Kofax Releases an Interim Management Statement for the First Quarter of its 2010 Financial Year

Revenues in Line With Expectations

BASINGSTOKE, England--(BUSINESS WIRE)--Kofax plc (LSE:KFX), the leading provider of document driven business process automation solutions, releases an Interim Management Statement for the first quarter of its 2010 financial year, which includes the period from 1 July to 30 September 2009 and the results of operations of 170 Systems, Inc. since Kofax’s acquisition of that company in early September 2009.

Kofax’s 2010 financial year started positively with total revenues in line with and adjusted operating profit ahead of our expectations. Software business revenues were higher than expected due to strong service revenues and offset lower than expected product distribution revenues in the hardware business. Sales execution and achievement levels across all segments of the company’s software business were generally as expected and the Company continued to make good progress in executing its strategic initiatives.

Other than the decrease in cash resulting from Kofax’s acquisition of 170 Systems, there have been no significant changes in the Company’s financial position since 30 June 2009 and its balance sheet remains strong.

Reynolds C. Bish, Chief Executive Officer, commented: “I’m pleased to report that we made good progress and performed better than expected in our software business this past quarter. Market conditions have stabilized and show early signs of improving to a limited extent but continue to be challenging and difficult to predict. As a result and excluding the effect of the 170 Systems acquisition, which should contribute approximately $22m of revenues after acquisition accounting, we continue to expect low to mid single digit organic revenue growth in our software business this financial year.”

Finally, on 8 September 2009 the Company announced its intention to report Kofax’s future financial results in US dollars. To assist readers in the transition from Pounds Sterling to US dollar reporting, the Company has attached and is today posting US dollar based financial statements for the years ended 30 June 2009 and 2008 on the Investor relations page of its website at www.kofax.com/ir.

About Kofax

Kofax plc (LSE: KFX) is the leading provider of document driven business process automation solutions. For more than 20 years, Kofax has provided award winning solutions that streamline the flow of information throughout an organization by managing the capture, transformation and exchange of business critical information arising in paper, fax and electronic formats in a more accurate, timely and cost effective manner. Kofax solutions provide a rapid return on investment to thousands of customers in financial services, government, business process outsourcing, healthcare, supply chain and other markets. Kofax delivers these solutions through its own worldwide sales and service organizations, and a global network of more than 1,000 authorized partners in more than 60 countries throughout the Americas, EMEA and Asia Pacific.

“Kofax” is a registered trademark in the US, the EU and other countries. All other trademarks and registered trademarks belong to their respective owners.

Consolidated Income Statement
	FY2009		H1 FY09		H2 FY09		FY2008		FY2007
	USD		USD		USD		USD		USD
Revenue	298,195		154,474		143,721		340,691		309,702
Software	169,391		86,693		82,698		192,209		169,333
Hardware	128,804		67,781		61,023		148,482		140,369
Cost of sales	142,105		74,425		67,679		147,353		135,044
Software	39,068		21,670		17,398		30,987		22,856
Hardware	103,037		52,755		50,281		116,367		112,187
Gross profit	156,090		80,049		76,042		193,337		174,658
Software	130,323		65,022		65,302		161,222		146,477
Hardware	25,767		15,027		10,740		32,115		28,181
Operating expenses	133,514		68,722		64,792		174,491		157,617
Adjusted operating profit before	22,576		11,327		11,250		33,687		30,040
Amortisation of acquired intangible assets	4,408		2,083		2,325		4,629		4,463
Reduction in goodwill arising on the utilisation of previously unrecognised tax losses	0		0		0		0		201
Restructuring costs	5,455		0		5,455		9,639		6,185
Share-based payment expense	1,318		1,110		208		573		2,151
Operating profit	11,396		8,134		3,262		18,846		17,041
Share of result of associated undertakings	173		115		58		174		110
Finance income	1,432		1,306		126		2,265		2,630
Finance expense	(1,008	)	(441	)	(567	)	(5,988	)	(228	)
Profit before tax	11,993		9,115		2,879		15,298		19,553
Tax expense	3,748		2,362		1,386		8,490		4,055
Profit after tax	8,245		6,752		1,492		6,808		16,076
Earnings per ordinary share
- Basic	10.0c		8.1c		1.9c		8.0c		17.6c
- Diluted	10.0c		8.1c		1.9c		7.8c		17.0c
- Adjusted basic	19.4c		9.1c		10.3c		28.9c		26.7c
- Adjusted diluted	19.4c		9.0c		10.4c		28.5c		25.9c

