PA - Malvern Computer Firm's Fortunes Rise as Y2K Fears Fade : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

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Title: Malvern, Pa., Computer Firm's Fortunes Rise as Y2K Fears Fade

Story Filed: Sunday, April 30, 2000 1:09 PM EST

Apr. 25 (The Philadelphia Inquirer/KRTBN)--Systems & Computer Technology Corp., hurt last quarter by fears that the Y2K computer glitch would be a monster, has rebounded strongly now that Y2K turns out to have been a gnat.

The Malvern company last week reported revenue of $114.3 million and earnings of 11 cents a share for the second quarter, which ended March 31 - a considerable turnaround from a loss of 19 cents per share in the quarter that ended Dec. 31.

"We had a very nice quarter," Michael J. Emmi, SCT's chairman and chief executive officer, said in a conference call with analysts last week.

He said companies that had delayed ordering software and systems for months due to Y2K concerns were back in the market for software and services that the company sells in its manufacturing, government, utilities and education markets.

SCT noticed an upturn after Jan. 1, but Emmi said there was a larger surge after March 1, when worries about computers' ability to handle the leap year date of Feb. 29 evaporated. Buoyed by news of the company's second-quarter performance, SCT's stock rose a total of $6.04 to reach a high of $23.06 Thursday before closing at $22.43 for the week.

The earnings report led two analysts to upgrade their recommendations. Richard Jacobs of Janney Montgomery Scott in Philadelphia moved from "accumulate" to "buy." Catherine A. Moore of CE Unterberg Towbin in New York shifted her recommendation from "buy" to "strong buy."

"We saw a resurgence in demand from their key vertical markets, so obviously we are going to see better revenue streams than last year," Moore said.

She said SCT's rapid recovery from the Y2K slowdown indicated it had "retained [its] leadership in [its] vertical markets."

In further good news for the company, Standard & Poor's added SCT to its SmallCap 600 index last week, giving the firm greater exposure.

SCT's manufacturing sector is doing especially well. The company recently announced that Cargill Inc., an international food processor and marketer, had chosen the company's new iProcess.sct software to manage sales transactions in its North American food operations.

Cargill expects to use SCT's business-to-business system to handle sales and purchases of food-processing items such as malt, salt and juice, and to distribute and track products.

"The Cargill deal, I think, is going to be a wonderful contract for the company for the next two or three years and literally could be in the tens of millions of dollars for SCT," Emmi said.

He said that on the day of the Cargill announcement, SCT received calls from three other large food-processing companies expressing interest in the system.

Emmi said that revenues in the company's utilities division, which provides software, service and system maintenance for electricity, gas and water companies, improved by 15 percent over the first quarter largely as a result of a $13 million contract with Portland General Electric in Oregon.

Late last year, when utilities were preoccupied with surviving Y2K, they stopped buying software. "The Y2K lockdown was real," Emmi said, "and it happened first and lasted the longest in the utilities."

He said that the market bounced back more quickly than he had expected. "I would not have expected utilities to be as adroit and agile," he said.

Emmi said that the government and education markets looked strong, as well. Last year, in the midst of the Y2K slowdown, SCT reduced its workforce worldwide by about 90 employees. It now employs 3,400. "I would anticipate a gradual buildup," Emmi said, "but we will be cautious."


-- (, April 30, 2000


Well, at least a few firms are benefiting, now that y2k is dead. It's amazing to me, just how many people actually believe this.

-- Uncle Fred (, April 30, 2000.

Well, at least a few firms are benefiting, now that y2k is dead. It's amazing to me, just how many people actually believe this.

-- Uncle Fred (, May 01, 2000.

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