SoftBrands Announces Third Quarter Fiscal 2008 Results
MINNEAPOLIS, Minn. — Aug. 6, 2008 — SoftBrands, Inc. (Amex:
SBN), a global supplier of enterprise application software, today
announced its financial results for the third quarter of fiscal 2008,
ended June 30, 2008.
Revenues for third quarter fiscal 2008
increased 15.8 percent to $27.4 million, compared with $23.6 million in
the prior year quarter. License revenue was 15.6% of total revenues in
the current quarter, compared with 18.1% in third quarter fiscal 2007.
Maintenance revenue was 52.5% of total revenues in the current quarter,
compared with 61.1% of revenues in third quarter fiscal 2007.
Professional services revenue was 26.2% of total revenues in the
quarter, compared with 17.2% in the prior year quarter.
SoftBrands reported operating income of $3.8 million in the
third quarter of fiscal 2008, compared with an operating loss of $(1.4)
million in the fiscal 2007 quarter. The company reported a net loss
available to common shareholders of $(0.1) million, or $(0.00) per
diluted share, compared with a net loss available to common
shareholders of $(2.1) million, or $(0.05) per diluted share, for third
quarter fiscal 2007. The prior year’s quarter includes the impact of a
$1.6 million charge associated with restructuring activities in the
company’s manufacturing business.
"We are pleased with our performance in the third quarter, which
was our largest revenue quarter in the company’s history, reflecting
the impact of large group contracts in our hospitality business and
strength in our consulting businesses," said Randy Tofteland,
SoftBrands’ president and chief executive officer. “In addition, both
of our businesses contributed to our strong operating profit
performance in the quarter.”
SoftBrands today updated its
guidance for fiscal 2008 for GAAP revenue of approximately $100 million
and operating income of 4% to 5% of revenues.
Highlights of the third quarter and other recent developments include:
- SoftBrands today announced in a separate news release that it has appointed Jo-Ann (Jo) Masters senior vice president and general manager, Hospitality. She will assume the role from Steve VanTassel, the current leader of the business, effective Oct. 1, 2008. Masters is currently vice president and general manager, SoftBrands Hospitality Americas.
- HyperTec Systems, a computer electronics manufacturer based in Quebec, selected SoftBrands and its FourthShift Edition for SAP Business One solution. The 100-seat contract represents one of the largest SAP Business One deals in North America.
- SoftBrands was named SAP’s first Extended Business Network Partner, which will allow SoftBrands to recruit its own SAP Business One/Fourth Shift Edition partners. The company expects that this will result in larger revenue opportunities for its channel business.
In the company's manufacturing business, third quarter fiscal
2008 revenues were $12.5 million, compared with $13.0 million in third
quarter fiscal 2007. Third quarter fiscal 2008 operating income in
manufacturing was $2.7 million, compared with $0.5 million in the prior
year's quarter which included $1.6 million in restructuring charges.
“Our manufacturing business delivered strong profitability in
the quarter. Our SAP business grew as a percentage of our total
revenue, but we are not yet at the point where our SAP business is
fully offsetting the natural attrition in our base business,” said
Tofteland. “In the fourth quarter, we expect stronger license
performance from the manufacturing business. In fiscal 2009 we expect
our manufacturing business to deliver top-line growth as revenue growth
accelerates in our SAP business.”
In the company's hospitality business, third quarter fiscal 2008
revenues were $14.9 million, compared with $10.6 million in the prior
year's quarter. In third quarter fiscal 2008 SoftBrands' hospitality
business posted operating income of $1.1 million, compared with an
operating loss of $(1.9) million in the prior year’s quarter.
“Our hospitality business posted its highest revenue quarter
ever, with double-digit increases in license and professional services
revenue,” said Tofteland. “Hospitality’s results included significant
revenue from Red Roof Inns, which will continue to have a material
positive impact on our results for the next nine to 12 months.”
From a geographic perspective, 65% of revenues were generated in
the Americas in the quarter; 20% in the EMEA region; and 15% in the
Asia Pacific region. This compares to a respective mix of 53%, 26% and
21% in the prior year's quarter.
Nine Month Results
SoftBrands
revenues for the first nine months of fiscal 2008 were $73.3 million,
compared with $70.0 million in the fiscal 2007 period. SoftBrands
reported operating income of $1.8 million for the first nine months of
fiscal 2008, compared with an operating loss of $(1.8) million for the
fiscal 2007 period. The company reported a net loss available to common
shareholders in the fiscal 2008 period of $(1.3) million, or $(0.03)
per diluted share, compared with a loss of $(5.4) million, or $(0.13)
per diluted share in the fiscal 2007 nine-month period.
Cash and Liquidity
As of June 30, 2008, SoftBrands had
$12.0 million in cash and cash equivalents, an increase from $9.4
million at the end of the previous quarter. SoftBrands’ total current
assets, which include accounts receivable, increased to $41.6 million
from $39.0 million at the end of the previous quarter. Deferred
revenue was $26.6 million at the end of the third quarter, a decrease
from $29.9 million at the end of the previous quarter.
Conference Call
SoftBrands will hold its third quarter
earnings conference call at 5:00 pm Eastern Time today, Aug. 6, 2008.
Interested parties may listen to the call by dialing 866-831-6267 or
international 617-213-8857 (passcode: 89825725) A live webcast will
also be available at SoftBrands' website at http://www.softbrands.com.
A replay will be available approximately one hour after the conference
call concludes and will remain available through Aug. 13, 2008. The
replay number is 888-286-8010 and international 617-801-6888 (passcode:
55377240). The webcast will be archived on SoftBrands' website for
approximately one year.
Forward-Looking Statements
All
statements other than historical facts included in this release
regarding future operations are subject to the risks inherent in
predictions and "forward-looking statements." These statements are
based on the beliefs and assumptions of management of SoftBrands and on
information currently available to us. Nevertheless, these
forward-looking statements should not be construed as guarantees of
future performance. They involve risks, uncertainties, and assumptions
identified in filings by SoftBrands with the SEC, including, but not
limited to, the following:
- Changes in the economy, natural disasters, disease or other events that affect the manufacturing and hospitality segments or the geographies we serve;
- Our increasing dependence upon our relationship with SAP;
- Our ability to continue to satisfy covenants with our lender;
- Our ability to timely complete and introduce, and the market acceptance of our new products;
- Our ability to properly document our sales consistent with the manner in which we recognize revenue;
- Our ability to manage international operations;
- Our ability to maintain and expand our base of clients on software maintenance programs; and
- The effects of and our ability to rapidly adapt to changes in standards for operating systems, databases and other technologies.
About SoftBrands
SoftBrands, Inc. is a leader in
providing software solutions for businesses in the manufacturing and
hospitality industries worldwide. The company has established a global
infrastructure for distribution, development and support of enterprise
software, and has approximately 5,000 customers in more than 100
countries actively using its manufacturing and hospitality products.
SoftBrands, which has approximately 775 employees, is headquartered in
Minneapolis, Minn., with branch offices in Europe, India, Asia,
Australia and Africa. Additional information can be found at http://www.softbrands.com.
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2008/08/06, Minneapolis, MN USA