Angoss reports Q2 results, continues US expansion; KnowledgeSEEKER(R) for Salesforce.com launched



    TORONTO, July 7 /CNW/ - Angoss Software Corporation (Angoss) (TSX-V: ANC)
today announced unaudited results for the second quarter and six months ending
May 31, 2008, reporting higher revenues and net income, while introducing its
On-Demand CRM Analytics offering for the Salesforce.com platform.
    In the second quarter, earned revenues of $1,888,807 increased by 9.4%
over 2007 results ($1,726,657). Year to date revenues of $3,841,844 were up
10.3% compared to prior year revenues of $3,484,636. Higher revenues derived
from sales to existing and new clients were offset by a 9.3% year over year
decline in the value of US Dollar. On a year over year local currency basis,
initial license billings grew 36.4 % while professional service billings
declined 27.5% reflecting the impact of longer sales cycles for these
services.
    Q2 operating profit was $60,126 compared with prior year operating profit
of $87,984. In year to date results, operating profit was $352,836, compared
with $278,260 in 2007. In 2008, Q2 operating profits reflect initial set up
and sales expenses associated with US expansion and new product development.
In year to date results, improved operating profits result from revenue growth
partially offset by higher marketing and sales costs.
    The Q2 net loss was $34,678, ($0.00 per share - 7,256,612 shares)
compared with a prior year net loss of $231,242 ($0.03 per share - 7,938,476
shares). In year to date results, net income of $120,936 compares with a prior
year net loss of $78,537.
    "We are pleased to report revenue growth in a period of significant
challenge for financial services industry clients particularly in the US and
UK" commented Angoss President Eric Apps. "Although budgets remain tight, and
discretionary spending is being closely managed, our clients understand the
proven ability of our products to deliver exceptional business value and
support critical business strategies in the areas of product re-pricing, loss
mitigation, customer retention, collections optimization, and regulatory
compliance. These are priority spend areas for our clients as they address
this year's challenging credit environment."
    The Company's billed revenues were $1,865,877 compared with prior year Q2
results of $1,750,269 - an increase of 6.6%. Billed revenues reflect payment
cycles for Angoss analytics solutions offerings. The Company's business model
is increasingly focused on selling and delivering predictive analytics
solutions combining software licensing or subscription services with
associated industry specific implementation and configuration services. As a
result, billed revenues will fluctuate based on solution implementation
cycles, and associated deliverables and payments milestones.
    Although the Company's pipeline of opportunities continues to grow,
implementation decisions continue to be impacted by the current business
environment. The Company's shift in focus from transactional, commodity based
statistical tools sales to higher value enterprise analytics solutions for the
marketing, sales and risk management functions will continue to impact on both
sales and billing cycles for the foreseeable future.
    Operating expenses of $1,828,681 were up 11.6% from the second quarter of
2007 ($1,638,673), with sales expenses up 11.0%, research and development
expenses up 57.5%, and general and administrative down 5.3% year over year.
Growth in sales and marketing expenses reflect planned expansion into the US
market with the opening of the Company's first US based office in New York
City. Higher research and development expense reflect investment in the
Company's On-Demand data mining solutions platform, primarily focused in the
second quarter on the build out of the Company's CRM Analytics solutions
platform. Year to date, operating expenses of $3,489,008 were up 8.8% compared
to the prior year.

    Second Quarter Highlights

    KnowledgeSEEKER(R) for Salesforce.com Enables Superior Sales Team
    Performance Through Advanced Analytics.

    The Company's On-Demand customer analytics solutions business was
extended in Q2 with the completion of KnowledgeSEEKER(R) for Salesforce.com
Version 1.0, the Company's On-Demand predictive analytics solution for
organizations using Salesforce.com as their CRM platform. KnowledgeSEEKER for
Salesforce.com enables improved lead management and conversion, better
prioritization of sales activities, improved understanding of the key drivers
of sales rep performance and success, and highly accurate revenue forecasts,
all driven by sophisticated analytic models running on the Angoss On-Demand
analytics platform. Feedback from the Q2 product launch has been extremely
positive. The Company will showcase the product during the fourth quarter at
Dreamforce, Salesforce.com's user conference.

