MINNEAPOLIS, Dec. 13 /PRNewswire-FirstCall/ -- SoftBrands, Inc. (AMEX:SBN), a global supplier of enterprise application software, today announced its financial results for the fourth quarter of fiscal 2007, ended Sept. 30, 2007.
Revenues for fourth quarter fiscal 2007 were $23.3 million, an increase of 23% compared to the prior year quarter. The year-over-year increase in revenue was primarily the result of the acquisition of HIS in fourth quarter fiscal 2006. License revenue was 19% of total revenues in the current quarter, up significantly from 11% in fourth quarter fiscal 2006. Maintenance revenue grew by 8% in absolute dollars and accounted for 57% of total revenues in the current quarter, compared with 65% of revenues in fourth quarter fiscal 2006.
SoftBrands reported operating income of $2.5 million in the fourth quarter of fiscal 2007, compared with an operating loss of $12.3 million in the fiscal 2006 quarter. The fiscal 2006 fourth quarter included purchased in-process research and development expense of $11.4 million related to the HIS acquisition. The company reported net income available to common shareholders of $1.8 million, or $0.03 per diluted share, for fourth quarter fiscal 2007, compared with a net loss available to common shareholders of $17.0 million, or a loss of $0.42 per diluted share, for the prior year's quarter.
"We are pleased with our fourth quarter results, which exceeded our profit expectations due to strong performance in our manufacturing business, and resulted in positive earnings per share for the quarter. While our revenue performance was slightly behind plan in the quarter, we continue to make gains in license revenue," said Randy Tofteland, SoftBrands' president and chief executive officer. "Our operating income was right on target, which shows that we are continuing to make excellent progress managing our expenses, which resulted in positive operating income for the full fiscal year, despite incurring $1.7 million in restructuring costs." "Our manufacturing business had a very strong quarter and continued to increase its profitability as a result of the restructuring actions we undertook in the third quarter," said Tofteland. "In addition we have recently signed several new SAP large enterprise customers, and we have entered the new fiscal year with a strong pipeline of sales opportunities. In fiscal 2008 we expect the manufacturing business to produce modest revenue growth as our SAP business continues to grow and offset natural attrition in our base business." "In hospitality the fourth quarter benefited from a large contract to supply our full enterprise suite to Navy Lodges. In addition, we were successful selling our Medallion property management system to Best Western hotels in the United States. We also saw marked improvement on the operating profit line compared to prior quarters," said Tofteland. "In fiscal 2007, we met our license revenue goals for hospitality, but we were slightly behind our overall revenue goals due to weakness in professional services from delays in large deployments, which are now underway." "We have entered fiscal 2008 with positive trends in both of our businesses, and we expect to further improve our financial performance in fiscal 2008," said Tofteland.
Highlights of the fourth quarter and other recent developments include: -- SoftBrands signed an agreement with Navy Lodge Program to operate
SoftBrands enterprise solutions including Epitome and Core across its
worldwide Navy Lodges. Navy Lodges operates 43 Navy Lodges worldwide,
providing accommodations to active duty military, Department of Defense
personnel, retirees and their families for both official and leisure
travel. -- SoftBrands introduced a new set of Customer Relationship Management
(CRM) tools for hotels, which allow hotels to centrally manage guest,
travel agent and company profiles and communication across multiple
properties. Mosaik CRM includes sales force automation, campaign
management and loyalty program administration. SoftBrands' Mosaik CRM
is the result of a partnership between SoftBrands and Serenata
Intraware AG, a Munich, Germany-based hospitality technology provider. -- SAP named SoftBrands as one of 22 worldwide early partners for SAP
Business ByDesign. SAP Business ByDesign is an on-demand solution
designed specifically for fast-growing midsize companies. Being chosen
as a partner to bring SAP Business ByDesign to the market presents an
opportunity for SoftBrands to further strengthen its partnership with
SAP and produce incremental revenue growth as it provides a significant
advantage to get a head start in a new market segment. In the company's manufacturing business, fourth quarter fiscal 2007 revenues were $12.5 million, essentially even with fourth quarter fiscal 2006. Fourth quarter fiscal 2007 operating income in manufacturing was $2.7 million, a sharp increase from $0.6 million in the prior year's fourth quarter. Operating income benefited from cost control actions throughout the fiscal year, and restructuring actions taken in the third quarter.
In the company's hospitality business, fourth quarter fiscal 2007 revenues were $10.8 million, a significant increase from $6.6 million in the prior year's quarter due primarily to the acquisition of HIS in fourth quarter fiscal 2006. In fourth quarter fiscal 2007, SoftBrands' hospitality business posted an operating loss of $0.2 million, compared with an operating loss of $12.9 million in the prior year's quarter, which included purchased in-process research and development expense of $11.4 million.
