ATOSS Software AG — Interim / Quarterly Report 2009

Nov 13, 2009

QuaRterly Report Q3.2009

«During economically challenging times in particular, ATOSS supports companies in deploying their personnel safely and efficiently. Our modern Workforce Management solutions allow them to react flexibly to current market needs and to improve processes and reduce costs.»

Dear Shareholders, Ladies and Gentlemen,

We have continued to achieve record performance in the third quarter with both sales and results to September 30 reaching new record figures. With one brief exception ATOSS has now consistently posted profits ever since the company was first founded 22 years ago. Over this long period of time we have never lost sight of our goals, and despite every crisis and every upheaval in the marketplace we have continued to refine and endow our business model with great stability.

With the current financial year now promising to be our fourth record year in succession, we have frequently been asked in recent months whether we are profiting from the current economic crisis. Undoubtedly, the constraints on companies to optimize processes and cut costs are intensified in a crisis, resulting in the current strong demand for ATOSS solutions. And yet, ATOSS does not need a crisis to succeed. Our solutions work just as well in times of growth as in times of crisis. Under both conditions our clients' competitiveness is substantially increased by the ability to deploy their staff with greater flexibility. In matters of workforce management ATOSS is the partner our clients can rely on over the long term, not least thanks to our sustained and extensive investment in our own products and services.

It is this high level of investment that underpins our gratifying business development. We make sure that our solutions deliver the maximum possible benefits for our clients, which is why we have grown in recent years regardless of the economic cycles.

The change in technology was our springboard, now we are aiming for maximum differentiation

In 2005 we implemented a complete change in technology. We are now enjoying our fourth record year in succession. There can be no mistaking the direct connection between our sustained investment in product performance and the success of our enterprise!

Negative as the economic climate now is, we are now once again consciously increasing our research and development (R&D) effort. Whereas sales in the period from January to September have grown by 7 percent, our R&D expenditure has increased by a disproportionate 11 percent. In financial year 2009 we shall invest a total of more than EUR 5 million in ensuring that our products and services offer even greater benefits for the customer.

We aim to maximize the distance between ourselves and our competitors! And given our profitability and our financial position, we are in a position to continue this investment policy in the future.

Flexibility is in demand

More than ever before, companies and organizations need to increase the flexibility with which their staff can be deployed. In this respect the crisis has indeed brought about a greater awareness of the necessity for investment and change that contrasts starkly with the economic constraints on their budgets. The reluctance of companies to spend has had a highly negative impact this year on software, and still more so on hardware purchases. According to industry association BITKOM, sales will be down by 3.2 percent for software and 6.5 percent for hardware.

Viewed against the background of our own development in sales, this means not only that ATOSS is growing against the trend in the current year, but that we are gaining additional market share. What's more, in recent months we have succeeded in winning some additional high-profile customers, particularly in the retail, healthcare and services sectors. Together with some of these new and existing customers, in years to come we shall step up the pace of our international expansion over and beyond the Germanspeaking territories.

ATOSS can point to a disproportionate increase in results, strong cash flow and continued growth in liquidity

ATOSS continues to report excellent figures that reaffirm the investment security enjoyed by our clients and shareholders alike. We remain on course for record performance. With a further marked rise of 43 percent bringing the total of orders on hand for software licenses to EUR 3.2 million, the Management Board has taken the decision to raise its forecast. We now expect to achieve EBIT of around EUR 5.4 million.

With sales up 7 percent at EUR 21.4 million for the period from January to September 2009, our operating profit (EBIT) rose by 11 percent to EUR 4.4 million, while earnings per share climbed 16 percent to EUR 0.78. Growth in liquidity was particularly strong with an increase of 24 percent taking the total to EUR 19.2 million, or EUR 4.85 per share. Cash flow at EUR 7.2 million was almost twice as strong as in the previous year, equivalent to 34 percent of sales. We also have an above-average equity ratio of 55 percent. Our thanks are due also to you, our shareholders, for the trust you have placed in us and the loyalty you have shown to our company. Andreas F.J. Obereder Christof Leiber

On course for continued record performance

We remain on course for further records as our increased expenditure on research and development increases our chances of continued positive development. Our goal is clear: To maximize the benefits for our customers!

One of the principal foundations underpinning the success of ATOSS is the high level of commitment on the part of our employees. We would like to take this opportunity to thank them warmly for their outstanding results!

Yours truly,

Andreas F.J. Obereder Christof Leiber

(Chief Executive Officer) (Member of the Board of Management)

Letter to shareholders

Economic background Economic output down by 5% in 2009. ICT sector slips by around 2.5%, slight growth expected for 2010. German software market seen down 3.2%, outlook positive.

