Event Summary
On April 17, Lawson Software, Inc. (NASDAQ: LWSN), a provider of Web-based business applications for selected service industries, announced the acquisition of Keyola, a Florida-based company with an innovative business intelligence (BI) technology. The acquisition of the privately held company is effective immediately, and terms of the deal were not disclosed. Keyola's collaborative business intelligence technology is seen to enhance the capabilities of Lawson's applications to automatically deliver event-driven notifications across an organization's enterprise, and instantly push key information to the right people. Called Lawson Smart Notification, the configurable, collaborative solution delivers information that is user defined and can be received via PDA, email, voice, text messages and wireless devices. Smart Notification should empower users by automatically sending them information important to their work, and by letting users define what information they want and how they want it delivered. When integrated with Lawson's solutions, Smart Notification will include rich content and actionable information to help Lawson's customers make better decisions, faster. The acquisition of Keyola may demonstrate Lawson's strategy to acquire companies that enhance Lawson's product offerings and provide value to Lawson's customers.
On April 2, Lawson announced that Catholic Healthcare West, a $4.5 billion integrated healthcare system based in San Francisco, has selected the company to provide its full range of Lawson Solutions for Healthcare. The multi-million dollar deal includes licenses for Lawson Financials, Human Resources (HR), Procurement, Enterprise Performance Management (EPM), Services Automation (SA), application extensions that facilitate enterprise-wide integration and collaboration, and associated consulting and implementation services. Catholic Healthcare West reportedly selected Lawson to replace a complex SAP system at some facilities and a variety of other systems at other facilities. Company officials cited Lawson's healthcare industry functionality and expertise, open and flexible system architecture, ease of integration, self-service capabilities, low total cost of ownership (TOC), and fast time to value as critical factors in their decision. Lawson won the contract following a vendor review that included Infinium and McKesson.
The win follows up on Lawson's March 25 announcement of a strategic alliance with Computer Sciences Corporation (NYSE: CSC), one of the world's leading consulting and information technology services firms, to deliver consulting and implementation solutions to the healthcare industry. Faced with the continual need to drive down costs, healthcare organizations are increasingly relying on best-in-class enterprise solutions as the foundation for operational improvement. To that end, Lawson Solutions for Healthcare deliver industry-specific functionality based on Internet and e-commerce technologies that should help healthcare organizations streamline and automate processes and promote operational excellence. Lawson's industry solutions, coupled with CSC's depth of healthcare industry and application deployment expertise, might deliver greater cost savings and provide an enterprise solution and infrastructure tuned for future growth.
Lawson reportedly serves more than 500 healthcare industry customers representing more than 4,500 facilities, including seven of the top 10 integrated delivery networks. The company also serves managed care systems, academic medical centers, hospitals, clinics, physician group practices, home healthcare, long-term care and other health services enterprises. Lawson solutions were devised to help healthcare organizations manage their business so they can focus on their patients, automate and streamline materials management for a better bottom line, and manage the challenges of labor shortages by helping healthcare organizations hire and retain the right employees.
This is Part 1 of a 2-part analysis of recent news concerning Lawson Software.
This part details announcements concerning:
- Keyola Acquisition
- Catholic Healthcare West Contract Win
- Computer Sciences Corporation Alliance
- Lucent Technologies Contract Win
- Indus Alliance
- Lawson Q3 2002 Financials
- Lawson Scorecard Launch
Part
2 discusses the Market Impact and make User Recommendations.
Lucent Technologies Win
On March 27, Lawson scored another important software solution contract with Lucent Technologies, this time for another of its industries of focus - professional services automation (PSA). Lucent cited positive references from its satisfied Lawson PSA users in The Netherlands and the solution's ability to easily integrate with other enterprise systems as key factors in its decision. The Lawson solution will replace several internally developed systems at Lucent. The win comes on the heels of the company's March 4 announcement of Lawson PSA 5.0 and SA 5.0, the newest versions of the company's comprehensive solution suites for professional services automation and internal services automation, which are scheduled for general availability in May 2002.
Designed by professional services and internal services experts, Lawson PSA and Lawson SA were devised to provide comprehensive solutions that integrate opportunity, project and resource management, time and expense, billing/chargeback, analytics and reporting. Leveraging powerful resource management and work request capabilities, the solutions organize, track and manage all work, resources, time and costs to improve the productivity, efficiency and effectiveness of the workforce. Both solutions are fully Web-based and have a promise of being implemented quickly and easily for a rapid return on investment (ROI).
Notable additions to the Lawson PSA and SA solution suites in release 5.0 include:
- French Language Translation - Extends the reach of PSA and SA to more international and multinational users.
