Ross Systems Reports Profitable Third Quarter

Apr 25, 2001, 01:00 ET from Ross Systems, Inc.

    ATLANTA, April 25 /PRNewswire/ -- Ross Systems, Inc. (Nasdaq:   ROSS), a
 leading provider of world class enterprise management software and e-business
 solutions for mid-market process manufacturers, today announced financial
 results for the third quarter of its Fiscal Year 2001, ended March 31, 2001.
     Revenues for the quarter of $11.5 million declined from $18.5 million in
 the same period of the prior year.  Operating expenses for the quarter of
 $10.9 declined from $22.0 million in the prior year.  The net profit for the
 quarter of $2.8 million or $0.11 per diluted share, including a $2.4 million
 extraordinary gain, compares to a net loss of $3.9 million or $0.16 per basic
 share in the prior year, which included a $1.1 million non-recurring charge.
 The results reflect operating earnings of $0.6 million, which improved over
 the sequential quarter.
     For the nine-month period ended March 31, 2001, the company reported that
 Revenues declined to $38.2 million from $63.6 million in the same period of
 the prior year, while Operating Expenses declined to $41.1 million from
 $66.8 million in the prior year.  The Net Loss for the nine-month period ended
 March 31, 2001 was $1.2 million or $0.05 per share, including non-recurring
 cost of $0.8 million as well as the extraordinary gain of $2.4 million,
 compared to a loss of $4.6 million or $0.20 per share, including non-recurring
 cost of $1.1 million.
     Software License Revenues increased 24% from the sequential quarter, while
 the cash position increased by $3.5 million form the prior quarter to
 $4.2 million.  Debt continued to decline, with Short-term debt of $5.3 million
 compared to $10.1 million at the end of Fiscal Year 2000 and long-term debt of
 $1.2 million compared to $2.6 million at the end of Fiscal Year 2000.
     The Company reported positive cash flow for both the quarter and nine-
 month period.  Earnings Before Interest, Taxes, Depreciation and Amortization,
 (EBITDA) for the quarter of $3.9 million or $0.15 per share, increased from a
 negative EBITDA of $4.4 million or $0.19 per share in the prior year same
 quarter.  EBITDA for the nine-month period of $2.2 million or $0.9 per share,
 increased from a negative EBITDA of $5.2 million or $0.22 per share in the
 prior year same period.
     "The results for the quarter reflect the results of the Company's
 aggressive actions to return the Company to profitability by focusing on its
 key markets and superior product functionality, while removing excess costs
 associated with activities in secondary markets," said Pat Tinley, the
 Company's CEO.  "Not only have we experienced two quarters of profitability
 but the sequential growth in software license fees is indicative of our
 activities to resume growth in markets where our products provide compelling
 economic advantage."
     "The sale of the Company's HR/Payroll product line was a win/win for both
 Ross and NOW Solutions, the acquirer," reported Bob Webster, the Company's
 EVP.  "The transaction gives Ross the right to continue the sale of this
 excellent product to its Process Manufacturing market, while NOW Solutions,
 led by the former Ross HR/Payroll management group, intends to expand the
 market for this very competitive internet-enabled product.  In addition, the
 taxable gain of approximately $4.8 million is to a great extent sheltered by
 the Company's NOL and provides a strong cash infusion to the Company."
     The Company experienced improved sales in its core process manufacturing
 business in both North America and Europe:
 
     *  Multi-national / Multi-site sales increased with the German-based
        Kluber Group selecting Ross for three locations, Quebecor, the world's
        largest printing company, expanding its license to over 500 users in
        Europe and Kerry Ingredients, expanding its license to the Asia /
        Pacific area.
 
     *  New and existing customers who continued to invest in Ross' solutions
        included: Cambrex, Centre Hospitalari, Centre Telecomunicacions,
        Cheshire Health Authority, Chesterfield Royal Hospital, Colormatrix,
        Diamond Products, East and North Herts, Frank Calandra, Generics, Grupo
        Bagues-Masriera, HBOC Essex, Isofix, Metropolitan Washington Airport
        Authority, Naipes Heraclio Fournier, Pittsburgh Corning, Recyg, Sumi-
        Agro, Stryker Biotech and Valenciana De Aluminio.
 
     The Company's European operations continued at profitable levels and are
 at their highest level of profitability in over five years.  This validates
 the Company's strategy of direct selling in select European countries and
 utilizing distribution partners in the rest of Europe.
 
