Tempe, AZ October 25, 2002 Earnings season continued to sweep through the supply chain space this week. On the heels of announcements last week from IBM, i2, PeopleSoft, SAP and Siebel, this week brought news from e-procurement bellwethers Ariba and Commerce One, as well as reports from Manhattan Associates, MatrixOne and others.
Overall the reports tell a tale of narrower, but continued, losses. One notable exception: supply chain execution specialist Manhattan Associates, which upped both its revenues and its net income for the third quarter compared to the same period of last year.
The solution providers generally characterized the past year as difficult and provided a guarded outlook for the tech sector.
Bob Calderoni, president and CEO of Ariba, said the last 12 months had proved "a challenging environment," while Kevin McKay, president and CEO of Verticalnet, said bluntly, "The software market continues to be extremely depressed." George Klaus, chairman, CEO and president of Epicor, cited "continued uncertainty in [information technology] spending and challenging new account business opportunities."
Following are summary reports from Ariba, Commerce One, Manhattan Associates and MatrixOne, as well as briefs covering providers BroadVision, Epicor, Vastera, Verticalnet and Zomax.
Ariba Narrows Loss Amid Revenue Drop
Enterprise spend management specialist Ariba reported this week a loss of $142.5 million for its fiscal fourth quarter, against a loss of $224.3 million for the same period of last year.
At the same time, the company, based in Sunnyvale, Calif., saw its revenues drop to $58.2 million, compared with $62.6 million for the year-ago period, a decline of 7 percent. However, software license revenues came in at $23 million for the just-closed quarter, against $32.7 million in the same period of last year, a decline of 30 percent.
Reporting its earnings, the company noted that, in addition to new customers coming onboard, several existing customers for Ariba solutions had signed up to use additional solutions from the provider. This included Dell Computer, an Ariba Buyer user that selected the provider's spend analysis and sourcing applications, and ExxonMobil, which added those two solutions and Ariba's contract management application.
The company also reported that its board of directors had authorized the repurchase of up to $50 million of its currently outstanding common stock "based on the company's strong cash position and the current price of the stock."
Ditto for Commerce One
Commerce One also reported a narrower loss for its fiscal third quarter, but the e-procurement pioneer saw a sharp drop in total revenues and software licensing revenues. The company's net loss for the most recent quarter was $46.9 million, including charges, against $119 million for the year-ago period. Excluding charges, the loss for the just-closed quarter came to $31 million, compared with $63.6 million for the same period of last year.
Total revenues for the third quarter came in at $26.4 million, down a precipitous 67 percent from the year-ago period, when revenues stood at $81.1 million. Software licensing fees fell to $8.5 million, down 49 percent from $16.7 million in the same period of last year.
In reporting its earnings, Commerce One highlighted its 28 customer wins for the past quarter, including three major players in the consumer packaged goods (CPG) industry, Kellogg, Land O' Lakes and Perfetti.
The company, headquartered in Pleasanton, Calif., executed a 1-for-10 reverse stock split last month in an effort to shore up its share price.
Manhattan Associates Sees Increased Revenues, Net
Manhattan Associates this week reported third-quarter revenues of $42.9 million, against year-ago revenues of $39.7 million, a rise of 8 percent. Net income increased from $4.6 million to $6 million for the same periods, a rise of 30 percent.
Atlanta-based Manhattan Associates said its software revenues for the just-ended quarter totaled $28.4 million, an increase of 15 percent over the third quarter of 2001.
In another bright note for the solution provider, the company reported that, based on a recent bankruptcy court ruling, it was reducing a reserve set aside in January to cover possible losses associated with the Kmart bankruptcy.
New customers signed in the third quarter included Aaron Rents, Delta Faucet and Pharmacia, according to Manhattan Associates. The company also announced plans to acquire the assets of fellow solution provider Logistics.com for about $20 million (see related story).
MatrixOne Cuts Loss, Workforce
Collaborative product development solution provider MatrixOne saw a net loss of $6.1 million for its fiscal first quarter, a nearly 50 percent drop compared to an $11.9 million loss for the same period of last year.
The company, based in Westford, Mass., reported a year-on-year increase in total revenues, to $31.1 million for the most recent quarter, up from $23.8 million for the year-ago period. License revenues posted a steep rise, to $13.7 million from $6.9 million year-on-year, while services revenues actually dipped slightly, to $17.4 million from $17.9 million over the same period.
MatrixOne also announced that it would cut about 100 staff, or 15 percent of its workforce, and consolidate some field offices and take other steps to cut costs.
New customers that came onboard with MatrixOne over the past quarter included energy systems manufacturer The Babcock & Wilcox Company, Lawrence Livermore National Laboratory and New Balance Athletic Shoe.
Briefs
Enterprise business portal specialist BroadVision saw losses of $67.7 million for the third quarter, on revenues of $27.2 million, including $10.8 million in software licensing revenue. That compares to a loss of $432.9 million for the year-ago period, when revenues came in at $51.2 million (including $19.7 million in software license revenue). The company, based in Redwood City, Calif., executed a 1-for-9 reverse stock split at the end of July.
Enterprise software provider Epicor reported a net loss of $1.4 million for the quarter, against a loss of $4.5 million for the year-ago period. Revenues for the quarter totaled $34.0 million, including $6.8 million in software revenues. That compares to $39.4 million and $8.8 million, respectively, for the same period of last year. The Irvine, Calif.-based company said that it ended the third quarter with cash and cash equivalents of $28.9 million. Epicor said in reporting its earnings that the company had taken steps to reduce its expense and cost structure, including cutting its workforce by about 15 percent and consolidating facilities, targeting savings of $3.0 million to $4.0 million per quarter. On the other hand, the company said last week that it would acquire the core procurement, sourcing, settlements and analytics solutions from Clarus Corporation.
Global trade management solution provider Vastera reported a net loss for the past quarter of $4.2 million, compared to a loss of $9.9 million for the same period of last year. Revenues for the just-concluded quarter totaled $19.3 million, an increase of 11 percent over the year-ago period. New clients added during the quarter include IBM, Juniper, Toyota Tsusho and Veritas. Vastera is headquartered in Dulles, Va., outside Washington.
Supply chain solution provider Verticalnet reported a net loss of $32.6 million for the third quarter, against a loss of $241.6 million for the same period last year. Revenues for the quarter totaled $6.6 million, including software license revenues of $4.4 million, compared to total revenue of $9.7 million for the year-ago period (including software license revenue of $6.4 million). Notably, the company posted pro forma net income of $0.5 million for the third quarter. Pro forma amounts exclude non-cash expenses, non-recurring items, discontinued operations and other charges. Malvern, Penn.-based Verticalnet reported cash and marketable securities of $11.8 million as of September 30.
Technology service provider Zomax announced a net loss of $0.5 million for the third quarter, on revenues of $135.1 million, against a profit of $1.9 million on sales of $160 million for the same period last year. The company also announced that its board of directors had authorized it to expend up to $10 million to purchase Zomax stock in the open market.
