ATOSS Software AG — Interim / Quarterly Report 2011

Nov 14, 2011

03.11 QUARTERLY REPORT

»In times of demographic change and a growing shortage of skilled labor, efficient workforce management is becoming crucial to success.«

ATOSS Kunde ABC ATOSS customer SportScheck

Letter to Sharholders

Dear Shareholders, Ladies and Gentlemen,

With the third quarter of 2011 now expired, ATOSS continues to record successful performance. Our message continues to be heard, both among customers and among new employees and investors. Between January and September we have once again grown at a rate that is ahead of the market. Sales in our core software business were up 6 percent, while industry association BITKOM expects growth of around just 4 percent for 2011. Turnover in our consulting business was actually 9 percent higher. This pleasing trend continues in the current fourth quarter and confirms our guidance.

We thus have a positive signal to send, in sharp contrast to current speculation about declining business expectations in almost all sectors and regions. We continue to expect ATOSS to record both rising sales and an increasing number of employees. To enable us to respond still more effectively to demand in the marketplace and exploit the opportunities available to us, we have specifically expanded our team with the recruitment of specialists in the fields of research & development and sales & marketing.

Building on core sectors and developing new areas

Looking back on the past nine months, it is clear that the retail sector and the ATOSS Retail Solution remain of great of importance to ATOSS Software AG. Numerous new customers have been acquired in this field, the complexity of which cries out for workforce management. The same may be said of the medical sector, in which human resource planning presents a formidable task without the support of the ATOSS Medical Solution – factors that are driving the consistent success of our solution. The latest client acquired by ATOSS is the University Clinic operated by the Johannes Gutenberg University in Mainz, which is now using ATOSS software to schedule and manage some 4,000 staff.

Nonetheless developments in other sectors are proving ever more important, underscoring the fact that the relevance of workforce management is not only appreciated in personnelintensive and personnel-critical branches. While we at ATOSS have long been convinced that demographic developments and a shortage of skilled labor would inevitably act as a brake on growth and therefore also success in the corporate sector, this realization is now becoming an open secret in the media and in political circles. Without comprehensive and intelligent workforce management designed to motivate employees, companies will struggle in the contest for competent staff and valued customers!

As our success and our future prospects demonstrate, research & development (R&D) must remain a central issue for ATOSS. The momentum derived from cooperation with our network of partners and from our work on new technologies and future trends has highlighted some very promising avenues. R&D expenditure in the first nine months of 2011 amounted to EUR 4.9 million, up by a substantial 14 percent over the year before. As a proportion of sales, spending on R&D thus equated to 21 percent. This is the only way in which to maintain and expand our hard-won lead.

It is our goal to remain a calculable and reliable force for our customers, shareholders, employees and business partners. For this reason our corporate strategy is built around sustained investment in research & development, first-class references and a sound financial policy.

Outlook for financial year 2011

After three quarters our performance is fully in line with our expectations. With a strong order book behind us, we continue to anticipate moderate sales growth and an EBIT margin securely in excess of 20 percent. Our record development thus continues for a sixth year in succession, while our attention is focused more strongly than ever on laying a positive foundation for the coming financial year.

Andreas F.J. Obereder und Christof Leiber, Board of Management, ATOSS Software AG

Yours truly,

Andreas F.J. Obereder Christof Leiber

Chief Executive Officer Member of the Board of Management

Facts Overview

CONSOLIDATED OVERVIEW ACCORDING TO IFRS: 9-MONTH COMPARISON IN T EUR
	01.01.2011 - 30.09.2011	Proportion of sales	01.01.2010 - 30.09.2010	Proportion of sales	Change 2011/2010
Sales	23,346	100%	21,443	100%	9%
Software	13,930	60%	13,195	62%	6%
Software licences	4,914	21%	4,831	23%	2%
Software maintenance	9,016	39%	8,364	39%	8%
Consulting	6,236	27%	5,710	27%	9%
Hardware	2,199	9%	1,643	8%	34%
Other	981	4%	895	4%	10%
EBITDA	5,900	25%	5,606	26%	5%
EBIT	5,542	24%	5,258	25%	5%
EBT	6,599	28%	5,316	25%	24%
Net income	4,476	19%	3,616	17%	24%
Cash flow	7,102	30%	6,963	32%	20%
Liquidity 1/2	26,349		21,980		20%
EPS (in EUR)	1.13		0.91		24%
Employees 3	259		247		5%

