Made2Manage Systems Reports Strong Revenue Growth in First Quarter; Forecasts Double-Digit Revenue Growth and Improved Earnings in 2001

Apr 18, 2001, 01:00 ET from Made2Manage Systems Inc.

    INDIANAPOLIS, April 18 /PRNewswire/ --
 Made2Manage Systems Inc. (Nasdaq:   MTMS), a leading provider of comprehensive
 enterprise application solutions for small and midsize manufacturers, today
 reported first quarter 2001 results and its outlook for 2001 revenues and
 earnings.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010323/M2MLOGO )
     For the quarter ended March 31, 2001, total revenues increased 15% to
 $8.4 million from $7.3 million in the first quarter of 2000.  Software license
 revenue was $3.8 million compared to $2.9 million in 2000, a 34% increase.
 Service revenues grew to $4.4 million from $4.3 million in 2000.
     Operating loss, excluding a restructuring charge, was $1.2 million,
 compared to $1 million in 2000.  Net loss, excluding a restructuring charge,
 was $1.1 million or ($.23) per diluted share, compared to $584,000 or ($.12)
 per diluted share in 2000.  The Company recorded a restructuring charge in the
 quarter primarily attributable to facilities rationalization, reductions in
 costs associated with its M2MVIP collaborative commerce application service
 and other actions to reduce future spending in less profitable portions of our
 business.  The pre-tax charge, which is largely non-cash, totaled
 $1.6 million.  The net loss for the first quarter, after the charge, was
 $2.1 million or ($.44) per diluted share.
     "Our first quarter operating performance was in line with our
 expectations," said Dave Wortman, CEO, "We were particularly pleased with our
 34% increase in software license revenue, a strong indicator of our ability to
 win new business in a difficult environment.  It also speaks to the market's
 acceptance of our expanded product offerings.  We have steadily added new
 customers and expanded our relationship with existing ones."
 
     Restructuring Charge
     As part of the Company's ongoing efforts to align its operations with the
 current technology and economic environment, all spending has been reviewed.
 Management has taken steps to establish the foundation for future
 profitability.
     "Accordingly, while expanded product offerings are a major component of
 the Company's long-term growth strategy, they can negatively impact both cost
 of sales and earnings in the short term.  M2MVIP collaborative commerce
 application service is an example," said Wortman.  "After a successful launch,
 the service has grown steadily in customer acceptance.  However, its
 subscription-based revenue model takes time to ramp up.  Now that the
 significant initial investment is behind us, we decided to slow the level of
 ongoing investment.  We will continue to improve and expand the offering, as
 it remains a very important part of our overall product strategy."
     Wortman went on to say, "Our customers have embraced our flexible,
 subscription-based Time2Learn education program which was introduced in
 February 2001.  In particular, our virtual classroom offerings have seen a
 significant increase in attendance since Time2Learn's inception.  The result
 of increased online attendance has rendered certain traditional classroom
 facilities unnecessary.  Such facilities are being marketed for sublease.  The
 restructuring charge includes the Company's estimate of non-recoverable costs
 and expenses associated with those facilities and activities."
 
     Outlook for 2001
     "Our new business pipeline looks strong, despite the weakened economy;
 however we are being cautious as to the economy's potential effects on our
 business," Wortman said.  "A fundamental shift is occurring in the way small
 and midsize manufacturers use technology and go to market.  Made2Manage is
 benefiting from that shift with the addition of significant new revenue growth
 opportunities beyond our original enterprise resource planning (ERP)
 foundation.  Additional revenue streams include customer relationship
 management (CRM), supply chain management (SCM), business intelligence (BI)
 and e-business applications -- all are projected to be faster growing
 application markets than ERP.  We believe this is just the beginning of the
 changes manufacturers will be faced with in the years to come in order to
 remain competitive.  We are positioned well to serve these manufacturers."
     For the 2001 financial outlook, the Company anticipates revenues will grow
 in the range of 12% to 20%, significantly outpacing 2000's 6% gain to
 $32.9 million from $31.1 million in 1999.  The Company anticipates the revenue
 growth will result from a meaningful percentage increase in software license
 revenue and increases in services revenue as the user base grows from the more
 than 1500 manufacturing sites currently served.  As in the first quarter, a
 larger percentage of software license revenue is expected from third-party
 software components compared to prior years.  The effect of this will reduce
 gross margins from historical levels.
     These increased revenues, when combined with lower operating costs from
 current and continuing expense reduction initiatives, will improve
 profitability on a comparable quarterly basis.  Profitability is anticipated
 in the second half and for the full year 2001, after excluding the effects of
 the first quarter restructuring charge.
     This guidance represents management's current estimate of 2001 performance
 and is subject to the risks and uncertainties contained in the Safe Harbor
 Provision that follows.
 
