Highlights: KALAMAZOO, Mich., March 12 /PRNewswire-FirstCall/ --
Manatron, Inc. (NASDAQ:MANA) a leading provider of property tax
solutions for State and local governments announced its financial
results for the third quarter of fiscal 2007, which ended on
January 31, 2007. For the third quarter, the Company reported net
revenues of $10.3 million, a 28.7 percent increase over net
revenues of $8.0 million recognized in last year's same period.
Operating income improved to $589,046 for the quarter, a positive
swing of $2.8 million versus the operating loss of $2.2 million
that was reported for third quarter of the prior fiscal year. Net
income after taxes was $393,662 or $0.08 per diluted share for the
third quarter compared to a net loss of $1.3 million or $(0.31) per
diluted share for the three months ended January 31, 2006. For the
nine months ended January 31, 2007, the Company reported net
revenues of $31.7 million, a 20.1 percent increase over net
revenues of $26.4 million posted for the nine months ended January
31, 2006. Operating income improved to $900,719 for the nine-month
period, representing a positive swing of $5.5 million over the
operating loss of $4.6 million reported for the first nine months
of the prior fiscal year. Net income was $618,220 or $0.12 per
diluted share for the nine months ended January 31, 2007 versus a
net loss of $2.7 million or $(0.64) per diluted share for the
comparable prior year period. "Our acquisitions of ASIX and Plexis
combined with solid organic growth and the impact of our cost
reduction efforts have resulted in significant improvements in our
financial performance," said Paul R. Sylvester, Manatron's Chief
Executive Officer. "Accelerating market acceptance for our products
and a strong portfolio of referenceable accounts has enabled us to
exceed the $10 million mark in revenues for each of the first three
quarters of our current fiscal year. More importantly, the revenue
growth and our continued focus on managing expenses has allowed us
to demonstrate sequential improvement in our gross profit, gross
margins, operating income and net income during the first three
quarters. Our gross margin increased to 51.6 percent for the third
quarter versus 27.0 percent in the comparable prior-year quarter
primarily because of our ability to leverage our costs against a
higher base of revenue. Our margins have also benefited from the
favorable change in our revenue mix, our restructuring initiative
last April and the positive impact of certain changes in our GRM(R)
software amortization. All of this has enabled us to add almost
$700,000 to our cash balances in the last twelve months after
paying out approximately $6.6 million for acquisitions and
repurchasing $436,000 of our common stock." "The market readiness
for legacy system upgrades has been increasing this year," said
Bill McKinzie, Manatron's President and Chief Operating Officer.
"This is evident by our solid increases in software license fees
for both the third quarter and nine months ended January 31, 2007.
In addition, our backlog has grown by $2.2 million at the end of
the quarter compared to January 31, 2006 and we have signed
approximately $5.5 million of contracts since then for our GRM(R)
solution in Beaufort County, South Carolina; Sedgwick County,
Kansas; and The Unified Government of Wyandotte County, Kansas
along with a few additional upgrades in our core markets." "We also
recognized an increase in our recurring software maintenance fees
of 26.3 percent to $4.6 million for the third quarter versus the
comparable prior year period," Mr. McKinzie continued. "This was
due to the acquisitions of ASIX and Plexis, software maintenance
recently initiated on new clients and annual price increases
approved in the prior year. Our total recurring revenue from
software maintenance, hardware maintenance, e-government
subscriptions, and printing and processing contracts on an
annualized basis currently stands at approximately $22 million, up
from $20 million at October 31, 2006. This amount will continue to
grow as the current year price increases, which approximate $2
million on an annual basis, are just beginning to take effect and,
more importantly, as we add new clients." The Company also reported
that it has extended the useful life of its capitalized GRM(R)
software from three years to five years given that GRM(R) is a
national product, its operational in three states, is currently
being implemented in six others and is targeted as the product for
new markets. The impact of this change was a reduction of software
amortization expense of approximately $350,000, which lowered the
Company's cost of revenues. This change in accounting estimate had
a $219,000 positive impact on net income or $0.04 per diluted share
for the three months ended January 31, 2007. Backlog for license
fees and services at the end of the third quarter was $18.3 million
compared to $16.1 million at January 31, 2006. The Company reported
that this growth has primarily been driven by sales to new name
accounts, such as Clay County, Missouri; Clinton County,
Pennsylvania; Vigo County, Indiana; four counties in Oregon; Oconee
County, South Carolina; and several upgrades in the Company's core
markets of Florida, Indiana, Illinois and Ohio. The Company
finished the quarter with working capital of $5.4 million, $4.5
million in cash and no bank debt. Shareholders' equity was $23.9
million compared to $23.0 million as of April 30, 2006. Manatron
also paid down $1.7 million of seller-financed notes payable
associated with the ASIX acquisition and repurchased 35,101 shares
of its common stock totaling $306,000 during the third quarter.
