Lawson Software Reports Fourth Quarter Fiscal 2008 Financial Results
Company posts more than $100 million increase in annual revenues
ST. PAUL, Minn.--(BUSINESS WIRE)--July 10, 2008--Regulatory News:
Lawson Software, Inc. (Nasdaq: LWSN) today reported financial
results for its fourth quarter of fiscal year 2008, which ended May
31, 2008. Lawson reported GAAP (generally accepted accounting
principles) revenues for the quarter of $233 million, up 9 percent
from revenues of $212.9 million in its fiscal 2007 fourth quarter. The
revenue increase was primarily driven by 14 percent growth in
maintenance revenues resulting from high customer renewal rates at
standard annual price increases and new customer contracts. License
fees and consulting revenues also grew by 3 percent and 8 percent
respectively. Currency fluctuations had a positive impact on all lines
of revenue.
Fourth quarter GAAP net income was $3.7 million, or $0.02 per
diluted share, compared with net income of $8.1 million, or $0.04 per
diluted share, in the fourth quarter of fiscal 2007. Operating income
of $17.5 million nearly doubled year-over-year, offset by a decrease
in other income and an increase in the tax provision. Other income
declined due to lower investment yields and a non operating impairment
charge of $6.1 million recorded in other expenses to reduce the fair
value of auction rate securities held by the company that have
subsequently been sold, which is further described below. The
impairment charge impacted net earnings by $0.03 per diluted share.
Currency fluctuations had a nominal negative impact of less than $0.01
on net earnings per diluted share. Refer to Table 1 attached to this
release for a summary of the impact of currency fluctuation to
Lawson's year-over-year performance.
Included in the reported GAAP net income and earnings per share
results are pre-tax expenses of $6.8 million for amortization of
acquired intangible assets, amortization of purchased maintenance
contracts, purchase accounting impact on consulting costs,
restructuring charges, the $6.1 million impairment charge for auction
rate securities and $2.1 million of non-cash stock-based compensation.
Excluding these expenses and including $0.4 million of maintenance and
consulting revenue impacted by purchase accounting adjustments made to
the opening deferred revenue balances acquired from the former
Intentia International AB and other acquisitions, non-GAAP net income
for the fourth quarter of fiscal 2008 was $17.6 million, or $0.10 per
diluted share. Non-GAAP earnings per diluted share of $0.10 increased
year over year from $0.08 in the fourth quarter of fiscal 2007."Our Q4 results once again demonstrate that Lawson is delivering
on our commitments to customers and shareholders," said Harry Debes,
Lawson president and CEO. "Our company is getting stronger and the
market is responding to our message. By focusing on our key verticals,
we grew software contracting to more than $51 million for the quarter,
the highest contracting for any quarter in company history. And for
the year, we made substantial progress by introducing many new
products and enhancements. We grew our license revenues by 25 percent
while deferred license revenues also increased more than 50 percent.
We substantially improved our profitability and we repurchased $106
million of our shares. We still have work to do to reach our
best-in-class profitability targets, but we believe it's clear that
we've demonstrated that we are more than capable of reaching our goals
by executing against our plans with consistency."
12-Months Ended May 31, 2008
GAAP revenues for the 12 months ended May 31, 2008, were $851.9
million, up 14 percent from revenues of $750.4 million in fiscal 2007.
GAAP net income was $13.7 million, or $0.08 per diluted share,
improving from a net loss of $20.9 million, or $0.11 per share loss a
year ago. The primary reason for the increase in net income in the
12-month period was revenue growth of $101.5 million, driven largely
by organic growth in license fees and maintenance revenues and
positive year-over-year impact due to currency fluctuations. Currency
fluctuations also inflated expenses incurred outside the U.S. The
company estimates currency fluctuations had a negative impact of $0.03
on net earnings per diluted share for the 12-month period.
Included in the reported 12-month GAAP results are pre-tax
expenses of $25.3 million for amortization of acquired intangible
assets, amortization of purchased maintenance contracts, purchase
accounting impact on consulting costs, reductions to pre-merger claim
reserves, restructuring charges, $18.4 million of impairment charges
for auction rate securities and $6.7 million of non-cash stock-based
compensation. Excluding these expenses and including $1.7 million of
maintenance and services revenue impacted by purchase accounting
adjustments made to the opening deferred revenue balances acquired
from the former Intentia International AB and other acquisitions,
non-GAAP net income for the 12 months ended May 31, 2008, was $59.6
million, or $0.33 per diluted share. Non-GAAP earnings per diluted
share of $0.33 increased year over year from $0.19 in fiscal 2007.
Financial Guidance
For the first quarter of fiscal 2009, which ends Aug. 31, 2008,
the company estimates total revenues of $195 million to $200 million.
The company anticipates GAAP fully diluted earnings per share will be
$0.02 to $0.04. Non-GAAP fully diluted earnings per share are
forecasted to be between $0.06 and $0.07, excluding approximately $8
million of pre-tax expenses related to the amortization of
acquisition-related intangibles, amortization of purchased maintenance
contracts, stock-based compensation charges and purchase accounting
adjustments for acquired deferred revenue balances.
