ROSS Ross Systems (MM)

Ross Systems 3rd Quarter Report Company reports 56% increase in Software license revenue. ATLANTA, May 5 /PRNewswire-FirstCall/ -- Ross Systems, Inc. , a leading provider of enterprise software solutions for manufacturers, today announced results for its second fiscal quarter, which ended March 31, 2004. The Company reported net earnings of $1.2 million or $0.36 per share, after merger transaction costs of $0.1 million. The merger transaction costs are associated with the proposed merger with CDC Software, a subsidiary of chinadotcom corporation . The proposed merger, which is subject to stockholder approval, is expected to proceed during the second quarter of calendar 2004. Revenues for the quarter at $13.7 million increased 20% from $11.4 million in the prior year's same quarter. Software license revenue for the quarter at $4.2 million increased 56% from $2.7 million in the prior year's same quarter. Consulting service revenue at $4.2 million increased 20% from $3.5 million in the prior year's same quarter. Maintenance revenue was $5.2 million in both the current quarter and the prior year's same quarter. The net earnings for the quarter of $1.2 million or $0.36 per diluted share, compared to net earnings of $0.7 million or $0.22 per diluted share in the prior year's same quarter. Net cash of $8.8 million this quarter increased $2.2 million over the prior year's same quarter and $1.4 million from the previous quarter. The Company's cash position at the end of the previous quarter was affected by the previously reported merger transaction and arbitration settlement costs incurred during that quarter. The Company has no long-term debt, and short-term debt decreased to $5.0 million from $5.3 million in the sequential quarter. Deferred revenues this quarter increased to $11.9 million from $10.6 million in the sequential quarter. Accounts receivable, at $15.0 million, increased from $13.9 million in the sequential quarter. For the most recent nine-month period, the Company reported revenue of $38.9 million or an 11% increase over the prior year's same period and net earnings of $0.3 million or $0.12 per share after litigation settlement and prospective merger transaction costs of $3.0 million. This compares to net earnings of $2.8 million or $0.87 per share for the prior year's same period. Excluding the $3.0 million of settlement and transaction costs noted above, earnings would have been $3.3 million for an 18% improvement over the prior year's nine-month performance. "Contributing to this quarter's software license results were particularly strong increases in new customer licenses of the iRenaissance Suite of enterprise applications in North America as well as continued customer purchases of Ross' Internet Application Framework (IAF) which provides browser capabilities that increase user productivity. We are also very pleased with the revenue growth of our Supply Chain Management products," said J. Patrick Tinley, Ross' Chairman and CEO. "Our continued focus on the process industries including life sciences, food and beverage, chemicals, metals, and natural products has continued to generate our revenue growth. We have seen an increase in demand from the food industry, driven by issues related to global food safety, that we uniquely address with our iRenaissance Suite." About Ross Systems Ross Systems, Inc. (NASDAQ:ROSS) delivers innovative software solutions that help manufacturers worldwide fulfill their business growth objectives through increased operational efficiencies, improved profitability, strengthened customer relationships and streamlined regulatory compliance. Focused on the food and beverage, life sciences, chemicals, metals and natural products industries and implemented by over 1,000 customer companies worldwide, the company's family of Internet-architected solutions is a comprehensive, modular suite that spans the enterprise, from manufacturing, financials and supply chain management to customer relationship management, performance management and regulatory compliance. Publicly traded on the NASDAQ since 1991, Ross's global headquarters are based in the U.S. in Atlanta, Georgia, with sales and support operations around the world. http://www.rossinc.com/ . STATEMENTS IN THIS ANNOUNCEMENT, WHICH EXPRESS THAT THE COMPANY "BELIEVES," "ANTICIPATES," "EXPECTS," "PLANS TO..." OR "SHOULD BEGIN TO... " AS WELL AS OTHER STATEMENTS, WHICH ARE NOT HISTORICAL FACT, ARE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD LOOKING STATEMENTS IN THIS ANNOUNCEMENT INCLUDE STATEMENTS ABOUT THE PROPOSED MERGER. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY AS A RESULT OF RISKS AND UNCERTAINTIES, INCLUDING THE RISK THAT THE MERGER IS NOT APPROVED BY ROSS SHAREHOLDERS OR IS OTHERWISE NOT COMPLETED, THE RISK THAT THE ANTICIPATED BENEFITS OF THE MERGER ARE NOT REALIZED, QUARTERLY FLUCTUATION OF SOFTWARE PRODUCT LICENSE REVENUE, WEAKENING OF CUSTOMER DEMAND FOR ENTERPRISE SYSTEMS, THE COMPANY'S MAINTENANCE OF A MINIMAL BACKLOG, THE UNCERTAINTY OF DEMAND FOR NEW PRODUCT OFFERINGS AND OTHER RISKS AND UNCERTAINTIES DESCRIBED IN REPORTS FILED BY THE COMPANY WITH THE SEC, INCLUDING THE ANNUAL REPORT ON FORM 10-K FILED FOR THE YEAR ENDED JUNE 30, 2003. YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS ANNOUNCEMENT. WE DO NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY UPDATE OR RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS ANNOUNCEMENT OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS, EXCEPT AS REQUIRED BY LAW. ROSS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three months ended Nine months ended March 31, March 31, 2004 2003 2004 2003 Revenues: Software product licenses $4,244 $2,696 $11,594 $9,903 Consulting and other services 4,237 3,489 11,815 9,794 Maintenance 5,191 5,235 15,538 15,323 Total revenues 13,672 11,420 38,947 35,020 Operating expenses: Costs of software product licenses 1,764 1,660 5,090 4,786 Costs of consulting and maintenance 5,313 4,229 15,491 12,784 Sales and marketing 3,272 2,864 9,021 8,193 Product development net of capitalized computer software costs 778 605 2,417 1,893 General and administrative 812 1,016 2,807 3,420 Litigation settlement cost - - 1,896 - Provision for uncollectible accounts 188 197 418 711 Total operating expenses 12,127 10,571 37,140 31,787 Operating earnings 1,545 849 1,807 3,233 Prospective merger transaction costs (139) - (1,133) - Other financial, net expense (113) (29) (144) (152) Earnings before taxes 1,293 820 530 3,081 Income tax expense 22 63 105 217 Net earnings $1,271 $757 $425 $2,864 Preferred stock dividend (38) (38) (113) (113) Net earnings available to common shareholders $1,233 $719 $312 $2,751 Net earnings per common share - basic $0.45 $0.27 $0.12 $1.05 Net earnings per common share - diluted $0.36 $0.22 $0.12 $0.87 Shares for basic calculation 2,728 2,638 2,707 2,616 Shares for diluted calculation 3,513 3,387 3,477 3,292 ROSS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share related data) March 31 June 30 2004 2003 (unaudited) ASSETS Current assets: Cash and cash equivalents $8,751 $8,628 Accounts receivable, less allowance for doubtful accounts and returns 14,967 12,880 Prepaids and other current assets 805 731 Total current assets 24,523 22,239 Property and equipment 1,208 1,406 Computer software costs 12,617 13,573 Other assets 2,993 2,993 Total assets $41,341 $40,211 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of debt $5,049 $2,800 Accounts payable 1,436 2,978 Accrued expenses 5,055 4,940 Income taxes payable 177 261 Deferred revenues 11,944 12,203 Total current liabilities 23,661 23,182 Shareholders' equity: Common stock 28 28 Preferred Stock 2,000 2,000 Additional paid-in capital 87,275 87,189 Accumulated deficit (68,669) (69,094) Accumulated comprehensive income (deficit) (1,834) (1,749) Treasury Stock (1,120) (1,345) Total shareholders' equity 17,680 17,029 Total liabilities and shareholders' equity $41,341 $40,211 DATASOURCE: Ross Systems, Inc. CONTACT: Robert B. Webster of Ross Systems, +1-770-351-9600, or Web site: http://www.rossinc.com/

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