"Our Board of Directors has also reviewed Constellation Software,
Inc.'s revised proposal to purchase all of our outstanding stock
for $10 per fully diluted share, which we received on March 2nd,"
Mr. Sylvester continued. "Once again, we have concluded that
pursuing their proposal at this point is not in the best interests
of the Company, its shareholders and our other stakeholders. We do
not believe the additional $1 per share warrants any significant
change in our thinking given that it has been less than 90 days
since Constellation's initial offer and we have made continued
progress on our three-year operating and growth plan as evidenced
by our third quarter financial results." Teleconference Information
Management will discuss the results in a conference call, scheduled
for 4:15 p.m. Eastern Time, on Monday, March 12. Anyone interested
in participating should call 888-694-4641 if calling within the
United States or 973-582-2734 if calling internationally. There
will be a playback available until March 19, 2007. To listen to the
playback, please call 877-519-4471 if calling within the United
States or 973-341-3080 if calling internationally. Please use pin
number 8521175 for the replay. This call is being web cast by
ViaVid Broadcasting and can be accessed at Manatron's website at
http://www.manatron.com/. The web cast may also be accessed at
ViaVid's website at http://www.viavid.net/. The web cast can be
accessed until April 12, 2007 on either site. To access the web
cast, you will need to have the Windows Media Player on your
desktop. For the free download of the Media Player please visit:
http://www.microsoft.com/windows/windowsmedia/en/download/default.asp.
About Manatron, Inc.: Manatron is primarily focused on providing
software and services to enable state and local governments in
North America to completely, fairly and efficiently assess real and
personal property, and to bill and collect the related property
taxes in their jurisdictions. The Company's software manages the
entire property life cycle, which includes deed recording, land
records, GIS (Geographic Information System) integration,
valuation, assessment administration, personal property, business
licenses, cashiering, tax billing and collection, delinquents and
tax sales, and e-government. Manatron's revenues are primarily
generated from software license fees, software maintenance fees,
professional services, and sales of hardware, forms and supplies.
Professional services consist of data conversions, installation,
training, project management, hardware maintenance, forms
processing and printing, consulting and appraisal services.
Manatron is headquartered in Portage, Michigan and has offices in
Florida, Georgia, Illinois, Indiana, Minnesota, Ohio, Pennsylvania
and Washington. Manatron currently serves approximately 1,300
customers in 30 states and two Canadian territories. More
information about Manatron, Inc. is available at the Company's site
on the World Wide Web at http://www.manatron.com/. About GRM(R):
GRM(R) is Manatron's fully integrated property management suite of
software designed to manage and support the entire property life
cycle, which includes deed recording, land records, GIS (Geographic
Information System) integration, valuation, assessment
administration, personal property, business licenses, cashiering,
tax billing and collection, delinquents and tax sales, and
e-government. Manatron GRM automates the operational, information
and planning needs for Assessors, Auditors, Treasurers, Tax
Collectors, Recorders and other state and local governmental
officials so that they can completely, fairly and efficiently
assess real and personal property and bill and collect the related
property taxes in their jurisdictions. More information on this
product is available at http://www.manatron.com/solutions/GRM.aspx.