For fiscal 2009, which ends May 31, 2009, the company estimates
total revenues of $920 million to $925 million. The company
anticipates GAAP fully diluted earnings per share of $0.28 to $0.32.
Non-GAAP fully diluted earnings per share are forecasted to be between
$0.43 and $0.47 excluding approximately $36 million of pre-tax
expenses related to the amortization of acquisition-related
intangibles, amortization of purchased maintenance contracts,
stock-based compensation charges and purchase accounting adjustments
for acquired deferred revenue balances. The non-GAAP effective tax
rate for fiscal 2009 is anticipated to be between 36 and 39 percent.
Fourth Quarter Fiscal 2008 Key Metrics
-- Cash, cash equivalents, marketable securities and investments
at quarter-end were $488.6 million (including $2.8 million of
restricted cash), compared with $390 million (including $3.3
million of restricted cash) on Feb. 29, 2008.
-- $105.6 million of cash was used to repurchase 11.6 million
shares at an average price of $9.12 in fiscal 2008. No shares
were repurchased in the fiscal 2008 fourth quarter. The
repurchases in fiscal 2008 caused a decline in cash, cash
equivalents, marketable securities and investments compared
with $561.3 million (including $7.4 million of restricted
cash) on May 31, 2007.
-- On July 10, 2008 the company announced a $200 million increase
to its current share repurchase authorization, resulting in
$239.5 million available for future stock repurchases as of
July 10, 2008 (see press release dated July 10, 2008, for
details).
-- Total deferred revenues were $312.6 million, including $54.6
million of deferred license revenues, compared with the Feb.
29, 2008, balance of $216 million, including $45.3 million of deferred license revenue. Total deferred revenues increased
primarily due to added deferred maintenance revenues resulting
from the company's May 31 annual contract renewal date for its
customers located in the Americas region. The increase in
deferred license revenue was primarily driven by higher
software contracting in the quarter.
-- Days sales outstanding (DSO) at quarter end were 71, compared
with 85 on Feb. 29, 2008. The DSO decrease was due to
increased receivables collections for maintenance contracts.
-- The company signed 603 deals, compared with 751 in the fourth
quarter of fiscal 2007. Average selling price of all deals
increased to $86,000 compared with $57,000 a year ago.
-- Thirty-eight new customer deals were signed, compared with 40
in the fourth quarter a year ago. Average selling price of new
customer deals increased to $391,000 compared to $228,000 a
year ago.
-- Four deals greater than $1 million and eight deals between
$500,000 and $1 million were signed, compared with two deals
greater than $1 million and seven deals between $500,000 and
$1 million in the fourth quarter fiscal 2007.
-- The Americas region represented 52 percent of total revenue;
Europe, Middle East, and Africa region represented 44 percent
of total revenue; and Asia-Pacific represented 4 percent of
total revenue.
-- Key customer wins: Americas - Community Medical Center;
Central Grocers Cooperative, Inc.; Greenville County Schools;
St. Alexius Medical Center; Total Wine & More; USC Care
Medical Group, Inc. EMEA - Abel und Schafer GmbH & Co.;
LaBrosse et Dupont SA; and Roller GmbH & Co. Asia-Pacific -
Caspex Corporation Limited; and Walker Shop Footwear Limited
Sale of Auction Rate Securities
As of May 31, 2008, the company had a total of $488.6 million in
cash and equivalents including $45.2 million in short-term investments
which consist of investments in auction rate securities. These auction
rate securities have a par value of $63.7 million. Subsequent to May
31, 2008 the company sold all of its investments in auction rate
securities for cash proceeds of $45.2 million. During the fourth
quarter, the company reclassified the auction rate securities from
long-term investments to short-term investments and recorded an
additional $6.1 million impairment charge on the securities, including
$2.9 million which had previously been recorded as a temporary
impairment as unrealized losses in stockholders' equity. In total, the
company has recorded impairment charges on its auction rate securities
of $18.4 million as non-operating losses in other expenses. The
impairment charges represent capital losses on the sale of the
securities for which the company does not have available capital gains
to offset. Accordingly, no tax benefits were recorded with the charge.
Lawson has no other exposure to auction rate securities.
Conference Call and Webcast
The company will host a conference call and webcast to discuss its
fourth quarter results and future outlook at 4:30 p.m. Eastern Time
(3:30 p.m. Central Time) July 10, 2008. Interested parties should dial
800-988-0202 (passcode: LWSN) and international callers should dial
+1-210-839-8501. A live webcast will be available on www.lawson.com.
Interested parties should access the conference call or webcast
approximately 10-15 minutes before the scheduled start time.
A replay will be available approximately one hour after the
conference call concludes and will remain available for one week. The
replay number is 888-562-2895 or + 1-402-220-6516. The webcast will
remain on www.lawson.com for approximately one week.
About Lawson Software
Lawson Software provides software and service solutions to
approximately 4,000 customers in manufacturing, distribution,
maintenance and service sector industries across 40 countries.
Lawson's solutions include Enterprise Performance Management, Supply
Chain Management, Enterprise Resource Planning, Customer Relationship
Management, Manufacturing Resource Planning, Enterprise Asset
Management and industry-tailored applications. Lawson solutions assist
customers in simplifying their businesses or organizations by helping
them streamline processes, reduce costs and enhance business or
operational performance. Lawson is headquartered in St. Paul, Minn.,
and has offices around the world. Visit Lawson online at
www.lawson.com.
