New Deals; Sales Growth Offset By Foreign Exchange Volatility Highlight
Angoss Second Quarter Results
TORONTO, July 20 /CNW/ - Angoss Software Corporation (Angoss) (TSX-V: ANC) today announced unaudited results for the second quarter and six months ended May 31, 2010.
In year to date results, earned revenues were $4,081,111 down 4% from prior year revenues of $4,265,516. Second quarter earned revenues were $2,067,845, off 8% from Q2, 2009 revenues of $2,244,549.
Second quarter highlights included:
- Expanded risk analytics software deployments at leading financial
services customers, including Bank of America, SunTrust, Wells Fargo
and eBay PayPal;
- Signing a multi-year subscription agreement for FundGUARD(TM) with a
major new US fund distribution client, further expanding the
Company's leadership position in the mutual fund and wealth
management marketing and sales analytics space;
- The successful completion of a proof of concept for the Company's
ClaimGUARD(TM) fraud detection system with a leading Blue Cross Blue
Shields benefits provider;
- The continued development of Intellimaxx Version 6, the Company's
integrated marketing solutions platform, planned for release in 1H
2011.
For the six months, billed revenues of $3,992,499 were up marginally from prior year billed revenues of $3,943,568. Billed revenues of $2,019,611 in Q2 were off 13% from prior year second quarter billed revenues of $2,312,326. In Q2 2010, new business in selected accounts was offset by slower initial software sales in Europe and continued long sales cycles for the Company's solution sales.
Significant volatility in foreign exchange markets continued to affect results. In Q2, $US and (pnds stlg)UK foreign exchange rates were down 15% and 14% respectively over 2009 (year-to-date down 15% and 11% respectively). Against this backdrop, foreign currency denominated sales in Q2 2010 represented 67% (2009 - 58%) of billed revenues (year-to-date 71% of billed revenues (2009 - 60%)). In Q2, $US denominated billings were up 13% over 2009 (year-to-date increase 26% over 2009). Similarly, year to date (pnds stlg)UK denominated billings were up 72% over 2009.
While the Company has mitigated foreign exchange cash impacts through effective hedging programs, foreign exchange volatility is expected to continue to impact on top line revenue and revenue growth rates. Please refer to the Company's financial statements and management discussion and analysis of operating results to understand how foreign exchange impacts on the Company's business and the programs the Company has implemented to address foreign exchange risks.
"While we achieved some notable wins in Q2, we need to continue to improve sales execution and expand our sales team to generate pipeline growth and close business in a tough business environment," commented Angoss President Eric Apps. "We are actively recruiting additional sales hires in the US and UK markets and expanding our sales organization is a key part of our financing plans."
Operating expenses were $1,972,760, up marginally from prior year expenses of $1,898,644 resulting in operating income of $95,085 versus prior year operating income of $345,905. Six month operating expenses were up marginally, resulting in operating income of $214,495 compared to $446,243 in 2009.
The Company reported a Q2 net loss of $146,175 ($0.02 per share) versus a prior year net loss of $119,435 ($0.02 per share). Year to date, the net loss was $283,689 ($0.04 per share) compared to $136,544 ($0.02 per share) in 2009. The net loss in 2010 resulted primarily from lower operating profits and higher interest costs offset, in part, by improved foreign exchange results.
Second Quarter Highlights
Marketing Solutions
Angoss offers integrated marketing solutions through its Sapien Information Services subsidiary under the IntelliMaxx(TM) brand. IntelliMaxx combines "on demand" data management, predictive analytics, market planning and campaign execution capabilities. IntelliMaxx helps Angoss customers analyze and optimize the performance and effectiveness of their marketing initiatives, delivering demonstrable improvements in targeting accuracy, campaign response, and marketing ROI. During the second quarter the Company continued development on Version 6 of Intellimaxx planned for release in 1H 2011, engaged in a number of market awareness initiatives with the Retail Council of Canada and Canadian Marketing Association, and explored partnering opportunities with complementary marketing solution providers, while continuing to expand its services offerings for existing clients. The Company's opportunity pipeline for Intellimaxx is expanding, and the Company is actively engaged in recruiting efforts to secure additional senior sales and business development talent as well as pursuing complementary partnerships to accelerate new customer acquisitions and activations.
