UNIT4 Business Software

UNIT4 Business Software

October 22, 2012 13:30 ET

UNIT4 Announces Performance for Q3 2012

VICTORIA, BRITISH COLUMBIA and MANCHESTER, NEW HAMPSHIRE--(Marketwire - Oct. 22, 2012) - UNIT4 (EURONEXT AMSTERDAM:UNIT4), the cloud-focused business software and services provider for Businesses Living in Change, is pleased to announce revenue growth for the third quarter of 2012, despite an increasing move towards subscription invoicing. Demand for cloud-based solutions, which include not only the FinancialForce.com division but also its core Coda and ABW products, continue to gain momentum with increasing interest from potential clients. Even with this strategic change in the business, license revenue increased in Q3 by more than 25%.

UNIT4's Q3 revenue amounted to $144.2 million (EUR110.7 million), an increase of 11% compared to revenue in Q3 2011.

License revenues grew by more than 70% in the UK and saw double digit growth in North America, Sweden, Benelux and Asia.

FinancialForce.com, the cloud applications company in which UNIT4 is the majority investor, again showed a strong performance and almost doubled its revenue over Q3 compared with the same period last year.

Due to increased workload and more hosting costs, the gross margin declined slightly in Q3 to 92.5% (Q3 2011: 92.9%).

Despite increased investments in FinancialForce.com, total EBITDA continued to grow. Total EBITDA in Q3 2012 - including FinancialForce.com - grew by 6% to $26.7 million (EUR20.5 million) [Q3 2011: $25.3 million/EUR19.4 million], representing an EBITDA Margin of 18.5%.

Excluding FinancialForce.com the EBITDA increased by more than 10%.

The forensic investigation of our Polish business is now close to completion and in addition to costs for lawyers and auditing around $1.3 million (EUR1 million) it is expected that the total remaining exposure is not material.

The growing momentum of cloud computing is now evident across most of UNIT4's products and revenue recognition is consequently changing steadily from upfront fees towards subscription. This may have a larger impact on the estimated EBITDA range for Q4 if large deals typically seen in the last few months of the year are sold as cloud solutions on a subscription basis instead of "as license", since in the subscription scenario only a very small part of the deal can be recognized.

Publication of Annual Results over 2012 is planned for 20 February, 2013 (after market close of the Amsterdam Stock Exchange).

This document contains certain future expectations about the financial state of affairs and results of the activities of UNIT4 as well as certain related plans and objectives. Such expectations for the future are naturally associated with risks and uncertainties because they relate to future events, and as such depend on certain circumstances that may not arise in future. Various factors can cause real results and developments to deviate considerably from explicitly or implicitly made statements about future expectations. Such factors may for instance be changes in expenditure by companies in important economies, statutory changes and changes in financial markets, in pension costs, in the salary levels of employees, in future exchange and interest rates, in future takeovers or divestitures and the pace of technological developments. UNIT4 therefore cannot guarantee that the expectations will be realized. UNIT4 also refuses to accept any obligation to update statements made in this document.

About UNIT4 Business Software

UNIT4 Business Software is the North American subsidiary of UNIT4, a $550 million global cloud-focused business software and services company. It offers solutions that help Businesses Living IN Change (BLINC)™ in public, private, non-profit and higher education organizations embrace business change simply, quickly and cost-effectively. Agresso Business World, the company's flagship Enterprise Resource Planning (ERP) suite and Coda Financials, its best-of-class financial management software, are used by 5500+ organizations in more than 100 countries. For more information visit www.unit4.com/na or follow the company on Twitter and LinkedIn.

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