ROSS Ross Systems (MM)

Ross Systems 1st Quarter Report Company reports 3% increase in Revenue over prior year ATLANTA, Oct. 31 /PRNewswire-FirstCall/ -- Ross Systems, Inc. , a leading provider of enterprise software solutions for manufacturers, today announced results for its first fiscal quarter, which ended September 30, 2003. Operating earnings were $0.3 million, before merger transaction costs associated with the previously announced merger with CDC Software, a subsidiary of chinadotcom. The company reported a net loss of $0.5 million or $0.19 per share, after merger transaction costs of $0.8 million. The Company also reported that the Hart Scott Rodino waiting period has elapsed without challenge and that the merger, subject to stockholder approval, is expected to proceed as previously forecast during the first quarter of calendar 2004. Revenues for the quarter at $11.7 million increased from $11.4 million in the prior year's same quarter. The net loss for the quarter of $0.5 million or $0.19 per share, compared to a net profit of $0.6 million or $0.20 per diluted share in the prior year's same quarter. Net cash of $7.9 million this quarter increased $3.3 million over the prior year's same quarter and declined $0.7 million from the previous quarter, reflecting the merger transaction costs incurred during the quarter. The Company has no long-term debt, and deferred revenues this quarter declined to $10.1 million from $10.6 million in the prior year. Accounts receivable, at $11.7 million, increased from $10.9 million in the prior year. Accounts receivable turnover at 84 days increased slightly compared to 77 days in the prior year's same quarter and improved 11 days from the sequential quarter. "Contributing to this quarter's results were sales of our Internet Application Framework (IAF) and related browser capabilities to improve user productivity as well as our Supply Chain Management (SCM) and Customer Relationship Management (CRM) products. We have had great success in introducing these products to our new and existing customers in both North America and Europe. We are also pleased that our existing customers continue to upgrade and are implementing additional iRenaissance applications," said J. Patrick Tinley, Ross' Chairman and CEO. About Ross Systems Ross Systems, Inc. (NASDAQ:ROSS) delivers innovative software solutions that help manufacturers worldwide fulfill their business growth objectives through increased operational efficiencies, improved profitability, strengthened customer relationships and streamlined regulatory compliance. Focused on the food and beverage, life sciences, chemicals, metals and natural products industries and implemented by over 1,000 customer companies worldwide, the company's family of Internet-architected solutions is a comprehensive, modular suite that spans the enterprise, from manufacturing, financials and supply chain management to customer relationship management, performance management and regulatory compliance. Publicly traded on the Nasdaq since 1991, Ross's global headquarters are based in the U.S. in Atlanta, Georgia, with sales and support operations around the world. http://www.rossinc.com/ . STATEMENTS IN THIS ANNOUNCEMENT, WHICH EXPRESS THAT THE COMPANY "BELIEVES," "ANTICIPATES," "EXPECTS," "PLANS TO..." OR "SHOULD BEGIN TO ... " AS WELL AS OTHER STATEMENTS, WHICH ARE NOT HISTORICAL FACT, ARE FORWARD- LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS IN THIS ANNOUNCEMENT INCLUDE STATEMENTS ABOUT THE PROPOSED MERGER. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY AS A RESULT OF RISKS AND UNCERTAINTIES, INCLUDING THE RISK THAT THE MERGER IS NOT APPROVED BY ROSS SHAREHOLDERS OR IS OTHERWISE NOT COMPLETED, THE RISK THAT THE ANTICIPATED BENEFITS OF THE MERGER ARE NOT REALIZED, QUARTERLY FLUCTUATION OF SOFTWARE PRODUCT LICENSE REVENUE, WEAKENING OF CUSTOMER DEMAND FOR ENTERPRISE SYSTEMS, THE COMPANY'S MAINTENANCE OF A MINIMAL BACKLOG, THE UNCERTAINTY OF DEMAND FOR NEW PRODUCT OFFERINGS AND OTHER RISKS AND UNCERTAINTIES DESCRIBED IN REPORTS FILED BY THE COMPANY WITH THE SEC, INCLUDING THE ANNUAL REPORT ON FORM 10-K FILED FOR THE YEAR ENDED JUNE 30, 2003. YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS ANNOUNCEMENT. WE DO NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY UPDATE OR RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS ANNOUNCEMENT OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS, EXCEPT AS REQUIRED BY LAW. ROSS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three months ended September 30, 2003 2002 Revenues: Software product licenses $2,961 $3,733 Consulting and other services 3,556 2,770 Maintenance 5,232 4,923 Total revenues 11,749 11,426 Operating expenses: Costs of software product licenses 344 346 Costs of consulting and maintenance 4,999 4,401 Sales and marketing 2,690 2,422 Product development net of capitalized and amortized computer software costs 2,125 1,801 General and administrative 1,118 1,361 Provision for uncollectible accounts 135 272 Total operating expenses 11,411 10,603 Operating earnings (loss) 338 823 Prospective merger transaction costs 758 - Other financial, net benefit (expense) 15 (94) Earnings before taxes (405) 730 Income tax expense 78 90 Net (loss) earnings (483) 640 Preferred stock dividend (38) (38) Net (loss) profit available to common shareholders $(521) $602 Net earnings (loss) per common share - basic $(0.19) $0.23 Net earnings (loss) per common share - diluted $(0.19) $0.20 Shares for basic calculation 2,685 2,646 Shares for diluted calculation 2,685 3,267 ROSS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share related data) September 30 June 30 2003 2003 (unaudited) ASSETS Current assets: Cash and cash equivalents $7,935 $8,628 Accounts receivable, less allowance for doubtful accounts and returns 11,716 12,880 Prepaids and other current assets 595 731 Total current assets 20,246 22,239 Property and equipment 1,357 1,406 Computer software costs 13,094 13,573 Other assets 2,993 2,993 Total assets $37,690 $40,211 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of debt $4,511 $2,800 Accounts payable 2,445 2,978 Accrued expenses 4,075 4,940 Income taxes payable 68 261 Deferred revenues 10,105 12,203 Total current liabilities 21,204 23,182 Shareholders' equity: Common stock 28 28 Preferred Stock 2,000 2,000 Additional paid-in capital 87,311 87,189 Accumulated deficit (69,577) (69,094) Accumulated comprehensive income (deficit) (1,931) (1,749) Treasury Stock (1,345) (1,345) Total shareholders' equity 16,486 17,029 Total liabilities and shareholders' equity $37,690 $40,211 DATASOURCE: Ross Systems, Inc. CONTACT: Robert B. Webster of Ross Systems, Inc., +1-770-351-9600, or Web site: http://www.rossinc.com/

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