CONSOLIDATED OVERVIEW ACCORDING TO IFRS: QUARTERLY COMPARISON IN T EUR
	Q3/11	Q2/11	Q1/11	Q4/10	Q3/10
Sales	7,584	7,913	7,848	7,870	7,178
Software	4,651	4,705	4,574	4,652	4,384
Software licences	1,586	1,676	1,652	1,711	1,544
Software maintenance	3,065	3,029	2,922	2,941	2,840
Consulting	1,931	2,184	2,122	2,204	1,928
Hardware	764	548	887	809	502
Other	239	476	265	206	364
EBITDA	1,792	2,054	2,054	1,684	1,928
EBIT	1,665	1,941	1,936	1,582	1,815
EBIT margin in %	22%	25%	25%	20%	25%
EBT	2,617	2,015	1,967	1,642	1,831
Net income	1,772	1,367	1,337	1,183	1,243
Cash flow	3,170	843	3,088	-1,168	4,250
Liquidity 1/2	26,349	22,375	23,682	20,691	21,980
EPS (in EUR)	0.45	0.34	0.34	0.30	0.31
Employees 3	259	249	253	247	247

1: Cash and equivalents, other current and non-current financial assets (e.g. equities, gold) 2: Dividend of EUR 0.50 per share on May 3, 2010 (T EUR 1,981) and EUR 0.60 per share on May 4, 2011 (T EUR 2,386)

3: At the end of the quarter

ECONOMIC BACKGROUND Economy overshadowed by the EU debt crisis Business climate in the high-tech sector remains good Majority of software and IT service providers continue to expect growth

ATOSS SOFTWARE AG ATOSS reports the best nine-monthly figures in its history Full-year outlook remains positive

INVESTOR RELATIONS

ATOSS stock displays impressive stability

In the past nine months the stock markets have experienced some very turbulent and occasionally dramatic times. These movements in the market as a whole have not, however, been reflected in the ATOSS share price which has remained extremely stable. The comparative Daxsubsector Software Performance index has been distinctly more volatile, but by September 30, 2011 it was back at the same level as at the start of the year. Over the same period ATOSS stock gained four percent. Taking into account the dividend payment of EUR 0.60, the increase in value to September 30, 2011 was in fact eight percent.

ATOSS stock in the long term

The consistent increase in value is all the more clear when one considers the development in ATOSS stock over an extended period. Since January 1, 2006 our share price has risen by 143 percent. The relevant comparative index put on just 9 percent.

Analysts continue to recommend the stock as a buy

The analysts at Warburg Research stands by their outlook for ATOSS stock. Since the provisional figures for Q3 2011 were published on October 13, 2011, they have continued to rate the shares as a buy. As our record performance continues, the target price stands at EUR 22.00. Orders received and on hand are developing satisfactorily, providing the basis for further growth in the coming quarters. Thanks to the sound development in operations and our strong financial result, the analysts have slightly increased their net income forecast.

ATOSS continues to develop the foundation underpinning its great stability

In line with the trend in business, there has been a distinctly positive development in key figures per share. Cash flow in the third quarter amounted to EUR 0.80 per share, while liquidity per share as of September 30, 2011 stood at EUR 6.63. Earnings per share (EPS) in Q3 – supported by a very strong financial result – came in at EUR 0.45. EPS for the period from January to September 2011 was EUR 1.13.

Given this strong development in important key figures as well as the expectations for the current fourth quarter and the company's long-term dividend policy, in a capital market environment that is prey to economic as well as political factors that are extremely difficult to estimate, ATOSS is relentlessly developing the necessary foundation for maximum share price stability.

