Fast Search
OSLO STOCK EXCHANGE : FAST.OL

October 25, 2005 11:16 ET

Fast Search & Transfer Announces Q3 2005 Results

OSLO, Norway--(CCNMatthews - Oct 25, 2005) -

Record Revenues of $26.6m in Q3, Yielding Growth of 61%;

Record Revenues of $71.9m for First Nine Months, Yielding Growth of 67%

Record EBIT of $4.6m in Q3 and $12.4m for First Nine Months, Both Reaching 17% of Revenues

Fast Search & Transfer™ (FAST™), the leading developer of enterprise search and real-time alerting technologies, today announced financial results for the third quarter ended September 30, 2005.

Highlights

-- Q3 2005 revenues of $26.6m - grew 11% over the last quarter and 61% year on year

-- Revenues for the first nine months increased to $71.9m, growing 67% year on year

-- Growth driven by widening adoption of the FAST Enterprise Search Platform (FAST ESP™), Search Derivative Applications (SDAs), and OEM enterprise search solutions from both new customers and expanding current relationships

-- Q3 operating income of $4.9m and EBIT of $4.6m - more than doubled year on year

-- Year-to-date operating income and EBIT margins increased to 18.0% and 17.3%, respectively

-- EBITDA of $6.4m in Q3 - grew 8% over last quarter and 56% year on year

-- Year-to-date growth increased EBITDA to $17.7m, improving margin from 24% to 25%

-- Q3 operating cash flow of $1.4m - quarter-end cash balances solid at $81.7m

-- Operating cash flow for the first nine months increased to $13.9m, as cash received from customers nearly doubled from $35.8m to $69.0m

-- Key wins in eBusiness, Knowledge Enablement and Application Enablement; spanning ecommerce, education, financial services, government, internet search, media, publishing, retail, software development, and telecommunications

-- New or extended customer relationships include Accoona, Babelstore SA/PriceMinister, Fidelity Investments, FirstGov, Gjensidige Forsikring, Iconoculture, KRAK, Kunnskapsforlaget, Nottingham Trent University, Schibsted Sok, Softbank, Stuller, Vodafone and World Directories, among others

-- New reseller, OEM and alliance partnership agreements with Accenture, BAU Solutions, Integrated Knowledge Dynamics, LexisNexis Applied Discovery, Merlin, Messaging Architects, nMatrix, Renew Data, Unified Solutions Ltd. and Wipro, among others

-- Product developments included the release of FAST InStream™ Version 4.2. FAST InStream is an OEM-specific enterprise search solution developed specifically to meet the complex application-specific search requirements of independent software vendors (ISVs)

-- Key customer milestones achieved with adoption of new product lines and industry-leading features include: Elsevier Scirus, Media News Group Interactive (MNGi) and WeightWatchers.com, among many others.



Q3 2005 Financial Summary

For the three months For the nine months
ending ending

Amounts in 30-Sept.-05 30-June-05 30-Sept.-04 30-Sept.-05 30-Sept.-04
US$000's (unaudited)(unaudited) (unaudited) (unaudited) (unaudited)
Revenue 26,602 24,070 16,503 71,938 43,165
EBITDA 6,438 5,962 4,135 17,678 10,261
EBIT 4,604 4,154 2,155 12,421 4,429
Net Income 3,499 3,143 1,742 9,376 3,548



Financial Performance

Commenting on the Company's results, Dr. John M. Lervik, chief executive officer of FAST, said, "In Q3 we pushed the revenues near the $27 million mark, outpacing all of our competitors by vigorous execution of our innovation, go-to-market, and client satisfaction strategies. I am delighted by the increasing importance of search in the marketplace. In particular, I am pleased that our current clients are expanding their relationships with FAST by utilizing our offerings in new strategic opportunities."

