Interim report January-September 2000

Continued growth for ReadSoft Interim report January-September 2000 * The turnover increased with 63 percent to 179,7 (110,0) MSEK. * Result after interest income -10,4 (-11,5) MSEK. * ReadSoft carries through record deal worth approximately MSEK 35. * Chevron Corporation, one of the world's largest oil companies, installs Eyes & Hands INVOICES. * CDW, a significant direct solutions provider in the US, signed an agreement with ReadSoft about the purchase of Eyes & Hands INVOICES. * ReadSoft establishes subsidiary in Brazil. IMPORTANT EVENTS ReadSoft has carried though a deal worth approximately 35 MSEK on the American continent to process tax forms for both individuals and corporations. The deal was won in cooperation with a multinational partner and is one of ReadSoft's largest deals so far. Chevron Corporation, one of the world's largest oil companies, chose to implement ReadSoft's new product for automatic invoice processing, Eyes & Hands INVOICES. The order is worth over three MSEK in the first phase, but will probably grow as the project develops. Through choosing Eyes & Hands INVOICES, the direct solutions provider CDW will become one of the first American organizations to install a system for automatic invoice processing. The deal is estimated to 6 MSEK and is considered, together with the Chevron deal, a breakthrough for INVOICES on the American market. ReadSoft has established a new subsidiary in Brazil, South America's single most interesting market for automatic data capture. Earlier, the Brazilian market has been worked on from the subsidiary in Brazil, which has led to for instance an agreement to deliver software to Avon Brazil. TURNOVER AND PROFITS The business has during the year's first three quarters developed well with a growth of 63 percent compared to the same period last year. The turnover amounted to 179,7 (110,0) MSEK and income after financial items - 10,4 (-11,5) MSEK. The operating margin for the period was -6,9 (-10,2) percent. Measured by rolling twelve months the operating margin amounted to -5,1 (-1,6) percent. Repayment from SPP is not included in the result of the period. The repayment amounted to 0,5 MSEK. GOAL OF ACTIVITIES Our goal for the year 2000 and forward is an organic growth of 40-50 percent per year. During the year's first nine months the goal has been surpassed and with rolling twelve months our growth is 53 percent. The goal is to reach a positive result for the entire year 2000 and in the long-term 20 percent's profit margin. We can conclude that the result after the first three quarters is somewhat better than expected and we count on reaching the targets set for the entire year. EXPANSION The company sales have increased strongly on the large export markets outside Scandinavia. During the period January-September sales on these markets increased with 91 percent, to 145,3 (76,0) MSEK. In Scandinavia our sales have been stable at 34,4 (34,0) MSEK. The license revenues for the period amount to 82,6 (54,1) MSEK and constitute 46 percent of the total revenue. The licenses, consisting of one-time payments for the right to use our software, are our largest and most important source of income. Service proceeds (annual proceeds from service agreements) amounted to 29,2 (18,7) MSEK for the period. In addition, revenues for training and customer-specific development were 28,0 (8,9) MSEK. Hardware sales (mainly scanners) amounted to 26,7 (21,0) MSEK. Other revenues totaled 13,2 (7,3) MSEK. STAFF The number of employees on September 30, 2000, was 241 (174), which means an increase with 39 percent compared to the same period last year. INVESTMENTS Investments during the period amounted to 6,0 (3,5) 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 September 30 amounted to 104,9 (19,3) MSEK excluding unused committed credit line. The solidity was 57,5 (22,6) percent as of September 30. At the beginning of the year the solidity was 61,9 percent. SHAREHOLDER INFORMATION The number of shareholders was 5 118 at the end of the period. Of the total share capital, Swedish and foreign institutions owned 49 percent, the company founders 31 percent and others, including personnel, 20 percent. At the end of the period, Swedish shareholders owned 75 percent and foreign shareholders 25 percent of the total share capital. THE PARENT COMPANY The parent company's net sales, including inter-company costs, amounted to 64,9 (57,5) MSEK for the period. The income after financial items was -8,6 (-2,1) 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 from 1999 difficult to use as comparison. Investments in the parent company amounted to 3,1 (1,2) MSEK. At the end of the period, liquidity was 85,0 (10,0) MSEK, excluding unused committed credit line. Equity was 132,6 (29,6) MSEK, resulting in a solidity of 74,2 (40,9) percent. PRODUCTS Our product concept e-capture offers a complete solution for automatic data capture from paper, via fax or over the Internet. Data capture in companies and authorities all over the world is still to a large extent done manually and information is still conveyed on paper in most cases. As the information society continues to develop, information will increasingly be transported over the Internet and volumes will grow. Our products are well positioned with respect to this development. 