- Analytic Datamarts - New OLAP data cubes for resource utilization and time and expense analysis give users detailed views of utilization rates for better financial visibility and forecasting.
- Portal Interface - Role-based portal environment delivers point-and-click access to mission-critical information and enterprise applications.
- Offline Access - Provides disconnected access to time and expense reporting for mobile workforces.
- Enhanced Work Request - Improves overall flexibility, intuitiveness and approval process to quickly capture and evaluate internal projects.
- Enhanced Resource Management - Functionality delivers deeper visibility to resources through performance management features and weighted skill searching.
Indus Alliance
Another product alliance happened on March 20, when Indus, a leading provider of enterprise asset management (EAM) solutions, announced it will merge its InSite Collaborative Asset Management solution with financial and procurement software suites from Lawson. A joint solutions will be delivered via Indus' Web-hosted, subscription-based model. Lawson is the first company to join the InSite Application Partner Program, which is designed to leverage the offerings of best-of-breed third-party software companies.
Lawson's Financial Performance
On March 21, Lawson reported total revenues of $115.5 million for its fiscal 2002 third quarter ended Feb. 28, 2002, a 13.6% increase from total revenues of $101.7 million in its fiscal 2001 third quarter. The company's net income from normalized operations for the fiscal 2002 third quarter was $9.0 million, compared with net income from normalized operations of $7.7 million in fiscal 2001 third quarter. The company's net income from normalized operations for the third quarter excludes expenses that are non-recurring or non-cash in nature and not part of its normal operations. These include non-cash stock-based compensation and an extraordinary charge for early repayment of senior subordinated debt. As a result of the non-cash charge of negative $0.33 per share associated with the beneficial conversion feature, the company's reported earnings were negative $0.27 per share for Q3 2002. The company's cash, cash equivalents and marketable securities, however, were a comfortable $228.2 million at Feb. 28, 2002. Third quarter cash provided by operating activities was $16.2 million.
For Q3 2002, license fee revenue totaled $49.1 million, up 7% from $45.8 million in Q3 2001. Services revenues for Q3 2002 totaled $66.4 million, up 16% from $55.9 million in the comparable fiscal 2001 period.
During Q3 2002, the company reportedly signed 11 software licensing agreements each valued at more than $1 million. The total number of contracts signed in the quarter was 187, compared with 130 in Q2 2002. Of total licensing activity in Q3 2002, 57% came from new customers and 43% from existing customers. The average selling price was $268,000, compared with $235,000 in the Q2 fiscal 2002.
Lawson Scorecard Availability
Finally, on February 5, Lawson announced availability of Lawson Scorecard, a secure, browser-based application that gives organizations an interactive collaboration point for real-time information analysis and supports enterprise-wide balanced scorecard initiatives and operational excellence. Faced with slower top-line revenue growth, retailers are placing greater attention on lowering operational costs to increase profit margins. At the same time, many of today's existing business intelligence (BI) systems are only partially effective in improving retailer operations because they require too much training and fail to deliver the right reports to the right people. In contrast, Lawson touts its Scorecard gives key decision makers actionable, role-based information from a single self-service data source. Lawson's unique OLAP Drill Around capability also gives users point-and-click access to data at any level of detail desired.
Lawson Scorecard provides context to analysis by combining key metrics with relevant information from any other source. Visual signals such as traffic lighting, graphs and key performance indicators (KPIs) help managers identify and take action on emerging issues and exceptions. And because all users are viewing and analyzing the same data, the solution delivers improved confidence in the information used to make vital business decisions.
Pre-built KPIs delivered with Scorecard help may speed implementation and further reduce training requirements, contributing to the application's rapid ROI. Full integration to other Lawson applications helps customers implement the suite in days or weeks rather than months. Scorecard drives even greater value in an organization when used as an integrated component of Lawson Enterprise Performance Management, a comprehensive analytic solution suite that also includes:
- Analytic Architect - Gathers operational data from key areas of the enterprise and delivers analytic information to multidimensional data marts.
- Analytic Server - Patent-pending technology enables Lawson Scorecard to communicate simultaneously with both Hyperion Essbase and MS OLAP servers.
- OLAP Server Integration - Links Lawson applications with market-leading OLAP platforms from Hyperion and Microsoft.
- Data Marts - A full set of pre-packaged performance measures for Lawson Financials, Human Resources, Procurement and Distribution suites.
This concludes Part 1 of a 2-part analysis of recent news from Lawson Software.
Part
2 discusses the Market Impact of these announcements and makes User Recommendations.