Sales Solutions
Angoss sales solutions combine "on demand" data management, predictive analytics, lead scoring and opportunity targeting capabilities to help our customers analyze and optimize the performance and effectiveness of their sales organizations. Angoss FundGUARD(TM) designed for the mutual fund and wealth management industry delivers demonstrable improvements in sales lead assignments and opportunity targeting, helping our customers grow revenues per rep and increase sales close rates, while better understanding the drivers of sales success. Angoss KnowledgeSEEKER(R) for Salesforce.com provides these enhanced analytics capabilities for sales organizations standardizing on Salesforce.com as their CRM platform.
During the second quarter the Company signed an additional major customer to its FundGUARD offering, with a multi-year subscription agreement, and bringing the total assets under management of mutual fund industry clients deploying FundGUARD(TM) well into the hundreds of billions of dollars. The Company expects to take this solution to adjacent market segments including the institutional, wealth management, and insurance marketplaces moving forward.
Risk Solutions
Angoss predictive analytics systems for decision managers, risk managers and fraud detection teams combine data management, predictive analytics, batch and real time scoring, scorecard development, and strategy optimization capabilities to help our clients better understand and manage credit and claims lifecycle events and fraud risks for individual customers and across their credit and claims portfolios.
During the second quarter, the Company continued to expand its KnowledgeSTUDIO(R) user community with a diverse customer base across the financial services, information and communications technology and retailing sectors including transactions with Bank of America, SunTrust, Wells Fargo, Mitsubishi, Centrica, Dollar Financial Group, American Girl, GreenTree and eBay.
The Company also successfully concluded the proof of concept phase of its ClaimGUARD(TM) claims lifecycle analytics solution implementation for a North American group benefits insurer, while engaging in preliminary discussions with another organization for the extension of the ClaimGUARD(TM) solution under license to a segment of the US health services market place.
The Company expects conditions to remain challenging for both US and UK financial services clients throughout 2010 but has continued to make progress in deployment expansions at major finance industry customers.
Outlook
General trends indicate improved understanding in the marketplace of the business value of predictive analytics systems to support better "data driven" decision making. These trends will generate continued growth in demand for advanced, easier to use systems to support this business need. The recent acquisition by Pitney Bowes of UK based Portrait Software is the most recent example of general interest among major enterprise technology, as well as services and solution delivery organizations, in the growth opportunities in the broader analytics marketplace.
The Company believes it is well positioned to provide advanced analytics solutions in our target markets. We plan to continue to expand our sales and delivery teams and are continuing to pursue higher value, but longer sales cycle solution sales and business development partnerships to leverage this positioning and leverage external channel partner resources for business expansion.
Investments associated with expansion of our sales and delivery teams require capital and the Company continues to explore financing options which would most likely include private placements including rights offering to existing shareholders.
Should such financing not be available on appropriate terms, the Company will explore other financing options up to and including a going private transaction. There can be no assurance any financing, public or private, will be available to the Company on appropriate terms or at all.
We also continue to make additional research and development investments in our predictive analytics technology to support our on demand solutions businesses for marketing and sales applications. These investments will continue throughout 2010 and into 2011, resulting in higher operating costs. Continued growth in billed revenues, through expansion of our inside and field sales teams, continued growth in development spending, and securing additional financing to support these initiatives, are expected to be our top priorities through the end of 2010.
Stock Option Disclosure
In accordance with the requirements of The Toronto Venture Exchange, and as previously disclosed in the Company's 2010 Management Information Circular the Company has granted 17,500 options to acquire a total of 17,500 common shares to directors at an exercise price of $0.47 per share.
