ROSS SYSTEMS REPORTS FIRST QUARTER RESULTS
ROSS SYSTEMS REPORTS FIRST QUARTER RESULTS REDWOOD CITY, Calif., Oct. 27 /PRNewswire/ -- Ross Systems, Inc.
(NASDAQ: ROSS) today announced results for the first quarter of fiscal 1993, ended Sept. 30.
Revenues for the quarter increased from $15.5 million the prior year to $16.5 million in the current year. In the quarter, the company accrued charges of approximately $6.4 million (pre-tax) associated with the prior acquisitions of Argonaut Information Systems and the Ross Systems Europe companies. Inclusive of these charges, net earnings for the quarter declined from $255,000 in the prior year to a net loss of approximately $6.3 million the current year, resulting in a current quarter loss per share of $0.66 compared to earnings per share of $0.03 for the same period in the prior year. Charges taken in the quarter included approximately $4.7 million associated with earn-out payments relating to the acquisition of Argonaut Information Systems in fiscal 1990. The majority of these charges have been allocated to in-process research and development, and compensation expense. In addition, approximately $1.7 million was accrued in conjunction with incentive compensation associated with the acquisition of the Ross Systems Europe companies in fiscal 1991. Argonaut and the Ross Systems Europe companies both have demonstrated rapid growth since their acquisition. Annualized Argonaut product revenues were in the $2-3 million range when acquired in December 1989. During fiscal 1992, these products generated revenues of nearly $9 million, or 12 percent of the company's revenues. The Ross Systems Europe companies include all the company's European operations excluding those in the United Kingdom. When acquired in fiscal 1990, these companies had generated approximately $4.2 million in revenues in their first 15 months of operations. During fiscal 1992, these same companies generated over $15 million in revenues. In commenting on the quarter, Dennis Vohs, Ross Systems' chairman and CEO, said: "Revenues were less than anticipated while expenses before the acquisition-related charges were somewhat below plan. Historically, our software license revenues have been low during the summer quarter. The increasing size of our European business magnifies this issue because of the holiday impact on contract closings in Europe. While we aren't pleased with the amount of software license revenues closed in the quarter, we are pleased with the current level of prospective sales, which is particularly high in the process manufacturing and human resource systems markets. Financial systems, however, continue to be sluggish in the domestic marketplace. "Revenues from our manufacturing systems grew by 25 percent to $2.7 million, representing 16 percent of total revenues. Acceptance of these products in the U.S. has exceeded our expectations. In continental Europe, where we just completed both the introduction of the product and our first direct sale, our rapidly growing prospect base reflects significant opportunity in this market," he said. "Also during the quarter, the company installed the first UNIX versions of our Renaissance Financial product line in both the U.S. and Europe," said Vohs. Bud Little, Ross' newly named chief financial officer, stated: "It is also important to note that the company invested in launching our Hewlett-Packard line during the quarter. This included both product development and establishing a sales organization. The first product installations on this platform should occur next month, although related software license revenues will probably not be recognized until the third fiscal quarter." The company also announced the restatement of prior year revenues and earnings in order to adopt the AICPA's Statement of Position regarding software revenue recognition and began recognizing revenue from first year maintenance agreements on a ratable basis. The restatement will result in the lowering of fiscal year 1992, ended June 30, revenues from $75,854,000 to $75,470,000, and net earnings from $4,208,000, or $0.42 per share, to $4,022,000, or $0.40 per share. The restatement increased fiscal year 1992 first quarter, ended Sept. 30, 1991, revenues from $15,277,000 to $15,508,000 and net earnings from $184,000, or $0.02 per share, to $255,000, or $0.03 per share. Previously, the company recorded first year maintenance revenue as related software license fees were recognized. Ross