Lawson Software Reports First Quarter Fiscal 2009 Financial Results
ST. PAUL, Minn.--(BUSINESS WIRE)--Oct. 2, 2008--Regulatory News:
Lawson Software, Inc. (Nasdaq: LWSN) today reported financial
results for its first quarter of fiscal year 2009, which ended Aug.
31, 2008. Lawson reported GAAP (generally accepted accounting
principles) revenues for the quarter of $190.9 million, up 2 percent
from revenues of $187.4 million in its fiscal 2008 first quarter. The
revenue increase was driven by 13 percent growth in maintenance
revenues due to customer maintenance renewals at standard annual price
increases, customer migrations to Lawson Total Care premium support
and new customer contracts. Offsetting the maintenance revenue
increase was a 17 percent decrease in license fees and a three percent
decline in consulting revenues. License fees declined due to lower
revenue from M3 sales in EMEA and lower revenue from S3 sales in the
Americas outside the company's targeted industries. Consulting
revenues declined due to lower billable headcount, lower utilization
in certain regions and third-party services decreased in line with
expectations.
First quarter GAAP net loss was $2.5 million, or $0.01 per share,
compared with net income of $5.6 million, or $0.03 per diluted share,
in the first quarter of fiscal 2008. The decline in net income is
primarily attributable to an increase in the provision for income
taxes and lower interest income resulting from lower investment
balances along with lower yields on those investments. In addition,
the results include a reduction to GAAP and non-GAAP net income of
$1.9 million for sales incentive compensation expense that should have
been recorded in the fourth quarter of fiscal 2008. Lawson has
determined that this sales incentive compensation expense was
immaterial to all quarterly and annual periods of fiscal 2008 and is
not expected to be material to fiscal 2009. Currency fluctuations had
a negative impact of nearly $0.02 on net earnings per share. Refer to
Table 1 attached to this release for a summary of the impact of
currency fluctuations to Lawson's year-over-year performance.
Included in the reported GAAP net income and earnings per share
results are pre-tax expenses of $4 million for amortization of
acquired intangible assets, amortization of purchased maintenance
contracts, purchase accounting impact on consulting costs,
restructuring charges, a pre-merger claims reserve adjustment and $1.8
million of non-cash stock-based compensation. Excluding these expenses
and including $0.3 million of maintenance and consulting revenue
impacted by purchase accounting adjustments made to the opening
deferred revenue balances acquired from the former Intentia
International AB and other acquisitions, non-GAAP net income for the
first quarter of fiscal 2009 was $8.7 million, or $0.05 per diluted
share. Non-GAAP net income per share includes a non-GAAP provision for
income taxes based upon an estimated rate of 35 percent. Non-GAAP
earnings per diluted share of $0.05 decreased year over year from
$0.07 in the first quarter of fiscal 2008."In our first fiscal quarter, we saw mixed results," said Harry
Debes, Lawson president and chief executive officer. "Relative to our
guidance, sales of our S3 solutions in healthcare and public sector
performed well but sales of M3 in the Americas and Europe were weaker
than forecasted. This resulted in flat year-over-year software
contracting. Services revenues and utilization were weaker than
forecasted particularly in certain European regions. However, our
maintenance business continues to deliver excellent results. Despite
this slower start to the year, we remain committed to our goal of
improving profitability but there's no doubt that current economic
conditions make this more challenging."
Financial Guidance
For the second quarter of fiscal 2009, which ends Nov. 30, 2008,
the company estimates total revenues of $205 million to $215 million.
The company anticipates GAAP fully diluted earnings per share will be
$0.03 to $0.06. Non-GAAP fully diluted earnings per share are
forecasted to be between $0.07 and $0.10, excluding approximately $8
million of pre-tax expenses related to the amortization of
acquisition-related intangibles, amortization of purchased maintenance
contracts, stock-based compensation charges and purchase accounting
adjustments for acquired deferred revenue balances. The non-GAAP
effective tax rate for fiscal 2009 is anticipated to be 35 percent
which the company intends to apply consistently throughout the fiscal
year.
The company is evaluating its outlook for fiscal year 2009 which
ends May 31, 2009. Based on the softening economy and other factors,
it is unlikely to achieve its prior fiscal year 2009 guidance. The
company will provide revised fiscal year guidance during its second
quarter conference call to be held in January 2009.
