Sate International Inc. develops, markets and supports front-office solutions for the Customer Relationship Management software market. The company's client/server and host-based applications are designed specifically for organizations for which field service and customer support are considered mission critical aspects of business operations. The Company's solutions have demonstrated quantifiable cost efficiency and service improvements in large enterprise environments that require sophisticated management of inventory and customer support resources. Astea International Inc. has a market cap of $12.05 million; its shares were traded at around $3.39 with a P/E ratio of 84.75 and P/S ratio of 0.5.
Highlight of Business Operations:For the three months ended September 30, 2009 and 2008, the Company recognized $4,791,000 and $5,442,000, respectively, of revenue related to software license fees and services and maintenance. For the nine months ended September 30, 2009 and 2008, the Company recognized $14,506,000 and $17,939,000 respectively, of revenue related to software license fees and services and maintenance.
Revenues decreased $651,000 or 12%, to $4,791,000 for the three months ended September 30, 2009 from $5,442,000 for the three months ended September 30, 2008. Software license fee revenues increased $273,000, or 194%, from the same period last year. Services and maintenance fees for the three months ended September 30, 2009 amounted to $4,377,000, a 17% decrease from the same quarter in 2008.
Software license fee revenues increased 194% to $414,000 in the third quarter of 2009 from $141,000 in the third quarter of 2008. Astea Alliance license revenues increased $57,000 or 130%, to $101,000 in the third quarter of 2009 from $44,000 in the third quarter of 2008. The Company sold $313,000 of software licenses from its FieldCentrix subsidiary, an increase of 223% from the same quarter of 2008. The increase is attributable to an increase in license sales in Europe.
Services and maintenance revenues decreased to $4,377,000 from $5,301,000 in the third quarter of 2009, a decrease of 17%. Astea Alliance service and maintenance revenues decreased by $1,015,000 or 25% compared to the third quarter of 2008. The decrease resulted from reduced demand from customers. Service and maintenance revenues generated by FieldCentrix, increased by $194,000 or 17% from $1,164,000 to $1,235,000 during the same period in 2008. In addition, DISPATCH-1 service and maintenance revenues decreased $4,000 to $77,000 from $81,000 in the prior year. The decline in service and maintenance revenue for DISPATCH-1 is expected as the Company discontinued development of DISPATCH-1 at the end of 1999.
Cost of software license fees decreased 23% to $543,000 in the third quarter of 2009 from $707,000 in the third quarter of 2008. Included in the cost of software license fees are the fixed costs of capitalized software amortization and, amortization of software acquired from FieldCentrix and any third party software embedded in the Company s software licenses sold to customers. The principal cause of the decrease in cost of revenues is lower amortization of capitalized software as certain versions which were amortized in 2008 have been fully amortized prior to this quarter. Amortization of capitalized software development costs was $464,000 for the quarter ended September 30, 2009 compared to $664,000 for the same quarter in 2008. The software license gross margin percentage was (31%) in the third quarter of 2008 compared to (401%) in the third quarter of 2008. The improvement in license margin resulted from both an increase in license revenues and a decrease in cost of revenues.
Product development expense decreased 29% to $526,000 in the third quarter of 2009 from $746,000 in the third quarter of 2008. The large decrease results from reduced costs for operating the Company s principal development center in Israel due to weakening of the Israeli shekel compared to the U.S dollar. Fluctuations in product development expense from period to period can vary due to the amount of development expense which is capitalized. Development costs of $480,000 were capitalized in the third quarter of 2009 compared to $757,000 during the same period in 2008. Gross product development expense was $1,006,000 in the quarter ended September 30, 2009 which is 33% less than the same quarter in 2008. Product development expense as a percentage of revenues decreased to 11% in the third quarter of 2009 compared with 13% in the third quarter of 2008. The decrease in costs relative to revenues is due to the significant decrease in product development expense.
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