ROSS Ross Systems (MM)

Ross Systems 2nd Quarter Report Company Reports 26% Increase in Software License Revenue ATLANTA, Feb. 11 /PRNewswire-FirstCall/ -- Ross Systems, Inc. , a leading provider of enterprise software solutions for manufacturers, today announced results for its second fiscal quarter, which ended December 31, 2003. The Company reported a net loss of $0.4 million or $0.15 per share, after merger transaction costs and an arbitration settlement charge which totaled $2.1 million. The merger transaction costsare associated with the merger with CDC Software, a subsidiary of chinadotcom. The arbitration settlement related to a product distribution agreement with a Dutch software firm which was terminated by the company in 2001. As previously reported, the Hart Scott Rodino waiting period for the merger has elapsed without challenge and the merger, subject to stockholder approval, is now expected to proceed during the second quarter of calendar 2004. Revenues for the quarter at $13.5 million increased 11% from $12.2 million in the prior year's same quarter. Software license revenue for the quarter at $4.4 million increased 26% from $3.5 million in the prior year's same quarter. Consulting service revenue at $4.0 million increased 14% from $3.5 million in the prior year's same quarter. Maintenance revenue at $5.1 million declined 1% from $5.2 million in the prior year's same quarter. The net loss for the quarter of $0.4 million or $0.15 per share, compared to a net profit of $1.4 million or $0.45 per diluted share in the prior year's same quarter. Excluding the $2.1 million of settlement and transaction costs noted above the earnings would have been $1.7 million for a 21% improvement over the prior year's same quarter. Net cash of $7.4 million this quarter increased $1.3 million over the prior year's same quarter and declined $0.6 million from the previous quarter, reflecting the merger transaction and settlement costs incurred during the quarter. The Company has no long-term debt, and deferred revenues this quarter increased to $10.6 million from $10.1 million in the sequential quarter. Accounts receivable, at $13.9 million, increased from $11.7 million in the sequential quarter. Accounts receivable turnover at 87 days increased slightly compared to 84 days in the sequential quarter. For the six month period, the Company reported revenue of $25.3 million or a 7% increase over the prior year's same period and a net loss of $0.9 million or $0.34 per share after settlement and transaction costsof $2.9 million compared to a net profit of $2.0 million or $0.65 per share for the prior year's same period. "Contributing to this quarter's software license results were both an increase in new customer licenses of the complete suite of process manufacturing software products as well as sales of our Internet Application Framework (IAF) and related browser capabilities to improve user productivity. We are also pleased that our existing customers continue to upgrade and implement additional iRenaissance applications and are excited by the increased activity level in new account decisions for Ross," said J. Patrick Tinley, Ross' Chairman and CEO. 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 Six months ended December 31, December 31, 2003 2002 2003 2002 Revenues: Software product licenses $4,388 $3,474 $7,350 $7,206 Consulting and other services 4,022 3,534 7,578 6,305 Maintenance 5,116 5,165 10,347 10,088 Total revenues 13,526 12,173 25,275 23,599 Operating expenses: Costs of software product licenses 502 521 846 867 Costs of consulting and maintenance 5,180 4,176 10,178 8,577 Sales and marketing 3,0592,883 5,749 5,305 Product development net of capitalized and amortized computer software costs 1,940 1,746 4,040 3,547 General and administrative 930 1,045 2,072 2,406 Litigation settlement cost 1,896 - 1,896 - Provision for uncollectible accounts 96 242 231 514 Total operating expenses 13,603 10,613 25,012 21,216 Operating earnings (loss) (77) 1,560 263 2,383 Prospective merger transaction costs (239) - (997) - Other financial, net benefit (expense) (41) (27) (29) (122) Earnings before taxes (357) 1,533 (763) 2,261 Income tax expense 5 65 83 155 Net (loss) earnings $(362) $1,468$(846) $2,106 Preferred stock dividend (38) (38) (75) (75) Net (loss) profit available to common shareholders $(400) $1,430 $(921) $2,031 Net earnings (loss) per common share - basic $(0.15) $0.54 $(0.34) $0.77 Net earnings (loss) per common share - diluted $(0.15) $0.45 $(0.34) $0.65 Shares for basic calculation 2,658 2,642 2,696 2,635 Shares for diluted calculation 2,658 3,260 2,696 3,252 ROSS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share related data) December 31 June 30 2003 2003 (unaudited) ASSETS Current assets: Cash and cash equivalents $7,366 $8,628 Accounts receivable, less allowance for doubtful accounts and returns 13,942 12,880 Prepaids and other current assets 489 731 Total current assets 21,796 22,239 Property and equipment 1,243 1,406 Computer software costs 12,832 13,573 Other assets 2,993 2,993 Total assets $38,864 $40,211 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of debt $5,309 $2,800 Accounts payable 2,025 2,978 Accrued expenses 4,654 4,940 Income taxes payable 68 261 Deferred revenues 10,590 12,203 Total current liabilities 22,646 23,182 Shareholders' equity: Common stock 28 28 Preferred Stock 2,000 2,000 Additional paid-in capital 87,157 87,189 Accumulated deficit (69,940) (69,094) Accumulated comprehensive income (deficit) (1,908) (1,749) Treasury Stock (1,120) (1,345) Total shareholders' equity 16,217 17,029 Total liabilities and shareholders' equity $38,864 $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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