ======== ========= ========
Diluted $(0.05) $0.09 --- $(0.16) $0.19 ---
======== ======== ========= ========
Shares used in
computing net
income (loss)
per share:
Basic 187,666 103,572 81% 186,962 102,384 83%
======== ======== ========= ========
Diluted 187,666 108,033 74% 186,962 106,877 75%
======== ======== ========= ========
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
Feb 28, 2007 May 31, 2006
------------ ------------
ASSETS
- ---------------------------------------------
Current assets:
Cash and cash equivalents $222,303 $210,154
Restricted cash 8,541 -
Marketable securities 44,849 90,348
Trade accounts receivable, net 185,118 159,933
Income taxes receivable 2,623 4,577
Deferred income taxes 24,242 21,465
Prepaid expenses and other current assets 30,183 28,085
------------ ------------
Total current assets 517,859 514,562
------------ ------------
Long-term marketable securities 3,937 6,079
Restricted Cash 6,449 -
Property and equipment, net 28,823 26,189
Goodwill 491,329 454,550
Other intangibles assets, net 139,553 154,695
Deferred income taxes 7,859 9,294
Other assets 7,936 5,283
------------ ------------
Total assets $1,203,745 $1,170,652
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ---------------------------------------------
Current liabilities:
Current portion of long-term debt $3,368 $3,475
Accounts payable 25,135 26,137
Accrued compensation and benefits 82,289 88,245
Income taxes payable 2,604 3,195
Deferred income taxes 5,122 4,221
Deferred revenue 166,857 146,206
Other current liabilities 90,833 74,882
------------ ------------
Total current liabilities 376,208 346,361
------------ ------------
Long-term debt, less current portion 5,278 4,275
Deferred income taxes 8,351 9,039
Deferred revenue - non-current 15,417 10,840
Other long-term liabilities 11,204 8,478
------------ ------------
Total liabilities 416,458 378,993
------------ ------------
Stockholders' equity:
Common stock 1,988 1,961
Additional paid-in capital 818,368 800,168
Treasury stock, at cost (74,470) (69,237)
Deferred stock-based compensation - (131)
Retained earnings 9,623 38,692
Accumulated other comprehensive income 31,778 20,206
------------ ------------
Total stockholders' equity 787,287 791,659
------------ ------------
Total liabilities and stockholders' equity $1,203,745 $1,170,652
============ ============
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
Feb 28, Feb 28, Feb 28, Feb 28,
2007 2006 2007 2006
--------- --------- --------- ---------
Cash flows from operating
activities:
Net (loss) income $(9,768) $10,007 $(29,069) $20,740
Adjustments to reconcile net
(loss) income to net cash
(used in) provided by
operating activities:
Depreciation 2,412 1,148 7,097 4,102
Amortization 7,502 2,133 22,102 6,471
Deferred income taxes (1,158) (1,167) (822) (1,102)
Provision for doubtful
accounts 2,061 (199) 3,769 (1,303)
Tax benefit from stock
option transactions (752) - (1,785) -
Tax benefit from stockholder
transactions for option
activity 582 2,446 1,434 4,255
Amortization of stock-based
compensation 1,840 98 5,513 337
Stock-based compensation
expense - - - 6,368
Amortization of discounts on
notes payable - (1) - 17
Amortization of discounts on
marketable securities (140) (274) (375) (311)
Net loss on sale of assets 135 - 137 -
Changes in operating assets
and liabilities, net of
effect from acquisitions:
Trade accounts receivable (10,665) (716) (9,492) (5,637)
Prepaid expenses and other
assets (6,965) (3,098) (5,286) 3,628
Accounts payable 6,325 606 (2,073) (935)
Accrued and other
liabilities 2,672 (141) (12,935) (1,186)
Income taxes 542 1,870 (1,130) 4,327
Deferred revenue and
customer deposits 20,186 2,486 6,737 (1,146)
--------- --------- --------- ---------
Net cash (used in) provided by
operating activities 14,809 15,198 (16,178) 38,625
--------- --------- --------- ---------
Cash flows from investing
activities:
Cash paid in conjunction with
acquisitions (1,580) (522) (3,575) (2,929)
Purchases of marketable
securities (26,671) (23,704) (100,420) (116,425)
Maturities of marketable
securities 60,237 21,277 148,010 72,773
Sales of marketable securities - - 500 -
Restricted cash designated (1,522) - (14,990) -
Purchases of property and
equipment (5,204) (1,855) (10,677) (2,967)
--------- --------- --------- ---------
Net cash used in investing
