Manugistics Group reported a net loss of $8.2 million for the first quarter, confirming last month's profit warning. Net income for the same quarter last year was $2 million.
Revenues in the supply chain software house rose overall, up 15 per cent to $39.8 million, but Manugistics attributes the loss to a marked fall in software licence revenues, down 17 per cent to $16.7 million from #20.1 million last year.
William Gibson, chairman and CEO, said he was "particularly disappointed with the first quarter results", adding "we did not achieve an appropriate balance between longer term initiatives and short term sales execution, and we did not successfully manage the rapid growth of our sales organisation."
Gibson believes the necessary actions have been taken to address the issues, saying: "Despite our performance this quarter, we remain confident in the continued growth of the supply chain management market, in the strength of our organisation [and] in the superiority of our product offerings."
More specifically, Gibson said that Manugistics will implement "more intense management of the sales organisation and its day-to-day activities."
Joseph Broderick, executive vice president of client sales and services, will focus on managing the field sales staff. A management reshuffle sees senior vice president Keith Enstice managing the professional services business on a global basis and continuing to manage relationships with strategic consulting partners. Reporting to Broderick previously, he now reports directly to the CEO.
Gibson concluded: "The issues that we are dealing with are manageable and well within our control. We have learned from our experience of the first quarter that we must not lose sight of the basics [and] we must focus more strongly on execution during the remainder of the year."
The Maryland company kicked off the second quarter with the acquisition of Tyecin Systems, a supplier of advanced planning and scheduling applications for the semiconductor industry. The $9.5 million transaction saw Manugistics issue 333,000 shares of common stock in exchange for all the outstanding stock of Tyecin.
Mary Lou Fox, Manugistics' senior vice president, commented: "This merger significantly strengthens our supply chain solution and increases the depth of functionality that we can offer to semiconductor manufacturers and other hi-tech companies. The complementary nature of our solutions and organisations [means] we can quickly add Tyecin's products to the Manugistics suite and manage the complete extended supply chain in these industries."
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