First Quarter Fiscal 2009 Key Metrics
-- Cash, cash equivalents, marketable securities and investments
at quarter-end were $363.8 million (including $2.4 million of
restricted cash), compared with $488.6 million (including $2.8
million of restricted cash) on May 31, 2008.
-- 11.5 million shares were repurchased in the first quarter
through a $100 million accelerated share repurchase.
-- Total deferred revenues were $275.1 million, including $57.8
million of deferred license revenues, compared with the May
31, 2008, balance of $312.6 million, including $54.6 million
of deferred license revenue. Total deferred revenues declined
primarily due to deferred maintenance revenue as the company's
renewal dates occur in the fiscal third and fourth quarters.
-- Days sales outstanding (DSO) at quarter end were 68, compared
with 71 on May 31, 2008.
-- The company signed 216 deals, compared with 294 in the first
quarter of fiscal 2008. Average selling price of all deals
increased to $123,000 compared with $89,000 a year ago.
-- Thirty-one new customer deals were signed, compared with 27 in
the first quarter a year ago. Average selling price of new
customer deals was relatively flat at $306,000 compared to
$308,000 a year ago.
-- One deal greater than $1 million and nine deals between
$500,000 and $1 million were signed, compared with six deals
greater than $1 million and four deals between $500,000 and $1
million in the first quarter fiscal 2008.
-- The Americas region represented 55 percent of total revenue;
Europe, Middle East, and Africa region represented 41 percent
of total revenue; and Asia-Pacific represented four percent of
total revenue.
-- Key customer wins: Americas - Cancer Treatment Centers of
America; City & Borough of Juneau, Alaska; Fresno Unified
School District; Montana State Fund; Munson Healthcare;
ProHealth Care; and Robert Wood Johnson University Hospital.
EMEA - Estrella Maarud; Fonderie du Poitou Aluminium; and
O'Neill. Asia-Pacific - Daizo.
In light of the $1.9 million out of period adjustment associated
with the previously mentioned sales incentive compensation expense,
the company is evaluating its internal controls over financial
reporting as they relate to sales incentive compensation, and
management's previous assessment of internal controls over financial
reporting as of May 31, 2008, included in the company's fiscal 2008
Form 10-K. As always, quarterly results and disclosures are not deemed
final until the company files its Form 10-Q, which the company expects
to file on a timely basis.
Conference Call and Webcast
The company will host a conference call and webcast to discuss its
first quarter results and future outlook at 4:30 p.m. Eastern Time
(3:30 p.m. Central Time) Oct. 2, 2008. Interested parties should dial
888-677-5721 (passcode: LWSN) and international callers should dial
+1-210-234-0000. A live webcast will be available on www.lawson.com.
Interested parties should access the conference call or webcast
approximately 10-15 minutes before the scheduled start time.
A replay will be available approximately one hour after the
conference call concludes and will remain available for one week. The
replay number is 866-513-9969 or +1-203-369-1996. The webcast will
remain on www.lawson.com for approximately one week.
About Lawson Software
Lawson Software provides software and service solutions to 4,500
customers in manufacturing, distribution, maintenance, healthcare and
service sector industries across 40 countries. Lawson's solutions
include Enterprise Performance Management, Supply Chain Management,
Enterprise Resource Planning, Customer Relationship Management,
Manufacturing Resource Planning, Enterprise Asset Management and
industry-tailored applications. Lawson solutions assist customers in
simplifying their businesses or organizations by helping them
streamline processes, reduce costs and enhance business or operational
performance. Lawson is headquartered in St. Paul, Minn., and has
offices around the world. Visit Lawson online at www.lawson.com.
