CHICAGO, June 6 /PRNewswire-FirstCall/ -- SSA Global (NASDAQ:SSAG),
a leading global provider of enterprise business software and
services, today announced financial results for the third quarter
ended April 30, 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051213/CGTU005LOGO ) "SSA
Global continues to deliver strong financial performance by
delivering comprehensive solutions that help our customers achieve
their critical business needs," said Mike Greenough, chairman,
president and CEO of SSA Global. Third quarter total revenue
increased 8% to $194.6 million compared to $180.4 million last
year. License revenue for the quarter was $62.3 million, an
increase of 19% from the third quarter last year and represented
32% of total revenue compared to 29% last year. On an organic
basis, excluding contribution from recent acquisitions in the
quarter and normalizing for foreign exchange equalization, license
revenue grew 12%. The acquisition of E.piphany, which closed on
September 29, 2005, contributed $15.1 million to total revenue and
$4.3 million to license revenue in the quarter. During the third
quarter, North America contributed 49% of total revenue; Europe,
Middle East and Africa (EMEA) contributed 35%; and
Asia-Pacific/Japan (APJ) and Latin America contributed 16%. For the
quarter, 1,361 contracts were signed, including 57 new customers
that represented 9% of total license value associated with software
contracts signed in the quarter. On an adjusted basis for the
quarter, total revenue grew 8% to $195.1 million and net income
grew 4% to $19.1 million or $0.26 per diluted share up from $18.4
million or $0.25 per diluted share last year. (Adjusted revenue,
net income and earnings per diluted share include deferred license
revenue associated with the E.piphany acquisition and an assumed
34% tax rate; it excludes amortization of acquired intangibles,
stock option-based compensation expense and restructuring charges).
For the quarter, the Company reported GAAP net income of $4.6
million compared to $9.2 million last year, and earnings per
diluted share under GAAP was $0.06. Cash and cash equivalents as of
April 30, 2006 totaled $140.6 million and net cash provided by
operating activities for the quarter totaled $19.4 million. Days
Sales Outstanding (DSO) were 77 and down from 83 days at the end of
the third quarter last year. Due to the Company's definitive
agreement to be acquired by Infor, which was announced on Monday,
May 15, 2006, the Company will not hold a conference call to
discuss its third quarter 2006 results. Presentation of Non-GAAP
Financial Measures The non-GAAP financial measures presented in the
text of this press release and accompanying supplementary financial
information (also referred to as "adjusted") represent the
financial measures used by the Company's management to evaluate the
quarterly operating and cash flows performance of the Company and
to conduct its business operations. These non-GAAP financial
measures are also used by management to evaluate return on
investment, income contribution and future impact to operating
results of potential mergers and acquisitions. In addition, these
non-GAAP financial measures facilitate management's internal
comparisons to competitors' operating results and the software
industry in general. This non-GAAP financial information is
provided as additional information for investors and is not in
accordance with, or an alternative to, GAAP. In addition, the
non-GAAP financial information provided may be different than
similar measures used by other companies. However, the Company's
management believes these non-GAAP measures provide useful
information to investors, potential investors, securities analysts
and others so each group can evaluate the Company's current and
future prospects in the same manner as management if they so
choose. A reconciliation of GAAP financial information to adjusted
results and EBITDA has been provided in the financial statement
tables that accompany this press release. About SSA Global SSA
Global (NASDAQ:SSAG) is a leading provider of enterprise business
software for mid-sized and large organizations, primarily in select
manufacturing, consumer and services industries. The company's
software solutions include enterprise resource planning, financial
management, human capital management, corporate performance
management, customer relationship management, product lifecycle
management, supply chain management and supplier relationship
management. Headquartered in Chicago, SSA Global has over 50
locations worldwide and its product offerings are used by customers
in over 90 countries. For additional information, visit the SSA
Global web site at http://www.ssaglobal.com/ . SSA Global is the
corporate brand for product lines, and subsidiaries and affiliates
of SSA Global Technologies, Inc. Other products mentioned in this
document are registered, trademarked or service marked by their
respective owners. SSA, SSA Global, SSA Global Technologies,
forward faster and other SSA Global products and services mentioned
herein as well as their respective logos are either registered
trademarks or trademarks of SSA Global in the United States and/or
other countries. Forward-Looking Statements These materials may
contain "forward-looking statements." Forward-looking statements
include, without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or
achievements, and may contain the words "believe," "anticipate,"
"expect," "estimate," "intend," "project," "plan," "will be," "will
likely continue," "will likely result," or words or phrases with
similar meaning. All of these forward-looking statements are based
on estimates and assumptions made by our management that, although
we believe to be reasonable, are inherently uncertain.
