Company Reports Profitability and Strong Revenue Growth of 21%.

Seagull Software (AEX:
SEAGULL), a leading provider of software products for connecting legacy applications to Internet architectures, today announced financial results for the quarter ended 31 July 2005, which is the first quarter of the Company’s financial year 2006 (Q1 FY 2006).
Total revenues for the period were $6.6 million, representing an increase of 21% as compared with total revenues of $5.5 million for the first quarter of the previous financial year. Net income for the first quarter was $52K as compared with a net loss of $1.5 million in the corresponding period of the previous financial year.
“We are very pleased with this strong performance,” said Don Addington, President and CEO of Seagull Software. “Seagull Software showed solid revenue growth and profitable results in the first quarter, and we are well-positioned to build on this success and further strengthen our market position.”

License revenue for Q1 FY2006 was $2.7 million, an increase of 31% as compared with license revenues of $2.1 million for the first quarter of the previous financial year. The Company added 38 new customers (not counting customers via acquisition) to the installed base as compared with 19 new customers added in the same period last year, making a significant contribution to the growth in license revenues. Service and maintenance revenues for the quarter were $3.8
million representing an increase of 14% as compared with similar revenues the first quarter of the previous financial year. Maintenance revenues increased by 19% as a result of a new maintenance revenue stream from the acquisition of SofTouch, as well as consistently high maintenance renewals from the Company’s installed base of customers.
Gross margin was $5.3 million or 81% of total revenues, as compared to gross margin of $4 million or 74% of total revenues for the corresponding quarter in the previous year. Gross margin for both consulting and maintenance increased year-over-year as a result of improved consultant utilization and increased maintenance revenue. Total operating expenses covering the sales & marketing, research & development and administrative functions were $5.5 million, in line with the first quarter of the previous year.