     Product Development achieved success in several important areas:
 
     *  The Company's family of e-business products continued to gain
        acceptance in the marketplace.  iRennaisance.connect, the Company's
        XML-based web and back-office integration tool began volume shipments.
 
     *  The latest release of Gembase, the Company's highly regarded
        application development tool provides enhanced performance on
        Microsoft's SQL Server database.  This allows large customers a choice
        to effectively deploy on either the SQL Server or Oracle database.
 
     "We are pleased with our continued progress in transforming our business
 to a more focused provider of enterprise management software and e-business
 solutions for mid-market process manufacturers," said Rod Jones, the Company's
 President.  "Activity levels in both North America and Europe are returning to
 more normal levels as the Y2K slowdown in our industry recedes.  As a result,
 our sales force is experiencing not only higher levels of activity, but
 accelerating sales cycle times.  We expect that the combination of our
 improved financial performance and world class process manufacturing solutions
 will result in a significant ramp up of customer decisions for Ross."
 
     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.
 Actual events or results may differ materially as a result of risks and
 uncertainties, including quarterly fluctuation of software product license
 revenue, weakening of customer demand, 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,
 2000, and the quarterly report on Form 10-Q for the quarters ended September
 30, 2000 and December 31, 2000.
     Ross Systems, Inc. is a leading world class provider of enterprise
 management software and e-business solutions for mid-market process
 manufacturers.  Ross Systems solutions are differentiated by their strong fit
 to specific process manufacturing industries, their strong product
 functionality and deep integration, the strong technology architecture found
 in the RNA architecture and the firm's ability to produce rapid results and
 ROI for its mid-market clients.Renaissance.ERP comprises a broad range of
 applications including financials, manufacturing, supply chain management,
 maintenance management, transportation management, materials management, and
 human resources/payroll.  iRenaissance.APS comprises a complete advanced
 planning system for process manufacturers.  iRenaissance.CMS is a customer
 management system that allows process manufacturers to optimize their order
 management and relationship management with their customers.  More than 3400
 companies around the world have selected Ross many for use of the
 iRenaissance.ERP suite in open systems environments including NT and UNIX.
 Ross Systems has more than 35 offices around the world to serve its customers.
 Ross Systems, Inc, Two Concourse Parkway, Suite 800, Atlanta, Georgia 30328,
 770-351-9600, 1-877-ROSS-INC, www.rossinc.com .
     Renaissance and GEMBASE are registered trademarks of Ross Systems, Inc.
 All other trademarks are the property of their respective holders.
 
 
 
                   ROSS SYSTEMS, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                               (Unaudited)
 
 
                                     Three months ended    Nine months ended
                                         March 31,             March 31,
                                       2001      2000      2001       2000
 
     Revenues:
       Software product licenses      $2,407     $4,146   $6,764    $14,929
       Consulting and other services   3,206      7,402   12,336     27,436
       Maintenance                     5,881      6,929   19,144     21,217
              Total revenues          11,494     18,477   38,244     63,582
 
     Operating expenses:
       Costs of software product
        licenses                         352        759    1,160      2,692
       Costs of consulting,
         maintenance and other
          services                     3,333      9,760   13,446     31,667
       Sales and marketing             3,038      4,858   11,544     15,498
       Product development             2,615      2,524    8,736      7,289
       General and administrative      1,117      1,914    3,869      5,780
       Provision for uncollectible
        accounts                         245        770    1,080      2,006
       Amortization of other assets      158        237      518        757
       Non-recurring costs               ---      1,145      790      1,145
              Total operating
               expenses               10,858     21,967   41,143     66,834
 
     Operating earnings (loss)           636     (3,490)  (2,899)    (3,252)
 
       Other expenses, net              (219)      (359)    (833)    (1,034)
 
     Income (loss) before
      extraordinary item                 417     (3,849)  (3,732)    (4,286)
       Extraordinary item, net of
        tax effect                     2,372        ---    2,372        ---
       Income tax expense (benefit)        2          4     (119)       295
 
     Net income (loss)                $2,787    $(3,853) $(1,241)   $(4,581)
 
 
 
     Net earnings loss per share
       Basic                           $0.11     $(0.16)  $(0.05)    $(0.20)
 
       Diluted  *                      $0.11     $(0.16)  $(0.05)    $(0.20)
 
 
     Shares used in per share
      computation - diluted
       Basic                          25,648     23,416   24,226     23,250
 
       Diluted                        25,648     23,416   24,226     23,250
 
 
                    ROSS SYSTEMS, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share related data)
 
 
                                                           March 31,    June 30
                                                             2001        2000
                                                         (unaudited)  (audited)
 