From a geographic perspective, 62% of revenues were generated in the Americas in the quarter; 24% in the EMEA region; and 14% in the Asia Pacific region. This compares to a respective mix of 60%, 28% and 12% in the prior year's quarter.
Full Year Results Revenues for fiscal 2007 were $93.4 million, compared with $69.3 million in fiscal 2006. The company said previously it expected to deliver full year revenues in the $95 million range.
In fiscal 2007 SoftBrands reported operating income of $0.7 million, which included restructuring costs of $1.7 million; non-cash amortization of intangibles expense of $3.5 million; and non-cash stock-based compensation expense of $1.7 million. In fiscal 2006, the company generated an operating loss of $16.4 million, which included purchased in-process research and development of $11.4 million related to the HIS acquisition, $0.2 million in restructuring costs, $3.6 million in non-cash amortization of intangibles expense and $1.9 million in non-cash stock-based compensation expense.
SoftBrands reported a net loss available to common shareholders of $3.7 million, or a loss of $0.09 cents per diluted share, for the full year ended Sept. 30, 2007, compared with a net loss of $21.1 million, or a loss of $0.52 cents per diluted share, for fiscal 2006. Net income in the 2006 fiscal year includes $0.4 million in income from discontinued operations.
Cash and Liquidity As of Sept. 30, 2007, SoftBrands had $8.7 million in cash and cash equivalents, a decrease from $14.5 million at Sept. 30, 2006. However, SoftBrands' total current assets, which includes accounts receivable, increased to $28.8 million from $25.6 million in the same period.
Deferred revenue was $21.0 million at the end of the fourth quarter, a decrease from $22.6 million at Sept. 30, 2006.
Fiscal 2008 Outlook For fiscal 2008, SoftBrands expects to deliver GAAP results of revenue in the range of $100 million to $105 million; operating income of 5% to 8% of revenues; net income to common shareholders of 0% to 3% of revenues; and diluted earnings per share of $0.00 to $0.05.
Conference Call SoftBrands will hold its fourth quarter earnings conference call at 5:00 pm Eastern Time today, Dec. 13, 2007. Interested parties may listen to the call by dialing 866-825-1709 or international 617-213-8060 (passcode: 41054406). 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 Dec. 20, 2007. The replay number is 888-286-8010 and international 617-801-6888 (passcode: 45479013). 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 effectively integrate the HIS business;
-- 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/.
SoftBrands, Inc.
Consolidated Balance Sheets September 30, September 30,
(In thousands, except share and per 2007 2006
share data) (Unaudited) (Unaudited) ASSETS Current assets:
Cash and cash equivalents $ 8,682 $ 14,520
Accounts receivable, net 15,683 7,555
Prepaid expenses and other current
assets 4,474 3,542
Total current assets 28,839 25,617
Furniture, fixtures and equipment, net 2,602 2,787
Goodwill 38,027 35,021
Intangible assets, net 7,433 10,844
Other long-term assets 439 778
Total assets $ 77,340 $ 75,047 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Current portion of long-term
obligations $ 3,510 $ 2,618
Revolving loan 1,585 -
Accounts payable 4,554 2,110
Accrued expenses 8,329 6,870
Accrued restructuring costs 423 936
Deferred revenue 21,015 22,560
Other current liabilities 2,354 1,288
Total current liabilities 41,770 36,382
Long-term obligations 16,082 19,302
Other long-term liabilities 832 835
Total liabilities 58,684 56,519
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;
41,391,043 and 41,024,960 shares
issued and outstanding, respectively 414 410
Additional paid-in capital 174,009 173,791
Accumulated other comprehensive loss (55) (1,670)
Accumulated deficit (183,831) (182,122)
Total stockholders' equity 18,656 18,528
Total liabilities and
stockholders' equity $ 77,340 $ 75,047 SoftBrands, Inc.