And with success to date – our shareholders have earned positive returns, rather than suffering losses. In 2005 ATOSS first paid a dividend of EUR 0.11 per share, on earnings per share of EUR 0.12. In financial year 2010 the dividend stood at EUR 0.60, with EPS of EUR 1.21. With ATOSS now reporting earnings per share of EUR 1.13 after three quarters, the outlook remains positive.

For further information visit: www.atoss.com

CONSOLIDATED OVERVIEW ACCORDING TO IFRS: QUARTERLY COMPARISON IN EUR
	Q3/11	Q2/11	Q1/11	Q4/10	Q3/10
High	18.34	18.28	17.92	17.51	16.90
Low	15.50	16.15	14.51	14.65	14.06
Share price at end of quarter	17.05	17.11	16.65	16.92	14.80
Treasury stock	49,099	49,099	49,099	56,099	57,099
Dividend paid per share	0.00	0.60	0.00	0.00	0.00
Cash flow per share	0.80	0.21	0.78	-0.29	1.07
Liquidity per share	6.63	5.63	5.96	5.22	5.55
EPS	0.45	0.34	0.34	0.30	0.31
EPS (diluted)	0.45	0.34	0.34	0.30	0.31

»ATOSS remains on course for success in the third quarter of 2011 with some impressive nine-monthly figures.«

ATOSS Kunde ABC ATOSS customer Kastner & Öhler

GROUP MANAGEMENT REPORT

1. Business and conditions: Mood darkening in the economy as a whole, but remaining bright in the high-tech sector

The outlook for the global economy is slowly but steadily deteriorating. In Europe there is a risk that the sovereign debt crisis will broaden into a banking crisis. This situation is increasingly burdening the German economy. According to the Joint Economic Forecast for Autumn 2011 published by the ifo Institute, the rapidly growing uncertainty will depress domestic demand while exports, given the difficulties in which some important trading partners find themselves, will cease to contribute to expansion.

Gross domestic product this year is expected to rise by 2.9 percent (last year: 3.6 percent), with a further increase of 0.8 percent next year. At the same time the unemployment rate for 2011 is estimated at 7.0 percent, slipping to 6.7 percent in 2012. The likely inflation rate of 2.3 percent in 2011 and 1.8 percent in 2012 will increasingly be determined by rising domestic prices. The deteriorating debt crisis and the potential for major economic regions (including the USA) to slip back into recession are seen as substantial risks with the capacity to seriously hamper the economic outlook.

The debt crisis has had no impact on the ICT market to date. The latest economic survey by industry association BITKOM reveals that the sales outlook and business expectations in the ICT sector improved in the third quarter. According to the survey, three quarters of information technology, telecommunications and entertainment electronics suppliers expected sales to increase relative to the same quarter last year. The BITKOM sector index is up eleven points at 63 according to the findings of BIT-KOM's current economic survey.

BITKOM also ascertained that the majority of companies take a positive view of future prospects. A total of 75 percent of the firms surveyed expect to see an increase in full-year sales in 2011. Among software suppliers, the proportion expecting higher sales revenues relative to last year was 82 percent.

With growth in the economy as a whole set to slow in 2011, and with an increase of 4.3 percent forecast for the IT sector in Germany, in the first nine months of financial year 2011 ATOSS remained on course with sales growth well above the market average at 9 percent.

Earnings situation: ATOSS growth far outpaces the market

In the first nine months of financial year 2011 ATOSS recorded sales totaling EUR 23.3 million (previous year: EUR 21.4 million), far outstripping last year's record performance. Sales of software rose by 6 percent from EUR 13.2 million to EUR 13.9 million. Software maintenance, too, continued to develop positively with turnover also increasing by 8 percent from EUR 8.4 million to EUR 9.0 million.