                                  ASSETS
 
     Current assets:
         Cash and cash equivalents                           $4,172     $2,010
         Accounts receivable, less allowance for
              doubtful accounts and returns                  12,106     21,927
         Prepaids and other current assets                    2,777      1,501
               Total current assets                          19,055     25,438
 
     Property and equipment                                   1,744      3,009
     Computer software costs                                 27,821     32,637
     Other assets                                             2,581      3,211
 
               Total assets                                 $51,201    $64,295
 
 
 
                          LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Current liabilities:
         Current installments of debt                        $5,322    $10,148
         Accounts payable                                     7,017      6,949
         Accrued expenses                                     4,259      5,459
         Income taxes payable                                   356        248
         Deferred revenues                                   11,829     17,974
               Total current liabilities                     28,783     40,778
 
     Long-term debt, less current
      installments                                            1,163      2,627
 
     Shareholders' equity:
         Common stock                                            26         24
         Additional paid-in capital                          86,918     85,780
         Accumulated deficit                                (64,275)   (63,034)
         Accumulated comprehensive income
          (deficit)                                          (1,414)    (1,880)
               Total shareholders' equity                    21,255     20,890
 
               Total liabilities and
                shareholders' equity                        $51,201    $64,295
 
 
 
                        ROSS SYSTEMS, INC. AND SUBSIDIARIES
                      SELECTED UNAUDITED QUARTERLY INFORMATION
                     (In thousands, except for per share data)
 
 
                                   Rolling
                                  12 Month
                                    Total                    Quarter Ended
                                          March 31, Dec. 31, Sept. 30, June 30,
                                            2001      2000     2000     2000
 
     Total revenues                $54,665  $11,494  $12,598  $14,152  $16,421
 
     Total operating expenses       62,274   10,858   12,093   18,193   21,130
 
     Operating earnings             (7,609)     636      505   (4,041)  (4,709)
 
     Net earnings                  $(6,321)  $2,787     $167  $(4,195) $(5,080)
 
     Net earnings per common share
      - diluted                     $(0.27)   $0.11    $0.01   $(0.17)  $(0.22)
 
     Common and common equivalent
      shares used in computing
      diluted earnings per share    24,146   25,648   23,336   24,119   23,480
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X70646916
 
 

SOURCE Ross Systems, Inc.
    ATLANTA, April 25 /PRNewswire/ -- Ross Systems, Inc. (Nasdaq:   ROSS), a
 leading provider of world class enterprise management software and e-business
 solutions for mid-market process manufacturers, today announced financial
 results for the third quarter of its Fiscal Year 2001, ended March 31, 2001.
     Revenues for the quarter of $11.5 million declined from $18.5 million in
 the same period of the prior year.  Operating expenses for the quarter of
 $10.9 declined from $22.0 million in the prior year.  The net profit for the
 quarter of $2.8 million or $0.11 per diluted share, including a $2.4 million
 extraordinary gain, compares to a net loss of $3.9 million or $0.16 per basic
 share in the prior year, which included a $1.1 million non-recurring charge.
 The results reflect operating earnings of $0.6 million, which improved over
 the sequential quarter.
     For the nine-month period ended March 31, 2001, the company reported that
 Revenues declined to $38.2 million from $63.6 million in the same period of
 the prior year, while Operating Expenses declined to $41.1 million from
 $66.8 million in the prior year.  The Net Loss for the nine-month period ended
 March 31, 2001 was $1.2 million or $0.05 per share, including non-recurring
 cost of $0.8 million as well as the extraordinary gain of $2.4 million,
 compared to a loss of $4.6 million or $0.20 per share, including non-recurring
 cost of $1.1 million.
     Software License Revenues increased 24% from the sequential quarter, while
 the cash position increased by $3.5 million form the prior quarter to
 $4.2 million.  Debt continued to decline, with Short-term debt of $5.3 million
 compared to $10.1 million at the end of Fiscal Year 2000 and long-term debt of
 $1.2 million compared to $2.6 million at the end of Fiscal Year 2000.
     The Company reported positive cash flow for both the quarter and nine-
 month period.  Earnings Before Interest, Taxes, Depreciation and Amortization,
 (EBITDA) for the quarter of $3.9 million or $0.15 per share, increased from a
 negative EBITDA of $4.4 million or $0.19 per share in the prior year same
 quarter.  EBITDA for the nine-month period of $2.2 million or $0.9 per share,
 increased from a negative EBITDA of $5.2 million or $0.22 per share in the
 prior year same period.
     "The results for the quarter reflect the results of the Company's
 aggressive actions to return the Company to profitability by focusing on its
 key markets and superior product functionality, while removing excess costs
 associated with activities in secondary markets," said Pat Tinley, the
 Company's CEO.  "Not only have we experienced two quarters of profitability
 but the sequential growth in software license fees is indicative of our
 activities to resume growth in markets where our products provide compelling
 economic advantage."
     "The sale of the Company's HR/Payroll product line was a win/win for both
 Ross and NOW Solutions, the acquirer," reported Bob Webster, the Company's
 EVP.  "The transaction gives Ross the right to continue the sale of this
 excellent product to its Process Manufacturing market, while NOW Solutions,
 led by the former Ross HR/Payroll management group, intends to expand the
 market for this very competitive internet-enabled product.  In addition, the
 taxable gain of approximately $4.8 million is to a great extent sheltered by
 the Company's NOL and provides a strong cash infusion to the Company."
     The Company experienced improved sales in its core process manufacturing
 business in both North America and Europe:
 
