MINNEAPOLIS, Feb. 5 /PRNewswire-FirstCall/ -- SoftBrands, Inc.
(NYSE Alternext: SBN), a global supplier of enterprise application
software, today announced its financial results for the first
quarter ended Dec. 31, 2008. Revenues for first quarter fiscal 2009
increased 14.8 percent to $25.6 million, compared with $22.2
million in the prior year first quarter. Excluding the effect of
changes in foreign currency exchange rates, or on a constant
currency rate basis, first quarter fiscal 2009 non-GAAP revenues
would have been $26.7 million. License revenue was 26.4% of total
revenues in the current quarter, compared with 13.5% in first
quarter fiscal 2008. Maintenance revenue was 50.7% of total
revenues in the current quarter, compared with 61.0% of revenues in
first quarter fiscal 2008. Professional services revenue was 19.2%
of total revenues in the quarter, compared with 22.1% in the prior
year quarter. SoftBrands reported operating income of $2.4 million
in the first quarter of fiscal 2009, compared with an operating
loss of $(1.2) million in the fiscal 2008 first quarter. The
company reported net income available to common shareholders of
$1.6 million, or $0.03 per diluted share, compared with a net loss
available to common shareholders of $(0.8) million, or $(0.02) per
diluted share, for first quarter fiscal 2008. Changes in foreign
currency exchange rates were beneficial to the company's operating
expenses and as a result, the impact to first quarter fiscal 2009
operating income was minimal. First quarter fiscal 2009 net income
includes income from discontinued operations of $0.4 million, or
$0.01 per diluted share. "SoftBrands posted a strong first quarter,
despite the negative impact of foreign currency rate fluctuations
on our revenues and weakness in the Large Enterprise portion of our
SAP Business," said Randy Tofteland, SoftBrands' president and
chief executive officer. "Our Hospitality business grew its
revenues more than 50 percent compared to the prior year,
benefitting from large projects underway for the Air Force and Red
Roof Inns. Despite the current economy and its potential impact on
revenue growth, we remain committed to improving our
profitability." In the company's manufacturing business, first
quarter fiscal 2009 revenues were $10.7 million, compared with
$12.6 million in first quarter fiscal 2008. On a constant foreign
currency basis, Manufacturing first quarter fiscal 2009 non-GAAP
revenues would have been $11.2 million. First quarter fiscal 2009
operating income in manufacturing was $1.1 million, compared with
$2.3 million in the prior year's first quarter. In the fiscal 2009
quarter the company exited an OEM relationship, which reduced
operating income by $0.3 million. "As we had indicated last
quarter, the Large Enterprise portion of our Manufacturing business
is the most affected by the current economic environment, as large
corporations delay or forego projects. The channel portion of our
SAP business delivered satisfactory results in the first quarter,"
said Tofteland. In the company's hospitality business, first
quarter fiscal 2009 revenues were $14.9 million, compared with $9.7
million in the prior year's first quarter. On a constant foreign
currency basis, Hospitality first quarter fiscal 2009 non-GAAP
revenues would have been $15.4 million. In first quarter fiscal
2009 SoftBrands' hospitality business posted operating income of
$1.3 million, compared with an operating loss of $(3.5) million in
the prior year's first quarter. "Our hospitality business delivered
excellent results in the first quarter, primarily due to the
success we have had in signing key government contracts," said
Tofteland. "Given the slowdown we are seeing in the commercial side
of the business, we are tightly controlling our expenses in order
to improve the profitability of our Hospitality business." From a
geographic perspective, 72% of revenues were generated in the
Americas in the quarter; 16% in the EMEA region; and 12% in the
Asia Pacific region. This compares to a respective mix of 60%, 24%
and 16% in the prior year's quarter. All financial results should
be considered preliminary pending the company's filing of its
quarterly report on Form 10-Q. Cash and Liquidity As of Dec. 31,
2008, SoftBrands had $10.9 million in cash and cash equivalents,
compared with $11.9 million at the end of the previous quarter.