Ali I. Riaz, president and chief financial officer of FAST, remarked, "FAST signed on a record number of new customers during the quarter, and broadened a record number of existing relationships with follow-on sales." FAST's year-to-date results showed top-line growth of 67%, with EBITDA growing by 72%, and the EBITDA-to-revenue margin pushing upward from 24% to 25%. Riaz added: "Strategically, our platform (FAST ESP) and search-derivative applications (SDAs) built on FAST ESP continue to deliver unprecedented value to our customers. Further, FAST is the safest bet in the market with its strong financial growth, debt-free balance sheet, high esteem amongst industry analysts, and leading-edge products proven by customer endorsements. Our top-rated consulting, hosting, and delivery services make FAST an ideal strategic technology partner. As a result, our customer loyalty is the best in the industry: 100% customer retention, 98% customer satisfaction. FAST continues to close the highest average deal size in the search business."

New Customers

FAST's new and expanded customer roster in Q3 spanned every continent and key business sector, including ecommerce, education, financial services, government, internet search, media, publishing, retail, software development, and telecommunications. These new and extended customers demonstrate significant traction in all three of FAST's business sectors: eBusiness, Knowledge Enablement and Application Enablement. The company closed a record number of new customer deals in Q3 2005.

New or extended eBusiness customers for Q3 included Accoona, Babelstore SA/PriceMinister, Iconoculture, Schibsted Sok AS, Softbank, Stuller, Vodafone and World Directories, among others. The FAST eBusiness product suite offers a range of applications from site search to mission-critical advanced online solutions. FAST also made strong headway in multimedia search, signing major agreements with four leading global brands to power search of rich media assets and data.

In FAST's Knowledge Enablement sector, new and extended customer relationships included Fidelity Investments, FirstGov, Nottingham Trent University, Renew Data, United Parcel Service (UPS), U.S. Department of Homeland Security and the U.S. Department of Agriculture, among others.

New Application Enablement (OEM) relationships were signed in Q3 with customers building their software solutions on top of FAST InStream™, including, Integrated Knowledge Dynamics, LexisNexis Applied Discovery, Messaging Architects, and nMatrix among others.

Strategic Partnerships

FAST continued to strengthen its indirect channel offerings by partnering with a wide array of ISVs and system integrators around the globe, and in multiple application areas including: brand protection, content management, email compliance, legal discovery, library sciences and storage/archiving. The richness of the InStream feature set and breadth of platform support continues to win over ISVs that use search as a competitive differentiator and productivity enhancement. FAST also extended its relationship with LexisNexis by adding an OEM relationship with Applied Discovery, and strengthened existing OEM relationships with Computer Associates and Chordiant Software. "Our Q3 marked the one year anniversary of the introduction of FAST InStream, our OEM enterprise search solution developed specifically to meet the complex application-based search requirements of independent software vendors. We have seen remarkable success over the past year, and that momentum increased in Q3. Scores of organizations have selected FAST as their search technology partner - clearly demonstrating confidence in our company, and in the strength of our technology platform for addressing a broad range of content and business applications," stated Riaz.

FAST has entered into a Joint Venture with Sensis Pty Ltd, the leading Australian directories company, and Schibsted Sok, a wholly owned subsidiary of Schibsted, a leading media group in the Nordic region. The Joint Venture Company will be located in London with a separate management team focused on delivering state-of-the-art search and online advertisement solutions to online directories and media companies. FAST's involvement in the Joint Venture includes a minority equity investment as well as delivery of software licenses and ancillary services. FAST owns 19% of the Joint Venture.

Consultancy Services

The FAST Search Best Practices™ (FAST SBP™) strategic consulting services continued to help a growing number of organizations exploit the full potential of search. In Q3 more than 30 workshops were conducted for FAST's major prospects and existing customers, supporting their search investment from initial concepts through deployment and expansion throughout the organization. SBP workshops execute a focused analysis of customer's current search context, providing a series of structured recommendations to optimize their use of search technology, and prioritize existing and future projects. SBP consulting workshops were also delivered in conjunction with FAST's SI partners, including Accenture, IBM and Tieto Enator, enabling them to provide best-in-class search consulting at technical, functional and strategic levels. "The uniqueness of SBP consulting lies in its combination of short-term recommendations for search implementation with a long-term vision in ways that intelligent search can redefine enterprise business processes," commented FAST chief technology officer Bjorn Olstad.