Forward-Looking Statements
This press release contains forward-looking statements that
contain risks and uncertainties. These forward-looking statements
contain statements of intent, belief or current expectations of Lawson
Software and its management. Such forward-looking statements are not
guarantees of future results and involve risks and uncertainties that
may cause actual results to differ materially from the potential
results discussed in the forward-looking statements. The company is
not obligated to update forward-looking statements based on
circumstances or events that occur in the future. Risks and
uncertainties that may cause such differences include but are not
limited to: uncertainties in uncertainties in the software industry;
uncertainties as to when and whether the conditions for the
recognition of deferred revenue will be satisfied; increased
competition; general economic conditions; continuation of the global
credit crisis; global military conflicts; terrorist attacks;
pandemics, and any future events in response to these developments;
changes in conditions in the company's targeted industries and other
risk factors listed in the company's most recent Annual Report on Form
10-K filed with the Securities and Exchange Commission. Lawson assumes
no obligation to update any forward-looking information contained in
this press release.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson Software
reports non-GAAP financial results including non-GAAP net income
(loss) and non-GAAP net income (loss) per share. We believe that these
non-GAAP measures provide meaningful insight into our operating
performance and an alternative perspective of our results of
operations. Our primary non-GAAP adjustments are described in detail
below. We use these non-GAAP measures to assess our operating
performance, to develop budgets, to serve as a measurement for
incentive compensation awards and to manage expenditures. Presentation
of these non-GAAP measures allows investors to review our results of
operations from the same perspective as management and our Board of
Directors. Lawson has historically reported similar non-GAAP financial
measures to provide investors an enhanced understanding of our
operations, facilitate investors' analysis and comparisons of our
current and past results of operations and provide insight into the
prospects of our future performance. We also believe that the non-GAAP
measures are useful to investors because they provide supplemental
information that research analysts frequently use to analyze software
companies including those that have recently made significant
acquisitions.
The method we use to produce non-GAAP results is not in accordance
with GAAP and may differ from the methods used by other companies.
These non-GAAP results should not be regarded as a substitute for
corresponding GAAP measures but instead should be utilized as a
supplemental measure of operating performance in evaluating our
business. Non-GAAP measures do have limitations in that they do not
reflect certain items that may have a material impact upon our
reported financial results. As such, these non-GAAP measures should be
viewed in conjunction with both our financial statements prepared in
accordance with GAAP and the reconciliation of the supplemental
non-GAAP financial measures to the comparable GAAP results provided
for each period presented, which are attached to this release.
Our primary non-GAAP reconciling items are as follows:
Purchase accounting impact on revenue - Lawson's non-GAAP
financial results include pro forma adjustments for deferred
maintenance and consulting revenues that we would have recognized
under GAAP but for the related purchase accounting. The deferred
revenue for maintenance and consulting on the acquired entity's
balance sheet, at the time of the acquisition, was eliminated from
GAAP results as part of the purchase accounting for the acquisition.
As a result, our GAAP results do not, in management's view, reflect
all of our maintenance and consulting activity. We believe the
inclusion of the pro forma revenue adjustment provides investors a
helpful alternative view of Lawson's maintenance and consulting
operations.
Integration related - We have incurred various integration related
expenses as part of our acquisitions. These costs of integrating the
operations of acquired businesses and Lawson are incremental to our
historical costs and were charged to GAAP results of operations in the
periods incurred. We do not consider these costs in our assessment of
our operating performance. While these costs are not recurring with
respect to our past acquisitions, we may incur similar costs in the
future if we pursue other acquisitions. We believe that the exclusion
of the non-recurring acquisition related integration costs provide
investors an appropriate alternative view of our results of operations
and facilitates comparisons of our results period-over-period.
Amortization of purchased maintenance contracts - We have excluded
amortization of purchased maintenance contracts from our non-GAAP
results. The purchase price related to these contracts is being
amortized based upon the proportion of future cash flows estimated to
be generated each period over the estimated useful lives of the
contracts. We believe that the exclusion of the amortization expense
related to the purchased maintenance contracts provides investors an
enhanced understanding of our results of operations.
Stock-based compensation - Expense related to stock-based
compensation has been excluded from our non-GAAP results of
operations. These charges consist of the estimated fair value of
share-based awards including stock option, restricted stock,
restricted stock units and share purchases under our employee stock
purchase plan. While the charges for stock-based compensation are of a
recurring nature, as we grant stock-based awards to attract and retain
quality employees and as an incentive to help achieve financial and
other corporate goals, we exclude them from our results of operation
in assessing our operating performance. These charges are typically
non-cash and are often the result of complex calculations using an
option pricing model that estimates stock-based awards' fair value
based on factors such as volatility and risk-free interest rates that
are beyond our control. The expense related to stock-based awards is
generally not controllable in the short-term and can vary
significantly based on the timing, size and nature of awards granted.