Consolidated Statements of Operations Three Months Ended Fiscal Year Ended
September 30, September 30,
(In thousands, except per 2007 2006 2007 2006
share data) (Unaudited)(Unaudited)(Unaudited)(Unaudited) Revenues:
Software licenses $ 4,526 $ 2,136 $ 17,133 $ 8,707
Maintenance and support 13,347 12,376 55,017 43,823
Professional services 4,614 4,036 18,030 14,619
Third-party software
and hardware 852 496 3,200 2,140
Total revenues 23,339 19,044 93,380 69,289 Cost of revenues:
Software licenses (21) 629 2,112 3,130
Maintenance and support 3,377 3,484 15,534 13,375
Professional services 3,733 3,626 16,318 13,007
Third-party software
and hardware 807 474 2,720 1,600
Total cost of revenues 7,896 8,213 36,684 31,112 Gross profit 15,443 10,831 56,696 38,177 Operating expenses:
Selling and marketing 4,859 3,987 20,175 13,343
Research and product
development 3,160 3,300 13,734 10,962
General and administrative 4,835 4,281 20,343 18,673
Restructuring related charges 75 196 1,705 196
Purchased in-process
research and development - 11,400 - 11,400
Total operating expenses 12,929 23,164 55,957 54,574 Operating income (loss) 2,514 (12,333) 739 (16,397) Interest expense (535) (229) (1,971) (238)
Other income (expense), net 69 (228) (89) 134 Income (loss) from
continuing operations
before provision for
(benefit from) income
taxes 2,048 (12,790) (1,321) (16,501) Provision for (benefit from)
income taxes (198) 97 388 110 Income (loss) from
continuing operations 2,246 (12,887) (1,709) (16,611) Discontinued operations:
Income from discontinued
operations, net of tax - - - 393 Net income (loss) 2,246 (12,887) (1,709) (16,218) Preferred stock dividends (482) (382) (1,949) (1,201)
Preferred stock beneficial
conversion feature charge - (756) - (756)
Deemed dividend on exchange
of preferred stock - (2,935) - (2,935) Net income (loss) available
to common shareholders $ 1,764 $(16,960) $ (3,658) $(21,110) Basic earnings (loss) per
common share:
Continuing operations $ 0.04 $ (0.42) $ (0.09) $ (0.53)
Discontinued operations 0.00 0.00 0.00 0.01
Net income (loss)
available to common
shareholders $ 0.04 $ (0.42) $ (0.09) $ (0.52) Diluted earnings (loss) per
common share:
Continuing operations $ 0.03 $(0.42) $ (0.09) $ (0.53)
Discontinued operations 0.00 0.00 0.00 0.01
Net income (loss)
available to common
shareholders $ 0.03 $(0.42) $ (0.09) $ (0.52) Weighted-average common
shares outstanding:
Basic 45,688 40,590 41,221 40,242
Diluted 57,117 40,590 41,221 40,242 SoftBrands, Inc. Supplemental Financial Information
(Unaudited, in thousands) Revenues and Operating Income (Loss) Three Months Ended September 30,
2007 2006 % Change
Operating Operating Operating
Income Income Income
Revenues (Loss) Revenues (Loss) Revenues (Loss) Manufacturing $ 12,533 $ 2,702 $ 12,445 $ 569 0.7% 374.9%
Hospitality 10,806 (188) 6,599 (12,902) 63.8% 98.5% Total $ 23,339 $ 2,514 $ 19,044 $(12,333) 22.6% 120.4%
Fiscal Year Ended September 30,
2007 2006 % Change
Operating Operating Operating
Income Income Income
Revenues (Loss) Revenues (Loss) Revenues (Loss) Manufacturing $ 50,346 $ 5,155 $ 51,076 $ 1,849 -1.4% 178.8%
Hospitality 43,034 (4,416) 18,213 (18,246) 136.3% 75.8% Total $ 93,380 $ 739 $ 69,289 $(16,397) 34.8% 104.5% Revenues by Segment and Type Three Months Ended September 30,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total Software
licenses $ 1,496 $ 3,030 $ 4,526 $ 1,240 $ 896 $ 2,136
Maintenance
and
support 8,105 5,242 13,347 8,140 4,236 12,376
Professional
services 2,666 1,948 4,614 2,846 1,190 4,036
Third-party
software
and hardware 266 586 852 219 277 496 Total $12,533 $10,806 $23,339 $12,445 $ 6,599 $19,044
Fiscal Year Ended September 30,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total Software
licenses $ 5,964 $11,169 $17,133 $ 6,363 $ 2,344 $ 8,707
Maintenance
and
support 32,584 22,433 55,017 31,896 11,927 43,823
Professional
services 10,942 7,088 18,030 11,576 3,043 14,619
Third-party
software
and hardware 856 2,344 3,200 1,241 899 2,140 Total $50,346 $43,034 $93,380 $51,076 $18,213 $69,289 SoftBrands, Inc. Supplemental Financial Information
(Unaudited, in thousands) Revenues by Segment and Geography Three Months Ended September 30,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total Americas $ 7,309 $ 7,281 $14,590 $ 7,300 $ 4,197 $11,497
Europe,
Middle East
and Africa 3,583 1,951 5,534 3,504 1,869 5,373
Asia Pacific 1,641 1,574 3,215 1,641 533 2,174 Total $12,533 $10,806 $23,339 $12,445 $ 6,599 $19,044
Fiscal Year Ended September 30,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total Americas $29,285 $26,291 $55,576 $29,751 $ 8,713 $38,464
Europe,
Middle East
and Africa 14,243 9,051 23,294 14,372 7,376 21,748
Asia Pacific 6,818 7,692 14,510 6,953 2,124 9,077 Total $50,346 $43,034 $93,380 $51,076 $18,213 $69,289 Contact Information:
Gregg Waldon
Chief Financial Officer
612-851-1805 Susan Eich
Vice President, Corporate Communications
612-851-6205
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/
|