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Danware back on track: Paying dividends again

Danware grew revenue by DKK 6.6m in 2006, equal to a 7.2% improvement over 2005. The company expects to become increasingly profitable over the next few years and will pay total dividends of DKK 9.6m to shareholders, equal to DKK 2.50 per share.

Birkerød, Denmark, March 13, 2007 – Earlier today, Danish software company Danware, the company behind the award-winning NetOp®-products, released its 2006 Annual Report announcing the following highlights:

Total revenue for the year was DKK 97.9m, compared with DKK 91.3m in 2005.
EBITDA was DKK 7.1m against DKK 21.6m in 2005.
Operating profit (EBIT) was DKK 1.1m against DKK 18.3m in 2005.
Profit for the year after tax was DKK 0.7m against DKK 14.6m in 2005.

Danware completed a major realignment of its sales strategy in 2006, which consisted mainly of establishing distribution subsidiaries in the USA, the UK and Germany, signing new OEM agreements and implementing a new partnership concept. The process had a direct impact on the year’s revenue and profit.

“We were very pleased to note the revenue increase, which was mainly due to new agreements with OEM customers and to the acquisition of new products. The earnings setback had been expected and was especially due to the costs of establishing the new distribution subsidiaries. Our aggressive growth strategy really began to take effect late in 2006, and by the end of the year our US revenue had exceeded the revenue performance of the former US distributor. That confirms that this is the right strategy,” said Danware CEO Peter Grøndahl.

By realigning the sales strategy in 2006, Danware has now primed its sales channels for the future and created a strong platform for the years ahead. “Given our company’s substantial financial strength and the outlook for a material improvement in profit in 2007, the Board proposes total dividends of DKK 9.6m, equal to DKK 2.50 per share of DKK 5 nominal value, in respect of the 2006 financial year,” said Danware’s chairman Ib Kunøe.

In addition to setting up the international sales subsidiaries, Danware signed strategically important distribution agreements with business partners in Spain, Italy, Russia and the Czech Republic, and similar agreements are expected to follow over the next few years.

Focusing on new products for growth markets
During the year, Danware was focused on developing products directed at high growth markets for Danware’s three product categories: Desktop Management, Education and Security.

A key priority in the Desktop Management business is the ongoing development of the NetOp Mobile product, which supports PC-based remote control of different kinds of mobile equipment, such as PDAs.

In the Education business, Danware acquired Cursum in 2006, a software business that has developed a technical platform enabling organisations to develop, implement and manage courses, training programmes and questionnaires to employees, customers and business partners via the Internet. Danware plans to relaunch this product in 2007 and to introduce other new products in the IT security field.

“Directing our products at growth markets is a big priority for us, and we plan to continue developing Internet-based products. In addition, we plan to make a big effort to ensure that new business partners receive comprehensive training in Danware’s products. For that purpose, we have established an extensive certification programme. We are also working to step up marketing of the NetOp® products in the more than 70 countries where our products are available,” said Peter Grøndahl.

About Danware
Danware’s core business is to develop and market software products based on the NetOp core technology – a technology enabling swift, secure and seamless transfer of screens, sound and data between two or more computers. The company’s three product areas are Desktop Management, Education and Security. Seventy-six per cent of Danware’s revenue is generated outside Denmark through subsidiaries in the US, the UK and Germany as well as partners in individual countries. In 2006, our products were sold to more than 70 different countries. Danware’s headquarters are located in Birkerød, north of Copenhagen. The company had 84 employees at year end 2006. Revenue was DKK 97.9m in 2006. The company’s shares are listed on the Copenhagen Stock Exchange and are a component of the Small Cap+ index.

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