System Software Associates Inc, Chicago-based provider of ERP software and services, has reported a second-quarter net loss of $9.4m on revenue up 4.4% at $102.4m, compared to a loss of $600,000 a year ago. SSA had previously announced that it expected to post a loss for the quarter (CI No 3,413) but the loss per share ($0.20) was far greater than the revised First Call consensus of $0.07. New president and chief executive officer William Stuek, who took over in April after the departure of company founder Roger Covey, says the company is now taking more aggressive action, which should lead to profitability in fiscal 1999. He warns, however, that restructuring and downsizing will be announced within the next 60 days. Chief financial officer Larry Zimmerman says that he’s looking to cut expenses by about 15% and that cut will be driven by people, for the most part. About 10%-15% of the company’s more than 2,000 staff will likely go in the restructuring. Another high-priority area will be consolidation of office facilities in an effort to get out of some pretty expensive places, according to Zimmerman. Travel and hardware leasing deals will also get a close look as will software accounting practices – Zimmerman hints that the company may move away from more cautious software revenue recognition. Six-month net loss was $10.8m on revenue up 5.8% at $201.3m, against a loss of $5.0m last year. Six-month results include one- time charges of $1.1m.
