Press Release
- Date:
- Thursday, January 30, 2003
- Contact:
- Mark Funston
- Phone:
- (301) 731-2300
- Email:
- mark_funston@g1.com
Group 1 Software Reports Record Third Quarter Results
Net Income up 74%, Revenue up 20% to $26.7 Million
Lanham, MD — Group 1 Software (Nasdaq: GSOF) today reported results for its third fiscal quarter ended December 31, 2002. The Company reported record third quarter revenue of $26.7 million compared with $22.2 million in the prior year's third quarter. Net income available to common stockholders, also a record, was $2.3 million, up from $1.3 million in the prior year's third quarter. Fully diluted earnings per share increased to $0.16 per share compared with $0.10 per share the prior year. All earnings per share data have been adjusted for the Company's two-for-one split in its common stock for shareholders of record as of November 15, 2002.
Total revenue for the quarter from Enterprise Solutions software and services increased 27% to $18.2 million from $14.3 million in the prior year's third quarter. Total revenue from DOC1 Customer Communications Management software and services was $8.5 million, compared with $7.9 million in the prior year's third quarter.
License fee revenue for the Company increased 58% to $12.5 million from $7.9 million in the same quarter of the prior year. License fees in the Enterprise Solutions division were up 78% to $8.7 million from $4.9 million in the prior year. License fees in the DOC1 division were $3.8 million, up 23% from $3.1 million in the prior year.
For the first nine months of the fiscal year, the Company reported revenue of $75.1 million, a 15% increase from $65.3 million the prior year. Net income available to common stockholders for the nine months more than doubled from $2.4 million to $5.2 million.
Group 1's cash position grew even stronger in the quarter. Cash and short-term investments totaled $55.3 million ($3.70 per diluted share) at December 31, 2002 compared with $52.9 million at September 30, 2002 and $47.6 million at March 31, 2002.
“We are pleased with our third quarter and year-to-date performance, and especially the strength of our newest product offerings,” said Group 1's CEO, Bob Bowen. “In the Enterprise Solutions division, we see continued strong demand for our newest data quality products, the Data Quality Connector for Siebel and our DataSight solution. In the DOC1 division, the market acceptance grows for our new DOC1 Archive solution, with several significant contracts signed during the quarter. We were also pleased with our strong market performance in Latin America.”
“Additionally, we announced a two-for-one stock split during the quarter. This appears to have had an important impact on the trading volume and liquidity of our common stock,” Bowen concluded.
“As guidance for the fourth quarter ending March 31, 2003, the Company is projecting earnings per share in the range of $0.17 to $0.18 on revenue in the range of $27 million to $28 million,” added Group 1's CFO, Mark Funston. “Achievement of these projections would result in revenue for the full fiscal year ending March 31, 2003 in the range of $102 million to $103 million and earnings per share of $0.54 to $0.55. For the 2004 fiscal year ending March 31, 2004, the Company projects revenue growth in the range of 10% to 12% over fiscal 2003. Net earnings are projected to increase in the range of 24% to 28%.”
The Company will hold a conference call at 4:30 p.m. EST today to discuss these results. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.g1.com or by dialing 800-374-0565.
Group 1 Software (Nasdaq: GSOF) is a leading provider of software solutions for data quality, marketing automation, customer communications management and direct marketing applications. Group 1's software systems and services enable over 2,000 customers worldwide to market smarter by helping them find, reach and keep customers. Founded in 1982 and headquartered in Lanham, Maryland, Group 1's solutions are utilized by leaders in the financial services, banking, retail, telecommunications, utilities, e-commerce, and insurance industries. The company's customer base includes such recognized names as AT&T, Charles Schwab, Entergy, GEICO, L.L. Bean, Wal-Mart and Wells Fargo. For more information about Group 1, visit the company's Web site at http://www.g1.com.
