Press Release
- Date:
- Wednesday, May 12, 2004
- Contact:
- Mark Funston
- Phone:
- (301) 731-2300
- Email:
- mark_funston@g1.com
Group 1 Software Reports Record Fourth Quarter and Fiscal Year Results
Quarterly Revenue and Earnings Well Above Guidance
Lanham, MD — Group 1 Software (Nasdaq: GSOF) today reported results for its fourth fiscal quarter and fiscal year ended March 31, 2004. The Company reported record fourth quarter revenue of $37.9 million, up 30% vs. the prior year's fourth quarter. Net income available to common stockholders, also a record, increased 14% to $3.9 million from $3.5 million for the prior year's fourth quarter. Guidance was for revenue of $34 – $36 million and net earnings of $2.5 – $3.5 million. Reducing operating income for the quarter were $0.3 million in merger and acquisition costs. Inclusion of operating costs associated with the newly-acquired Sagent assets also limited the earnings increase, although revenues from Sagent and Centrus products were better than plan during the quarter. Fully diluted earnings per share for the quarter increased to $0.25 per share from $0.22 per share the prior year.
For the entire 2004 fiscal year, the Company also reported record revenue and net income. Revenue totaled $118.7 million, a 14% increase from $104.3 million the prior year. Net income available to common stockholders was $9.5 million, an increase of 9% from $8.7 million reported for the prior year. Reducing operating income for the year were $1.1 million in merger and acquisition costs. Fully diluted earnings per share were $0.60 compared with $0.59 in the prior year.
Total revenue for the quarter from Enterprise Solutions software and services was $28.2 million, a 42% increase over the prior year's fourth quarter. The Enterprise Solutions results include the software and services from the assets acquired from Sagent in October 2003. Total revenue from DOC1 Customer Communications Management software and services was $9.7 million, up from $9.4 million in the prior year's fourth quarter.
Fourth quarter license fee revenue for the Company increased 42% to $20.9 million vs. the prior year. License fees in the Enterprise Solutions division were up 53% to $15.7 million. License fees in the DOC1 division increased 18% to $5.2 million.
Group 1's cash position grew even stronger in the quarter. Cash and short-term investments totaled $60.0 million at March 31, 2004 compared with $58.5 million at December 31, 2003.
“We are very pleased with our performance this quarter, especially in that all of our market areas performed well,” said Bob Bowen, CEO of Group 1 Software. “Both of our operating segments saw significant increases in license revenues compared with the prior year. Our DOC1 division performed strongly in both domestic and international markets, including several initial sales of our next-generation DOC1 Series 5 product released during the quarter. In the Enterprise Solutions division, the products we acquired with the assets of Sagent Technologies in October 2003, sold strongly. This performance reinforced our conviction that these products and the professionals who develop, distribute and support them are an important part of Group 1's future. Finally, our traditional direct marketing applications and data quality solutions also were strong with several large enterprise sales.”
On April 13, 2004, Group 1 and Pitney Bowes Inc. of Stamford, CT issued a joint press release describing an agreement under which Pitney Bowes will acquire Group 1, subject to regulatory review, Group 1 shareholder approval and certain other conditions. Please see the Website of either company for further details.
About Group 1 Software:
Group 1 Software (Nasdaq: GSOF) is a leading provider of solutions that help over 3,000 organizations worldwide maximize the value of their customer and other data. Group 1 provides industry-leading technologies that allow businesses to cleanse and enrich their corporate data, generate personalized customer communications and integrate and deliver data across the enterprise. These technologies are essential components of enterprise applications including customer relationship management (CRM), enterprise resource planning (ERP) and business intelligence systems. Founded in 1982 and headquartered in Lanham, Maryland, Group 1 offers solutions utilized by leaders in the financial services, banking, GIS/mapping, retail, telecommunications, utilities, insurance and other industries. The company's customer base includes such recognized names as Entergy, L.L. Bean, MapQuest, QVC, Siemens, Wal-Mart and Wells Fargo. For more information about Group 1, visit the company's Web site at http://www.g1.com..