Forward-Looking Statements
This press release contains forward-looking statements that
contain risks and uncertainties. These forward-looking statements
contain statements of intent, belief or current expectations of Lawson
Software and its management. Such forward-looking statements are not
guarantees of future results and involve risks and uncertainties that
may cause actual results to differ materially from the potential
results discussed in the forward-looking statements. The company is
not obligated to update forward-looking statements based on
circumstances or events that occur in the future. Risks and
uncertainties that may cause such differences include but are not
limited to: uncertainties in Lawson's ability to realize synergies and
revenue opportunities anticipated from the Intentia International
acquisition; uncertainties in the software industry; uncertainties as
to when and whether the conditions for the recognition of deferred
revenue will be satisfied; increased competition; global military
conflicts; terrorist attacks; pandemics, and any future events in
response to these developments; changes in conditions in the company's
targeted industries and other risk factors listed in the company's
most recent Quarterly Report on Form 10-Q and the most recent Annual
Report on Form 10-K filed with the Securities and Exchange Commission.
Lawson assumes no obligation to update any forward-looking information
contained in this press release.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson Software
reports non-GAAP financial results including non-GAAP net income
(loss) and non-GAAP net income (loss) per share. We believe that these
non-GAAP measures provide meaningful insight into our operating
performance and an alternative perspective of our results of
operations. Our primary non-GAAP adjustments are described in detail
below. We use these non-GAAP measures to assess our operating
performance, to develop budgets, to serve as a measurement for
incentive compensation awards and to manage expenditures. Presentation
of these non-GAAP measures allows investors to review our results of
operations from the same perspective as management and our Board of
Directors. Lawson has historically reported similar non-GAAP financial
measures to provide investors an enhanced understanding of our
operations, facilitate investors' analysis and comparisons of our
current and past results of operations and provide insight into the
prospects of our future performance. We also believe that the non-GAAP
measures are useful to investors because they provide supplemental
information that research analysts frequently use to analyze software
companies including those that have recently made significant
acquisitions.
The method we use to produce non-GAAP results is not in accordance
with GAAP and may differ from the methods used by other companies.
These non-GAAP results should not be regarded as a substitute for
corresponding GAAP measures but instead should be utilized as a
supplemental measure of operating performance in evaluating our
business. Non-GAAP measures do have limitations in that they do not
reflect certain items that may have a material impact upon our
reported financial results. As such, these non-GAAP measures should be
viewed in conjunction with both our financial statements prepared in
accordance with GAAP and the reconciliation of the supplemental
non-GAAP financial measures to the comparable GAAP results provided
for each period presented, which are attached to this release.
Our primary non-GAAP reconciling items are as follows:
Purchase accounting impact on revenue - Lawson's non-GAAP
financial results include pro forma adjustments for deferred
maintenance and consulting revenues that we would have recognized
under GAAP but for the related purchase accounting. The deferred
revenue for maintenance and consulting on the acquired entity's
balance sheet, at the time of the acquisition, was eliminated from
GAAP results as part of the purchase accounting for the acquisition.
As a result, our GAAP results do not, in management's view, reflect
all of our maintenance and consulting activity. We believe the
inclusion of the pro forma revenue adjustment provides investors a
helpful alternative view of Lawson's maintenance and consulting
operations.
Integration related - We have incurred various integration related
expenses as part of our acquisitions. These costs of integrating the
operations of acquired businesses and Lawson are incremental to our
historical costs and were charged to GAAP results of operations in the
periods incurred. We do not consider these costs in our assessment of
our operating performance. While these costs are not recurring with
respect to our past acquisitions, we may incur similar costs in the
future if we pursue other acquisitions. We believe that the exclusion
of the non-recurring acquisition related integration costs provide
investors an appropriate alternative view of our results of operations
and facilitates comparisons of our results period-over-period.
Amortization of purchased maintenance contracts - We have excluded
amortization of purchased maintenance contracts from our non-GAAP
results. The purchase price related to these contracts is being
amortized based upon the proportion of future cash flows estimated to
be generated each period over the estimated useful lives of the
contracts. We believe that the exclusion of the amortization expense
related to the purchased maintenance contracts provides investors an
enhanced understanding of our results of operations.
Stock-based compensation - Expense related to stock-based
compensation has been excluded from our non-GAAP results of
operations. These charges consist of the estimated fair value of
share-based awards including stock option, restricted stock,
restricted stock units and share purchases under our employee stock
purchase plan. While the charges for stock-based compensation are of a
recurring nature, as we grant stock-based awards to attract and retain
quality employees and as an incentive to help achieve financial and
other corporate goals, we exclude them from our results of operation
in assessing our operating performance. These charges are typically
non-cash and are often the result of complex calculations using an
option pricing model that estimates stock-based awards' fair value
based on factors such as volatility and risk-free interest rates that
are beyond our control. The expense related to stock-based awards is
generally not controllable in the short-term and can vary
significantly based on the timing, size and nature of awards granted.
