Manugistics Posts Modest 4Q Operating Profit

Manugistics

The revenue marked a 17 percent increase over third-quarter revenue but was down 10 percent from the year-ago quarter. Manugistics' adjusted operating income was $189,000 for the quarter, compared with an operating loss of $10.1 million in the previous quarter.

Software license revenue increased to $38 million, a 70 percent jump over the third quarter. License revenue accounted for about 47 percent of total revenue for the quarter.

Services revenue declined from the previous quarter, to $42.6 million, but Manugistics CEO Greg Owens told financial analysts and media representatives on a conference call that the shift was by design.

"We've got to get back to a software model," he said. "We work with our strategic partners, and we will continue to grow services at a proportional rate."

Owens said he expected software-license revenue will account for more than half of sales in coming quarters.

After charges related to amortization of technology acquired from Talus and other factors, Manugistics' loss in the quarter was $1.3 million, or 2 cents per share. In the fourth quarter of 2001, the company reported an adjusted profit of $3.7 million.

Manugistics stopped its unpaid-leave program in the final quarter of fiscal 2002, a temporary measure that had been designed to reduce expenses related to employee salaries. The vendor also opened two offices in Asia.

For the year, the company reported sales of $310 million, a 16 percent increase over the prior year's sales of $268.0 million.

Some $129.8 million of fiscal 2002's sales were software licenses. License sales for the year were down about 7 percent from the previous year.

Overall loss for fiscal 2002 was $115.2 million, or $1.69 per share. This contrasts with a loss of $28.1 million, or 48 cents per share for 2001.

Owens said the company is training about 250 consultants per quarter. He added that systems integrators are "coming up to speed" on Manugistics' products.

Owens added that his channel-management team had fruitful meetings this quarter with KPMG, Cap Gemini Ernst and Young, Accenture, IBM Global Services and PwC Consulting.

"I am told by most of these organizations that we have gained the dominant mind share within their organization for supply chain management," he said.

Manugistics is forecasting $40 million in license sales in the current quarter, with overall revenue in the range of $84 million and $85 million, Owens said. He added that he expected operating income to be positive but flat in the current quarter.

Manugistics shares closed Tuesday trading at $18.23.