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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): December 22, 1998
Manugistics Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-22154 52-1469385
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification Number)
2115 East Jefferson Street
Rockville, Maryland 20852
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(Address of principal executive offices and zip code)
(301) 984-5000
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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Item 5. Other events.
On December 22, 1998, Manugistics Group, Inc. issued a press release
announcing its financial results for its third quarter ended November 30, 1998,
and its continuing preliminary discussions with other companies concerning a
potential business combination. A copy of the press release appears as Exhibit
99 to this Report and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
The following is filed as an Exhibit to this Report:
Exhibit Number Description
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99 Press Release dated December 22, 1998.
2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Rockville, State of
Maryland, on the 23rd day of December, 1998.
MANUGISTICS GROUP, INC.
By: /s/ Peter Q. Repetti
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Peter Q. Repetti
Senior Vice President and
Chief Financial Officer
3
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EXHIBIT INDEX
Exhibit Number Description
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99 Press Release dated December 22, 1998
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Contacts: Peter Q. Repetti
Chief Financial Officer
301-984-5087
Nate Wallace
Manager, Investor Relations
301-984-5059
For Immediate Release
MANUGISTICS ANNOUNCES THIRD QUARTER
RESULTS AND PRELIMINARY DISCUSSIONS
REGARDING POSSIBLE BUSINESS COMBINATION
Rockville, Md., December 22, 1998 - Manugistics Group, Inc. (Nasdaq:
MANU) today reported quarterly revenues and a net loss for the three months
ended November 30, 1998. In addition, the Company announced that it has been and
continues to be in preliminary discussions with other companies concerning a
potential business combination. However, there can be no assurance that a
combination will occur or when it might occur.
Total revenues increased 2% to $43.0 million in the third quarter from
$42.2 million in the third quarter of the prior year. Software license revenues
decreased 33% to $15.4 million in the third quarter from $23.0 million in the
same quarter last year. Including a charge of $701,000 associated with the
restructuring announced in September 1998, the Company had a net loss of $10.4
million, or $.39 loss per basic and diluted share compared to net income of $3.8
million, or $.14 per diluted share last year.
For the nine months ended November 30, 1998, total revenues increased
17% to $137.1 million from $116.9 million in the same period of the prior year.
Excluding non-recurring charges associated with the acquisition of TYECIN
Systems Inc. on June 1, 1998 and the restructuring on September 24, 1998, the
(more)
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Manugistics Announces Third Quarter Results... Page 2
Company reported a pro forma net loss of $22.4 million, or $.85 loss per basic
and diluted share for the nine months ended November 30, 1998. Including these
non-recurring charges for that period, the Company reported a net loss of $24.9
million, or $.95 loss per diluted and basic share, compared to net income of
$8.7 million, or $.38 per basic share and $.34 per diluted share in the same
period in the prior year.
"We have experienced problems this year because of our issues with
execution, new competitive forces, and some market factors affecting our clients
and prospects," said William M. Gibson, chairman and chief executive officer of
Manugistics. "The concern with these market factors has caused our clients and
prospects to make decisions more slowly than in the past and accordingly,
adversely affected our performance. However, we're beginning to notice that
clients and prospects that previously delayed decisions have recently been
re-engaging with us."
"While we believe the Company's core business is sound, we are
evaluating aggressive measures to further restructure our operations as part of
our continuing efforts to improve execution and efficiencies, better align
expenses with revenues, and enhance our sales and marketing activities to meet
the challenges of the marketplace," Gibson continued. "We are continuing
preliminary discussions with other companies concerning a potential business
combination. We are analyzing all of our options and expect to make our
decisions in January, taking into account the best interests of our
shareholders, our employees, and our clients."
