| Mon 7 Mar 2005, 9:16 | | Fifth Quarter Of Consecutive growth |
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Frontrange Limited - Frontrange Solutions Announces Fifth Quarter Of Consecutive
growth
FRONTRANGE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/009928/06)
Share code: FRO ISIN: ZAE000035325
FrontRange Solutions Reports Sequential Increase in Revenues and Profits
Announces 5th Consecutive Quarter of Sequential Revenue and Profit Growth
Q3 FY 2005 License Revenues Increase Over 29% Over Prior Year
Profits Increase 50% Over Prior Year
PLEASANTON, CA (March 7, 2005) FrontRange Solutions, Inc. (`FrontRange
Solutions`), the 100%-held subsidiary of JSE Securities Exchange listed
FrontRange Limited, a global leader in service management, CRM, and voice
application solutions for the small-to-medium-enterprise (SME) and distributed
enterprise markets, reported an increase in revenues and profits for the quarter
ended January 31, 2005. License revenue increased 29% over the prior year, while
total revenue for the quarter increased to $20.7 million, an increase of over
13% from the $18.3 million for the comparable reported three months ended
December 31, 2003. In addition to an increase in revenue, FrontRange Solutions
also reported an operating profit of $2.3 million, an increase of 50% over the
three months ended December 31, 2003.
Michael McCloskey, CEO of FrontRange Solutions said, `The results of the quarter
reflect the progress we have made in reshaping the company into a leading
provider of service management, CRM, and voice applications. During the
quarter, we have grown license revenues by 29%, operating profit by more than
50% and total revenues by 13% over the prior year. Our HEATRegistered and
GoldMineRegistered products continue to attract customers at a rapid clip, and
our product and geographic expansions are providing future opportunities for
growth.`
`I am very pleased with our 29% increase in license revenues over the prior
year. License revenue growth is one of the most important measures of the health
of a software company, and is a strong indication of the value we are delivering
to our customers. Customers continue to be excited about our product roadmap
enhancements, and the number of new products that we will be bringing to market
during the next few quarters. Our commitment to the customer, combined with our
stronger focus on going to market through our channel partners, has bolstered
our ability to maintain and improve license sales,` McCloskey stated.
`Our business model performance continues to be strong, as evidenced by a 50%
increase in operating income and a 65% increase in research and development.
This increase in R&D is helping us to deliver new products and enhancements to
market, as well as provide localized products for international markets,` stated
McCloskey.
He added, `We continue to make progress on our product delivery plans, as
evidenced by our new HEAT 8.3 release, which offers significant new
functionality as well as full integration to our new ITIL modules. This approach
allows our customers to retain the investment they have made, while providing
significant additional functionality based on best practices.`
`We`re also pleased to announce our new platform and ITSM application,`
continued McCloskey. `This new product is based upon the ITIL framework, and is
being well received by our customers. Although only recently released late in
our quarter, we have already won significant contracts from both current and new
customers.`
John Hillyard, CFO of FrontRange Solutions, said, `I`m pleased to see our
business strategy reflected in our financial model. Our channel strategy focus
is resulting in higher overall revenues, increased investment in R&D is fuelling
the growth of our current and new product offerings, and increased Sales &
Marketing efficiency are all contributing to FrontRange`s improved financial
performance.`
Highlights since our last Financial Release:
* FrontRange Solutions Continues Strong License Revenue Growth: License revenue
grew sequentially for the fifth consecutive quarter, representing a 29%
increase over the prior year.
* Customer Momentum Continues: FrontRange Solutions added 358 new customers
during the period, including 237 new GoldMine Corporate Edition customers, 111
new customers for its HEAT product line, as well as 5 new IP Contact Center
customers and 5 new customers for its IT Service Management (ITSM) product.
This includes 202 new customers in North America, 120 in EMEA, and 36 in Asia
Pacific.
* Customer Wins for the Period Include:
* North America - ABB, NRT, Northern Pipeline, Thomason Hospital, Minolta,
Army Medical Command, Medline Industries, FaceTime Communications,
Indianapolis Power & Light, LA County Mental Health, Dye & Durham, El Pollo
Loco, WorldPac, Gander Mountain
* Asia Pacific - Australian Unity, Flight Centre Product Nation, MBF Cards Sdn
Bhd, Indomobil Sukses International, Visy Board Pty Ltd, Leading Edge Group,
SKYCITY Ltd, Computer Systems Advisors, JMT Network Services, Kotak Mahindra
Bank Ltd
* EMEA - Daimler Chrysler, LOT Polish Airlines, Datakraft, AKB Bank
Elektronika, Siberia Avia Oil, Armena Mobile Provider, Telewest, Marlboro
Sterling, Britvic, Business Intelligence Direct Ltd, LPT Ltd, O`Neill &
Brennan, Marketsafe.com/Creditsafe, Urbium, Sasfin Bank, University of Cape
Town, Dawn Wing Couriers, South Africa Endangered Wildlife Trust, Cotlands,
South Africa Department of Housing
* Continued Expansion of International Operations: FrontRange Solutions
continues to make significant investment in its geographic expansion plans,
including its Latin American, Asian and European operations. This includes
substantial new investment in personnel, product localizations and marketing
initiatives. Several new languages were added during the quarter, including
Russian, German, Polish, and Spanish.
