Platinum Software Sees Earnings Triple
Platinum Software Corp. is shining once again.
The Irvine accounting software maker announced Thursday that its third-quarter earnings more than tripled because of its expansion into new markets.
The company earned $4.3 million, or 15 cents a share, for the quarter ended March 31, up from $1.2 million, or 4 cents a share, for the same period last year.
Reflecting this growth, investors have boosted the company’s stock in the last year from $6 per share to more than $24 per share. On Thursday, the stock rose 75 cents, closing at a 52-week high of $24.25 amid heavy trading on the Nasdaq market. Nearly 6.6 million shares were traded, compared to the average daily volume of 617,600.
Platinum hasn’t enjoyed this kind of investor confidence since 1994, before an accounting scandal wiped out most of its top executives and led to an investigation by the Securities and Exchange Commission.
Wall Street’s change of heart, say analysts, is due to chief executive L. George Klaus and his belief that Platinum needed a broader market focus.
Klaus, known as a Silicon Valley turnaround specialist, joined Platinum’s executive team in 1996. Soon after, he rebuilt the company’s management, recruiting William Pieser as a senior vice president of marketing and business development. The pair had worked together at Frame Technology Corp., a San Jose-based company that underwent a successful restructuring before being sold in 1995.
And recently, Klaus has been helping Platinum diversify. Historically, the company was known primarily for making accounting software.
“I think it’s important for us to be known for doing more than one thing,” Klaus said recently. “We’ve been making this transition for quite some time. People are now starting to notice.”
For the past several years, Platinum has had a solid stake in the mid-range market for accounting software. It’s an arena that’s ripe for expansion and has attracted the attention of such competitors as Oracle Corp. and Peoplesoft Inc.
Last year, Platinum completed a couple of acquisitions that helped shift its focus from accounting software toward being a provider of companywide solutions.
The company purchased Focus Soft Inc., a Louisville, Ky., maker of manufacturing and distribution software, and Clientele Software Inc. of Portland, Ore., which specializes in customer management software.
Platinum said its third-quarter revenue rose 61%, to $26.4 million from $16.4 million for the same time period last year.
For the nine months, the company earned $7.7 million, or 26 cents a share, compared with a loss of $1.5 million, or 7 cents a share, a year ago. Revenue climbed 55%, to $66.3 million from $42.8 million.