As such, we do not include such charges in our operating plans. We
believe that the exclusion of stock-based compensation provides
investors useful information facilitating the comparison of current
period results of operations and prior periods when such charges were
not required to be recorded in our financial statements. In addition,
we believe the exclusion of these charges facilitates comparisons of
our operating results with those of our competitors who may have
different policies regarding the use of stock-based awards.
Pre-merger claims reserve adjustment - We have excluded the
adjustment to our pre-merger claims reserve from our non-GAAP results.
As part of the purchase accounting relating to the Intentia
transaction, we established a reserve for Intentia customer claims and
disputes that arose before the acquisition which were originally
recorded to goodwill. As we are outside the period in which
adjustments to such purchase accounting is allowed, adjustments to the
reserve are recorded in our general and administrative expenses under
GAAP. We do not consider the adjustments to this reserve established
under purchase accounting in our assessment of our operating
performance. Further, since the original reserve was established in
purchase accounting, the original charge was not reflected in our
operating statement. We believe that the exclusion of the pre-merger
claims reserve adjustment provides investors an appropriate
alternative view of our results of operations and facilitates
comparisons of our results period-over-period.
Restructuring - We have recorded various restructuring charges to
reduce our cost structure to enhance operating effectiveness and
improve profitability and to eliminate certain redundancies in
connection with acquisitions. These restructuring activities impacted
different functional areas of our operations in different locations
and were undertaken to meet specific business objectives in light of
the facts and circumstances at the time of each restructuring event.
These charges include costs related to severance and other termination
benefits as well as costs to exit leased facilities. These
restructuring charges are excluded from management's assessment of our
operating performance. We believe that the exclusion of the
non-recurring restructuring charges provide investors an enhanced view
of the cost structure of our operations and facilitates comparisons
with the results of other periods that may not reflect such charges or
may reflect different levels of such charges.
Amortization - We have excluded amortization of
acquisition-related intangible assets including purchased technology,
client lists, customer relationships, trademarks, order backlog and
non-compete agreements from our non-GAAP results. The fair value of
the intangible assets, which was allocated to these assets through
purchase accounting, is amortized using accelerated or straight-line
methods which approximate the proportion of future cash flows
estimated to be generated each period over the estimated useful lives
of the applicable assets. While these non-cash amortization charges
are recurring in nature and benefit our operations, this amortization
expense can fluctuate significantly based on the nature, timing and
size of our past acquisitions and may be affected by any future
acquisitions. This makes comparisons of our current and historic
operating performance difficult. Therefore, we exclude such accounting
expenses when analyzing the results of all our operations including
those of acquired entities. We believe that the exclusion of the
amortization expense of acquisition-related intangible assets provides
investors useful information facilitating comparison of our results
period-over-period and with other companies in the software industry
as they each have their own acquisition histories and related
adjustments.
Impairment on long-term investments - The liquidity and fair value
of our investments in marketable securities, including Auction Rate
Securities (ARS), have been negatively impacted by the uncertainty in
the credit markets and exposure to the financial condition of bond
insurance companies. As a result, we recorded impairment charges to
reduce the carrying value of our ARS investments. The impairment
charges related to our ARS investments have been excluded from our
non-GAAP results of operations. These impairment charges are excluded
from management's assessment of our operating performance. We believe
that the exclusion of these unique charges provide investors an
enhanced view of our operations and facilitates comparisons with the
results of other periods that do not reflect such charges.
-0-
*T
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended % Increase
-----------------------------
May 31, 2008 May 31, 2007 (Decrease)
-------------- -------------- --------------------
Revenues:
License fees $ 41,722 $ 40,618 3%
Maintenance 88,930 77,796 14%
Consulting 102,377 94,437 8%
-------------- --------------
Total
revenues 233,029 212,851 9%
-------------- --------------
Cost of
revenues:
Cost of license
fees 8,646 9,688 (11%)
Cost of
maintenance 17,006 14,608 16%
Cost of
consulting 83,826 85,703 (2%)
-------------- --------------
Total cost of
revenues 109,478 109,999 (0%)
-------------- --------------
Gross profit 123,551 102,852 20%
-------------- --------------
Operating
expenses:
Research and
development 24,125 22,090 9%
Sales and
marketing 51,560 44,017 17%
General and
administrative 27,314 24,344 12%
Restructuring (529) 583 ----
Amortization of
acquired
intangibles 3,591 2,835 27%
-------------- --------------
Total
operating
expenses 106,061 93,869 13%
-------------- --------------
Operating income
(loss) 17,490 8,983 95%
-------------- --------------
Other income
(expense), net:
