- The Washington Times - Sunday, August 22, 2004

Joe Cowan has a record of helping struggling software companies. Manugistics Group Inc. has struggled for years.

The Rockville firm, which makes software that helps companies track inventory, hired Mr. Cowan four weeks ago to help it emerge from a funk that has resulted in a cumulative net loss of $586.4 million since fiscal 1998, according to regulatory filings.

“I’m here to help this company look at ways to make money and grow again,” Mr. Cowan said.

Mr. Cowan, a 55-year-old Alabama native, was in his sixth month of retirement in suburban Atlanta when he agreed last month to take over Manugistics.

“Five weeks ago I was trying to decide what I wanted to do besides play golf, which I am not good at,” he said.

He has proved he can help companies. He is a cost cutter with a knack for streamlining operations.

Texas software firm EXE Technologies Inc. hired Mr. Cowan in November 2002. He narrowed losses to $4.9 million for the nine months ending September 2003, down from $15.6 million for the same period a year earlier. The company was swallowed up by SSA Global Technologies Inc. a year after Mr. Cowan took over because company officials determined EXE Technologies needed to grow, but wasn’t in a position to acquire another firm.

Mr. Cowan also headed a few wholly owned subsidiaries controlled by the British firm Invensys PLC, including Foxboro, Baan and Wonderware Corp.

Gartner Inc. analyst Jeff Woods labeled Mr. Cowan a “renowned software industry turnaround specialist” in a report issued three weeks ago and indicated that Manugistics has a lot at stake.

Mr. Woods said Mr. Cowan’s appointment means Manugistics is mounting a final effort to solve the company’s problems before searching for a buyer.

“I was not brought in to sell this company,” Mr. Cowan said.

Instead, Mr. Cowan said, he will focus on trimming costs and figuring out how to boost sales.

“We will make some necessary changes. You can read from that that we will probably make some cuts, some adjustments. It’s not a trivial task. But if you do it correctly, you’ve got a company that makes money and is positioned for growth,” Mr. Cowan said.

The company’s problems started when software sales began to plummet in 2003, falling 42 percent from $129.7 million in fiscal 2002 to $74.9 million the next year. Software sales were flat in fiscal 2004, which ended in February, compared with the previous year.

“I am very conscious of our declining revenue,” said Manugistics Chairman Gregory Owens, who stepped aside as chief executive to let Mr. Cowan take over day-to-day operations. “But it has been a tough time for software [companies] in general.”

Manugistics has laid off 494 employees since fiscal 2003.

Mr. Cowan will continue to cut costs, said John Moore, vice president and general manager at ARC Advisory Group, an industry analyst firm in Boston.

“He does a good job of going in and cleaning up a company,” Mr. Moore said. “My perspective on Joe is that he’s very operations focused. He’s not a vision guy. But if you want someone to come in and make the cuts that need to be made, he’s the guy.”

Mr. Cowan was introduced to investors Thursday during the company’s annual meeting, where he said he is developing a plan to address the problems at Manugistics.

The company’s leaders put their faith in him on display.

“I felt it was time to bring in a new perspective,” Mr. Owens said. Manugistics “wanted someone who had been through tough times.”

Manugistics’ long decline has left investors anxious.

“I just want to get my money back,” said Rick Schwamb, who owns more than 10,000 shares of the company’s stock.

Shares of Manugistics, which traded as high of $22.75 a share in 2003, closed Friday at $2.31 on the Nasdaq Stock Market.

“I am so disappointed because Manugistics should never have been in this position,” Mr. Schwamb said.

If Mr. Cowan has anything to say about it, the company won’t stay in the doldrums for long.

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