Press Release
- Date:
- Wednesday, January 28, 2004
- Contact:
- David Peikin
- Phone:
- (301) 918-0818
- Email:
- G1@schwartz-pr.com
Group 1 Software Reports Third Quarter Results
Revenue Including Sagent Acquisition Up 17.4% Reaching New Record of $31.3 Million
Lanham, MD — Group 1 Software (Nasdaq: GSOF) today reported results for its third fiscal quarter ended December 31, 2003. The company reported record third quarter revenue of $31.3 million, an increase of 17.4% over the prior year's third quarter. Net income, including non-recurring costs associated with the acquisition of assets of Sagent Technology, was $1.0 million compared with $2.3 million reported in the prior year's third quarter. Fully diluted earnings per share in the third quarter were $0.06 vs. $0.16 the prior year.
For the first nine months of the fiscal year, the company reported revenue of $80.8 million, up from $75.1 million in the same period of the prior year. Net income for the nine months was $5.6 million compared with $5.2 million the prior year. Fully diluted earnings per share were $0.35 vs. $0.37 the prior year.
Group 1's cash position grew even stronger during the quarter. Cash and short-rted results for its third fiscal quarter ended December 31, 2003. The company reported record third quarter revenue of $31.3 million, an increase of 17.4% over the prior year's third quarter. Net income, including non-recurring costs associated with the acquisition of assets of Sagent Technology, was $1.0 million compared with $2.3 million reported in the prior year's third quarter. Fully diluted earnings per share in the third quarter were $0.06 vs. $0.16 the prior year.
Third quarter license fee revenue for the company was $14.2 million, compared with $12.5 million reported for the prior year's third quarter. Total revenue for the quarter for the Enterprise Solutions division (including Sagent software and services) was $24.2 million compared with $18.2 million in the prior year's third quarter. License fees in the Enterprise Solutions division were $11.9 million, up from $8.7 million reported the prior year. Total revenue from DOC1 Customer Communications Management software and services was $7.2 million compared with $8.5 million in the prior year's third quarter. License fees in the DOC1 division were $2.3 million compared with $3.8 million reported the prior year. Group 1's term investments totaled $58.5 million at December 31, 2003 vs. $57.9 million at September 30, 2003, despite cash outflow for the Sagent asset acquisition totaling $1.1 million during the quarter.
"The decline in earnings during the quarter was primarily due to the initial impact of the Sagent acquisition and the continued softness in the DOC1 marketplace," said Bob Bowen, CEO of Group 1 Software. "With respect to Sagent, sales pipelines were weaker than originally anticipated due to the three month delay in closing the acquisition. Nonetheless, our early experience with Sagent makes us enthusiastic about the market potential of the powerful combination of the Sagent data integration and business geographics technologies and Group 1's core data quality and customer communications management solutions. We see stronger pipelines across both of our operating divisions - including domestic and international opportunities for Sagent products - and we are optimistic about the current quarter."
"Our guidance for the fourth fiscal quarter ending March 31, 2004 is for revenue in the range of $34-$36 million and net earnings of $2.5-$3.5 million," said Mark Funston, CFO of Group 1 Software.
The company will hold a conference call at 4:30 PM 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 solutions that help over 3,000 organizations worldwide maximize the value of their customer and other data. Group 1 provides industry-leading technologies that allow businesses to cleanse and enrich their corporate data, generate personalized customer communications and integrate and deliver data across the enterprise. These technologies are essential components of enterprise applications including customer relationship management (CRM), enterprise resource planning (ERP) and business intelligence systems. Founded in 1982 and headquartered in Lanham, Maryland, Group 1 offers solutions utilized by leaders in the financial services, banking, GIS/mapping, retail, telecommunications, utilities, insurance and other industries. The company's customer base includes such recognized names as Entergy, GEICO, L.L. Bean, MapQuest, QVC, Siemens, Wal-Mart and Wells Fargo. For more information about Group 1, visit the company's Web site athttp://www.g1.com.
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 "makes us enthusiastic", "seem stronger", "are optimistic", and "guidance" 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 and estimations 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 of Group 1 Software, Inc.
GROUP 1 SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three For the Nine
Month Period Month Period
Ended December 31, Ended December 31,
2003 2002 2003 2002
Revenue:
Software license and related
revenue $14,198 $12,525 $35,507 $33,731
Maintenance and services 17,124 14,165 45,304 41,358
Total revenue 31,322 26,690 80,811 75,089
Cost of revenue:
Software license expense 4,038 3,379 11,024 11,213
Maintenance and service expense 4,821 4,302 13,332 12,681
Total cost of revenue 8,859 7,681 24,356 23,894
Gross profit 22,463 19,009 56,455 51,195
Operating expenses:
Research and development 5,228 3,032 10,952 8,586
Sales and marketing 11,107 8,464 27,037 23,712
General and administrative 4,579 3,999 11,104 10,868
Total operating expenses 20,914 15,495 49,093 43,166
Income from operations 1,549 3,514 7,362 8,029
Non-operating income
Interest income 187 276 1,008 879
Interest expense (6) (97) (31) (289)
Other non-operating income
(expense) (141) (31) 352 (222)
Total non-operating income 40 148 1,329 368
Income before provision
for income taxes 1,589 3,662 8,691 8,397
Provision for income taxes 613 1,321 3,110 3,112
Net income 976 2,341 5,581 5,285
Preferred stock dividend
requirements - - - (14) - - - (42)
Net income available to common
stockholders $976 $2,327 $5,581 $5,243
Basic earnings per share $0.07 $0.18 $0.40 $0.41
Diluted earnings per share $0.06 $0.16 $0.35 $0.37
Basic weighted average shares
outstanding 13,865 13,182 13,800 12,858
Diluted weighted average shares
outstanding 15,766 14,959 15,821 14,376
GROUP 1 SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
December 31, March 31,
2003 2003
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 50,685 $ 56,475
Short-term investments,
available-for-sale 7,801 7,712
Trade and installment accounts
receivable, less allowance
of $2,561 and $1,755 22,963 18,834
Deferred income taxes 1,886 2,130
Prepaid expenses and other
current assets 4,335 4,067
Total current assets 87,670 89,218
Installment accounts receivable,
long-term 11 39
Property and equipment, net 5,723 4,707
Computer software, net 25,458 23,490
Goodwill 24,287 12,716
Other assets 6,025 206
Total assets $ 149,174 $ 130,376
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,926 $ 1,358
Current portion of note payable and
capital lease obligations 457 371
Accrued expenses 10,720 7,033
Accrued compensation 8,093 9,454
Current deferred revenues 35,938 31,241
Total current liabilities 57,134 49,457
Note payable and capital lease
obligations, net of current portion 443 350
Deferred revenues, long-term 1,863 315
Deferred income taxes 4,104 4,694
Total liabilities 63,544 54,816
Commitments and contingencies
Stockholders'equity:
6% cumulative convertible preferred
stock $0.25 par value; 1,200 shares
authorized; no shares issued
(aggregate involuntary liquidation
preference $950) - - - - - -
Common stock $0.50 par value; 200,000 and
50,000 shares authorized; 15,156
and 14,902 shares issued 7,578 7,451
Additional paid in capital 37,309 34,951
Retained earnings 43,200 37,619
Accumulated other comprehensive income 2,636 184
Less treasury stock, 1,271 and 1,246
shares, at cost (5,093) (4,645)
Total stockholders' equity 85,630 75,560
Total liabilities and stockholders'
equity $ 149,174 $ 130,376