Lawson Software, Inc. continued its march to profitability in its fiscal 2008 first quarter, with a 16% revenue increase from a year ago and net income in the black. The ERP vendor started its first full year following its prolonged acquisition of Intentia International AB with revenue of $187.
4 million, up 16% from $161.8 million in its fiscal 2007 first quarter. GAAP net income was $5.
6 million, or $.03 per diluted share, compared with a net loss of $15.8 million, or $.
08 per share, a year ago. Overall, license fee revenue increased 52% to $25.5 million; maintenance revenue rose 13% to $78.
5 million; and consulting revenue increased 11% to $83.4 million. CEO Harry Debes told analysts on a conference call yesterday that the company "met or exceeded its financial guidance in every aspect.
" He added, "We delivered growth in both our top and bottom lines, and we started to see real traction on our M3 product." That was accomplished in a quarter that Debes described as "typically the weakest quarter of the year due to vacation schedules for both employees and customers, especially in Europe," where the company does a significant portion of its business. Even so, Lawson signed 294 deals at an average selling price of $89,000, compared with 228 deals at an average selling price of $113,000 a year ago.
Lawson signed six deals greater than $1 million and four deals between $500,000 and $1 million in the quarter. In the 2007 first quarter, four deals worth more than $1 million and six deals in the $500,000-to-$1 million range were signed. Revenue increases were posted across the product line in all three of the company's geographic regions, Lawson CFO Rob Schriesheim told analysts on the conference call.
In the Americas, which accounted for 55% of total revenue, growth was 10%. The Europe, Middle East, and Africa region, representing about 41% of total revenue, grew 25%. The Asia-Pacific region represented 4% of the total and contributed about 11% growth in the quarter.
In discussing customer wins in the quarter, Debes pointed to particular ones where Lawson, he claimed, beat out its much-larger ERP rivals, SAP and Oracle. For example, he noted that GCT Global Container Terminals Inc. in the Americas chose Lawson over both Oracle and SAP.
He attributed these victories to Lawson's focus on selling its software platforms and applications into 10 vertical markets in 40 countries "where we have the most potential," and to its direct-sales approach. "Customer intimacy is in our DNA," Debes told analysts. Debes attributed some "temporary softness" in license revenue in the Americas to the company's strong fourth quarter and "perhaps some execution issues.
" He noted that the company is still training a large roster of new sales personnel -- nearly 50% of the 200-strong force -- who came on board last year. Lawson's demand pipeline is healthy, he stressed, adding that he is not seeing any sign of a slowdown in spending by customers. Lawson continues to trim its operating costs and increase efficiency with moves to offshore facilities, such as one in Manila, the Philippines, where it is adding mostly development personnel.
Currency fluctuations increased costs of revenue and expenses reported in U.S. dollars by roughly $6 million, the company reported.
It estimated that the currency impact on net earnings per share was less than a penny. The guidance for the second fiscal quarter ending Nov. 30, 2007, is for GAAP revenue of $200 million to $205 million, which includes license fee growth in the range of 20% to 30% over the prior-year period.
The company anticipates GAAP fully diluted earnings per share of $.02 to $.04.
Lawson's first-quarter performance paled slightly compared with a very strong fourth-quarter finish to fiscal 2007. In that quarter, the company recorded GAAP net income of $8.1 million on revenue of $212.
9 million. Debes noted during the question-and-answer session with analysts that the sales incentives are set up for a big year-end push. "Our salespeople are cash-oriented.
I don't blame them," he said.
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