News & Events

23 May 2006

Preliminary Results Announcement - For the year ended 31 March 2006

Endace Limited (the "company" or "Endace") (AIM : EDA), the world leader in the acceleration of network security and network traffic analysis applications, is pleased to announce its preliminary results for the year ended 31 March 2006. This follows the company's successful fund raising and admission to the Alternative Investment Market (AIM), a market regulated by the London Stock Exchange, in June 2005.

• Commenced introduction of next generation Data Acquisition and Generation technology architecture (DAG-II) across all new DAG cards.
• New markets penetrated, including the financial services market. The largest customer for 2006 is an internationally recognized financial services firm.
• Customer numbers grew by 111% to 195 customers in the twelve months to 31 March 2006.
• Increased customer spread, with 58% of total sales generated by the top 10 customers, compared with 66% in the year ending 31 March 2005.
• Direct sales forces now established in the US and Europe, with distributors appointed in several new countries including Germany, Switzerland, Austria, Poland, South Africa, China, Singapore, Malaysia, Taiwan and South Korea.
• New Finance Director appointed - Neil Hopkins, currently C.F.O. to become Finance Director, succeeding Claire Mitchell.
• Stuart Wilson joined Endace as VP Engineering. He will be appointed to C.T.O. on 1st June 2006. Professor Ian Graham, current C.T.O will become Chief Scientist.
• Successful admission to AIM in June 2005, raising £8m (gross) (US$14m).

*Note: The results presented in the Admission document dated 10 June 2005 were shown on a pro-forma basis consolidating the accounts of all Endace companies as if they had been under common ownership within a formal legal group for the previous three years. Under the principles of merger accounting the comparatives for 1 April 2004 to 30 September 2004 include only Endace Technology Ltd. The comparatives for the period ended 31 March 2005 cover Endace Technology Ltd only for period 1 April 2004 to 23 November 2004 and the formal legal entity from 23 November 2004 to 31 March 2005 which includes all group companies.

• Revenue generated from product support increased to $0.9m (2005: $0.3m), being 8.2% of revenue demonstrating strong repeat revenue.
Component shortages in the fourth quarter resulted in less than forecasted sales and profits.
• Selling, administrative and R&D costs have increased (by $4.4m) in line with budget as the company's infrastructure was developed following the IPO.
• Pre-tax profit includes an exchange gain of $730,000 (2005: $55,000) arising primarily from unrealised gains on the conversion of foreign currency working capital to the company's functional currency, New Zealand dollars.

Selwyn Pellett, CEO of Endace, commented: "I am very pleased to reflect on the progress made during our first year as a publicly quoted company and am delighted that in a period of infrastructure growth we were able to trade profitably. I am excited by the company's ability to exploit the rapidly expanding opportunities presented by the network security industry. The company's leading-edge products are widely recognized as an effective solution to many of the industry's challenges and we are strongly positioned to take advantage of this next year and beyond."

"Claire Mitchell, who for personal reasons has decided to return to Australia, will shortly step down as Finance Director. The board of Endace would like to place on record its appreciation for Claire's outstanding contribution to the development of this company, particularly during its successful flotation in 2005. She leaves with every good wish for her future in Queensland."