QualityStocks News - GBS Enterprises Provides Shareholder Update, Q3 and Nine Months Financial Results

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Company highlights growth strategy, announces year-over-year revenue improvement of 53%

The demand and need for our technology and application expertise is significant and going forward we anticipate a rapid expansion of our business pipeline.

QualityStocks would like to highlight GBS Enterprises Inc., a publicly traded company that is the 50.1% parent company of GROUP Business Software AG ("GBS"), a global software and services company specializing in application modernization and cloud automation. GBS serves to automate business processes, optimize system and application performance, ensure messaging security and compliance, modernize server-based applications to Web 2.0, and simplify application development and delivery.

In the company’s news yesterday,

GBS Enterprises provided a shareholder update and financial results for the three and nine months ended Dec. 31, 2011.

Joerg Ott, CEO of GBS Enterprises, said the company grew year-over-year revenue by 53.5 percent during the 2011 third quarter, reflecting revenue generated through its core software and services business. Despite this growth, Ott said the company is focusing on the “much larger” opportunity with its Transformer technology and Cloud Automation capabilities, which he said will position the company for strong growth going forward.

“Transformer is already demonstrating a significant impact helping companies to gain insight into their business applications and enabling them to formulate and execute a strategy to modernize those applications,” Ott stated in the press release. “We have already completed pilot projects with large financial services organizations in New York and are in the process of beginning large engagements with these and other enterprise level customers both in North America and Europe. The demand and need for our technology and application expertise is significant and going forward we anticipate a rapid expansion of our business pipeline.”

The company highlighted several other 2011 business updates, including its acquisition of IDC Global, GroupWare and Pavone AG, and announced third quarter and nine months financial results.

GBS Enterprises reported revenue for the third quarter ended Dec. 31, 2011, at approximately $8.2 million, an increase of 53.5 percent as compared to approximately $5.4 million for the same period the year prior. Revenue for the nine-month period ended Dec. 31, 2011, totaled approximately $21.3 million, an increase of approximately 18.7 percent, as compared to approximately $18 million for the same period the year prior.

Gross profit for the quarter ended Dec. 31, 2011, totaled approximately $3.5 million, a 33.8 percent increase compared to approximately $2.6 million for the same period the year prior. Gross profit margin during the 2011 period was approximately 43 percent as compared to approximately 49.3 percent for the 2010 period. Gross profit for the nine months ended Dec. 31, 2011, totaled approximately $10.5 million, an increase of approximately 13 percent, as compared to approximately $9.3 million for the first nine months of 2010. Gross profit margin for the 2011 nine-month period was approximately 49.1 percent as compared to approximately 51.6 percent the prior year.

The company was cash flow positive from operations through the first nine months of 2011. During the quarter ended Dec. 31, 2011, certain warrant holders exercised their warrants to purchase an aggregate of 2,020,000 shares of common stock for a total purchase price of $3,030,000 before fees.

As of Dec. 31, 2011, GBS Enterprises had approximately $3.5 million in cash and cash equivalents; and total current assets and total assets at approximately $10.2 million and approximately $86.7 million, respectively.

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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.

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