| Wed 5 May 2004, 13:18 | | Frontrange Solutions Reports |
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Frontrange Solutions Reports Sequential Increase In Revenues And Profits
Release Date: 05/05/2004 12:57:01 Code(s): FRO
FrontRange Solutions Reports Sequential Increase in Revenues and Profits
FrontRange Limited
Registration number: 1997/009928/06
(Incorporated in the Republic of South Africa)
Share Code: FRO
ISIN Code: ZAE000035325
Pleasanton, California (5 May 2004) FrontRange Solutions, Inc. ("FrontRange
Solutions"), the 100%-held subsidiary of JSE Securities Exchange listed
FrontRange Limited, a global leader in service management and CRM solutions for
the Small-to-Mid-Enterprise (SME) and Distributed Enterprise markets, reported
an increase in revenue, operating profit and cash for the third quarter ended 31
March 2004.
Revenue for the quarter was $18,7-million (R127,1-million), an increase over
both the same quarter in the prior year, as well as the previous quarter ended
December 2003. This is the first time in FrontRange Solutions" history that the
company grew revenue between its fiscal second quarter and the seasonally weak
third quarter. Operating income increased by 18,6% over the prior quarter to
$1,8-million (R12,2-million), or 9,6% of revenue. FrontRange Solutions also
generated more than $4-million (R27,1-million) of cash in the quarter, and ended
with more than $20,4-million (R129,6-million) of cash.
Michael McCloskey, CEO of FrontRange Solutions said, "We are pleased with our
performance during our third quarter. Our sequential revenue growth, combined
with continued growth in our license revenues, is a strong indication of
increased customer adoption of our solutions. While the March quarter is
traditionally viewed as being a weak seasonal period, we have accomplished this
growth while achieving the profitability objectives we set in being one of the
premier companies in the industry."
"The results we are beginning to see are a validation of the strategy we started
to implement nine months ago," McCloskey added. "We"re focused on delivering
families of solutions specifically developed for unique market segments within
the SME and Distributed Enterprise market. In addition to products that help
organizations manage a wide range of business opportunities, we"re working to
provide complete Service Management capabilities to IT and Technical Support
Centers within the SME and Distributed Enterprise market."
"In addition to our strong quarterly performance, we are also pleased to
announce the introduction of two new products subsequent to our quarter end.
FrontRange "DiscoverNET", an Infrastructure management product, and IPCC, an IP
based Contact Center solution, provide new differentiated capabilities for both
new and existing customers. DiscoverNET and IPCC represent a significant
expansion of our market opportunity, and a continued extension of our product
portfolio."
Vice President of Products, Kevin J. Smith, noted that, "We"re starting to see
the result of our renewed focus on meeting real customer needs. That focus-and a
conscious effort to work closely with our partners-is accelerating our ability
to deliver improvements to our existing product lines and create new products
that will address customer needs in the future."
Highlights for the recent quarter include:
FrontRange Customer Momentum Continues: FrontRange Solutions added thousands of
small business customers during the third quarter through sales of GoldMine
Business Contact Manager solutions. The company also added over 450 new mid-
market customers, including more than 300 new Goldmine Corporate Edition
customers as well as over 180 new customers for its HEAT product line. This
includes more than 200 new customers in North America, over 180 in EMEA, and
over 75 in Asia Pacific.
Customer wins: New customers for the third quarter include:
North America: ADP, Alliance Advisory and Security, American Bank Note Company,
Blue Cross/Blue Shield of ND, Community Bank, Computer Sciences Corp, Cosco
North America, Ford Motor Company, Foster Farms, Houston Airport, LifePro,
Lockheed Martin, State of New Mexico, US Embassy.
Asia Pacific: ABB Australia, Australian Stock Exchange, Canon NZD Ltd, City of
Whittlesea, Deloitte and Touche Consulting, Department of Education, Monash
University, NCR Australia, Nippon Travel Pte. Ltd, State Transit Authority, and
Unocal.
Europe, Middle East and Africa: Abbey Group Ltd, Banctec GmbH, Barloworld
Motors, BMW Ireland, BMW Military, British Parking Association, CGI Group Ltd,
Coca-Cola HBC Eurasia, Daihatsu Nederland, Euroshell International, First
National Bank, Gap, Global Refund Austria GmbH, LG Electronics South Africa,
Lloyds TSB, Mascom Botswana, Ministry of Health, RMC Readymix, South African
Airways, Stafford College, Suffolk County Council, Swedish Chamber of Commerce,
Thomas Cook Agent Services, University College London, and Yorkshire Water
Services.
Strengthened management team:
John O"Brien appointed Head of Asia Pacific. John brings a wealth of experience
to FrontRange Solutions, including a history of success at Genesys Telecom where
he established and built the Asia Pacific region. John will lead FrontRange"s
Asia Pacific Expansion Strategy, including penetration of Japan, Korea,
Southeast Asia, and China.
Expanded new advanced development office in Pleasanton, CA: In addition to its
Colorado Springs development office, FrontRange has continued to expand hiring
in its development office in Silicon Valley. FrontRange continues to recruit and
attract outstanding talent and thought leadership to its Pleasanton development
facility, a key component to its strategy of delivering leading products
rapidly.
New releases of HEAT and GoldMine products in Q2 help Drive 3rd Quarter Revenue:
Demonstrating commitment to existing product lines, and continuing to develop
products that meet customer needs, FrontRange"s HEAT 8.0 and GoldMine 6.5
releases, with significant additional functionality and usability, were
instrumental in driving the company"s sequential revenue growth.
FrontRange Solutions, Inc.
Unaudited Consolidated Income Statement
For the Three Months Ended 31 March 2004 *
$"000 R"000
Total Revenue $ R 100.0%
18,741 127,139
Gross Profit 14,613 99,135 78.0%
Operating Costs:
Sales & Marketing 7,974 54,096 42.5%
Research & 2,817 19,111 15.0%
Development
General & 2,019 13,697 10.8%
Administrative
Total Operating Costs 12,810 86,903 68.3%
Operating Profit $ R 9.6%
1,803 12,232
* This unaudited income statement has been drawn up to show the operating
performance of FrontRange Solutions, the 100%-held subsidiary of FrontRange
Limited. It excludes items such as finance income, foreign currency gains and
losses, goodwill amortization and exceptional restructuring charges as well as
all of FrontRange Limited"s costs.
About FrontRange Solutions
FrontRange Solutions develops award-winning software and solutions that are used
by more than 130,000 companies and 1.2 million users worldwide to manage a wide
variety of business relationships and provide exceptional service. FrontRange
product families include GoldMine, for business relationship management, team-
based contact management and sales forces automation solutions; and HEAT, for
complete service management including Help Desk, Knowledge Management, Asset
Management and Service Level Management. FrontRange products are designed
specifically for small- to mid-sized enterprises and distributed enterprise
organizations. Customers representing 44% of the Fortune 100 and 76% of the FTSE
100, include Coca-Cola, Shell Oil, Prudential Securities, ElectricitE de France,
Mack Trucks, Blue Cross, Campbell Soup, Avaya, Bertelsmann Services, Bechtel
Corp, Bank of America, BMW and Turner News Network.
