ANGOSS REPORTS THIRD QUARTER RESULTS

FUNDGUARD™ EXPANSION WITH NEW CLIENT SUBSCRIPTIONS HIGHLIGHTED

TORONTO, Oct 5 /CNW/ - Angoss Software Corporation (Angoss) (TSX-V: ANC) today announced unaudited results for the third quarter and nine months ending August 31, 2010.

Third quarter billed revenues were $1,986,386, up 6.3% from 2009 third quarter revenues of $1,869,936.  Year to date billed revenues were $5,977,517, up 2.9% from 2009 revenues of $5,810,684.

Third quarter earned revenues were $2,012,993, off 2.7% from 2009 results of $2,067,775.  For the nine months ended August 31, 2010 earned revenues were $6,094,104 down 3.8% from 2009 results of $6,333,291.

The Company's "on demand" analytics solutions business segment was up 64% in the third quarter and is up 55% year to date, compared with 2009 results.  Growth has been led primarily by FundGUARD™ new client deployments and subscription renewals.

The Company's analytics software business segment is flat year over year, with 18% growth in Europe offset by a 10% decline in North America.  Although the Company expanded existing deployments and added new clients in the third quarter, sales cycles remain lengthy, and continue to be impacted by analytics department consolidations, budget restrictions and more complex approval processes.  These trends are expected to continue into 2011.

The Company's Intellimaxx marketing solutions business segment was up 20% in the third quarter compared with 2009 Q3 results, but year to date remains 10% below 2009 results.  Growth this year has been driven primarily by existing customers.  The Company has repositioned the Intellimaxx offering for new prospects, developing a more complete suite of consumer data insights, advanced predictive analytics and digital marketing capabilities for their web, email, mobile and social media needs.  Initial customer and prospect feedback has been positive; however, significant additional sales effort will be required to build the opportunity pipeline for Intellimaxx into 2011.

"Continued expansion of our fund industry client base, underpinned by our analytics-as-a-service solution platform, is encouraging" commented Angoss President Eric Apps.  "We believe this solution is a solid beachhead to move into other industries with large sales organizations trying to bring improved analytics and sales effectiveness to their teams.  However, we also need to address our own initial sales resource challenges. With an small sales team currently divided across three distinct business segments, we are looking at options to expand our direct field sales team in the US, enhance our sales reach through partnerships, and create an enhanced and more scalable sales structure for growth.  Moving into 2011 we will need to increase our sales resources focused in all these areas.  Securing additional financing to support this expansion remains a key element of this process."

Third quarter operating expenses were $1,963,499, up 9.6% from prior year operating expenses of $1,791,395.  In year to date results operating expenses of $5,830,115 were up 3.9% from 2009 operating expenses of $5,610,688.  Higher operating expenses primarily reflect higher research and development costs associated with the scheduled fourth quarter release of the Company's KnowledgeSTUDIO® 7.5 product suite, which includes among other features, in database mining support for Teradata Versions 12 and 13, and continuing development of the Company's Intellimaxx product release, Version 6, scheduled for the first half of 2011.

Third quarter operating income of $49,494 was down from prior year Q3 operating income of $276,380 primarily as a result of lower earned revenues (down $55,000 this year over last) and higher operating expenses ($172,000).  Year to date operating income was $263,989 down from prior year operating income of $722,623 as a result of lower earned revenues (down $239,000 YTD 2010 over 2009) and higher operating expenses ($219,000).

The third quarter net loss was $115,746 compared to prior year net income of $139,330.  The change in year over year third quarter results was driven primarily by reduced operating income ($227,000) combined with higher non-cash amortization costs off-set by lower interest costs and increased foreign exchange gains.  The year to date 2010 net loss was $399,615, compared with prior year net income of $2,786.  The change in the year to date net loss was driven primarily by reduced operating income ($459,000) combined with higher non-cash amortization costs and interest expense off-set by foreign exchange gains and reduced stock-based compensation expenses.  Higher amortization and interest expenses are primarily associated with the Company's Intellimaxx acquisition. 

