EXHIBIT 99.1
Lawson Software Reports Preliminary Fourth Quarter and Fiscal 2006
Financial Results; Reports 9% Revenue Growth in Q4 for Legacy Lawson
ST. PAUL, Minn.--(BUSINESS WIRE)--July 27, 2006--Lawson Software,
Inc. (Nasdaq:LWSN) today reported preliminary financial results for
the fiscal fourth quarter and fiscal year ended May 31, 2006. Final
financial statements are pending completion of results for the former
Intentia International AB, which Lawson acquired on April 24, 2006.
These preliminary financial results include final unaudited results
for the legacy Lawson operations and preliminary estimated ranges for
the partial quarter of operations for Intentia. Because of the
complexity of adopting U.S. GAAP for the former Intentia operations
and the limited time between the closing date of the acquisition and
Lawson's fiscal year end, the company anticipates that it will use the
Securities and Exchange Commission's 15-day extension period for
filing its audited financial statements and its Form 10-K.
Preliminary Results of Consolidated Operations
For the fourth quarter, the company expects total consolidated
revenues of $125.0 to $126.6 million, including license revenues of
$19.0 to $19.5 million. Excluded from the results are $3.0 to $3.5
million of deferred maintenance and service revenue that was written
down under the purchase accounting method used for the Intentia
acquisition. The company also expects to report a consolidated GAAP
net loss of $9.3 to $12.8 million, or a net loss per diluted share of
($0.07) to ($0.09). The net loss is attributable to the consolidation
of the former Intentia's financial results from the acquisition date.
Included in these results are pre-tax expenses totaling $8.6 to $9.5
million for amortization of acquired intangible assets, restructuring
charges, amortization of purchased maintenance contracts, acquisition
related costs, and non-cash stock-based compensation.
For the full fiscal year 2006, the company expects total
consolidated revenue of $389.6 to $391.2 million, including license
revenues of $70.8 to $71.3 million. Excluded from the results are $3.0
to $3.5 million of deferred maintenance and service revenue that was
written down under the purchase accounting method used for the
Intentia acquisition. The company also expects to report consolidated
GAAP net income of $8.0 to $11.5 million, or fully diluted EPS between
$0.07 an $0.10. Included in these results are pre-tax expenses
totaling $25.1 to $26.2 million for amortization of acquired
intangible assets, restructuring charges, amortization of purchased
maintenance contracts, acquisition related costs, and non-cash
stock-based compensation.
Preliminary Results for Legacy Lawson Business
Excluding the impact of Intentia's results from the acquisition
date, legacy Lawson's revenues in the fourth quarter were up from the
same period last year in every category. Total revenue for the legacy
Lawson business was $94.6 million, an increase of 9 percent. License
fees were $18.4 million, compared with $17.4 million last year.
Maintenance revenues were $47.2 million, compared with $43.9 million
last year. Consulting services revenues were $29.0 million, compared
with $25.5 million last year.
For the fourth quarter, legacy Lawson's GAAP net income was $7.2
million, compared with GAAP net income of $5.9 million in the same
period last year. Included in these results are pre-tax expenses
totaling $6.4 million for Lawson-specific merger and integration
related costs, restructuring charges, amortization of acquired
intangible assets, and amortization of purchased maintenance
contracts. In the fourth quarter of fiscal year 2005, $2.9 million of
pre-tax expenses for merger related costs, restructuring charges,
amortization of acquired intangible assets, amortization of purchased
maintenance contracts, and non-cash stock-based compensation were
included in GAAP net income.
On a full-year basis, excluding the impact of the partial quarter
of Intentia's results, legacy Lawson's revenues for fiscal year 2006
were up from fiscal 2005 in every category, led by a healthy increase
in license fees. Total legacy revenue was $359.2 million, an increase
of 7 percent. License fees were $70.2 million, an increase of 22
percent. Maintenance revenues were $180.8 million, an increase of 6
percent. Consulting services revenues were $108.2 million, up 1
percent.
