Made2Manage Systems Reports Profit for Second Quarter and First Half of 2003
INDIANAPOLIS--July 17, 2003--Made2Manage Systems Inc. , a leading provider of comprehensive enterprise business systems for small and midsize manufacturers and distributors, today reported a profit for the second quarter and for the first half of 2003.For the quarter ended June 30, 2003, net income was $342,000 or $.07 per diluted share, a significant improvement from a net income of $135,000 or $.03 per diluted share in the second quarter of 2002. Operating income was $294,000 for the second quarter of 2003, compared to $60,000 in the second quarter of the prior year. In addition, the company generated $500,000 of positive cash flow from operations in the second quarter of 2003 resulting in cash and investments at June 30, 2003, of $17.2 million.
Total revenues in 2003's second quarter were $7.9 million compared to $8.5 million in 2002's second quarter. Software license revenue was $2.2 million compared to $3.1 million in the second quarter of 2002 and reflects continued softness in capital spending in a tough economy. Service revenues grew to $5.4 million from $5.2 million in the second quarter of 2002, primarily due to the growth in the number of customers with support and maintenance contracts.
For the six months ended June 30, 2003, the net income was $222,000 or $.04 per diluted share, an improvement over a loss of $199,000 or ($.04) per diluted share in 2002.
Total revenues for the six months ended June 30, 2003, were $15.2 million compared with $15.9 million in 2002. Software license revenues declined to $3.9 million from $5.1 million a year earlier, while service revenues increased to $10.8 million from $10.5 million in 2002.
David B. Wortman, chairman and chief executive officer, said, "We continue to operate in a very difficult business environment. That being the case, we are pleased to have generated operating and net income and positive cash flow from operations for the quarter and year to date. Our diligence in managing costs is evident in our improved profitability on lesser revenues when compared with the prior year."
"While the market for enterprise software is very competitive and the economy not yet strong, it is indisputable that there is still a significant need for small and midsize manufacturers and distributors to invest in the types of software and services Made2Manage provides. We stand ready to meet their business system needs," said Wortman.
Outlook for the Second Half of 2003
The company anticipates that its financial performance for the second half of 2003 will exceed that of 2002. Given the difficult economic climate and the competitive nature of the enterprise software space, the company projects modest revenue growth accompanied by improved profitability in the last half of 2003 as compared to the same period of the prior year. The company also expects to continue to realize positive cash flow from operations in the second half of 2003.
Second Quarter 2003 Conference Call
David Wortman, chief executive officer, and Traci Dolan, chief financial officer, will host a conference call to discuss the company's second quarter 2003 financial results at 11 a.m. Eastern Daylight Time on Thursday, July 17, 2003. Investors will have the opportunity to listen to the conference call live at the company's Web site, www.made2manage.com. To listen to the live call via the Internet, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available two hours after the call and will remain available for 90 days.
Proposed Transaction With Battery Ventures VI, L.P.
The company has entered into an Agreement and Plan of Merger, dated June 4, 2003, with BV Holding Co., Inc., a subsidiary of Battery Ventures VI, L.P., and Scottsdale Merger Sub, a wholly owned subsidiary of BV Holding Co. Under the Merger Agreement, Made2Manage and Merger Sub will merge and the company will become a wholly owned subsidiary of BV Holding Co. if the holders of at least a majority of the outstanding shares of common stock approve the Merger Agreement. The company's shareholders meeting to vote on the Merger Agreement is scheduled to take place on July 30, 2003. In the event the shareholders approve the Merger Agreement, the company expects the transaction to close on or about August 7, 2003. The company filed a proxy statement and related documents containing a recommendation with respect to the proposed transaction on June 23, 2003. The documents are available at no charge at the SEC's Web site at www.sec.gov or by contacting the Made2Manage Investor Relations department at ir@made2manage.com.
About Made2Manage Systems Inc.
Made2Manage Systems delivers a comprehensive enterprise business system designed specifically for the unique needs of small and midsize manufacturers and distributors. The company's extensible, end-to-end solution and award-winning customer services are designed to evolve with a manufacturer's individual business environment while protecting the original technology investment. Real-time scheduling and information retrieval capabilities help manufacturers maximize shop floor throughput and profitability, communicate more effectively with business partners across the supply chain, and quickly access meaningful data to make critical business decisions. With more than 25,000 licensed users, Made2Manage works with discrete manufacturers and distributors servicing a variety of industries, including fabricated metals, industrial and commercial machinery, electronics, and rubber and plastics products. Visit the Made2Manage Systems Web site at www.made2manage.com. Made2Manage Systems may be reached via e-mail at info@made2manage.com or by calling (800) 626-0220.
