Financial year-end communiqué 2000 - ReadSoft exceeds goals for year 2000

Financial year-end communiqué 2000 ReadSoft exceeds goals for year 2000 · The turnover increased with 72% to 291,6 (169,2) MSEK · Result after interest income 10,6 (-10,2) MSEK · ReadSoft signs record deal worth 35 MSEK · Break-through for Eyes & Hands INVOICES on the American market · New and improved software released at the future conference Read the Future · A bonus issue of 2:1 was made during the year · ReadSoft established a new subsidiary in Brazil · ReadSoft completed a buyback of convertible loan with Industrifonden and also carried out a new issue of 1 000 000 series B shares to be able to acquire the convertible loan. IMPORTANT EVENTS ReadSoft closed number of important deals on the American continent during the year. The largest deal, worth 35 MSEK, was signed in corporation with a multinational partner to process tax forms for both individuals and corporations. Chevron, one of the world's largest oil companies chose to implement Eyes & Hands INVOICES, ReadSoft's new product for automatic invoice processing. The order is worth over 3 MSEK in the first phase, but will probably grow as the project develops. This order, together with a 6 MSEK order to deliver INVOICES to the direct solutions provider CDW, was the breakthrough for INVOICES on the American market. At the end of the year, ReadSoft signed another important agreement with a global company. The system integrator BancTec will resell ReadSoft's products to, for instance, the financial sector and estimate to buy software to an annual order value of 15-30 MSEK. ReadSoft's home market in Sweden was also a great success during year 2000 with several prestigious deals. The Swedish Postal service decided to sign a three-year agreement worth 10 MSEK, and Nordea, the largest bank group in Scandinavia turned to ReadSoft to streamline the flow of paper documents at a value of 4 MSEK annually. During year 2000, ReadSoft's international expansion continued. ReadSoft's 11th subsidiary was established in Brazil - South America's single most interesting market for automatic data capture. ReadSoft completed the buyback of the convertible subordinated loan with Industrifonden that was taken in 1998 ("Conversion loan 1998/2001"). The buyback was made through the exercise of an option and at a price considerably below the market value and had no impact on ReadSoft's profit. ReadSoft also went through with a new issue of shares, 1 000 000 series B, to be able to acquire the convertible loan. TURNOVER AND PROFITS The business during year 2000 has developed well with a growth of 72 percent compared to last year. The entire growth was organic. The turnover amounted to 291,6 (169,2) MSEK and income after financial items amounted to 10,6 (-10,2) MSEK. The operating margin for the year was 3,6 (-6,0) percent. ReadSoft has received SPP repayment with 0,5 MSEK, 0,3 MSEK has been included in the year 2000. The remaining 0,2 MSEK will be used for the year 2001. GOAL OF ACTIVITIES ReadSoft's goal is an organic growth of 40-50 percent per year, which was clearly exceeded during 2000. Moreover, the goal to reach a positive result for the year was reached and the long term goal is to reach a 20 percent profit margin EXPANSION Sales have strongly increased on the large export markets outside Scandinavia. During year 2000, sales on these markets increased with 99 percent, to 226,6 (114,0) MSEK. The increase in Scandinavian sales was 18 percent and amounted to 65,0 (55,2) MSEK. The license revenues for the period amounted to 142,4 (83,0) MSEK and constituted 49 percent of the total revenue. The licenses, consisting of one-time payments for the right to use ReadSoft's software, are our largest and most important source of income. Service proceeds (annual proceeds from service agreements) amounted to 44,5 (29,2) MSEK for the period. In addition, revenues for training and customer-specific development were 41,0 (15,2) MSEK. Hardware sales (mainly scanners) amounted to 46,3 (30,7) MSEK. Other revenues totaled 17,5 (11,1) MSEK. STAFF The number of employees as of December 31, 2000, was 282 (181), which means an increase with 56 percent compared to last year. INVESTMENTS Investments during the period amounted to 10,6 (4,8) MSEK and consisted of the acquisition of computer, office and exhibition equipment. All costs for product development have continually burdened the period's results. FINANCIAL POSITION The liquid capital as of December 31, 2000 amounted to 91,8 (132,9) MSEK excluding unused committed credit line. The solidity was 60,1 percent as of December 31. At the beginning of the year the solidity was 61,9 percent. SHAREHOLDERS INFORMATION The number of shareholders was 5 552 at the end of the period. Of the total share capital, Swedish and foreign institutions owned 50 percent, the company founders 30 percent and others, including personnel, 20 percent. At the end of the period, Swedish shareholders owned 76 percent and foreign shareholders 24 percent of the total share capital. THE PARENT COMPANY The net sales of the parent company, including inter-company costs, amounted to 108,7 (89,2) MSEK for the period. The income after financial items was -6,4 (-13,3) MSEK. It should be remembered that the parent company's statistics for 1999 included the sales on the Swedish market. These sales have been outsourced to a fully owned subsidiary, which makes the statistics between the years difficult to use as comparison. Investments in the parent company amounted to 5,4 (1,5) MSEK. At the end of the period, liquidity was 58,4 (118,5) MSEK, excluding unused committed credit line. Equity was 162,1 (136,2) MSEK, resulting in a solidity of 88,0 (74,2) percent. FUTURE PROSPECTS ReadSoft's