ECsoft Group Announces Fourth Quarter and Preliminary Year End Results.Business Editors LONDON--(BUSINESS WIRE)--Feb. 10, 2000 ECsoft Group plc (&uot;ECsoft&uot; or the &uot;Company&uot;; Nasdaq: ECSG ECSG Electronic Commerce Study Group ; London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. : ECS See eComStation. ) the independent E-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. consultancy, systems integrator An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and IT solutions provider, today announced revenues and net earnings for the fourth quarter and year ended December 31, 1999. Combined revenues for the year increased to $111.4 million from $110.7 million for 1998. Combined net income for the year was $4.4 million compared to $9.7 million for 1998 and earnings per share for the year were $0.38 per share compared to $0.92 per share for the year ended December 31, 1999. Headcount as of December 31, 1999 increased 22% to 961 from 791 as of December 31, 1998. Combined revenues for the fourth quarter was $27.7 million compared to $30.6 million for the fourth quarter 1998. Combined net earnings for the quarter were $517,000 compared to $3.4 million for the same period last year. Earnings per share for the fourth quarter were $0.04 per share, compared with $0.30 per share in the fourth quarter of 1998. &uot;1999 has been a challenging year for ECsoft in an adverse market,&uot; commented Terje Laugerud, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President, ECsoft Group plc. &uot;There is continued hesitancy hes·i·tan·cy n. An involuntary delay or inability in starting the urinary stream. to start new projects in the first half of 2000 in ECsoft's traditionally strong market verticals like the insurance and finance industries. However, we are seeing increased demand for CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. solutions and data warehousing See data warehouse. data warehousing - data warehouse projects across several industry sectors. We have won new projects for eBusiness, eChain, eProcurement, and Wireless Area Protocol (WAP (1) (Wireless Access Point) See access point. (2) (Wireless Application Protocol) A standard for providing cellular phones, pagers and other handheld devices with secure access to e-mail and text-based Web pages. ) and Java mobile telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. projects.&uot; &uot;In the fourth quarter of 1999 we started several new initiatives to prepare for an anticipated upswing Upswing An upward turn in a security's price after a period of falling prices. in our business in 2000. ECsoft has established a Center of Excellence in Stockholm for WAP technology and mobile telephony,&uot; continued Terje Laugerud. &uot;We have established two new groups, EC-Mobile Business Solutions to provide mobile business solutions to the enterprise market, and EC-Factory to provide services for the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market and to application vendors. ECsoft works with customers like Nokia and Ericsson to develop new applications in mobile telephony as well as developing the technology used to create new applications and services. We believe ECsoft is in a unique position to expand on this knowledge base and offer a high level of expertise to customers seeking alternative channels of information delivery.&uot; &uot;ECsoft also initiated in the fourth quarter and has announced an Application Service Provision (ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). ) offering aimed specifically at small- and medium-sized companies,&uot; stated Laugerud. &uot;The growing need for these companies to focus on their core business activities has created a huge growth in the demand for high quality, low risk ASP services. ECsoft seeks to be able to take advantage of this market with both the skill and track record including core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the capabilities. Web access and application functionality indicate that ASP is the route to market for the next generation of business systems, and we believe ECsoft is well positioned to host and deliver them.&uot; &uot;In 1999 we acquired three companies,&uot; commented Laugerud. &uot; The first being the Dutch IT services company Achilles IT Group BV. This gave us a presence in the Netherlands, a new territory for the Group. The fourth quarter of 1999 included two acquisitions in two of our territories, the Netherlands and Norway, acquiring Dutch IT services company Project in Motion BV and the Norwegian Norwegian associated in some way with Norway. Norwegian buhund, Norwegian sheepdog a medium-sized (26-40 lb), spitz-type dog with a short, dense coat in wheaten, black, red or sable, sometimes with black markings on the face, ears IT Partners AS. In January of 2000 we continued our acquisition strategy with the German based IT Services company, DVMB DVMB Deutsche Vereinigung Morbus Bechterew (German) AG, strengthening the Group's northern European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. presence. DVMB brings the Group a customer base in an attractive IT market, an enviable en·vi·a·ble adj. So desirable as to arouse envy: "the enviable English quality of being able to be mute without unrest" Henry James. and strategic relationship with Microsoft, and a services management software offering, DVMB Help.&uot; The company's results will be discussed in a conference call on Thursday, February 10, 2000, at 11:00 am EST EST electroshock therapy. EST abbr. electroshock therapy , 4:00 pm GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 . The contact numbers for this call are: USA 1-800-547-9328 212-748-2763 UK Freephone 0800 279 0096 +44 (0) 208 781 0597 ECsoft Group plc (London: ECS, Nasdaq: ECSG) is an independent E-business consultancy, systems integrator and IT solutions provider, specialising in the development and delivery of innovative mission-critical business solutions to Europe's top 500 companies. Headquartered in London with a current workforce of over 1000 people across sixteen offices in the UK, Denmark, Norway, Sweden, the Netherlands, and Germany, ECsoft is a leader in the practical application of advanced technology and in turning a customer's E-business vision into a technical reality. More information about ECsoft Group can be found at www.ecsoft-group.com.