ATOSS Software AG ATOSS remains on course for continued growth. Fourth record year in succession forecast. Target: Operating result of around EUR 5.4 million.

Facts Overview

CONSOLIDATED OVERVIEW AS PER IFRS: 9-MONT H COMPA RISON IN EUR'000
	01.01.2009 - 30.09.2009	Proportion of total revenues	01.01.2008 - 30.09.2008	Proportion of total revenues	Change 2009 / 2008
Software	12,440	58%	11,840	59%	5%
Software licenses	4,550	21%	4,423	22%	3%
Software maintenance	7,890	37%	7,417	37%	6%
Consulting	6,136	29%	5,524	28%	11%
Hardware	1,575	7%	2,080	10%	-24%
Other	1,240	6%	624	3%	99%
Total sales revenues	21,391	100%	20,067	100%	7%
EBITDA	4,664	22%	4,225	21%	10%
EBIT	4,388	21%	3,948	20%	11%
EBT	4,595	21%	3,949	20%	16%
Net income	3,098	14%	2,679	13%	16%
Cash flow	7,225	34%	3,556	18%	› 100%
Liquidity1,2	19,182		15,425		24%
EPS (EUR)	0.78		0.67		16%
Employees3	232		213		9%

CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPA RISON IN EUR'000
	Q3/09	Q2/09	Q1/09	Q4/08	Q3/08
Software	4,090	4,162	4,188	4,178	4,126
Software licenses	1,425	1,551	1,575	1,642	1,603
Software maintenance	2,666	2,612	2,613	2,536	2,523
Consulting	1,986	2,157	1,992	1,839	1,860
Hardware	666	345	564	689	540
Other	491	361	388	170	222
Total sales revenues	7,233	7,026	7,132	6,876	6,748
EBITDA	1,557	1,498	1,610	1,203	1,310
EBIT	1,463	1,405	1,520	1,097	1,214
EBIT margin	20%	20%	21%	16%	18%
EBT	1,516	1,472	1,607	1,166	1,394
Net income	1,023	995	1,080	831	948
Cash flow	3,695	748	2,782	-1,055	3,034
Liquidity1,2	19,182	15,549	16,680	14,000	15,425
EPS (EUR)	0.26	0.26	0.27	0.21	0.24
Employees3	232	224	220	226	213

1 Cash and marketable securities; 2 Dividend of EUR 0.44 per share on May 4, 2009, equating to EUR 1,739,000 (previous year: EUR 0.31 on April 30, 2008); 3 At the end of the quarter

Investor relations

CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPA RISON IN EUR
			2009		2008
	Q3	Q2	Q1	Q4	Q3
High	12.65	10.00	7.80	7.60	8.90
Low	8.85	7.42	6.80	5.20	7.10
Share price at end of quarter	12.65	9.20	7.52	7.23	7.10
Treasury stock	65,099	72,099	73,099	68,894	24,500
Dividend paid per share	0.00	0.44	0.00	0.00	0.00
Cash flow per share	0.93	0.19	0.70	-0.34	0.76
Liquidity per share	4.85	3.93	4.22	3.48	3.86
EPS	0.26	0.25	0.27	0.21	0.24
EPS (diluted)	0.26	0.25	0.27	0.20	0.24

Share price performance consistently positive

The development in the price of ATOSS stock reflects the strong fundamental development of the company itself. In the months from January to September 2009, in generally buoyant trading the price rose by a substantial 80 percent from around EUR 7 to almost EUR 13. Taking the dividend into consideration, the gain amounts to 87 percent. With this level of performance during the reporting period ATOSS has clearly outstripped indices such as the Prime IG Software (plus 38 percent) and the DAX (plus 17 percent).

Likewise in the longer term, the combination of a rising share price, dividend payments and substantial, largely tax-free special distributions have contributed to an appreciable increase in shareholder value.

Analysts continue to rate ATOSS very highly

SES Research, a Warburg Group company, confirms our financial stability and the excellent quality of our balance sheet. Their analysts have also stressed our fundamentally conservative accounting policy and the consistency with which we attract new customers. In addition to our numerous customer references and our solidity, SES attributes the success of our enterprise to our highly specialized solutions based on the latest Java technology, our absolute independence from any manufacturer or vendor and the high degree of compatibility of our products.

In the course of the year as figures and data have been published, SES has analyzed the company's development and evaluated the potential offered by our stock. On every occasion SES has issued a "buy" rating, and has most recently in October lifted its price target from 14 to 16 euro.

Other analysts, too, have expressed optimism. For example, as part of its GBC Best of Software/IT/Media I.2009 research program, GBC AG presented ATOSS as an attractive and clearly under-valued long-term investment.

