Press Release
- Date:
- Thursday, February 03, 2000
- Contact:
- Mark Funston
- Phone:
- (301) 731-2300
- Email:
- mark_funston@g1.com
Group 1 Software Reports Record Third Quarter Results
EPS Increases 95% to $0.43 from $0.22
Lanham, MD, February 3, 2000 — Group 1 Software (Nasdaq: GSOF) today reported record results for its third fiscal quarter ending December 31, 1999. The Company reported revenues of $20.2 million, up 12% over the prior year's third quarter revenues of $18.0 million. Net income available to common stockholders doubled to $1.7 million or $0.43 per share from $0.8 million or $0.22 per share the prior year.
For the first nine months of the fiscal year, the Company reported a 27% increase in revenue to $56.3 million, from $44.5 million in the same period the prior year. Net income available to common stockholders for the first nine months was $3.2 million or $0.83 per share, compared with $1.2 million or $0.35 per share reported for the prior year.
"Sales of our DOC1 electronic document composition products continued their strong revenue growth while Y2K related issues slowed sales of data quality products" remarked Robert Bowen, Group 1 Software's CEO. Bowen added that he was very pleased with Group 1's performance for the quarter, especially in light of the reluctance of many organizations to begin new IT initiatives due to general concerns with Y2K.
Cash flow also continued strong. Cash and short-term investments totaled $25.5 million (approximately $6.40 per share) at December 31, 1999 compared with $22.4 million at September 30, 1999 and $14.8 million at March 31, 1999.
"We continue to invest heavily in Internet initiatives in both electronic document composition and data quality" Bowen commented. "In data quality, we will make available to e-commerce sites our industry-leading name and address verification technology for on-line application. We will also offer a wealth of additional demographic and geographic data to maximize Web-marketing effectiveness. In electronic document composition, we will continue to enhance the electronic document delivery and online presentment capabilities of our industry leading DOC1 system."
Group 1 Software is a leading provider of software for data quality, mailing efficiency, database marketing, and electronic document composition applications. Group 1 supports UNIX, Windows NT and other operating systems and various computers including IBM mainframe, AS/400, PC, Digital, HP and others. Group 1 has offices throughout the US and in Canada, the United Kingdom, Europe and Latin America, and representatives elsewhere in the world.
Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation reform Act of 1995. The words "continue to invest," and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. 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)
For the Three Month For the Nine Month Period Ended Period Ended December 31, December 31, 1999 1998 1999 1998
Revenue: Software licenses and related revenue $9,292 $9,377 $25,410 $21,082 Maintenance and service revenue 10,951 8,599 30,860 23,384
Total revenue 20,243 17,976 56,270 44,466
Cost of revenue: Software licenses expenses 3,370 3,194 9,830 7,923 Maintenance and service expenses 3,356 3,256 10,820 9,124
Total cost of revenue 6,726 6,450 20,650 17,047
Gross profit 13,517 11,526 35,620 27,419
Operating expenses: Research, development and indirect support 1,024 674 2,829 1,893 Sales and marketing 6,216 5,997 18,415 15,313 General and administrative 3,690 3,543 9,687 8,141
Total operating expenses 10,930 10,214 30,931 25,347
Income from operations 2,587 1,312 4,689 2,072
Non-operating income Interest income 322 85 743 283 Interest expense (6) (36) (69) (63) Other non-operating 28 (6) 21 (60)
Total non-operating income 344 43 695 160
Income from operations before provision for income taxes and minority interest 2,931 1,355 5,384 2,232 Provision for income taxes 1,212 521 2,176 847 Minority interest in net income of consolidated subsidiary ---- ---- ---- 83 Net income 1,719 834 3,208 1,302 Preferred stock dividend requirements 14 14 42 72 Net income available to common stockholders $1,705 $820 $3,166 $1,230 Basic earnings per share $0.45 $0.22 $0.85 $0.36 Diluted earnings per share $0.43 $0.22 $0.83 $0.35 Basic weighted average shares outstanding 3,772 3,719 3,740 3,437 Diluted weighted average shares outstanding 3,995 3,798 3,820 3,505
GROUP 1 SOFTWARE, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except par value)
December March 31, 31, 1999 1999
ASSETS Current assets: Cash and cash equivalents $14,713 $13,378 Short-term investments 10,771 1,471 Trade and installment accounts receivable, less allowance of $4,316 and $3,383 16,396 22,596 Deferred income taxes 3,451 3,039 Prepaid expenses and other current assets 3,380 3,149 Total current assets 48,711 43,633 Installment accounts receivable, long-term 1,392 2,221 Property and equipment, net 3,954 3,678 Computer software, net 21,651 22,559 Other assets 4,966 5,708 Total assets $80,674 $77,799
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,823 $2,136 Current portion of long-term debt 107 99 Accrued expenses 7,580 5,647 Accrued compensation 5,284 7,095 Current deferred revenues 22,523 20,863
Total current liabilities 37,317 35,840 Long-term debt, net of current portion 117 198 Deferred revenues, long-term 1,430 2,670 Deferred income taxes 2,674 3,670
Total liabilities 41,538 42,378
Commitments and contingencies Stockholders' equity: 6% cumulative convertible preferred stock $0.25 par value; 200 shares authorized; 48 issued and outstanding 916 916 Common stock $0.50 par value; 14,000 shares authorized; 4,118 and 4,045 issued and outstanding 2,059 2,023 Additional paid in capital 25,606 25,071 Retained earnings 12,617 9,451 Accumulated comprehensive income 33 14 Less treasury stock, 324 and 322 shares, at cost (2,095) (2,054) Total stockholders' equity 39,136 35,421 Total liabilities and stockholders' equity $80,674 $77,799