<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): March 26, 1998
MANUGISTICS GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-22154 52-1469385
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
2115 EAST JEFFERSON STREET, ROCKVILLE, MARYLAND 20852
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301) 984-5000
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ITEM 5. OTHER EVENTS
On March 26, 1998, the Company issued a press release announcing its
earnings figures for its fourth fiscal quarter and for its fiscal year ended
February 28, 1998. A copy of the press release is attached hereto as Exhibit
99.8 and is incorporated by reference herein.
ITEM 7. EXHIBITS
Exhibit Number
99.8 Press Release dated March 26, 1998.
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SIGNATURES
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 hereunto duly authorized.
MANUGISTICS GROUP, INC.
Date: March 27, 1998 By: /s/ PETER Q. REPETTI
--------------------
Peter Q. Repetti
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer and
Chief Accounting Officer)
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
99.8 Press Release dated March 26, 1998
<PAGE> 1
Exhibit 99.8
Contacts: Peter Q. Repetti
Chief Financial Officer
301-984-5409
Nate Wallace
Manager, Investor Relations
301-984-5059
FOR IMMEDIATE RELEASE
MANUGISTICS POSTS RECORD REVENUES,
COMPLETING OUTSTANDING YEAR WITH 113%
LICENSE REVENUE GROWTH
Rockville, Md., March 26, 1998 -- Manugistics Group, Inc. (Nasdaq:
MANU), the world's most recognized name in supply chain management, today
reported record quarterly revenues and pro forma earnings for the three months
ended February 28, 1998, marking the largest quarter ever for any supply chain
management vendor.
Led by a 113% increase in supply chain software license revenues, which
rose to $40.5 million from $19.0 million in the same quarter of the prior year,
total revenues for the quarter increased 94% to $62.1 million from $32.0 million
in the fourth quarter last year. Pro forma net income for the quarter, excluding
the impact of a one-time charge for purchased research and development costs
(R&D), increased 91% to $6.7 million, or $.25 per share, from $3.5 million, or
$.15 per share, for the same period last year.
"We are extremely pleased with the continued surge in demand for our
products this quarter, both from new clients and from established clients that
chose Manugistics for the second or third time," said William M. Gibson,
chairman and CEO of Manugistics. "We have the largest market penetration in the
supply chain management market with more than 600 licensed clients. This demand
proves that our clients are realizing the value of synchronized supply chain
management solutions."
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MANUGISTICS POSTS RECORD REVENUES... PAGE 2
"During the year, we successfully executed an aggressive strategy to be
the dominant supplier of supply chain management software for the consumer
products industry, licensing our solutions to more than 110 clients in that
market," Gibson continued. "At the same time, we delivered new functionality
that has been rapidly adopted by our clients in discrete manufacturing
industries. In addition, the acquisition of ProMIRA Software Inc. further
enhances our solutions for these industries."
In the fourth quarter, Manugistics continued to expand its
comprehensive, end-to-end supply chain management solutions by acquiring ProMIRA
Software, Inc., the leading provider of supply chain planning tools for
manufacturers of complex products. This acquisition combines Manugistics'
strengths in demand planning, complex distribution, constraint-based supply
chain optimization, and manufacturing scheduling with ProMIRA's optimized
material and capacity planning and real-time order promising capabilities for
complex products in industries such as high technology, electronics, and motor
vehicles and parts. In connection with this acquisition, the Company incurred a
one-time charge for the write-off of purchased R&D costs of $47.3 million.
(Including the effects of this non-recurring charge, the Company had a net loss
of $22.0 million, or $(.90) per share for the fourth quarter compared to net
income of $3.5 million, or $.15 per share for the same quarter last fiscal
year.)
For the fiscal year ended February 28, 1998, total revenues increased
85% to $175.7 million from $95.1 million last year. Supply chain management
license revenues increased 112% to $102.3 million from $48.2 million last year.
Pro forma net income for the year increased 93% to $15.4 million from pro forma
net income for last year of $8.0 million, excluding the effects of write-offs of
in-process R&D from the acquisitions of ProMIRA in fiscal year 1998 and Avyx,
Inc. in fiscal year 1997. (Including the effects of these non-recurring
charges, the
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MANUGISTICS POSTS RECORD REVENUES... PAGE 3
Company had a net loss of $13.3 million, or $(.57) per share for fiscal year
1998, compared to net income of $4.3 million, or $.19 per share for fiscal
1997.)
"We attribute our success this year to one thing - our ability to
deliver," Gibson continued. "We deliver breakthrough value to our clients by
helping them rapidly implement our solutions so they can realize substantial
returns quickly. We continue to deliver more new, innovative products than any
other supply chain vendor. We deliver on our commitment to partner with
companies providing complementary applications to further extend our supply
chain offering. And, we delivered value to our shareholders through another
record year of revenue and earnings growth."
All income per share amounts represent diluted income per share as
defined within Statements of Financial Accounting Standards No. 128.