Interest income 2,829 4,921 (43%)
Interest
expense (1,980) (1,829) 8%
Other income
(expense), net (5,210) 893 ----
-------------- --------------
Total other
income
(expense),
net (4,361) 3,985 ----
-------------- --------------
Income (loss)
before income
taxes 13,129 12,968 1%
Provision for
income taxes 9,453 4,836 95%
-------------- --------------
Net income
(loss) $ 3,676 $ 8,132 (55%)
============== ==============
Net income
(loss) per
share:
Basic $ 0.02 $ 0.04 (50%)
============== ==============
Diluted $ 0.02 $ 0.04 (50%)
============== ==============
Weighted average
common shares
outstanding:
Basic 173,272 184,566 (6%)
============== ==============
Diluted 176,475 187,846 (6%)
============== ==============
Twelve Months Ended % Increase
-----------------------------
May 31, 2008 May 31, 2007 (Decrease)
-------------- -------------- --------------------
Revenues:
License fees $ 132,156 105,861 25%
Maintenance 336,779 291,657 15%
Consulting 382,991 352,870 9%
-------------- --------------
Total
revenues 851,926 750,388 14%
-------------- --------------
Cost of
revenues:
Cost of license
fees 28,782 26,530 8%
Cost of
maintenance 65,885 59,108 11%
Cost of
consulting 318,253 313,682 1%
-------------- --------------
Total cost of
revenues 412,920 399,320 3%
-------------- --------------
Gross profit 439,006 351,068 25%-------------- --------------
Operating
expenses:
Research and
development 85,374 85,325 0%
Sales and
marketing 189,336 160,551 18%
General and
administrative 100,259 98,263 2%
Restructuring (731) 15,483 ---
Amortization of
acquired
intangibles 13,690 10,089 36%
-------------- --------------
Total
operating
expenses 387,928 369,711 5%
-------------- --------------
Operating income
(loss) 51,078 (18,643) +++
-------------- --------------
Other income
(expense), net:
Interest income 20,086 15,500 30%
Interest
expense (8,844) (4,134) 114%
Other income
(expense), net (17,455) 740 ----
-------------- --------------
Total other
income
(expense),
net ( 6,213) 12,106 ----
-------------- --------------
Income (loss)
before income
taxes 44,865 (6,537) +++
Provision for
income taxes 31,158 14,400 116%
-------------- --------------
Net income
(loss) $ 13,707 $ (20,937) +++
============== ==============
Net income
(loss) per
share:
Basic $ 0.08 $ (0.11) +++
============== ==============
Diluted $ 0.08 $ (0.11) +++
============== ==============
Weighted average
common shares
outstanding:
Basic 177,283 186,363 (5%)
============== ==============
Diluted 180,580 186,363 (3%)
============== ==============
*T
-0-
*T
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
May 31, 2008 May 31, 2007
------------- -------------
ASSETS
------------------------------------------
Current assets:
Cash and cash equivalents $ 435,121 $ 473,963
Restricted cash - current 746 555
Marketable securities 5,453 74,995
Short term investments 45,236 -
Trade accounts receivable, net 184,047 162,947
Income taxes receivable 10,309 5,183
Deferred income taxes - current 16,839 17,431
Prepaid expenses and other current assets 44,470 28,196
------------- -------------
Total current assets 742,221 763,270
Long-term marketable securities - 4,878
Restricted cash - non-current 2,038 6,889
Property and equipment, net 45,044 30,879
Goodwill 546,578 483,060
Other intangibles assets, net 120,194 133,456
Deferred income taxes - non-current 35,907 36,889
Other assets 18,614 19,786
------------- -------------
Total assets $ 1,510,596 $ 1,479,107
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------
Current liabilities:
Long-term debt - current $ 3,849 $ 3,322
Accounts payable 23,481 21,475
Accrued compensation and benefits 89,733 85,144
Income taxes payable 8,860 3,535
Deferred income taxes - current 7,399 4,605
Deferred revenue - current 298,509 247,587
Other current liabilities 49,318 72,986
------------- -------------
Total current liabilities 481,149 438,654
Long-term debt - non current 244,734 245,228
Uncertain tax positions - non-current 5,757 -
Deferred income taxes - non-current 12,529 12,558
Deferred revenue - non-current 14,097 15,817
Other long-term liabilities 8,771 11,622
------------- -------------
Total liabilities 767,037 723,879
------------- -------------
Stockholders' equity:
Common stock 2,010 1,994
Additional paid-in capital 838,141 822,740
Treasury stock, at cost (225,598) (123,207)
Retained earnings 31,462 17,755
Accumulated other comprehensive income 97,544 35,946
------------- -------------
Total stockholders' equity 743,559 755,228
------------- -------------
Total liabilities and stockholders' equity $ 1,510,596 $ 1,479,107
============= =============
*T
-0-
*T
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
-------------------------
May 31, 2008 May 31, 2007 ------------ ------------
Cash flows from operating
activities:
Net income (loss) $ 3,676 $ 8,132
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depreciation and
amortization 11,112 10,303
Amortization of debt
issuance costs 322 133
Deferred income taxes 7,919 8,898
Provision for doubtful
accounts 3,354 (268)
Warranty provision 1,805 1,017
Impairment on
investments 6,118 -
Net (gain) loss on
disposal of assets - (6)
Excess tax benefits from
stock transactions (103) (672)
Stock-base compensation
expense 2,060 2,139
Amortization of
discounts and premiums
on marketable
securities - (68)
Changes in operating
assets and liabilities,
net of effect from
acquisitions:
Trade accounts
receivable 23,232 23,576
Prepaid expenses and
other assets (7,638) 4,747
Accounts payable (50) (3,776)
Accrued and other
liabilities (15,428) (18,041)
Income taxes
payable/receivable (1,485) (1,397)
Deferred revenue and
customer deposits 92,930 80,004
------------ ------------
Net cash provided by
operating activities 127,824 114,721
------------ ------------
Cash flows from investing
activities:
