SCT Announces Second Quarter Fiscal 2001 Results

Apr 19, 2001, 01:00 ET from SCT

    MALVERN, Pa., April 19 /PRNewswire/ -- SCT (Nasdaq: SCTC), a leading
 global provider of e-business solutions for four industry markets - utilities;
 process manufacturing and distribution; education; and government - today
 announced its financial results for the second quarter of fiscal year 2001,
 ended March 31, 2001.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001006/PHF017LOGO )
     Revenue for the quarter was $103,729,000, compared with $114,270,000 in
 the second quarter of fiscal 2000, resulting in a loss of $6,502,000 before
 charges for asset impairment (discussed below) and taxes, compared with income
 before taxes of $6,134,000 for the prior year's second fiscal quarter.  On an
 after-tax basis before the impairment charge, the Company incurred a loss for
 the period of $4,031,000, versus net income of $3,619,000 for the same period
 last year.  After the asset impairment charge, the loss before taxes was
 $18,087,000, and the net loss was $11,214,000.
     During the quarter, SCT recorded an asset impairment charge against its
 aggregate investments in various privately held companies, consisting
 primarily of WebCT and CourtLink Corporation, of $11,585,000 reducing the
 carrying value of SCT's investment in these internet-related companies to
 $9,415,000.  SCT's investment in Campus Pipeline, Inc. was reduced to zero in
 fiscal year 2000 under the equity method of accounting and was not included in
 the impairment charge this quarter.
     Before the charge, second quarter 2001 diluted loss per share was $.12;
 and after the charge, a diluted loss per share of $.34.  For the same quarter
 last year, diluted earnings per share were $.11.
     The Company's backlog of business under contract at the end of second
 quarter was approximately $734 million, compared with approximately
 $693 million a year ago.
     "The dramatic change and growing caution in the general business climate
 during this last quarter has been all too evident, particularly in the tech
 sector, and it has impacted our quarterly results as well," said Michael J.
 Emmi, Chairman and CEO of SCT.  "Certainly we are disappointed by this
 downturn, but nonetheless believe that we are well positioned for growth in
 our four vertical markets."
     "In this economic environment, it's prudent to closely monitor and manage
 expenses," Emmi said.  "Accordingly, we are in the process of targeting a 5%
 reduction in operating expenses.  This will result in eliminating some
 programs, along with a reduction in related staffing levels.  These combined
 initiatives will better position us to improve our overall bottom line as the
 economic environment improves."
     Emmi added, "License fees were a disappointment across all of our
 businesses. However, we did close some important deals."
     SCT's global energy, utilities and communications solutions business
 signed a $3.3 million contract for its Banner(R) Customer Management System
 and for extensive services with Metropolitan St. Louis Sewer District (MSD),
 one of the nation's largest wastewater treatment utilities.
     "We also saw promise in our consulting and services business, particularly
 in the growing market for utilities where deregulation is presenting many
 challenges," Emmi said.  SCT has the dominant market lead in total aggregation
 and fulfillment systems, where more than 220 clients use more than 180 SCT
 systems to support both regulated and deregulated public and private utility
 companies.
     "In our process manufacturing and distribution solutions business," Emmi
 said, "we introduced our expanded vision for collaboration in commerce
 networks and have received tremendous feedback from the analyst and client
 community.  In support of that vision, we are continuing to build new products
 and enhancements into our iProcess.sct solution.  And this quarter we hired a
 new vice president of sales and anticipate that this strengthening of our
 sales force will contribute to improved overall results."
     In SCT's market-leading global education solutions business, five major
 new services contracts were closed, and a significant services and license
 agreement was also signed with the Tennessee Board of Regents.
     SCT's global government solutions business posted an increase in
 outsourcing services, and signed its first SCT Juror contract with a large
 metropolitan court.  SCT Juror (formerly Omni-Tech's JUROR for Windows) is a
 market-leading jury management software solution that automates jury selection
 and jury management processes.  SCT added the jury management solution upon
 acquiring Omni-Tech Systems in the first quarter of fiscal year 2001.
 