Media response stronger this year than at any time since our flotation

In addition to extensive, positive coverage in the press and stock market information services, we have once again this year enjoyed an even stronger response from the specialist financial media. Various journalists have focused on ATOSS stock and delivered their own evaluations, and the stock has also been included in the model portfolios constructed by financial market magazines. ATOSS has in fact in the course of the year proven to be one of their top performers.

Thanks to the consistency with which our success has been reported, coupled with the fact that despite the increase in the share price ATOSS stock remains attractively valued, during the year to date our market capitalization has risen substantially to a new multi-year high. Not only have large numbers of new private investors discovered ATOSS, there is also evidence of a growing interest on the part of investors abroad.

Share price continues to rise in Q4, the message is being heard

In buoyant trading the price of ATOSS stock continued its upward path in October. Analysts, journalists, and also to an increasing extent institutional investors were impressed by the reports describing the development in our enterprise between January and September 2009. The growing interest on the part of asset managers and investment funds was particularly evident from the notable increase in oneto-one discussions in the third quarter and requests for meetings in the coming weeks.

The message is being heard! The combination of profitable growth coupled with conservative accounting, a high level of transparency and an excellent balance sheet offers the desired mix of security and future promise.

We shall continue to make every effort to fulfill the expectations of investors and enhance the prosperity of our shareholders. We have but a single goal, the wellbeing of our enterprise. Only if a course of action is good for the company will it also be in the interest of both shareholders as well as employees and customers.

This may sound self-evident, but it is not so. In our fastpaced society with its narrow focus on short-term profit, all too little attention is paid to medium- and long-term considerations. We at ATOSS have a certain expertise in pursuing long-term goals, as we have demonstrated for some 22 years now.

Further information available from: www.atoss.com

Group Management Report

«In the third quarter of the current fiscal year, ATOSS succeeded yet again in strengthening its market position by adhering consistently to the company's strategy. Our solid growth in an economically difficult environment further expanded our market leadership in the area of Workforce Management Software.»

5. Employees

Over the past twelve months the number of employees has risen by 9% from 213 to 232. On September 30, 2009 ATOSS employed 94 software developers (previous year: 80), with a further 68 staff employed in consulting (previous year: 62), 35 in sales and marketing (previous year: 37) and 35 in administration (previous year: 34).

Personnel costs for the first nine months of the current financial year increased to EUR 10.9 million (previous year: EUR 9.9 million).

6. Risks associated with future development

There has been no change in the company's risk structure relative to the description contained in the consolidated financial statements to December 31, 2008.

As in the past, the company's investment policy continues to focus on preserving the value of freely available resources.

7. Events after the balance sheet closing date

There have been no reportable events of particular import subsequent to September 30, 2009.

8. Outlook

With all of the key figures for the development in business remaining highly positive in both Q4 2008 and the first nine months of 2009, the Management Board has raised its forecast. The Board now expects EBIT in the order of EUR 5.4 million.

1. Business and conditions: Confidence returning at high-tech SMEs

According to industry association BITKOM, the information and communications technology (ICT) industry is faring better than the economy as a whole, which researchers expect to register a decline of 5 percent.

By contrast, the high-tech industry is likely to emerge from the crisis without suffering major losses. The current BIT-KOM forecast indicates that turnover in information and communications technology products and services in Germany will slip by 2.5 percent in 2009. Next year the market is expected to grow once more by 0.1 percent.

Companies that have themselves been hard-hit by the crisis have postponed their IT investments. If these companies are to maintain their competitiveness, however, it is to be expected that the present investment backlog will soon be overcome and investment activity will recommence.

2. Earnings situation: Growth in virtually all areas

During the reporting period ATOSS recorded growth in virtually all areas. Only hardware sales, which are not part of our core business, registered a decline. Total sales revenues increased from EUR 20.1 million to EUR 21.4 million, up 7 percent compared with the year before. Within this total, software licenses put on 3 percent, rising from EUR 4.4 million to EUR 4.6 million. There was also a continuous improvement in software maintenance with turnover increasing by 6 percent from EUR 7.4 million to EUR 7.9 million.

Thanks to high levels of capacity utilization and the considerable commitment of our consultants, turnover in services again developed strongly. Sales rose by 11 percent from EUR 5.5 million to EUR 6.1 million. This gratifying progress is attributable not least to the effort ATOSS has devoted to developing both personnel and expertise for some years.

At EUR 4.4 million, the operating profit (EBIT) in particular was 11 percent higher than the previous year's figure of EUR 3.9 million.

Earnings after taxes to September 30, 2009 came in at EUR 3.1 million, representing growth of 16 percent relative to the EUR 2.7 million recorded in the same period last year. Earnings per share accordingly rose from EUR 0.67 to EUR 0.78.

