Cranes Software International Ltd. (Cranes Software), a global scientific and engineering software solutions provider, today announced its unaudited results for the quarter and nine months ended December 31, 2005. The Company's Board of Directors also approved the acquisitions of InventX, Inc. and Karna Softek India.
Commenting on the performance, Asif Khader, Managing Director, Cranes Software International Limited, said:
"Our financial performance in the reported period is indicative of the strong leverage derived from focused strategies in the existing technical software products' space. While continuing to deliver on such localized strategies and initiatives in each region of our focus, we have also enhanced our opportunities by expanding presence in the enterprise software segment.
The two acquisitions announced today take us closer to our objective of taking our widely acclaimed suite of products to global enterprises with a domain focus of identified verticals. While InventX adds to our portfolio a comprehensive and cost-effective suite of integrated project management applications at the enterprise level, the Karna India acquisition gives us a head start within the banking and financial services vertical, a key focus area for our enterprise-focused products. Cranes has a highly successful track record of using acquisitions to expand its range of competencies and we are confident that InventX and Karna India will create significant upsides for our business going forward."
Cranes Software Group performance review:
Nine - month review:
9M FY2006 (April - December 2005) v/s 9M FY 2005 (April - December 2004)
- Operating revenues up by 34% to Rs. 1460.9 million compared to Rs. 1,088.9 million.
- Operating profit higher by 79% at Rs. 877.0 million from Rs. 490.7 million.
- Net profit after tax increased 50% to Rs. 420.67 million from Rs. 280.0 million.
Corresponding quarter performance:
Q3 FY2006 (October - December 2005) v/s Q3 FY 2005 (October - December 2004)
- Operating revenues up by 40% to Rs. 512.3 million compared to Rs. 364.8 million.
- Net profit after tax higher by 54% to Rs. 154.4 million from Rs. 100.6 million.
- EPS on higher share capital, restated, up at Rs. 1.37 compared to Rs. 0.99 ( previous period figure adjusted for Bonus Issue and Stock Split )
Acquisition of InventX Inc.
Cranes Software and its wholly owned subsidiary Systat Software Inc. have announced the acquisition of the ongoing business of the Texas-based, InventX, Inc. The consideration for the acquisition is to be paid in a phased manner to enable InventX to discharge certain of its identified and specified liabilities upto $ 1 million, together with issue of 1,000,000 equity shares of Cranes Software International Limited, of face value of Rs. 2/- to be made to InventX on or before October 2006.
Details of the acquisition
The acquisition comes with the IPR to InventX ePM, a project portfolio management solution, the sales and marketing rights for which had previously been acquired by Cranes, and InventX Inc. selected core management team. InventX ePM is a comprehensive and cost-effective suite of 100% web-based integrated project management applications. The software supports total communication, collaboration, and coordination of an organization's geographically diverse personnel and project resources to maximize the potential for project success. Some of InventX Inc's existing customers include Texas Instruments, World Vision, Novartis, Dell and Target.
Acquisition rationale
The InventX acquisition will enable Cranes to make a strong entry into the enterprise products space. The post-acquisition integration process will be facilitated by the fact that Cranes already provides product development and implementation support for InventX ePM through a dedicated development center. This involves product upgrades; customer and implementation support; and technical and after sales support across the global customer base.
Cranes will manage the entire life-cycle for the InventX product in line with its defined roadmap including version control and ongoing enhancements by leveraging its long expertise in offshore product development. Overall, it expects to further invest US$ 3-4 million over the course of the year and employ 50 to 60 people within this initiative.
The InventX ePM product acquisition will also allow Cranes to further leverage the extensive reach of its global sales and distribution network in 33 countries through direct offices and distributor / re-seller relationships to 360,000 existing users of its scientific and engineering software products.
Acquisition of Karna Softek India
Cranes has announced the acquisition of selected ongoing business undertaken by Karna Softek India Pvt. Ltd. (Karna India), the wholly owned subsidiary and Indian development center of Delaware- based Karna Global Technologies. Cranes will pay a consideration not exceeding Rs. 42 million in cash for the acquisition which includes an amount of Rs. 22 million towards discharge of identified liabilities in respect of the acquired business.