    Expansion of Predictive Analytics Software Deployments in Finance and ICT
    Sectors.

    Client acquisitions of the Angoss KnowledgeSEEKER(R), KnowledgeSTUDIO(R)
and StrategyBUILDER(TM) suite during the first quarter continued to focus on
the finance and information and communications technology industries, with
client additions and expansions including Citigroup, Choicepoint, CashEdge,
Compass Bancshares, Financiera Rural, GE Commercial Finance Asia, Genpact,
HSBC Mexico, JP Morgan Chase Canada, MBNA Europe, O2, Russell Investments,
Standard Chartered Bank, and Yellow Pages Group. Expanded use of the Company's
Credit Risk Analytics Systems in the financial services sector, for portfolio
analysis, credit risk modeling, loss mitigation and credit re-pricing, as well
as default estimation and compliance with Basel and local market regulatory
requirements, was a primary contributor to growth in software revenues.

    Expansion of US Sales Operations.

    During the second quarter, the Company opened and staffed a New York
based sales office to support business development and more effective account
based field sales with existing customers and new prospects. Planned expansion
of the Company's US based marketing, sales and solution delivery teams is
expected to occur through 2009, focused on the financial services and ICT
industries. It is expected that both marketing and sales and research and
development expenses will increase moderately during the 2008 fiscal year as
the Company invests in the expansion of its US based sales organization and in
additional research and development associated with the expansion of its
On-Demand solutions offerings for customer analytics in marketing, sales and
risk. Since the Company's solutions offerings tend to take longer sales cycles
than previous sales of packaged software, revenue impacts of direct field
sales expansion in the US market is expected to be realized late in 2008 and
into the 2009 fiscal year.

    Stock Option Grants

    The Company has approved the granting of 22,500 options to acquire 22,500
common shares at an exercise price of $0.68 per share to 4 non-executive
directors as previously disclosed in the Company's 2007 management information
circular. Options granted to directors vest over one year.

    Results Summary

    Unaudited preliminary results for the three and six months ended May 31,
2008 and corresponding 2007 results are as follows:


    
    ANGOSS Software Corporation
    Income Statement Information
    (unaudited, stated in Canadian dollars)

                              Three Months ended         YTD - Six Months
                             May 31,      May 31,      May 31,      May 31,
                              2008         2007         2008         2007

    Revenues              $ 1,888,807  $ 1,726,657  $ 3,841,844  $ 3,484,636
                          ------------------------- -------------------------
    Gross margin            1,888,807    1,726,657    3,841,844    3,484,636
    Operating Expenses
      General and
       administration         433,245      457,297      819,768      839,815
      Sales and marketing   1,109,988    1,000,154    2,173,510    1,906,086
      Research and
       development, net       285,448      181,222      495,730      460,475
                          ------------------------- -------------------------
                            1,828,681    1,638,673    3,489,008    3,206,376
                          ------------------------- -------------------------
    Income before the
     following                 60,126       87,984      352,836      278,260
      Other income             19,895       36,194       19,895       36,194
      Amortization of
       capital assets        (111,918)     (78,439)    (190,047)    (148,459)
      Amortization of
       deferred charges        (7,210)     (16,968)     (14,420)     (26,236)
      Dividend expense        (10,118)     (20,235)     (20,263)     (40,305)
      Foreign exchange
       gain (loss)             28,521     (235,943)     (10,919)    (168,916)
      Stock option expense    (13,974)      (3,835)     (16,146)      (9,075)
                          ------------------------- -------------------------
    Net income and
     comprehensive income
     for the period       $   (34,678) $  (231,242) $   120,936  $   (78,537)
                          ------------------------- -------------------------
                          ------------------------- -------------------------

    Basic and diluted
     loss per share       $     (0.00) $     (0.03) $      0.02  $     (0.01)
                          ------------------------- -------------------------
                          ------------------------- -------------------------

    Weighted average
     number of shares
     outstanding
      Basic                 7,256,612    7,938,476    7,504,877    7,938,043
      Diluted               7,256,612    7,938,476    7,528,732    7,938,043



    Selected Cash Flow Information
    (unaudited, stated in Canadian dollars)

