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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): April 7, 1999
Manugistics Group, Inc.
(Exact name of issuer as specified in its charter)
Delaware 0-22154 52-1469385
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
2115 East Jefferson Street
Rockville, Maryland 20852
(Address of principal executive offices and zip code)
(301) 984-5000
(Registrant's telephone number, including area code)
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Item 5. Other events.
On April 7, 1999, Manugistics Group, Inc. (the "Company") issued a press
release announcing its financial results for its fourth quarter and fiscal year
ended February 29, 1999, which included a charge for its previously announced
restructuring. (The Company had reported the restructuring in its Current Report
on Form 8-K dated January 19, 1999.)
The Company also stated that it is currently responding to a comment letter
from the SEC relating to the allocation of the purchase price for an
acquisition, including the in-process research and development charge, as
reported in the Company's Form 10-K for the year ended February 28, 1998. The
Company stated that, although it believes that the accounting charges that it
took were proper, there can be no assurance that the SEC review will not result
in a material change in reported earnings in fiscal 1998 and fiscal 1999.
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 April 7, 1999.
2
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SIGNATURE
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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 9th day of April, 1999.
MANUGISTICS GROUP, INC.
By: /s/ Peter Q. Repetti
------------------------
Peter Q. Repetti
Senior Vice President and
Chief Financial Officer
3
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EXHIBIT INDEX
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Exhibit Number Description
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99 Press Release dated April 7, 1999.
<PAGE>
EXHIBIT 99
Contacts: Peter Q. Repetti
Chief Financial Officer
301-984-5409
Nate Wallace
Manager, Investor Relations
301-984-5059
For Immediate Release
MANUGISTICS REPORTS FOURTH QUARTER
AND FISCAL 1999 RESULTS
Rockville, MD, April 7, 1999 -- Manugistics Group, Inc. (Nasdaq: MANU),
today reported quarterly revenues and earnings (losses) for the three month and
12 month periods ended February 28, 1999.
Manugistics generated software license revenues of $15.2 million and total
revenues of $40.5 million for the quarter ended February 28, 1999. The Company
reported a proforma net loss for the quarter of $19.3 million or $0.72 per basic
and diluted share (excluding the impact of a $33.1 million charge for
restructuring and the deferred tax valuation allowance of $18.8 million),
compared to proforma net income of $6.7 million or $0.27 per basic share and
$0.25 per diluted share in the quarter ending February 28, 1998 (excluding the
impact of a $47.3 million charge for purchased in-process research and
development ("R&D") costs associated with the acquisition of ProMIRA Software,
Inc. ("ProMIRA") in February 1998). The Company reported an actual net loss for
the quarter ended February 28, 1999 of $71.2 million, or $2.66 per basic and
diluted share, compared to a net loss of $21.9 million or $0.89 per basic and
diluted share in the quarter ended February 28, 1998.
<PAGE>
"Although we reported a significant operating loss in the quarter, we
accomplished our restructuring goals announced on January 19, 1999 and believe
we have stabilized the business," said William M. Gibson, chairman and CEO of
Manugistics. "Our success in the last half of the quarter shows that we have
renewed client confidence in our core business of providing solutions that
deliver rapid results to companies with dynamic supply chains. This is
especially true regarding those that recognize the advantages available through
an aggressive e-commerce strategy."
"During the year, we have emerged as an early leader in e-commerce for
supply chain connectivity with a focus on solutions that are easy to integrate,
have high user flexibility, and can be quickly implemented," Gibson continued.
"Supply chain efficiencies are clearly enhanced with effective e-commerce
solutions and customers in the fourth quarter enthusiastically responded to our
new e-Chain product offering."
Manugistics generated software license revenues of $73.8 million and total
revenues of $177.6 million for the year ended February 28, 1999. The Company
reported a proforma net loss for the year of $54.1 million or $2.05 per basic
and diluted share (excluding the impact of $36.9 million in charges related to
acquisition and restructuring expenses and the deferred tax valuation allowance
of $4.0 million), compared to proforma net income of $15.4 million or $0.66 per
basic share and $0.59 per diluted share for the year ending February 28, 1998
(excluding the impact of a $47.3 million charge for purchased in-process R&D
costs associated with the acquisition of ProMIRA). The Company reported an
actual net loss for the year ended February 28, 1999 of $96.1 million, or $3.64
per basic and diluted share, compared to a net loss of $13.2 million or $0.56
per basic and diluted share in the year ended February 28, 1998.
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Gibson concluded, "We enter our new fiscal year having substantially
completed our restructuring plan. We believe we have the right people,
technology, and focus to successfully compete in today's dynamic environment."
Special Note
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The Company is currently responding to a comment letter from the SEC that
related to its Form 10-K for the year ended February 28, 1998. Specifically, the
SEC is reviewing the Company's accounting and disclosure with respect to the
allocation of the purchase price for the ProMIRA acquisition, including the in-
process R&D charge resulting from that allocation. The Company believes that its
accounting for acquired in-process R&D was proper and is in accordance with
generally accepted accounting principles ("GAAP") and with industry practices in
effect during 1998. However, the SEC review has not yet been completed, and
there can be no assurance that the review will not result in a material change
in reported earnings in fiscal 1998 and fiscal 1999.