COMPANY HIGHLIGHTS
Significant highlights of Manugistics' year include:
Industry-Specific Solutions
Several releases of Manugistics5, which contained robust
industry-specific functionality, were shipped during the year. With
best-in-class point-of-sale data integration, Manugistics continued its market
leadership in the consumer products industries by incorporating current consumer
data into Manugistics5 to create more precise forecasting, event planning,
manufacturing, and distribution strategies.
Manugistics expanded its solution for discrete manufacturing by
delivering new releases of Manugistics5 with industry-specific features. In
addition, with the acquisition of ProMIRA Software, Inc., Manugistics obtained
new functionality for optimized material planning and supplier collaboration
which complements
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MANUGISTICS POSTS RECORD REVENUES... PAGE 4
existing solutions and bolsters Manugistics' offering in industries such as high
technology, electronics, and motor vehicles and parts.
In addition, Manugistics introduced Manugistics NetWORKS(TM), an
Internet-based solution that gives companies the ability to collaborate on
supply chain decision-making. By enabling collaboration and communication among
manufacturers, retailers, distributors, suppliers, and third-party providers,
NetWORKS ties multiple industries together into an extended supply chain.
Global Expansion
Revenues generated from outside of North America increased during the
year and represented 38 percent of total revenues in the last quarter. During
fiscal year 1998, Manugistics opened offices in eight countries around the
world, Australia, Belgium, Brazil, Ireland, Japan, The Netherlands, New Zealand,
and Singapore, significantly enhancing its global presence. In addition,
Manugistics introduced the first Japanese version of Manugistics5 with a Kanji
interface and Yen conversions.
Market Expertise
Manugistics demonstrated its market-leading vision and expertise with
the introduction of Manugistics Supply Chain Compass(TM), an innovative business
analysis model that guides companies through the process of identifying the
appropriate supply chain management organizational and technical strategies to
help them achieve and maintain a competitive advantage and breakthrough results.
Manugistics also added significant expertise in manufacturing with the
acquisition of Synchronized Manufacturing Group, leading consultants on
constraint-based planning and manufacturing scheduling.
In recognition of his leadership, vision and expertise, Manugistics
Chairman and CEO, William M. Gibson, was awarded Entrepreneur of the Year honors
from both Ernst & Young and KPMG Peat Marwick.
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MANUGISTICS POSTS RECORD REVENUES... PAGE 5
Partnerships
As part of its strategy to extend the supply chain through integration
with complementary applications, Manugistics signed sales and marketing
agreements with enterprise resource planning vendors, Baan and Marcam, continued
its relationships with Oracle and SAP, and announced an investment in
CrossWorlds, which is developing open application integration technology.
Manugistics continued to strengthen and expand its alliances with world-class
consulting partners such as Andersen Consulting, Ernst & Young, and Price
Waterhouse, and developed important new strategic alliance relationships with
additional market leaders such as Coopers & Lybrand, CSC, Deloitte & Touche,
KPMG Peat Marwick, Kurt Salmon Associates, and IBM Consulting.
Manugistics is the world's most recognized name in supply chain
management. Used by over 600 companies around the world, Manugistics'
synchronized supply chain managementTM solution assists managers in making the
right decisions involving product demand, supply, manufacturing scheduling, and
transportation. Through its advanced technology and an aggressive partnership
strategy, Manugistics provides a single view of the supply chain that connects
decision makers not only across an enterprise, but also among enterprises.
FORWARD LOOKING STATEMENTS
This press release contains forward looking statements that are subject
to risks and uncertainties. There are several 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 response of prospective customers to
announced or commercially available products or pricing or competitors'
acquisitions or marketing relationships, or the Company's ability to
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MANUGISTICS POSTS RECORD REVENUES... PAGE 6
integrate acquired operations and technologies rapidly and effectively. The
Company's expense levels are based largely on its expectations of further
revenues, and if revenues were to be below expectations, the Company's operating
results could be 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 S-3 Registration Statements
or other reports 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 and the Manugistics logo are registered trademarks and Synchronized
Supply Chain Management, Manugistics NetWORKS, and Supply Chain Compass are
trademarks of Manugistics, Inc.