As such, we do not include such charges in our operating plans. We
believe that the exclusion of stock-based compensation provides
investors useful information facilitating the comparison of current
period results of operations and prior periods when such charges were
not required to be recorded in our financial statements. In addition,
we believe the exclusion of these charges facilitates comparisons of
our operating results with those of our competitors who may have
different policies regarding the use of stock-based awards.
Pre-merger claims reserve adjustment - We have excluded the
adjustment to our pre-merger claims reserve from our non-GAAP results.
As part of the purchase accounting relating to the Intentia
transaction, we established a reserve for Intentia customer claims and
disputes that arose before the acquisition which were originally
recorded to goodwill. As we are outside the period in which
adjustments to such purchase accounting is allowed, adjustments to the
reserve are recorded in our general and administrative expenses under
GAAP. We do not consider the adjustments to this reserve established
under purchase accounting in our assessment of our operating
performance. Further, since the original reserve was established in
purchase accounting, the original charge was not reflected in our
operating statement. We believe that the exclusion of the pre-merger
claims reserve adjustment provides investors an appropriate
alternative view of our results of operations and facilitates
comparisons of our results period-over-period.
Restructuring - We have recorded various restructuring charges to
reduce our cost structure to enhance operating effectiveness and
improve profitability and to eliminate certain redundancies in
connection with acquisitions. These restructuring activities impacted
different functional areas of our operations in different locations
and were undertaken to meet specific business objectives in light of
the facts and circumstances at the time of each restructuring event.
These charges include costs related to severance and other termination
benefits as well as costs to exit leased facilities. These
restructuring charges are excluded from management's assessment of our
operating performance. We believe that the exclusion of the
non-recurring restructuring charges provide investors an enhanced view
of the cost structure of our operations and facilitates comparisons
with the results of other periods that may not reflect such charges or
may reflect different levels of such charges.
Amortization - We have excluded amortization of
acquisition-related intangible assets including purchased technology,
client lists, customer relationships, trademarks, order backlog and
non-compete agreements from our non-GAAP results. The fair value of
the intangible assets, which was allocated to these assets through
purchase accounting, is amortized using accelerated or straight-line
methods which approximate the proportion of future cash flows
estimated to be generated each period over the estimated useful lives
of the applicable assets. While these non-cash amortization charges
are recurring in nature and benefit our operations, this amortization
expense can fluctuate significantly based on the nature, timing and
size of our past acquisitions and may be affected by any future
acquisitions. This makes comparisons of our current and historic
operating performance difficult. Therefore, we exclude such accounting
expenses when analyzing the results of all our operations including
those of acquired entities. We believe that the exclusion of the
amortization expense of acquisition-related intangible assets provides
investors useful information facilitating comparison of our results
period-over-period and with other companies in the software industry
as they each have their own acquisition histories and related
adjustments.
Impairment on long-term investments - The liquidity and fair value
of our investments in marketable securities, including Auction Rate
Securities (ARS), were negatively impacted in fiscal 2008 by the
uncertainty in the credit markets and exposure to the financial
condition of bond insurance companies. As a result, during the second,
third and fourth quarters of fiscal 2008 we recorded impairment
charges to reduce the carrying value of our ARS investments. The
impairment charges related to our ARS investments have been excluded
from our non-GAAP results of operations. These impairment charges are
excluded from management's assessment of our operating performance. We
believe that the exclusion of these unique charges provide investors
an enhanced view of our operations and facilitates comparisons with
the results of other periods that do not reflect such charges.