SoftBrands' total current assets, which include accounts
receivable, increased to $40.6 million from $38.4 million at the
end of the previous quarter. Deferred revenue was $21.1 million at
the end of the first quarter, a decrease from $21.5 million at the
end of the previous quarter. Effect of Changes in Foreign Currency
Exchange Rates This press release contains information excluding
the effect of changes in foreign currency exchange rates on
revenues, which is a non-GAAP measure. The strengthening of the
U.S. dollar during first quarter fiscal 2009 negatively impacted
our reported GAAP revenues. The references excluding the effect of
changes in foreign currency exchange rates are calculated on the
basis of exchange rates in first quarter fiscal 2009 being constant
with the rates in first quarter fiscal 2008. Management believes
this non-GAAP measure, when read in conjunction with the Company's
GAAP financials, provides useful information to investors by
providing the ability to make more meaningful period-to-period
comparisons of the company's ongoing operating results. Conference
Call SoftBrands will hold its first quarter earnings conference
call at 5:00 pm Eastern Time today, Feb. 5, 2009. Interested
parties may listen to the call by dialing 866-788-0538 or
international 857-350-1676 (passcode: 93980534) A live webcast will
also be available at SoftBrands' website at
http://www.softbrands.com/. A replay will be available
approximately one hour after the conference call concludes and will
remain available through Feb. 12, 2009. The replay number is
888-286-8010 and international 617-801-6888 (passcode: 14382284).
The webcast will be archived on SoftBrands' website for
approximately one year. Forward-Looking Statements All statements
other than historical facts included in this release regarding
future operations are subject to the risks inherent in predictions
and "forward-looking statements." These statements are based on the
beliefs and assumptions of management of SoftBrands and on
information currently available to us. Nevertheless, these
forward-looking statements should not be construed as guarantees of
future performance. They involve risks, uncertainties, and
assumptions identified in filings by SoftBrands with the SEC,
including, but not limited to, the following: -- Changes in the
economy, natural disasters, disease or other events that affect the
manufacturing and hospitality segments or the geographies we serve;
-- Our increasing dependence upon our relationship with SAP; -- Our
ability to continue to satisfy covenants with our lender; -- Our
reliance on revenues from large hospitality customers; -- Our
ability to timely complete and introduce, and the market acceptance
of our new products; -- Our ability to properly document our sales
consistent with the manner in which we recognize revenue; -- Our
ability to manage international operations; -- Our ability to
maintain and expand our base of clients on software maintenance
programs; and -- The effects of and our ability to rapidly adapt to
changes in standards for operating systems, databases and other
technologies. About SoftBrands SoftBrands, Inc. is a leader in
providing software solutions for businesses in the manufacturing
and hospitality industries worldwide. The company has established a
global infrastructure for distribution, development and support of
enterprise software, and has approximately 5,000 customers in more
than 100 countries actively using its manufacturing and hospitality
products. SoftBrands, which has approximately 775 employees, is
headquartered in Minneapolis, Minn., with branch offices in Europe,
India, Asia, Australia and Africa. Additional information can be
found at http://www.softbrands.com/. Tables Follow SoftBrands, Inc.
Consolidated Balance Sheets December September 31, 30, (In
thousands, except share and per share data) 2008 2008 (Unaudited)
ASSETS Current assets: Cash and cash equivalents $10,857 $11,948
Accounts receivable, net 24,730 21,665 Prepaid expenses and other
current assets 5,012 4,791 Total current assets 40,599 38,404
Furniture, fixtures and equipment, net 1,880 2,095 Goodwill 35,309
35,591 Intangible assets, net 3,636 4,346 Other long-term assets
229 425 Total assets $81,653 $80,861 LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Current portion of long-term
obligations $3,360 $3,407 Revolving loan 8,076 7,782 Accounts