Forward-looking statements involve risks and uncertainties,
including, but not limited to, economic, competitive, governmental
and technological factors outside of our control, that may cause
our business, strategy or actual results to differ materially from
the forward-looking statements. We operate in a changing
environment in which new risks can emerge from time to time. It is
not possible for management to predict all of these risks, nor can
it assess the extent to which any factor, or a combination of
factors, may cause our business, strategy or actual results to
differ materially from those contained in forward-looking
statements. Factors you should consider that could cause these
differences include, among other things: -- General economic and
business conditions, including exchange rate fluctuations; -- Our
ability to identify acquisition opportunities and effectively and
cost-efficiently integrate acquisitions; -- Our ability to maintain
effective internal control over financial reporting; -- Our ability
to attract and retain personnel, including key personnel; -- Our
success in developing and introducing new services and products;
and -- Competition in the software industry, as it relates to both
our existing and potential new customers. SSA GLOBAL TECHNOLOGIES,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS - GAAP (in millions, except per share data) (Unaudited)
Three Months Ended Nine Months Ended April 30, April 30, Revenue:
2006 2005 2006 2005 License fees $62.3 $52.5 $171.1 $144.9 Support
90.3 86.4 266.2 258.7 Services and other 42.0 41.5 122.7 121.3
Total revenue 194.6 180.4 560.0 524.9 Operating expenses: Cost of
revenues: Cost of license fees 11.7 7.5 29.1 19.7 Amortization of
acquired technology 4.0 3.6 12.4 11.9 Cost of support, services and
other 51.6 49.4 151.3 145.0 Sales and marketing 49.2 46.4 142.4
135.6 Research and development 27.3 26.6 82.3 76.3 General and
administrative 22.1 19.5 62.6 62.1 Non-cash stock option
compensation expense 3.9 2.4 10.2 7.3 Amortization of intangibles
7.2 6.4 21.0 19.2 Restructuring charge (benefit) 3.1 0.1 8.5 (1.4)
Total operating expenses 180.1 161.9 519.8 475.7 Operating income
14.5 18.5 40.2 49.2 Interest expense, net 2.9 3.9 7.8 11.8 Loss on
early extinguishment of debt - - 3.3 - Other expense (income) 1.4
(0.8) 3.5 (2.0) Income before income taxes 10.2 15.4 25.6 39.4
Provision for income taxes 5.6 6.2 13.4 15.8 Net income 4.6 9.2
12.2 23.6 Preferred stock dividends - 7.9 - 23.3 Preferred stock
dividends in excess of stated amount - 11.1 - 32.5 Cash dividend
paid to preferred stockholders - - - 25.0 Distributed earnings -
preferred stockholders - 19.0 - 80.8 Net income (loss) to common
stockholders $4.6 $(9.8) $12.2 $(57.2) Earnings (loss) per common
share: Basic $0.07 $(2.05) $0.18 $(11.95) Diluted 0.06 (2.05) 0.17
(11.95) Earnings per preferred share: Basic and diluted $- $6.33 $-
$26.93 Weighted average common shares: Basic 69.725 4.785 68.851
4.785 Diluted 72.812 4.785 73.429 4.785 Weighted average preferred
shares: Basic and diluted - 3.000 - 3.000 SSA GLOBAL TECHNOLOGIES,
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS -
ADJUSTED (NON-GAAP) (in millions, except per share data)
(Unaudited) Three Months Ended April 30, % of % of % Revenue: 2006
Revenues 2005 Revenues Inc (Dec) License fees $62.8 32% $52.5 29%
20% Support 90.3 46% 86.4 48% 5% Services and other 42.0 22% 41.5
23% 1% Total revenue 195.1 100% 180.4 100% 8% Operating expenses:
Cost of revenues: Cost of license fees 11.7 6% 7.5 4% 56% Cost of
support, services and other 51.6 27% 49.4 27% 4% Sales and
marketing 49.2 25% 46.4 26% 6% Research and development 27.3 14%
26.6 15% 3% General and administrative 22.1 11% 19.5 11% 13% Total
operating expenses 161.9 83% 149.4 83% 8% Operating income 33.2 17%