Safe Harbor Provision
MADE2MANAGE SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(unaudited)
Statement of Operations Data:
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2003 2002 2003 2002
-------- ------- ------- -------
Total revenues $ 7,885 $8,480 $15,228 $15,914
Operating income (loss) 294 60 128 (355)
Net income (loss) 342 135 222 (199)
Per share amounts:
Basic:
Net income (loss) $ 0.07 $ 0.03 $ 0.04 $ (0.04)
Weighted-average shares
outstanding 4,944 4,879 4,937 4,867
Diluted:
Net income (loss) $ 0.07 $ 0.03 $ 0.04 $ (0.04)
Weighted-average shares
outstanding 5,195 5,195 5,103 4,867
Balance Sheet Data:
June 30, December 31,
2003 2002
---------- ------------
Cash and marketable securities $ 17,173 $ 16,513
Total assets 25,492 25,128
Long-term obligations, less current
portion -- 23
Total shareholders' equity 12,271 11,940
MADE2MANAGE SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
June 30, December 31,
2003 2002
---------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 16,273 $ 15,613
Marketable securities 900 900
Trade accounts receivable, net 5,380 5,475
Prepaid expenses and other 1,290 1,275
---------- ---------
Total current assets 23,843 23,263
Property and equipment, net 1,649 1,865
---------- ---------
Total assets $ 25,492 $ 25,128
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,094 $ 476
Accrued liabilities 2,222 2,256
Current portion of capitalized lease 85 112
Deferred revenue 9,359 9,619
---------- ---------
Total current liabilities 12,760 12,463
Capitalized lease -- 23
Deferred revenue 461 702
---------- ---------
Total liabilities 13,221 13,188
---------- ---------
Shareholders' equity:
Preferred stock, no par value; 2,000,000
shares authorized, no shares issued and
outstanding at June 30, 2003, and
December 31, 2002 -- --
Common stock, no par value; 10,000,000
shares authorized, 4,960,935 and
4,925,447 shares issued and outstanding
at June 30, 2003, and December 31, 2002,
respectively 23,029 22,920
Accumulated deficit (10,758) (10,980)
---------- ---------
Total shareholders' equity 12,271 11,940
---------- ---------
Total liabilities and shareholders'
equity $ 25,492 $ 25,128
========== =========
MADE2MANAGE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2003 2002 2003 2002
--------- -------- --------- --------
Revenues:
Software $ 2,214 $3,116 $ 3,947 $ 5,094
Services 5,362 5,213 10,756 10,511
Hardware 309 151 525 309
--------- -------- --------- --------
Total revenues 7,885 8,480 15,228 15,914
--------- -------- --------- --------
Costs of revenues:
Software 411 533 811 963
Services 2,024 2,213 4,032 4,298
Hardware 252 107 420 220
Restructuring -- -- (51) --
--------- -------- --------- --------
Total costs of revenues 2,687 2,853 5,212 5,481
--------- -------- --------- --------
Gross profit 5,198 5,627 10,016 10,433
--------- -------- --------- --------
Operating expenses:
Sales and marketing 2,602 3,043 5,112 5,945
Product development 1,277 1,357 2,685 2,654
General and administrative 1,025 1,167 2,091 2,189
--------- -------- --------- --------
Total operating expenses 4,904 5,567 9,888 10,788
--------- -------- --------- --------
Operating income (loss) 294 60 128 (355)
Other income, net 58 75 114 156
--------- -------- --------- --------
Income (loss) before income taxes 352 135 242 (199)
Income tax provision 10 -- 20 --
--------- -------- --------- --------
Net income (loss) $ 342 $ 135 $ 222 $ (199)
========= ======== ========= ========
Per share amounts:
Basic:
Net income (loss) $ 0.07 $ 0.03 $ 0.04 $ (0.04)
Weighted-average shares
outstanding 4,944 4,879 4,937 4,867
Diluted:
Net income (loss) $ 0.07 $ 0.03 $ 0.04 $ (0.04)
Weighted-average shares
outstanding 5,195 5,195 5,103 4,867