It doesn’t seem to have done project management software company Learmonth & Burchett Management Systems Plc much good moving its headquarters to Houston, Texas from London: a profit of $459,000 a year ago was transformed into a loss of $4.3m, and revenue slumped so badly it only just covered the loss at $5.2m, down from $9.8m. The biggest damage was in product licenses sold – users checked out in droves and $2m for licenses compares with $5.4m a year ago – but services faded too, $3.2m against $4.4m. Everything clearly costs more in Texas: sales and marketing expenses rose 7.3% to $4.5m, general and administrative costs rose 6.2% to $1.3m – and even if British research and development is vastly cheaper than American, it costs more to run it at a distance, and those fadeaway sales are having to finance research and development expenditure up 6.3% at $1.3m. On the plus side, it can claim $22.7m in assets, including $11.4m cash, offset by $15.2m in liabilities, but trade accounts receivable have followed sales down, and stand at $5m, down from $9.6m. That all looks pretty unimpressive – but wait! You ain’t seen nothing yet. Learmonth says that for the current quarter, it expects to record a one-time restructuring charge of about $18m to cover the costs of getting rid of surplus people and getting out of lease obligations early. Convinced that it does still have a future, the company says the restructuring plan will focus on increased investment in its Process Engineer product line, transfer of direct sales and services resources to distributors, and the new management team (CI No 2,973). The company will eliminate substantially all on-going operating costs outside the US as it changes to a distributor sales model.