activities 25,260 (4,804) 18,848 (49,548)
--------- --------- --------- ---------
Cash flows from financing
activities
Principal payments on long-
term debt (378) (717) (1,351) (1,684)
Cash proceeds from long-term
debt 1,454 - 3,222 -
Payments on capital lease
obligations (445) - (1,406) -
Exercise of stock options 2,971 3,526 10,055 9,266
Excess tax benefit from stock
transactions 752 - 1,785 -
Issuance of treasury shares
for employee stock purchase
plan 694 1,240 2,023 2,737
Repurchase of common stock (5,900) - (5,900) -
--------- --------- --------- ---------
Net cash provided by financing
activities (852) 4,049 8,428 10,319
--------- --------- --------- ---------
Effect of exchange rate changes
on cash and cash equivalents (115) - 1,051 -
--------- --------- --------- ---------
Increase (decrease) in cash and
cash equivalents 39,102 14,443 12,149 (604)
Cash and cash equivalents at
beginning of period 183,201 172,697 210,154 187,744
--------- --------- --------- ---------
Cash and cash equivalents at
end of period $222,303 $187,140 $222,303 $187,140
========= ========= ========= =========
Reconciliation of Consolidated GAAP Net (Loss) Income to Consolidated
Non-GAAP Net Income (Tax Effected)
(in thousands)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Feb 28, Feb 28, Feb 28, Feb 28,
2007 2006 2007 2006
Net (loss)
income, as
reported (9,768) 10,007 (29,069) 20,740
Purchase
accounting
impact on
revenue (1) $1,818 $- $10,288 $-
Purchase
accounting
impact on
consulting (4) $614 $- $614 $-
Acquisition of
Intentia $1,804 $750 $9,356 $3,665
Purchased
maintenance
contracts $863 $981 $2,711 $2,969
Stock based
compensation $1,839 $- $5,515 $6,303
Restructuring $11,540 $- $14,900 $5
Amortization $6,640 $1,151 $19,391 $3,500
Other $- $- $- $(357)
Tax $(3,959) $(3,025) $(12,224) $(9,881)
-------------------------- -----------------------
Non-GAAP Net
income $11,391 $9,864 $21,482 $26,944
-------------------------- -----------------------
Reconciliation of Consolidated GAAP to Consolidated Non-GAAP per Share
Effect
(in thousands)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Feb 28, Feb 28, Feb 28, Feb 28,
2007 2006 2007 2006
Net income, as
reported (2) (0.05) 0.09 (0.16) 0.19
Purchase
accounting
impact on
revenue (1) 0.01 - 0.06 -
Purchase
accounting
impact on
consulting (4) 0.00 - 0.00 -
Acquisition of
Intentia 0.01 0.01 0.05 0.04
Purchased
maintenance
contracts 0.00 0.01 0.01 0.03
Stock based
compensation 0.01 - 0.03 0.06
Restructuring 0.06 - 0.08 0.00
Amortization 0.04 0.01 0.10 0.03
Other - - - (0.00)
Tax (0.02) (0.03) (0.07) (0.10)
-------------------------- -----------------------
Non-GAAP net
income (2)(3) $0.06 $0.09 $0.11 $0.25
-------------------------- -----------------------
Weighted
average
shares -
basic 187,666 103,572 186,962 102,384
Weighted
average
shares -
diluted 190,790 108,033 190,307 106,877
Summary of Non-GAAP items
(in thousands)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Feb 28, Feb 28, Feb 28, Feb 28,
2007 2006 2007 2006
Purchase
accounting impact
on revenue (1) $1,818 $- $10,288 $-
Purchase
accounting impact
on consulting (4) $614 $- $614 $-
Acquisition of
Intentia - pre-
tax $1,804 $750 $9,356 $3,665
Purchased
maintenance
contracts - pre-
tax $863 $981 $2,711 $2,969
Stock based
compensation -
pre-tax $1,839 $- $5,515 $6,303
Restructuring -
pre-tax $11,540 $- $14,900 $5
Amortization $6,640 $1,151 $19,391 $3,500
$- $- $- $(357)
------------------------- -----------------------
Other subtotal
pre-tax
adjustments $25,118 $2,882 $62,775 $16,085
------------------------- -----------------------
Tax provision $(3,959) $(3,025) $(12,224) $(9,881)
------------------------- -----------------------
Impact on net
income $21,159 $(143) $50,551 $6,204
========================= =======================
(1) For the purchase accounting impact on deferred revenues for Three
Months and Nine Months ended, $1,354 and $7,212, respectively,
relates to maintenance revenue and $464 and $3,076, respectively,
relates to consulting revenue
(2) For calculation of EPS, basic weighted average shares are used
with a net loss and diluted weighted average shares are used with net
income
(3) May not total due to rounding
(4) Purchase accounting impact on consulting fees is a cumulative
adjustment for fiscal year 2007
LAWSON SOFTWARE, INC.