     First Quarter Highlights:
     *  Launched Made2Manage v4.0, which includes Explorer Link, Field Service
        and Multi-Warehouse capabilities.  This release uses Microsoft's newest
        server software, SQL Server(TM) 2000.
 
     *  Announced Made2Manage Synchronizer.  M2M Synchronizer enables
        manufacturers to fine-tune their manufacturing operations, utilizing
        advanced optimization technology to schedule resources and meet
        commitments to customers.
 
     *  Introduced Time 2Learn, a low-cost, subscription-based education
        program designed to address the training needs of small and midsize
        manufacturing enterprises by providing unlimited access to Made2Manage
        educational offerings.
 
     *  Expanded M2MVIP service offering to provide manufacturers' channel
        partners -- independent representatives, field sales personnel,
        distributors and customers -- with continuous access to the
        manufacturer's back-office information.
 
     David Wortman, CEO, and Traci Dolan, CFO, will host a conference call to
 discuss the Company's first quarter 2001 financial results at 11 a.m. Eastern
 Daylight Time on Wednesday, April 18, 2001.
 
     About Made2Manage Systems Inc.
     Made2Manage Systems, a leading provider of enterprise business systems for
 small and midsize manufacturers, offers integrated enterprise application
 solutions for automating business processes from selling and design, finance
 and human resources, customer service and support, through manufacturing and
 distribution.  These end-to-end solutions, which utilize Microsoft-based
 technology, help strengthen customer relationships, enhance collaboration
 throughout the supply chain and develop employees.
     For the fourth consecutive year, Made2Manage software was named to
 Manufacturing Systems' "Top 100 Software Vendors," and for the second time, to
 Software Magazine's "Top 500" lists.  Visit the Made2Manage Web page at
 www.made2manage.com .  Made2Manage may be reached via e-mail at
 info@made2manage.com or by calling 800-626-0220.
 
     Safe Harbor Provision:
     This press release contains certain "forward-looking statements" that
 reflect Made2Manage Systems' expectations regarding its future growth, results
 of operations, performance, and business prospects and opportunities.  Words
 such as, "estimates," "believes," "anticipates," "plans" and similar
 expressions may be used to identify these forward-looking statements, but are
 not the exclusive means of identifying these statements.  These statements
 reflect Made2Manage Systems' current beliefs and are based on information
 currently available to Made2Manage Systems.  Accordingly, these statements are
 subject to known and unknown risks, uncertainties and other factors that could
 cause Made2Manage Systems' actual growth, results, performance and business
 prospects and opportunities to differ from those expressed in, or implied by,
 these statements.  These risks, uncertainties and other factors include
 Made2Manage Systems' ability to develop and market existing and acquired
 products; Made2Manage Systems' ability to successfully integrate its acquired
 products; Made2Manage Systems' ability to adjust to changes in technology,
 customer preferences, enhanced competition and new competitors in the ERP
 market; Made2Manage Systems' ability to develop and market a Web-based ERP
 system; risks associated with developing products using next-generation
 Internet technology; risks associated with conducting a consulting services
 business; general economic and business conditions, which may reduce or delay
 customers' purchases of Made2Manage Systems' products and services; and
 Made2Manage Systems' ability to anticipate variability of quarterly revenues,
 manage rapid growth, attract and retain key employees, deliver new product
 introductions, achieve market acceptance of the products, and protect its
 proprietary software rights from infringement or misappropriation.
 Made2Manage Systems is not obligated to update or revise these forward-looking
 statements to reflect new events or circumstances or otherwise.  Additional
 information concerning factors that could cause actual results to differ
 materially from those in the forward-looking statements is contained in the
 company's SEC reports, including the report on Form 10-K for the year ended
 December 31, 2000.
 
