shifted deeper into the "lagging ERP vendor" category last week, as falling
licensing revenue led to a drop in overall revenue and net losses in the company's
third quarter, ended July 31. For the period, J.D. Edwards reported revenue
of $232 million, $8 million down from last year's third-quarter revenue of $240
million. While licensing revenue fell quarter over quarter from $98 million
last year to $75 million this year, the company was saved from total disaster
by an 11% increase in services revenue to $157 million, compared with $141 million
in third-quarter 1998. Without that, J.D. Edwards' picture would have been very
bleak indeed. The net loss after acquisition write-offs was $33.2 million compared
with a profit last year of $18.1 million. J.D. Edwards has lost a significant
amount of its cash strength too. Since last November, its cash position has
dwindled $142.2 million to $391.8 million. In the last quarter alone, cash resources
fell by a whopping $125 million, of which $80 million is accounted for by the
acquisition of supply chain vendor Numetrix.
this updates Fig. 2 in TEC's note on J.D. Edwards & Co. ("J.D.
Edwards - Creating OneWorld of Mid-Sized ERP Users" August, 1999) as can
be seen in Fig. 1 below. However, this does not substantially change our position
on the vendor as outlined in the note. More aggressive marketing and achieving
OneWorld stability remain the main critical success factors for J.D. Edwards
recovery, particularly within the Tier 2 ERP market.
We remain firm
on the recommendations that we already outlined in our J.D. Edwards note:
including J.D. Edwards in a long list of an enterprise application selection
to mid-market and low end tier 1 companies ($100M-$2B in revenue), especially
within automotive, consumer packaged goods, electronics, and manufacturing
& distribution industries.
should be on the short list in any selection within the ERP mid-market where
manufacturing, logistics and financial modules are the main pillars of an