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. Our 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's products are efficient tools in reducing costs for the increasingly more important information management around the world. FUTURE PROSPECTS The good development during the first nine months of the year indicates that we will surpass our targets for 2000 for a 40-50 percent turnover growth and at the same time show a positive result. From a historical perspective, the fourth quarter is by far the largest when it comes to sales and last year one-third of the entire year's turnover was made during the last quarter. Most likely, we should be able to get such an outcome this year as well. The planning for next year is approaching its end and we estimate to develop in accordance with our targets in 2001 as well. The sales of FORMS on the great markets abroad is continuing to grow with unreduced strength and we have launched INVOICES abroad with a number of significant deals in Europe and the US. This proves that the new product works internationally and with important reference installations in several important markets, we believe that INVOICES will develop strongly next year. NEXT INFORMATION OCCASION @ Year-end communiqué 2000, February 26, 2001 @ Annual report 2000, April 25, 2001 For more information contact MD Jan Andersson at +46-42-490 21 00, mobile +46-708-37 66 00. Group's income in statement Amount in MSEK Jan - Sep 2000 Jan - Sep 1999 Rolling 12 months Whole year if no other 9910 - 0009 mention is made Net sales 179,7 110,0 238,9 169,2 Commodities -30,3 -20,6 -39,8 -30,1 Other external -63,9 -36,6 -83,0 -55,7 costs Personnel costs -94,5 -61,7 -123,2 -90,4 Depreciation on -3,4 -2,3 -5,0 -3,9 fixed assets Operating income -12,4 -11,2 -12,1 -10,9 Financial income and expense Interest income 2,0 -0,3 3,0 0,7 Income after -10,4 -11,5 -9,1 -10,2 financial items Result in group pertaining to -0,4 0,0 -0,4 0,0 period before acquisition Minority -0,0 -0,4 0,2 -0,2 interests Profit/loss -10,8 -11,9 -9,3 -10,4 before taxes Taxes -1,2 -1,0 -1,5 -1,3 Net profit/loss -12,0 -12,9 -10,8 -11,7 after taxes Group's balance sheet in summary Amount in MSEK if no other mention is made 00-09-30 99-09-30 99-12-31 Assets Fixed assets 11,4 9,5 9,2 Current assets 213,8 81,3 217,3 Total assets 225,2 90,8 226,5 Shareholder's equity and liabilities Shareholder's equity 129,6 20,5 140,2 Tax provision 0,4 0,4 0,4 Minority interests in shareholders' equity 0,0 0,7 0,4 Long-term liabilities 27,0 29,0 27,9 Short-term liabilities 68,2 40,2 57,6 Total shareholders' equity and 225,2 90,8 226,5 liabilities. Cashflow statements in summary Amount in MSEK if no Jan - Sep 2000 Jan - Sep 1999 Whole year 1999 other mention is made Cashflow before changes -10,1 -11,1 -8,2 in working capital Chanhes in working -13,8 -6,8 -12,6 capital Cash flow from the -23,9 -17,7 -20,8 current business Cashflow from -5,6 -3,5 -5,0 investment activities Cashflow from financial 1,5 25,3 143,5 activities Change in liquid assets -28,0 4,1 117,7 Key data, group Amount in MSEK if no Jan - Sep 2000 Jan - Sep 1999 Whole year 1999 other mention is made Revenue 179,7 110,0 169,2 Revenue growth % 63,4 105,6 70,4 Operating income -12,4 -11,2 -10,9 Income after financial -10,4 -11,5 -10,2 items Operating margin % -6,9 -10,2 -6,5 Profit margin % -5,8 -10,5 -6,0 Equity/assets ratio % 57,5 22,6 61,9 Capital employed 156,6 50,2 168,0 Net/debt/equity ratio -0,60 0,45 -0,75 (multiple) Net interest-bearing -77,9 9,7 -105,2 liabilities No. of employees at 241 174 181 close of period No. of shares at close 28.063 23.562 *) 28.063 *) of period Shareholder's equity 4,62 0,87 *) 5,00 *) per share (SEK) Earnings per share -0,37 -0,50 *) -0,36 *) after tax, (SEK) Market value at end of 61 28 *) 51 *) period (SEK) *) 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/2000/10/26/20001026BIT00600/bit0001.doc http://www.bit.se/bitonline/2000/10/26/20001026BIT00600/bit0002.pdf