Best Software Announces Results for the Second Quarter; Highlights Include Core Product Launches and Best! Imperativ HRMS Customer Wins.RESTON Reston, uninc. city (1990 pop. 48,556), Fairfax co., N Va., a planned community established in 1961. A suburb of Washington, D.C., Reston is organized in a series of residential villages and commercial areas. , Va.--(BUSINESS WIRE)--July 21, 1999-- Best Software, Inc. (Nasdaq: BEST), a leading provider of corporate resource management solutions, today announced financial results for the second quarter ended June June: see month. 30, 1999. In the quarter, Best Software generated record revenue of $21.7 million and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.20 (exclusive of amortization). Best Software's revenue grew 33% to $21.7 million compared to $16.3 million in the quarter ended June 30, 1998 with strong contributions coming from its Best! Imperativ(tm) human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. and payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. solutions. License fees and royalties rose to $10.2 million from $8.3 million. Services revenue increased to $11.4 million from $7.9 million. "We are pleased to deliver another quarter of 30 percent revenue and earnings growth," said Tim Davenport Davenport, city (1990 pop. 95,333), seat of Scott co., E central Iowa, on the Mississippi River; inc. 1836. Bridges connect it with the Illinois cities of Rock Island and Moline; the three communities and neighboring Bettendorf, Iowa, are known as the Quad Cities. , president, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and chairman. "Our growth is a result of the strong performance of all our lines of business, especially the continued ramp-up of our Best! Imperativ product line." Comparing the quarterly results on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis before the effect of acquisition-related amortization charges: Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. grew 39% to $3.4 million and operating income margin at 16% compared with operating income of $2.4 million in the second quarter of 1998; Net income was $2.4 million, a 31% increase over net income of $1.8 million in the prior period; and diluted earnings per share were $0.20 compared with diluted earnings per share of $0.15 in the quarter ended June 30, 1998, an increase of 33%. The Company's pro forma financial results for the three- and six-month periods exclude the following acquisition-related charges: the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of in-process research and development ("IPR&D") related to the acquisition of the assets of OmniVista Software Corporation in March 1999, the write-off of IPR&D related to the acquisition of HR Management Software GmbH GmbH Gesellschaft mit Beschränkter Haftung (German: limited liability company; business entity) in March 1998, the amortization of acquired intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and the related tax effects. As reported for the June 1999 quarter, operating income was $2.8 million compared with $2.1 million in the second quarter of 1998. Net income was $2.1 million compared with $1.7 million in the prior period. Diluted earnings per share were $0.17 compared with $0.14 in the quarter ended June 30, 1998. Revenue for the first half of 1999 was $41.7 million compared to $30.0 million for the same period in 1998, an increase of 39%. Comparing the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. results on a pro forma basis before the effect of acquisition-related write-offs and amortization charges: Operating income for the six-month period ended June 30, 1999 was $6.6 million compared with $5.0 million for the same period in 1998, an increase of 33%; net income was $4.8 million, a 26% increase over net income of $3.8 million in the prior period; and diluted earnings per share were $0.39 compared with diluted earnings per share of $0.32 in the six months ended June 30, 1998. As reported for the six months ended June 30, 1999, operating income was $4.5 million compared with $881,000 in the same period of 1998. Net income was $3.5 million compared with $1.3 million in the prior period. Diluted earnings per share were $0.29 compared with $0.10. Highlights since the first quarter earnings release include: -- Best Software was named one of Business Week Magazine's Top 100 Fastest Growing Small Cap stocks, debuting in the annual rankings at No. 43. In June 1999, Best Software also was added to the Russell 2000 index Russell 2000 Index An index measuring the performance of the 2,000 smallest companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States. of small-capitalization Adj. 1. small-capitalization - of stocks of companies with a market capitalization of less than one billion dollars small-cap, small-capitalisation stocks. New Solutions -- In June 1999, the Company introduced FAS Suite(tm), a comprehensive, fully-integrated fixed asset management solution, and FAS FirstStep(tm) an entry-level en·try-lev·el adj. Appropriate for or accessible to one who is inexperienced in a field or new to a market: an entry-level job in advertising; an entry-level computer. solution. FAS Suite combines Best Software's four best-of-breed The best product of its type. Organizations often purchase software from different vendors in order to obtain the best-of-breed for each application area; for example, a human resources package from one vendor and an accounting package from another. products: FAS Asset Accounting(tm), FAS