HRD harvestroad limited

heads up an impressive turn around

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    HARVESTROAD LIMITED                           2003-04-30  ASX-SIGNAL-G 
     
    HOMEX - Perth 
     
    +++++++++++++++++++++++++ 
    OVERVIEW 
     
    In the March quarter HarvestRoad Ltd ("Company") successfully 
    transitioned from a software development mode to commercialisation 
    mode. 
     
    The Company continues to implement a stringent cost management 
    programme however the results for this quarter fundamentally 
    demonstrates improvement to the Company's revenue base. 
     
    Having an internationally recognised product released and generally 
    available for sale in February  generating sales almost immediately 
    as a result - is a positive story for the Company this quarter. 
     
    SALES AND MARKETING ACTIVITY 
     
    In February 2003, the Company officially launched its flagship 
    product HarvestRoad Learning Content Management System (LCMS) 2.0, 
    also know as HarvestRoad "Hive", at the BlackBoard Users Group 
    Conference in Baltimore, USA. 
     
    The Company's key reference accounts; Open Learning Australia, the 
    Northern Territory Department of Education and the Australian 
    Department of Defence have deployed the new release capability in the 
    quarter. 
     
    HarvestRoad LCMS orders were received from Griffith University in 
    Queensland, Erasmus University, Delft University, Waginengen 
    Agricultural University in the Netherlands and the company expects to 
    acquire six new higher education accounts across the United States, 
    United Kingdom and Singapore in the fourth quarter. Almost all new 
    sales are based on a software-leasing model and therefore create 
    recurring annual income streams. 
     
    The Company is also undertaking significant business development 
    activity in the Federal Schools Online Curriculum Management market 
    with two foreign Ministries of Education  an area in which the 
    HarvestRoad LCMS excels. The year one value of these sales is 
    estimated to total around $2 million with a whole of life value of at 
    least $5 million. Sales into pilot projects expected in the next four 
    months represent sales valued at approximately $300,000. 
     
    During the quarter the Company became a software development partner 
    of IBM Inc to facilitate the integration of the HarvestRoad LCMS to 
    IBM's newly launched Learning Management System. The Company and IBM 
    are researching the Defence and corporate market potential with this 
    joint capability. 
     
    The Company has also appointed new agents in Singapore and the United 
    Kingdom to help expand its marketing services and has become a member 
    of the WebCT Learning Innovations Network. 
     
    As part of the Company's recognised market leadership and ongoing 
    initiatives it is in discussions to enter into an exclusive Master 
    Distributor Agreement for a UK developed industry standards 
    compliant, content authoring application. This tool will be 
    integrated with the HarvestRoad LCMS to enable the creation of web 
    based (HTML) content via Microsoft Word without the need for 
    specialised authoring skills. The integration with HarvestRoad LCMS 
    will enable content to be published directly into the HarvestRoad 
    LCMS for storage; verification and version control and delivered to 
    the client's chosen course management systems. Building on the 
    Company's successful partnerships with leading course management 
    systems, the integration with authoring solutions will provide its 
    clients with a comprehensive solution for their content development, 
    management and delivery needs, whilst further enhancing the Company's 
    value proposition and market competitiveness. This has been well 
    received by the Company's lead clients and it is expected the product 
    will create a viable, new, recurring income stream for the Company. 
     
    FINANCIAL OVERVIEW 
     
    The Company is pleased to announce that Receipts for the month 
    increased from $227,000 (Q2) to $419,000 (Q3) with Net Cash Operating 
    Outflows continuing to decrease from $373,000 (Q2) to $50,000 (Q3). 
    Total Operating and investing (R&D) outflows decreased from $752,000 
    (Q2) to $359,000 in the March quarter. 
     
    For the June quarter, the Company is targeting $750,000 in sales 
    receipts of which $521,000 in sales commitments and receipts has 
    already been received in April. Importantly, the Company is 
    anticipating a breakeven cash flow for the June quarter, based upon 
    the receipt of targeted sales receipts and operating expenses of 
    $750,000 for the quarter. 
     
    Assuming authorisation is received for contracts entered into, or 
    expected to be entered into in the next two months - and systems are 
    subsequently installed  the Company expects to receive an additional 
    $1.1 million in receipts for the September 2003 and December 2003 
    quarters. 
     
    As set out in the Company's announcement to ASX on 15 April 2003 the 
    Company has lodged a Prospectus for a non-renounceable rights issue 
    to Eligible Shareholders of up to 10,650,000 New Shares on the basis 
    of 1 New Share for every 5 Shares held at an issue price of eight 
    cents ($0.08) per New Share to raise approximately $850,000 (before 
    expenses). 
     
    Cash at Bank as at 31 March 2003 is $758,000. Combining the sales 
    commitments and income receipts to date of $521,000 with the maximum 
    capital raising funds of $850,000 (before expenses) will provide the 
    Company with cash inflows of $1,321,000 in the June quarter, the 
    Company is anticipating a Cash at Bank balance at 30 June 2003 of 
    approximately $1.3 million (subject to the capital raising being 
    fully subscribed). 
     
    SUMMARY 
     
    The Company has successfully transitioned from a software development 
    mode to commercialisation of its HarvestRoad LCMS product with a 
    global launch in Baltimore, Maryland and sales in Singapore, 
    Australia, United Kingdom, Belgium, Holland, the United States and 
    with more countries expected to follow. 
     
    The Company has established a technology leadership position in the 
    Higher Education market and believes it is an outright prime mover in 
    the Federal Schools Online Curriculum Management Market as evidenced 
    by meeting the needs of Ministries of Education around the world. 
     
    The Company's association with IBM is very exciting and the Company 
    expects major sales announcements this quarter. 
     
    Finally, the identification of a new software partner to integrate 
    HarvestRoad LCMS with simple learning content authoring tool is an 
    important technology and revenue initiative and will enhance the 
    value of the HarvestRoad LCMS to the education market, and 
    demonstrate the Company's ability to work with third party 
    developers, as well as a maturing of the Company's business model. 
     
    On behalf of the Board I look forward to continuing to drive the 
    business forward and to provide a long sought after return to 
    shareholders. 
     
    G Barty 
    EXECUTIVE CHAIRMAN 
 
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