Details of the acquisition
The development team of Karna-India has, over the last few years, developed e-banking software for its international customers, hence creating a strong team of domain experts in the Banking and Financial Services (BFS) field. This acquisition provides Cranes with access to a comprehensive banking product suite and ongoing relationships with present and prospective customers for product development and deployment particularly in the BFS segment. Karna also has some significant customer relationships, with strong visibility within the high growth Middle East region, which is to transition to Cranes following the acquisition.
Acquisition rationale
The Karna India acquisition will spearhead Cranes' entry into the BFS sector by leveraging upon Karna's expertise in this space. This acquisition blends with Cranes' strategy of leveraging existing competencies to offer its range of products to global enterprises within its focus technologies / domains. Banking and Financial Services has been identified as a core vertical to be aggressively addressed by Cranes as part of its growth strategy in domain specific product development and the acquisition of customer relationship and personnel with domain knowledge from Karna India provides a strong initial base from where the presence can be extended.
Key corporate highlights for Q3 FY2006:
- Middle East operations launched in a JV with the Kanoo Group:
Cranes launched its Middle East operations in collaboration with the Kanoo Group to offer customized solutions in its product domains and services in the areas of analytics, enterprise project and portfolio management, Six Sigma consulting and enterprise applications by leveraging its own products, IP's and capabilities. Cranes will draw upon the Kanoo Group's brand equity, wide reach and vast network of partners and clients to expand its business in the Middle East, a key growth market for its software products.
- Cranes ranked among Asia's fastest growing Technology Companies:
Cranes was recognized as one of the fastest growing technology companies in the Asia Pacific region by Deloitte Technology Fast 500 Asia Pacific 2005 program for the third year in succession. Cranes' revenues grew 165% during the two year assessment period (FY 2003 to FY 2005). Prior to that, the inaugural Deloitte Technology Fast 50 India Program also recognized Cranes as one of the 50 fastest growing companies in India.
- Cranes commended at NASSCOM Product Summit 2005
Cranes Software was awarded the "Distinguished Application Product Company Award" by the NSRCEL, Indian Institute of Management, Bangalore (IIMB) under the aegis of NASSCOM Product Forum. Cranes Software was judged on the basis of its product range, financial performance, senior management team, alliance partnerships and market share.
- Cranes flagship product SYSTAT received the "Statistics 2005 Products of the Year"
Scientific Computing & Instrumentation (SCI), a leading publisher of technical information for the scientific community, recognized SYSTAT as a "Statistics 2005 Products of the Year" Winner.
SYSTAT was selected as one of the winners in the magazine's "Products of the Year for 2005" program on the basis of readers' response over the past year and on feedback from the Editorial Board.
SYSTAT has continued to win accolades for being a desktop statistics package with a variety of standard and advanced statistical features. In 2004, SYSTAT was judged to be among the "Top 5 Products by Scientific Computing & Instrumentation. Systat Software Inc., Cranes Software's 100% subsidiary, was rated as a 'Technology Leader' for 2003 & 2004 by SCI.
For further information, please contact :
Contact : Akila Lean (Cranes Software International Limited)
Phone : +91 80 4112 0000
Fax: +91 80 4123 1274
Cell: +91 9845246723
E-mail :
akila@cranessoftware.com
Contact : Shiv Muttoo (Citigate Dewe Rogerson)
Phone : +91 22 4007 5036
Fax : +91 22 2284 4561
Cell: +91 9821061591
E-mail :
shiv@cdr-india.com
About Cranes Software International Ltd. (CSIL):
Cranes Software is a global scientific & engineering products and solutions provider. The Company's business interests straddle products, services, RD in future technologies, training and high-end consultancy for engineers and scientist worldwide. Focused on the scientific and engineering community, Cranes Software has addressed the needs of a variety of customer groups ranging from large multinational companies to government, defence, educational and research institutions for over a decade.
Today, Cranes Software has its presence in 33 countries across the world and has a user base of more than 360,000. Cranes Software also offers world-renowned solutions from reputed principals such as The Mathworks, Texas Instruments, IBM through product alliances.
With a mission statement to provide its customers the best in scientific technology and to enable its customers to define new limits, Cranes Software is setting new standards in the scientific and engineering field. For more information visit www.cranessoftware.com
Certain statements in this release concerning our growth prospects are forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties, including government actions; local political or economic developments; technological risks; risks inherent in the Company's growth strategy; dependence on certain clients; dependence on availability of technical consultants and other factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statements. The Company undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
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