| Abstract: | The enterprise software provider rides its stronger ties to SAP to an increase in sales, but lags year-earlier performance for its manufacturing-specific products. |
| Keywords: | SoftBrands SAP, SoftBrands earnings |
SoftBrands Inc. today reported a healthy rise in sales in its recently completed second fiscal quarter, although revenue from its manufacturing products dropped during the period.
Overall, SoftBrands, which sells enterprise software to manufacturing and hospitality industry customers, saw revenue climb more than 10% to $23.7 million during the quarter, ended March 31, 2008. That compared with revenue of $21.4 million for the same quarter a year ago.
SoftBrands experienced a significant jump in revenue from software licenses, mostly from sales of its hospitality-related products. Software license revenue grew 39.7% to $4 million. SoftBrands’ maintenance and support revenues were essentially flat.
Despite the overall revenue increase, SoftBrands reported a $798,000 operating loss for the quarter, which was a 55.5% improvement over the $1.8 million operating loss reported in the second quarter last year.
Due to a $1.2 million tax benefit, SoftBrands was able to eke out positive net income of $45,000 for the quarter. That compared with a net loss of $2.8 million in the second quarter last year.
SoftBrands’ operating expenses rose 4.9% to $14.6 million. The spike was due to increased research and development expenses, increased bad debt charges, and costs related to the move of the company’s headquarters to downtown Minneapolis, said CFO Gregg Waldon.
“We were pleased with our sales performance in the second quarter,” said SoftBrands CEO Randy Tofteland in remarks to financial analysts. “We achieved the backlog of business that we needed to bring into the quarter in order to solidify our fiscal 2008 performance.”
Regarding SoftBrands’ operating loss for the quarter, Tofteland said, “We are slightly below where we expected to be, given higher operating expenses.”
SoftBrands lowered its financial guidance slightly, predicting that, for the full year 2008, the company would report revenue in the range of $100 million to $105 million and per-share results ranging from a $.02 loss to a $.04 gain. The company also predicted 2008 operating income of 4% to 7% of revenue, down from previous guidance of 5% to 7%.
For the quarter, SoftBrands reported revenue from its manufacturing-facing business of $11.9 million, down 1.7% from the year-earlier figure. Manufacturing products generated software license revenue of $1.2 million, down 2.4% from a year ago. The company’s manufacturing software products, however, generated $1.7 million in operating income, a 120.6% improvement over the year-earlier figure.
SoftBrand’s manufacturing business “posted satisfactory operating profit in the quarter, up significantly but not on pace with the level of profitability we saw in the past two quarters,” Tofteland said. Over the past two quarters, he said, SoftBrands’ manufacturing products generated operating profit of $2 million per quarter on stronger revenue.
Tofteland attributed the revenue decline from manufacturing products to some large deals that failed to close during the quarter. He predicted they would close in the third or fourth quarters of 2008.
Overall, Tofteland said, “We have confidence in our SAP strategy and its potential to deliver significant license revenues.”
Last year, SoftBrands announced a restructuring of its manufacturing products, discontinuing the sale of its FourthShift legacy product and emphasizing FourthShift Edition for SAP BusinessOne ERP, an enhanced version of SAP’s Business One product, which SoftBrands is reselling.
The decision has started to pay off, Tofteland said. The SAP Business One product now represents 15% of SoftBrands’ manufacturing revenue, he said, and has helped the company sign significant new deals with Carrier Corp. and Philip Morris.
Page : 12 ... NEXT
 |
|
|
|