MINNEAPOLIS, May 7 /PRNewswire-FirstCall/ -- SoftBrands, Inc. (NYSE
Amex: SBN), a global supplier of enterprise application software,
today announced its financial results for the second quarter ended
March 31, 2009. Revenues for second quarter fiscal 2009 were $21.4
million, compared with $23.7 million in the prior year second
quarter. Excluding the effect of changes in foreign currency
exchange rates, or on a constant currency rate basis, second
quarter fiscal 2009 non-GAAP revenues would have been $23.0
million. License revenue was 13.2% of total revenues in the current
quarter, compared with 17.0% in second quarter fiscal 2008.
Maintenance revenue was 58.9% of total revenues in the current
quarter, compared with 57.1% of revenues in second quarter fiscal
2008. Professional services revenue was 22.1% of total revenues in
the quarter, compared with 19.8% in the prior year quarter.
SoftBrands reported operating income of $0.4 million in the second
quarter of fiscal 2009, compared with an operating loss of $(0.8)
million in the fiscal 2008 second quarter. Excluding the effect of
changes in foreign currency exchange rates, or on a constant
currency rate basis, SoftBrands second quarter fiscal 2009 non-GAAP
operating income would have been $0.6 million. The company reported
a net loss available to common shareholders of $(0.3) million, or
$(0.01) per diluted share, compared with a net loss available to
common shareholders of $(0.4) million, or $(0.01) per diluted
share, for second quarter fiscal 2008. "SoftBrands improved its
profitability from the prior year quarter and our balance sheet
strengthened in the second quarter," said Randy Tofteland,
SoftBrands' president and chief executive officer. "We are pleased
that SoftBrands is pacing ahead of its first half results from last
year in both revenues and profitability, especially given the state
of the economy and foreign currency effects on our results. We are
committed to improving our profitability in fiscal 2009 no matter
what our level of revenue performance." In the company's
manufacturing business, second quarter fiscal 2009 revenues were
$10.1 million, compared with $11.9 million in second quarter fiscal
2008. On a constant foreign currency basis, Manufacturing second
quarter fiscal 2009 non-GAAP revenues would have been $10.9
million. Second quarter fiscal 2009 operating income in
manufacturing was $1.9 million, compared with $1.7 million in the
prior year's second quarter. "In Manufacturing, our base business
delivered improved operating income in the second quarter. The
channel portion of our SAP business continues to perform well,
partially due to the availability of our new product Fourth Shift
Edition 9.0, which is a true add-on to SAP Business One. Our SAP
Large Enterprise business continues to be affected by tight
corporate capital expenditure budgets but did pick up from the
first quarter and is seeing more activity in its pipeline," said
Tofteland. In the company's hospitality business, second quarter
fiscal 2009 revenues were $11.3 million, compared with $11.7
million in the prior year's second quarter. On a constant foreign
currency basis, Hospitality second quarter fiscal 2009 non-GAAP
revenues would have been $12.1 million. In second quarter fiscal
2009 SoftBrands' hospitality business posted an operating loss of
$(1.5) million, compared with an operating loss of $(2.5) million
in the prior year's second quarter. "Our Hospitality business
delivered strong six-month results, posting revenue growth of more
than 20%, primarily due to large contracts with Red Roof Inns and
the U.S. Air Force," said Tofteland. "SoftBrands' central
reservation system and CRM solution are now installed at Red Roof
Inns, and we will be implementing the property management system
rollout later in 2009. This is a major milestone for our
hospitality business and demonstrates the strength of our products,
our reliability as a technology partner, and our capability to
handle large, complex rollouts." From a geographic perspective, 70%
of revenues were generated in the Americas in the quarter; 16% in
the EMEA region; and 14% in the Asia Pacific region. This compares
to a respective mix of 62%, 24% and 14% in the prior year's
quarter. All financial results should be considered preliminary
pending the company's filing of its quarterly report on Form 10-Q.