Orders on hand for software licenses on September 30, 2009 amounted to EUR 3.2 million, a significant increase over the previous year's figure of EUR 2.3 million. Against this background, even in a difficult economic environment the company remains confident and has raised its profit targets for financial year 2009.

3. Net assets and financial position

Operating cash flow developed strongly during the first nine months, rising from EUR 3.6 million last year to EUR 7.2 million. Liquidity (cash and marketable securities) was increased from EUR 15.4 million to EUR 19.2 million, despite the payment of a dividend of EUR 0.44 per share (previous year EUR 0.31) at the beginning of May which resulted in an outflow of EUR 1.7 million (previous year EUR 1.2 million). Liquidity per share on September 30, 2009 accordingly stood at EUR 4.85 (previous year EUR 3.86).

In addition to net earnings, positive factors impacting cash flow included in particular an increase in deferred revenues due to the invoicing of maintenance charges and a tax refund from the previous year. Receivables at EUR 4.0 million were some EUR 0.5 million higher than last year, due primarily to the increase in business with new customers.

As a result of the gratifying development in business, the equity ratio rose to 55 percent of total capital. The company thus remains extremely well capitalized, with solvency ensured at all times.

4. Product development

ATOSS continues to intensively pursue the development of both new and existing products. Research and development costs rose by 11 percent in the first nine months to stand at EUR 4.1 million, compared with EUR 3.7 million in the preceding year. As in the year before, development costs equate to 19 percent of overall sales.

The company continues to refrain from capitalizing the expense of developing new products. All expenditure for this purpose is recognized in the income statement in the period in which it is incurred.

Assets	30.09.2009	31.12.2008
Non-current assets
Tangible fixed assets (net)	674,052	552,672
Intangible assets (net)	101,805	141,333
Deferred taxes	292,671	305,877
Total non-current assets	1,068,528	999,882
Current assets
Inventories	25,464	9,375
Trade accounts receivable (net)	3,967,483	3,455,286
Other current assets	779,800	977,556
Cash and cash equivalents	19,181,543	14,000,412
Total current assets	23,954,290	18,442,629
Total assets	25,022,818	19,442,511
Equity and liabilities	30.09.2009	31.12.2008
Equity
Subscribed capital	4,025,667	4,025,667
Capital reserve	-260,188	-248,453
Treasury stock	-531,859	-562,617
Unappropriated net income	10,611,362	9,252,962
Total equity	13,844,982	12,467,559
Non-current liabilities
Convertible bonds	16,000	24,000
Pension provisions	1,896,618	1,176,896
Deferred taxes	591,684	225,612
Total non-current liabilities	2,504,302	1,426,508
Current liabilities
Trade accounts payable	651,748	226,430
Short-term accruals	2,609,151	3,045,828
Deferred revenues	4,511,527	1,485,910
Tax provisions	235,260	269,421
Other current liabilities	665,848	520,855
Total current liabilities	8,673,534	5,548,444
Total equity and liabilities	25,022,818	19,442,511

30.09.2009	31.12.2008
674,052	552,672
101,805	141,333
292,671	305,877
1,068,528	999,882
25,464	9,375
3,967,483	3,455,286
779,800	977,556
19,181,543	14,000,412
23,954,290	18,442,629
25,022,818	19,442,511
30.09.2009	31.12.2008
4,025,667	4,025,667
$-260,188$	$-248,453$
$-531,859$	$-562,617$
10,611,362	9,252,962
13,844,982	12,467,559
16,000	24,000
1,896,618	1,176,896
591,684	225,612
2,504,302	1,426,508
651,748	226,430
2,609,151	3,045,828
4,511,527	1,485,910
235,260	269,421
665,848	520,855
8,673,534	5,548,444
25,022,818	19,442,511

Balance sheet

CASH FLOW STATEMENT

CASH FLOW STATEMENT FROM 01.01. TO 30.09.2009 in EUR

	- 30.09.2009	- 30.09.2008
Net profit	3,097,530	2,679,170
Depreciation of fixed assets	275,845	277,190
Loss incurred on the disposal of fixed assets	-41,467	5,121
Changes in deferred taxes	379,278	146,331
Provisions for pension commitments	719,723	-22,972
Change in net current assets
Trade accounts receivable	-512,198	-204,599
Inventories and other current assets	298,708	-209,564
Trade accounts payable	425,317	-183,322
Short-term accruals	-436,677	-558,384
Deferred revenues	3,025,618	2,227,180
Tax provisions	-151,202	-552,201
Other current liabilities	144,993	-47,676
Cash flow generated through business operations (1)	7,225,468	3,556,273
Cash flow from investment activities
Acquisition of tangible and intangible assets	-358,430	-368,273
Disposal of tangible fixed assets	42,200	0
Cash flow generated through investment activities (2)	-316,230	-368,273
Cash flow from financing activities
Expenditure for the purchase of treasury stock	-30,417	-48,510
Income from the sale of treasury stock	41,440	56,479
Dividend payments	-1,739,130	-1,238,812
Cash flow generated through financing activities (3)	-1,728,107	-1,230,843
Changes in liquidity1 – total of (1) to (3)	5,181,131	1,957,157
Liquidity1 at the beginning of the period	14,000,412	13,467,767