In the consulting area, ATOSS recorded growth of 9 percent in the first nine months of 2011, with revenues rising from EUR 5.7 million last year to EUR 6.2 million. This even exceeded the very strong performance recorded in 2009 when sales revenues came in at EUR 6.1 million.

The operating profit (EBIT) at EUR 5.5 million increases by 5 percent over the previous year's figure of EUR 5.3 million.

Because of an strong financial result earnings before taxes (EBT) rose by 24 percent over the previous year from EUR 5.3 million to EUR 6.0 million.

Net income to September 30, 2011 came in at EUR 4.5 million, representing growth of 24 percent relative to the EUR 3.6 million recorded in the same period last year. Earnings per share accordingly rose from EUR 0.91 to EUR 1.13.

Orders on hand for software licenses as of September 30, 2011 increased to EUR 2.9 million (previous year: EUR 2.7 million), providing an excellent starting point for the current fourth quarter 2011 and the next financial year 2012.

2. Net assets and financial position

In the first nine months, cash flow from operations was on a par with the preceding year at EUR 7.1 million (previous year: EUR 7.0 million). Cash and equivalents slipped from EUR 22.0 million to EUR 17.5 million. The position as a whole, however, comprising cash and equivalents and other current and noncurrent financial assets (e.g. gold, equities) increased from EUR 22.0 million to EUR 26.3 million. Liquidity per share on September 30, 2011 including these current and non-current assets accordingly stood at EUR 6.63 (previous year EUR 5.55).

The decline in cash and equivalents relative to the year before is attributable to a redistribution of investments in other current and non-current financial assets. With this change in investment strategy the company intends to emphasize its focus on safeguarding long-term value and hedging against inflation and take adequate precautions against the effects of an increase in money supply and the steep rise in the sovereign debt ratios in numerous euro zone states as well as the USA.

In total, the Management Board is authorized by the Supervisory Board to invest in physical gold in an amount of up to EUR 17.0 million and in dividend-bearing securities in an amount of up to EUR 5.0 million. On September 30, 2011 the company had EUR 7.0 million invested in gold and EUR 2.3 million invested in dividend-bearing securities.

Cash and equivalents was also affected by the payment of a dividend in the amount of EUR 0.60 (previous year: EUR 0.50) per share.

In addition to net earnings of EUR 4.5 million, the EUR 7.1 million in cash flow from operations was also boosted by an increase in deferred revenues of EUR 3.7 million.

As a result of the gratifying development in business, in addition to increasing its balance sheet total by 18 percent, ATOSS also recorded an equity ratio of 60 percent (previous year: 58 percent). The company thus remains extremely well capitalized, with solvency assured at all times.

3. Product development

A high level of expenditure on research & development remains an important component of the ATOSS growth strategy with the goal of further extending the company's strong position as a technological leader in workforce management. Research and development costs rose by 14 percent in the first nine months to stand at EUR 4.9 million (previous year: EUR 4.3 million). R&D costs as a proportion of overall sales amounted to 21 percent (previous year: 20 percent).

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.

4. Employees

As compared to previous year the number of employees rose from 247 to 259. On September 30, 2011 ATOSS employed 117 software developers (previous year: 105), with a further 68 staff employed in consulting (previous year: 70), 37 in sales and marketing (previous year: 34) and 37 in administration (previous year: 38).

Personnel costs for the first nine months of the current financial year amounted to EUR 11.1 million (previous year: EUR 10.6 million).

5. Risks associated with future development

There has been no fundamental change in the company's risk structure relative to the description contained in the consolidated financial statements to December 31, 2010. The investment strategy announced in the annual report to December 31, 2010 was consistently implemented and refined during the first nine month of 2011. The company's liquid funds are invested wholly or partly in other noncurrent or current financial assets (gold, equities) as well as in fixed-term and other bank deposits. ATOSS continues to counter financial risk through regular monitoring of the financial market as well as weekly reports to the Management Board and a monthly report to the Supervisory Board on the development in financial investments.

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

6. Events after the reporting period

There have been no further reportable events of particular significance since September 30, 2011.