SUPPLEMENTAL NON-GAAP MEASURES
INCREASE (DECREASE) IN GAAP AMOUNTS REPORTED
(in thousands)
(unaudited)
Three Months Nine Months
Ended Ended
-------------------------------------
Feb 28, Feb 28, Feb 28, Feb 28,
2007 2006 2007 2006
--------- -------- --------- --------
Revenue items
Purchase accounting impact on
maintenance $1,354 $- $7,212 $-
Purchase accounting impact on
consulting 464 - 3,076 -
--------- -------- --------- --------
Total revenue items 1,818 - 10,288 -
Cost of license items
Amortization of acquired
software (2,735) (805) (7,904) (2,423)
Non-cash stock-based
compensation (7) - (21) -
--------- -------- --------- --------
Total cost of license items (2,742) (805) (7,925) (2,423)
Cost of maintenance items
Amortization of purchased
maintenance contracts (863) (981) (2,711) (2,969)
Integration related (1) - - (70) -
Non-cash stock-based
compensation (33) - (110) -
--------- -------- --------- --------
Total cost of maintenance
items (896) (981) (2,891) (2,969)
Cost of consulting items
Purchase accounting impact on
consulting (614) - (614) -
Amortization (1,440) - (4,233) -
Integration related (1) 39 (24) (1,712) (262)
Non-cash stock-based
compensation (249) - (606) (3)
--------- -------- --------- --------
Total cost of consulting
items (2,264) (24) (7,165) (265)
Research and development items
Integration related (1) (56) (62) (74) (179)
Non-cash stock-based
compensation (150) - (468) (7)
--------- -------- --------- --------
Total research and
development items (206) (62) (542) (186)
Sales and marketing items
Integration related (1) 53 (35) (1,489) (900)
Non-cash stock-based
compensation (321) - (1,092) (14)
--------- -------- --------- --------
Total sales and marketing
items (268) (35) (2,581) (914)
General and administrative items
Integration related (1) (1,840) (629) (6,011) (2,324)
Non-cash stock-based
compensation (3) (1,079) - (3,218) (6,279)
--------- -------- --------- --------
Total general and
administrative (2,919) (629) (9,229) (8,603)
Restructuring (11,540) - (14,900) (5)
Amortization of acquired
intangibles (2,465) (346) (7,254) (1,077)
Other income (expense) - - - (357)
Tax provision (2) (3,959) (3,025) (12,224) (9,881)
Total Adjustments $21,159 $(143) $50,551 $6,204
========= ======== ========= ========
(1) Represents integration related expenses relating to the merger
with Intentia International.
(2) Based on a projected annual global effective tax rate analysis,
non-GAAP Q3 tax provision was calculated to be 37.4%.
(3) Non-cash stock-based compensation from 2005 relates to a stock
option modification resulting in $6.3M in expense under APB 25.
Use of Non-GAAP Financial Information
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
website at www.lawson.com/investor.
CONTACT: Lawson Software, Inc.
Media:
Terry Blake, +1-651-767-4766
terry.blake@us.lawson.com
or
Investors and Analysts:
Barbara Doyle, +1-651-767-4385
barbara.doyle@us.lawson.com