New pilot will try to right the ship

Manugistics picks Owens as CEO, and Legg analyst applauds

Maryland business

April 29, 1999|By Robert Little | Robert Little,SUN STAFF

Manugistics Group Inc., a Rockville-based software and consulting business that recently laid off 400 employees and reported a $96.1 million annual loss, appointed a new top executive yesterday to take charge of the restructured company.

Gregory J. Owens, a partner with Andersen Consulting, was named president and chief executive officer, replacing William M. Gibson, who will remain company chairman.

Manugistics' core business is "supply chain management" -- providing computer software to help companies manage their inventories.

Owens, 39, has worked closely with Manugistics in his role as global managing partner for Andersen Consulting's supply chain management practice.

"I think it was a good choice, a good find," said Christopher Desautelle, an analyst with Legg Mason Inc. in Baltimore. "You get a guy of that caliber, who's been in the supply chain [business] what seems like his whole life? It's one of the last pieces they need to get the ship righted."

Manugistics reported a net loss for the fiscal year that ended Feb. 28 of $96.1 million, or $3.64 per share. The loss included a one-time charge of $36.9 million in acquisition and restructuring expenses.

That restructuring, announced in January, is now complete, and included layoffs for about 400 employees. Manugistics employed about 1,300 before the layoffs, just under half of them in Maryland.

The goal of the restructuring, Gibson said, was to reduce Manugistics' quarterly expenses to about $40 million -- a level at which the company would be profitable. That has largely been accomplished, he said.

"I felt that I had the responsibility to bring our revenues and our expenses into balance, and we did that," said Gibson, who announced his resignation when the company's restructuring was announced.

Owens takes over Manugistics just weeks after it posted a fourth-quarter net loss of $71 million, but said he expects the company's lowered expenses and the pros- pects for new business to restore Manugistics to profitability.

"If you look at what's been happening in the industry, the supply chain is one of the areas that's really going to drive benefits," said Owens. "I think we're in a high-growth industry, and going forward."

Shares of Manugistics rose 18.75 cents to $8 on the Nasdaq stock market yesterday.

Pub Date: 4/29/99

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