* FrontRange Solutions CEO Named to Industry Leadership List: The December issue
of CRM Magazine featured McCloskey in its annual article recognizing `dynamic
leaders.` CRM recognized him as `One to Watch` within the industry`s
`Influential Leader` category, a distinction that `reveals those who, by their
words and actions, have made a significant impact either within their company
or on the industry over the past year,` according to the magazine`s editors.
* Expanded Leadership Team: The addition of Jim O`Gara as Vice President,
Worldwide Business Development for FrontRange Solutions shows the company`s
commitment to strengthening partner and strategic relationships. With over 28
years in sales, channel sales, alliance development and executive management
positions, Jim joins FrontRange Solutions after leading channel and alliance
efforts at Digital Equipment, Informix and AltaVista.
* FrontRange Solutions Partner Expansion Continues: FrontRange Solutions
continued to successfully sign new partners during the quarter, expanding its
market coverage. This includes partners in new market areas as well as new
geographic locations such as Poland and Russia.
* GoldMine Receives CISRegistered magazine`s 2004 Product of the Year Award:
FrontRange
Solutions` GoldMine solution is a recipient of a 2004 Product of the Year
Award presented by Technology Marketing Corporation (TMCRegistered)`s Customer
Inter@ction SolutionsRegistered magazine (www.cismag.com), a preeminent
publication in
the CRM, call center and teleservices industries since 1982.
* FrontRange Solutions Launches New ITIL-Compatible ITSM 5.0: FrontRange
Solutions ITSM modules are designed to improve the performance of IT and
support organizations for new customers as well as offer increased
functionality for HEAT customers. Built on the MicrosoftRegistered .NET
platform, the
solution offers advanced technology capabilities, and is the most integrated
solution adopting IT Infrastructure Library (ITILRegistered) best practice
standards in
the marketplace. Seven ITIL-compatible modules that are launched from a single
common architecture means that all applications work from a single database
and can easily exchange information - simplifying reporting and integration
across all levels of the business. The eight service management modules that
comprise the new ITSM product are:
* Incident Management
* Problem Management
* Change Management
* Release Management
* Availability Management
* Configuration Management
* Service Level Management
* Self Service
* New HEAT 8.3 delivers enhanced support for IT Best Practices and ITIL
Compatibility: HEAT 8.3 allows customers to provide top quality stand-alone
service management and also to integrate easily with modules from the new
FrontRange Solutions ITSM solution at a customer`s pace. The integration
capability of HEAT 8.3, which also is built on the Microsoft .NET platform,
means more than 8,000 customers worldwide already using the FrontRange
Solutions HEAT product line can extend their current functionality by adding
the new ITIL based ITSM modules with no change to their current environments.
Available to current users and new customers immediately, HEAT 8.3 is a low-
risk way to adopt ITIL processes readily and rapidly, resulting in
standardized processes that increase efficiency and lower service desk costs.
FrontRange Solutions
Combined Operating Group P&L`s*
$`s in Thousands
Nov 04 - Jan Oct 03 - Dec Prior Year
05 03 Variance
$ % $ % $ %
License 9,005 43.5% 6,96 38.1% 2,041 29.3%
Revenue 3
Services 1,778 8.6% 2,06 11.3% (288) -13.9%
Revenue 6
Maintenance 9,918 47.9% 9,24 50.6% 678 7.3%
Revenue 1
Total Revenue 20,701 100.0% 18,2 100.0% 2,431 13.3%
70
Product Costs 933 10.4% 1,23 17.8% 305 24.6%
9
Services Costs 1,506 84.7% 1,43 69.3% (74) -5.2%
1
Maintenance 1,791 18.1% 1,63 17.7% (153) -9.3%
Costs 9
Total Cost of 4,230 20.4% 4,30 23.6% 78 1.8%
Sales 9
% Gross Margin 79.6% 76.4
%
Sales 5,745 27.8% 5,27 28.9% (469) -8.9%
6
Marketing 2,014 9.7% 2,62 14.4% 613 23.3%
8
R&D 4,254 20.5% 2,57 14.1% (1,678 -65.1%
6 )
G&A 2,177 10.5% 1,96 10.7% (215) -11.0%
2
Total 14,190 68.5% 12,4 68.1% (1,749 -14.1%
Operating 41 )
Costs
Operating 2,281 11.0% 1,52 8.3% 761 50.0%
Profit 0
* This unaudited income statement has been drawn up to show the operating
performance of FrontRange Solutions. It excludes items such as finance income,
foreign currency gains and losses, amortisation of intangible assets,
exceptional restructuring charges as well as all of FrontRange Limited`s costs.
