Lawson Grows Sales by 18 Percent in Fiscal Q2
January 14, 2008 Timothy Prickett Morgan
It is starting to look like the acquisition of rival ERP vendor Intentia International was a good idea for Lawson Software despite some of the criticism that investors heaped upon the two companies when Lawson shelled out $480 million in stock to buy Intentia back in June 2005. In the second quarter of its fiscal 2008, Lawson booked sales of $218.6 million in its second quarter of fiscal 2008 ended November 30, up 18 percent compared to the prior year’s second quarter.
Importantly, Lawson had double-digit revenue growth across sales of software licenses, maintenance, and consulting revenues. Specifically, software license fee sales rose by 50 percent to $33 million (pushed by 331 deals, 38 of them from new customers to the Lawson product line), maintenance fees rose by 19 percent to $84.7 million (driven primarily by annual maintenance fee increases), and consulting sales rose by 10 percent to $100.9 million. Even though sales and marketing and general and administrative costs rose in the double digits–21 percent and 16 percent, respectively–Lawson was able to post an operating profit of $11.8 million, a lot better than the $2.65 million operating loss it had in the year-ago quarter. After paying taxes and other expenses, Lawson brought $3.7 million to the bottom line (2 cents per share), which compared nicely to the $3.5 million loss it had a year ago in Q2 of fiscal 2007 (a minus 2 cents per share).
For the first six months of fiscal 2008, Lawson has had $406 million in sales, up 17 percent, and net income of $9.3 million–a big improvement over the $19.3 million loss it had in the first six months of fiscal 2007.
Lawson exited the quarter with $424.1 million in cash and equivalents, down from the $483.1 million it had in August 2007, the end of the fiscal 2008 first quarter. Total deferred revenues in Q2 came to $176.5 million, down significantly from the August quarter’s $236.3 million level. Lawson said that deferred revenues dropped because it shifted renewal dates for maintenance contracts to the third and fourth quarters.
“Our second quarter results show that business was strong in all regions and verticals,” said Harry Debes, president and chief executive officer at Lawson in a statement accompanying the financial results. “While there is always more to be done, we are making excellent progress in our business and that is reflected in our year-over-year growth in revenues and earnings.”
Looking ahead to the fiscal third quarter, which ends on February 29, Lawson said it expects sales to be in the range of $216 million to $220 million, with software license fee growth of approximately 20 percent compared to the year-ago quarter. Earnings per share are expected to be in the range of 3 cents to 4 cents.