 
                           MADE2MANAGE SYSTEMS, INC.
                              FINANCIAL HIGHLIGHTS
                     (in thousands, except per share data)
                                  (unaudited)
 
                                 Three Months Ended
                                      March 31,
                             2001         2001         2000
                            Actual     Pro forma*     Actual
 
     Total revenues        $ 8,392      $ 8,392      $ 7,296
     Operating loss         (2,783)      (1,191)      (1,030)
     Net loss               (2,096)      (1,093)        (584)
 
     Basic and Diluted:
       Net loss per share  $ (0.44)     $ (0.23)     $ (0.12)
       Weighted average
        shares outstanding   4,810        4,810        4,716
 
     * Pro forma results exclude the restructuring charge.
 
 
                           MADE2MANAGE SYSTEMS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)
 
                                            March 31,    December 31,
                                              2001           2000
                                           (unaudited)
     ASSETS
     Current assets:
       Cash and cash equivalents            $  9,879        $ 11,336
       Marketable securities                   2,641             615
       Trade accounts receivable, net          9,224          11,532
       Prepaid expenses and other              1,342           1,267
       Income taxes, receivable                   47              47
       Deferred income taxes                     215             215
         Total current assets                 23,348          25,012
 
     Property and equipment, net               3,496           4,679
     Deferred income taxes                     2,578           2,054
 
         Total assets                       $ 29,422        $ 31,745
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                     $    943        $  1,197
       Accrued liabilities                     2,594           2,741
       Deferred revenue                       10,509          10,342
         Total current liabilities            14,046          14,280
 
     Deferred revenue                            517             544
 
         Total liabilities                    14,563          14,824
 
     Shareholders' equity:
       Preferred stock, no par value;
        2,000,000 shares authorized,
        no shares issued and outstanding
        in 2001 and 2000                          --              --
       Common stock, no par value;
        10,000,000 shares authorized,
        4,820,804 and 4,758,112 issued and
        outstanding in 2001 and 2000,
        respectively                          22,520          22,486
       Accumulated deficit                    (7,661)         (5,565)
         Total shareholders' equity           14,859          16,921
 
         Total liabilities and
          shareholders' equity              $ 29,422        $ 31,745
 
 
                           MADE2MANAGE SYSTEMS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
                                  (unaudited)
 
                                                          Three Months Ended
                                                               March 31,
                                                            2001        2000
     Revenues:
       Software                                          $ 3,832     $ 2,851
       Services                                            4,356       4,267
       Hardware                                              204         178
         Total revenues                                    8,392       7,296
 
     Costs of revenues:
       Software                                              709         338
       Services                                            2,266       2,030
       Hardware                                              149         122
       Amortization of purchased technology                   --          98
       Restructuring charge                                  640          --
         Total costs of revenues                           3,764       2,588
 
     Gross profit                                          4,628       4,708
 
     Operating expenses:
       Sales and marketing                                 3,540       2,903
       Product development                                 1,705       1,700
       General and administrative                          1,214       1,073
       Amortization of goodwill                               --          62
       Restructuring charge                                  952          --
         Total operating expenses                          7,411       5,738
 
     Operating loss                                       (2,783)     (1,030)
 
     Other income, net                                       163         152
 
     Loss before income taxes                             (2,620)       (878)
 
     Income tax benefit                                      524         294
 
     Net loss                                            $(2,096)    $  (584)
 
     Per share amounts - basic and diluted:
       Net loss per share                                $ (0.44)    $ (0.12)
       Weighted average shares outstanding                 4,810       4,716
 