Asset Inventory(tm), FAS Property Tax(tm)and FAS Report Writer(tm) to integrate asset accounting, inventory reconciliation, and property tax compliance. FAS FirstStep simplifies installation, data entry and new company creation, among other key functions. -- In May 1999, the Company launched new roles-based self-service capability for Best! Imperativ Payroll(tm), the latest addition to its award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" Best! Imperativ HRMS HRMS Human Resource Management System HRMS High Resolution Microwave Survey (SETI, Project Phoenix) HRMS High Resolution Mass Spectroscopy HRMS High Resolution Molecular Spectroscopy HRMS Human Resources Management Specialist (tm) solution. The new web-native functionality helps reduce human resources and payroll administration time and expense and adds value by enabling real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. , on-line selection and processing of information by employees and managers. Select New Best! Imperativ HRMS Customers -- In July July: see month. 1999, Best Software announced that OneSoft Corporation, a leading provider of Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the commerce software and vertical-market solutions, implemented Best! Imperativ HRMS just 45 days after OneSoft selected the product to replace its manual benefits and HR administration systems. -- In June 1999, Best Software announced that Kawasaki Kawasaki (käwä`säkē), city (1990 pop. 1,173,603), Kanagawa prefecture, central Honshu, Japan, on Tokyo Bay. Located in the Tokyo-Yokohama industrial area, it has steel mills, shipyards, oil refineries, engineering works, and Motors Corp. USA, a leading manufacturer of powersports Powersports are a subset of the generalized category motorsports. Examples of powersport vehicles are motorcycles, ATVs, snowmobiles and PWCs. One of the defining features of any powersport is the use of an engine, in one form or another. products, chose Best! Imperativ HRMS to replace its in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. system to manage benefits and HR activities for its employees nationwide. Kawasaki expects to implement the administrator role of Best! Imperativ HRMS and then add employee and manager roles-based self-service. -- In June 1999, Best Software announced that FreeMarkets OnLine, Inc., a global leader in creating business-to-business  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. online markets for buyers at Global 1000 corporations, will implement Best! Imperativ HRMS, including employee and manager roles-based self-service modules, to replace a combination of manual HR processes and in-house developed tracking methods using multiple databases. Best Software, with over 50,000 customers worldwide and offices in the US, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , is a leading provider of corporate resource
management solutions which help organizations to better manage their
people, assets and planning. Its scalable, cost-effective cost-effective,n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. solutions complement core accounting systems and support the full spectrum of Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. platforms, including Windows(R) 95, Windows(R) 98, Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. (R), and BackOffice An earlier suite of network server software products from Microsoft that was licensed and supported as one inclusive bundle. The suite was discontinued in late 2001, but some of the underlying products and their client access licenses (CALs) remained as stand-alone products. (R). Best Software will hold an investor conference call today at 5:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . Investors interested in participating should dial 800-260-0719 and reference the Best Software Conference Call. Investors from outside the U.S. or without access to the toll-free number should dial 612-332-1210. NOTE TO EDITORS: Forward looking statements in this release, including statements regarding the delivery and integration of new products and services and expectations for revenue and earnings, are based on information available to the Company as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Such forward looking statements are made only as of the date hereof. The Company's actual results could differ materially from those stated or implied by such forward looking statements due to risks and uncertainties associated with fluctuations in the Company's quarterly operating results, concentration of the Company's product offerings, development risks involved with new products and technologies, competition, and other risk factors disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the Company's filings with the Securities and Exchange Commission. Best Software and the Best logo are registered trademarks and Best! Imperativ, Best! Imperativ HRMS, Best! Imperativ Payroll, FAS Asset Accounting, FAS Asset Inventory, FAS FirstStep, FAS Property Tax, FAS Report Writer and FAS Suite are trademarks of Best Software, Inc. Abra Abra favorite concubine of Solomon. [Br. Lit.: Solomon on the Vanity of the World, Benét, 3] See : Mistresses is a registered trademark of Abra Software, Inc., a wholly-owned subsidiary of Best Software, Inc. Microsoft, Windows, Windows 95, Windows 98, Windows NT, and BackOffice are registered trademarks of Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, . All other trademarks are the property of their respective holders. -0-
Best Software, Inc.