Financial Results
ANGOSS Software Corporation
Income Statement Information
(unaudited, stated in Canadian dollars)
For the period ended Three months ending Six months ending
----------------------- -----------------------
May 31, May 31, May 31, May 31,
2010 2009 2010 2009
Revenues $2,067,845 $2,244,549 $4,081,111 $4,265,516
----------------------- -----------------------
Operating Expenses
General and
administration 441,233 409,894 865,104 817,944
Sales and marketing 1,048,469 1,100,344 2,168,333 2,340,616
Research and
development, net 483,058 388,406 833,179 660,713
----------------------- -----------------------
1,972,760 1,898,644 3,866,616 3,819,273
----------------------- -----------------------
Income before
the following 95,085 345,905 214,495 446,243
Amortization of
capital assets (151,596) (99,187) (308,616) (181,843)
Amortization of
intangible assets (36,252) (50,000) (72,504) (100,000)
Interest expense (70,885) (37,005) (152,115) (75,771)
Foreign exchange
gain (loss) 13,800 (255,062) 33,946 (198,837)
Stock based compensation 3,673 (24,086) 925 (26,336)
----------------------- -----------------------
Net (loss) and comprehensive
(loss) for the period $(146,175) $(119,435) $(283,869) $(136,544)
----------------------- -----------------------
----------------------- -----------------------
Basic and diluted (loss)
earnings per share $(0.02) $(0.02) $(0.04) $(0.02)
----------------------- -----------------------
----------------------- -----------------------
Weighted average number
of shares outstanding
Basic 7,256,612 7,256,612 7,256,612 7,256,612
Diluted 7,256,612 7,256,612 7,256,612 7,256,612
Selected Balance
Sheet Information May 31, November 30,
(unaudited, stated 2010 2009
in Canadian dollars)
Cash and cash
equivalents $2,035,109 $1,523,663
Restricted investments 359,000 391,000
Accounts receivable 1,067,982 1,860,796
Prepaid expenses and
other assets 347,059 425,179
-----------------------
Total current assets 3,809,150 4,200,638
Acquired Software, net 788,002 898,000
Capital assets, net 805,130 978,438
Intangible assets, net 684,496 757,000
-----------------------
Total assets $6,086,778 $6,834,076
-----------------------
Accounts payable and
accrued liabilities $ 682,060 $ 719,642
Current portion of
deferred revenue 3,511,924 3,627,590
Current portion of
capital leases 150,412 166,228
Current portion of
term debt 214,286 214,286
Current portion of
long-term debt 113,148 113,148
Other 41,819 38,071
-----------------------
Total current liabilities 4,713,649 4,878,965
-----------------------
Long-term debt 1,923,805 1,980,379
Deferred revenue 90,895 128,963
Capital leases 94,558 165,459
Term debt 160,714 267,857
Lease inducement 32,380 56,882
-----------------------
Total liabilities 7,016,001 7,478,505
-----------------------
Total shareholders'
equity (929,223) (644,429)
-----------------------
Liabilities and
shareholders' equity $6,086,778 $6,834,076
-----------------------
Selected Cash Flow Information
(unaudited, stated in Canadian dollars)
For the period ended Three months ending Six months ending
----------------------- -----------------------
May 31, May 31, May 31, May 31,
2010 2009 2010 2009
Cash provided by
operating activities $307,100 $(277,796) $804,089 $137,166
Cash used in investing
activities (12,791) (22,057) (25,310) (2,184,734)
Cash provided (used) by
financing activities (120,641) (135,844) (250,434) 1,694,099
Effect of foreign exchange
rate fluctuations on cash
and cash equivalents 2,906 (113,147) (16,899) (101,934)
----------------------- -----------------------
Net increase (decrease) in
cash during the period 176,574 (548,844) 511,446 (455,403)
----------------------- -----------------------
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: The Toronto Venture Exchange has neither approved nor disapproved the above information.
For further information: Lon Vining, Chief Financial Officer, 416-593-2420, [email protected]
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