Gemcom announces second quarter fiscal 2008 results



    Total revenue up 61%; net income up 91% over the same quarter in the
    prior year

    VANCOUVER, Nov. 13 /CNW/ - Gemcom Software International Inc. (TSX:GCM),
the largest global supplier of specialised mining productivity solutions,
today announced its financial results for the three-month period ended
September 30, 2007. All figures are quoted in Canadian dollars.

    Q2 Fiscal 2008 Highlights:

    
    Financial

    -   Total revenue increased 61% to $13.0 million in Q2 2008 from
        $8.1 million in Q2 2007;
    -   EBITDA(1) increased 67% to $2.7 million in Q2 2008 from $1.6 million
        in Q2 2007;
    -   Income from operations increased to $2.4 million, or 19% of revenue,
        from $1.1 million, or 14% of revenue, in Q2 2007;
    -   Net income increased by 91% to $1.5 million, or 12% of revenue, from
        $0.8 million, or 10% of revenue in Q2 2007;
    -   Working capital increased 39% to $15.8 million on September 30, 2007
        as compared with $11.4 million on March 31, 2007.

    Operational

    -   Lonmin Plc, the world's third largest and lowest cost platinum
        producer, selected Gemcom InSite(TM) as its short-term planning and
        continuous measurement system for its Marikana mining operation in
        South Africa;
    -   Released Gemcom InSite 2.1, incorporating features that address the
        growing need of multi-national corporations in an era of global
        consolidation in the mining industry; and
    -   Released Gemcom MineSched(TM) 5.1, the latest version of its popular
        scheduling software for surface and underground mines.
    

    "We continue to actively access new opportunities in the larger Mining
Execution Systems space, while improving our offerings and sales to our
existing customers," said Rick Moignard, president and CEO of Gemcom. "Our
objective is to enhance the capabilities of our geological modelling and mine
planning tools, integrating these into a total solutions framework that
address our customer's specific needs and supports a growing international
sales pipeline."
    "We delivered very solid results in the second quarter from increased
license sales across each of our product lines and substantial growth in both
maintenance and professional service revenue," said Garth Albright, CFO of
Gemcom. "The Company's higher activity levels in each of its regional business
units in both the established and emerging markets has positioned Gemcom to
generate positive financial performance despite the impact of the strong
Canadian dollar versus other international currencies."

    Second Quarter 2008 Financial Review:

    Gemcom's consolidated results include Surpac Minex Group Pty Ltd. (Surpac
Minex) which was acquired in July 2006, and are compared to pre-acquisition
results of the prior fiscal period as applicable.
    Revenue for the three months ended September 30, 2007 was $12,998,155, an
increase of 61% over the same quarter last year. Higher license sales and
related Upgrade Service and Technical Support (USTS) revenue, resulting from
the Surpac Minex acquisition on July 19, 2006, was a primary reason for the
increase. In addition, higher sales of Gemcom Surpac, Gemcom GEMS and Gemcom
Whittle software resulted in license revenue of $6,855,833 in Q2 of fiscal
2008 as compared to license revenue of $4,248,350 in Q2 of last year. USTS
revenue in Q2 was $3,890,160, professional services revenue was $2,008,674 and
other revenue was $243,488. As compared with Q2 of last year, USTS revenue and
professional services revenue increased 61% and 82%, respectively. Organic
growth in the quarter was 45% as compared to last year's comparable quarter.
    Research and development expenses for the second quarter of this year
were $2,315,441, as compared to $1,797,683 in Q2 of the prior year, an
increase of $517,758, or 29%. This increase is due primarily to the bringing
together of the two research and development teams upon the acquisition of
Surpac Minex in July 2006, and the formation of the Company's product
management team in the last half of fiscal 2007. Exclusive of investment tax
credits recorded in this quarter of $271,160 and exclusive of development
costs deferred in Q2 of last year of $185,979, research and development
expenses as a percentage of revenue were 20% in Q2 2008, versus 24% in Q2
2007.
    During the three months ended September 30, 2007, sales and marketing
expenses were $4,478,199 as compared with $2,930,359 for the same three months
last year. This increase of $1,547,840, or 53%, is primarily due to personnel
costs on the expansion of Gemcom's regional business units upon the
acquisition of Surpac Minex in July 2006 and the addition of 70 employees in
sales, support and services at that time.
    EBITDA(1) increased to $2,699,045 for the three months ended
September 30, 2007 compared with $1,616,067 for the same three month period in
2007, an increase of $1,082,978, or 67%.
    Net income for Q2 of fiscal 2008 was $1,530,199, or basic and diluted
earnings per share of $0.03 and $0.02 respectively. This represents a 91%
increase over earnings of $801,713 or basic and diluted earnings per share of
$0.02 in the same quarter last year. Total shares issued and outstanding as at
September 30, 2007 was 53,164,771.