The income statements for FrontRange Solutions`s last six reporting quarters are
now as follows:
Jul 03 - Sep Oct 03 - Dec Jan 04 - Mar
03 03 04
$ % $ % $ %
License 5,972 35.5% 6,96 38.1% 7,554 39.9%
Revenue 3
Services 2,175 12.9% 2,06 11.3% 1,979 10.5%
Revenue 6
Maintenance 8,672 51.6% 9,24 50.6% 9,382 49.6%
Revenue 1
Total Revenue 16,819 100.0% 18,2 100.0% 18,915 100.0%
70
Product Costs 1,107 18.5% 1,23 17.8% 1,015 13.4%
9
Services Costs 1,444 66.4% 1,43 69.3% 1,451 73.3%
1
Maintenance 1,642 18.9% 1,63 17.7% 1,834 19.5%
Costs 9
Total Cost of 4,193 20.4% 4,30 23.6% 4,300 22.7%
Sales 9
% Gross Margin 75.1% 76.4 77.3%
%
Sales 5,625 33.4% 5,27 28.9% 4,965 26.2%
6
Marketing 3,207 19.1% 2,62 14.4% 3,011 15.9%
8
R&D 2,511 14.9% 2,57 14.1% 2,817 14.9%
6
G&A 2,079 12.4% 1,96 10.7% 2,019 10.7%
2
Total 13,422 79.8% 12,4 68.1% 12,811 67.7%
Operating 41
Costs
Operating (796) -4.7% 1,52 8.3% 1,803 9.5%
Profit 0
Apr 04 - Jun Aug 04 - Oct Nov 04 - Jan
04 04 05
$ % $ % $ %
License 8,457 42.6% 8,68 43.0% 9,005 43.5%
Revenue 0
Services 2,026 10.2% 1,78 8.8% 1,778 8.6%
Revenue 4
Maintenance 9,384 47.2% 9,69 48.1% 9,918 47.9%
Revenue 9
Total Revenue 19,866 100.0% 20,1 100.0% 20,701 100.0%
63
Product Costs 862 10.2% 1,04 12.0% 933 10.4%
3
Services Costs 1,569 77.5% 1,49 83.7% 1,506 84.7%
3
Maintenance 1,772 18.9% 1,85 19.1% 1,791 18.1%
Costs 4
Total Cost of 4,203 21.2% 4,39 21.8% 4,230 20.4%
Sales 0
% Gross Margin 78.8% 78.2 79.6%
%
Sales 6,126 30.8% 5,31 26.4% 5,745 27.8%
8
Marketing 2,016 10.1% 2,64 13.1% 2,014 9.7%
5
R&D 3,422 17.2% 3,43 17.0% 4,254 20.5%
0
G&A 2,041 10.3% 2,23 11.1% 2,177 10.5%
6
Total 13,605 68.5% 13,6 67.6% 14,190 68.5%
Operating 29
Costs
Operating 2,058 10.4% 2,14 10.6% 2,281 11.0%
Profit 4
About FrontRange Solutions
FrontRange Solutions develops award-winning software and solutions used by more
than 130,000 companies and over 1.2 million users worldwide to manage a wide
variety of business relationships and provide exceptional service. FrontRange
product families, designed specifically for small-to-medium-enterprise (SME) and
distributed enterprise organizations include: GoldMineRegistered for business
relationship management, team-based contact management and sales forces
automation solutions; IT Service Management with HEATRegistered and ITIL
standards-based modules for complete service management; and IP Contact Center
for reduced telephony costs and increased agent productivity, streamlined
customer service and communications; and Infrastructure Management, which
provides the ability to optimize the full lifecycle of a company`s assets.
Customers representing 44 percent of the Fortune 100 and 76 percent of the FTSE
100, include Coca-Cola, Shell Oil, Prudential Securities, ElectricitE de France,
Mack Trucks, Campbell Soup, Avaya, Bechtel Corp, Bank of America, and Turner
News Network. For more information, call +1 (800) 776-7889 or visit
www.frontrange.com.
###
GoldMine, HEAT and other FrontRange Solutions products, brands and trademarks
are property of FrontRange Solutions USA Inc. and/or its affiliates in the
United States and/or other countries. Other products, brands and trademarks are
property of their respective owners/companies.