Consolidated Financial Information - Unaudited
Pro Forma Consolidated Statements of Operations
(in thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
---- ---- ---- ----
Pro forma Pro forma Pro forma Pro forma
Revenue:
License fees and
royalties $10,233 $8,339 $19,575 $15,142
Services 11,420 7,914 22,120 14,809
--------- --------- --------- ---------
Total 21,653 16,253 41,695 29,951
--------- --------- --------- ---------
Cost of revenue:
License fees and
royalties 571 455 911 895
Services 3,910 2,807 7,275 4,946
--------- --------- --------- ---------
Total 4,481 3,262 8,186 5,841
--------- --------- --------- ---------
Gross margin 17,172 12,991 33,509 24,110
--------- --------- --------- ---------
Operating expenses:
Sales and marketing 7,531 5,847 15,083 10,551
Research and
development 3,775 2,700 7,115 4,821
General and
administrative
(Note 1) 2,499 2,024 4,670 3,734
--------- --------- --------- ---------
Total 13,805 10,571 26,868 19,106
--------- --------- --------- ---------
Operating income 3,367 2,420 6,641 5,004
Other income, net 531 558 1,122 1,152
--------- --------- --------- ---------
Income before income
taxes 3,898 2,978 7,763 6,156
Income tax provision 1,480 1,130 2,930 2,330
--------- --------- --------- ---------
Net income $2,418 $1,848 $4,833 $3,826
========= ========= ========= =========
Basic earnings per
common share $0.21 $0.16 $0.41 $0.34
========= ========= ========= =========
Diluted earnings per
common share $0.20 $0.15 $0.39 $0.32
========= ========= ========= =========
Basic shares used in
computing earnings
per share 11,722 11,568 11,711 11,276
========= ========= ========= =========
Diluted shares used
in computing earnings
per share 12,173 12,249 12,272 12,052
========= ========= ========= =========
Note 1. For the quarters ended June 30, 1999, and June 30, 1998,
excludes amortization of acquired intangibles of $579,000 and $273,000
respectively. For the six months ended June 30, 1999, excludes $1.2
million related to the write-off of IPR&D related to the acquisition
of the assets of OmniVista Software Corporation in March 1999, and
amortization of acquired intangibles of $929,000. For the six months
ended June 30, 1998, excludes $3.9 million related to the write-off of
IPR&D related to the acquisition of HR Management Software GmbH in
March 1998, and amortization of acquired intangibles of $273,000.
Best Software, Inc.
Consolidated Financial Information - Unaudited
Consolidated Statements of Operations
(in thousands, except per share amounts)
Quarter Ended Six-Months Ended
June 30 June 30
1999 1998 1999 1998
---- ---- ---- ----
Revenue:
License fees and royalties $10,233 $8,339 $19,575 $15,142
Services 11,420 7,914 22,120 14,809
--------- --------- -------- ----------
Total 21,653 16,253 41,695 29,951
--------- --------- -------- ----------
Cost of revenue:
License fees and royalties 571 455 911 895
Services 3,910 2,807 7,275 4,946
--------- --------- -------- ----------
Total 4,481 3,262 8,186 5,841
--------- --------- -------- ----------
Gross margin 17,172 12,991 33,509 24,110
--------- --------- -------- ----------
Operating expenses:
Sales and marketing 7,531 5,847 15,083 10,551
Research and development 3,775 2,700 7,115 4,821
General and administrative 2,499 2,024 4,670 3,734
Amortization of acquired
intangible 579 273 929 273
Write-off of purchased
research and development -- -- 1,200 3,850
--------- --------- -------- ----------
Total 14,384 10,844 28,997 23,229
--------- --------- -------- ----------
Operating income 2,788 2,147 4,512 881
Other income, net 531 558 1,122 1,152
--------- --------- -------- ----------
Income before income taxes 3,319 2,705 5,634 2,033
Income tax provision 1,260 1,040 2,135 770
========= ========= ======== ==========
Net income $2,059 $1,665 $3,499 $1,263
========= ========= ======== ==========
Basic earnings per
common share $0.18 $0.14 $0.30 $0.11
========= ========= ======== ==========
Diluted earnings per
common share $0.17 $0.14 $0.29 $0.10
========= ========= ======== ==========
Basic shares used in
computing earnings
per share 11,722 11,568 11,711 11,276
========= ========= ======== ==========
Diluted shares used in
computing earnings
per share 12,173 12,249 12,272 12,052
========= ========= ======== ==========
Consolidated Condensed Balance Sheets
(In thousands) June 30 December 31
1999 1998
---- ----
Assets:
Cash, cash equivalents and short term
marketable securities $25,316 $46,280
Accounts receivable, net of allowances 9,794 8,198
Other current assets 4,155 3,130
Long term marketable securities 17,656 --
Property and equipment, net 5,180 4,333
Other intangibles 11,407 7,178
Other non-current assets 5,475 5,451
============ =============
Total assets $78,983 $74,570
============ =============
Liabilities and Shareholders' Equity:
Current deferred maintenance and
services revenue $21,053 $19,350
Other current liabilities 13,039 14,394
Non-current deferred maintenance and
services revenue 754 616
Other non-current liabilities -- 125
----------- -------------
Total liabilities 34,846 34,485
----------- -------------
Total shareholders' equity 44,137 40,085
=========== =============
Total liabilities and shareholders'
equity $78,983 $74,570
=========== =============
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