CASH FLOW STATEMENT FROM 01.01. TO 30.09.2009 in EUR
	01.01.2009 - 30.09.2009	01.01.2008 - 30.09.2008
Net profit	3,097,530	2,679,170
Depreciation of fixed assets	275,845	277,190
Loss incurred on the disposal of fixed assets	-41,467	5,121
Changes in deferred taxes	379,278	146,331
Provisions for pension commitments	719,723	-22,972
Trade accounts receivable	-512,198	-204,599
Inventories and other current assets	298,708	-209,564
Trade accounts payable	425,317	-183,322
Short-term accruals	-436,677	-558,384
Deferred revenues	3,025,618	2,227,180
Tax provisions	-151,202	-552,201
Other current liabilities	144,993	-47,676
Cash flow generated through business operations (1)	7,225,468	3,556,273
Acquisition of tangible and intangible assets	-358,430	-368,273
Disposal of tangible fixed assets	42,200	0
Cash flow generated through investment activities (2)	-316,230	-368,273
Expenditure for the purchase of treasury stock	-30,417	-48,510
Income from the sale of treasury stock	41,440	56,479
Dividend payments	-1,739,130	-1,238,812
Cash flow generated through financing activities (3)	-1,728,107	-1,230,843
– total of (1) to (3)	5,181,131	1,957,157
at the beginning of the period	14,000,412	13,467,767
at the end of the period	19,181,543	15,424,924

Liquidity1

INCOME STATEMENT FROM 01.01. TO 30.09.2009 in EUR
		Quarterly report		9-month report
	01.07.2009 - 30.09.2009	01.07.2008 - 30.09.2008	01.01.2009 - 30.09.2009	01.01.2008 - 30.09.2008
Sales revenues	7,233,467	6,748,020	21,390,896	20,067,357
Cost of sales	-2,463,197	-2,129,302	-6,821,980	-6,538,747
Gross profit on sales	4,770,270	4,618,718	14,568,916	13,528,610
Marketing costs	-1,489,117	-1,467,470	-4,329,637	-4,121,737
Administration costs	-551,991	-622,559	-1,786,152	-1,804,027
Research and development costs	-1,345,675	-1,319,081	-4,082,712	-3,671,131
Other operating income	12,287	16,169	37,289	29,308
Other operating expenses	67,312	36,314	-19,911	-12,584
Operating result (EBIT)	1,462,599	1,213,875	4,387,793	3,948,439
Interest and similar income	67,190	170,382	241,593	458,656
Interest and similar expenses	-13,594	9,832	-34,700	-457,691
Income before taxes	1,516,196	1,394,052	4,594,686	3,949,403
Taxes on income and earnings	-493,460	-445,678	-1,497,156	-1,270,233
Net profit	1,022,736	948,374	3,097,530	2,679,170
Earnings per share (undiluted)	0.26	0.24	0.78	0.67
Earnings per share (diluted)	0.26	0.24	0.78	0.67
Average number of shares in circulation (undiluted)	3,959,894	3,999,645	3,956,748	3,997,916
Average number of shares in circulation (diluted)	3,978,253	4,025,776	3,975,565	4,027,481

Income Statement

1 Liquidity: Cash and marketable securities

Statement of changes in EQUITY

CHANGES IN CONSOLIDATED EQUITY AS OF 30.09.2009 in EUR
	Subscribed capital	Capital reserve	Treasury stock	Unapp. ret. earnings	Total
As of 01.01.2008	4,025,667	-134,511	-406,608	6,981,913	10,466,461
Net profit	0	0	0	2,679,170	2,679,170
Sale of treasury stock	0	-92,160	179,100	0	86,942
Purchase of treasury stock	0	0	-67,550	0	-67,550
Dividend	0	0	0	-1,238,812	-1,238,812
As of 30.09.2008	4,025,667	-226,670	-295,058	8,422,272	11,926,211
As of 01.01.2009	4,025,667	-248,453	-562,618	9,252,962	12,467,558
Net profit	0	0	0	3,097,530	3,097,530
Sale of treasury stock	0	-11,735	61,175	0	49,440
Purchase of treasury stock	0	0	-30,416	0	-30,416
Dividend	0	0	0	-1,739,130	-1,739,130
As of 30.09.2009	4,025,667	-260,188	-531,859	10,611,362	13,844,982

One share represents 1 Euro of subscribed capital.

