The Reynolds and Reynolds Company on April 25 reported revenues of $241.3 million for the quarter ended March 31, 2001, an increase of 9 percent over the prior year.

Net income for the quarter of $23.8 million or 32 cents per share was in line with consensus estimates.

During the quarter, the company recorded a 3-cent charge associated with a work stoppage on a software development contract, and a 2-cent gain related to discontinued operations. Without these two items, earnings per share from continuing operations were 33 cents, 14 percent above the prior year.

"We achieved a strong performance in an uncertain economic environment," said Lloyd "Buzz" Waterhouse, president and CEO of Reynolds and Reynolds. "We expect the weaker market conditions to continue, negatively impacting consulting revenues and new systems sales. We are keeping our cost structure in line with our revenues. We continue to increase our market share lead with our ERA3 system -- the most widely used retail management system in North America. We are on schedule with the integration of our customer relationship management solutions with the ERA3 system. We continue to aggressively strengthen our broad suite of solutions as well."

Highlights of the quarter include:

* Strong operating margins in Retail Management Solutions driven by high recurring service revenues.

* Improved operating margins in Documents driven by manufacturing consolidation and other cost improvements.

* Continued growth in Automark, the company's Web services arm, which was selected by Sonic Automotive Inc. and Asbury Group as their Web site developer for over 200 dealership locations.

* The launch of ReySource(TM), an Internet solution that provides a unique procurement option to automotive retailers to help manage their purchase of business forms, office supplies and other products and services in their dealership.

* The selection by BMW Canada Inc. as its exclusive provider of retail management systems and related products and services for all their dealers.

* Continued recognition for high achievement in customer support as evidenced by Reynolds' Technical Assistance Center (TAC) winning the Help Desk Institute's 2001 Team Excellence Award -- the gold medal of the customer support profession.

"While we don't expect to achieve double-digit sales growth goals in this business environment, we are encouraged by our performance through the first six months and we remain confident in our ability to meet consensus earnings estimates for the fiscal year," Waterhouse said.

For the 2001 fiscal year the company currently expects:

* Earnings per share to be in line with the consensus estimate of $1.31, compared to $1.19 from continuing operations in fiscal year 2000 (excluding restructuring charges).

* Return on equity to approach 20 percent.

* Capital expenditures and capitalized software to total approximately $70 million.

* Depreciation and amortization expense is expected to total approximately $50 million.

* R&D expenses to be approximately $75 million.

* Dividends to remain at the rate of 11 cents per common share per quarter.

About Reynolds and Reynolds

Reynolds and Reynolds, headquartered in Dayton, Ohio, is a provider of integrated information management solutions to the automotive retailing marketplace.

The company's services include retail and enterprise management systems, networking and support, e-business applications, Web services, learning and consulting services, customer relationship management solutions, document management and leasing services.

To find out more about the company, its vision, products and services, visit