FrontRange Solutions, Inc, 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 31 July 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 30 June 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 30 June 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. Additionally, our new IP-based contact centre 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 GoldMine, HEAT and FrontRange Contact Centre 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 Centre 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 broader market share, we are now the leading provider of distributed ITIL-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 new customers for its HEAT product line, as well as 11 new IP Contact Centre 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 Centre, 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, Mangaung Local Municipality, National Treasury, Department of Land Affairs, Metrorail Witwatersrand, Enterprise Connection, Africon, EE 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 licence revenue, FrontRange is identified as a global market leader in the IT service desk for enterprise management market according to a Gartner report entitled "Market Share: Enterprise Management, Worldwide, 2004".
* FrontRange Solutions launches new IP Contact Centre 5.0: FrontRange IP Contact Centre 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.
Unaudited combined operating group income statement (* Dollars in thousands)
Table
* 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.
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