For fiscal 2006, legacy Lawson's GAAP net income was $28.0
million, a five-fold increase over fiscal 2005 GAAP results of $5.3
million. Included in these 2006 results are pre-tax expenses totaling
$22.9 million for Lawson-specific merger and integration related
costs, restructuring charges, amortization of acquired intangible
assets, amortization of purchased maintenance contracts, severance,
and non-cash stock-based compensation. For the fiscal year 2005, the
pre-tax expenses totaling $17.6 million for merger related costs,
amortization of acquired intangible assets, amortization of purchased
maintenance contracts, non-cash stock-based compensation, and SEC
investigation costs were included in the GAAP net income.
Strong Financial Results in Fiscal 2006
"Our results reflect the significant progress we made in fiscal
2006 in legacy Lawson's business. Customer demand for our software is
strong across our target markets," said Harry Debes, Lawson president
and chief executive officer. "The process to close the accounting for
the acquisition and to report Intentia's financial results under U.S.
GAAP, which occurred just five weeks prior to our year-end, has been
challenging. As a result, we anticipate that we will use the SEC's
15-day 10-K filing extension. This is a matter of taking the time we
need to complete a highly complex process. We are looking forward to
the filing of our 10-K in late August, which will be a culmination of
much hard work and dedication from our accounting team. In the
meantime, I'm excited about the work we've already begun to combine
our businesses."
Conference Call and Webcast
The company will host a conference call and live webcast at 4:30
P.M. Eastern Time (3:30 P.M. Central Time) today, July 27, 2006, to
discuss its preliminary fourth quarter, fiscal 2006 year-end results,
and future outlook. Interested parties may listen to the call by
dialing 800-857-4748 (passcode Lawson 727) and international callers
1-210-234-7123. A live webcast will also be available on
www.lawson.com. Interested parties should dial into the conference
call or access the webcast approximately 10-15 minutes before the
scheduled start time.
A replay will be available approximately one hour after the
conference call concludes and will remain available for one week. The
replay number is 866-407-9272 and international 1-203-369-0617. The
webcast will remain on www.lawson.com for approximately two weeks.
About Lawson Software
Lawson Software provides software and service solutions to 4,000
customers in manufacturing, distribution, maintenance and service
sector industries across 40 countries. Lawson's solutions include
Enterprise Performance Management, Supply Chain Management, Enterprise
Resource Planning, Customer Relationship Management, Manufacturing
Resource Planning, Enterprise Asset Management and industry-tailored
applications. Lawson solutions assist customers in simplifying their
businesses or organizations by helping them streamline processes,
reduce costs and enhance business or operational performance. Lawson
is headquartered in St. Paul, Minn., and has offices around the world.
Visit Lawson online at www.lawson.com.
Forward-Looking Statements
This press release contains forward-looking statements that
contain risks and uncertainties. These forward-looking statements
contain statements of intent, belief or current expectations of Lawson
Software and its management. Such forward-looking statements are not
guarantees of future results and involve risks and uncertainties that
may cause actual results to differ materially from the potential
results discussed in the forward-looking statements. The company is
not obligated to update forward-looking statements based on
circumstances or events that occur in the future. Risks and
uncertainties that may cause such differences include but are not
limited to: uncertainties in Lawson's ability to realize synergies and
revenue opportunities anticipated from the Intentia International
acquisition; uncertainties in the software industry; global military
conflicts; terrorist attacks; pandemics, and any future events in
response to these developments; changes in conditions in the company's
targeted industries; increased competition and other risk factors
listed in the company's most recent Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission and as included in
Lawson Holding's Form S-4 Proxy Statement/Prospectus filed with the
Commission. Lawson assumes no obligation to update any forward-looking
information contained in this press release.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, Lawson Software
reports non-GAAP financial results. Non-GAAP results, as presented in
the attached consolidated financial statements, excludes amortization
of all acquisition-related intangibles, restructuring charge and
certain stock-based compensation expenses. In addition, Lawson's
combined non-GAAP financial results include the historical results for
Lawson and Intentia for comparative fiscal periods, deferred revenue
that has been eliminated from GAAP results as part of the purchase
accounting for the acquisition of Intentia, and adjustments based on
the fair values of assets acquired and liabilities assumed as part of
the acquisition, and exclude certain GAAP expenses, net of tax.