                              Three Months ended         YTD - Six Months
                          ------------------------- -------------------------
                             May 31,      May 31,      May 31,      May 31,
                              2008         2007         2008         2007

    Cash (used in)
     provided by
     operating
     activities           $  (650,217) $   (96,512) $    52,135  $  (150,083)
    Cash used in
     investing activities     (86,584)    (111,975)    (171,091)    (673,832)
    Cash (used) provided
     by financing
     activities                11,174       68,400     (816,728)     666,915
    Net decrease in
     cash during the
     period                  (725,627)    (140,087)    (935,684)    (157,000)



    Selected Balance Sheet Information                 May 31,   November 30,
    (unaudited, stated in Canadian dollars)             2008        2007

      Cash and cash equivalents                     $ 1,399,423  $ 2,335,107
      Accounts receivable                             1,533,624    2,025,907
      Prepaid expenses and other assets                 356,812      467,440
                                                    -------------------------
    Total current assets                              3,289,859    4,828,454
      Capital assets, net                               843,512      862,468
                                                    -------------------------
    Total assets                                    $ 4,133,371  $ 5,690,922
                                                    -------------------------

      Accounts payable and accrued liabilities      $   552,306  $   752,731
      Current portion of deferred revenue             3,207,136    3,880,371
      Current portion of repayable contribution               -       10,988
      Current portion of capital leases                 106,432      110,685
      Current portion of term debt                       60,000       60,000
      Current redeemable portion of preferred
       shares                                           562,267      547,847
      Other                                              33,592       38,376
                                                    -------------------------
    Total current liabilities                         4,521,733    5,400,998
                                                    -------------------------
      Capital leases                                    179,382      175,047
      Term debt                                         165,000      195,000
      Lease inducement                                  108,834      122,715
                                                    -------------------------
    Total liabilities                                 4,974,949    5,893,760
    Total shareholders' equity                         (841,578)    (202,838)
                                                    -------------------------
    Liabilities and shareholders' equity            $ 4,133,371  $ 5,690,922
                                                    -------------------------
    


    Angoss Software empowers people to make "Better Business Decisions. Every
Day."(TM)
    Some of the world's leading financial services, information and
communications technology, life sciences, and retail organizations use Angoss
predictive analytics software and services to grow revenues, while reducing
risk and cost. Angoss helps our clients utilize business data to discover the
key drivers of behavior, predict future trends and events, and act with
confidence when making business decisions. Angoss combines powerful market
proven software with focused industry services expertise in the deployment,
integration and use of predictive analytics in enterprise environments. Our
differentiators include broad user acceptance, a commitment to open standards,
rich functionality, rapid deployment, exceptional ease-of-use and
affordability.
    Headquartered in Toronto Canada, Angoss has offices in the UK and
partners with the world's leading enterprise software and services vendors.
For more information, visit www.angoss.com.

    This press release contains statements of a forward-looking nature. These
statements are made under the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. The accuracy of these statements may
be impacted by a number of business risks and uncertainties that could cause
actual results to differ materially from those projected or anticipated,
including: the risk that the sale of our products and services involves a long
sales cycle; the risk that the economic environment and business conditions
will remain difficult to predict; the risk of competition in our target
markets; the risk that we may not respond adequately to evolving technologies;
the risk that we or our customers may have difficulties in introducing our
products or services; the risk that we will encounter difficulties in
continuing to offer services; the risk that we will encounter difficulties in
integrating the operations of acquired companies with our own; the risks of
conducting our operations in a variety of international locations; the risk
that we may need to record future write-downs of assets arising from our
investments in other companies; the risks relating to the costs that we may
incur as a result of litigation against us; and other risks described in our
filings with securities regulatory authorities, including our annual reports,
interim financial statements and similar disclosure documents. Angoss Software
does not undertake any obligation to update this forward-looking information
after the date of its initial publication, except as required under applicable
law.

    Note: The Toronto Venture Exchange has neither approved nor disapproved
    the above information.





For further information:

For further information: Lon Vining, Chief Financial Officer, (416)
593-2420, lvining@angoss.com

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Angoss Software Corporation

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