MINNEAPOLIS, Feb. 7 /PRNewswire-FirstCall/ -- SoftBrands, Inc. (AMEX:SBN), a global supplier of enterprise application software, today announced its financial results for the first quarter of fiscal 2008, ended Dec. 31, 2007.
Revenues for first quarter fiscal 2008 were $22.2 million, compared with $25.0 million in the prior year quarter. License revenue was 13.5% of total revenues in the current quarter, compared with 21.9% in first quarter of fiscal 2007, which included a large contract from the U.S. Navy. Maintenance revenue was 61% of total revenues in the current quarter, compared with 55% of revenues in first quarter fiscal 2007, and was an increase in absolute dollars.
SoftBrands reported an operating loss of $1.2 million in the first quarter of fiscal 2008, compared with operating income of $1.4 million in the fiscal 2007 quarter. The company reported a net loss available to common shareholders of $.8 million, or a loss of $0.02 per diluted share, compared with net income available to common shareholders of $0.0 million, or $0.00 per diluted share, for first quarter fiscal 2007.
"As we have said before, our quarterly results will be lumpy due to timing of large transactions. In the first quarter, our revenue run rate was below our internal expectations but our outlook and guidance for revenue and operating profitability for fiscal 2008 remains unchanged," said Randy Tofteland, SoftBrands' president and chief executive officer. "As an example of this variability, in the first quarter fiscal 2007 we booked $1.8 million in hospitality revenues from the U.S. Navy contract, which makes for a difficult comparison for the current quarter. In addition, we had two major hospitality transactions slip to the second quarter; we closed one of the two in January and expect to close the other shortly." "In our hospitality business we expect the second quarter to be one of our strongest ever in terms of new contract signings from hotel groups and we are confident by the end of the quarter we will have closed enough group business to show we are on track for the full year," said Tofteland.
SoftBrands said it is confident of its full year performance and is reconfirming its prior guidance of GAAP revenue in the range of $100 million to $105 million and operating income of 5% to 8% of revenues. The company is updating its net income and earnings per share guidance based on an increase in its non-cash tax provision. As a result, for fiscal 2008 the company now expects net income to common shareholders of (2)% to 1% of revenues; and diluted earnings per share of $(0.04) to $0.02.
In the company's manufacturing business, first quarter fiscal 2008 revenues were $12.6 million, compared with $12.7 million in first quarter fiscal 2007. First quarter fiscal 2008 operating income in manufacturing was $2.3 million, an 88% increase compared with $1.2 million in the prior year's first quarter. Operating income in the current quarter benefited from restructuring actions taken in third quarter fiscal 2007. SoftBrands received two awards from SAP at its recent field sales kickoff meetings for business partners. SoftBrands won the Solution Partner Sales Excellence Award for Revenue, and SoftBrands was also named as a member of SAP's "Top 10 Club," honoring the past year's leading resellers for SAP Business One.
In the company's hospitality business, first quarter fiscal 2008 revenues were $9.7 million, compared with $12.3 million in the prior year's quarter. In first quarter fiscal 2008 SoftBrands' hospitality business posted an operating loss of $3.5 million, compared with operating profit of $0.2 million in the prior year's quarter.
From a geographic perspective, 60% of revenues were generated in the Americas in the quarter; 24% in the EMEA region; and 16% in the Asia Pacific region. This compares to a respective mix of 62%, 24% and 14% in the prior year's quarter.
As of Dec. 31, 2007, SoftBrands had $9.9 million in cash and cash equivalents, an increase from $8.7 million at Sept. 30, 2007. SoftBrands' total current assets, which includes accounts receivable, increased to $31.9 million from $28.8 million in the same period.
Deferred revenue was $21.4 million at the end of the first quarter, an increase from $21.0 million at Sept. 30, 2007.
Conference Call SoftBrands will hold its first quarter earnings conference call at 5:00 pm Eastern Time today, Feb. 7, 2008. Interested parties may listen to the call by dialing 866-356-4279 or international 617-597-5394 (passcode: 89787066). A live webcast will also be available at SoftBrands' website at http://www.softbrands.com/. A replay will be available approximately one hour after the conference call concludes and will remain available through Feb. 14, 2008. The replay number is 888-286-8010 and international 617-801-6888 (passcode: 99134184). The webcast will be archived on SoftBrands' website for approximately one year.
Forward-Looking Statements All statements other than historical facts included in this release regarding future operations are subject to the risks inherent in predictions and "forward-looking statements." These statements are based on the beliefs and assumptions of management of SoftBrands and on information currently available to us. Nevertheless, these forward-looking statements should not be construed as guarantees of future performance. They involve risks, uncertainties, and assumptions identified in filings by SoftBrands with the SEC, including: -- Changes in the economy, natural disasters, disease or other events that
affect the manufacturing and hospitality segments or the geographies we
serve; -- Our increasing dependence upon our relationship with SAP; -- Our ability to continue to satisfy covenants with our lender; -- Our ability to timely complete and introduce, and the market acceptance
of our new products; -- Our ability to properly document our sales consistent with the manner
in which we recognize revenue; -- Our ability to manage international operations; -- Our ability to maintain and expand our base of clients on software
maintenance programs; -- The effects of and our ability to rapidly adapt to changes in standards
for operating systems, databases and other technologies; and -- Our ability to successfully upgrade our financial systems
About SoftBrands
SoftBrands, Inc. is a leader in providing software solutions for businesses in the manufacturing and hospitality industries worldwide. The company has established a global infrastructure for distribution, development and support of enterprise software, and has approximately 5,000 customers in more than 100 countries actively using its manufacturing and hospitality products. SoftBrands, which has approximately 775 employees, is headquartered in Minneapolis, Minn., with branch offices in Europe, India, Asia, Australia and Africa. Additional information can be found at http://www.softbrands.com/.