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*T
LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended % Increase
-------------------------
Aug 31, 2008 Aug 31, 2007 (Decrease)
------------ ------------ ----------
Revenues:
License fees $ 21,125 $ 25,460 (17%)
Maintenance 89,109 78,514 13%
Consulting 80,682 83,434 (3%)
------------ ------------
Total revenues 190,916 187,408 2%
------------ ------------
Cost of revenues:
Cost of license fees 5,332 6,753 (21%)
Cost of maintenance 16,874 15,660 8%
Cost of consulting 72,447 71,226 2%
------------ ------------
Total cost of revenues 94,653 93,639 1%
------------ ------------
Gross profit 96,263 93,769 3%
------------ ------------
Operating expenses:
Research and development 21,918 17,286 27%
Sales and marketing 46,491 42,291 10%
General and administrative 19,289 25,723 (25%)
Restructuring (231) (145) 59%
Amortization of acquired
intangibles 2,627 3,216 (18%)
------------ ------------
Total operating expenses 90,094 88,371 2%
------------ ------------
Operating income (loss) 6,169 5,398 14%
------------ ------------
Other income (expense), net:
Interest income 3,048 6,863 (56%)
Interest expense (2,038) (2,604) (22%)
Other income (expense), net 72 322 (78%)
------------ ------------
Total other income (expense),
net 1,082 4,581 (76%)
------------ ------------
Income before income taxes 7,251 9,979 (27%)
Provision for income taxes 9,774 4,398 122%
------------ ------------
Net income (loss) $ (2,523) $ 5,581 (145%)
============ ============
Net income (loss) per share:
Basic $ (0.01) $ 0.03 (133%)
============ ============
Diluted $ (0.01) $ 0.03 (133%)
============ ============
Weighted average common shares
outstanding:
Basic 168,394 181,512 (7%) ============ ============
Diluted 168,394 185,116 (9%)
============ ============
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LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
Aug 31, 2008 May 31, 2008
------------ ------------
ASSETS
--------------------------------------------
Current assets:
Cash and cash equivalents $ 360,368 $ 435,121
Restricted cash - current 424 746
Marketable securities 1,000 5,453
Short term investments - 45,236
Trade accounts receivable, net 144,762 184,047
Income taxes receivable 1,653 10,309
Deferred income taxes - current 16,438 16,839
Prepaid expenses and other current assets 44,449 44,470
------------ ------------
Total current assets 569,094 742,221
Restricted cash - non-current 1,959 2,038
Property and equipment, net 47,391 45,044
Goodwill 522,749 546,578
Other intangibles assets, net 112,092 120,194
Deferred income taxes - non-current 33,924 35,907
Other assets 19,212 18,614
------------ ------------
Total assets $1,306,421 $1,510,596
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------------
Current liabilities:
Long-term debt - current portion $ 4,002 $ 3,849
Accounts payable 14,050 23,481
Accrued compensation and benefits 69,348 89,733
Income taxes payable 6,322 8,860
Deferred income taxes - current 7,000 7,399
Deferred revenue - current 256,164 298,509
Other current liabilities 41,549 49,318
------------ ------------
Total current liabilities 398,435 481,149
Long-term debt - non-current 244,418 244,734
Uncertain tax positions - non-current 5,848 5,757
Deferred income taxes - non-current 12,196 12,529
Deferred revenue - non-current 18,934 14,097
Other long-term liabilities 8,044 8,771
------------ ------------
Total liabilities 687,875 767,037
------------ ------------
Stockholders' equity:
Common stock 2,014 2,010
Additional paid-in capital 841,242 838,141
Treasury stock, at cost (324,657) (225,598)
Retained earnings 28,939 31,462
Accumulated other comprehensive income 71,008 97,544
------------ ------------
Total stockholders' equity 618,546 743,559
------------ ------------
Total liabilities and stockholders' equity $1,306,421 $1,510,596
============ ============
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LAWSON SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
(unaudited)
Three Months Ended
-------------------------
Aug 31, 2008 Aug 31, 2007
------------ ------------
Cash flows from operating activities:
Net income (loss) $ (2,523) $ 5,581
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 10,260 10,200
Amortization of debt issuance costs 321 315
Deferred income taxes 905 1,000
Provision for doubtful accounts (250) 447
Warranty provision 1,257 1,056
Net gain on the disposal of assets - (308)
Excess tax benefits from stock
transactions (348) (1,021)
Stock-based compensation expense 1,817 2,028
Amortization of discounts and premiums
on marketable securities 6 (27)
Changes in operating assets and liabilities:
Trade accounts receivable 34,907 28,372
Prepaid expenses and other assets (5,362) (12,163)
Accounts payable (8,117) (6,041)
Accrued and other liabilities (19,004) (25,181)
Income taxes payable/receivable 5,185 4,747
Deferred revenue and customer deposits (33,631) (29,608)
------------ ------------
Net cash used in operating activities (14,577) (20,603)
------------ ------------
Cash flows from investing activities:
Change in restricted cash 401 451
Purchases of marketable securities and
investments - (179,555)
Proceeds from maturities and sales of
marketable securities and investments 49,694 81,355
Purchases of property and equipment (6,946) (2,901)
------------ ------------
Net cash provided by (used in) investing
activities 43,149 (100,650)
------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt (582) (406)
Payments on capital lease obligations (130) (335)
Cash proceeds from exercise of stock
options 1,433 3,604
Excess tax benefit from stock transactions 348 1,021
Cash proceeds from employee stock purchase
plan 779 702
Repurchase of common stock from related
parties - (36,800)
Repurchase of common stock - other (100,041) (16,863)
------------ ------------
Net cash used in financing activities (98,193) (49,077)
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents (5,132) 1,004
------------ ------------
Net decrease in cash and cash equivalents (74,753) (169,326)
Cash and cash equivalents at beginning of
the period 435,121 473,963
------------ ------------
Cash and cash equivalents at end of the
period $ 360,368 $ 304,637
============ ============
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*T TABLE 1
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LAWSON SOFTWARE, INC.