Safe Harbor Statement: The information provided in this news
release may include forward-looking statements relating to future
events, such as the development of new products, the commencement
of production, or the future financial performance of the Company.
Actual results may differ from such projections and are subject to
certain risks including, without limitation, risks arising from:
changes in the rate of growth of the local government market,
increased competition in the industry, delays in developing and
commercializing new products, adequacy of financing and other
factors described in the Company's most recent annual report on
Form 10-K filed with the Securities and Exchange Commission, which
can be reviewed at http://www.sec.gov/. Tables to Follow MANATRON,
INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS January
31, April 30, 2007 2006 (Unaudited) (Audited) ASSETS CURRENT
ASSETS: Cash and equivalents $4,504,910 $4,209,831 Accounts
receivable, net 10,877,516 7,556,313 Income tax receivable --
2,182,248 Revenues earned in excess of billings on long-term
contracts 5,192,455 6,151,346 Unbilled retainages on long-term
contracts 939,787 1,105,320 Notes receivable 281,435 450,565
Inventories 99,625 146,800 Deferred tax assets 1,153,651 1,153,651
Other current assets 389,293 485,525 Total current assets
23,438,672 23,441,599 NET PROPERTY AND EQUIPMENT 2,382,758
2,618,588 OTHER ASSETS: Notes receivable, less current portions
143,091 272,261 Computer software development costs, net of
accumulated amortization 3,316,904 2,610,216 Goodwill 12,022,385
12,022,385 Intangible assets, net of accumulated amortization
2,481,306 3,202,935 Other, net 288,465 253,980 Total other assets
18,252,151 18,361,777 Total assets $44,073,581 $44,421,964
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $651,919 $898,301 Current portion of notes payable 818,760
2,700,000 Billings in excess of revenues earned on long-term
contracts 1,287,093 3,373,271 Billings for future services
12,162,832 8,369,114 Accrued liabilities 3,147,845 3,419,286 Total
current liabilities 18,068,449 18,759,972 DEFERRED INCOME TAXES
284,963 284,963 LONG-TERM PORTION OF NOTES PAYABLE 1,849,416
2,334,228 SHAREHOLDERS' EQUITY: Common stock 16,748,215 16,538,483
Retained earnings 7,122,538 6,504,318 Total shareholders' equity
23,870,753 23,042,801 Total liabilities and shareholders' equity
$44,073,581 $44,421,964 MANATRON, INC. AND SUBSIDIARY CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months
Ended Nine Months Ended January 31, January 31, 2007 2006 2007 2006
NET REVENUES $10,324,099 $8,024,451 $31,715,423 $26,414,813 COST OF
REVENUES 4,997,650 5,858,868 16,638,237 18,398,909 Gross profit
5,326,449 2,165,583 15,077,186 8,015,904 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 4,737,403 4,368,023 14,176,467 12,638,649
Income (loss) from operations 589,046 (2,202,440) 900,719
(4,622,745) OTHER INCOME, NET 40,616 54,213 90,101 207,078 Income
(loss) before provision (credit) for income taxes 629,662
(2,148,227) 990,820 (4,415,667) PROVISION (CREDIT) FOR INCOME TAXES
236,000 (816,000) 372,600 (1,677,440) NET INCOME (LOSS) $393,662
$(1,332,227) $618,220 $(2,738,227) BASIC EARNINGS (LOSS) PER SHARE
$.08 $(.31) $.13 $(.64) DILUTED EARNINGS (LOSS) PER SHARE $.08
$(.31) $.12 $(.64) BASIC WEIGHTED AVERAGE SHARES OUTSTANDING
4,909,756 4,322,363 4,897,821 4,297,453 DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 5,088,126 4,322,363 4,968,896 4,297,453
DATASOURCE: Manatron, Inc. CONTACT: Paul Sylvester, Co-Chairman and
CEO of Manatron, Inc., +1-269-567-2900, ; or Cameron Donahue of
Hayden Communications, Inc., +1-651-653-1854, , for Manatron, Inc.
Web site: http://www.viavid.net/ Web site: http://www.manatron.com/
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