MANA Manatron (MM)

Highlights: KALAMAZOO, Mich., Dec. 13 /PRNewswire-FirstCall/ -- Manatron, Inc. (NASDAQ:MANA) the nation's leading provider of integrated, enterprise-level property tax solutions for state and local governments, announced its financial results for the second quarter of fiscal 2008, which ended on October 31, 2007. The results include the operations of Sigma Systems Technology, Inc., that was acquired on August 1, 2007 and the Records Management Solutions Business of Hart InterCivic that was acquired on September 1, 2007, as well as the acquisition and integration expenses related to these two acquisitions. For the second quarter, the Company reported record net revenues of $11.8 million, an increase of 10.6% over the $10.7 million of revenues reported for the second quarter of fiscal 2007. This marks the sixth consecutive quarter in which revenues exceeded $10 million. The Company's gross profit was $5.2 million or 44.2% compared to gross profit of $5.1 million or 47.9% for last year's second quarter. The decrease in gross profit margin was due to the acquisition of Hart, which utilizes an outside contractor to assist with certain software maintenance contracts. Operating income decreased to $223,460 for the quarter compared to $251,594. The decrease in operating income was due to the additional costs associated with completing and integrating the acquisitions of Sigma and Hart. Net income was $162,905, or $0.03 per diluted share versus net income of $173,017 or $0.04 per diluted share for the three months ended October 31, 2006. Fully diluted shares increased to 5.1 million from 5.0 million in the prior-year second quarter. "We maintained consistent levels of net income despite the costs related to completing and integrating the Sigma and Hart acquisitions during the second quarter," said Paul Sylvester, Manatron's Chief Executive Officer. "We accomplished this in large part due to record revenue, resulting from organic growth and the incremental contributions from Hart and Sigma. Both companies are being fully integrated into the Manatron organization and we are already benefiting from the additional subject matter expertise and solid client relationships provided by these two acquisitions. If you exclude our appraisal services revenues from all periods, which have been steadily declining due to market and competitive pressures, our revenues from software licenses, maintenance fees and professional services have increased by 17.5% for the second quarter and 14.4% for the first half. Our recurring revenue from software maintenance, hardware maintenance and printing and processing contracts has grown to $26 million on an annualized basis from $20 million at this time a year ago." For the first six months of fiscal 2008, net revenues were $22.2 million, which is an increase of 3.5% over the $21.4 million of net revenues for the first half of fiscal 2007. Gross profit for the first half of fiscal 2008 was $10.1 million or 45.8% compared with gross profit of $9.8 million or 45.6% for the six months ended October 31, 2006. Income from operations was $789,429, which is an increase of 153% over the $311,673 of operating income for the first half of the prior fiscal year. For the first six months of the current fiscal year, net income was $560,405, or $0.11 per diluted share, compared to net income of $224,558, or $0.05 per diluted share for the same period last year. Fully diluted shares increased to 5.1 million from 5.0 million in the prior-year period. "We remain focused on successfully implementing our new GRM clients and selling this new suite of enterprise-level software, built on Microsoft's .Net platform in our current and new markets," added Bill McKinzie, Manatron's President and Chief Operating Officer. "Our GRM software is being used by ten accounts in six states and is scheduled to be live in two additional states before the end of our fiscal year. Our goal is to build a powerful list of reference accounts who will encourage other jurisdictions to follow their lead and implement GRM. Each of these accounts is using the same line of code, validating our strategy to develop and introduce a single software package which can be leveraged across state boundaries nationwide." As of October 31, 2007, the Company's backlog was $16.9 million compared to $16.5 million as of July 31, 2007 and $16.8 million at October 31, 2006. Signed contracts for the six months ended October 31, 2007 totaled approximately $7.7 million versus $8.9 million for the six months ended October 31, 2006. The Company did announce the sale of its GRM software to the City of Charleston, South Carolina subsequent to the quarter for approximately $2 million and is continuing to aggressively market its software to build the backlog. "Despite the decrease in our appraisal services revenues, our second quarter was highlighted by a $1.8 million appraisal services contract with Marion County, Indiana," Paul Sylvester concluded. "We are using our GRM CAMA software and leveraging our newly acquired regression analysis skills from the Sigma acquisition to complete this important project