STOCKHOLM, SWEDEN, July 22, 2005 (PRIMEZONE) -- Intentia International AB (XSSE:INTB) (Other OTC:IAINF), the global enterprise solutions provider for the manufacturing, distribution and maintenance industries, announces its results for the first six months of 2005. The complete financial report is available at www.intentia.com.
-- Revenues for the second quarter of 2005 were SEK 826.5 million, an increase of 3.9 percent, as compared to the second quarter of 2004. Revenues for the first half of the year were SEK 1,450.9 million, a decline of 1.4 percent, as compared to the first half of 2004.
-- Profit for the second quarter of 2005 was SEK 48.2 million, or SEK 0.29 per share, compared to SEK 6.3 million, or SEK 0.04 per share, in the second quarter of 2004. In the first half of 2005, Intentia incurred a loss of SEK -28.1 million, or SEK -0.17 per share, as compared to a loss of SEK -106.4 million, or SEK -0.77 per share, in the first half of 2004.
-- Total costs and expenses in the second quarter were reduced 1.7 percent, as compared to the second quarter of 2004. In the first half of 2005, total costs and expenses were reduced 7.5 percent. Excluding merger-related costs, depreciation, amortization, and accrued severance and excess facilities charges, and including capitalized product development costs, costs and expenses in the first half of 2005 showed a reduction of 10.0 percent, as compared to the first half of 2004.
-- The professional services margin increased to 25.8 percent in the second quarter of 2005, as compared to 18.7 percent in the second quarter of 2004.
-- Adjusted EBITDA was SEK 96.7 million in the second quarter of 2005, as compared to SEK 40.3 million in the second quarter of 2004. In the first half of 2005, Adjusted EBITDA was SEK 74.0 million, as compared to a loss of SEK -34.1 million in the first half of 2004.
-- Cash and cash equivalents at June 30, 2005, totaled SEK 362.7 million, compared to SEK 499.7 million at December 31, 2004.
Earnings Summary
April-June January-June
(SEK million) 2005 2004 Change 2005 2004 Change
Revenues 826.5 795.5 3.9% 1,450.9 1,472.2 -1.4%
of which software
license revenue 143.7 146.8 -2.1% 206.8 198.6 4.1%
of which software
updates and
support 163.3 149.1 9.5% 313.2 290.5 7.8%
Profit/Loss from
operations 72.5 28.6 20.7 -74.3
Profit/Loss
for the period 48.2 6.3 -28.1 -106.4
Earnings
per share (SEK) 0.29 0.04 -0.17 -0.77
Adjusted EBITDA 96.7 40.3 74.0 -34.1
"Intentia's six month results demonstrate the continued financial improvement in the business with substantial increases in profitability, services margin and cost reduction and a growing presence in the market, as we work to complete the proposed merger with Lawson Software. Our Adjusted EBITDA more than doubled in the second quarter, and our professional services margin increased to 25.8 percent," noted CEO Bertrand Sciard. "Our share of recurring revenue continues to rise gradually. During the quarter, we established a new product board to accelerate the marketing and delivery of the Java-based Intentia Application Suite. In addition, more than 100 people are now working at our Global Operation Centers in India as part of our offshoring initiative. We expect to have more than 250 by year-end."
"Progress continues to be made on the proposed merger with Lawson. Internal transition working groups have been created, and the reconciliation of Intentia's historical financials to US GAAP is nearly complete. Subject to shareholder approval, we remain on track to complete the merger before the end of the year," concluded Sciard.
Results Improve Significantly Compared to 2004
Revenues for the second quarter of 2005 were SEK 826.5 million, an increase of 3.9 percent, as compared to the second quarter of 2004. Software updates and support revenue increased 9.5 percent; professional services revenue increased 2.8 percent, and hardware revenue increased 19.4 percent. These increases were partially offset by a 2.1 percent decline in software license revenue. Professional services costs and margins were positively affected by lower personnel costs and higher productivity. The average number of professional services staff employed during the second quarter was 21.5 percent below the second quarter of 2004, while revenue per professional services employee increased by 31.1 percent, from SEK 296 thousand to SEK 388 thousand.
Total head count at the end of the second quarter of 2005 was 2,212, a reduction of 70 during the second quarter and 497 over the prior 12 months. This represents an 18.3 percent reduction compared to June 30, 2004 staffing levels.
The operating result was a profit of SEK 72.5 million in the second quarter of 2005, compared to SEK 28.6 million in last year's period. Intentia earned a profit of SEK 48.2 million in the second quarter of 2005, or SEK 0.29 per share, as compared to a profit of SEK 6.3 million, or SEK 0.04 per share in the second quarter of 2004.
For the first half, the operating profit was SEK 20.7 million, compared to an operating loss of SEK 74.3 million in the same period of 2004. The six month result was a loss of SEK 28.1 million, compared to a loss of SEK 106.4 million in the first half of 2004.
Earnings before interest and other financial items, taxes, depreciation and amortization, including capitalized product development costs and excluding write-downs of intangible assets and accrued severance and excess facilities charges (Adjusted EBITDA) were SEK 96.7 million in the second quarter of 2005, as compared to SEK 40.3 million in the second quarter of 2004. Net accrued severance and excess facilities charges in the second quarter of 2005 were SEK 20.6 million. For the first half of the year, Adjusted EBITDA was SEK 74.0 million, as compared to a loss of SEK -34.1 million in the first half of 2004.
Strong Financial Position Sustained
At June 30, 2005, cash and cash equivalents totaled SEK 362.7 million, compared to SEK 499.7 million at December 31, 2004. Cash used in operating activities was SEK 64.8 million in the first half of 2005 and includes the effect of a reduction in current liabilities, primarily severance and other accrued personnel costs and accounts payable. Excluding the effect of changes in foreign exchange rates, current liabilities were reduced by SEK 151.1 million. Cash outflows from investing activities, which were composed primarily of capitalized product development costs, were SEK 70.1 million in the first half of 2005. Cash used in financing activities was SEK 11.0 million, and reflects reduced capitalized lease repayments. "Intentia's cash position remains strong, with the reduction in cash primarily reflecting planned severance payments and reductions in other personnel-related current liabilities and accounts payable," said Arthur Gitajn, Intentia's CFO.
Teleconference Today
CEO Bertrand Sciard and CFO Arthur Gitajn will comment on the results in a teleconference today at 10:00 a.m. (CET). To participate in the teleconference, call +44 20 7162 0086. Please place the call about five to ten minutes before 10:00 a.m. (CET) to ensure that you are connected in time.
A recording of the teleconference will be available for replay on demand today, at +44 20 7031 4064, code: 668417 after 11:00 a.m. (CET) and at www.financialhearings.com
About Intentia
Intentia is the only global enterprise solutions provider 100% dedicated to bringing software applications and consulting services to companies whose core processes involve manufacturing, distribution and maintenance, what we call the "make, move and maintain" market.
- 100% of our resources are committed to this market. - 100% of our software is designed for this market. - 100% of our experience is in serving this market.
Intentia was founded in 1984 and serves over 3,000 customer sites in some 40 countries around the world. Our business solutions currently comprise enterprise management, supplier relationship management, customer relationship management, supply chain management, value chain collaboration, enterprise performance management and workplace management.
Intentia is a public company traded on the Stockholm Stock Exchange (XSSE) under the symbol INT B. Visit Intentia's Web site at www.intentia.com
Intentia The Intelligent Choice
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