Lawson's management believes the non-GAAP measures used in this press
release are useful to investors because they provide supplemental
information that facilitates comparisons to prior periods. Management
uses these non-GAAP measures to evaluate its financial results,
develop budgets and manage expenditures. The method Lawson uses to
produce non-GAAP results is not computed according to GAAP, may differ
from the methods used by other companies, and should not be regarded
as a replacement for corresponding GAAP measures. Investors are
encouraged to review the reconciliation of these non-GAAP financial
measures to the comparable GAAP results, which is attached to this
release. Additional information can be found on the investor relations
page of Lawson's website at www.lawson.com/investor.
Lawson Software, Inc.
Estimated Condensed Consolidated Financial Measures
UNAUDITED
(in millions, except per share data)
- ----------------------------------------------------------------------
Estimated Three Months
Ended May 31, 2006 Range
--------------------------- Three Months
Ended
Low High May 31, 2005
------------- ------------- -------------
Total Revenue 125.0 126.6 86.8
Cost of Sales 65.0 63.7 35.3
------------- ------------- -------------
Gross Profit 60.0 62.9 51.5
Operating Expenses 68.0 66.5 42.9
------------- ------------- -------------
Operating Income (8.0) (3.6) 8.6
Other Income 1.7 1.2 1.5
Income Tax 6.5 6.9 4.2
------------- ------------- -------------
Net Income/(Loss) (12.8) (9.3) 5.9
============= ============= =============
Net Income/(Loss) Per Share $(0.09) $(0.07) $0.06
============= ============= =============
Weighted Average Shares
Outstanding 136.8 136.8 104.9
- ----------------------------------------------------------------------
Lawson Software, Inc.
Estimated Supplemental Information
UNAUDITED
(in millions)
- ----------------------------------------------------------------------
Estimated Three Months
Ended May 31, 2006 Range
--------------------------- Three Months
Ended
Low High May 31, 2005
------------- ------------- -------------
Purchase price impact on
deferred maintenance and
services recognized 3.0 3.5 -
Amortization of acquired
intangibles 2.8 3.2 1.2
Restructuring 2.9 3.1 (0.2)
Amortization of purchased
maintenance 1.0 1.0 1.0
Acquisition related 1.9 2.2 0.8
Non-cash stock-based
compensation - - 0.1
------------- ------------- -------------
11.6 13.0 2.9
============= ============= =============
Effective tax rate for
modeling 40% 35% 34%
- ----------------------------------------------------------------------
Lawson Software, Inc.
Supplemental Condensed Consolidated Financial Statements Without
Intentia Results
UNAUDITED
(in millions)
- ----------------------------------------------------------------------
Three Months Three Months
Ended Ended Percent
May 31, 2006 May 31, 2005 Change
------------- ------------- -------------
Total Revenue 94.6 86.8 9%
Cost of Sales 38.8 35.3 10%
------------- -------------
Gross Profit 55.8 51.5 8%
Operating Expenses 48.1 42.9 12%
------------- -------------
Operating Income 7.7 8.6 -10%
Other Income 3.5 1.5 133%
Income Tax 4.0 4.2 -5%
------------- -------------
Net Income 7.2 5.9 22%
============= =============
- ----------------------------------------------------------------------
Lawson Software, Inc.
Supplemental Information Without Intentia Information
UNAUDITED
(in millions)
- ----------------------------------------------------------------------
Three Months Three Months
Ended Ended
May 31, 2006 May 31, 2005
------------- -------------
Amortization of acquired
intangibles 1.2 1.2
Restructuring 2.9 (0.2)
Amortization of purchased
maintenance 1.0 1.0
Acquisition related 1.3 0.8
Non-cash stock-based
compensation - 0.1
------------- -------------
6.4 2.9
============= =============
Effective tax rate for
modeling 35% 34%
- ----------------------------------------------------------------------
Lawson Software, Inc.