Cash paid in conjunction
with acquisitions, net of
cash acquired (20,253) -
Change in restricted cash 513 7,546
Purchases of marketable
securities and
investments 3 (94,742)
Proceeds from maturities
and sales of marketable
securities and
investments 53 63,699
Purchases of property and
equipment (7,145) (6,839)
------------ ------------
Net cash used in investing
activities (26,829) (30,336)
------------ ------------
Cash flows from financing
activities:
Principal payments on
long-term debt (927) (427)
Cash proceeds from
issuance of long-term
debt - 241,271
Payments for debt issuance
costs - (6,289)
Cash proceeds from sale of
stock warrants - 34,176
Payments for call options - (57,697)
Payments on capital lease
obligations (355) (422)
Cash proceeds from
exercise of stock options 420 2,332
Excess tax benefit from
stock transactions 103 672
Cash proceeds from
employee stock purchase
plan 778 692
Repurchase of common stock
from related parties - -
Repurchase of common stock
- other - (48,970)
------------ ------------
Net cash provided by (used
in) financing activities 19 165,338
------------ ------------
Effect of exchange rate
changes on cash and cash
equivalents 1,333 1,937
------------ ------------
Net increase (decrease) in
cash and cash equivalents 102,347 251,660
Cash and cash equivalents
at beginning of period 332,774 222,303
------------ ------------
Cash and cash equivalents
at end of period $ 435,121 $ 473,963
============ ============
Twelve Months Ended
-------------------------
May 31, 2008 May 31, 2007
------------ ------------
Cash flows from operating
activities:
Net income (loss) $ 13,707 $ (20,937)
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depreciation and
amortization 43,295 39,502
Amortization of debt
issuance costs 1,288 133
Deferred income taxes 8,599 8,076
Provision for doubtful
accounts 1,110 3,501
Warranty provision 6,398 2,537
Impairment on
investments 18,414 -
Net (gain) loss on
disposal of assets (311) 131
Excess tax benefits from
stock transactions (2,128) (2,457)
Stock-base compensation
expense 6,743 7,652
Amortization of
discounts and premiums
on marketable
securities (92) (443)
Changes in operating
assets and liabilities,
net of effect from
acquisitions:
Trade accounts
receivable (6,432) 14,084
Prepaid expenses and
other assets (19,498) (539)
Accounts payable 73 (5,849)
Accrued and other
liabilities (33,594) (29,542)
Income taxes
payable/receivable 9,911 (2,527)
Deferred revenue and
customer deposits 34,156 85,221
------------ ------------
Net cash provided by
operating activities 81,639 98,543
------------ ------------
Cash flows from investing
activities:
Cash paid in conjunction
with acquisitions, net of
cash acquired (20,253) (3,575)
Change in restricted cash 4,660 (7,444)
Purchases of marketable
securities and
investments (205,095) (195,162)
Proceeds from maturities
and sales of marketable
securities and
investments 216,393 212,209
Purchases of property and
equipment (22,992) (17,516)
------------ ------------
Net cash used in investing
activities (27,287) (11,488)
------------ ------------
Cash flows from financing
activities:
Principal payments on
long-term debt (2,267) (1,778)
Cash proceeds from
issuance of long-term
debt - 244,493
Payments for debt issuance
costs - (6,289)
Cash proceeds from sale of
stock warrants - 34,176
Payments for call options - (57,697)
Payments on capital lease
obligations (1,379) (1,828)
Cash proceeds from
exercise of stock options 6,910 12,387
Excess tax benefit from
stock transactions 2,128 2,457
Cash proceeds from
employee stock purchase
plan 2,990 2,715
Repurchase of common stock
from related parties (36,800) -
Repurchase of common stock
- other (68,829) (54,870)
------------ ------------
Net cash provided by (used
in) financing activities (97,247) 173,766
------------ ------------
Effect of exchange rate
changes on cash and cash
equivalents 4,053 2,988
------------ ------------
Net increase (decrease) in
cash and cash equivalents (38,842) 263,809
Cash and cash equivalents
at beginning of period 473,963 210,154 ------------ ------------
Cash and cash equivalents
at end of period $ 435,121 $ 473,963
============ ============
*T
-0-
*T
TABLE 1
----------------------------------------------------------------------
LAWSON SOFTWARE, INC.
CURRENCY IMPACT SUMMARY
(in thousands)
(unaudited)
Three % Increase
Months % Increase (Decrease) at
Ended (Decrease) as constant
May 31, 2008 reported currency
------------- -------------- ----------------
License fees $ 41,722 3% (3%)
Maintenance 88,930 14% 9%
Consulting 102,377 8% (1%)
------------- -------------- ----------------
Total revenues 233,029 9% 2%
------------- -------------- ----------------
Total cost of revenues 109,478 (0%) (8%)
Total operating expenses $ 106,061 13% 6%
Twelve % Increase
Months % Increase (Decrease) at
Ended (Decrease) as constant
May 31, 2008 reported currency
------------- -------------- ----------------
License fees $ 132,156 25% 20%
Maintenance 336,779 15% 11%
Consulting 382,991 9% 1%
------------- -------------- ----------------
Total revenues 851,926 14% 8% ------------- -------------- ----------------
Total cost of revenues 412,920 3% (3%)
Total operating expenses $ 387,928 5% (0%)
We provide the percent change in the results from one period to
another using constant currency disclosure to adjust year-over-year
measurements for impacts due to currency fluctuations. Constant
currency changes should be considered in addition to, and not as a
substitute for changes in revenues, expenses, income, or other
measures of financial performance prepared in accordance with US
GAAP. We calculate constant currency changes by converting entities
reporting in currencies other than the United States dollar at the
exchange rate in effect for the current period rather than the
previous period.