 

SOURCE Made2Manage Systems Inc.
    INDIANAPOLIS, April 18 /PRNewswire/ --
 Made2Manage Systems Inc. (Nasdaq:   MTMS), a leading provider of comprehensive
 enterprise application solutions for small and midsize manufacturers, today
 reported first quarter 2001 results and its outlook for 2001 revenues and
 earnings.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010323/M2MLOGO )
     For the quarter ended March 31, 2001, total revenues increased 15% to
 $8.4 million from $7.3 million in the first quarter of 2000.  Software license
 revenue was $3.8 million compared to $2.9 million in 2000, a 34% increase.
 Service revenues grew to $4.4 million from $4.3 million in 2000.
     Operating loss, excluding a restructuring charge, was $1.2 million,
 compared to $1 million in 2000.  Net loss, excluding a restructuring charge,
 was $1.1 million or ($.23) per diluted share, compared to $584,000 or ($.12)
 per diluted share in 2000.  The Company recorded a restructuring charge in the
 quarter primarily attributable to facilities rationalization, reductions in
 costs associated with its M2MVIP collaborative commerce application service
 and other actions to reduce future spending in less profitable portions of our
 business.  The pre-tax charge, which is largely non-cash, totaled
 $1.6 million.  The net loss for the first quarter, after the charge, was
 $2.1 million or ($.44) per diluted share.
     "Our first quarter operating performance was in line with our
 expectations," said Dave Wortman, CEO, "We were particularly pleased with our
 34% increase in software license revenue, a strong indicator of our ability to
 win new business in a difficult environment.  It also speaks to the market's
 acceptance of our expanded product offerings.  We have steadily added new
 customers and expanded our relationship with existing ones."
 
     Restructuring Charge
     As part of the Company's ongoing efforts to align its operations with the
 current technology and economic environment, all spending has been reviewed.
 Management has taken steps to establish the foundation for future
 profitability.
     "Accordingly, while expanded product offerings are a major component of
 the Company's long-term growth strategy, they can negatively impact both cost
 of sales and earnings in the short term.  M2MVIP collaborative commerce
 application service is an example," said Wortman.  "After a successful launch,
 the service has grown steadily in customer acceptance.  However, its
 subscription-based revenue model takes time to ramp up.  Now that the
 significant initial investment is behind us, we decided to slow the level of
 ongoing investment.  We will continue to improve and expand the offering, as
 it remains a very important part of our overall product strategy."
     Wortman went on to say, "Our customers have embraced our flexible,
 subscription-based Time2Learn education program which was introduced in
 February 2001.  In particular, our virtual classroom offerings have seen a
 significant increase in attendance since Time2Learn's inception.  The result
 of increased online attendance has rendered certain traditional classroom
 facilities unnecessary.  Such facilities are being marketed for sublease.  The
 restructuring charge includes the Company's estimate of non-recoverable costs
 and expenses associated with those facilities and activities."
 
     Outlook for 2001
     "Our new business pipeline looks strong, despite the weakened economy;
 however we are being cautious as to the economy's potential effects on our
 business," Wortman said.  "A fundamental shift is occurring in the way small
 and midsize manufacturers use technology and go to market.  Made2Manage is
 benefiting from that shift with the addition of significant new revenue growth
 opportunities beyond our original enterprise resource planning (ERP)
 foundation.  Additional revenue streams include customer relationship
 management (CRM), supply chain management (SCM), business intelligence (BI)
 and e-business applications -- all are projected to be faster growing
 application markets than ERP.  We believe this is just the beginning of the
 changes manufacturers will be faced with in the years to come in order to
 remain competitive.  We are positioned well to serve these manufacturers."
     For the 2001 financial outlook, the Company anticipates revenues will grow
 in the range of 12% to 20%, significantly outpacing 2000's 6% gain to
 $32.9 million from $31.1 million in 1999.  The Company anticipates the revenue
 growth will result from a meaningful percentage increase in software license
 revenue and increases in services revenue as the user base grows from the more
 than 1500 manufacturing sites currently served.  As in the first quarter, a
 larger percentage of software license revenue is expected from third-party
 software components compared to prior years.  The effect of this will reduce
 gross margins from historical levels.
     These increased revenues, when combined with lower operating costs from
 current and continuing expense reduction initiatives, will improve
 profitability on a comparable quarterly basis.  Profitability is anticipated
 in the second half and for the full year 2001, after excluding the effects of
 the first quarter restructuring charge.
     This guidance represents management's current estimate of 2001 performance
 and is subject to the risks and uncertainties contained in the Safe Harbor
 Provision that follows.
 