    
    (1) EBITDA, defined as earnings, before interest, taxes, depreciation and
        amortization, does not have any standardised meaning prescribed by
        GAAP. However, management believes it is a useful supplemental
        measure of operational performance.
    

    Complete financial statements can be found via SEDAR (www.sedar.com), or
on the Company's website (www.gemcomsoftware.com/investor_relations).

    Conference Call

    Gemcom will host a conference call to discuss these financial results on
November 14, 2007 at 9:00 a.m. E.S.T (6:00 a.m. P.S.T.) To access the
conference call by telephone, dial +1 416-915-5763 or 1-800-250-4892. Please
connect approximately 10 minutes prior to the beginning of the call to ensure
participation. The conference call will be archived for replay until
Wednesday, November 21, 2007 at midnight. To access the archived conference
call, dial +1 416-640-1917 or 1-877-289-8525 and enter the reservation number
21253267 followed by the number sign. A live audio webcast of the conference
call will be available at www.gemcomsoftware.com and www.newswire.ca. Please
connect at least 15 minutes prior to the conference call to ensure adequate
time for any software download that may be required to join the webcast. The
webcast will be archived at the above web sites for 90 days.

    About Gemcom

    When mining companies seek to increase mine productivity, they turn to
Gemcom for technology and services. The Company is home to world-renowned
mining solutions like GEMS, Surpac, Minex, Whittle, and InSite and to industry
thought-leaders who are pushing the boundaries of what's possible in mining.
Established in 1985, Gemcom has a global reach delivering comprehensive
solutions in all major mining centres in more than 90 countries. Every major
mining company, including BHP Billiton, Codelco, CVRD, De Beers and Newmont,
is a Gemcom client. Through a combination of organic growth and strategic
acquisitions, the Company has become the largest global supplier of
specialised mining productivity solutions. Gemcom is listed on the TSX under
the ticker "GCM." For more information, visit www.gemcomsoftware.com.

    This press release contains forward-looking statements concerning the
future performance of Gemcom's business, its operations, and its financial
performance and condition. These forward-looking statements are based on
management's current expectations and judgment. The Company cautions readers
that all forward-looking information is inherently uncertain and actual
results may differ materially from the assumptions, estimates, or expectations
reflected or contained in the forward-looking information, and that actual
future performance will be affected by a number of factors, including but not
limited to economic conditions, technological change, and changes in
competitive factors, many of which are beyond the Company's control. Risks and
uncertainties that could affect Gemcom's business are discussed more
extensively in the MD&A section of the Company's most recent annual report and
annual information form, which are available on the Company's website or on
SEDAR at www.sedar.com. Future events and results may vary significantly from
what management currently foresees. These forward-looking statements are made
as of the date of this release and management assumes no obligation to update
or revise these statements to reflect new events or circumstances.

    
     Gemcom, the Gemcom logo and combinations thereof, are trademarks of
       Gemcom Software International Inc. GEMS, Surpac, Minex, Whittle,
    MineSched, PCBC and Gemcom InSite are either registered trademarks or
               trademarks of Gemcom Software International Inc.
    





For further information:

For further information: Investor Communications, Garth Albright, Chief
Financial Officer, (604) 684-6550, galbright@gemcomsoftware.com; Nick Hurst,
Vice President, The Equicom Group, (403) 538-4845, nhurst@equicomgroup.com;
Corporate Communications, Mark Bese, Marketing Communications Manager, (604)
684-6550 ext. 4481, mbese@gemcomsoftware.com

Organization Profile

GEMCOM SOFTWARE INTERNATIONAL INC.

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