31.0 17% 7% Interest expense, net 2.9 1% 3.9 2% -26% Other (income)
expense 1.4 1% (0.8) 0% * Income before income taxes 28.9 15% 27.9
15% 4% Provision for income taxes 9.8 5% 9.5 5% 3% Net income $19.1
10% $18.4 10% 4% Earnings per common share: Basic $0.27 $0.27
Diluted $0.26 $0.25 Weighted average common shares: Basic 69.725
68.017 Diluted 73.423 72.746 * not meaningful Nine Months Ended
April 30, % of % of % Revenue: 2006 Revenues 2005 Revenues Inc
(Dec) License fees $172.7 31% $144.9 28% 19% Support 266.2 47%
258.7 49% 3% Services and other 122.7 22% 121.3 23% 1% Total
revenue 561.6 100% 524.9 100% 7% Operating expenses: Cost of
revenues: Cost of license fees 29.1 5% 19.7 4% 48% Cost of support,
services and other 151.3 27% 145.0 28% 4% Sales and marketing 142.4
26% 135.6 26% 5% Research and development 80.6 14% 76.3 14% 6%
General and administrative 62.6 11% 62.1 12% 1% Total operating
expenses 466.0 83% 438.7 84% 6% Operating income 95.6 17% 86.2 16%
11% Interest expense, net 7.8 1% 11.8 1% -34% Other (income)
expense 3.5 1% (2.0) 0% * Income before income taxes 84.3 15% 76.4
15% 10% Provision for income taxes 28.7 5% 26.0 5% 10% Net income
$55.6 10% $50.4 10% 10% Earnings per common share: Basic $0.81
$0.74 Diluted $0.75 $0.69 Weighted average common shares: Basic
68.851 68.017 Diluted 74.040 72.834 * not meaningful SSA GLOBAL
TECHNOLOGIES, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO
ADJUSTED (NON-GAAP) CONSOLIDATED STATEMENTS OF OPERATIONS (in
millions, except per share data) (Unaudited) Three Months Ended
April 30, 2006 2006 2005 2005 Revenue: GAAP Adjustments Non-GAAP
GAAP Adjustments Non-GAAP License fees (1) $62.3 $0.5 $62.8 $52.5
$- $52.5 Support 90.3 - 90.3 86.4 - 86.4 Services and other 42.0 -
42.0 41.5 - 41.5 Total revenue 194.6 0.5 195.1 180.4 - 180.4
Operating expenses: Cost of revenues: Cost of license fees 11.7 -
11.7 7.5 - 7.5 Amortization of acquired technology (2) 4.0 (4.0) -
3.6 (3.6) - Cost of support, services and other 51.6 - 51.6 49.4 -
49.4 Sales and marketing 49.2 - 49.2 46.4 - 46.4 Research and
develop- ment 27.3 - 27.3 26.6 - 26.6 General and administra- tive
22.1 - 22.1 19.5 - 19.5 Non-cash stock option compensation expense
(3) 3.9 (3.9) - 2.4 (2.4) - Amortization of intangibles (2) 7.2
(7.2) - 6.4 (6.4) - Restructuring charges (benefits) (4) 3.1 (3.1)
- 0.1 (0.1) - Total operating expens- es 180.1 (18.2) 161.9 161.9
(12.5) 149.4 Operating income 14.5 18.7 33.2 18.5 12.5 31.0
Interest expense, net 2.9 - 2.9 3.9 - 3.9 Other (income) expense
1.4 - 1.4 (0.8) - (0.8) Income before income taxes 10.2 18.7 28.9
15.4 12.5 27.9 Provision for income taxes (6) 5.6 4.2 9.8 6.2 3.3
9.5 Net income 4.6 14.5 19.1 9.2 9.2 18.4 Preferred stock dividends
(7) - - - 7.9 (7.9) - Preferred stock dividends in excess of stated
amount (7) - - - 11.1 (11.1) - Distributed earnings - preferred
stockholders - - - 19.0 (19.0) - Net income (loss) to common stock-
holders $4.6 $14.5 $19.1 $(9.8) $28.2 $18.4 Earnings (loss) per
common share (7): Basic $0.07 $0.27 $(2.05) $0.27 Diluted $0.06
$0.26 $(2.05) $0.25 Earnings per preferred share (7): Basic and
diluted $- $- $6.33 $- Weighted average common shares (7): Basic
69.725 - 69.725 4.785 63.232 68.017 Diluted 72.812 0.611 73.423
4.785 67.961 72.746 Weighted average preferred shares (7): Basic
and diluted - 3.000 (3.000) - Nine Months Ended April 30, 2006 2006
2005 2005 Revenue: GAAP Adjustments Non-GAAP GAAP Adjustments
Non-GAAP License fees (1) $171.1 $1.6 $172.7 $144.9 $- $144.9
Support 266.2 - 266.2 258.7 - 258.7 Services and other 122.7 -
122.7 121.3 - 121.3 Total revenue 560.0 1.6 561.6 524.9 - 524.9
Operating expenses: Cost of revenues: Cost of license fees 29.1 -
29.1 19.7 - 19.7 Amortization of acquired technology (2) 12.4