7. Outlook

All of the company's essential performance figures continued to develop positively in the first nine months of 2011. The Management Board therefore stands by its forecast for moderate sales growth in 2011 with an EBIT margin securely greater than 20 percent.

CONSOLIDATED BALANCE SHEET TO 30.09.2011 Assets (EUR) 30.09.2011 31.12.2010 Non-current assets Tangible fixed assets 2,880,559 2,812,173 Intangible assets 135,242 136,155 Deferred taxes 629,777 260,259 Other financial assets 548,835 0 Total non-current assets 4,194,413 3,208,587 Current assets Inventories 14,126 9,480 Trade accounts receivable 2,303,332 3,063,813 Other financial assets 8,279,749 399,816 Other non-financial assets 529,832 401,975 Cash and equivalents 17,520,540 20,691,419 Total current assets 28,647,579 24,566,503 Total assets 32,841,992 27,775,090 Equity and Liabilities (EUR) 30.09.2011 31.12.2010 Equity capital Subscribed capital 4,025,667 4,025,667 Capital reserve -387,528 -375,203 Treasury stock -322,909 -376,284 Equity deriving from unrealized profits/losses -21,801 0 Profit shown on balance sheet 16,386,602 14,296,435 Total equity 19,680,031 17,570,615 Non-current liabilities Convertible bonds 0 7,000 Pension provisions 1,709,268 1,744,723 Deferred taxes 829,927 727,851 Total non-current liabilities 2,539,195 2,479,574 Current liabilities Trade accounts payable 301,882 788,217 Other liabilities 3,829,216 4,153,537 Deferred revenues 5,390,488 1,709,514 Tax provisions 1,002,180 974,633 Other provisions 99,000 99,000 Total current liabilities 10,622,766 7,724,901

Assets (EUR)	30.09.2011	31.12.2010
Non-current assets
Tangible fixed assets	2,880,559	2,812,173
Intangible assets	135,242	136,155
Deferred taxes	629,777	260,259
Other financial assets	548,835	0
Total non-current assets	4,194,413	3,208,587
Current assets
Inventories	14,126	9,480
Trade accounts receivable	2,303,332	3,063,813
Other financial assets	8,279,749	399,816
Other non-financial assets	529,832	401,975
Cash and equivalents	17,520,540	20,691,419
Total current assets	28,647,579	24,566,503
Total assets	32,841,992	27,775,090
Equity and Liabilities (EUR)	30.09.2011	31.12.2010
Equity capital
Subscribed capital	4,025,667	4,025,667
Capital reserve	-387,528	-375,203
Treasury stock	-322,909	-376,284
Equity deriving from unrealized profits/losses	-21,801	0
Profit shown on balance sheet	16,386,602	14,296,435
Total equity	19,680,031	17,570,615
Non-current liabilities
Convertible bonds	0	7,000
Pension provisions	1,709,268	1,744,723
Deferred taxes	829,927	727,851
Total non-current liabilities	2,539,195	2,479,574
Current liabilities
Trade accounts payable	301,882	788,217
Other liabilities	3,829,216	4,153,537
Deferred revenues	5,390,488	1,709,514
Tax provisions	1,002,180	974,633
Other provisions	99,000	99,000
Total current liabilities	10,622,766	7,724,901
Total equity and liabilities	32,841,992	27,775,090