     First Quarter Highlights:
     *  Launched Made2Manage v4.0, which includes Explorer Link, Field Service
        and Multi-Warehouse capabilities.  This release uses Microsoft's newest
        server software, SQL Server(TM) 2000.
 
     *  Announced Made2Manage Synchronizer.  M2M Synchronizer enables
        manufacturers to fine-tune their manufacturing operations, utilizing
        advanced optimization technology to schedule resources and meet
        commitments to customers.
 
     *  Introduced Time 2Learn, a low-cost, subscription-based education
        program designed to address the training needs of small and midsize
        manufacturing enterprises by providing unlimited access to Made2Manage
        educational offerings.
 
     *  Expanded M2MVIP service offering to provide manufacturers' channel
        partners -- independent representatives, field sales personnel,
        distributors and customers -- with continuous access to the
        manufacturer's back-office information.
 
     David Wortman, CEO, and Traci Dolan, CFO, will host a conference call to
 discuss the Company's first quarter 2001 financial results at 11 a.m. Eastern
 Daylight Time on Wednesday, April 18, 2001.
 
     About Made2Manage Systems Inc.
     Made2Manage Systems, a leading provider of enterprise business systems for
 small and midsize manufacturers, offers integrated enterprise application
 solutions for automating business processes from selling and design, finance
 and human resources, customer service and support, through manufacturing and
 distribution.  These end-to-end solutions, which utilize Microsoft-based
 technology, help strengthen customer relationships, enhance collaboration
 throughout the supply chain and develop employees.
     For the fourth consecutive year, Made2Manage software was named to
 Manufacturing Systems' "Top 100 Software Vendors," and for the second time, to
 Software Magazine's "Top 500" lists.  Visit the Made2Manage Web page at
 www.made2manage.com .  Made2Manage may be reached via e-mail at
 info@made2manage.com or by calling 800-626-0220.
 
     Safe Harbor Provision:
     This press release contains certain "forward-looking statements" that
 reflect Made2Manage Systems' expectations regarding its future growth, results
 of operations, performance, and business prospects and opportunities.  Words
 such as, "estimates," "believes," "anticipates," "plans" and similar
 expressions may be used to identify these forward-looking statements, but are
 not the exclusive means of identifying these statements.  These statements
 reflect Made2Manage Systems' current beliefs and are based on information
 currently available to Made2Manage Systems.  Accordingly, these statements are
 subject to known and unknown risks, uncertainties and other factors that could
 cause Made2Manage Systems' actual growth, results, performance and business
 prospects and opportunities to differ from those expressed in, or implied by,
 these statements.  These risks, uncertainties and other factors include
 Made2Manage Systems' ability to develop and market existing and acquired
 products; Made2Manage Systems' ability to successfully integrate its acquired
 products; Made2Manage Systems' ability to adjust to changes in technology,
 customer preferences, enhanced competition and new competitors in the ERP
 market; Made2Manage Systems' ability to develop and market a Web-based ERP
 system; risks associated with developing products using next-generation
 Internet technology; risks associated with conducting a consulting services
 business; general economic and business conditions, which may reduce or delay
 customers' purchases of Made2Manage Systems' products and services; and
 Made2Manage Systems' ability to anticipate variability of quarterly revenues,
 manage rapid growth, attract and retain key employees, deliver new product
 introductions, achieve market acceptance of the products, and protect its
 proprietary software rights from infringement or misappropriation.
 Made2Manage Systems is not obligated to update or revise these forward-looking
 statements to reflect new events or circumstances or otherwise.  Additional
 information concerning factors that could cause actual results to differ
 materially from those in the forward-looking statements is contained in the
 company's SEC reports, including the report on Form 10-K for the year ended
 December 31, 2000.
 
