Lawson Cancels Chat with Wall Street on Fiscal Q3 Numbers
April 4, 2011 Timothy Prickett Morgan
The top brass at Lawson Software aren’t in the mood to talk to Wall Street.
The company is weighing a $1.83 billion takeover offer from Infor, and rumors are swirling around that Oracle may take a run at the enterprise application software maker, too. And thus, instead of attending their quarterly conference call with Wall Street analysts last Thursday, Lawson’s execs kicked out a PDF of their prepared comments, posted the financial tables, and zipped their lips about everything that is going on.
In the quarter ended February 28, Lawson’s sales rose by 5 percent, to $196 million. Software license fee revenues were up 6 percent, to $33.8 million, while maintenance revenues rose by 9 percent, to $97.5 million. Consulting revenues were down a fraction of a percent at $64.8 million. Thanks to some tax benefits and $4.3 million in other income, Lawson’s net income came in at $21.4 million, up by a factor of 13 compared to the year-ago period.
For the last nine months, Lawson had $558.1 million in revenues, up 3 percent, and net income is more than quadrupled to $43 million. The company exited the quarter with $311.3 million in cash and equivalents at the end of February, with $232.7 million in debts.
In its prepared comments, Lawson said that total software and subscription contracting was up 27 percent in the quarter, with contracting for both the S3 (Lawson) and M3 (Intentia) products rising and with increases in all three of its key geographies. Across both the S3 and M3 lines, average deal sizes were on the rise, up 21 percent, and the company inked 313 deals in fiscal Q3.
S3 software and subscription contracts were up 37 percent, and booked license revenues in the quarter were up 20 percent. The healthcare industry accounted for five of the six largest S3 deals that Lawson did in Q3. Sales of S3 software to state and national governments was muted, given the budget cutting that is going on.
The M3 product line, which has a strong OS/400 and i heritage, saw contracting rise by 13 percent in the quarter. M3 operating margins were only 8 percent and are well shy of the 25 percent that the S3 line attained in the quarter, but they are moving in the right direction, up from 3 percent in the fiscal second quarter.