Consolidated Income Statement - Segmental Disclosure
	FY09		H1 FY09		H2 FY09
	USD		USD		USD
Software Revenue	169,391		86,693		82,698
Application Software Licenses	71,413		36,905		34,508
Application Software Services	76,115		37,738		38,377
OEM/POS	21,863		12,050		9,813
Hardware Revenue	128,804		67,781		61,023
Hardware Distribution	92,613		48,954		43,660
Hardware Services	36,191		18,827		17,363
Total Revenue	298,195		154,474		143,721
Cost of sales	142,105		74,425		67,679
Gross profit	156,090		80,049		76,042
Software	130,323		65,022		65,302
Hardware	25,767		15,027		10,740
Operating Expenses	133,514		68,722		64,792
Sales	56,568		28,144		28,425
Marketing	9,787		5,102		4,685
R + D	29,125		15,098		14,027
G + A	38,034		20,378		17,655
Adjusted operating profit before	22,576		11,327		11,250
Amortisation of acquired intangible assets	4,408		2,083		2,325
Restructuring costs	5,455		0		5,455
Share-based payment expense	1,318		1,110		208
Operating profit	11,396		8,134		3,262
Share of result of associated undertakings	173		115		58
Finance income	1,432		1,306		126
Finance expense	(1,008	)	(441	)	(567	)
Profit before tax	11,993		9,115		2,879
Tax expense	3,748		2,362		1,386
Profit after tax	8,245		6,752		1,492
EBITA split
EBITA	22,576		11,327		11,250
Software	13,783		5,619		8,164
Hardware	8,793		5,708		3,086

Consolidated Balance Sheet
	30.06.2009		31.12.2008		30.06.2008		30.06.2007
	USD		USD		USD		USD
Non-current assets
Intangible assets	137,500		115,734		140,074		136,399
Property, plant and equipment	9,809		10,065		9,341		7,321
Deferred tax assts	8,440		4,537		6,854		6,816
Investments	2,252		2,203		2,365		1,884
	158,001		132,539		158,634		152,420
Current assets
Inventories	15,902		13,963		18,276		14,690
Trade and other receivables	95,623		77,144		80,324		73,855
Investments - current	348		596		453		357
Current tax assets	2,173		1,898		3,368		0
Cash and cash-equivalent	49,294		47,541		72,619		78,600
	163,340		141,142		175,040		167,502
Total assets	321,341		273,681		333,674		319,922
Current liabilities
Trade and other payables	62,281		52,303		63,245		47,715
Deferred income - current	47,049		27,731		40,833		38,087
Other financial liabilities	2,531		2,203		3,073		2,161
Current tax liabilities	2,156		0		0		5,605
Provisions - current	5,531		2,780		5,413		5,513
	119,548		85,017		112,564		99,081
Non-current liabilities
Other payables	3,051		2,888		3,936		5,597
Deferred income - non current	10,127		15,384		13,440		11,015
Deferred tax liabilities	10,274		8,552		9,543		5,078
Provisions - non current	717		0		0		0
	24,169		26,824		26,919		21,690
Total liabilities	143,717		111,841		139,483		120,771
Net assets	177,624		161,840		194,191		199,151
Capital and reserves
Called up share capital	4,064		3,264		4,477		4,456
Share premium account	3,874		2,797		2,732		118,201
CTA / retained earnings	197,286		176,746		206,664		73,791
Merger reserve	2,835		2,483		3,424		3,442
ESOP shares	(14,455	)	(11,239	)	(14,993	)	(1,052	)
Treasury shares	(15,980	)	(12,211	)	(8,113	)	0
Minority interests - equity	0		0		0		313
Shareholders' equity	177,624		161,840		194,191		199,151