     About SCT
     SCT provides and supports e-business solutions that enable clients to
 achieve breakthrough business results.  The company's unique and powerful
 e-business solutions combine application software and services to deliver
 benefits quickly.  As a global operation, SCT offers specific solutions for
 four industry markets: energy, utilities and communications; process
 manufacturing and distribution; education; and government.  SCT has more than
 3,400 employees and serves more than 2,900 clients worldwide.  The company is
 headquartered in Malvern, Pa.  For more information, visit www.sct.com.
 
     The matters discussed in this press release that are forward-looking
 statements are based on current management expectations that involve risks and
 uncertainties that could cause actual results to differ materially from those
 anticipated.  Potential risks and uncertainties include, without limitation,
 the impact on the Company of rapidly changing areas such as the Internet,
 on-line services and electronic commerce; continued market acceptance of the
 Company's and its alliance partners' products and services; the ability of the
 Company and its alliance partners to accomplish their integration plans and to
 meet development and implementation schedules; the timing of the receipt of
 software licenses; competitive and pricing pressures in the markets which the
 Company serves; the Company's ability to complete fixed-price contracts
 profitably; the timing of the receipt of services contracts and renewals; the
 mix of products and services the Company sells; the Company's ability to
 develop and market innovative products and enhancements cost-effectively and
 on a timely basis; the Company's ability to attract and retain highly skilled
 technical, managerial, sales and marketing personnel; general economic
 conditions; and other risks and uncertainties more specifically set forth in
 the Company's filings with the Securities and Exchange Commission.
 
       SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES
       CONSOLIDATED RESULTS OF OPERATIONS
       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
                             Three Months Ended           Six Months Ended
                                  March 31,                   March 31,
                             2001          2000          2001          2000
     Revenues:
       Outsourcing
        services            $32,001       $33,309      $62,699       $65,451
       Software sales         7,174        19,297       23,303        24,223
       Maintenance and
        enhancements         25,973        23,681       50,412        45,001
       Software services     37,242        37,704       71,384        75,690
       Other income and gain
        on sale of assets     1,339           279        2,958           584
          Total Revenues    103,729       114,270      210,756       210,949
 
     Expenses:
       Cost of outsourcing
        services             27,141        28,992       52,260        54,986
       Cost of software
        sales and maintenance
        and enhancements     23,249        22,812       44,247        42,661
       Cost of software
        services             25,290        24,166       50,007        52,372
       Selling, general, and
        administrative       33,344        28,810       64,987        56,595
       Asset impairment
        charge               11,585             0       11,585             0
       Equity in losses of
        affiliates                0         2,220            0         4,761
       Restructuring charges      0             0            0         1,000
       Interest expense       1,207         1,136        2,421         2,292
          Total Expenses    121,816       108,136      225,507       214,667
 
     Income (loss) before
      income taxes          (18,087)        6,134      (14,751)       (3,718)
     Provision (benefit)
      for income taxes       (6,873)        2,515       (5,538)       (1,130)
     Net income (loss)     ($11,214)       $3,619      ($9,213)      ($2,588)
 
 
     Net income (loss)
      per common share       ($0.34)        $0.11       ($0.28)       ($0.08)
     Net income (loss)
      per share -- assuming
      dilution               ($0.34)        $0.11       ($0.28)       ($0.08)
 
     Common shares and
      equivalents
      outstanding:
       Average common
        shares               32,811        32,324       32,771        32,230
       Average common shares
        -- assuming dilution 32,811        33,847       32,771        32,230
 
 
      CONDENSED CONSOLIDATED BALANCE SHEETS
 
                                                     March 31,      Sept. 30,
                                                       2001           2000
 
     Cash & short-term investments                    $74,341        $65,948
     Receivables                                      126,918        138,965
     Prepaid expenses and other receivables            32,026         25,586
     Property & equipment                              60,849         63,335
     Capitalized software                              16,679         19,310
     Cost in excess of fair value of net assets
      acquired                                         14,956         15,738
     Other assets & deferred charges                   34,772         39,241
          TOTAL ASSETS                               $360,541       $368,123
 
     Current liabilities                              $87,010        $87,135
     Long-term debt                                    77,113         77,521
     Other long-term liabilities                        2,066          2,030
     Shareholders' equity                             194,352        201,437
          TOTAL LIABILITIES & EQUITY                 $360,541       $368,123
 