1. General

The present report has been prepared in accordance with International Financial Reporting Standards (IFRS) in compliance with IAS 1.14. In particular, the report complies with the provisions contained in IAS 34 "Interim Financial Reporting". The requirements contained in German Accounting Standard (DRS) No. 6 regarding interim reporting have likewise been fulfilled.

In accordance with IAS 34.20, the present statements include a consolidated balance sheet, consolidated income statement, consolidated cash flow statement, consolidated statement of changes in equity and explanatory notes to the consolidated statements.

The same financial accounting, valuation and computation methods have been applied as in the case of the annual financial statements.

The Management Board is convinced that this financial statement fairly presents the financial position, financial performance and cash flows of the company and adequately reflects the economic situation of the company. This interim report has not undergone an auditor's inspection or statutory audit.

2. Reporting period

The present interim report was prepared to 30.09.2009, for the reporting period from 01.01.2009 to that date.

3. Currency

All figures are stated in euro. Figures are rounded up to whole euro units.

1. Group of consolidated companies

In addition to the parent company ATOSS Software AG, Munich, the consolidated financial statements to 30.09.2009 also include all subsidiary companies:

ATOSS CSD Software GmbH, Cham ATOSS Software Ges.mbH, Vienna, Austria ATOSS Software AG, Zurich, Switzerland ATOSS Software S.R.L., Timisoara, Romania

These companies are fully consolidated.

5. Changes in equity

The development in equity is evident from the statement of changes in consolidated equity.

«ATOSS sets itself apart not only through its technology and power of innovation, but also through its high profitability and very solid financial position.»

Notes to the consolidated financial statement

6. Treasury stock

In the first nine months of the financial year 8,000 treasury shares were dispensed in response to the exercise of convertible bonds and 4,205 shares were acquired. On September 30, 2009 the company held 65,099 treasury shares acquired at an average price of EUR 8.17. Treasury stock is reported as a separate equity item at cost of acquisition.

7. Sales revenues

The company's sales revenues were composed as follows:

The geographic breakdown of sales revenues was as follows:

8. Personnel costs

The consolidated personnel costs to September 30, 2009 were composed as follows:

Provisions for personnel costs for financial year 2008 were not utilized in full. In the current financial year these provisions were liquidated in line with costs incurred, thereby reducing the personnel costs. In this respect the company has altered the balance sheet accounting practice employed in the preceding year, by liquidating provisions for personnel costs and reporting these as other operating income. In order to ensure comparability with the previous year, the figures for the previous year have likewise been adjusted.

As a result of an increase in pension provisions, pension costs were higher than the previous year.

9. Other operating income and expenses

In the first nine months of the current financial year the company recorded other operating income in the amount of EUR 37,289 (previous year: EUR 29,308). This was comprised mainly of rental income. In respect of the liquidation of provisions for personnel costs, the company changed its balance sheet accounting practice relative to the preceding year. With effect from the current financial year 2009 these provisions will be liquidated in line with personnel costs incurred. The other operating expenses amounting to EUR 19,911 (previous year: EUR 12,584) essentially concerned bad debts and exchange rate differences.

10. Financial investment income and expenditure

In the first nine months of the current financial year the company recorded income in the amount of EUR 241,107 (previous year: EUR 458,656) from financial investments. This was comprised of interest earnings on fixed-term and current account deposits.

Similarly in the first nine months of the year the company recorded expenditure on financial investments in the amount of EUR 34,700 (previous year: EUR 457,691). This essentially concerned financial expenses in connection with pension provisions amounting to EUR 34,253 (previous year: EUR 31,289).

11. Tax expenses

Consolidated tax expenses to September 30, 2009 were comprised as follows:

12. Earnings per share

The figure for earnings per share is arrived at by dividing the result for the period in the amount of EUR 3,097,530 by the weighted average number of shares outstanding. From January 1 to September 30, 2009 there were an average of 3,956,748 shares in circulation. Thus earnings per share for this period amounted to EUR 0.78, in comparison with EUR 0.67 in the first nine months of the preceding year.

In order to calculate diluted earnings per share, the result for the period must be adjusted to allow for the interest cost relating to convertible bonds in the amount of EUR 447 (previous year: EUR 616). In addition hereto the average number of shares outstanding is increased with the inclusion of shares potentially issued as a result of convertible bonds. From January 1 to September 30, 2009 there was an average of 21,000 convertible bonds in circulation. Thus the diluted earnings per share for this period amounted to EUR 0.78, in comparison with EUR 0.67 in the preceding year.

