Earnings Roundup: Bright Times for Some NJ Tech Firms

Some of the companies reporting earnings last week, including Ness Technologies, Wayside Technology Group and Heartland Payments, had good news for their investors.

Teaneck, N.J.-based Ness Technologies Inc., which is in the process of implementing its merger with Citi Venture Capital International, a global private equity investment fund, said everything is on track for the proposed merger, which will be closed in the third quarter of 2011. The company said it was continuing to run normally during this time and that the board of directors has recommended that shareholders approve the all cash merger at a shareholder’s meeting scheduled for August 30.

The company did take a big write-off, which it called a “non-cash goodwill impairment charge of $55.2 million,” as of June 30, 2011. Ness reported to Globes, an Israeli business website, that it had overpaid for several acquisitions before the recession took hold and that the write-off brought the company’s book value in line with the transaction value. Most of the “goodwill impairment” involved Ness’s IT integration business, on which it reported an operating loss of $48 million on $110 million in sales, Globes reported.

Heartland Payment Systems Inc., based in Princeton, had a very good quarter, reporting a 35 percent increase in adjusted earnings per share for the quarter. According to Robert Carr, chairman and CEO, “through the combination of steady growth across our card and non-card businesses and disciplined expense management,” Heartland has achieved one of the most profitable quarters in the company’s history.

He said the company had made continued progress with new initiatives while simultaneously better leveraging its business model through the successful implementation of efficiency initiatives that drove the operating margin to 17.7 percent.

Carr views the economy as on the mend and says Heartland will be able to build value for its shareholders through the effective execution of a back-to-basics marketing strategy, along with the introduction of innovative new products and services.

Alcatel-Lucent, which still has strong ties to N.J., is back in the black and on track to deliver on its forecast for the year, CEO Ben Verwaayen told CNBC. The journey from voice to video is happening massively, and the U.S. has reacted with an aggressive build out of the latest technology, not just in the wireless space but in the IP and optical space, which is right in the middle of “where we are.” And it’s not just the U.S. but also Latin America and China, he said.

West Windsor-based Dataram’s stock rose a bit on generally good news from its earnings results. Revenues for the fourth quarter and the fiscal year that ended April 30, 2011, were $11.3 million and $46.8 million, respectively, compared with $11.9 million and $44.0 million for the comparable prior year periods.

John Freeman, Dataram’s president and CEO, said that, “In fiscal 2011, our memory solutions business grew to $46.8 million. During the fiscal year, we continued our integration of MMB and our traditional memory business. In March 2011, we completed the consolidation of our two manufacturing facilities and reduced our expenses by approximately $1.2 million annually as a result. The memory business is now operating profitably.”

Wayside Technology Group, based in Shrewsbury, saw “record results,” Simon Nynens, Wayside’s CEO, said, thanking everyone at the company for their part in its success. Revenue increased 25 percent and income from operations grew 29 percent over the previous quarter. Once again, the company’s Lifeboat Distribution segment was responsible for much of Wayside’s profit.

The company reiterated its careful growth strategy. It continues to be “really thoughtful” about the firms with whom it partners and whose products it incorporates into its own lines, to make sure both parties can be “mutually profitable.” In general, Wayside teams with software publishers that are dissatisfied with the service they receive from their current distributors and shows them that this can work differently. Wayside ended the quarter with $13.1 million in cash and securities. The company has decided to take advantage of early pay bonuses, which enhance its reputation by sending the message to software publishers that it is a viable company with no cash flow issues.

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