Consolidated Cash Flow Statement
	FY 09		H1 FY09		H2 FY09		FY08		FY07
	USD		USD		USD		USD		USD
Cash flows from operating activities
Profit before tax	11,993		9,115		2,879		15,298		19,553
Share results of associated undertakings	(173	)	(115	)	(58	)	(174	)	(110	)
Finance income	(1,432	)	(1,306	)	(126	)	(2,265	)	(2,630	)
Finance expense	1,008		441		567		5,988		228
Depreciation and amortisation	8,702		4,111		4,591		9,560		9,155
Share-based payment expense	889		1,110		(220	)	573		2,151
Reduction in goodwill arising on the utilisation of previously unrecognised tax losses			0		0				201
Movement in provisions	5,211		1,139		4,072		2,686		4,271
Gain/(loss) on disposal of property, plant and equipment	43		3		40		(124	)	(110	)
Movement in working capital	(11,436	)	(11,091	)	(345	)	9,101		(1,455	)
Cash generated from operations before restructuring	14,805		3,407		11,400		40,643		31,254
Payments under restructuring	(5,214	)	(2,676	)	(2,538	)	(8,265	)
Cash generated from for operations	9,591		731		8,862		32,378		31,254
Income tax paid	(1,926	)	(1,830	)	(97	)	(14,358	)	(6,297	)
Net cash inflow/(outflow) from operating activities	7,665		(1,099	)	8,765		18,020		24,957
Cash flows from investing activities
Purchase of property, plant and equipment, licences and similar rights	(12,508	)	(6,497	)	(6,011	)	(7,375	)	(3,705	)
Disposal of property, plant and equipment, licences and similar rights	153		14		139		397		298
Acquisition of a subsidiary, net of cash acquired	(2,681	)	(2,945	)	264		(1,445	)	(2,085	)
Acquisition of subsidiaries, net of cash disposed	0		0		0		(1,251	)	(3,253	)
Disposal of subsidiaries			0		0		(36	)	(2,829	)
Sale of non-current investment	0		0		0		0		172
Movement in long term loans to non-current investments	0		0		0		0		23
Interest received	944		2,498		(1,554	)	1,494		2,362
Net cash (outflow)/inflow from investing activities	(14,092	)	(6,930	)	(7,162	)	(8,216	)	(9,017	)
Cash flows from financing activities
Issue of share capital	1,247		1,253		(5	)	3,169		4,888
Increase/(decrease) in short term borrowings	859		(474	)	1,333		(355	)	(282	)
Share buy back	(7,023	)	(7,538	)	515		(22,493	)	0
Dividends paid to shareholders	(2,004	)	(2,378	)	185		(3,789	)	(3,309	)
Dividends paid to minorities interest	0		0		0		(158	)	0
Capital element on finance lease payments	0		(5	)	5		0		0
Currency swap	1,621		0		1,621		(3,961	)	(12	)
Interest paid	(305	)	(117	)	(188	)	(283	)	(201	)

Net cash outflow from financing activities	(5,605	)	(9,259	)	3,466		(27,870	)	1,084
Net (decrease)/increase in cash and cash-equivalents in the period	(12,032	)	(17,289	)	5,067		(18,066	)	17,023
Cash and cash-equivalents at start of the period	70,034		70,034		45,353		76,943		57,150
Exchange rate effects	(9,935	)	(7,392	)	(2,353	)	11,156		3,136
Cash and cash-equivalents at the end of the period	48,067		45,353		48,067		70,033		77,309
Cash and cash-equivalents consists of:
Cash and cash-equivalents	49,294		47,541		49,294		72,618		78,600
Overdrafts	(1,227	)	(2,188	)	(1,227	)	(2,585	)	(1,291	)
	48,067		45,353		48,067		70,033		77,309

Foreign Exchange Rates
	FY09		H1 FY09		FY08		FY07
	Average rate	Closing rate	Average rate	Closing rate	Average rate	Closing rate	Average rate	Closing rate
USD/GBP	0.62	0.61	0.58	0.69	0.50	0.50	0.50	0.50
USD/EURO	0.73	0.71	0.71	0.71	0.68	0.63	0.68	0.63
USD/CHF	1.12	1.08	1.12	1.06	1.11	1.02	1.11	1.02