EUR	01.01.2009 30.09.2009	01.01.2008 30.09.2008
Germany	19,674,813	17,802,329
Austria	1,066,625	1,625,622
Switzerland	349,802	523,002
German-speaking territories in total	21,091,240	19,950,953
Other countries	299,655	116,404
Total sales revenues	21,390,895	20,067,357

EUR	01.01.2009 30.09.2009	01.01.2008 30.09.2008
Wages and salaries	8,509,185	8,345,080
Social security contributions and expenditure on retirement pensions and welfare	2,341,476	1,594,204
Total personnel costs	10,850,662	9,939,284

EUR	01.01.2009 30.09.2009	01.01.2008 30.09.2008
Software licenses	4,550,109	4,423,017
Software maintenance	7,890,212	7,416,831
Total software	12,440,321	11,839,848
Consulting	6,135,649	5,523,855
Hardware	1,575,072	2,079,611
Other	1,239,853	624,043
Total sales revenues	21,390,895	20,067,357

EUR	01.01.2009 30.09.2009	01.01.2008 30.09.2008
Pre-tax earnings as per IFRS	4,594,686	3,949,403
Expected tax charge (2008: 32.98%, 2007: 40.86%)	-1,515,328	-1,302,513
Non-deductible operating expenses	-11,270	-15,547
Differences in tax rates at consolidated companies	29,442	47,827
Actual Group tax charge	-1,497,156	-1,270,233

13. Segment reporting

The company has only one uniform business segment which comprises the creation, sale and implementation of software solutions directed towards the efficient deployment of personnel.

The individual software solutions comprise:

ATOSS Staff Efficiency Suite (ASES) und ATOSS Startup Edition (ASE)

ASES and ASE are working time management and personnel resource planning solutions for customers of all sizes and in all industries. These software solutions are generally accompanied by other services covering implementation and training. In addition consulting services are rendered with the objective of making meaningful use of the available scope and developing optimum solutions for the efficient deployment of personnel under specific operating conditions and in consideration of works agreements and industry-wide pay deals. The company also sells hardware components for time recording and access control purposes. ASES/ASE software is used with all major standard system platforms and databases. Moreover thanks to the extensive facility to define customer-specific parameters these solutions are capable of satisfying even the most sophisticated requirements of customers of all sizes in all industries.

ATOSS Time Control (ATC)

ATC offers a software solution to working time management and personnel resource planning for small and medium-sized customers as well as large but decentrally organized clients. Likewise in conjunction with ATC, ATOSS offers software implementation and training as well as consulting services. Merchandise including hardware and recording media is also available. ATC software is installed on the Microsoft Windows system platform with standard SQL databases and is particularly user-friendly and convenient for small to medium-sized customers as well as large decentralized organizations.

14. Employees

On September 30, 2009 the company had 232 employees.

15. Member of the Management Board

The company's Management Board continued to comprise two members:

16. Supervisory Board

The company's Supervisory Board as of September 30, 2009 comprised three members:

17. Board member shareholdings

On the reporting date of September 30, 2009 board members held the following numbers of ATOSS shares:

18. Convertible bonds held by board members

On September 30, 2009 board members held the following number of bonds convertible into ATOSS shares:

	30.09.2009	31.06.2009	31.03.2009	30.12.2008	30.09.2008
Andreas F.J. Obereder	1,981,184	1,981,184	1,981,184	1,981,184	1,981,184
Peter Kirn	19,760	29,760	29,760	29,760	29,760

EUR	01.01.2009 30.09.2009	01.01.2008 30.09.2008
Sales revenues
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	19,861,281	18,359,497
ATOSS Time Control (ATC)	1,529,614	1,707,860
Total sales revenues	21,390,895	20,067,357
Operating result (EBIT)
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	4,164,680	3,707,396
ATOSS Time Control (ATC)	223,600	241,043
Total operating result (EBIT)	4,388,280	3,948,439

30.09.2009	30.09.2008

	30.09.2009	30.09.2008
Development	94	80
Consulting	68	62
Sales and marketing	35	37
Administration	35	34
Total	232	213

Andreas F.J. Obereder	Chief Executive Officer
Christof Leiber	Member of the Management Board

Peter Kirn	Chairman
Fritz Fleischmann	Deputy Chairman
Rolf Baron Vielhauer von Hohenhau	Member of the Supervisory Board

	30.09.2009	31.06.2009	31.03.2009	30.12.2008	30.09.2008
Christof Leiber	0	5,000	5,000	5,000	5,000

19. Convertible bonds

In the first nine months of financial year 2009 some 8,000 convertible bonds were exercised. As of September 30, 2009 there were 16,000 convertible bonds outstanding.