(more)
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Manugistics Announces Third Quarter Results... Page 3
Company Highlights
During the quarter, the Company made significant progress on strategic
initiatives including:
o Expanded Integration Capabilities - Manugistics expanded its Open
Application Integration(TM) (OAI) strategy to include a technology
partnership with Enterprise Application IntegrationTM (EAI) leader, Oberon
Software, Inc., and an integration lab which will enable systems
integrators and software partners to rapidly build a library of certified
integration software solutions or "plug-ins" to Manugistics. Partners
announcing support for the OAI lab included AnswerThink Consulting Group,
Catalyst, GLOVIA International, HK Systems, J.D. Edwards, MarketMAX, Inc.,
ObTech, POMS Corporation, Real World Technology, Revere Group, Supply Chain
Solutions, SYNTRA, and The Vista Technology Group.
o New Architecture for Supply Chain Data Warehouse and Analysis Capabilities
- Using the powerful, scalable, and open online processing functionality of
Microsoft SQL Server 7.0, Manugistics anticipates that it will deliver
sophisticated supply chain data warehousing and analysis capabilities early
next year. Manugistics' Supply Chain Warehouse(TM) will support ad hoc
multi-dimensional browsing and reporting and will give users the ability to
view, measure, and analyze the performance of the entire supply chain,
adopting a closed-loop system that bridges the gap between planning,
execution, and collaboration activities.
o Enhancing Internet-Based Collaboration - New capabilities were introduced
in Manugistics NetWORKS(TM) to allow companies to collaboratively create
and maintain joint business plans and monitor the execution of those plans.
Manugistics also announced the significant success of its clients, Nabisco
U.S. Foods Group and Wegmans, that reported solid sales growth resulting
from a Collaborative Planning, Forecasting and Replenishment (CPFR) pilot.
(more)
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Manugistics Announces Third Quarter Results... Page 4
o Introduction of Midrange Affiliate Program - Manugistics unveiled a new
program which is delivering its market-leading solutions to midrange
companies and announced that two leading companies, AnswerThink Consulting
Group and JGI, have joined its affiliate network. Manugistics has
established a comprehensive program to provide solutions and services to
companies with annual revenues of less than $500 million through a network
of affiliate companies which will market, sell, and support Manugistics'
solutions.
Headquartered in Rockville, Md., Manugistics is the leading provider of
solutions for customer-centric supply chain optimization and has the largest
global client base of any supply chain provider. The company's solutions are
used by more than 850 companies to improve the flow of product within and among
companies from raw materials or parts through manufacturing to delivery of
product to the end customer. Manugistics' solutions uniquely allow its clients
to create and optimize their supply chains around their customers and are quick
to implement, adapt easily to change, and deliver rapid results. Its clients
include leading companies such Compaq, Harley-Davidson, Nike, Frito-Lay,
Wal-Mart, DuPont, and Nortel.
Forward-Looking Statements
This press release contains forward-looking statements that are subject
to risks and uncertainties, and there are important factors that could cause
actual results to differ materially from those anticipated by such statements.
(Certain of such statements may be identified by use of words such as
"anticipate," "believe," "estimate," "intend," "expect," or "future.") Most
importantly, there are a number of important factors that could affect the
Company's performance. Demand for the Company's supply chain management software
products and the Company's quarterly operating results could be affected by
business conditions or the general economy in domestic and international
markets, the timely availability and acceptance of the Company's products,
technological change, the
(more)
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Manugistics Announces Third Quarter Results... Page 5
timing and results of the Company's longer-term initiatives, the response of
prospective customers to announced or commercially available products or
pricing, competitors' announcements and other marketing activities, acquisitions
or marketing relationships, the length of the Company's sales cycles, or the
Company's ability to integrate acquired operations and technologies rapidly and
effectively. The Company's expense levels are based largely on its expectations
of future revenues, and if revenues were to be below expectations (as has
occurred in the first two quarters of fiscal 1999), the Company's operating
results would be and have been affected. The timing of releases of the Company's
software products can be affected by client needs, marketplace demands,
technological advances, and competitors' activities. The expansion of the
Company's operations into foreign markets, including the Asia/Pacific and South
America regions, might be affected by general economic conditions in foreign
countries, difficulties in staffing and managing international operations,
changes in foreign currency exchange rates, and political and economic
instability. For further information, please refer to the Company's Form 10-K
for the year ended February 28, 1998, and other reports and documents
subsequently filed with the Securities and Exchange Commission which are
publicly available, copies of which may also be obtained by contacting the
Company's Investor Relations department at 301-984-5409. The Company assumes no
obligation to update the information contained in this press release.
