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 ANN ARBOR, Mich., Oct. 21 /PRNewswire/ -- Comshare, Incorporated (NASDAQ: CSRE) announced today net income of 12 cents a share and revenue of $23.7 million for the first quarter, compared with 13 cents a share and revenue of $28.7 million for the year earlier quarter. Net income of 12 cents a share was in line with the highest of analyst expectations for the quarter.
 The fluctuation in the relationship of foreign currencies to the U.S. dollar from first quarter last year to first quarter this year accounted for most of the reported revenue decline. On a comparable currency basis, revenue would have declined approximately $700,000, or 3 percent, with the decrease stemming from mainframe software attributable to the continuing industry slowdown in sales of mainframe computer software.
 "Our mainline EIS and MSS (executive information and management support system) business performed very well for the quarter," said T. Wallace Wrathall, senior vice president and chief financial officer. "The client/server and personal computer software side of our EIS/MSS business grew, and while the mainframe software side continued to decline, the rate of decline lessened from recent quarters." At the end of June, the company simultaneously released a new Windows version of Commander EIS for local area networks (LAN) and Commander Profit, a new application for profitability analysis and reporting that is built on top of Commander EIS LAN. "We are pleased to see a positive effect from those introductions in such a short time," said Wrathall.
 In the company's financial consolidation and reporting application area of business, the Windows version of Commander FDC was delayed from a first quarter release but is scheduled to ship in November. "As might be expected, we did not attain the record setting growth in this area that we have experienced in recent quarters as some companies delayed their purchases while waiting for the availability of the Windows version," said Wrathall.
 "Our ARTHUR applications for merchandise planning and performance tracking in the retail industry continued their steady, good revenue growth," said Wrathall. "To advance our leadership in this vertical market, we just announced at a major conference and exposition for retailers that we are extending our set of ARTHUR applications to include a merchandise allocation system, which will be available in early calendar 1994."
 Expenses would have been reduced $1.4 million from the year earlier quarter on a currency adjusted basis instead of the reported $5.1 million. The $1.4 reduction was due to a $2.3 million decrease in expenses that resulted from past restructuring actions that was partially offset by a $900,000 increase in software amortization. The increase in software amortization resulted from the numerous products that went into commercial release during the fourth quarter last year.
 Income from operations would have increased approximately $800,000 compared with the year earlier quarter on a comparable currency basis instead of the reported $127,000. "Comparative currency effects in the other quarters of this fiscal year should be less severe," said Wrathall, "because the relationship of foreign currencies to the US dollar changed about this time last year."
 Interest expense increased compared with the quarter a year earlier due to the higher interest rate incurred by the company when it renegotiated its lending agreements last April. The banks with which the company has its lending agreements have now agreed to reduce the interest rate for the company effective Nov. 1, and to extend the maturity date of the borrowing agreements from August 1994 to April 1995, based on recent financial results. "Positive cash flow from operations this quarter and in the future will reduce debt and the lower interest rate on our loans will contribute to reduced interest expense in the future," said Wrathall.
 The exchange gain returned to a more normal level of $41,600. The unusually high $216,900 for the quarter a year earlier was principally due to Britain's withdrawal from the European Exchange Rate Mechanism.
 The effective tax rate was lower this quarter compared with the year earlier quarter. "Results from our improved operating performance enabled us to take advantage of tax planning, and assuming continued improved performance we should see a continuation of a lowered tax rate," said Wrathall.
 During the quarter, the company entered into an agreement to sell undeveloped land that it owns in an Ann Arbor technology park to the University of Michigan. The scheduled closing date for the real estate transaction is next week. According to Wrathall, the property is being sold for cash and at a profit. "This is the first step in reexamining our facilities to match them to our future needs," said Wrathall. "The cash from the sale of the land will be used to offset any costs associated with facilities downsizing that we may undertake this year, and to reduce our debt."
 Comshare, Incorporated is a full-service international software company that develops, markets and supports business intelligence applications, such as financial reporting and consolidation, profit management, enterprise budgeting and management reporting, as well as EIS. Comshare is recognized for creating the EIS market, of which it holds a 50 percent share worldwide according to International Data Corp., a market research firm. Founded in 1966 and headquartered in Ann Arbor, the company has an installed customer base of more than 2,000 corporations worldwide and is one of the top 50 independent software vendors as ranked by several computer industry trade publications.
 Comshare, Incorporated
 Consolidated Statement of Income
 Three Months Ended
 September 30,
 1993 1992
 ---- ----
 Software licenses $ 7,832,700 $ 11,060,200
 Software maintenance 11,051,900 11,595,000
 Professional services 4,449,400 5,637,000
 Remote processing and other 395,900 361,100
 ------------ ------------
 23,729,900 28,653,300
 Costs and expenses:
 Selling and marketing 11,032,500 14,401,000
 Cost of revenue and support 4,204,300 5,733,200
 Cost of software amortization 3,008,200 2,261,200
 Internal research
 and product development 5,280,600 6,168,400
 Internally capitalized software (3,512,300) (3,714,900)
 General and administrative 2,719,600 2,934,800
 ------------ ------------
 22,732,900 27,783,700
 ------------ ------------
 Income from operations 997,000 869,600
 Other income (expense):
 Interest income 28,300 79,900
 Interest expense (139,900) (71,000)
 Exchange gain 41,600 216,900
 ------------ ------------
 (70,000) 225,800
 ------------ ------------
 Income before taxes 927,000 1,095,400
 Provision for income taxes 269,900 383,000
 ------------ ------------
 Net income $ 657,100 $ 712,400
 ============ ============
 Weighted average number of
 common and dilutive
 common equivalent shares 5,368,200 5,306,600
 ============ ============
 Net income per common share $.12 $.13
 ===== =====
 NOTE: Certain amounts in the prior period financial statements have been reclassified to conform with the current presentation.
 -0- 10/21/93
 /CONTACT: T. Wallace Wrathall, 313-769-6177, or Ricia Hughes, 313-769-6068, both of Comshare/

CO: Comshare, Incorporated ST: Michigan IN: CPR SU: ERN

KE -- DE040 -- 5496 10/21/93 18:44 EDT
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Publication:PR Newswire
Date:Oct 21, 1993

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