CURRENCY IMPACT SUMMARY
(in thousands)
(unaudited)
Three Months % Increase % Increase
Ended (Decrease) (Decrease)
Aug 31, 2008 as reported at constant
currency
----------------------------------------
License fees $ 21,125 (17%) (20%)
Maintenance 89,109 13% 10%
Consulting 80,682 (3%) (8%)
------------- ----------- --------------
Total revenues 190,916 2% (2%)
Total cost of revenues $ 94,653 1% (5%)
Total operating expenses $ 90,094 2% (3%)
*T
We provide the percent change in the results from one period to
another using constant currency disclosure to adjust year-over
measurements for impacts due to currency fluctuations. Constant
currency changes should be considered in addition to, and not as a
substitute for changes in revenues, expenses, income, or other
measures of financial performance prepared in accordance with US GAAP.
We calculate constant currency changes by converting entities
reporting in currencies other than the United States dollar at the
exchange rate in effect for the current period rather than the
previous period.
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*T
TABLE 2
----------------------------------------------------------------------
RECONCILIATION OF CONSOLIDATED GAAP NET INCOME (LOSS) TO CONSOLIDATED
NON-GAAP NET INCOME
(in thousands)Three Months Ended Three Months Ended
Aug 31, 2008 Aug 31, 2007
Net income (loss), as
reported $(2,523) $ 5,581
Purchase accounting impact
on revenue (1) $ 259 $ 620
Purchase accounting impact
on cost of consulting $ 34 $ 93
Amortization of purchased
maintenance contracts $ 710 $ 822
Stock-based compensation $ 1,817 $ 2,028
Pre-merger claims reserve
adjustment $(1,807) $ -
Restructuring $ (231) $ (145)
Amortization $ 5,277 $ 6,671
Tax provision (4) $ 5,115 $(3,027)
-------------------------------------
Non-GAAP net income $ 8,651 $12,643
-------------------------------------
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TABLE 3
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RECONCILIATION OF CONSOLIDATED GAAP TO CONSOLIDATED NON-GAAP PER SHARE
EFFECT
Three Months Three Months
Ended Ended
Aug 31, 2008 Aug 31, 2007
Net income (loss), as reported (2) $ (0.01) $ 0.03
Purchase accounting impact on
revenue (1) 0.00 0.00
Purchase accounting impact on cost
of consulting 0.00 0.00
Amortization of purchased
maintenance contracts 0.00 0.00
Stock-based compensation 0.01 0.01
Pre-merger claims reserve
adjustments (0.01) -
Restructuring (0.00) (0.00)
Amortization 0.03 0.04
Tax provision (4) 0.03 (0.02)
--------------------------
Non-GAAP net income (2),(3) $ 0.05 $ 0.07
--------------------------
Weighted average shares - basic 168,394 181,512
Weighted average shares - diluted 171,700 185,116
*T
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TABLE 4
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SUMMARY OF NON-GAAP ITEMS
(in thousands)
Three Months Three Months
Ended Ended
Aug 31, 2008 Aug 31, 2007
Purchase accounting impact on revenue (1) $ 259 $ 620
Purchase accounting impact on cost of
consulting $ 34 $ 93
Amortization of purchased maintenance
contracts $ 710 $ 822
Stock-based compensation $ 1,817 $ 2,028
Pre-merger claims reserve adjustments $ (1,807) $ -
Restructuring $ (231) $ (145)
Amortization $ 5,277 $ 6,671
---------------------------
subtotal pre-tax adjustments $ 6,059 $10,089
---------------------------
Tax provision (4) $ 5,115 $(3,027)
---------------------------
Impact on net income $ 11,174 $ 7,062
===========================
*T
(1) For the purchase accounting impact on deferred revenues for
three months ending August 31, 2008 and August 31, 2007, $259,000 and
$502,000, respectively relates to maintenance revenue and $0 and
$118,000, respectively relates to consulting revenue.
