Comshare Reports Second Quarter Results.Business Editors/High-Tech Writers ANN ARBOR Ann Arbor, city (1990 pop. 109,592), seat of Washtenaw co., S Mich., on the Huron River; inc. 1851. It is a research and educational center, with a large number of government and industrial research and development firms, many in high-technology fields such as , Mich.--(BUSINESS WIRE)--Jan. 18, 2001 Comshare Inc. (Nasdaq:CSRE CSRE Comparative Studies in Race and Ethnicity CSRE Closed System Respirator Evaluator ) announced today net income of $.01 million, or $.00 per share, for the quarter ended December December: see month. 31, 2000, compared to net income of $.1 million, or $.01 per share, for the same period one year ago. Total revenue for the second quarter was $14.8 million, compared to $15 million for the same quarter a year ago. The Company also anticipates it will take an estimated $.9 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in the Company's third quarter ended March 31, 2001, reflecting cost reduction actions. "Revenue from our management planning and control products grew 21% in the second quarter, compared to the same quarter a year ago," stated Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the G. Ganster, 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. , "driven by strong sales of our budgeting application, which had 89% license fee growth in the quarter. We continue to see strong demand for enterprise budgeting applications to replace internally-developed spreadsheet spreadsheet Computer software that allows the user to enter columns and rows of numbers in a ledgerlike format. Any cell of the ledger may contain either data or a formula that describes the value that should be inserted therein based on the values in other cells. systems. The recent release of our latest version of MPC (1) (Mobile PC) A handheld or laptop computer. See handheld computer, laptop computer and Ultra-Mobile PC. (2) (MultiPath Channel) See multipath. 4.0 strengthens our product offering and provides what we believe is the first web-based, integrated application for budgeting, planning, consolidation and reporting." "The progress that we are making transitioning our business to the new management planning and control products is masked A state of being disabled or cut off. by the decline in revenue from legacy our products," continued Ganster. "While total license fees declined 5%, license fees of the management planning and control license products grew 27%. For the quarter, legacy license fees declined 40%. Similarly, maintenance revenue declined 2% in total, with the growth in maintenance from the management planning and control applications offset by the decline in legacy maintenance. Implementation services revenue, which reflects the product mix of new name sales, grew 5% on the continuing strength of budgeting application sales." "We have made solid progress in achieving our management planning and control strategic direction," Ganster emphasized. "Total revenue from our management planning and control products was $9.5 million in the second quarter, growing 21% over the same period a year ago and representing 64% of total revenue." "I was also pleased by the resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of growth in license fees in our direct operations, where license fees grew 10% in the second quarter over the same quarter a year ago," stated Ganster. "While we continued to experience declining license fees from our foreign distributors, the declines in the recent quarters have been in the legacy products. License fees of our budgeting application by the distributors are growing strongly, up 102% this quarter compared to the same quarter a year ago." "Our strategy during this business transition has been to invest the profits of the legacy business to build the new management planning and control business, operating basically at breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations ," continued Ganster. "The decline in legacy revenue has led to increased variability in total revenue and hampers our ability to operate at breakeven. As a result, we are reducing selective costs going forward, and we expect to trim approximately $2 million of annual personnel and other expenses in the third quarter. We are continuing to invest in the management planning and control business with a view towards its continued growth." "In addition to the December release of MPC 4.0, we just released Comshare Decision 4.0, our web-based platform for custom business intelligence solutions," added Ganster. "Since Decision is the heart and soul of our MPC product suite, it can be used to design special analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. Psychoanalytic. solutions that work seamlessly with the Comshare systems our current customers have. And because of Decision's advanced open architecture, it can also easily leverage mainstream data warehousing See data warehouse. data warehousing - data warehouse technology, including that used for ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. and CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. systems, allowing customers to extend their use of Comshare technology." During the quarter, new-name customers for Comshare's management planning and control solutions included companies like AKZO-PQ Silica silica or silicon dioxide, chemical compound, SiO2. It is insoluble in water, slightly soluble in alkalies, and soluble in dilute hydrofluoric acid. Pure silica is colorless to white. ; Dana Corporation, Spicer Light Axle axle Pin or shaft on or with which wheels revolve; with fixed wheels, one of the basic simple machines for amplifying force. Combined with the wheel, in its earliest form it was probably used for raising weights or water buckets from wells. Group; DoubleClick; EMI Records EMI Records is a record label, founded by EMI in 1972 as the successor label to the Columbia label. The global success that EMI enjoyed with pop music in the 1960s also exposed trade mark issues as EMI only had the rights to some of its trade marks, most notably His Master's Voice UK; Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony UK; OneSource Information Services See Information Systems. , Inc.; Patagon.com; Transco LNG LNG (liquefied natural gas): see under natural gas. Storage and Weigh-Tronix, Inc. In December Comshare was ranked as one of the nation's top 100 customer-centric companies according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the first-ever "Innovation 100" research study coproduced by Information Week magazine and Cap Gemini Ernst & Young. "Comshare was the only financial analytic software firm to make the ranking," commented Ganster, "We were pleased to be recognized for our customer-centric innovation because we believe that we have had a strong customer focus throughout our 35 year history." "Comshare has made great progress building a new business around management planning control," concluded Ganster. "What gives me confidence is that our budgeting product, which is at the heart of the new business, is growing strongly on a worldwide basis. Our focus is to build on that foundation to achieve a market leadership position in the broader application of management planning and control." Comshare will hold a conference call chaired by Dennis Ganster today at 5:30 p.