Third Quarter Highlights
Notable third quarter highlights included the following:

Sales Solutions - Angoss Adds Two Major US Mutual Fund Distributors to FundGUARD Roster.  During the third quarter Angoss continued to expand the scope of its implementations with existing FundGUARD™ clients, signing multi-year subscription agreements with two new major US mutual fund companies, with combined assets under management exceeding $400 billion, bringing the total of funds under management being mined by Angoss to in excess of $1 Trillion.  These solutions are being deployed in coming quarters as fully integrated end to end predictive analytics systems for clients on their CRM systems.  The Company is currently supporting FundGUARD deployments primarily on these clients' Salesforce.com and Oracle Siebel CRM platforms.

Risk Solutions - Continued Customer Expansion In Financial and Other Sectors.  Angoss continued to expand its relationship with existing and new financial services and ICT industry clients, adding new customers and expanding existing relationships through software licensing and training and knowledge transfer transactions.  Third quarter opportunities closed included JP Morgan Chase, Accretive Health, M&T Bank, Wells Fargo, National Australia Bank, Bank of America, Amgen, Dun & Bradstreet, Emirates NBD, Owens-Illinois, Taco Bell and Mutual of Omaha.

Marketing Solutions - IntelliMaxx™.  During the third quarter Angoss integrated marketing solutions business unit Sapien Information Services was selected under a competitive bidding process as an approved solution provider to meet the integrated marketing requirements of one of Canada's leading distributors and retailers of consumer beverages.  The Company also finalized an agreement in principle to provide a joint offering with Toronto, Canada based The Futura Loyalty Group (TSX-V:FUT), a loyalty and rewards solution provider targeting the Canadian retailing market.  Under this structure, Angoss and Futura will jointly offer a fully integrated, turn-key loyalty / rewards and integrated marketing and customer insights solution for retailers.  See separate news release.

Financing Update.  In its second quarter results release, the Company announced its intention to explore financing alternatives to support investments in additional sales and solution delivery personnel to accelerate business growth, primarily focused on North American and European markets.  The Company believes it has compelling product offerings in all three areas of its business, and that additional growth can be achieved in fiscal 2011 despite the continued challenges of the business environment.  However, the Company's growth plan requires additional capital to be allocated to expand the Company's sales organization and its client delivery teams across these three business segments.  The Company is currently reviewing financing alternatives to address these funding requirements.  There can be no assurance any financing will be available on acceptable terms or at all.  In such circumstances the Company may need to incur operating losses, reduce the scope of its planned headcount expansion by focusing on fewer business opportunities, and / or secure other methods of financing for its business expansion plans.

ANGOSS Software Corporation
Income Statement Information
(unaudited, stated in Canadian dollars)
For the period ended	Three months ended			Nine months ending
	August 31,	August 31,		August 31,	August 31,
	2010	2009		2010	2009
Revenues	$2,012,993	$2,067,775		$6,094,104	$6,333,291
Operating Expenses
General and administration	417,142	378,972		1,282,246	1,196,916
Sales and marketing	1,162,939	1,061,210		3,331,272	3,401,826
Research and development, net	383,418	351,213		1,216,597	1,011,926
	1,963,499	1,791,395		5,830,115	5,610,668
Income before the following	49,494	276,380		263,989	722,623
Amortization of capital assets	(148,595)	(90,374)		(457,211)	(311,797)
Amortization of intangible assets	(36,252)	(36,252)		(108,756)	(96,672)
Interest expense	(23,155)	(36,538)		(175,270)	(112,309)
Foreign exchange gain (loss)	52,052	35,119		85,998	(163,718)
Stock based compensation	(9,290)	(9,005)		(8,365)	(35,341)
Net (loss) income and comprehensive (loss) income for the period	$(115,746)	$139,330		$(399,615)	$2,786
Basic and diluted (loss) earnings per share	$(0.02)	$0.02		$(0.06)	$0.00
Weighted average number of shares outstanding
Basic	7,256,612	7,256,612		7,256,612	7,256,612
Diluted	7,256,612	7,315,231		7,256,612	7,296,529