(2) For calculation of EPS, basic weighted average shares are used
with a net loss and diluted weighted average shares are used with net
income.
(3) May not add due to rounding.
(4) Non-GAAP tax provision is calculated excluding the non-GAAP
adjustments on a jurisdictional basis.
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TABLE 5
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LAWSON SOFTWARE, INC.
SUPPLEMENTAL NON-GAAP MEASURES
INCREASE (DECREASE) IN GAAP AMOUNTS REPORTED
(in thousands)
(unaudited)
Three Months Ended
---------------------
August 31, August 31,
2008 2007
---------- ----------
Revenue items
Purchase accounting impact on maintenance $ 259 $ 502
Purchase accounting impact on consulting - 118
---------- ----------
Total revenue items 259 620
Cost of license items
Amortization of acquired software (2,651) (3,455)
Non-cash stock-based compensation - (7)
---------- ----------
Total cost of license items (2,651) (3,462)
Cost of maintenance items
Amortization of purchased maintenance
contracts (710) (822)
Non-cash stock-based compensation (52) (41)
---------- ----------
Total cost of maintenance items (762) (863)
Cost of consulting items
Purchase accounting impact on cost of
consulting (34) (93)
Amortization 1 -
Non-cash stock-based compensation (11) (218)
---------- ----------
Total cost of consulting items (44) (311)
Research and development items
Non-cash stock-based compensation (134) (164)
---------- ----------
Total research and development items (134) (164)
Sales and marketing items
Non-cash stock-based compensation (456) (366)
---------- ----------
Total sales and marketing items (456) (366)
General and administrative items
Pre-merger claims reserve adjustments 1,807 -
Non-cash stock-based compensation (1,164) (1,232)
---------- ----------
Total general and administrative 643 (1,232)
Restructuring 231 145
Amortization of acquired intangibles (2,627) (3,216)
Tax provision (1) 5,115 (3,027)
Total adjustments $11,174 $ 7,062
========== ==========
*T
(1) Based on a projected annual global effective tax rate
analysis, non-GAAP Q1 tax provision was calculated to be 35%. Non-GAAP
tax provision is calculated excluding the non-GAAP adjustments in a
jurisdictional basis.
Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information In addition to reporting
financial results in accordance with generally accepted accounting
principles, or GAAP, Lawson Software reports non-GAAP financial
results. These non-GAAP results exclude amortization of all
acquisition-related intangibles, Intentia integration costs,
restructuring charges, certain stock-based compensation expenses and
other expenses. In addition, Lawson's non-GAAP financial results
include pro forma revenue for maintenance contracts acquired in the
Intentia acquisition for which the deferred revenue on Intentia's
balance sheet has been eliminated from GAAP results as part of the
purchase accounting for the acquisition. Lawson's management believes
the non-GAAP measures used in this press release are useful to
investors because they provide supplemental information that research
analysts frequently use to analyze software companies that have
recently made significant acquisitions. Management uses these non-GAAP
measures to evaluate its financial results, develop budgets and manage
expenditures. The method Lawson uses to produce non-GAAP results is
not computed according to GAAP, may differ from the methods used by
other companies, and should not be regarded as a replacement for
corresponding GAAP measures. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to the comparable
GAAP results, which is attached to this release.
CONTACT: Lawson Software
Media:
Joe Thornton, +1-651-767-6154
joe.thornton@us.lawson.com
or
Investors and Analysts:
Heather Pribyl, +1-651-767-6459
heather.pribyl@us.lawson.com
Lawson Software Reports First Quarter Fiscal 2009 Financial Results
| Source: Lawson Software, Inc.
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