* Company revenues exceed $10 million KALAMAZOO, Mich., Sept. 13
/PRNewswire-FirstCall/ -- Manatron, Inc. (NASDAQ:MANA) a leading
provider of software products and services for local governments,
including the Government Revenue Management(R) (GRM(R)) software,
today announced its financial results for the first quarter of
fiscal 2007, which ended July 31, 2006. For the quarter, the
Company reported net revenues of $10.7 million, which is a 14.4
percent increase over the $9.4 million of net revenues that were
reported for the first quarter in the prior fiscal year. The
Company's first quarter net revenues were also 8.2 percent higher
than the net revenues that were posted for the fourth quarter of
fiscal 2006. Operating income was $60,079 for the quarter, which
represents a significant improvement over the operating loss of
$1.3 million that was reported for the first quarter of the prior
fiscal year, as well as a positive swing of over $2.3 million from
the operating loss that was incurred for the most recently ended
fourth quarter of fiscal 2006. Net income was $51,541 or $.01 per
diluted share for the first quarter versus a net loss of $737,879
or $(.17) per diluted share for the comparable period in the prior
fiscal year. "I am pleased with the double-digit growth in our
revenues for the quarter, but more importantly, with our return to
profitability," said Paul R. Sylvester, Manatron's Chief Executive
Officer. "With our second year of successful delivery of property
values and tax bills in Gwinnett County behind us, as well as our
recent GRM wins in Arizona, Minnesota, Nevada, South Carolina,
Tennessee and Virginia, we are starting to build a portfolio of
reference accounts which will enable us to shorten the sales cycle
and further increase our leadership position in the Property Tax
market. While this optimism and the positive impact of our
reference accounts is not yet fully apparent in our financial
results, we were able to return to profitability and once again
cross the $10 million revenue milestone, both indications of
operational improvement. Our return to profitability was primarily
due to a lower cost structure, which was as a result of the
restructuring we implemented near the end of our last fiscal year."
"We have yet to fully benefit from the ASIX acquisition, as our
integration efforts are ongoing," Sylvester continued. "However,
the ASIX team has provided us an immediate and significant presence
in California, which we expect will result in new business for us
in this fiscal year and beyond. In addition, ASIX is providing us
with valuable subject matter expertise and assistance on Property
Tax projects we have in process in Illinois, Minnesota, Nevada and
Oregon." "Other recent highlights include approximately $2.4
million of new business signed in Ohio and Oregon," Mr. Sylvester
concluded. "The Ohio sales are upgrades to MVP Tax and CAMA for
current clients, while the Oregon sales are new accounts. We also
recently announced a new Property Tax contract with Clay County,
Missouri, another new client for Manatron. This contract will
generate approximately $750,000 of license fees and professional
services and provides an additional $90,000 of software maintenance
and support annually. Finally, the first quarter included the
successful delivery of GRM Tax and CAMA in Kenai, Alaska, our third
county who is live on this new software. We currently have the same
GRM code base running or being implemented in nine states."