     *  Multi-national / Multi-site sales increased with the German-based
        Kluber Group selecting Ross for three locations, Quebecor, the world's
        largest printing company, expanding its license to over 500 users in
        Europe and Kerry Ingredients, expanding its license to the Asia /
        Pacific area.
 
     *  New and existing customers who continued to invest in Ross' solutions
        included: Cambrex, Centre Hospitalari, Centre Telecomunicacions,
        Cheshire Health Authority, Chesterfield Royal Hospital, Colormatrix,
        Diamond Products, East and North Herts, Frank Calandra, Generics, Grupo
        Bagues-Masriera, HBOC Essex, Isofix, Metropolitan Washington Airport
        Authority, Naipes Heraclio Fournier, Pittsburgh Corning, Recyg, Sumi-
        Agro, Stryker Biotech and Valenciana De Aluminio.
 
     The Company's European operations continued at profitable levels and are
 at their highest level of profitability in over five years.  This validates
 the Company's strategy of direct selling in select European countries and
 utilizing distribution partners in the rest of Europe.
 
     Product Development achieved success in several important areas:
 
     *  The Company's family of e-business products continued to gain
        acceptance in the marketplace.  iRennaisance.connect, the Company's
        XML-based web and back-office integration tool began volume shipments.
 
     *  The latest release of Gembase, the Company's highly regarded
        application development tool provides enhanced performance on
        Microsoft's SQL Server database.  This allows large customers a choice
        to effectively deploy on either the SQL Server or Oracle database.
 
     "We are pleased with our continued progress in transforming our business
 to a more focused provider of enterprise management software and e-business
 solutions for mid-market process manufacturers," said Rod Jones, the Company's
 President.  "Activity levels in both North America and Europe are returning to
 more normal levels as the Y2K slowdown in our industry recedes.  As a result,
 our sales force is experiencing not only higher levels of activity, but
 accelerating sales cycle times.  We expect that the combination of our
 improved financial performance and world class process manufacturing solutions
 will result in a significant ramp up of customer decisions for Ross."
 
     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.
 Actual events or results may differ materially as a result of risks and
 uncertainties, including quarterly fluctuation of software product license
 revenue, weakening of customer demand, 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,
 2000, and the quarterly report on Form 10-Q for the quarters ended September
 30, 2000 and December 31, 2000.
     Ross Systems, Inc. is a leading world class provider of enterprise
 management software and e-business solutions for mid-market process
 manufacturers.  Ross Systems solutions are differentiated by their strong fit
 to specific process manufacturing industries, their strong product
 functionality and deep integration, the strong technology architecture found
 in the RNA architecture and the firm's ability to produce rapid results and
 ROI for its mid-market clients.Renaissance.ERP comprises a broad range of
 applications including financials, manufacturing, supply chain management,
 maintenance management, transportation management, materials management, and
 human resources/payroll.  iRenaissance.APS comprises a complete advanced
 planning system for process manufacturers.  iRenaissance.CMS is a customer
 management system that allows process manufacturers to optimize their order
 management and relationship management with their customers.  More than 3400
 companies around the world have selected Ross many for use of the
 iRenaissance.ERP suite in open systems environments including NT and UNIX.
 Ross Systems has more than 35 offices around the world to serve its customers.
 Ross Systems, Inc, Two Concourse Parkway, Suite 800, Atlanta, Georgia 30328,
 770-351-9600, 1-877-ROSS-INC, www.rossinc.com .
     Renaissance and GEMBASE are registered trademarks of Ross Systems, Inc.
 All other trademarks are the property of their respective holders.
 