Systems, Inc. was among the first companies to offer commercial accounting software in the mid-range market. Its primary focus has been on the Digital VAX market where the company has been a member of Digital's Cooperative Marketing Program (CMP) since 1984. Today, Ross Systems, Inc. develops and markets a broad range of business solutions in six strategic environments: Digital Alpha, VMS and OSF/1, HP-UX, UNIX, and Client/Server. Ross products encompass financial, human resources, and distribution systems as well as manufacturing and public sector applications complemented by a fourth generation application development language. The company has been following a corporate development strategy of broadening the product line and expanding through both internal growth and acquisitions. Ross Systems serves its customers through a network of over 32 offices worldwide. The company's corporate headquarters are located at 555 Twin Dolphin Drive, Redwood City, CA 94065; telephone, 415-593-2500. ROSS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) 3 months ended 9/30/92 9/30/91(a) Revenues: Software produce licenses $ 5,665 $ 6,124 Consulting and other services 5,771 5,146 Maintenance 5,094 4,238 Total 16,530 15,508 Operating expenses: Cost of revenues 7,856 5,717 Sales and marketing 7,501 5,372 Product development 2,461 1,866 General and administrative 2,491 1,894 Charges for in-process research and development 4,091 --- Amortization of other assets 290 280 Total 24,690 15,129 Operating earnings (loss) (8,160) 379 Interest income, net 10 67 Earnings (loss) before inc. taxes (8,150) 446 Income tax expense (benefit) (1,839) 191 Net earnings (loss) $ (6,311) $ 255 Net earnings (loss) per common and common equiv. share $ (0.66) $ 0.03 Common and common equiv. shares used in computing earnings (loss) per common share 9,559 10,094 (a) As restated for change in revenue recognition. ROSS SYSTEMS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands) (unaudited) 9/30/92 6/30/92(a) ASSETS Current assets: Cash and cash equivalents $ 7,741 $ 7,741 Accounts receivable, net 28,272 32,749 Prepaids and other current assets 2,534 1,722 Deferred income taxes 3,190 3,277 Total current assets 41,737 45,489 Property and equipment 6,179 5,991 Computer software costs 7,316 6,521 Other assets 4,905 4,357 Total $ 60,137 $ 62,358 Liabilities and Shareholders' Equity Current liabilities: Current installments of debt $ 317 $ 250 Accounts payable 4,150 4,210 Accrued expenses 13,034 7,279 Income taxes payable --- 1,328 Deferred revenue 13,698 14,348 Total current liabilities 31,199 27,415 Long-term debt, less current installments 1,334 1,128 Deferred income taxes 2,886 2,886 Total liabilities 35,419 31,429 Shareholders' equity: Common stock 40,900 40,640 Accumulated deficit (16,464) (10,154) Cumulative translation adjustment 282 443 Total shareholders' equity 24,718 30,929 Total $ 60,137 $ 62,358 (a) As restated for change in revenue recognition. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) RESTATED TO INCLUDE IMPACT OF SOP 91-1 Three months ended Total 9/30/91 12/31/91 3/31/92 6/30/92 Fiscal Revenues: 1992 Software product license $ 6,124 $ 9,830 $ 7,490 $11,859 $35,303 Consulting and other services 5,146 5,380 5,889 6,362 22,777 Maintenance 4,238 4,273 4,326 4,553 17,390 Total 15,508 19,483 17,705 22,774 75,470 Operating expenses: Cost of revenues 5,717 6,234 6,284 6,764 24,999 Sales and marketing 5,372 6,795 5,947 7,973 26,087 Product development 1,866 2,432 2,439 2,370 9,107 General and admin. 1,894 1,727 1,875 2,363 7,859 Amortization of other assets 280 246 228 213 967 Total ? 15,129 17,434 16,773 19,683 69,019 Operating earnings 379 2,049 932 3,091 6,451 Interest income, net 67 34 10 84 195 Earnings before income taxes 446 2,083 942 3,175 6,646 Income tax expense 191 913 406 1,114 2,624 Net earnings $ 255 $ 1,170 $ 536 $ 2,061 $ 4,022 Net earnings per common and common equiv. share $ 0.03 $ 0.12 $ 0.05 $ 0.20 $ 0.40 Common and common equiv. shares used in computing earnings per common share 10,094 10,116 10,240 10,055 10,126 -0- 10/27/92 R /CONTACT: Dennis Vohs, 415-593-2500, or Denise O'Connor, 404-851-1872, both of Ross Systems, or Barbara Kline of BKMPR, 415-694-7991, for Ross Systems/ (ROSS) CO: Ross Systems, Inc. ST: California IN: CPR SU: ERN
BR-BN -- AT002 -- 5324 10/27/92 11:04 EST
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|Date:||Oct 27, 1992|
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