Financial Results The increase in revenues was primarily due to the
acquisition of ASIX, which occurred on February 1, 2006. As a
result, the prior year first quarter did not reflect any of their
revenues. Software license fees increased 72.0 percent to $1.0
million for the quarter versus $588,000 for the comparable period
in the prior fiscal year. This increase was driven by the
installation of Lawrence County, Ohio, as well as the continued
execution of the Company's GRM implementations in Minnesota,
Nevada, South Carolina, Tennessee and Virginia. Recurring software
support and maintenance fees increased 25.4 percent to $4.6 million
for the quarter from $3.6 million in the first quarter of last year
due to the acquisitions of the Plexis Group and ASIX in the prior
fiscal year. Annual price increases and new support initiated on
recently completed implementations in Gwinnett County, Georgia;
Payette County, Idaho; Duval County, Florida; Davidson County,
Tennessee; and the CAMA portion of the City of Virginia Beach
contract also contributed to the increase. Professional services
revenues increased 9.1 percent to $4.3 million for the quarter from
$4.0 million in the prior year first quarter. This increase was
driven by the additional consulting services that the Company now
has as a result of the ASIX acquisition. In addition, appraisal
services revenues increased by $163,000 over the prior year three
month period due to the timing of the completion of a large
appraisal project. The Company anticipates that appraisal services
revenues for the remaining nine months of fiscal 2007 will lag
behind prior year comparable amounts due to the reduction in
backlog for this work, as well as the fact that the Company is at
the low point of this cyclical business. The appraisal business
continues to serve as a conduit for software sales. Cost of
revenues for the first quarter decreased by 8.7 percent to $6.1
million for the quarter from $6.7 million in the comparable period
in the prior fiscal year. This resulted in an increase in gross
profit to $4.6 million or 43.3 percent of sales from gross profit
of $2.7 million and a margin of 29.0 percent for the first quarter
in the prior fiscal year. This improvement was due to the
restructuring that occurred at the end of the prior fiscal year, as
well as a lower utilization of subcontractors on the Baltimore
project in the current year quarter. Selling, general and
administrative expenses increased to $4.6 million for the three
months ended July 31, 2006 from $4.0 million for the three months
ended July 31, 2005 primarily because of additional amortization
expense related to the intangible assets acquired in connection
with the Company's acquisitions of Plexis and ASIX. The remaining
increase is due to the addition of key sales, marketing and
development personnel associated with the Plexis and ASIX
acquisitions offset by decreased costs attributable to the
restructuring noted previously. As of July 31, 2006, the Company's
backlog was $17.3 million compared to $13.4 million at July 31,
2005. These backlog amounts are exclusive of the Company's $20.0
million of annualized recurring revenue from maintenance, support,
e-government subscriptions, and printing and processing contracts
as of July 31, 2006. In addition, the current backlog amount is
exclusive of $2.0 million of the new contracts in Ohio and Oregon
and the $840,000 contract with Clay County, Missouri noted above.
The Company finished the quarter with working capital of $5.0
million, $2.1 million in cash, and no bank debt. Shareholders'
equity was $23.2 million compared to $23.0 million as of April 30,
2006. "Manatron's GRM solution is now gaining the traction
nationally that we expected when we embarked on this strategic
evolution," said G. William McKinzie, Manatron's President and
Chief Operating Officer. "Recent wins in Minnesota, Horry County,
South Carolina, Washoe County, Nevada, Virginia Beach, Virginia and
several counties in Tennessee, Ohio and Oregon should serve as the
basis of our next phase of growth. In addition, the difficult
decisions to streamline our organization have enabled us to regain
profitability. I am confident that we will continue our momentum in
the second quarter and for the balance of our fiscal year."
Teleconference Information Management will discuss the results in a
conference call, scheduled for 4:15 p.m. Eastern Time, on
Wednesday, September 13, 2006. Anyone interested in participating
should call 888-603-6873 if calling within the United States or
973-582-2706 if calling internationally. There will be a playback
available until September 20, 2006. To listen to the playback,
please call 877-519-4471 if calling within the United States or
973-341-3080 if calling internationally. Please use pin number
7834356 for the replay. This call is being web cast by ViaVid
Broadcasting and can be accessed at Manatron's website at
http://www.manatron.com/. The web cast may also be accessed at
ViaVid's website at http://www.viavid.net/. The web cast can be
accessed until October 13, 2006 on either site. To access the web
cast, you will need to have the Windows Media Player on your
desktop. For the free download of the Media Player please visit:
http://www.microsoft.com/windows/windowsmedia/en/download/default.asp.
About Manatron, Inc.: Manatron, Inc. designs, develops, markets and
supports a family of web-based and client/server application
software products for county, city and township governments.