Details of outstanding convertible bonds held by board members and employees are summarized in the following table:

20. Notifiable participating interests

In the first nine months of financial year 2009 the company received no notifications regarding changes in participating interests pursuant to §§ 21 ff. of the German Securities Trading Act.

21. Business transactions with closely related persons

A business relationship exists with the wife of the Chief Executive Officer, from whom the company rents business premises in Meerbusch. The premises concerned comprise 1,176 m2 of office space for which rental costs in the amount of EUR 171,603 (previous year: EUR 171,603) were incurred in the first nine months of 2009.

Moreover the wife of the Chief Executive Officer provides services to the company. In the first nine months of the year 2009 the value of these services amounted to EUR 5,980 (previous year: EUR 3,120).

The company is satisfied that the terms agreed for these transactions are standard market terms.

22. Dividend

By a resolution adopted by the General Meeting on April 30, 2009 in accordance with the proposal by the Management Board and Supervisory Board a dividend of EUR 0.44 per share was paid on May 4, 2009 representing a total distribution of EUR 1,739,130.

23. Events after the balance sheet closing date

There have been no reportable events of particular import subsequent to September 30, 2009.

	Exercise price in EUR	Outstanding options	Contractual validity in years	Possible rights remaining to be exercised as of 30.09.2009
Employees
	3,52	4.000	1,0	4.000
	3,97	3.000	2,1	3.000
	6,18	9.000	1,7	9.000
Total		16.000		16.000

We hereby give an assurance to the best of our knowledge and belief that in accordance with the applicable interim reporting standards these interim consolidated financial statements convey an impression of the net assets, financial position and earnings situation of the Group which accords with the true facts; and that the development in business including the results and the situation of the Group are so described in the interim consolidated management report as to convey an impression which likewise accords with the true facts; and that the essential opportunities and risks associated with the anticipated development of the Group in the remainder of the financial year are so described.

Munich, November 13, 2009

Andreas F.J. Obereder Christof Leiber

(Chief Executive Officer) (Member of the Board of Management)

Declaration by the legal representatives

Disclaimer

This report contains forward-looking statements that are based on the conviction of the Management Board of ATOSS Software AG and reflect current assumptions and estimations. These forward-looking statements are subject to risks and uncertainties. Many facts that cannot currently be predicted may cause the actual performance and earnings of ATOSS Software AG to develop in a different manner. This could for example include the non-acceptance of newly introduced products or services, changes in the general economic and business climate, a failure to achieve efficiency and cost-reduction targets or changes in business strategy.

The Management Board is firmly convinced that the expectations embodied in these forward-looking statements are sound and realistic. Should, however, the above-mentioned or other unforeseeable risks materialize, ATOSS Software AG cannot guarantee that the expressed expectations will prove to be correct.

Corporate Calendar

IMprint

29.01.2010	Press release announcing preliminary results for 2009	RESPONSIBLE
12.03.2010	Publication of the annual report for 2009		Düsseldorf
12.03.2010	Balance sheet press conference	ATOSS Software AG
26.04.2010	Press release announcing the 3-monthly statements	Am Moosfeld 3
30.04.2010	Annual General Meeting	D-81829 Munich	Frankfurt
17.05.2010	Publication of the 3-monthly financial statements	Fon +49.89.4 27 71-0
26.07.2010	Press release announcing the 6-monthly statements	Fax +49.89.4 27 71-100
13.08.2010	Publication of the 6-monthly financial statements	www.atoss.com	Hamburg
25.10.2010	Press release announcing the 9-monthly statements
15.11.2010	Publication of the 9-monthly financial statements
		INVESTOR RELATIONS CONTACT	Stuttgart
		ATOSS Software AG
		Investor Relations
		Christof Leiber
		Fon +49.89.4 27 71-0	Germany
		Fax +49.89.4 27 71-100
		Christof.Leiber@atoss.com
			Austria
			Romania

OTHER OFFICES

Düsseldorf Fon +49.21 50.9 65-0

Fon +49.69.66 05 99-0

Fon +49.40.27 81 63-0

Fon +49.711.7 28 73 20-0

SUBSIDIARIES ATOSS CSD Software GmbH, Cham Fon +49.99 71.85 18-0

ATOSS Software Ges.mbH, Vienna Fon +43.1.7 17 28-334

Switzerland ATOSS Software AG, Zurich Fon +41.44.308 39-56

ATOSS Software SRL, Timisoara Fon +40.356.71 01 82

ATOSS Software AG

Am Moosfeld 3 D-81829 München Fon +49.89.4 27 71-0 Fax +49.89.4 27 71-100

info@atoss.com www.atoss.com