ECsoft Group plc
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(prepared in accordance with US GAAP, in thousands of U.S. dollars,
except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
1999 1998 1999 1998
Revenues: $ 27,710 $ 30,642 $111,404 $110,710
Operating Expenses:
Cost of projects 21,132 20,138 82,505 75,146
Sales &marketing 2,892 2,435 9,881 8,492
General & administrative 3,261 3,696 13,158
13,507
Goodwill
amortisation 300 270 1,079 1,066
Non-recurring
expenses 199 1,416 0
------------------- --------------------
Total operating
expenses 27,784 26,539 108,039 98,211
Income (loss) from
operations -73 4,103 3,365 12,499
Other income 877 1,149 3,503 2,648
------------------- --------------------
Income (loss)
before income taxes 804 5,252 6,868 15,147
Income taxes 316 1,818 2,466 5,415
Minority interest -29 40
Net income 517 3,434 4,362 9,732
=================== ====================
Basic net income per share 0.04 0.30 0.38 0.92
Weighted average
number of common
shares outstanding 11,485 11,407 11,469 10,628
Diluted net income per share 0.04 0.29 0.37 0.87
Weighted average number of
common and common equivalent
shares outstanding 11,760 11,857 11,828 11,205
Diluted net income per share
excluding acquisition costs,
non-recurring expenses
and goodwill 0.09 0.31 0.58 0.96
Copies of the ECsoft Group plc Preliminary Results for 1999, prepared
in accordance with UK GAAP, are available from the Company.
ECsoft Group plc
CONDENSED CONSOLIDATED BALANCE SHEET
(Prepared in accordance with US GAAP, in thousands of U.S. dollars)
Dec 31 Dec 31
1999 1998
ASSETS
Current assets :
Cash $ 68,928 $ 73,152
Restricted cash 2,132 1,915
Accounts receivable - net of allowances 17,731 18,566
Other current assets 4,961 5,011
-------- --------
Total current assets $ 93,752 $ 98,644
Property &equipment, net 5,603 5,283
Intangible assets, net 19,492 18,000
Other non-current assets 883 710
-------- --------
Total assets $119,730 $122,637
======== ========
LIABILITIES &SHAREHOLDERS EQUITY
Current liabilities :
Bank overdraft &short term borrowings $ 36 $ 8
Loan Notes 2001 0 1,149
Accounts payable 3,755 3,513
Accrued liabilities 9,297 11,420
Current portion of lease obligations 485 447
Deferred revenues 2,433 1,609
Other current liabilities 6,509 7,527
-------- --------
Total current liabilities $ 22,515 $ 25,673
Non-current liabilities 2,028 2,145
-------- --------
Total liabilities $ 24,543 $ 27,818
Shareholders equity :
Ordinary shares 9,273 9,203
Additional paid in capital 68,418 67,540
Retained earnings (defecit) 21,222 16,899
Cumulative translation adjustment -3,726 1,177
-------- --------
Total liabilities &shareholders' equity $119,730 $122,637
======== ========
Copies of the ECsoft Group plc Preliminary Results for 1999, prepared
in accordance with UK GAAP, are available from the Company.
FORWARD LOOKING STATEMENTS: Statements contained in this release that are not historical facts may contain forward-looking information with respect to the plans, projections or future performance of the Company, the occurrence of which involve certain risks and uncertainties. Potential risks and uncertainties include, without limitation, continued competitive pressures in the market place; reliance on attracting and retaining technically skilled professional staff; successful integration of acquired companies; managing risks associated with customer projects; significant fluctuation Fluctuation A price or interest rate change. in quarterly operating results; the Company's ability to manage its growth; dependence on trends towards open systems computing computing - computer architecture and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. ; reliance on key executives; reliance on relationships with third parties; and the Company's ability to develop information technology solutions that keep pace with rapid and continuing changes in computing technology, evolving industry standards and changing customer preferences. More information on potential factors that could affect the Company's financial results are included in the Company's filings with the Securities and Exchange Commission, particularly in its Annual Report on Form 20-F. ECsoft and the ECsoft logo are trademarks of ECsoft Group plc |
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