Rockville services company slumps

Manugistics losses exceed estimates

SEC reviews deal

April 08, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Manugistics Group Inc., the troubled Rockville inventory management firm, said late yesterday that it is posting larger-than-expected losses for its fiscal year and quarter that ended Feb. 28.

Manugistics also said the Securities and Exchange Commission is reviewing the company's accounting and disclosure of its purchase of Canadian software company Promira Software Inc., a cash-and-stock acquisition announced in February 1998 and initially valued at $68 million.

For its fiscal fourth quarter, Manugistics had a net loss of $71.2 million, or $2.66 per diluted share. Even the pro forma loss per share of 72 cents well exceeded the loss of 47 cents per share that analysts had predicted for the quarter.

In the quarter ending in February 1997, Manugistics had a net loss of $21.9 million, or 89 cents per share.

The company had total quarterly revenue of $40.5 million, down from the $63.3 million it took in during the same period in the previous year.

On the year, Manugistics suffered a net loss of $96.1 million, or $3.64 per diluted share. Again, even the pro forma loss of $2.05 was considerably more than the analysts' estimate of $1.31 per share.

Yearly total revenue was $177.6 million, compared to the $180.3 million posted for the same period last year.

"Although we reported a significant operating loss in the quarter, we accomplished our restructuring goals and believe we have stabilized the business," William M. Gibson, Manugistics' chairman and chief executive officer, said in a statement.

That restructuring, announced Jan. 19, included laying off 400 workers, about a third of Manugistics' work force. The company also said it would replace Gibson and a number of other key executives, focus more on electronic commerce, and end attempts to find a merger partner.

This overhaul came as Manugistics, which develops and markets business software and services to assist managers, struggled to respond to the Asian financial crisis, the Year 2000 computer problem, and the company's own poor job of managing its growth.

The latest potential problem for Manugistics is the SEC's review of its Promira acquisition. The company insisted yesterday that it had acted properly; the SEC declined to comment.

Manugistics' announcements came after the close of markets. The company's stock ended at $6.75 yesterday. Almost one year ago, Manugistics stock hit a record high of $64.75.

Pub Date: 4/08/99

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