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Frontrange Limited - Quarter 1 Of The 2006 Financial Year Results
FRONTRANGE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/009928/06)
Share code: FRO ISIN: ZAE000035325
(`FrontRange`)
Q1 FY 2006 results - FrontRange Solutions Announces Seventh Consecutive Quarter
of Revenue Growth
DUBLIN, CA (August 25, 2005) FrontRange Solutions, Inc. (`FrontRange
Solutions`), the 100%-held subsidiary of JSE-listed FrontRange Limited, a global
leader in service management, CRM, and voice application solutions for the
growing small and medium enterprise (`SME`) and distributed enterprise markets,
reported an increase in revenues and profits for the quarter ended July 31,
2005. Total revenue for the quarter increased to $21.9 million, an increase of
10% from the $19.9 million for the three months ended June 30, 2004. In
addition to the increase in revenue, FrontRange Solutions reported an operating
profit of $2.4 million, an increase of 15% over the three months ended June 30,
2004.
The quarterly comparison periods differ by a month due to FrontRange changing
its year end, and are impacted by this reported quarter including the seasonally
weak month of July whereas the comparative period quarter ended in June.
`Our fiscal Q1 results are an excellent continuation of our strong financial
performance, especially considering that this past quarter is traditionally our
weakest quarter. FrontRange Solutions has now produced seven straight quarters
of revenue and profitability growth. We are committed to building a company
that delivers steady and sustained growth,` said FrontRange CEO Michael
McCloskey. `Particularly encouraging was the 15 % profit growth while making
significant investments in our global services delivery and implementation
capability as well as maintaining a healthy R&D spend rate at over 16% of
revenue.`
`Notwithstanding the difficult market conditions we have seen solid momentum
with our new product offerings,` McCloskey continued. `Since the release of our
new ITSM product in January 2005, we have signed 74 customers to date.
Additionally, our new IP-based contact center product has shown positive
traction with 45 customer signings since inception. Our investment in global
services delivery and implementation capability will allow us to deliver world-
class, best-of-breed enterprise services to our clients.`
FrontRange Solutions continues to release significant updates to its
GoldMineRegistered, HEATRegistered and FrontRange Contact Center products.
Additionally, its major new product, IT Service Management (`ITSM`), was
released at the end of January 2005.
`Our customers have embraced the improvements we`ve made to HEAT and GoldMine,
as well as new products like IP Contact Center and IT Service Management that
complement HEAT and GoldMine,` said Kevin J. Smith, FrontRange Solutions vice
president of product. `The combined product offerings were designed in response
to the needs of our customers and partners. As a result, these solutions enable
our customers to proactively address critical initiatives including corporate
governance, IT best practices, ITIL and Sarbanes Oxley. Beyond the strong
enabled solutions for the US.`
Highlights in the quarter:
* FrontRange adds new customers: FrontRange Solutions added 329 new customers
during the period, including 221 new GoldMine Corporate Edition customers, 66
broader market share, we are now the leading provider of distributed ITIL- new
customers for its HEAT product line, as well as 11 new IP Contact Center
customers and 31 new customers for its ITSM product. This includes 199 new
customers in North America, 86 in EMEA, and 44 in Asia Pacific.
* Customer wins for the period include: North America - Miami-Dade County Public
Schools, NCCI, Bronson Hospital, Winston & Strawn, LLP, Morgan, Lewis & Bockius,
LLP, Carlyle Group, Software House International, Resolve Corporation, US
DOT/RITA/Volpe Center, Adventist HealthCare, Nichols Aluminum, State of North
Dakota, Gallup Organization, Salt Lake Community College, Calgary Regional
Health Authority, Apache Corporation, Fremont Investment & Loan, MedQuist, Inc.,
Panduit Wiring & Communications, Forrest General Hospital, L & S Associates,
Inc.; Asia Pacific - Industrial and Commercial Bank, Neusoft Park Industrial
Development Co., Ltd., SurfControl; South Africa - Brandhouse Beverages, Manguan
Local Municipality, National Treasury, Department of Land Affairs, Metrorail
Witwatersrand, Enterprise Connection, Africon, E.E. Publishers; Europe -
ItalCementi, Northern Constabulary.
* Market share: FrontRange Solutions held significant market share in 2004 in IT
Service Desk solutions for Enterprise Management markets. Based on new license
revenue, FrontRange is identified as a Global market leader in the `IT Service
Desk for Enterprise Management` market according to a Gartner, Inc. report
entitled `Market Share: Enterprise Management, Worldwide, 2004.`
* FrontRange Solutions Launches New IP Contact Center 5.0: FrontRange IP Contact
Center 5.0 (IPCC) is the newest addition to the Communication Management
solution family. The new version of FrontRange`s Voice Over Internet Protocol-
based (VoIP) software suite features Quality Management and integration with
other FrontRange product families, including the company`s award-winning HEAT,
GoldMine Corporate Edition, and the new ITSM modules.
FrontRange Solutions
Unaudited Combined Operating Group Income Statement *
$`s in Thousands
May 05 - July Apr 04 - Prior Year
05 June 04 Variance
$ % $ % $ %
License 8,851 40.5% 8,45 42.6% 394 4.7%
Revenue 7
Services 2,225 10.2% 2,02 10.2% 199 9.8%
Revenue 6
Maintenance 10,801 49.4% 9,38 47.2% 1,417 15.1%
Revenue 4
Total Revenue 21,877 100.0% 19,8 100.0% 2,011 10.1%
66
Product Costs 880 9.9% 862 10.2% (18) -2.1%
Services Costs 2,383 107.1% 1,56 77.5% (814) -51.9%
9
Maintenance 1,523 14.1% 1,77 18.9% 249 14.1%
Costs 2
Total Cost of 4,786 21.9% 4,20 21.2% (583) -13.9%
Sales 3
% Gross Margin 78.1% 78.8
%
Sales 6,361 29.1% 6,12 30.8% (235) -3.8%
6
Marketing 2,651 12.1% 2,01 10.1% (635) -31.5%
6
R&D 3,525 16.1% 3,42 17.2% (103) -3.0%
2
G&A 2,195 10.0% 2,04 10.3% (154) -7.5%
1
Total 14,732 67.3% 13,6 68.5% (1,127 -8.3%
Operating 05 )
Costs
Operating 2,360 10.8% 2,05 10.4% 301 14.6%
Profit 8
* Note - the above 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, share option expense,
amortisation of intangible assets, exceptional items and FrontRange Limited`s
costs.
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 force
automation solutions; IT Service Management (ITSM) with HEATRegistered and ITIL
standards-based modules for complete service management; Communication
Management including IP Contact Center (IPCC) 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 (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.
Date: 25/08/2005 09:07:55 AM
Produced by the JSE SENS Department