Customer Milestones

A number of significant milestones were reached by our customers in Q3 as more than forty projects went live. Included among these projects is Scirus, Reed Elsevier's award-winning scientific web search engine. Reed Elsevier further enhanced their users' experience by leveraging FAST's expertise in advanced search technology and relevancy ranking, enabling Scirus to deliver extremely precise search results with lightning speed. MediaNews Group uses FAST technology to increase their customer search experiences for many of their media properties, including major news organizations such as The Denver Post and the San Francisco Bay papers. WeightWatchers.com applied FAST advanced search and navigation capabilities to deliver health, food and fitness information more easily to all site visitors. This powerful search function, combined with a scientific approach people trust and the best weight-loss tools on the Internet, continue to make WeightWatchers.com the leading subscription-based weight-loss site on the Web.

FAST Innovation

FAST's continuous investment and focus on R&D has in Q3 delivered a number of major improvements of the platform and search derivative applications. These product innovations have been driven by market trends and are already adopted by a number of customers:

-- FAST's OEM offering, FAST InStream, had its third version release in its first year, expanding feature and innovation leadership in the market. New capabilities include Index Data Management for ASP and multi-tenet models, Web Services and increased performance

-- FAST added a number of new capabilities to its publishing applications that enable publishers to offer more valuable content. These capabilities include sub-document navigation, printing of "publications" not just documents, saved searches, and e-mail integration for sharing pointers to documents with other users

-- In advance of upcoming deployments for customers such as Amp'd Mobile, FAST added a number of new strengths to its mSearch offerings, including advancing its user activity modeling capabilities

-- FAST further evolved FAST ESP for Multimedia - extending FAST's rich media solution across Broadband, Telecom, Publishing and Media Industries to enable organizations to mine both archived and streamed rich media deeper than ever before

-- FAST furthered development of the FAST Personal Search Platform in advance of an expected product announcement early in Q4. FAST PSP extends FAST's search technology to a flexible platform that enables partners and their enterprise customers to make every desktop computer a search hub unifying the desktop, enterprise and Web.

Q4 2005 Business Focus

"We have made solid progress during the year, including meeting our technology, customer acquisition, partner relations, and financial objectives," commented Lervik. "With an increasing number of technology capabilities and market driven offerings, FAST has the most complete vision and a demonstrated ability to execute on our strategy. The demand for business transformation based on Search has just begun, and we intend to take a leadership role in this development. We are on track to deliver another record year for FAST in 2005. The progress and investments during 2005 also represent a sound foundation for 2006 and beyond."

About FAST

FAST creates the real-time search and filtering solutions that are behind the scenes at the world's best known companies with the most demanding search problems. FAST's flexible and scalable integrated technology platform elevates the search capabilities of enterprise customers and connects people to the relevant information they seek regardless of medium. This drives revenues and reduces total cost of ownership by effectively leveraging IT infrastructure. FAST's powerful enterprise search technology solutions are used by more than 1,500 global customers and partners, including America Online (AOL), AT&T, Cardinal Health, CareerBuilder.com, Chordiant, CIGNA, CNET, Dell, Factiva, Fidelity Investments, Findexa, FirstGov.gov (GSA), IBM, Knight Ridder, LexisNexis, Overture, Rakuten, Reed Elsevier, Reuters, Sensis, Stellent, Tenet Healthcare, Thomas Industrial Networks, T-Online, US Army, Virgilio (Telecom Italia), Vodafone, and Wanadoo.

FAST is headquartered in Norway and is publicly traded under the ticker symbol 'FAST' on the Oslo Stock Exchange. The FAST Group operates globally with presence in Europe, the United States, Asia Pacific, Australia, South America, and the Middle East. For further information about FAST, please visit www.fastsearch.com.

(C) 2005 Fast Search & Transfer ASA - Fast Search & Transfer, FAST, FAST ESP, FAST PSP, FAST Data Search, FAST Marketrac, FAST AdVisor, FAST InStream, FAST ImPulse, FAST Search Best Practices, FAST SBP, FAST ProPublish, FAST mSearch and the FAST four-colored logo are trademarks of Fast Search & Transfer ASA. All rights reserved. FAST disclaims any proprietary interest in the marks and names of others. All other trademarks mentioned in this document are the property of their respective owners.

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