CONSOLIDATED BALANCE SHEET

ATOSS customer BLG LOGISTICS GROUP

CONSOLIDATED INCOME STATEMENT FROM 01.01. TO 30.09.2011
		Quarterly report		9-months report
EUR	01.07.2011 - 30.09.2011	01.07.2010 - 30.09.2010	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Sales	7,584,286	7,177,868	23,346,121	21,443,315
Cost of sales	-2,247,178	-2,179,939	-6,918,378	-6,524,709
Gross profit on sales	5,337,108	4,997,929	16,427,743	14,918,606
Selling costs	-1,301,039	-1,133,453	-4,030,207	-3,598,484
Administration costs	-673,882	-613,126	-1,941,665	-1,830,545
Research and development costs	-1,684,047	-1,470,201	-4,927,642	-4,331,778
Other operating income	48,824	22,572	114,387	102,493
Other operating expenses	-62,554	11,523	-100,670	-2,739
Operating profit (EBIT)	1,664,410	1,815,244	5,541,946	5,257,553
Interest and similar income	1,855,293	35,116	1,998,934	115,791
Interest and similar expenses	-902,485	-19,127	-941,741	-57,216
Earnings before taxes (EBT)	2,617,218	1,831,233	6,599,139	5,316,128
Taxes on income and earnings	-845,288	-588,217	-2,123,031	-1,700,520
Net income	1,771,930	1,243,016	4,476,108	3,615,608
Earnings per share (undiluted)	0.45	0.31	1.13	0.91
Earnings per share (diluted)	0.45	0.31	1.13	0.91
Average number of shares in circulation (undiluted)	3,976,568	3,967,318	3,975,121	3,963,312
Average number of shares in circulation (diluted)	3,976,568	3,978,057	3,976,568	3,977,070

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FROM 01.01. TO 30.09.2011
EUR	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Net income	4,476,108	3,615,608
Changes in equity not recognized in the income statement	19,249	36,590
Other income for the period after taxes	19,249	36,590
Comprehensive income after taxes	4,495,357	3,652,198

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED CASH FLOW STATEMENT FROM 01.01. TO 30.09.2011
EUR	01.01.2011 - 30.06.2011	01.01.2010 - 30.06.2010
Operating activities
Net income	4,476,108	3,615,608
Depreciation of fixed assets	357,825	348,689
Gain/loss on the disposal of fixed assets	255	511
Result on the disposal of financial asset available for sale	-1,842,618	0
Other result from non-current and current financial asset	875,962	0
Changes in deferred taxes	-267,442	1,163,619
Changes in pension provisions	-35,456	-41,135
Adjustment for other items not recognized in profit or loss	18,303	0
Change in net current assets
Trade accounts receivable	760,481	2,084,659
Inventories and other current financial assets	-132,503	-381,621
Trade accounts payable	-479,759	95,962
Other current liabilities	-331,322	-228,572
Deferred revenues	3,674,398	1,152,557
Tax provisions	27,547	39,772
Other provisions	0	-887,014
Cash flows from operating activities (1)	7,101,779	6,963,035
Investing activities
Acquisition of tangible and intangible assets	-425,552	-2,367,173
Disposal of tangible and intangible assets	0	0
Acquisition of other financial assets	-23,054,921	0
Disposal of other financial assets	15,552,706	0
Cash flows used in investing activities (2)	-7,927,767	-2,367,173
Financing activities
Expenditure for the purchase of treasury stock	0	0
Income from the sale of treasury stock	41,050	36,590
Dividend payments	-2,385,941	-1,980,784
Cash flows from financing activities (3)	-2,344,891	-1,944,194
Changes in cash and equivalents – total of (1) to (3)	-3,170,879	2,651,668
Cash and equivalents at the beginning of the period	20,691,419	19,328,060
Cash and equivalents at the end of the period	17,520,540	21,979,728

CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

One share represents 1 euro of subscribed capital.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

ATOSS customer Allgaier Werke

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY TO 30.09.2011

EUR	Subscribed capital	Capital reserve		Treasury stock Equity deriving from unrealized profits/losses	Unappropriated net profit	Total
As of 01.01.2010	4,025,667	-301,013	-491,034	0	11,478,130	14,711,750
Net income	0	0	0	0	3,615,608	3,615,608
Sale of treasury stock	0	-65,410	102,000	0	0	36,590
Purchase of treasury stock	0	0	0	0	0	0
Dividend	0	0	0	0	-1,980,784	-1,980,784
As of 30.09.2010	4,025,667	-366,423	-389,034	0	13,112,954	16,383,164
As of 01.01.2011	4,025,667	-375,203	-376,284	0	14,296,435	17,570,615
Net income	0	0	0	0	4,476,108	4,476,108
Sale of treasury stock	0	-12,325	53,375	0	0	41,050
Purchase of treasury stock	0	0	0	0	0	0
Dividend	0	0	0	0	-2,385,941	-2,385,941
Other changes in equity	0	0	0	-21,801	0	-21,801
As of 30.09.2011	4,025,667	-387,528	-322,909	-21,801	16,386,602	19,680,031