Forward-Looking Statements
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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 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 three quarters of fiscal 1999), the
Company's operating results would 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
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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.
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 www.manugistics.com.
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MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
February 28, February 28,
1999 1998
--------------------- -----------------------
<S> <C> <C>
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 20,725 $ 19,891
Marketable securities 22,637 62,246
Accounts receivable - net 50,987 59,584
Other current assets 13,811 5,218
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Total current assets 108,160 146,939
PROPERTY AND EQUIPMENT - NET 24,678 21,142
NONCURRENT ASSETS:
Software development costs - net 20,544 22,986
Intangibles and other assets - net 11,371 16,555
Deferred tax asset 9,240 17,593
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TOTAL $173,993 $225,215
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 7,148 $ 8,918
Accrued liabilities 21,635 23,493
Restructuring Accruals 24,904 -
Line of Credit 9,500 -
Deferred revenue 24,710 18,546
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Total current liabilities 87,897 50,957
LONG-TERM LIABILITIES 374 512
STOCKHOLDERS' EQUITY 85,722 173,746
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TOTAL $173,993 $225,215
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</TABLE>
(more)
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MANUGISTICS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Threee Months Ended Fiscal Year Ended
February 28, February 28,
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1999 1998 1999 1998
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REVENUES:
<S> <C> <C> <C> <C>
License fees $ 15,185 $ 41,872 $ 73,802 $ 107,547
Services 25,272 21,456 103,762 72,716
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Total revenues 40,457 63,328 177,564 180,263
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OPERATING EXPENSES:
Cost of license fees 3,780 3,331 13,415 11,102
Cost of services 12,852 10,262 50,585 33,213
Sales and marketing 29,672 23,707 103,006 66,228
Product development 11,883 11,293 49,389 32,794
General and administrative 4,075 4,751 19,828 14,639
Acquisition-related expenses - - 3,095 -
Purchased research and development - 47,340 - 47,340
Restructuring costs 33,074 - 33,775 -
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Total operating expenses 95,336 100,684 273,093 205,316
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(LOSS) INCOME FROM OPERATIONS (54,879) (37,356) (95,529) (25,053)
OTHER INCOME-NET 80 965 2,362 2,863
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NET (LOSS) INCOME BEFORE INCOME TAXES (54,799) (36,391) (93,167) (22,190)
(BENEFIT) PROVISION FOR INCOME TAXES 16,401 (14,518) 2,945 (9,025)
----------- --------- ---------- ----------
NET (LOSS) INCOME ($71,200) ($21,873) ($96,112) ($13,165)
=========== ========= ========== ==========
NET (LOSS) INCOME PER SHARE-BASIC ($2.66) ($0.89) ($3.64) ($0.56)
=========== ========= ========== ==========
NET (LOSS) INCOME PER SHARE-DILUTED ($2.66) ($0.89) ($3.64) ($0.56)
=========== ========= ========== ==========
SHARES USED IN SHARE COMPUTATION
BASIC 26,755 24,633 26,402 23,484
DILUTED 26,755 24,633 26,402 23,484
PROFORMA FINANCIAL INFORMATION:
PROFORMA NET (LOSS) INCOME ($19,345) (a) $ 6,734 ($54,102) (a) $ 15,442
PROFORMA (LOSS) INCOME PER SHARE-BASIC ($0.72) (a) $ 0.27 ($2.05) (a) $ 0.66
=========== ========= ========== ==========
PROFORMA (LOSS) INCOME PER SHARE-DILUTED ($0.72) (a) $ 0.25 ($2.05) (a) $ 0.59
=========== ========= ========== ==========
SHARES USED IN SHARE COMPUTATION
BASIC 26,755 24,633 26,402 23,484
DILUTED 26,755 27,342 26,402 26,305
</TABLE>
(a) The proforma net (loss) income and related per share amounts for the three
and twelve months ended February 28, 1999 reflect the operating results of the
Company, excluding the impact of a Q3 charge of $0.7 million and a Q4 charge of
$33.1 million for certain restructuring costs in connection with management's
plan to reduce costs and improve operating efficiencies and the Q4 deferred tax
valuation allowance of $18.8 million. These costs included, among other things,
severance costs, facilities closing costs, and fixed asset write-offs resulting
from the reduction in the Company's workforce. Also, the proforma net income and
related per share amounts for the 12 months ended February 28, 1999, 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 of certain capitalized software costs that had no
realizable value. The proforma net income and related per share amounts for the
three and twelve months ended February 28, 1998, reflect the operating results
of the Company, excluding the impact of a non-recurring charge of $47.3 million
related to purchased research and development for the ProMIRA acquisition.