*T
-0-
*T
TABLE 2
RECONCILIATION OF CONSOLIDATED GAAP NET INCOME (LOSS) TO CONSOLIDATED
NON-GAAP NET INCOME
----------------------------------------------------------------------
(in thousands)
Three Months Ended Three Months Ended
------------------- -------------------
May 31, 2008 May 31, 2007
------------------- -------------------
Net income (loss), as
reported $ 3,676 $ 8,132
Purchase accounting impact
on revenue (1) 408 1,142
Purchase accounting impact
on consulting costs 139 284
Integration related (4) - 536
Amortization of purchased
maintenance contracts 726 844
Stock-based compensation 2,059 2,139
Pre-merger claims reserve
adjustment - -
Restructuring (529) 583
Amortization 6,473 6,663
Impairment on long-term
investments 6,117 -
Tax (5) (1,452) (5,675)
---------------------------------------
Non-GAAP net income $ 17,617 $ 14,648
---------------------------------------
Twelve Months Ended Twelve Months Ended
------------------- -------------------
May 31, 2008 May 31, 2007
------------------- -------------------
Net income (loss), as
reported $ 13,707 $ (20,937)
Purchase accounting impact
on revenue (1) 1,670 11,430
Purchase accounting impact
on consulting costs 525 898
Integration related (4) - 9,892
Amortization of purchased
maintenance contracts 3,369 3,555
Stock-based compensation 6,741 7,654
Pre-merger claims reserve
adjustment (3,827) -
Restructuring (731) 15,483
Amortization 25,988 26,054
Impairment on long-term
investments 18,413 -
Tax (5) (6,237) (17,899)
---------------------------------------
Non-GAAP net income $ 59,618 $ 36,130
---------------------------------------
*T
-0-
*T
TABLE 3
RECONCILIATION OF CONSOLIDATED GAAP TO CONSOLIDATED NON-GAAP PER SHARE
EFFECT
----------------------------------------------------------------------
(in thousands)
Three Months Ended Three Months Ended
--------------------- ---------------------
May 31, 2008 May 31, 2007
--------------------- ---------------------
Net income (loss),
as reported (2) $ 0.02 $ 0.04
Purchase accounting
impact on revenue (1) 0.00 0.01
Purchase accounting
impact on
consulting costs 0.00 0.00
Integration related (4) - 0.00
Amortization of
purchased
maintenance
contracts 0.00 0.00
Stock-based
compensation 0.01 0.01
Pre-merger claims
reserve adjustment - -
Restructuring 0.00 0.00
Amortization 0.04 0.04
Impairment on long-
term investments 0.03 -
Tax (5) (0.01) (0.03)
-------------------------------------------
Non-GAAP net income
per share (2)(3) $ 0.10 $ 0.08
-------------------------------------------
Weighted average
shares - basic 173,272 184,566
Weighted average
shares - diluted 176,475 187,846
Twelve Months Ended Twelve Months Ended
--------------------- ---------------------
May 31, 2008 May 31, 2007
--------------------- ---------------------
Net income (loss),
as reported (2) $ 0.08 $ (0.11)
Purchase accounting
impact on revenue (1) 0.01 0.06
Purchase accounting
impact on
consulting costs 0.00 0.00
Integration related (4) - 0.05
Amortization of
purchased
maintenance
contracts 0.02 0.02
Stock-based
compensation 0.04 0.04
Pre-merger claims
reserve adjustment (0.02) -
Restructuring 0.00 0.08
Amortization 0.14 0.14
Impairment on long-
term investments 0.10 -
Tax (5) (0.03) (0.10)
-------------------------------------------
Non-GAAP net income
per share (2)(3) $ 0.33 $ 0.19
-------------------------------------------
Weighted average
shares - basic 177,283 186,363
Weighted average
shares - diluted 180,580 189,692
*T
-0-
*T
TABLE 4
SUMMARY OF NON-GAAP ITEMS
----------------------------------------------------------------------
(in thousands)
Three Months Ended Three Months Ended
-------------------- -------------------
May 31, 2008 May 31, 2007
-------------------- -------------------
Purchase accounting
impact on revenue (1) $ 408 $ 1,142
Purchase accounting
impact on consulting
cost (4) 139 284
Integration related - 536
Amortization of purchased
maintenance contracts 726 844
Stock-based compensation 2,059 2,139
Pre-merger claims reserve
adjustment - -
Restructuring (529) 583
Amortization 6,473 6,663
Impairment on long-term
investments 6,117 -
----------------------------------------
subtotal pre-tax
adjustments 15,393 12,191
----------------------------------------
Tax provision (5) (1,452) (5,675)
----------------------------------------
Impact on net income $ 13,941 $ 6,516
========================================
Twelve Months Ended Twelve Months Ended
-------------------- -------------------
May 31, 2008 May 31, 2007
-------------------- -------------------
Purchase accounting
impact on revenue (1) $ 1,670 $ 11,430
Purchase accounting
impact on consulting
cost (4) 525 898
Integration related - 9,892
Amortization of purchased
maintenance contracts 3,369 3,555
Stock-based compensation 6,741 7,654
Pre-merger claims reserve
adjustment (3,827) -
Restructuring (731) 15,483
Amortization 25,988 26,054
Impairment on long-term
investments 18,413 -
----------------------------------------
subtotal pre-tax
adjustments 52,148 74,966
----------------------------------------
Tax provision (5) (6,237) (17,899)
----------------------------------------
Impact on net income $ 45,911 $ 57,067
========================================
*T
(1) For the purchase accounting impact on deferred revenues for
three months and twelve months ended May 31, 2008, $366,000 and
$1,438,000, respectively, relates to maintenance revenues and $42,000
and $232,000, respectively, relates to consulting revenues.