Contact:
Gregg Waldon Chief Financial Officer
612-851-1805 Susan Eich
Vice President, Corporate Communications
612-851-6205 Tables Follow SoftBrands, Inc.
Consolidated Balance Sheets December 31, September 30,
(In thousands, except share and per 2007 2007
share data) (Unaudited) (Unaudited)
ASSETS Current assets:
Cash and cash equivalents $9,944 $8,682
Accounts receivable, net 16,142 15,683
Prepaid expenses and other current
assets 5,814 4,474
Total current assets 31,900 28,839
Furniture, fixtures and equipment,
net 2,463 2,602
Goodwill 37,271 37,271
Intangible assets, net 6,731 7,433
Other long-term assets 592 439
Total assets $78,957 $76,584 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Current portion of long-term
obligations $3,487 $3,510
Revolving loan 2,596 1,585
Accounts payable 4,699 4,554
Accrued expenses 9,001 8,329
Accrued restructuring costs 279 423
Deferred revenue 21,449 21,015
Other current liabilities 3,275 2,354
Total current liabilities 44,786 41,770
Long-term obligations 15,226 16,082
Other long-term liabilities 733 832
Total liabilities 60,745 58,684
Commitments and contingencies
Stockholders' equity:
Series A and undesignated preferred
stock, $.01 par value; 10,647,973
shares authorized; no shares issued
or outstanding - -
Series B convertible preferred
stock, $.01 par value; 4,331,540
shares authorized, issued and
outstanding; liquidation value of
$4,591 5,068 5,068
Series C-1 convertible preferred
stock, $.01 par value; 18,000
shares authorized, issued and
outstanding; liquidation value of
$18,000 plus unpaid dividends 18,000 18,000
Series D convertible preferred
stock, $.01 par value; 6,673
shares authorized, 6,000 shares
issued and outstanding;
liquidation value of $6,000 plus
unpaid dividends 5,051 5,051
Common stock, $.01 par value;
110,000,000 shares authorized;
41,448,993 and 41,391,043 shares
issued and outstanding,
respectively 414 414
Additional paid-in capital 174,395 174,009
Accumulated other comprehensive
loss (552) (811)
Accumulated deficit (184,164) (183,831)
Total stockholders' equity 18,212 17,900
Total liabilities and
stockholders' equity $78,957 $76,584 SoftBrands, Inc.
Consolidated Statements of Operations Three Months Ended
December 31,
(In thousands, except per share data) 2007 2006
(Unaudited) (Unaudited) Revenues:
Software licenses $2,997 $5,462
Maintenance and support 13,564 13,758
Professional services 4,926 4,938
Third-party software and hardware 762 837
Total revenues 22,249 24,995 Cost of revenues:
Software licenses 588 1,007
Maintenance and support 4,005 3,906
Professional services 4,113 4,339
Third-party software and hardware 732 578
Total cost of revenues 9,438 9,830 Gross profit 12,811 15,165 Operating expenses:
Selling and marketing 4,952 5,212
Research and product development 3,759 3,322
General and administrative 5,310 5,189
Restructuring related charges 25 -
Total operating expenses 14,046 13,723 Operating income (loss) (1,235) 1,442 Interest expense (492) (472)
Other income, net 357 49 Income (loss) before provision for
(benefit from) income taxes (1,370) 1,019 Provision for (benefit from) income
taxes (1,037) 516 Net income (loss) (333) 503 Preferred stock dividends (491) (491) Net income (loss) available to common
shareholders $(824) $12 Basic and diluted earnings (loss) per
common share $(0.02) $0.00 Weighted-average common shares
outstanding:
Basic 41,419 45,382
Diluted 41,419 47,499 SoftBrands, Inc. Supplemental Financial Information
(Unaudited, in thousands)
Revenues and Operating Income (Loss) Three Months Ended December 31,
2007 2006 % Change Operating Operating Operating
Income Income Income
Revenues (Loss) Revenues (Loss) Revenues (Loss) Manufacturing $12,560 $2,299 $12,721 $1,221 -1.3% 88.3%
Hospitality 9,689 (3,534) 12,274 221 -21.1% NM Total $22,249 $(1,235) $24,995 $1,442 -11.0% -185.6% Revenues by Segment and Type Three Months Ended December 31,
2007 2006 Manufacturing Hospitality Total Manufacturing Hospitality Total Software
licenses $1,527 $1,470 $2,997 $1,449 $4,013 $5,462
Maintenance
and support 8,096 5,468 13,564 8,073 5,685 13,758
Professional
services 2,822 2,104 4,926 2,991 1,947 4,938
Third-party
software
and hardware 115 647 762 208 629 837 Total $12,560 $9,689 $22,249 $12,721 $12,274 $24,995 Revenues by Segment and Geography Three Months Ended December 31,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total
Americas $7,594 $5,778 $13,372 $7,192 $8,310 $15,502
Europe,
Middle
East and
Africa 3,349 1,944 5,293 3,694 2,391 6,085
Asia
Pacific 1,617 1,967 3,584 1,835 1,573 3,408 Total $12,560 $9,689 $22,249 $12,721 $12,274 $24,995
DATASOURCE: SoftBrands, Inc.
CONTACT: Gregg Waldon, Chief Financial Officer, +1-612-851-1805, , or Susan Eich, Vice President, Corporate Communications, +1-612-851-6205, , both of SoftBrands, Inc.
Web site: http://www.softbrands.com/
|