MINNEAPOLIS -- SoftBrands, Inc. (Amex:SBN), a global supplier of enterprise application software, today announced its financial results for the second quarter ended March 31, 2007. Revenues for the second quarter of fiscal 2007 were $21.4 million, an increase of 23% compared with revenues of $17.4 million in the second quarter fiscal 2006. The year-over-year increase in revenue was primarily the result of the acquisition of HIS in fourth quarter fiscal 2006.
Maintenance revenue accounted for 63 percent of total revenues in the current quarter, an increase from 60 percent of revenues in the second quarter of fiscal 2006. SoftBrands reported an operating loss of $1.8 million in the second quarter of fiscal 2007, compared with an operating loss of $1.3 million in the second quarter of fiscal 2006. The company reported a net loss available to common shareholders of $3.3 million, or $0.08 per diluted share, for second quarter fiscal 2007, compared with a loss of $1.6 million, or a loss of $0.04 per diluted share, for the prior year's quarter. "The early stages of our growth initiatives, combined with the timing of large transactions, can cause variability in our quarter-to-quarter results, and we experienced the positive and negative impact associated with this during the first half of fiscal 2007. As we previewed on April 10, our financial performance in the second quarter was below our original expectations," said Randy Tofteland, SoftBrands president and chief
executive officer. "Our hospitality business was the primary cause of the revenue shortfall in the second quarter. However, we are confident about hospitality's long- term outlook due to the strong results of this business during the prior two quarters. In addition, we have a solid pipeline of opportunities that includes large potential projects with customers already in the process of being implemented," said Tofteland. "In manufacturing, we were closer to plan in the second quarter, and since that time, SoftBrands has been selected in two strategic SAP B1 Large deals. These wins have the potential to open the door to additional opportunities over the long term. We are optimistic about our manufacturing business given this progress in large accounts and the momentum we are seeing in our channel activities." "While the revenue shortfall in the second quarter impacts our full year outlook, we expect to post sequential improvement in revenue during the third and fourth quarters. Success in doing so would lead to operating margins in the low single digits for the year, including non-cash stock compensation and amortization of intangibles expenses, which have a combined five percentage point impact on operating margin. This would represent a material year-over- year improvement in operating profit for
the fiscal year," said Tofteland. Highlights of the second quarter and other recent developments include:
In the company's manufacturing business, second quarter fiscal 2007 revenues were $12.1 million, compared with $13.0 million in the fiscal 2006 period. Second quarter fiscal 2007 operating income in manufacturing was $770,000, an increase compared to $140,000 in the prior year's second quarter.
In the company's hospitality business, second quarter fiscal 2007 revenues were $9.3 million, a significant increase from $4.4 million in the prior year's quarter due to the acquisition of HIS. In second quarter fiscal 2007, SoftBrands' hospitality business generated an operating loss of $2.6 million, compared to an operating loss of $1.5 million in the second quarter of fiscal 2006.
From a geographic perspective, 60 percent of our revenues were generated in the Americas in the quarter; 26 percent in the EMEA region; and 14 percent in the Asia Pacific region. This compares to a respective mix of 54 percent, 34 percent and 12 percent in the prior year's quarter.
Six Month Results
SoftBrands reported an operating loss of $351,000 for the first half of fiscal 2007, compared with an operating loss of $2.1 million for the first
six months of fiscal 2006. The company reported a net loss available to common shareholders of $3.3 million for the fiscal 2007 six-month period, or a loss of $0.08 cents per diluted share, compared with a loss of $2.1 million, or a loss of $0.05 per diluted share in the fiscal 2006 period.
Revenues for the six months ended March 31, 2007 were $46.4 million, compared with $34.1 million in the 2006 period, primarily as a result of the HIS acquisition.
Cash and Liquidity
As of March 31, 2007, SoftBrands had $15.3 million in cash and cash equivalents, an increase of 20 percent from $12.8 million at the end of the previous quarter. The increase in cash was driven by positive cash from operations during the quarter. A $3.1 million increase in deferred revenue was the primary contributor to the positive cash flow in the second quarter.
Conference Call
SoftBrands will hold its second quarter earnings conference call at 5:30 pm Eastern Time on May 15, 2007. Interested parties may listen to the call by dialing 866-700-7477 or international 617-213-8840 (passcode:
41951775). A live webcast will also be available at SoftBrands' website at
SoftBrands, Inc.
Consolidated Balance Sheets
March 31, September 30,
(In thousands, except share and per 2007 2006
share data) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $15,345 $14,520
Accounts receivable, net 10,124 7,555
Prepaid expenses and other current
assets 4,041 3,542
Total current assets 29,510 25,617
Furniture, fixtures and equipment,
net 2,637 2,787
Restricted cash 78 73
Goodwill 34,761 35,021
Intangible assets, net 9,090 10,844
Other long-term assets 627 705
Total assets $76,703 $75,047
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
obligations $3,893 $2,618
Accounts payable 1,659 2,110
Accrued expenses 8,341 6,870
Accrued restructuring costs 355 936
Deferred revenue 25,685 22,560
Other current liabilities 1,360 1,288
Total current liabilities 41,293 36,382
Long-term obligations 17,824 19,302
Other long-term liabilities 1,075 835
Total liabilities 60,192 56,519
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 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 5,051 5,051
Common stock, $.01 par value;
110,000,000 shares authorized;
41,253,625
and 41,024,960 shares issued
and outstanding, respectively 412 410
Additional paid-in capital 173,954 173,791
Accumulated other comprehensive
loss (1,640) (1,670)
Accumulated deficit (184,334) (182,122)
Total stockholders' equity 16,511 18,528
Total liabilities and
stockholders' equity $76,703 $75,047
SoftBrands, Inc.
