Press Release
- Date:
- Monday, May 13, 2002
- Contact:
- Mark Funston
- Phone:
- (301) 731-2300
- Email:
- mark_funston@g1.com
Group 1 Software Reports Fourth Quarter and Year-end Results - Exceeds Analyst Estimates
Lanham, MD — Group 1 Software (Nasdaq: GSOF) today reported results for its fourth fiscal quarter and for the 2002 fiscal year ended March 31, 2002. For the quarter, the Company reported net income available to common stockholders of $2.0 million or $0.29 per share on revenue of $24.1 million, vs. analyst estimates of $0.21 to $0.23 per share on revenue of $22.5 to $23.8 million. This compares with the prior year's quarterly net income of $3.7 million or $0.53 per share on revenue of $27.2 million. For the fiscal year, the Company reported revenue of $89.4 million compared with $94.2 million for the prior year. Net income available to common stockholders for the year was $4.4 million or $0.63 per share, vs. $8.8 million or $1.28 per share the prior year.
The decline in net income for the fiscal year was attributable primarily to the reduced revenue resulting from difficult economic and market conditions. In addition, net income was reduced by $2.2 million ($0.32 per share) by operating and interest expenses in excess of revenue associated with the acquisitions during the year of assets of Vision-R Technologies, HotData, Inc. and TriSense Software, Ltd. This reduction in net income was consistent with business plans for the acquisitions.
Group 1's cash position continued to grow despite the difficult market circumstances and the acquisitions. Cash and short-term investments totaled $47.6 million ($6.86 per share) at March 31, 2002, up from the $43.8 million reported on December 31, 2001 and $44.1 million at March 31, 2001.
Revenue for the quarter from the Enterprise Solutions division was $16.7 million compared with $16.8 million for the same quarter of the prior year. License fees for the division were $7.1 million in the fourth quarter of both the current and prior fiscal year. License fee revenue was up 44% over the third quarter, however. The Company's data quality solutions provide significant benefits for organizations' customer relationship management (CRM) initiatives and continue to show strong demand in spite of the difficult economic climate.
Revenue from the DOC1 Customer Communications Management division was $7.4 million in the fourth quarter compared with the record $10.4 million in the prior year's fourth quarter. License fees in this segment were $2.6 million in the fourth quarter compared with $5.0 million in the prior year's fourth quarter. License fees continued to be impacted by deferred purchases and elongated sales cycles for DOC1 products.
“While the year was very challenging for Group 1 and other applications software vendors, the fundamental strength of the Company enabled us to remain solidly profitable, make three significant acquisitions, fully integrate the exciting new technology from these acquisitions, and still increase our cash position,,” said Bob Bowen, CEO of Group 1 Software. “We enter the current fiscal year with a number of important new product offerings, the result of both internal development efforts and the integration of acquired technology. We are especially encouraged about the potential for our newest enterprise data quality solutions, DataSight and the Data Quality Connector for Siebel, as well as our new DOC1 Interactive, DOC1 Digital and DOC1 Archive products. These major new product offerings, coupled with our market and financial strength, position us well to take advantage of all the business opportunities we anticipate as the economy improves.”
The Company's guidance for the fiscal year ending March 31, 2003 remains unchanged. The Company projects revenue growth of approximately 10% over fiscal 2002. Earnings per share are projected to increase in the range of 18% to 22%.
The Company will hold a conference call at 4:30 p.m. EST today to discuss these results. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.g1.com or by dialing 888-939-6306.
The financial projections offered today are based on the Company's current expectations. Actual results may differ materially from these projections. Our current assumption concerning general economic activity is that we do not expect improvement during the first half of the coming fiscal year, but we do anticipate modest improvement in economic conditions in the second half and our guidance is structured accordingly. We recognize however, that the Company's (desirable) movement toward larger size deals with its new products makes it more difficult to project revenue and earnings accurately. This is particularly true given the added uncertainties associated with the current business climate.
In addition to the financial projections, forward-looking statements in this press release can be identified by words like “intend” and “are no less optimistic”. Readers are cautioned not to place undue reliance on these forward-looking statements, which address the conditions as they are found on the date of this press release. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances that arise after the date of this press release or to reflect the occurrence of unanticipated events. For additional information regarding these and other risks and uncertainties associated with the company's business, reference is made to the company's reports filed from time to time with the Securities and Exchange Commission. Group 1 Software, and DOC1 are registered trademarks of Group 1 Software, Inc.
Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation reform Act of 1995. Words like “anticipate”, “estimates”, “are no less optimistic”, “can lead to”, and “projects” are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. The financial projections offered today are based on the Company's current expectations. These projections are forward looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed in the future. Our current assumption concerning general economic activity is that we do not expect improvement during the first half of the coming fiscal year, but we do anticipate modest improving economic conditions and our guidance is structured accordingly. We recognize however, that the company's desirable movement toward larger size deals with its new products makes it more difficult to project revenue and earnings accurately. This is particularly true given the added uncertainties associated with the current business climate. Readers are cautioned not to place undue reliance on these forward-looking statements, which address the conditions as they are found on the date of this press release. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances that arise after the date of this press release or to reflect the occurrence of unanticipated events. For additional information regarding these and other risks and uncertainties associated with the company's business, reference is made to the company's reports filed from time to time with the Securities and Exchange Commission. Group 1 Software, and DOC1 are registered trademarks of Group 1 Software, Inc.