payable 4,431 5,194 Accrued expenses 6,813 7,652 Deferred revenue
21,127 21,500 Other current liabilities 3,162 2,642 Total current
liabilities 46,969 48,177 Long-term obligations 11,857 12,667 Other
long-term liabilities 496 487 Total liabilities 59,322 61,331
Commitments and contingencies Stockholders' equity: Series A and
undesignated preferred stock, $.01 par value; 10,647,973 shares
authorized; no shares issued or outstanding - - Series B
convertible preferred stock, $.01 par value; 4,331,540 shares
authorized, issued and outstanding; liquidation value of $4,591
5,068 5,068 Series C-1 convertible preferred stock, $.01 par value;
18,000 shares authorized, issued and outstanding; liquidation value
of $18,000 plus unpaid dividends of $0 18,000 18,000 Series D
convertible preferred stock, $.01 par value; 6,673 shares
authorized, 6,000 shares issued and outstanding; liquidation value
of $6,000 plus unpaid dividends of $0 5,051 5,051 Common stock,
$.01 par value; 110,000,000 shares authorized; 44,325,827 and
41,931,386 shares issued and outstanding, respectively 443 419
Additional paid-in capital 175,279 174,348 Accumulated other
comprehensive loss (1,144) (939) Accumulated deficit (180,366)
(182,417) Total stockholders' equity 22,331 19,530 Total
liabilities and stockholders' equity $81,653 $80,861 SoftBrands,
Inc. Consolidated Statements of Operations Three Months Ended
December 31, (In thousands, except per share data) 2008 2007
(Unaudited) (Unaudited) Revenues: Software licenses $6,739 $2,997
Maintenance and support 12,944 13,564 Professional services 4,906
4,926 Third-party software and hardware 963 762 Total revenues
25,552 22,249 Cost of revenues: Software licenses 1,090 588
Maintenance and support 3,833 4,005 Professional services 4,290
4,113 Third-party software and hardware 898 732 Total cost of
revenues 10,111 9,438 Gross profit 15,441 12,811 Operating
expenses: Selling and marketing 4,009 4,952 Research and product
development 4,028 3,759 General and administrative 4,979 5,310
Restructuring related charges - 25 Total operating expenses 13,016
14,046 Operating income (loss) 2,425 (1,235) Interest expense (345)
(492) Other income (expense), net 36 357 Income (loss) from
continuing operations before provision for (benefit from) income
taxes 2,116 (1,370) Provision for (benefit from) income taxes 427
(1,037) Income (loss) from continuing operations 1,689 (333) Income
from discontinued operations, net of tax 362 - Net income (loss)
2,051 (333) Preferred stock dividends (491) (491) Net income (loss)
available to common shareholders $1,560 $(824) Weighted-average
common shares outstanding: Basic 46,294 41,419 Diluted 46,391
41,419 Basic and diluted earnings (loss) per common share:
Continuing operations $0.02 $(0.02) Discontinued operations 0.01 -
Net income (loss) $0.03 $(0.02) SoftBrands, Inc. Supplemental
Financial Information (Unaudited, in thousands) Revenues and
Operating Income (Loss) Three Months Ended December 31, 2008 2007 %
Change Operating Operating Operating Income Income Income Revenues
(Loss) Revenues (Loss) Revenues (Loss) Manufacturing $10,654 $1,139
$12,560 $2,299 -15.2% -50.5% Hospitality 14,898 1,286 9,689 (3,534)
53.8% 136.4% Total $25,552 $2,425 $22,249 $(1,235) 14.8% 296.4%
Revenues by Segment and Type Three Months Ended December 31, 2008
2007 Manufact- Manufact- uring Hospitality Total uring Hospitality
Total Software licenses $1,089 $5,650 $6,739 $1,527 $1,470 $2,997
Maintenance and support 7,598 5,346 12,944 8,096 5,468 13,564
Professional services 1,882 3,024 4,906 2,822 2,104 4,926
Third-party software and hardware 85 878 963 115 647 762 Total
$10,654 $14,898 $25,552 $12,560 $9,689 $22,249 Revenues by Segment
and Geography Three Months Ended December 31, 2008 2007 Manufact-
Manufact- uring Hospitality Total uring Hospitality Total Americas
$6,609 $11,757 $18,366 $7,594 $5,778 $13,372 Europe, Middle East
and Africa 2,646 1,383 4,029 3,349 1,944 5,293 Asia Pacific 1,399
1,758 3,157 1,617 1,967 3,584 Total $10,654 $14,898 $25,552 $12,560
$9,689 $22,249 Contact: Gregg Waldon Chief Financial Officer
612-851-1805 Susan Eich Vice President, Corporate Communications
612-851-6205 DATASOURCE: SoftBrands, Inc. CONTACT: Gregg Waldon,
Chief Financial Officer, +1-612-851-1805, , or Susan Eich, Vice
President, Corporate Communications, +1-612-851-6205, , both of
SoftBrands, Inc. Web Site: http://www.softbrands.com/
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