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 POSTS RECORD REVENUES... PAGE 7
MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
February 28, February 28,
1998 1997
---------------- ----------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 19,695 $ 8,543
Marketable securities 62,246 13,631
Accounts receivable - net 58,217 37,093
Other current assets 4,883 2,275
---------------- ----------------
Total current assets 145,041 61,542
PROPERTY AND EQUIPMENT - NET 20,909 10,355
NONCURRENT ASSETS:
Software development costs - net 22,100 9,932
Intangibles and other assets - net 16,010 2,494
Deferred tax asset 17,923 -
---------------- ----------------
TOTAL $ 221,983 $ 84,323
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 8,830 $ 4,244
Accrued expenses 22,335 9,574
Deferred revenue 17,974 13,808
Income taxes payable and other liabilities 891 1,417
---------------- ----------------
Total current liabilities 50,030 29,043
LONG-TERM LIABILITIES 392 220
DEFERRED INCOME TAXES - 1,467
STOCKHOLDERS' EQUITY 171,561 53,593
---------------- ----------------
TOTAL $ 221,983 $ 84,323
================ ================
</TABLE>
(more)
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MANUGISTICS POSTS RECORD REVENUES... PAGE 8
MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
February 28, February 28,
----------------------------------- --------------------------
(unaudited)
1998 1997 1998 1997
----------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Software products $ 41,099 $ 19,726 $ 105,018 $ 51,186
Consulting, maintenance
and other services 20,975 12,270 70,648 43,944
------------- ------------- ----------- -------------
Total revenues 62,074 31,996 175,666 95,130
------------- ------------- ----------- -------------
OPERATING EXPENSES:
Cost of software sold 3,314 1,580 11,031 4,940
Cost of consulting, maintenance
and other services 10,136 5,524 32,652 19,101
Sales and marketing 23,192 11,252 64,194 32,909
Product development 10,995 5,394 31,665 17,380
General and administrative 4,536 2,904 13,959 8,817
Purchased research and development 47,340 - 47,340 3,697
------------- ------------- ----------- -------------
Total operating expenses 99,513 26,654 200,841 86,844
------------- ------------- ----------- -------------
(LOSS) INCOME FROM OPERATIONS (37,439) 5,342 (25,175) 8,286
OTHER INCOME-NET 975 278 2,828 1,016
------------- ------------- ----------- -------------
NET (LOSS) INCOME BEFORE INCOME TAXES (36,464) 5,620 (22,347) 9,302
(BENEFIT) PROVISION FOR INCOME TAXES (14,499) 2,094 (9,064) 4,960
------------- ------------- ----------- -------------
NET (LOSS) INCOME $ (21,965) $ 3,526 $ (13,283) $ 4,342
============ ============= =========== =============
NET (LOSS) INCOME PER SHARE-BASIC $ (0.90) $ 0.16 $ (0.57) $ 0.20
============= ============= =========== ============
NET (LOSS) INCOME PER SHARE-DILUTED $ (0.90) $ 0.15 $ (0.57) $ 0.19
============= ============= =========== ============
WEIGHTED AVERAGE COMMON
SHARES AND EQUIVALENT SHARES
OUTSTANDING
BASIC 24,300 21,633 23,151 21,324
DILUTED 24,300 23,350 23,151 22,826
</TABLE>
The above represents the actual results of operations reported in the Company's
Condensed Statements of Income to be filed in Form 10-K for the years ended
February 28, 1998 and 1997. The Company acquired ProMIRA Software Inc. in the
quarter ended February 28, 1998 and Avyx, Inc. in the quarter ended May 31,
1996. The purchased research and development costs represent the value of
in-process research and development which had not yet reached technological
feasibility and had no alternative future use and, as such, was charged to
operations.
(more)
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MANUGISTICS POSTS RECORD REVENUES... PAGE 9
MANUGISTICS GROUP, INC. AND SUBSIDIARIES
PRO FORMA COMPARATIVE STATEMENTS OF INCOME (EXCLUDING PURCHASED R&D)
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
February 28, February 28,
--------------------------------- ---------------------------------
1998 1997 1998 1997
----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES:
Software products $ 41,099 $ 19,726 $ 105,018 $ 51,186
Consulting, maintenance
and other services 20,975 12,270 70,648 43,944
----------------- --------------- ---------------- ----------------
Total revenues 62,074 31,996 175,666 95,130
----------------- --------------- ---------------- ----------------
OPERATING EXPENSES:
Cost of software sold 3,314 1,580 11,031 4,940
Cost of consulting, maintenance
and other services 10,136 5,524 32,652 19,101
Sales and marketing 23,192 11,252 64,194 32,909
Product development 10,995 5,394 31,665 17,380
General and administrative 4,536 2,904 13,959 8,817
----------------- --------------- ---------------- ----------------
Total operating expenses 52,173 26,654 153,501 83,147
----------------- --------------- ---------------- ----------------
INCOME FROM OPERATIONS 9,901 5,342 22,165 11,983
OTHER INCOME-NET 975 278 2,828 1,016
----------------- --------------- ---------------- ----------------
NET INCOME BEFORE INCOME TAXES 10,876 5,620 24,993 12,999
PROVISION FOR INCOME TAXES 4,187 2,094 9,623 4,960
----------------- --------------- ---------------- ----------------
NET INCOME $ 6,689 $ 3,526 $ 15,370 $ 8,039
================= =============== ================ ================
NET INCOME PER SHARE-BASIC $ 0.28 $ 0.16 $ 0.66 $ 0.38
================= =============== ================ ================
NET INCOME PER SHARE-DILUTED $ 0.25 $ 0.15 $ 0.59 $ 0.35
================= =============== ================ ================
WEIGHTED AVERAGE COMMON
SHARES AND EQUIVALENT SHARES
OUTSTANDING
BASIC 24,300 21,633 23,151 21,324
DILUTED 27,009 23,350 25,972 22,826
</TABLE>
These pro forma statements of income reflect the operating results of the
Company, excluding the impact of one-time charges of $47,340 for the three and
twelve months ended February 28, 1998 and $3,697 for the twelve months ended
February 28, 1997 for purchased research and development costs.
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