very strong growth during the year 2000 gives strength for the future. The board of directors and the management strive to maximize the company's growth while reaching the profit targets. Since sales grew faster than we planned during year 2000 the company has accepted larger costs for recruitment and other investments. This is expected to have a positive effect for the year that follows. The goal for 2001 is to improve the result even more towards our long term goal of a 20 percent profit margin, and at the same time keep a high growth rate at 40-50 percent during the year. Well aware of the seasonal split of revenue we expect a rather large loss during the first quarter, followed by two quarters with balanced result and finally the profit will be generated in the fourth quarter, where normally more than 1/3 of the revenue is generated. We anticipate that the sales of Eyes & Hands FORMS in the larger markets will continue to grow at a firm speed during the year. Eyes & Hands INVOICES now has got an international break through and we expect a strong growth in all established markets. At ReadSoft's "Read the Future" -conference in Malaga, version 5-2, with improved software functionality in both FORMS and INVOICES was released. Another two releases are to be presented in 2001. Early in the year ReadSoft's twelfth subsidiary was founded in Norway and the start-up of a subsidiary in Mexico is under way. At least one more subsidiary is planned for the year and it will most likely be founded in Asia. Depending on business opportunities, one more subsidiary could be founded during the year. In all, the future looks bright for ReadSoft and we anticipate a strong growth according to our planned targets. PRODUCTS & THE COMPANY Our product concept e-capture offers a complete solution for automatic data capture. e-capture is the technology that has the ability to capture, interpret and process information from paper, fax, the web, e-mail and other media and transport it to a customer target system. The name of ReadSoft's software is Eyes & Hands FORMS and Eyes & Hands INVOICES and they facilitate and improve the data capture at companies and authorities all over the world. They give our customers the possibility to lower their costs and automate their data capture, irrespective of if the information comes from paper or electronic documents. With ReadSoft's solutions, customers do not need to build and maintain parallel systems to handle the different information flows, instead they can build a uniform system with common rules for how the information should be captured and handled. ReadSoft is the market leader and has established offices in the most important international markets. Since the start in 1991, ReadSoft has evolved into a global corporation with twelve subsidiaries in several European countries, in North and South America and Australia. NEXT INFORMATION OCCASIONS · Annual report 2000 sent out to share holders mid April · Interim report January - Mars, 25 April 2001 · Annual general meeting will be held in Helsingborg, 25 April 2001 · Interim report January - June, 27 August 2001 · Interim report January - September, 25 October 2001 For further information please contact MD Jan Andersson at +46-42-490 21 00, mobile +46-708-37 66 00 or Information Services ManagerOlof Engvall at + 46-42 490 21 37, mobile + 46-708 - 37 66 70 GROUP'S INCOME STATEMENT IN SUMMARY Amount in MSEK if no other mention is made 2000 1999 Net sales 291,6 169,2 Expenses of sold goods and services -50,4 -30,1 Other external costs -88,2 -55,7 Personnel costs - -90,4 140,1 Depreciation of fixed assest -5,8 -3,9 Operating profit/loss 7,1 -10,9 Financial income and expenses Interest income 3,5 0,7 Profit and loss after financial items 10,6 -10,2 Profit/loss by group companies from period proir to acquisition 0,1 0,0 Minority share 0,0 -0,2 Net profit/loss before tax 10,7 -10,4 Tax on profit for the year -5,4 -1,3 Net profit/loss for the year 5,3 -11,7 Group's balance sheet in summary Amount in MSEK if no other mention 2000-12- 1999-12- is made 31 31 Assets Fixed assets 14,4 9,2 Current assets 265,5 217,3 Total assets 279,9 226,5 Equity and liabilities Equity 168,3 140,2 Provisions for deferred taxes 0,7 0,4 Minority share of equity 0,0 0,4 Long term liabilities 0,8 27,9 Current liabilities 110,1 57,6 Total equity and liab ilities 279,9 226,5 Cash flow statements in summary Amount in MSEK if no other mention is made 2000 1999 Cash flow from current operations before changes in 10,6 -8,2 working capital Changes in current operations -35,9 -12,6 Cash flow from current operations -25,3 -20,8 Cash flow from investment activities -11,0 -5,0 Cash flow from financial activities -4,8 143,5 Cash flow for the year -41,1 117,7 Key data, group Amount in MSEK if no other mention is 2000 1999 made Revenue 291,6 169,2 Revenue growth, % 72,3 70,4 Operating profit/loss 7,1 -10,9 Profit/loss after financial items 10,6 -10,2 Operating margin, % 2,4 -6,5 Profit margin, % 3,6 -6,0 Solidity, % 60,1 61,9 Capital employed 169,1 168,0 Net dept-equity ratio -0,54 -0,75 Net interest-bearing liabilities -91,0 -105,2 Number of employees at close of period 282 181 Equity per share, SEK 5,79 5,00 *) Profit/loss after financial items per 0,37 -0,43 *) share, SEK Profit/loss after tax per share, SEK 0,18 -0,50 *) Number of shares at close of period 29 063 28 063 260 260 *) Average numbers of shares for the period 28 563 23 655 725 260 *) Market value at the end of period, SEK 53 51 *) *) Comparative values have been recalculated with regard to the bonus issue during the second quarter 2000. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/02/26/20010226BIT00260/bit0002.doc http://www.bit.se/bitonline/2001/02/26/20010226BIT00260/bit0002.pdf