 

SOURCE SCT
    MALVERN, Pa., April 19 /PRNewswire/ -- SCT (Nasdaq: SCTC), a leading
 global provider of e-business solutions for four industry markets - utilities;
 process manufacturing and distribution; education; and government - today
 announced its financial results for the second quarter of fiscal year 2001,
 ended March 31, 2001.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001006/PHF017LOGO )
     Revenue for the quarter was $103,729,000, compared with $114,270,000 in
 the second quarter of fiscal 2000, resulting in a loss of $6,502,000 before
 charges for asset impairment (discussed below) and taxes, compared with income
 before taxes of $6,134,000 for the prior year's second fiscal quarter.  On an
 after-tax basis before the impairment charge, the Company incurred a loss for
 the period of $4,031,000, versus net income of $3,619,000 for the same period
 last year.  After the asset impairment charge, the loss before taxes was
 $18,087,000, and the net loss was $11,214,000.
     During the quarter, SCT recorded an asset impairment charge against its
 aggregate investments in various privately held companies, consisting
 primarily of WebCT and CourtLink Corporation, of $11,585,000 reducing the
 carrying value of SCT's investment in these internet-related companies to
 $9,415,000.  SCT's investment in Campus Pipeline, Inc. was reduced to zero in
 fiscal year 2000 under the equity method of accounting and was not included in
 the impairment charge this quarter.
     Before the charge, second quarter 2001 diluted loss per share was $.12;
 and after the charge, a diluted loss per share of $.34.  For the same quarter
 last year, diluted earnings per share were $.11.
     The Company's backlog of business under contract at the end of second
 quarter was approximately $734 million, compared with approximately
 $693 million a year ago.
     "The dramatic change and growing caution in the general business climate
 during this last quarter has been all too evident, particularly in the tech
 sector, and it has impacted our quarterly results as well," said Michael J.
 Emmi, Chairman and CEO of SCT.  "Certainly we are disappointed by this
 downturn, but nonetheless believe that we are well positioned for growth in
 our four vertical markets."
     "In this economic environment, it's prudent to closely monitor and manage
 expenses," Emmi said.  "Accordingly, we are in the process of targeting a 5%
 reduction in operating expenses.  This will result in eliminating some
 programs, along with a reduction in related staffing levels.  These combined
 initiatives will better position us to improve our overall bottom line as the
 economic environment improves."
     Emmi added, "License fees were a disappointment across all of our
 businesses. However, we did close some important deals."
     SCT's global energy, utilities and communications solutions business
 signed a $3.3 million contract for its Banner(R) Customer Management System
 and for extensive services with Metropolitan St. Louis Sewer District (MSD),
 one of the nation's largest wastewater treatment utilities.
     "We also saw promise in our consulting and services business, particularly
 in the growing market for utilities where deregulation is presenting many
 challenges," Emmi said.  SCT has the dominant market lead in total aggregation
 and fulfillment systems, where more than 220 clients use more than 180 SCT
 systems to support both regulated and deregulated public and private utility
 companies.
     "In our process manufacturing and distribution solutions business," Emmi
 said, "we introduced our expanded vision for collaboration in commerce
 networks and have received tremendous feedback from the analyst and client
 community.  In support of that vision, we are continuing to build new products
 and enhancements into our iProcess.sct solution.  And this quarter we hired a
 new vice president of sales and anticipate that this strengthening of our
 sales force will contribute to improved overall results."
     In SCT's market-leading global education solutions business, five major
 new services contracts were closed, and a significant services and license
 agreement was also signed with the Tennessee Board of Regents.
     SCT's global government solutions business posted an increase in
 outsourcing services, and signed its first SCT Juror contract with a large
 metropolitan court.  SCT Juror (formerly Omni-Tech's JUROR for Windows) is a
 market-leading jury management software solution that automates jury selection
 and jury management processes.  SCT added the jury management solution upon
 acquiring Omni-Tech Systems in the first quarter of fiscal year 2001.
 