Selected Cash Flow Information
(unaudited, stated in Canadian dollars)
For the period ended	Three months ended			Nine months ending
	August 31,	August 31,		August 31,	August 31,
	2010	2009		2010	2009
Cash provided by operating activities	$(4,660)	$(3,711)		$799,429	$133,455
Cash used in investing activities	(86,433)	(217,929)		(111,743)	(2,402,663)
Cash provided (used) by financing activities	(69,401)	179,929		(319,835)	1,874,028
Effect of foreign exchange rate fluctuations on cash and cash equivalents	10,779	1,800		(6,120)	(100,134)
Net increase (decrease) in cash during the period	(149,715)	(39,911)		361,731	(495,314)
Selected Balance Sheet Information	August 31,	November 30,
(unaudited, stated in Canadian dollars)	2010	2009
Cash and cash equivalents	$ 1,885,394	$ 1,523,663
Restricted investments	359,000	391,000
Accounts receivable	1,154,005	1,860,796
Prepaid expenses and other assets	359,129	425,179
Total current assets	3,757,528	4,200,638
Acquired Software, net	733,003	898,000
Capital assets, net	797,967	978,438
Intangible assets, net	648,244	757,000
Total assets	$ 5,936,742	$ 6,834,076
Accounts payable and accrued liabilities	$    719,692	$    719,642
Current portion of deferred revenue	3,529,090	3,627,590
Current portion of capital leases	165,415	166,228
Current portion of term debt	214,286	214,286
Current portion of long-term debt	120,666	113,148
Other	41,819	38,071
Total current liabilities	4,790,968	4,878,965
Long-term debt	1,888,000	1,980,379
Deferred revenue	72,295	128,963
Capital leases	92,012	165,459
Term debt	107,143	267,857
Lease inducement	22,003	56,882
Total liabilities	6,972,421	7,478,505
Total shareholders' equity	(1,035,679)	(644,429)
Liabilities and shareholders' equity	$ 5,936,742	$ 6,834,076

About Angoss Software Corporation

Headquartered in Toronto, Canada, with operations in the U.S., and U.K, Angoss helps clients grow revenues and reduce risk using powerful predictive analytics and data mining software that unlock actionable knowledge from customer data. Angoss increases the intelligence of marketing, sales, and risk activities for some of the world's largest financial services, telecom and technology companies including HSBC, Citigroup, JP Morgan Chase, GE Money, Vodaphone, T- Mobile, and in Canada, RBC, Bell Canada, Rogers Communications, and CT Financial. Angoss helps these and other companies discover patterns amongst customer activity, predict the impact of their marketing, sales and risk strategies, and act on this insight with actionable, predictive rules that generate improved business performance. Angoss is listed on the Toronto Venture Exchange under the symbol "ANC" and has been operating since 1984. For more information regarding Angoss Software Corporation, visit www.angoss.com.

This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including: the risk that the sale of our products and services involves a long sales cycle; the risk that the economic environment and business conditions will remain difficult to predict; the risk of competition in our target markets; the risk that we may not respond adequately to evolving technologies; the risk that we or our customers may have difficulties in introducing our products or services; the risk that we will encounter difficulties in continuing to offer services; the risk that we will encounter difficulties in integrating the operations of acquired companies with our own; the risks of conducting our operations in a variety of international locations; the risk that we may need to record future write-downs of assets arising from our investments in other companies; the risks relating to the costs that we may incur as a result of litigation against us; and other risks described in our filings with securities regulatory authorities, including our annual reports, interim financial statements and similar disclosure documents. Angoss Software Corporation does not undertake any obligation to update this forward-looking information after the date of its initial publication, except as required under applicable law. Sapien Information Services Corporation is not affiliated with Sapien Canada Inc. of Toronto, Ontario or Sapient Corporation of Boston, Massachusetts.

Note: Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

Contact:

Lon Vining
Chief Financial Officer
416-593-2420
[email protected]