St. Louis, Missouri, November 13, 1997 -- Data Research Associates, Inc. (DRA) (NASDAQ: DRAI) announced today that earnings for its fiscal year, ended September 30, 1997, were a record $4.49 million, compared with $4.45 million earned in fiscal 1996. These results marked the company’s eleventh consecutive year of record earnings.
In conjunction with the earnings announcement, the company announced that its Board of Directors had increased its regular, annual cash dividend from 10 cents per share to 12 cents per share. The dividend has a record date of January 14, 1998 and a payment date of January 28, 1998.
Earnings per share for fiscal 1997 were 81 cents, equaling earnings per share for fiscal year 1996. Earnings for the fourth quarter were $1.7 million, or 31 cents per share, also equaling earnings per share for the same period in fiscal 1996.
Revenues for fiscal 1997 were $35.4 million, a decrease of 8% compared with $38.6 million for fiscal 1996. For the fourth quarter, revenues were $9.7 million, a decrease of 10% compared with $10.8 million in the same period last year.
Michael J. Mellinger, president and CEO, attributed the company’s ability to maintain steady earnings in the face of falling revenues to a combination of factors, including increased service revenues; a decrease in salaries and general and administrative expenses both in absolute terms and as a percentage of revenues; an increase in other income; and a decline in the company’s consolidated tax rate.
Service revenues were $18.6 million in fiscal 1997, an increase of 10% compared with $16.9 million in fiscal 1996. For fiscal 1997, service revenues had a 77% gross margin, the highest of the three components of the company’s revenues.
Salaries and general and administrative expenses fell 11%, or slightly more than the percentage decrease in total revenues, owing primarily to capitalization of salaries related to development of the company’s new library automation system. Other income rose 34%, to $788,000 in fiscal 1997 from $590,000 in fiscal 1996, owing to an increase in interest income reflecting the company’s increase in cash and cash equivalents. The decline in the company’s consolidated effective tax rate to 32.5% in fiscal 1997 from 38.1% in fiscal 1996 resulted from the use of tax loss carryforwards from certain of the company’s foreign subsidiaries.
"As we moved into the latter stages of development on our new library automation system, Taos, during the past fiscal year, our new software revenues fell," said Mellinger. "Our ability to keep pace with our earnings of last year, despite a slowdown in new-system sales, is indicative of a strong underlying base of business from our existing customers.
"We continue to strive to balance new sales of our existing system, DRA Classic, with anticipatory demand for our new system, and we have seen good interest in both systems in recent months. At fiscal year-end, we had three signed contracts for Taos systems awaiting completion and delivery of the product, and we had been selected for multiple large implementations of DRA Classic.
"While we are pleased that we have continued our eleven-year trend of record earnings, we are realistic in acknowledging that the increase over last year was negligible, and that our results for fiscal 1997 were not in line with our historical growth rates. Nonetheless, we are encouraged by the demand we are encountering for both our new and existing products and services, and we hope to offer more acceptable performance to investors in future periods."
Data Research Associates, headquartered in St. Louis, is a leading systems integrator for libraries and other information providers, offering its own proprietary information services software; third-party software and hardware; Internet, World Wide Web and other networking services; and other related support services.
This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause DRA’s actual results to differ materially. These risk factors are discussed in detail in DRA’s Annual Report and Form 10-K for fiscal year 1996. DRA does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Summary of Quarterly Results (in thousands, except per-share data)
|Three Months Ended September 30||Fiscal Year Ended September 30|
|Services and other||4,941||4,350||18,641||16,909|
|Earnings per share||$.31||$.31||$.81||$.81|
|Weighted average number
of common shares