(more)
Manugistics, the Manugistics logo and working as one are registered trademarks
and Supply Chain Warehouse, Manugistics NetWORKS, and Open Application
Integration are trademarks of Manugistics, Inc. All other product or company
names mentioned are used for identification purposes only, and may be trademarks
of their respective owners. Additional information about Manugistics can be
found at the Company's site on the World Wide Web, at
http://www.manugistics.com.
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Manugistics Announces Third Quarter Results... Page 6
MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
November 30, February 28,
1998 1998
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(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,655 $ 19,891
Marketable securities 28,310 62,246
Accounts receivable - net 56,615 59,584
Other current assets 12,930 5,218
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Total current assets 103,510 146,939
PROPERTY AND EQUIPMENT - NET 26,388 21,142
NONCURRENT ASSETS:
Software development costs - net 23,190 22,986
Intangibles and other assets - net 13,717 16,555
Deferred tax asset 28,009 17,593
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TOTAL $194,814 $225,215
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,631 $ 8,918
Accrued liabilities 14,166 23,493
Deferred revenue 21,178 18,546
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Total current liabilities 39,975 50,957
LONG-TERM LIABILITIES 387 512
STOCKHOLDERS' EQUITY 154,452 173,746
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TOTAL $194,814 $225,215
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(more)
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Manugistics Announces Third Quarter Results... Page 7
MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
REVENUES:
License fees $15,365 $23,014 $58,617 $65,675
Services 27,679 19,145 78,490 51,260
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Total revenues 43,044 42,159 137,107 116,935
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OPERATING EXPENSES:
Cost of license fees 3,349 2,652 9,635 7,771
Cost of services 13,219 8,677 37,733 22,951
Sales and marketing 25,262 14,520 73,334 42,521
Product development 11,712 7,831 37,506 21,501
General and administrative 4,686 3,365 15,753 9,888
Acquisition-related expenses - - 3,095 -
Restructuring costs 701 - 701 -
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Total operating expenses 58,929 37,045 177,757 104,632
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(LOSS) INCOME FROM OPERATIONS (15,885) 5,114 (40,650) 12,303
OTHER INCOME-NET 551 1,185 2,282 1,898
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NET (LOSS) INCOME BEFORE INCOME TAXES (15,334) 6,299 (38,368) 14,201
(BENEFIT) PROVISION FOR INCOME TAXES
(4,927) 2,504 (13,456) 5,493
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NET (LOSS) INCOME $(10,407) $3,795 $(24,912) $8,708
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NET (LOSS) INCOME PER SHARE-BASIC ($0.39) $0.16 ($0.95) $0.38
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NET (LOSS) INCOME PER SHARE-DILUTED ($0.39) $0.14 ($0.95) $0.34
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SHARES USED IN SHARE COMPUTATION
BASIC 26,520 24,288 26,285 23,101
DILUTED 26,520 26,940 26,285 25,956
PRO FORMA FINANCIAL INFORMATION:
PRO FORMA NET (LOSS) INCOME
(9,931) (a) 3,795 (22,447) (a) 8,708
PRO FORMA (LOSS) INCOME PER SHARE-BASIC ($0.37) (a) $0.16 ($0.85) (a) $0.38
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PRO FORMA (LOSS) INCOME PER SHARE-DILUTED ($0.37) (a) $0.14 ($0.85) (a) $0.34
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SHARES USED IN SHARE COMPUTATION
BASIC 26,520 24,288 26,285 23,101
DILUTED 26,520 26,940 26,285 25,956
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(a) The pro forma net income and related per share amounts for the three and
nine months ended November 30, 1998 reflect the operating results of the
company, excluding the impact of a non-recurring charge of $.7M for certain
restructuring costs in connection with management's plan to reduce costs and
improve operating efficiencies. These non-recurring costs included, among other
things, severance costs and legal and accounting fees and expenses. Also, the
pro forma net income and related per share amounts for the nine months ended
November 30, 1998, reflect the operating results of the company, excluding the
impact of a non-recurring charge of $3.1 million for certain acquisition-related
expenses in connection with the business combination involving TYECIN Systems,
Inc. These non-recurring costs included, among other things, investment banking,
legal and accounting fees and expenses, and the write-off certain capitalized
software costs that have no realizable value.
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