The Company will hold a conference call at 4:30 PM EST today to discuss these results. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.g1.com or by dialing 800-374-0565.
Contacts:
Mark Funston, CFO, Group 1 Software at 301.918.0381 or mark_funston@g1.com
David Peikin, Corporate Communications Manager, Group 1 Software at 301.918.0818 or pr@g1.com
Charles Messman, MKR Group at 626-395-9500 or cmessman@mkr-group.com
GROUP 1 SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three For the Twelve
Month Period Month Period
Ended March 31, Ended March 31,
2004 2003 2004 2003
Revenue:
Software license and related
revenue $20,965 $14,749 $56,472 $48,480
Maintenance and services 16,965 14,414 62,269 55,772
Total revenue 37,930 29,163 118,741 104,252
Cost of revenue:
Software license expense 3,932 4,080 14,956 15,293
Maintenance and service expense 5,066 4,413 18,398 17,094
Total cost of revenue 8,998 8,493 33,354 32,387
Gross profit 28,932 20,670 85,387 71,865
Operating expenses:
Research and development 5,022 3,214 15,974 11,800
Sales and marketing 12,838 9,235 39,875 32,947
General and administrative 5,053 3,758 16,157 14,626
Total operating expenses 22,913 16,207 72,006 59,373
Income from operations 6,019 4,463 13,381 12,492
Non-operating income
Interest income 200 278 1,208 1,157
Interest expense (24) (12) (55) (301)
Other non-operating income 168 236 520 14
Total non-operating income 344 502 1,673 870
Income before provision for
income taxes 6,363 4,965 15,054 13,362
Provision for income taxes 2,418 1,490 5,528 4,602
Net income 3,945 3,475 9,526 8,760
Preferred stock dividend
requirements - - - (2) - - - (44)
Net income available to common
stockholders $3,945 $3,473 $9,526 $8,716
Basic earnings per share $0.28 $0.26 $0.69 $0.67
Diluted earnings per share $0.25 $0.22 $0.60 $0.59
Basic weighted average shares
outstanding 13,903 13,543 13,826 13,029
Diluted weighted average shares
outstanding 15,560 15,586 15,765 14,621
GROUP 1 SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
March 31, March 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $ 43,211 $ 56,475
Short-term investments,
available-for-sale 16,777 7,712
Trade and installment accounts
receivable, less allowance of
$2,459 and $1,755 35,478 18,834
Deferred income taxes 2,766 2,130
Prepaid expenses and other current assets 4,786 4,067
Total current assets 103,018 89,218
Installment accounts receivable,
long-term - - - 39
Property and equipment, net 5,824 4,707
Computer software, net 25,736 23,490
Goodwill 24,340 12,716
Other assets 6,151 206
Total assets $ 165,069 $ 130,376
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,007 $ 1,358
Current portion of note payable and
capital lease obligation 527 371
Accrued expenses 13,368 7,033
Accrued compensation 10,129 9,454
Current deferred revenues 42,975 31,241
Total current liabilities 69,006 49,457
Note payable and capital lease
obligation, net of current portion 42 350
Deferred revenues, long-term 1,534 315
Deferred income taxes 4,587 4,694
Total liabilities 75,169 54,816
Commitments and contingencies - - - - - -
Stockholders' equity:
6% cumulative convertible
preferred stock $0.25 par value;
1,200 shares authorized; no shares
issued (aggregate involuntary
liquidation preference $950) - - - - - -
Common stock $0.50 par value;
200,000 and 50,000 shares
authorized; 15,197 and 14,902
shares issued 7,598 7,451
Additional paid in capital 37,589 34,951
Retained earnings 47,145 37,619
Accumulated other comprehensive 2,661 184
income (loss)
Less treasury stock, 1,271 and
1,246 shares, at cost (5,093) (4,645)
Total stockholders' equity 89,900 75,560
Total liabilities and stockholders'
equity $ 165,069 $ 130,376