ST. PAUL, Minn.– Lawson Software, Inc., which makes enterprise resource management applications, reported a net loss of US$9.8 million for its fiscal 2007 third quarter.
That compared with GAAP net income of $10 million (all figures in U.S. dollars) in the same period last year, the company said. It attributed the decline primarily to the consolidation of the costs, operating expenses and restructuring following its acquisition of Intentia International AB in April, 2006.
Lawson incurred a restructuring charge of $11.5 million in the quarter for severance and related benefits for approximately 350 positions in the United States and Europe that will be eliminated over the next five quarters ending in May, 2008 as work is shifted to a global support center in the Philippines.
It was the third full quarter of post-combination results after its acquisition of Intentia. Lawson said it has substantially completed the purchase accounting review associated with the acquisition and has increased the goodwill associated with the purchase by $21.4 million. However, it also said it may have subsequent purchase accounting adjustments in the fiscal fourth quarter ending May 31 related to Value Added Taxes (VAT) items in Europe and refinement to reserves for pre-acquisition customer claims.
Overall, Lawson reported GAAP (generally accepted accounting principles) revenues of $191.2 million for the third quarter. This was an increase of 118 percent from revenues of $87.7 million in its fiscal 2006 third quarter, primarily attributed to the consolidation of revenues of the former Intentia. Excluded from these results is $1.8 million of deferred maintenance and services revenue that was written down under purchase accounting in the acquisition of Intentia.
“We executed well on many levels during the third quarter,” said Harry Debes, Lawson’s president and CEO. “We met or exceeded our financial commitments for revenues, expenses and non-GAAP earnings per share. In addition, our maintenance renewals came in strong from our Lawson M3 (Make, Move, Maintain) customer base, our cash flow from operations improved, our consulting services margin improved, we outlined our transformation plans for our new global operations and began to execute those plans, and our sales pipeline grew for the fourth consecutive quarter. Although we still have more to work to do, we made strong progress on our customer commitments and company goals during the third quarter.”
For the nine months ended Feb. 28, GAAP net loss was $29.1 million, or $0.16 per share, on total revenues of $537.5 million, compared with GAAP net income of $20.7 million, or $0.19 per diluted share, on total revenues of $264.6 million, in the comparable fiscal 2006 period. Excluded from these results is $10.3 million of deferred maintenance and services revenue that was written down under purchase accounting in the acquisition of Intentia.
