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FrontRange Solutions reported an increase in revenues and profits for the quarter ended January 31, 2005. License revenue increased 29% over the prior year, while total revenue for the quarter increased to $20.7 million, an increase of over 13% from the $18.3 million for the three months ended December 31, 2003. In addition to an increase in revenue, FrontRange also reported an operating profit of $2.3 million, an increase of 50% over the three months ended December 31, 2003.
Michael McCloskey, CEO of FrontRange said, "The results of the quarter reflect the progress we have made in reshaping FrontRange into a leading provider of service management, CRM, and voice applications. During the quarter, we have grown license revenues 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 future opportunities for growth."
"I am very pleased with our 29% increase in license revenues over the prior year. License 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 license sales," McCloskey stated.
"Our 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 us to deliver new products and enhancements to market, as well as provide localized products for international markets," stated McCloskey.
He added, "We continue to make progress on our product delivery plans, as evidenced by our new 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 ITSM application," continued McCloskey. "This new product is based upon the ITIL framework, and is being well received by our customers. Although only recently released late in our quarter, we have already won significant contracts from both current and new customers."
John Hillyard, CFO of FrontRange, said, "I'm pleased to see our business strategy reflected in our financial model. Our channel strategy focus is resulting in higher overall revenues, increased investment in R&D is fuelling the growth of our current and new product offerings, and increased Sales & Marketing efficiency are all contributing to FrontRange's improved financial performance."
Highlights since the last Financial Release:
- FrontRange Continues Strong License Revenue Growth: License revenue grew sequentially for the fifth consecutive quarter, representing a 29% increase over the prior year.
- Customer Momentum Continues: FrontRange 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 5 new IP Contact Center customers and 5 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 Include:
- 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, 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, Kotak Mahindra Bank Ltd
- 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 Africa Endangered Wildlife Trust, Cotlands, South Africa Department of Housing
Continued Expansion of International Operations
FrontRange continues to make significant investment in its geographic expansion plans, including its Latin American, Asian and European operations. This includes substantial new investment in personnel, product localizations and marketing initiatives. Several new languages were added during the quarter, including Russian, German, Polish, and Spanish.
FrontRange CEO Named to Industry Leadership List
The December issue of CRM Magazine featured McCloskey in its annual article recognizing "dynamic leaders." CRM recognized 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 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, Jim joins FrontRange after leading channel and alliance efforts at Digital Equipment, Informix and AltaVista.
FrontRange Partner Expansion Continues
FrontRange 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's 2004 Product of the Year Award
FrontRange's GoldMine solution is a recipient of a 2004 Product of the Year Award presented by Technology Marketing Corporation (TMC)'s Customer Inter@ction Solutions magazine (www.cismag.com), a preeminent publication in the CRM, call center and teleservices industries since 1982.
FrontRange Launches New ITIL-Compatible ITSM 5.0
FrontRange ITSM modules are designed to improve the performance of IT and support organizations 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 IT Infrastructure Library (ITIL) best practice standards in the marketplace. Seven ITIL-compatible modules that are 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 the business. The eight service management modules that comprise the new ITSM product are:
- Incident Management
- Problem Management
- Change Management
- Release Management
- Availability Management
- Configuration Management
- Service Level Managemen
- Self Service
New HEAT 8.3 delivers enhanced support for IT Best Practices and ITIL Compatibility
HEAT 8.3 allows customers to provide top quality stand-alone service management and also to integrate easily with modules from the new FrontRange 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 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 standardized processes that increase efficiency and lower service desk costs.
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