Corporate | 31 January 2005 08:35

ATOSS Software AG: Preliminary Figures for 2004

Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— Munich, January 31, 2005 – ATOSS Software AG, the specialist in software solutions covering all aspects of intelligent staff deployment, has achieved its announced intention of improving sales in the second half of 2004. The company booked stronger sales than in the first half and continued to add new customers in the SME segment in particular. Overall performance fell short of the record figures achieved in 2003, however sales at EUR 21.8 (previous year 23.4) million and EBIT of EUR 1.2 (previous year 2.3) million were in line with expectations. Looking ahead to financial year 2005, the Managing Board is optimistic. Following on from action taken in 2004, the Board expects to see growth especially in the field of software licensing. The company has meanwhile made substantial investments in new technology and implemented extensive organizational changes. In 2004 ATOSS recorded sales of EUR 12.6 (previous year 12.8) million at its Software division. The trend in software maintenance remained highly positive, however despite a sharp increase in new customers in the SME segment (small and medium-sized enterprises), software licensing sales did not match the previous year. Software maintenance sales in 2004 came in at EUR 7.7 (previous year 7.3) million, while software licensing slipped to EUR 4.9 (previous year 5.5) million. Sales recorded by the Consulting division amounted to EUR 5.8 million, against EUR 6.7 million the year before. Hardware sales came in at EUR 2.6 (previous year 2.7) million and other sales at EUR 0.8 (previous year 1.2) million. After successfully completing a three-year program in 2003 dedicated to enhancing profitability, in 2004 ATOSS Software AG was able to focus fully on its new growth strategy. There was a further increase in investment in research and development (R&D) which totaled EUR 4.3 million, equal to almost 20% of sales. At the same time the number of staff employed in product development rose sharply from 41 to 54. These investments will enable ATOSS to use entirely new, Java-based technology to tailor its products far more flexibly to suit customer requirements and embed them in existing system environments. Thanks to this considerable advance outlay in 2004, ATOSS can now not only reap the benefits of future- oriented development technology, but also offer a range of products and end- to-end solutions for both the SME segment as well as premium small businesses and major customers. Operating profits before the effects of convertible bonds (EBITCB) at EUR 1.5 (previous year 2.3) million and EBIT at EUR 1.2 (previous year 2.4) million lagged behind last year’s record results. Profitability was affected by the development in sales, as well as by the changeover to IFRS accounting practices and the associated impact on the balance sheet treatment of the employee participation program. However, with a margin on sales of 7% (previous year 10%) before the effects of the convertible bond program and 6% (previous year 10%) thereafter, ATOSS remains highly profitable. Pre-tax earnings (EBT) came in at EUR 1.7 (previous year 3.0) million, while net income for the period amounted to EUR 0.9 (previous year 1.8) million. Earnings per share (EPS) amounted to EUR 0.23 (previous year EUR 0.47). No decision has yet been taken regarding the dividend. However the Board expects to be able to announce details no later than at the time of the balance sheet press conference. The company has a policy of paying a dividend representing between 30 and 50% of net income after tax. When this policy was first put in place at the beginning of 2003, ATOSS paid two special dividends each of EUR 1.50 per share (on 30.12.2003 and 23.04.2004) financed out of funds surplus to operating requirements. Despite the EUR 5.7 million dividend payout in April 2004, thanks to the positive cash flow from operations the company’s liquidity still stands at EUR 26.6 (previous year 31.9) million, representing liquid funds of EUR 7 per share. As a result of the reduced result and tax payments, however, cash flow has declined in comparison with the year before. The capital ratio as of 31.12.2004 amounted to 85% (previous year 84%). Thus ATOSS continues to enjoy an extremely solid financial position which offers a high degree of long-term security for both investors as well as partners and customers. During 2004 ATOSS has been investing in new technologies which will be on show at CeBIT 2005. In addition the company has substantially restructured its organization, moving from a divisional structure to a team-based organization. The extensive existing competences spanning product sales, business process consulting and professional services have been integrated and interlinked. These changes are aimed at forcing the pace of growth by increasing the value added component available to customers of ATOSS Software AG. Even though the implementation of these measures in 2004 in some cases impeded business operations, ATOSS nevertheless scored some successes in attracting new customers. The number of new customers in the SME segment has risen sharply. Based on orders received as of December 31 the proportion of software licensing accounted for by new customers stood at 56%, against 49% the year before. This positive trend in the SME segment is expected to continue in 2005. The company sees further potential for growth specifically in its software licensing business as a result of increased concentration by the new team organization on the premium segment (large companies) and the existing customer base. Overall, the Managing Board expects higher sales in 2005 coupled with a perceptible improvement in results and a strongly positive cash flow. 2004 Perc. 2003 Perc. Chg. Sales 21,826 23,406 -7% Software 12,624 58% 12,815 55% -1% thereof software licenses 4,927 23% 5,495 23% -10% thereof software mainten. 7,697 35% 7,320 31% +5% Consulting 5,798 27% 6,673 29% -13% thereof professional 4,672 21% 4,928 21% -5% serv. (1) thereof consulting 1,126 5% 1,745 7% -35% Hardware 2,594 12% 2,693 12% -4% Miscellaneous 810 4% 1,225 5% -34% EBITDA 2,116 10% 3,285 14% -36% EBITCB (2) 1,487 7% 2,306 10% -35% EBIT 1,230 6% 2,267 10% -46% EBT 1,745 8% 3,038 13% -43% Net Income 877 4% 1,800 8% -51% Cash flow (3) 1,640 8% 3,504 15% -53% Financel resources (4/5) 26,589 31,855 -17% EPS (in Euro) 0.23 0.47 -51% Employees (6) 179 173 +3% (1): Formerly IT Services (2): EBIT before cost of employee participation program arising from convertible bonds (3): Previous year’s figures adjusted due to restructuring to determine cash flow (4): Cash and marketable securities, formerly liquidity (5): Distributions of EUR 1.50 per share on 30.12.2003 and 23.04.2004 (6): At end of quarter end of message, (c)DGAP 31.01.2005 —————————————————————————— WKN: 510440; ISIN: DE0005104400; Index: Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover und Stuttgart 310835 Jän 05