Consolidated Statements of Operations
Three Months Ended Six Months Ended
March 31, March 31,
(In thousands, except 2007 2006 2007 2006
per share data) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Software licenses $2,871 $2,561 $8,333 $4,918
Maintenance and support 13,481 10,462 27,239 20,967
Professional services 4,407 3,707 9,345 7,062
Third-party software
and hardware 666 646 1,503 1,171
Total revenues 21,425 17,376 46,420 34,118
Cost of revenues:
Software licenses 222 933 1,229 1,916
Maintenance and support 4,193 3,294 8,099 6,542
Professional services 4,294 3,214 8,633 6,254
Third-party software
and hardware 563 433 1,141 775
Total cost of revenues 9,272 7,874 19,102 15,487
Gross profit 12,153 9,502 27,318 18,631
Operating expenses:
Selling and marketing 4,763 3,169 9,975 5,957
Research and
product development 3,853 2,553 7,175 4,992
General and administrative 5,330 5,106 10,519 9,829
Total operating expenses 13,946 10,828 27,669 20,778
Operating loss (1,793) (1,326) (351) (2,147)
Interest expense (472) (2) (944) (6)
Other income, net (89) 88 (40) 173
Loss from continuing
operations before (2,354) (1,240) (1,335) (1,980)
provision for income taxes
Provision for income taxes 457 92 973 5
Loss from
continuing operations (2,811) (1,332) (2,308) (1,985)
Discontinued operations:
Income (loss) from discontinued
operations, net of tax -- (38) -- 388
Net loss (2,811) (1,370) (2,308) (1,597)
Preferred stock dividend (491) (273) (982) (546)
Net loss available to common
shareholders $(3,302) $(1,643) $(3,290) $(2,143)
Basic and diluted earnings (loss) per
common share:
Continuing operations $(0.08) $(0.04) $(0.08) $(0.06)
Discontinued operation 0.00 0.00 0.00 0.01
Net loss available to common
shareholders $(0.08) $(0.04) $(0.08) $(0.05)
Weighted-average common shares
outstanding:
Basic and diluted 41,192 40,137 41,121 40,088
SoftBrands, Inc.
Supplemental Financial Information
(Unaudited, in thousands)
Revenues and Operating Income (Loss)
Three Months Ended March 31,
2007 2006 % Change
Operating Operating Operating
Income Income Income
Revenues (Loss) Revenues (Loss) Revenues (Loss)
Manufacturing $12,119 $770 $12,962 $140 -6.5% 450.0%
Hospitality 9,306 (2,563) 4,414 (1,466) 110.8% -74.8%
Total $21,425 $(1,793) $17,376 $(1,326) 23.3% -35.2%
Six Months Ended March 31,
2007 2006 % Change
Operating Operating Operating
Income Income Income
Revenues (Loss) Revenues (Loss) Revenues (Loss)
Manufacturing $24,840 $1,991 $25,642 $809 -3.1% 146.1%
Hospitality 21,580 (2,342) 8,476 (2,956) 154.6% 20.8%
Total $46,420 $(351) $34,118 $(2,147) 36.1% 83.7%
SoftBrands, Inc.
Supplemental Financial Information
(Unaudited, in thousands)
Revenues by Segment and Type
Three Months Ended March 31,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total
Software
licenses $1,233 $1,638 $2,871 $1,946 $615 $2,561
Maintenance
and
support 7,884 5,597 13,481 7,819 2,643 10,462
Professional
services 2,815 1,592 4,407 2,917 790 3,707
Third-party
software
and
hardware 187 479 666 280 366 646
Total $12,119 $9,306 $21,425 $12,962 $4,414 $17,376
Six Months Ended March 31,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total
Software
licenses $2,682 $5,651 $8,333 $3,705 $1,213 $4,918
Maintenance
and
support 15,957 11,282 27,239 15,681 5,286 20,967
Professional
services 5,806 3,539 9,345 5,707 1,355 7,062
Third-party
software
and
hardware 395 1,108 1,503 549 622 1,171
Total $24,840 $21,580 $46,420 $25,642 $8,476 $34,118
SoftBrands, Inc.
Supplemental Financial Information
(Unaudited, in thousands)
Revenues by Segment and Geography
Three Months Ended March 31,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total
Americas $7,200 $5,685 $12,885 $7,643 $1,717 $9,360
Europe,
Middle
East and
Africa 3,421 2,219 5,640 3,654 2,227 5,881
Asia
Pacific 1,498 1,402 2,900 1,665 470 2,135
Total $12,119 $9,306 $21,425 $12,962 $4,414 $17,376
Six Months Ended March 31,
2007 2006
Manufacturing Hospitality Total Manufacturing Hospitality Total
Americas $14,392 $13,995 $28,387 $14,926 $3,131 $18,057
Europe,
Middle
East and
Africa 7,115 4,610 11,725 7,212 4,150 11,362
Asia
Pacific 3,333 2,975 6,308 3,504 1,195 4,699
Total $24,840 $21,580 $46,420 $25,642 $8,476 $34,118
Contact
Gregg Gregg Waldon
Chief Financial Officer
Phone: 612-851-1805
Email: gregg.waldon@softbrands.com
Organization
Infor
https://www.infor.com/industries/hospitality/
641 Avenue of the Americas
USA
- New York, NY 10011
Phone: 1 800 260 2640
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