Six Month Results SoftBrands revenues for the first half of fiscal
2009 were $46.9 million, compared with $45.9 million in the fiscal
2008 period. Excluding the effect of changes in foreign currency
exchange rates, or on a constant currency rate basis, first half
fiscal 2009 non-GAAP revenues would have been $49.6 million.
SoftBrands reported operating income of $2.8 million for the first
six months of fiscal 2009, compared with an operating loss of
$(2.0) million for the first half of fiscal 2008. The company
reported net income available to common shareholders in the fiscal
2009 period of $1.3 million, or $0.03 per diluted share, compared
with a loss of $(1.3) million, or a loss of $(0.03) per diluted
share in the fiscal 2008 period. Six month fiscal 2009 net income
includes income from discontinued operations of $0.4 million, or
$0.01 per diluted share. Cash and Liquidity As of March 31, 2009,
SoftBrands had $14.2 million in cash and cash equivalents, compared
to $10.9 million at the end of the previous quarter. SoftBrands'
total current assets, which include accounts receivable, increased
to $41.8 million, from $40.6 million at the end of the previous
quarter. Deferred revenue was $25.6 million at the end of the
second quarter, an increase from $21.1 million at the end of the
previous quarter. Effect of Changes in Foreign Currency Exchange
Rates This press release contains information excluding the effect
of changes in foreign currency exchange rates on revenues and
operating income, which are non-GAAP measures. The strengthening of
the U.S. dollar during first and second quarter fiscal 2009
negatively impacted our reported GAAP revenues. The references
excluding the effect of changes in foreign currency exchange rates
are calculated on the basis of exchange rates in first and second
quarter fiscal 2009 being constant with the rates in first and
second quarter fiscal 2008. Management believes these non-GAAP
measures, when read in conjunction with the Company's GAAP
financials, provide useful information to investors by providing
the ability to make more meaningful period-to-period comparisons of
the company's ongoing operating results. Conference Call SoftBrands
will hold its second quarter earnings conference call at 5:00 pm
Eastern Time today, May 7, 2009. Interested parties may listen to
the call by dialing 866-804-6928 or international 857-350-1674
(passcode: 96917817) A live webcast will also be available at
SoftBrands' website at http://www.softbrands.com/. A replay will be
available approximately one hour after the conference call
concludes and will remain available through May 14, 2009. The
replay number is 888-286-8010 and international 617-801-6888
(passcode: 34390268). The webcast will be archived on SoftBrands'
website for approximately one year. Forward-Looking Statements All
statements other than historical facts included in this release
regarding future operations are subject to the risks inherent in
predictions and "forward-looking statements." These statements are
based on the beliefs and assumptions of management of SoftBrands
and on information currently available to us. Nevertheless, these
forward-looking statements should not be construed as guarantees of
future performance. They involve risks, uncertainties, and
assumptions identified in filings by SoftBrands with the SEC,
including, but not limited to, the following: -- Changes in the
economy, natural disasters, disease or other events that affect the
manufacturing and hospitality segments or the geographies we serve;
-- Our increasing dependence upon our relationship with SAP; -- Our
ability to continue to satisfy covenants with our lender; -- Our
reliance on revenues from large hospitality customers; -- Our
ability to timely complete and introduce, and the market acceptance
of our new products; -- Our ability to properly document our sales
consistent with the manner in which we recognize revenue; -- Our
ability to manage international operations; -- Our ability to
maintain and expand our base of clients on software maintenance
programs; and -- The effects of and our ability to rapidly adapt to
changes in standards for operating systems, databases and other
technologies. About SoftBrands SoftBrands, Inc. is a leader in
providing software solutions for businesses in the manufacturing
and hospitality industries worldwide. The company has established a
global infrastructure for distribution, development and support of
enterprise software, and has approximately 5,000 customers in more
than 100 countries actively using its manufacturing and hospitality
products. SoftBrands, which has approximately 740 employees, is
headquartered in Minneapolis, Minn., with branch offices in Europe,
India, Asia, Australia and Africa. Additional information can be
found at http://www.softbrands.com/. Contact: Gregg Waldon Chief
Financial Officer 612-851-1805 Susan Eich Vice President, Corporate
Communications 612-851-6205 Tables Follow SoftBrands, Inc.
