Seagull Software Announces Year-to-Date and Q3
Results for Financial Year 2006
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Revenue Up 16% Over 2005
ALL FINANCIAL DATA INCLUDED IN THIS PRESS RELEASE IS PRESENTED IN US DOLLARS AND IS NOT AUDITED
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DORDRECHT, THE NETHERLANDS and ATLANTA – 17 February 2006
Seagull Software (AEX: SEAGULL), a leading provider of software products for connecting legacy applications to Internet architectures, today announced that revenue for the nine-month period ended 31 January 2006 was $20.3 million, an increase of 16% as compared to $17.5 million for the corresponding period in the previous financial year. On a pro forma basis net income for the nine-month period ended 31 January 2006 was $310K, as compared with a loss of $2.8 million for the corresponding period last year. On a pro forma basis earnings per share were $0.03, as compared to a loss of $0.34 per share for the corresponding period last year. Cash increased from $5.2 million at the end of Q2 FY06 to $6.1 million at the end of Q3 FY06.
“To provide a consistent basis for comparison against performance for the same period last year, we are also providing pro forma results that exclude $182K in deferred stock compensation costs resulting from compliance with IAS, and $563K in intangible asset amortization costs associated with the acquisition of SofTouch in April 2005 and Oak Grove in July 2005,” commented Mory Motabar, Seagull Software Chief Financial Officer.
On an International Accounting Standards (IAS) basis, the Company reported a net loss of $435K for the nine-month period ended 31 January 2006; including deferred stock compensation costs and amortization of intangible assets.
“Seagull Software has achieved continued revenue growth on both a year-over-year and quarterly basis,” said Don Addington, Seagull Software CEO and President. “We’ve added 117 new customers to the installed base this year, not counting the customers who joined as a result of our acquisitions. We’re pleased to report that license revenue has increased 20 percent year-over-year, which drives ongoing consulting and maintenance revenues.”
Gross margin for the nine-month period increased from $13.3 million or 76% of total revenues to $16.4 million or 81% of total revenues.
For the nine-month period, total operating expense was $17.2 million as compared with $16.1 million in the corresponding period of the previous financial year, with most of the additional cost resulting from headcount increases associated with the SofTouch and Oak Grove acquisitions.
Quarterly Results
For the quarter ended 31 January 2006, the Company achieved revenue of $6.8 million, an increase of 8% as compared to revenue of $6.3 million for the corresponding quarter in the previous financial year (Q3 FY05). On a pro forma basis net loss for the quarter was $263K, as compared to Q3 FY05 net income of $46K. On an IAS basis net loss for the quarter was $536K, as compared to Q3 FY05 net income of $30K.
Gross margin for Q3 FY06 was $5.3 million or 79% of total revenues, as compared with gross margin of $4.9 million or 78% of total revenues for the corresponding quarter in the previous year.
Total operating expenses related to sales & marketing, research & development and administrative functions were $5.9 million, as compared with $4.9 million reported for the same period in the previous financial year. Sales & marketing expenses increased from $2.9 million to $3.4 million, reflecting headcount increases and investment in the development of a new corporate Web site. Research & development costs increased from $1 million to $1.4 million due primarily to amortization of intellectual property and additional operating costs associated with the SofTouch and Oak Grove acquisitions.
Q3 Business Highlights
During Q3 FY06, 31 new customers joined the Seagull Software installed base. The Company closed new and follow-on transactions with customers such as Sandia National Laboratories, LiquidLogic, Legal and General Group PLC, SMABTP, Kabel Baden and Regiopolitie.
Other highlights include:
The Technology Association of Georgia (TAG) announced Seagull Software as one of the Top 40 Innovative Technology Companies in Georgia for 2006. The Top 40 candidates are outstanding examples of the breadth of exciting technologies that are being developed and commercialized in Georgia. The Innovators were chosen based on degree of innovation; scope and financial impact of innovation; likelihood of success; and promotion of Georgia's innovative efforts nationally and internationally.
LegaSuite Integration Engine Earns IBM ServerProven Status. In January we announced that LegaSuite® Integration Engine has achieved IBM ServerProven validation, joining previously–validated products BlueZone™ terminal emulator and J Walk® and WinJa® (now known as LegaSuite GUI). LegaSuite Integration Engine runs on IBM eServer zSeries, xSeries and iSeries systems. The IBM ServerProven status requires verification from our customers that LegaSuite Integration Engine is in production use on IBM platforms. Our customers use LegaSuite Integration Engine on all three IBM eServer platforms to transform legacy applications into Web services for SOA.
LegaSuite for CICS™ Announced. In December, the industry's most flexible and comprehensive solution for transforming CICS applications into SOA assets was announced. Among its many unique features, LegaSuite for CICS supports multiple run-time architectures from one development effort and offers integrated Business Process Management (BPM) workflow capabilities. Customers can implement LegaSuite with no changes to their CICS applications, and with little or no coding.
CEO Named to Technology Association of Georgia Board. Don Addington, President and CEO was appointed to Technology Association of Georgia's (TAG) board of directors in November. As a board member, Mr. Addington will participate in a statewide initiative to expanding the size, achievements and influence of Georgia's technology sector. TAG’s 2100-plus members act as a primary catalyst in fostering a rich environment for economic development within Georgia's technology community. Participation also puts the Seagull Software brand in front of the State’s most prominent CIO’s, who are potential purchasers of the Company’s technology.
Seagull Software Joins Consortium Responding to EU Commission Tender. In November, Seagull Software submitted a research project to the EU Commission. Using procedural models, methods and tools, the project entitled Stepwise Migration of Legacy Systems to Service Oriented Systems --"SAMSON"-- aims to assist the conversion of rigid corporate IT systems to flexible service-oriented architectures (SOA) that are easily tailored to changing business procedures. The consortium includes such companies as HP, Intesi, and Q-Sphere as well as the Universities of Vienna and Stuttgart and research institutes in Slovenia and Lithuania.
Partner Agreement with Kapow Technologies. Kapow Technologies, a leader in Web integration, announced in November that the companies have entered into a partnering agreement under which Seagull Software will market and sell the Kapow Web Integration platform in conjunction with its LegaSuite® platform. With the addition of the Kapow Web Integration Pla