GROUP 1 SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Adjusted to reflect the 2 for 1 stock split approved
by the Board of Directors on November 5, 2002)
(In thousands, except per share data)
(Unaudited)
For the Three For the Nine
Month Period Month Period
Ended December 31, Ended December 31,
2002 2001 2002 2001
Revenue:
Software license and
related revenue $12,525 $7,938 $33,731 $23,330
Maintenance and services 14,165 14,235 41,358 41,984
Total revenue 26,690 22,173 75,089 65,314
Cost of revenue:
Software license expense 3,379 2,839 11,213 8,304
Maintenance and service expense 4,302 4,826 12,681 16,286
Total cost of revenue 7,681 7,665 23,894 24,590
Gross profit 19,009 14,508 51,195 40,724
Operating expenses:
Research and development 3,032 2,716 8,586 7,808
Sales and marketing 8,464 7,150 23,712 21,933
General and administrative 3,999 2,686 10,868 8,148
Total operating expenses 15,495 12,552 43,166 37,889
Income from operations 3,514 1,956 8,029 2,835
Non-operating income
Interest income 276 323 879 1,300
Interest expense (97) (95) (289) (254)
Other non-operating income
(expense) (31) 77 (222) (69)
Total non-operating income 148 305 368 977
Income before provision for
income taxes 3,662 2,261 8,397 3,812
Provision for income taxes 1,321 909 3,112 1,419
Net income 2,341 1,352 5,285 2,393
Preferred stock dividend
requirements (14) (14) (42) (42)
Net income available to common
stockholders $2,327 $1,338 $5,243 $2,351
Basic earnings per share $0.18 $0.11 $0.41 $0.19
Diluted earnings per share $0.16 $0.10 $0.37 $0.17
Basic weighted average shares
outstanding 13,182 12,509 12,858 12,398
Diluted weighted average shares
outstanding 14,959 13,662 14,376 13,729
GROUP 1 SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
December 31, March 31,
2002 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 42,150 $ 22,936
Short-term investments,
available-for-sale 13,150 24,669
Trade and installment accounts
receivable, less allowance of
$2,017 and $2,058 19,890 17,551
Deferred income taxes 1,717 1,718
Prepaid expenses and other
current assets 4,207 3,219
Total current assets 81,114 70,093
Installment accounts receivable,
long-term 53 263
Property and equipment, net 4,676 5,797
Computer software, net 23,058 22,873
Goodwill 12,716 12,686
Other assets 193 167
Total assets $ 121,810 $ 111,879
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 900 $ 1,198
Current portion of note payable
and capital lease obligation 377 3,496
Accrued expenses 5,609 5,857
Accrued compensation 8,004 3,732
Current deferred revenues 30,411 28,833
Total current liabilities 45,301 43,116
Notes payable, net of current portion 722 3,630
Deferred revenues, long-term 259 197
Deferred income taxes 4,464 4,534
Total liabilities 50,746 51,477
Commitments and contingencies - - - - - -
Stockholders' equity:
6% cumulative convertible
preferred stock $0.25 par value;
1,200 shares authorized; 48 shares
issued (aggregate involuntary
liquidation preference $950) 916 916
Common stock $0.50 par value; 50,000
shares authorized; 14,623 and
13,836 shares issued 7,311 6,918
Additional paid in capital 33,111 29,620
Retained earnings 34,146 28,903
Accumulated other comprehensive
income (loss) 193 (1,368)
Less treasury stock, 1,244 and
1,240 shares, at cost (4,613) (4,587)
Total stockholders' equity 71,064 60,402
Total liabilities and
stockholders' equity $ 121,810 $ 111,879
Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation reform Act of 1995. Words like "guidance" and "projects" are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Readers are cautioned not to place undue reliance of these forward-looking statements, which address the conditions as they are found on the date of this press release. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances that arise after the date of this press release or to reflect the occurrence of unanticipated events. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the Securities and Exchange Commission. Group 1 Software and DOC1 are registered trademarks and DataSight is a trademark of Group 1 Software, Inc. Additional Contact InformationDavid PeikinCorporate Communications ManagerGroup 1 Software301.918.0818pr@g1.comCharles MessmanMKR Group 212.308.4557 cmessman@mkr-group.com