 
                           MADE2MANAGE SYSTEMS, INC.
                              FINANCIAL HIGHLIGHTS
                     (in thousands, except per share data)
                                  (unaudited)
 
                                 Three Months Ended
                                      March 31,
                             2001         2001         2000
                            Actual     Pro forma*     Actual
 
     Total revenues        $ 8,392      $ 8,392      $ 7,296
     Operating loss         (2,783)      (1,191)      (1,030)
     Net loss               (2,096)      (1,093)        (584)
 
     Basic and Diluted:
       Net loss per share  $ (0.44)     $ (0.23)     $ (0.12)
       Weighted average
        shares outstanding   4,810        4,810        4,716
 
     * Pro forma results exclude the restructuring charge.
 
 
                           MADE2MANAGE SYSTEMS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)
 
                                            March 31,    December 31,
                                              2001           2000
                                           (unaudited)
     ASSETS
     Current assets:
       Cash and cash equivalents            $  9,879        $ 11,336
       Marketable securities                   2,641             615
       Trade accounts receivable, net          9,224          11,532
       Prepaid expenses and other              1,342           1,267
       Income taxes, receivable                   47              47
       Deferred income taxes                     215             215
         Total current assets                 23,348          25,012
 
     Property and equipment, net               3,496           4,679
     Deferred income taxes                     2,578           2,054
 
         Total assets                       $ 29,422        $ 31,745
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                     $    943        $  1,197
       Accrued liabilities                     2,594           2,741
       Deferred revenue                       10,509          10,342
         Total current liabilities            14,046          14,280
 
     Deferred revenue                            517             544
 
         Total liabilities                    14,563          14,824
 
     Shareholders' equity:
       Preferred stock, no par value;
        2,000,000 shares authorized,
        no shares issued and outstanding
        in 2001 and 2000                          --              --
       Common stock, no par value;
        10,000,000 shares authorized,
        4,820,804 and 4,758,112 issued and
        outstanding in 2001 and 2000,
        respectively                          22,520          22,486
       Accumulated deficit                    (7,661)         (5,565)
         Total shareholders' equity           14,859          16,921
 
         Total liabilities and
          shareholders' equity              $ 29,422        $ 31,745
 
 
                           MADE2MANAGE SYSTEMS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
                                  (unaudited)
 
                                                          Three Months Ended
                                                               March 31,
                                                            2001        2000
     Revenues:
       Software                                          $ 3,832     $ 2,851
       Services                                            4,356       4,267
       Hardware                                              204         178
         Total revenues                                    8,392       7,296
 
     Costs of revenues:
       Software                                              709         338
       Services                                            2,266       2,030
       Hardware                                              149         122
       Amortization of purchased technology                   --          98
       Restructuring charge                                  640          --
         Total costs of revenues                           3,764       2,588
 
     Gross profit                                          4,628       4,708
 
     Operating expenses:
       Sales and marketing                                 3,540       2,903
       Product development                                 1,705       1,700
       General and administrative                          1,214       1,073
       Amortization of goodwill                               --          62
       Restructuring charge                                  952          --
         Total operating expenses                          7,411       5,738
 
     Operating loss                                       (2,783)     (1,030)
 
     Other income, net                                       163         152
 
     Loss before income taxes                             (2,620)       (878)
 
     Income tax benefit                                      524         294
 
     Net loss                                            $(2,096)    $  (584)
 
     Per share amounts - basic and diluted:
       Net loss per share                                $ (0.44)    $ (0.12)
       Weighted average shares outstanding                 4,810       4,716
 
 SOURCE  Made2Manage Systems Inc.