(12.4) - 11.9 (11.9) - Cost of support, services and other 151.3 -
151.3 145.0 - 145.0 Sales and marketing 142.4 - 142.4 135.6 - 135.6
Research and develop- ment (2) 82.3 (1.7) 80.6 76.3 - 76.3 General
and administra- tive 62.6 - 62.6 62.1 - 62.1 Non-cash stock option
compensation expense (3) 10.2 (10.2) - 7.3 (7.3) - Amortization of
intangib- les (2) 21.0 (21.0) - 19.2 (19.2) - Restructuring charges
(benefits) (4) 8.5 (8.5) - (1.4) 1.4 - Total operating expen- ses
519.8 (53.8) 466.0 475.7 (37.0) 438.7 Operating income 40.2 55.4
95.6 49.2 37.0 86.2 Interest expense, net 7.8 - 7.8 11.8 - 11.8
Loss on early extinguishment of debt (5) 3.3 (3.3) - - - - Other
(income) expense 3.5 - 3.5 (2.0) - (2.0) Income before income taxes
25.6 58.7 84.3 39.4 37.0 76.4 Provision for income taxes (6) 13.4
15.3 28.7 15.8 10.2 26.0 Net income 12.2 43.4 55.6 23.6 26.8 50.4
Preferred stock dividends (7) - - - 23.3 (23.3) - Preferred stock
dividends in excess of stated amount (7) - - - 32.5 (32.5) - Cash
dividend paid to preferred stockholders (7) - - - 25.0 (25.0) -
Distributed earnings - preferred stockholders - - - 80.8 (80.8) -
Net income (loss) to common stock- holders $12.2 $43.4 $55.6
$(57.2) $107.6 $50.4 Earnings (loss) per common share (7): Basic
$0.18 $0.81 $(11.95) $0.74 Diluted $0.17 $0.75 $(11.95) $0.69
Earnings per preferred share (7): Basic and diluted $- $- $26.93 $-
Weighted average common shares (7): Basic 68.851 - 68.851 4.785
63.232 68.017 Diluted 73.429 0.611 74.040 4.785 68.049 72.834
Weighted average preferred shares (7): Basic and diluted - 3.000
(3.000) - Footnotes - Adjustments: (1) In connection with the
Epiphany acquisition, we were required to eliminate deferred
license revenue for purchase accounting purposes. The adjustment
amount represents license fees that would have been otherwise
recorded by Epiphany that were not recognized for GAAP purposes.
(2) Represents the amortization of intangible assets and charges
associated with acquisitions, which includes acquired technology,
customer lists, patents and in-process research and development
charges. (3) Represents non-cash stock-based compensation expense
associated with stock options granted to certain employees on July
31, 2003 and the adoption of SFAS 123R effective August 1, 2005.
(4) Restructuring charges (benefits) include costs associated with
SSA employee severance and facilities termination costs and
adjustments to restructuring liabilities assumed in connection with
acquisitions that occur more than twelve months subsequent to the
consummation of the related acquisition. (5) Represents a non-cash
charge for the write-off of unamortized deferred financing fees
associated with early repayment of long-term debt. (6) Provision
for income taxes is adjusted to 34% for all periods as this
represents the Company's estimated long-term effective cash income
tax rate. The Company's cash income tax rate was approximately 10%
for fiscal 2005. (7) For the three and nine months ended April 30,
2005, the adjustments give effect to the issuance of common stock
associated with the initial public offering of common stock as if
it occurred November 1, 2004 and August 1, 2004, respectively,
including (a) conversion of preferred stock into 52.755 million
shares of common stock, (b) issuance of 10.350 million shares in
the initial public offering and (c) inclusion of potentially
dilutive securities in diluted earnings per common share that were
anti-dilutive for historical reporting purposes. For the three and
nine months ended April 30, 2006, the adjustment gives effect to
the inclusion of potentially dilutive securities in diluted
earnings per common share that were anti-dilutive for GAAP
reporting purposes. SSA GLOBAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) April 30,