Estimated Condensed Consolidated Financial Measures
UNAUDITED
(in millions, except per share data)
- ----------------------------------------------------------------------
Estimated Twelve Months
Ended May 31, 2006 Range
--------------------------- Twelve Months
Ended
Low High May 31, 2005
------------- ------------- -------------
Total Revenue 389.6 391.2 335.2
Cost of Sales 172.1 170.8 150.6
------------- ------------- -------------
Gross Profit 217.5 220.4 184.6
Operating Expenses 204.6 203.1 180.8
------------- ------------- -------------
Operating Income 12.9 17.3 3.8
Other Income 9.2 8.7 4.3
Income Tax 14.1 14.5 2.8
------------- ------------- -------------
Net Income 8.0 11.5 5.3
============= ============= =============
Net Income Per Share $0.07 $0.10 $0.05
============= ============= =============
Weighted Average Shares
Outstanding 114.4 114.4 104.6
- ----------------------------------------------------------------------
Lawson Software, Inc.
Estimated Supplemental Information
UNAUDITED
(in millions)
- ----------------------------------------------------------------------
Estimated Twelve Months
Ended May 31, 2006 Range
--------------------------- Twelve Months
Ended
Low High May 31, 2005
------------- ------------- -------------
Purchase price impact on
deferred maintenance and
services recognized 3.0 3.5 -
SEC Investigation - - 2.7
Amortization of acquired
intangibles 6.2 6.6 4.8
Restructuring 3.0 3.2 5.0
Amortization of purchased
maintenance 4.0 4.0 4.0
Acquisition related 5.6 6.1 0.8
Non-cash stock-based
compensation 6.3 6.3 0.3
------------- ------------- -------------
28.1 29.7 17.6
============= ============= =============
Interest income on tax
refund 0.4 0.4 -
============= ============= =============
Effective tax rate for
modeling 39% 38% 36%
- ----------------------------------------------------------------------
Lawson Software, Inc.
Supplemental Condensed Consolidated Financial Measures Without
Intentia Results
UNAUDITED
(in millions)
- ----------------------------------------------------------------------
Twelve Months Twelve Months
Ended Ended Percent
May 31, 2006 May 31, 2005 Change
------------- ------------- -------------
Total Revenue 359.2 335.2 7%
Cost of Sales 145.9 150.6 -3%
------------- -------------
Gross Profit 213.3 184.6 16%
Operating Expenses 184.7 180.8 2%
------------- -------------
Operating Income 28.6 3.8 653%
Other Income 11.0 4.3 156%
Income Tax 11.6 2.8 314%
------------- -------------
Net Income 28.0 5.3 428%
============= =============
- ----------------------------------------------------------------------
Lawson Software, Inc.
Supplemental Information Without Intentia Information
UNAUDITED
(in millions)
- ----------------------------------------------------------------------
Twelve Months Twelve Months
Ended Ended
May 31, 2006 May 31, 2005
------------- -------------
SEC Investigation - 2.7
Amortization of acquired
intangibles 4.6 4.8
Restructuring 3.0 5.0
Amortization of purchased
maintenance 4.0 4.0
Acquisition related 5.0 0.8
Non-cash stock-based
compensation 6.3 0.3
------------- -------------
22.9 17.6
============= =============
Interest Income on tax
refund 0.4 -
============= =============
Effective tax rate for
modeling 39% 36%
- ----------------------------------------------------------------------
CONTACT: Lawson Software, Inc., St. Paul
U.S. Media:
Terry Blake, 651-767-4766
terry.blake@lawson.com
or
Investors and Analysts:
Barbara Doyle, 651-767-4385
barbara.doyle@lawson.com