Consolidated Balance Sheets March 31, September 30, (In thousands,
except share and per share data) 2009 2008 (Unaudited) ASSETS
Current assets: Cash and cash equivalents $14,183 $11,948 Accounts
receivable, net 22,519 21,665 Prepaid expenses and other current
assets 5,075 4,791 Total current assets 41,777 38,404 Furniture,
fixtures and equipment, net 1,746 2,095 Goodwill 35,299 35,591
Intangible assets, net 2,951 4,346 Other long-term assets 105 425
Total assets $81,878 $80,861 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Current portion of long-term obligations
$3,312 $3,407 Revolving loan 8,101 7,782 Accounts payable 3,076
5,194 Accrued expenses 5,991 7,474 Deferred revenue 25,626 21,500
Other current liabilities 1,871 2,820 Total current liabilities
47,977 48,177 Long-term obligations 11,048 12,667 Other long-term
liabilities 515 487 Total liabilities 59,540 61,331 Commitments and
contingencies Stockholders' equity: Series A and undesignated
preferred stock, $.01 par value; 10,647,973 shares authorized; no
shares issued or outstanding - - Series B convertible preferred
stock, $.01 par value; 4,331,540 shares authorized, issued and
outstanding; liquidation value of $4,591 5,068 5,068 Series C-1
convertible preferred stock, $.01 par value; 18,000 shares
authorized, issued and outstanding; liquidation value of $18,000
plus unpaid dividends of $360 and $368, respectively 18,000 18,000
Series D convertible preferred stock, $.01 par value; 6,673 shares
authorized, 6,000 shares issued and outstanding; liquidation value
of $6,000 plus unpaid dividends of $120 and $123, respectively
5,051 5,051 Common stock, $.01 par value; 110,000,000 shares
authorized; 44,858,101 and 41,931,386 shares issued and
outstanding, respectively 448 419 Additional paid-in capital
175,165 174,348 Accumulated other comprehensive loss (1,231) (939)
Accumulated deficit (180,163) (182,417) Total stockholders' equity
22,338 19,530 Total liabilities and stockholders' equity $81,878
$80,861 SoftBrands, Inc. Consolidated Statements of Operations
Three Months Ended Six Months Ended March 31, March 31, (In
thousands, except 2009 2008 2009 2008 per share data)
(Unaudited)(Unaudited)(Unaudited)(Unaudited) Revenues: Software
licenses $ 2,823 $ 4,012 $ 9,562 $ 7,009 Maintenance and support
12,579 13,513 25,523 27,077 Professional services 4,722 4,691 9,628
9,617 Third-party software and hardware 1,232 1,439 2,195 2,201
Total revenues 21,356 23,655 46,908 45,904 Cost of revenues:
Software licenses 504 590 1,594 1,178 Maintenance and support 3,536
4,151 7,369 8,156 Professional services 4,375 3,902 8,665 8,015
Third-party software and hardware 908 1,185 1,806 1,917 Total cost
of revenues 9,323 9,828 19,434 19,266 Gross profit 12,033 13,827
27,474 26,638 Operating expenses: Selling and marketing 3,626 4,968
7,635 9,920 Research and product development 3,905 4,086 7,933
7,845 General and administrative 4,111 5,571 9,090 10,881
Restructuring related charges - - - 25 Total operating expenses
11,642 14,625 24,658 28,671 Operating income (loss) 391 (798) 2,816
(2,033) Interest expense (227) (496) (572) (988) Other income
(expense), net 62 153 98 510 Income (loss) from continuing
operations before provision for (benefit from) income taxes 226
