Platinum Software Posts $4.5-Million 1st-Quarter Loss, Announces Layoffs

Platinum Software Corp., a troubled publisher of accounting software, reported a hefty quarterly loss Monday and announced plans to lay off 100 to 125 workers, mostly in the company’s beleaguered sales force.

Platinum posted a loss of $4.48 million in its first fiscal quarter, ended Sept. 30, compared to a profit of $51,000 in the corresponding three-month period a year earlier. Sales fell 14%, to $12.6 million from $14.6 million, in the quarter.

Calling the disappointing news “a gigantic sales miss,” Platinum Chief Executive Carmelo Santoro said the company will lay off about one-fifth of its 560 employees. As many as 40 of the company’s 275 employees in Irvine could be affected by the cuts, Santoro said.

Santoro said the company will save about $3 million per quarter by eliminating its sales force and selling its products through so-called “value-added resellers,” companies that buy computer products and sell them as packages to corporations or retailers.

Santoro, who took over as CEO after a bookkeeping scandal last year, said that the company had been weighing the move to value-added resellers for some time. But he acknowledged that he had been repeatedly disappointed by the inability of the company’s sales force to meet its own rosy projections.

“We have been consistently missing the projections,” Santoro said. “In the middle of [the first] quarter, we took the position that this was the last quarter to wait for the sales to materialize.”

He also admitted that the company has lost customers due to a lack of confidence in the firm’s staying power. Platinum appeared near collapse last year after its admission that it had overstated revenue by $18.2 million in 1993 and 1994.

“People are unhappy with the checkered financial situation of 1994,” said Santoro, who added that rivals have been quick to remind customers of Platinum’s problems.

“Competitors are relentless in dredging up our past,” Santoro said.

Platinum, which two weeks ago warned stockholders of the impending loss, attributed the revenue shortfall to lackluster sales of its Enterprise software, targeted to large corporations with heavy accounting needs.

But Santoro said that Platinum will no longer depend on direct sales to such large companies, concentrating instead on the growing market for software designed to work with the client/server computer networks that are increasingly popular among small and mid-sized companies.

As part of that effort, the company is pushing financial software that can be used with Microsoft’s Windows NT, a top-selling operating system used by companies to join their computers in client/server networks.

“We’re focused on bringing [accounting software] to the mass market,” Santoro said.

The price of Platinum’s stock remained unchanged at $7.75 in Nasdaq trading Monday.

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Platinum Tarnished

Platinum Software Corp.’s near 14% decline in revenue and $4.5-million loss for the first quarter ended Sept. 30, left shareholders with a 32-cent loss per share. Figures n thousands of dollars, except per-share data:

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1st Qtr. 1995 1st Qtr. 1996 Percent change Total revenue $14,000 $12,600 -13.7 Net earnings (loss) 51 (4,500) .. Earnings per share 0.00 (0.32) ..

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Source: Platinum Software Corp; Researched by JANICE L. JONES / Los Angeles Times