by February of 2008. We are also pleased that Charleston County, South Carolina has recently agreed to purchase our GRM suite of property management software. This $2.0 million contract will increase our backlog and marks the fifth GRM contract in that state in less than two years. As market activity for legacy system upgrades continues to increase, we are well positioned to strengthen our leadership position in the Property Tax market in South Carolina and other states." The Company finished the quarter with working capital of $709,283, cash of $110,613 and $1,013,104 of borrowings under its $8.0 million line of credit. Working capital and cash decreased during the second quarter as $5.1 million of cash was paid toward the Sigma and Hart acquisitions. As of October 31, 2007, the Company owes $3,153,132 of seller-financed notes payable related to the ASIX, Hart and VisiCraft acquisitions. Book value per share has increased to $4.99 as of October 31, 2007 from $4.82 at April 30, 2007. Book value per share is calculated by dividing total shareholders' equity by total shares outstanding at the end of each respective period. The Company repurchased 7,130 shares of its common stock on the market during the second quarter at a price of $8.98 per share. Teleconference Information Management will discuss the results in a conference call, scheduled for 4:30 p.m. Eastern Time, on Thursday, December 13, 2007. Anyone interested in participating should call 888-469-6384 if calling within the United States or 480-629-9562 if calling internationally. There will be a playback available until December 20, 2007. To listen to the playback, please call 800-406-7325 if calling within the United States or 303-590-3030 if calling internationally. Please use pin number 3815743 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 January 13, 2008 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 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 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, New York, Ohio, Pennsylvania, Texas and Washington. Manatron currently serves approximately 1,400 customers in 40 states, two Canadian territories, South Africa and the U.S. Virgin Islands. 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 (Unaudited) October 31, April 30, 2007 2007 ASSETS CURRENT ASSETS: Cash and equivalents $110,613 $7,057,403 Marketable securities -- 495,146 Accounts receivable, net 8,536,719 5,498,816 Income tax receivable -- 346,075 Revenues earned in excess of billings on long-term contracts 6,917,842 4,813,083 Unbilled retainages on long-term contracts 716,643 745,409 Notes receivable 257,222 256,874 Inventories 73,596 86,059 Deferred tax assets 1,002,412 1,002,412 Other current assets 683,298 387,312 Total current assets 18,298,345 20,688,589 NET PROPERTY AND EQUIPMENT 2,508,116 2,264,969 OTHER ASSETS: Notes receivable, less current portions 154,317 98,770 Computer software development costs, net of accumulated amortization 4,534,437 3,699,498 Goodwill 14,310,864 12,022,385 Intangible assets, net of accumulated amortization 4,192,594 2,240,763 Other, net 598,255 318,678 Total other assets 23,790,467 18,380,094 Total assets $44,596,928 $41,333,652 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $968,398 $676,435 Line of credit borrowings 1,013,104 -- Current portion of notes payable 2,485,257 1,500,000 Billings in excess of revenues earned on long-term contracts 1,310,974 1,198,357 Billings for future services 8,889,712 9,275,681 Accrued liabilities 2,921,617 2,698,864 Total current liabilities 17,589,062 15,349,337 DEFERRED INCOME TAXES 587,000 587,000 LONG-TERM PORTION OF NOTES PAYABLE 667,875 653,193 LONG-TERM DEFERRED COMPENSATION 255,531 227,535 SHAREHOLDERS' EQUITY: Common stock 17,486,657 17,066,189 Retained earnings 8,010,803 7,450,398 Total shareholders' equity 25,497,460 24,516,587 Total liabilities and shareholders' equity $44,596,928 $41,333,652 MANATRON, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended October 31, October 31, 2007 2006 2007 2006 NET REVENUES $11,800,113 $10,668,865 $22,150,206 $21,391,324 COST OF REVENUES 6,588,637 5,560,384 12,001,450 11,640,587 Gross profit 5,211,476 5,108,481 10,148,756 9,750,737 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,988,016 4,856,887 9,359,327 9,439,064 Income from operations 223,460 251,594 789,429 311,673 OTHER INCOME, NET 44,945 26,423 122,476 49,485 Income before provision for income taxes 268,405 278,017 911,905 361,158 PROVISION FOR INCOME TAXES 105,500 105,000 351,500 136,600 NET INCOME $162,905 $173,017 $560,405 $224,558 BASIC EARNINGS PER SHARE $.03 $.04 $.11 $.05 DILUTED EARNINGS PER SHARE $.03 $.03 $.11 $.05 BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 4,973,739 4,900,400 4,955,719 4,891,809 DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 5,124,294 4,961,906 5,088,250 4,953,315 CONTACT: Paul Sylvester, or Cameron Donahue Co-Chairman and CEO Hayden Communications, Inc. Manatron, Inc. (651) 653-1854 (269) 567-2900 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.manatron.com/ http://www.viavid.net/

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