(1,141) 2,342 (2,511) Provision for (benefit from) income taxes 23
(1,186) 450 (2,223) Income (loss) from continuing operations 203 45
1,892 (288) Income from discontinued operations, net of tax - - 362
- Net income (loss) 203 45 2,254 (288) Preferred stock dividends
(480) (485) (971) (976) Net income (loss) available to common
shareholders $(277) $(440) $1,283 $(1,264) Weighted-average common
shares outstanding: Basic 44,790 41,827 47,739 41,623 Diluted
44,790 41,827 47,825 41,623 Basic and diluted earnings (loss) per
common share: Continuing operations $(0.01) $(0.01) $0.02 $(0.03)
Discontinued operations - - 0.01 - Net income (loss) $(0.01)
$(0.01) $0.03 $(0.03) SoftBrands, Inc. Supplemental Financial
Information (Unaudited, in thousands) Revenues and Operating Income
(Loss) Three Months Ended March 31, 2009 2008 % Change Operating
Operating Operating Income Income Income Revenues (Loss) Revenues
(Loss) Revenues (Loss) Manufacturing $10,104 $ 1,930 $11,916 $
1,699 -15.2% 13.6% Hospitality 11,252 (1,539) 11,739 (2,497) -4.1%
38.4% Total $21,356 $ 391 $23,655 $ (798) -9.7% 149.0% Six Months
Ended March 31, 2009 2008 % Change Operating Operating Operating
Income Income Income Revenues (Loss) Revenues (Loss) Revenues
(Loss) Manufacturing $20,758 $ 3,069 $24,476 $ 3,998 -15.2% -23.2%
Hospitality 26,150 (253) 21,428 (6,031) 22.0% 95.8% Total $46,908 $
2,816 $45,904 $(2,033) 2.2% 238.5% Revenues by Segment and Type
Three Months Ended March 31, 2009 2008 Manufacturing Hospitality
Total Manufacturing Hospitality Total Software licenses $1,070
$1,753 $2,823 $1,204 $2,808 $4,012 Maintenance and support 7,134
5,445 12,579 7,817 5,696 13,513 Professional services 1,788 2,934
4,722 2,751 1,940 4,691 Third-party software and hardware 112 1,120
1,232 144 1,295 1,439 Total $10,104 $11,252 $21,356 $11,916 $11,739
$23,655 Six Months Ended March 31, 2009 2008 Manufacturing
Hospitality Total Manufacturing Hospitality Total Software licenses
$2,159 $7,403 $9,562 $2,731 $4,278 $7,009 Maintenance and support
14,732 10,791 25,523 15,913 11,164 27,077 Professional services
3,670 5,958 9,628 5,573 4,044 9,617 Third-party software and
hardware 197 1,998 2,195 259 1,942 2,201 Total $20,758 $26,150
$46,908 $24,476 $21,428 $45,904 SoftBrands, Inc. Supplemental
Financial Information (Unaudited, in thousands) Revenues by Segment
and Geography Three Months Ended March 31, 2009 2008 Manufacturing
Hospitality Total Manufacturing Hospitality Total Americas $6,419
$8,603 $15,022 $7,077 $7,458 $14,535 Europe, Middle East and Africa
2,313 1,095 3,408 3,312 2,390 5,702 Asia Pacific 1,372 1,554 2,926
1,527 1,891 3,418 Total $10,104 $11,252 $21,356 $11,916 $11,739
$23,655 Six Months Ended March 31, 2009 2008 Manufacturing
Hospitality Total Manufacturing Hospitality Total Americas $13,028
$20,360 $33,388 $14,671 $13,236 $27,907 Europe, Middle East and
Africa 4,959 2,478 7,437 6,661 4,334 10,995 Asia Pacific 2,771
3,312 6,083 3,144 3,858 7,002 Total $20,758 $26,150 $46,908 $24,476
$21,428 $45,904 DATASOURCE: SoftBrands, Inc. CONTACT: Gregg Waldon,
Chief Financial Officer, +1-612-851-1805, , or Susan Eich, Vice
President, Corporate Communications, +1-612-851-6205, , both of
SoftBrands, Inc. Web Site: http://www.softbrands.com/
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