Interim Report January to September 1999

Continued expansion for ReadSoft Interim Report January to September 1999 *The turnover increased by 106% to 110,0 (53,5) MSEK *Results after interest income improved by 49% to -11,5 (- 22,4) MSEK * A global partner deal was closed with UNISYS *There was a directed new issue of shares of 118 MSEK to institutional investors, completed after the closing of the period. IMPORTANT EVENTS As part of acquiring financial resources for the continued expansion of the company, a directed new issue of shares at MSEK 118 was made to ten or so institutional investors. Payment was made during the month of October. The resources will be used to finance the company's continued market expansion, organically as well as through acquisitions During this period, we also closed an important partner deal with UNISYS. The agreement gives UNISYS the right to sell our product globally. We expect this deal to be especially important in the U.S., where UNISYS is one of the largest suppliers to governmental authorities and large companies. UNISYS has long had a business area called Document Management and previously cooperated with several of our competitors. The deal with ReadSoft was closed after UNISYS had performed a technical and commercial evaluation of the systems and companies available on the market. TURNOVER AND PROFITS The development of the business during the first nine months of 1999 was strong, with growth of 106 percent compared to the same period last year. The turnover was 110.0 (53.5) MSEK and income after financial items was -11.5 (- 22.4). The result improved by 49 percent compared to the corresponding period in 1998. The third quarter saw a growth of 87 percent, with a turnover of 36.8 (19.7) MSEK and an income after financial items of -2.4 (-8.9). GOAL OF ACTIVITIES The goal for the year 2000 is to reach profitability, and eventually we should reach a profit margin of at least 20 percent. Our organic growth target of at least 60 percent for 1999 was surpassed with good margin during this year's first three quarters, and we should be able to reach the goal for 1999. Our goal for the year 2000 and beyond is organic growth of 40 to 50 percent per year. Rapid growth balanced by a gradually increasing profitability is the key to success for ReadSoft. Our aim is to reach this by letting the organization grow organically, with emphasis on our sales organization, while carrying out acquisitions. EXPANSION The company's sales increased on all markets. The most powerful sales increase occurred on the major export markets outside Scandinavia. During the first nine months of the year, sales in these markets increased by 132 percent to 76.0 (32.7). In Sweden and the rest of Scandinavia our sales were steady, with a good growth rate of 63 percent the first nine months, increasing to 34.0 (20.8) MSEK. License revenues for the period amounted to 54.1 (28.5) MSEK and accounted for 49 percent of the total revenues. The licenses, consisting of one-time payments for the right to use our software, are our largest and most important source of revenue. Service proceeds (annual proceeds from service agreements) amounted to 18.7 (9.9) MSEK for the period. In addition, revenues for training and customer-specific development were 8.9 (4.9) MSEK. Hardware sales (scanners) amounted to 21.0 (6.2) MSEK during the period. Other revenues totaled 7.3 (4.0) MSEK. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/10/29/19991029BIT00850/bit0001.doc The full report http://www.bit.se/bitonline/1999/10/29/19991029BIT00850/bit0002.pdf The full report