     About SCT
     SCT provides and supports e-business solutions that enable clients to
 achieve breakthrough business results.  The company's unique and powerful
 e-business solutions combine application software and services to deliver
 benefits quickly.  As a global operation, SCT offers specific solutions for
 four industry markets: energy, utilities and communications; process
 manufacturing and distribution; education; and government.  SCT has more than
 3,400 employees and serves more than 2,900 clients worldwide.  The company is
 headquartered in Malvern, Pa.  For more information, visit www.sct.com.
 
     The matters discussed in this press release that are forward-looking
 statements are based on current management expectations that involve risks and
 uncertainties that could cause actual results to differ materially from those
 anticipated.  Potential risks and uncertainties include, without limitation,
 the impact on the Company of rapidly changing areas such as the Internet,
 on-line services and electronic commerce; continued market acceptance of the
 Company's and its alliance partners' products and services; the ability of the
 Company and its alliance partners to accomplish their integration plans and to
 meet development and implementation schedules; the timing of the receipt of
 software licenses; competitive and pricing pressures in the markets which the
 Company serves; the Company's ability to complete fixed-price contracts
 profitably; the timing of the receipt of services contracts and renewals; the
 mix of products and services the Company sells; the Company's ability to
 develop and market innovative products and enhancements cost-effectively and
 on a timely basis; the Company's ability to attract and retain highly skilled
 technical, managerial, sales and marketing personnel; general economic
 conditions; and other risks and uncertainties more specifically set forth in
 the Company's filings with the Securities and Exchange Commission.
 
       SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES
       CONSOLIDATED RESULTS OF OPERATIONS
       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
                             Three Months Ended           Six Months Ended
                                  March 31,                   March 31,
                             2001          2000          2001          2000
     Revenues:
       Outsourcing
        services            $32,001       $33,309      $62,699       $65,451
       Software sales         7,174        19,297       23,303        24,223
       Maintenance and
        enhancements         25,973        23,681       50,412        45,001
       Software services     37,242        37,704       71,384        75,690
       Other income and gain
        on sale of assets     1,339           279        2,958           584
          Total Revenues    103,729       114,270      210,756       210,949
 
     Expenses:
       Cost of outsourcing
        services             27,141        28,992       52,260        54,986
       Cost of software
        sales and maintenance
        and enhancements     23,249        22,812       44,247        42,661
       Cost of software
        services             25,290        24,166       50,007        52,372
       Selling, general, and
        administrative       33,344        28,810       64,987        56,595
       Asset impairment
        charge               11,585             0       11,585             0
       Equity in losses of
        affiliates                0         2,220            0         4,761
       Restructuring charges      0             0            0         1,000
       Interest expense       1,207         1,136        2,421         2,292
          Total Expenses    121,816       108,136      225,507       214,667
 
     Income (loss) before
      income taxes          (18,087)        6,134      (14,751)       (3,718)
     Provision (benefit)
      for income taxes       (6,873)        2,515       (5,538)       (1,130)
     Net income (loss)     ($11,214)       $3,619      ($9,213)      ($2,588)
 
 
     Net income (loss)
      per common share       ($0.34)        $0.11       ($0.28)       ($0.08)
     Net income (loss)
      per share -- assuming
      dilution               ($0.34)        $0.11       ($0.28)       ($0.08)
 
     Common shares and
      equivalents
      outstanding:
       Average common
        shares               32,811        32,324       32,771        32,230
       Average common shares
        -- assuming dilution 32,811        33,847       32,771        32,230
 
 
      CONDENSED CONSOLIDATED BALANCE SHEETS
 
                                                     March 31,      Sept. 30,
                                                       2001           2000
 
     Cash & short-term investments                    $74,341        $65,948
     Receivables                                      126,918        138,965
     Prepaid expenses and other receivables            32,026         25,586
     Property & equipment                              60,849         63,335
     Capitalized software                              16,679         19,310
     Cost in excess of fair value of net assets
      acquired                                         14,956         15,738
     Other assets & deferred charges                   34,772         39,241
          TOTAL ASSETS                               $360,541       $368,123
 
     Current liabilities                              $87,010        $87,135
     Long-term debt                                    77,113         77,521
     Other long-term liabilities                        2,066          2,030
     Shareholders' equity                             194,352        201,437
          TOTAL LIABILITIES & EQUITY                 $360,541       $368,123
 
 SOURCE  SCT

RELATED LINKS

http://www.sctcorp.com