January 31, July 31, 2006 2006 2005 Assets (Unaudited) (Unaudited)
(Unaudited) Current assets: Cash and cash equivalents $140.6 $136.0
$165.4 Restricted cash 0.6 3.1 4.9 Investments - 0.5 - Accounts
receivable, net 170.2 181.3 144.1 Deferred tax assets 19.5 19.9
19.9 Prepaid and other current assets 28.9 26.9 25.7 Total current
assets 359.8 367.7 360.0 Non-current assets: Restricted cash 3.3
4.2 - Property and equipment, net 19.3 19.7 18.3 Intangible assets,
net 169.7 170.7 143.1 Goodwill 400.8 391.4 296.3 Deferred tax
assets - - 6.4 Other 9.1 6.8 6.6 Total non-current assets 602.2
592.8 470.7 Total Assets $962.0 $960.5 $830.7 Liabilities and
Stockholders' Equity Current liabilities: Current portion of
long-term debt $4.0 $4.0 $1.6 Accounts payable and accrued
liabilities 115.2 115.8 106.0 Accrued compensation and related
benefits 62.1 61.2 56.5 Deferred revenue 219.9 228.5 183.8 Income
taxes payable 3.0 1.8 1.8 Total current liabilities 404.2 411.3
349.7 Non-current liabilities: Long-term debt 208.4 209.2 161.0
Accrued restructuring 11.4 10.4 - Deferred tax liabilities 0.5 3.2
- Other long term obligations 7.7 7.4 7.1 Deferred revenue 33.7
34.9 38.5 Total liabilities 665.9 676.4 556.3 Stockholders' equity
296.1 284.1 274.4 Total Liabilities and Stockholders' Equity $962.0
$960.5 $830.7 SSA GLOBAL TECHNOLOGIES, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in millions) (unaudited) Three Months
Ended Nine Months Ended April 30, April 30, 2006 2005 2006 2005 Net
income $4.6 $9.2 $12.2 $23.6 Non-cash expenses 23.7 24.1 70.4 68.6
Changes in working capital, net of acquisitions: Accounts
receivable 15.8 17.5 (9.1) (9.8) Deferred revenue (18.4) (3.4) 5.3
3.4 Other (6.3) (4.3) (18.4) (22.5) Net cash provided by operating
activities 19.4 43.1 60.4 63.3 Cash flows from investing
activities: Acquisitions, net of cash acquired (20.0) - (129.6) 1.0
Purchase of property and equipment (1.6) (5.9) (4.4) (9.3)
Capitalized software costs and acquired technology (1.2) (1.1)
(5.1) (2.4) Other 0.5 - 0.5 - Net cash used in investing activities
(22.3) (7.0) (138.6) (10.7) Cash flows from financing activities:
Borrowings - - 200.0 - Payments of debt (1.0) (0.6) (157.2) (2.3)
Cash dividend paid to preferred stockholders - - - (25.0) Proceeds
from stock option exercises 1.8 - 5.1 - Other 3.1 (3.6) 0.1 (3.6)
Net cash provided by (used in) financing activities 3.9 (4.2) 48.0
(30.9) Effect of exchange rate changes on cash and cash equivalents
3.6 (0.6) 5.4 1.1 Net increase (decrease) in cash and cash
equivalents 4.6 31.3 (24.8) 22.8 Cash and cash equivalents at
beginning of period 136.0 97.6 165.4 106.1 Cash and cash
equivalents at end of period $140.6 $128.9 $140.6 $128.9 SSA GLOBAL
TECHNOLOGIES, INC. AND SUBSIDIARIES RECONCILIATION OF EBITDA TO NET
CASH PROVIDED BY OPERATIONS (in millions) (Unaudited) Three Months
Ended Nine Months Ended April 30, April 30, 2006 2005 2006 2005
EBITDA (1) $35.1 $34.2 $100.5 $94.8 Interest paid (3.8) (2.3)
(10.3) (6.9) Income taxes paid (0.4) (0.6) (1.2) (1.7) Other
changes in working capital (11.5) 11.8 (28.6) (22.9) Net cash
provided by operations $19.4 $43.1 $60.4 $63.3 (1) Represents net
income before interest, income taxes, options amortization,
depreciation and amortization related to customer lists, patents,
acquired technology, capitalized software development and
in-process research and development and restructuring charges
(benefits).
http://www.newscom.com/cgi-bin/prnh/20051213/CGTU005LOGO
http://photoarchive.ap.org/ DATASOURCE: SSA Global CONTACT:
Investor, Dawn Drella, +1-312-474-7694, , or Press, Maria Diecidue,
+1-312-258-6000, , both of SSA Global Web site:
http://www.ssaglobal.com/
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