Manatron's products support the back-office processes for these
government agencies and facilitate the broader business processes
via eGovernment and Internet features, such as Internet payments
and mortgage lender integration, targeted at the needs of taxpayers
and industry professionals. Manatron also provides mass appraisal
services, which includes the assessment of residential, commercial
and other types of properties to ensure updated and equitable
property valuations. Manatron is headquartered in Portage, Michigan
and has offices in Florida, Georgia, Illinois, Indiana, Ohio,
Tennessee and Washington. Manatron currently serves approximately
1,300 customers in 30 states and two Canadian territories.
Information about Manatron, Inc. is available at the Company's site
on the World Wide Web at http://www.manatron.com/. Safe Harbor
Statement: The information provided in this news release may
include forward-looking statements relating to future events, such
as the development of new products, the commencement of production,
or the future financial performance of the Company. Actual results
may differ from such projections and are subject to certain risks
including, without limitation, risks arising from: changes in the
rate of growth of the local government market, increased
competition in the industry, delays in developing and
commercializing new products, adequacy of financing and other
factors described in the Company's most recent annual report on
Form 10-K filed with the Securities and Exchange Commission, which
can be reviewed at http://www.sec.gov/. Tables to Follow MANATRON,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS July 31, April 30, 2006
2006 (Unaudited) (Audited) ASSETS CURRENT ASSETS: Cash and
equivalents $2,080,253 $4,209,831 Accounts receivable, net
7,377,017 7,556,313 Income tax receivable 1,960,826 2,182,248
Revenues earned in excess of billings on long-term contracts
6,229,105 6,151,346 Unbilled retainages on long term contracts
1,206,637 1,105,320 Notes receivable 443,960 450,565 Inventories
230,993 146,800 Deferred tax assets 1,153,651 1,153,651 Other
current assets 657,641 485,525 Total current assets 21,340,083
23,441,599 NET PROPERTY AND EQUIPMENT 2,514,497 2,618,588 OTHER
ASSETS: Notes receivable, less current portions 256,630 272,261
Computer software development costs, net of accumulated
amortization 2,658,335 2,610,216 Goodwill 12,022,385 12,022,385
Intangible assets, net of accumulated amortization 2,962,392
3,202,935 Other, net 246,265 253,980 Total other assets 18,146,007
18,361,777 Total assets $42,000,587 $44,421,964 LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $811,737
$898,301 Current portion of notes payable 2,500,000 2,700,000
Billings in excess of revenues earned on long-term contracts
2,725,003 3,373,271 Billings for future services 7,055,747
8,369,114 Accrued liabilities 3,233,429 3,419,286 Total current
liabilities 16,325,916 18,759,972 DEFERRED INCOME TAXES 284,963
284,963 LONG-TERM PORTION OF NOTES PAYABLE 2,139,933 2,334,228
SHAREHOLDERS' EQUITY: Common stock 16,693,916 16,538,483 Retained
earnings 6,555,859 6,504,318 Total shareholders' equity 23,249,775
23,042,801 Total liabilities and shareholders' equity $42,000,587
$44,421,964 MANATRON, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) Three Months Ended July 31, 2006 2005 NET
REVENUES $10,722,459 $9,373,152 COST OF REVENUES 6,080,203
6,656,237 Gross profit 4,642,256 2,716,915 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 4,582,177 3,983,752 Income (loss) from
operations 60,079 (1,266,837) OTHER INCOME, NET 23,062 75,958
Income (loss) before provision (credit) for income taxes 83,141
(1,190,879) PROVISION (CREDIT) FOR INCOME TAXES 31,600 (453,000)
NET INCOME (LOSS) $51,541 $(737,879) BASIC EARNINGS (LOSS) PER
SHARE $.01 $(.17) DILUTED EARNINGS (LOSS) PER SHARE $.01 $(.17)
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 4,875,851 4,259,361
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 4,935,628 4,259,361
DATASOURCE: Manatron, Inc. CONTACT: Paul Sylvester, Co-Chairman and
CEO of Manatron, Inc., +1-269-567-2900, Web site:
http://www.viavid.net/ Web site: http://www.manatron.com/
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