FrontRange Solutions, Inc, the 100%-held subsidiary of JSE-listed FrontRange Limited, reported its fifth consecutive quarter of growth in revenue and profits for the three months to end January. Licence revenue increased 29% over the prior year, while total revenue for the quarter rose to $20.7 million, an increase of over 13% from the $18.3 million for the comparable three months to end December 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 to end December 2003.
FrontRange chief executive Michael McCloskey says the results reflect the progress made in reshaping the company into a leading provider of service management, CRM and voice applications for the small to medium enterprise (SME) and distributed enterprise markets.
"During the quarter we grew licence revenue by 29%, operating profit by more than 50% and total revenues by 13% over the prior year. Our HEAT and GoldMine products continue to attract customers at a rapid clip, and our product and geographic expansions are providing opportunities for growth," he says.
"I am very pleased with our 29% increase in licence revenue over the prior year. Licence 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 licence sales."
McCloskey says FrontRange`s 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 the company deliver new products and enhancements to market, as well as provide localised products for international markets.
"We continue to make progress on our product delivery plans, as evidenced by our 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 IT Service Management (ITSM) application. This new product is based upon the IT Infrastructure Library (ITIL) framework, and is being well received by our customers. Although only recently released late in our January quarter, we have already won significant contracts from current and new customers."
Further highlights of the January quarter:
* 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 five new IP Contact Centre customers and five 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 included: * 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 and 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 and Kotak Mahindra Bank.
* 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 African Endangered Wildlife Trust, Cotlands and Department of Housing (South Africa).
* Continued expansion of international operations: FrontRange Solutions continues to make significant investment in geographic expansion, including its Latin American, Asian and European operations. This includes substantial investment in personnel, product localisations 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 recognising "dynamic leaders". CRM recognised 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, O`Gara 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 CIS magazine 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`s Customer Inter@ction Solutions magazine, a pre-eminent publication in the CRM, call centre and teleservices industries since 1982.
* FrontRange Solutions launches ITIL-Compatible ITSM 5.0: FrontRange Solutions ITSM modules are designed to improve the performance of IT and support organisations for new customers as well as offer increased functionality for HEAT customers. Built on the Microsoft .NET platform, the solution offers advanced technology capabilities, and is the most integrated solution adopting ITIL best practice standards in the market. Seven ITIL-compatible modules 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 a business.
* HEAT 8.3 delivers enhanced support for IT best practices and ITIL compatibility: HEAT 8.3 allows customers to provide top quality standalone 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 standardised processes that increase efficiency and lower service desk costs.
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