 
 
                   ROSS SYSTEMS, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                               (Unaudited)
 
 
                                     Three months ended    Nine months ended
                                         March 31,             March 31,
                                       2001      2000      2001       2000
 
     Revenues:
       Software product licenses      $2,407     $4,146   $6,764    $14,929
       Consulting and other services   3,206      7,402   12,336     27,436
       Maintenance                     5,881      6,929   19,144     21,217
              Total revenues          11,494     18,477   38,244     63,582
 
     Operating expenses:
       Costs of software product
        licenses                         352        759    1,160      2,692
       Costs of consulting,
         maintenance and other
          services                     3,333      9,760   13,446     31,667
       Sales and marketing             3,038      4,858   11,544     15,498
       Product development             2,615      2,524    8,736      7,289
       General and administrative      1,117      1,914    3,869      5,780
       Provision for uncollectible
        accounts                         245        770    1,080      2,006
       Amortization of other assets      158        237      518        757
       Non-recurring costs               ---      1,145      790      1,145
              Total operating
               expenses               10,858     21,967   41,143     66,834
 
     Operating earnings (loss)           636     (3,490)  (2,899)    (3,252)
 
       Other expenses, net              (219)      (359)    (833)    (1,034)
 
     Income (loss) before
      extraordinary item                 417     (3,849)  (3,732)    (4,286)
       Extraordinary item, net of
        tax effect                     2,372        ---    2,372        ---
       Income tax expense (benefit)        2          4     (119)       295
 
     Net income (loss)                $2,787    $(3,853) $(1,241)   $(4,581)
 
 
 
     Net earnings loss per share
       Basic                           $0.11     $(0.16)  $(0.05)    $(0.20)
 
       Diluted  *                      $0.11     $(0.16)  $(0.05)    $(0.20)
 
 
     Shares used in per share
      computation - diluted
       Basic                          25,648     23,416   24,226     23,250
 
       Diluted                        25,648     23,416   24,226     23,250
 
 
                    ROSS SYSTEMS, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share related data)
 
 
                                                           March 31,    June 30
                                                             2001        2000
                                                         (unaudited)  (audited)
 
                                  ASSETS
 
     Current assets:
         Cash and cash equivalents                           $4,172     $2,010
         Accounts receivable, less allowance for
              doubtful accounts and returns                  12,106     21,927
         Prepaids and other current assets                    2,777      1,501
               Total current assets                          19,055     25,438
 
     Property and equipment                                   1,744      3,009
     Computer software costs                                 27,821     32,637
     Other assets                                             2,581      3,211
 
               Total assets                                 $51,201    $64,295
 
 
 
                          LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Current liabilities:
         Current installments of debt                        $5,322    $10,148
         Accounts payable                                     7,017      6,949
         Accrued expenses                                     4,259      5,459
         Income taxes payable                                   356        248
         Deferred revenues                                   11,829     17,974
               Total current liabilities                     28,783     40,778
 
     Long-term debt, less current
      installments                                            1,163      2,627
 
     Shareholders' equity:
         Common stock                                            26         24
         Additional paid-in capital                          86,918     85,780
         Accumulated deficit                                (64,275)   (63,034)
         Accumulated comprehensive income
          (deficit)                                          (1,414)    (1,880)
               Total shareholders' equity                    21,255     20,890
 
               Total liabilities and
                shareholders' equity                        $51,201    $64,295
 
 
 
                        ROSS SYSTEMS, INC. AND SUBSIDIARIES
                      SELECTED UNAUDITED QUARTERLY INFORMATION
                     (In thousands, except for per share data)
 
 
                                   Rolling
                                  12 Month
                                    Total                    Quarter Ended
                                          March 31, Dec. 31, Sept. 30, June 30,
                                            2001      2000     2000     2000
 
     Total revenues                $54,665  $11,494  $12,598  $14,152  $16,421
 
     Total operating expenses       62,274   10,858   12,093   18,193   21,130
 
     Operating earnings             (7,609)     636      505   (4,041)  (4,709)
 
     Net earnings                  $(6,321)  $2,787     $167  $(4,195) $(5,080)
 
     Net earnings per common share
      - diluted                     $(0.27)   $0.11    $0.01   $(0.17)  $(0.22)
 
     Common and common equivalent
      shares used in computing
      diluted earnings per share    24,146   25,648   23,336   24,119   23,480
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X70646916
 
 SOURCE  Ross Systems, Inc.