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ). Investors can access the call from the Investors section of the Comshare web site, www.comshare.com, or by dialing 212/271-4737. If you are unable to listen to the live call, a replay will be available for 48 hours and can be accessed by dialing 800/633-8284 with access code 17569927. The replay will also be on Comshare's web site for 90 days. About Comshare Comshare, Incorporated is a leading provider of e-business software applications for management planning and control (MPC), which comprises planning, budgeting, financial consolidation, management reporting and analysis. Comshare's MPC applications deliver business-critical information over the Web that can be used to make sound planning and management decisions. In business for 35 years, Comshare is one of the top independent software companies, with customers around the world, many of which are Fortune 500 and Financial Times Top 1000 companies. Comshare is a Microsoft Data Warehousing Alliance Platinum Partner, an IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Business Partner, an Oracle Business Alliance Partner, a mySAP.com Software Partner and a Hyperion Alliance Partner. For more information on Comshare, call 800/922-7979, send e-mail to info@comshare.com or visit Comshare's Web site at www.comshare.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Certain information in this press release contains "forward looking statements" within the meaning of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , including those concerning the Company's future results, new market and business opportunities, strategy and product releases. Actual results could differ materially from those in the forward looking statements due to a number of uncertainties, including, but not limited to, the demand for the Company's products and services; the size, timing and recognition of revenue from significant orders; the impact that cost reductions may have on the Company's revenues and operating results; increased competition and pricing pressures from competitors; the Company's success in and expense associated with developing, introducing and shipping new products; new product introductions and announcements by the Company's competitors; the level of interest and success of the Company's distributors in marketing and selling the Company's products; changes in Company strategy; product life cycles; the cost and continued availability of third party software and technology incorporated into the Company's products, including the impact of the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the license for Essbase in December 2002; the impact of rapid technological advances, evolving industry standards and changes in customer requirements, including the impact on the Company's revenues of Microsoft's OLAP (OnLine Analytical Processing) Decision support software that allows the user to quickly analyze information that has been summarized into multidimensional views and hierarchies. OLAP tools are used to perform trend analysis on sales and financial information. database; the overall competition for key employees; cancellations of maintenance and support agreements; software defects; changes in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ; fluctuations in foreign exchange rates; the ability of the Company to generate sufficient future taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. or to execute available tax strategies required to realize deferred tax assets; economic conditions generally or in specific industry segments. The level of annual expense reductions resulting for cost reduction actions may vary due to a number of factors, including unanticipated increases in costs resulting from such actions. In addition, a significant portion of the Company's revenue in any quarter is typically derived from non-recurring license fees, a substantial portion of which is booked in the last month of a quarter. Since the purchase of the Company's products is relatively discretionary and generally involves a significant commitment of capital, in the event of any downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in any potential customer's business or the economy in general, purchases of the Company's products may be deferred or canceled. Further, the Company's expense levels are based, in part, on its expectations as to future revenue and a significant portion of the Company's expenses do not vary with revenue. As a result, if revenue is below expectations, results of operations are likely to be materially, adversely affected. Note to Editors: Comshare is a registered trademark; Comshare BudgetPLUS, Comshare DecisionWeb, Comshare Decision, Comshare FDC FDC - Floppy Disk Controller , Comshare Planning and Comshare Management Reporting and Analysis are trademarks of Comshare, Inc. All other trademarks are the property of their respective holders.
COMSHARE, INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited; in thousands, except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
--------------------- --------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenue
Software licenses $ 5,308 $ 5,566 $ 10,011 $ 10,868
Software maintenance 5,899 6,006 11,740 11,754
Implementation,
consulting and
other services 3,618 3,451 8,517 6,907
-------- -------- -------- --------
Total revenue 14,825 15,023 30,268 29,529
Costs and expenses
Selling and
marketing 5,803 5,932 11,264 11,749
Cost of revenue
and support 5,951 5,733 12,732 10,971
Internal research and
product development 2,085 2,136 4,141 4,286
General and
administrative 1,290 1,472 2,722 2,951
-------- -------- -------- --------
Total costs
and expenses 15,129 15,273 30,859 29,957
-------- -------- -------- --------
Loss from operations (304) (250) (591) (428)
Other income (expense)
Interest income, net 373 330 798 694
Exchange gain (loss) (61) 10 (76) (94)
-------- -------- -------- --------
Total other income 312 340 722 600
Income before taxes 8 90 131 172
Provision for
income taxes 3 31 48 61
-------- -------- -------- --------
Net income $ 5 $ 59 $ 83 $ 111
======== ======== ======== ========
Shares used in
basic EPS
computation 9,790 9,604 9,785 9,623
======== ======== ======== ========
Shares used in
diluted EPS
computation 9,833 9,735 9,926 9,685
======== ======== ======== ========
Net income per
common share -
basic & diluted $ 0.00 $ 0.01 $ 0.01 $ 0.01
======== ======== ======== ========
COMSHARE, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
December 31, June 30,
2000 2000
--------------- ---------------
Assets (unaudited) (audited)
Current assets
Cash and cash equivalents $22,163 $29,506
Accounts receivable, net 19,578 17,328
Other current assets 3,375 3,056
------- -------
Total current assets 45,116 49,890
Property and equipment, net 1,645 1,885
Deferred income taxes 6,392 5,845
Other assets 2,434 2,526
------- -------
Total assets $55,587 $60,146
======= =======
Liabilities and shareholders' equity
Current liabilities
Deferred revenue $11,182 $12,178
Other current liabilities 8,905 12,229
------- -------
Total current liabilities 20,087 24,407
Long-term debt 114 599
Other liabilities 4,170 4,249
Shareholders' equity 31,216 30,891
------- -------
Total liabilities and
shareholders' equity $55,587 $60,146
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