Updated from 5:22 p.m. EDT
reported a second-quarter net loss Thursday that beat Wall Street estimates, but the company said it will make additional cuts to its staff.
The Rockville, Md.-based supply-chain software maker also reported that President Richard Bergmann, on a leave of absence from the company since late June, will be leaving the company to "pursue other business opportunities."
Manugistics, which already had slashed its workforce by 12% in the past quarter after announcing disappointing first-quarter results, said it will make additional cuts of between 10% and 12% of its 1,387 workers, while also reducing discretionary spending.
The cuts will result in a charge to earnings of approximately $2 million to $4 million in the third quarter ending in November. It is the company's third round of layoffs in the last year, which follows an involuntary furlough in July and one earlier this month.
Despite the bad news, though, Manugistics CEO Greg Owens said the company believes its revenue has hit a floor. It expects a sequential improvement in license revenue in the third quarter, as well as an improvement in earnings, but gave no sales numbers.
CFO Raghavan Rajaji said that the license-revenue increase is expected to modestly offset a possible decline in service revenue. Wall Street analysts were expecting total revenue of $72.9 million for the third quarter, according to Thomson Financial/First Call.
Rajaji said the company is comfortable with the consensus estimate forecasting a pro forma loss of 13 cents a share.
Owens also offered some encouraging signs for future quarters. He said request-for-proposal activity went up sequentially every month this summer -- a trend that has not occurred in more than a year. He also said there are some bigger deals worth more than $2.5 million in license revenue in the pipeline for the next two quarters.
Software executives, however, have been saying for at least a couple of quarters now that their pipeline of deals has remained strong -- but it's closing the deals that is the challenge.
Manugistics reported a net loss of $47.7 million, or 68 cents a share, in the second quarter, as calculated by generally accepted accounting principles. That compared with a net loss of $21.7 million, or 32 cents a share, in the same period a year earlier, and a net loss of $27.1 million, or 39 cents a share, in the previous quarter.
Manugistics said excluding charges, it had a pro forma net loss of $13.1 million, or 19 cents a share, in the second quarter, compared with a pro forma net loss of $10.7 million, or 16 cents a share, a year earlier and a pro forma net loss of $18.4 million, or 27 cents per share, in the first quarter. Wall Street was expecting the company to lose 20 cents a share in the fiscal second quarter, which ended in August, according to Thomson Financial/First Call.
Manugistics registered second-quarter revenue of $69.9 million, which was down 5.6% from $73.8 million a year ago and down sequentially by 6.3%. That fell slightly short of the $70.8 million in revenue that analysts were expecting.
Manugistics said its latest round of cuts, which it hopes to complete by Dec. 1, should enable it to report break-even operating income with expenses in the mid- to low-$70 million range. Operating expenses in the second quarter totaled $95.4 million.
"Our No. 1 goal right now is accelerating our return to profitability," Owens said on a postclose earnings call.
Because Manugistics' quarterly report comes out about a month ahead of other software makers, it is often watched as an indicator of how other software companies will perform.
, whose quarter is also one month ahead of most peers,
spooked some investors when CFO Jeff Henley said he was less optimistic about the outlook for the full year than he previously had been.
Manugistics and other supply-chain companies such as
, however, have been particularly hard hit in the software arena because of their heavier dependence on larger deals and stiffer competition from enterprise software makers.
Shares of Manugistics declined 13 cents, or 3.3%, Thursday to close at $3.85. In after-hours trading, shares were falling an additional 10.4%.