(2) For calculation of EPS, basic weighted average shares are used
with a net loss and diluted weighted average shares are used with net
income.
(3) Net income per share columns may not total due to rounding.
(4) Represents integration related expenses relating to the
acquisition of Intentia International AB.
(5) Non-GAAP tax provision is calculated by excluding the non-GAAP
adjustments on a jurisdictional basis.
-0-
*T
TABLE 5
----------------------------------------------------------------------
LAWSON SOFTWARE, INC.
SUPPLEMENTAL NON-GAAP MEASURES
INCREASE (DECREASE) IN GAAP AMOUNTS REPORTED
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
--------------------------------------
May 31, May 31, May 31, May 31,
2008 2007 2008 2007
-------- -------- --------- ---------
Revenue items
Purchase accounting impact
on maintenance $ 366 $ 888 $ 1,438 $ 8,100
Purchase accounting impact
on consulting 42 254 232 3,330
-------- -------- --------- ---------
Total revenue items 408 1,142 1,670 11,430
Cost of license items
Amortization of acquired
software (2,883) (2,844) (12,298) (10,748)
Non-cash stock-based
compensation (3) (7) (19) (28)
-------- -------- --------- ---------
Total cost of license
items (2,886) (2,851) (12,317) (10,776)
Cost of maintenance items
Amortization of purchased
maintenance contracts (726) (844) (3,369) (3,555)
Integration related (1) - 48 - (22)
Non-cash stock-based
compensation (40) (38) (119) (148)
-------- -------- --------- ---------
Total cost of maintenance
items (766) (834) (3,488) (3,725)
Cost of consulting items
Purchase accounting impact
on consulting (139) (284) (525) (898)
Amortization - (984) - (5,217)
Integration related (1) - 4 - (1,708)
Non-cash stock-based
compensation (189) ( 229) (602) (835)
-------- -------- --------- ---------
Total cost of consulting
items (328) (1,493) (1,127) (8,658)
Research and development items
Integration related (1) - - - (74)
Non-cash stock-based
compensation (127) (167) (452) (635)
-------- -------- --------- ---------
Total research and
development items (127) (167) (452) (709)
Sales and marketing itemsIntegration related (1) - 42 - (1,447)
Non-cash stock-based
compensation (350) (418) (1,104) (1,510)
-------- -------- --------- ---------
Total sales and marketing
items (350) (376) (1,104) (2,957)
General and administrative
items
Integration related (1) - (630) - (6,641)
Pre-merger claims reserve
adjustment - - 3,827 -
Non-cash stock-based
compensation (1,350) (1,280) (4,445) (4,498)
-------- -------- --------- ---------
Total general and
administrative (1,350) (1,910) (618) (11,139)
Restructuring 529 (583) 731 (15,483)
Amortization of acquired
intangibles (3,590) (2,835) (13,690) (10,089)
Other income (expense),
impairment on long-term
investments 6,117 - 18,413 -
Tax provision (2) (1,452) (5,675) (6,237) (17,899)
-------- -------- --------- ---------
Total Adjustments $13,941 $ 6,516 $ 45,911 $ 57,067
======== ======== ========= =========
(1) Represents integration related expenses relating to the
acquisition of Intentia International AB.
(2) Based on a projected annual global effective tax rate analysis,
non-GAAP Q4 tax provision was calculated to be 38.2%. Based on a
projected annual global effective tax rate analysis, the non-GAAP tax
provision was calculated to be 38.5% for the twelve month period. The
non-GAAP tax provision is calculated excluding the non-GAAP
adjustments in a jurisdictional basis.
*T
CONTACT: Lawson Software
Media:
Joe Thornton, +1-651-767-6154
joe.thornton@us.lawson.com
or
Investors and Analysts:
Barbara Doyle, +1-651-767-4385
barbara.doyle@us.lawson.com
Lawson Software Reports Fourth Quarter Fiscal 2008 Financial Results
| Quelle: Lawson Software, Inc.
Anhänge