NOTES TO THE CONSOLIDATED FINANCAL STATEMENT

»We give priority to sustained investment in research & development, a sound financial policy and open communication.«

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 statement of comprehensive income, consolidated cash flow statement, a statement of changes in consolidated 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 to December 31, 2010.

In accordance with IAS 39, the other financial assets (equities, gold) acquired in the first nine months have been classified as financial assets available for sale and valued accordingly.

On every reporting date at the latest, the Group investigates whether there are objective indications to conclude that the value of a financial asset available for sale is impaired. In the case of financial assets classified as available for sale (gold, dividend-bearing securities), a significant or sustained decline in the fair value of the instrument below the cost of acquisition would constitute such objective grounds. The decision as to what constitutes "significant" or "sustained" is discretionary. The Group therefore recognizes impairments if the gold price on the quarterly or annual closing date is 10 percent or the price of stock 25 percent below cost of acquisition, or if the price of gold or share price remains continuously below the cost of acquisition for six months.

The Management Board is satisfied that the impression of the economic situation of the company, its net assets, financial position, earnings situation and cash flow conveyed by the present quarterly financial statements accords with the true facts. This interim report has not undergone an auditors' inspection or statutory audit.

2. Reporting period

The present interim report was prepared to September 30, 2011 for the reporting period from January 1, 2011 to that date.

3. Currency

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

4. Group of consolidated companies

In addition to the parent company ATOSS Software AG, Munich, the consolidated financial statements to June 30, 2011 also include all subsidiary companies:

ATOSS CSD Software GmbH, Cham, Germany 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.

6. Treasury stock

In the first nine months of the financial year 7,000 treasury shares were dispensed in response to the exercise of convertible bonds. On September 30, 2011 the company held 49,099 treasury shares acquired at an average price of EUR 6.58. Treasury stock is reported as a separate equity item at cost of acquisition.

7. Sales

The company's sales were composed as follows:

EUR	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Software licenses	4,913,554	4,830,536
Software maintenance	9,016,677	8,364,932
Total software	13,930,231	13,195,468
Consulting	6,236,274	5,709,796
Hardware	2,198,652	1,643,051
Others	980,964	895,000
Total Sales	23,346,121	21,443,315

The geographic breakdown of Sales was as follows:

EUR	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Germany	21,218,431	19,577,895
Austria	1,304,318	1,161,989
Switzerland	524,592	394,398
German-speaking territories in total	23,047,341	21,134,282
Other countries	298,780	309,033
Total Sales	23,346,121	21,433,315

8. Personnel costs

The consolidated personnel costs to September 30, 2011 were composed as follows:

EUR	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Wages and salaries	9,173,180	8,679,571
Social security contributions and expenditure on retirement pensions and welfare	1,972,512	1,864,079
Total personnel costs	11,145,692	10,543,650

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 114,387 (previous year: EUR 102,493). This essentially comprised income resulting from exchange rate differentials in the amount of EUR 105,356 (previous year: EUR 64,100) and income the liquidation of provisions in the amount of EUR 6,758 (previous year: EUR 6,601). The other operating expenses amounting to EUR 100,670 (previous year: EUR 2,739) essentially related to exchange rate losses.

10. Financial investment income and expenses

In the first nine months of the current financial year the company recorded income in the amount of EUR 1,998,934 (previous year: EUR 115,791) from financial investments. This essentially comprised gains deriving from the sale of gold and equities and dividends received.

The company also recorded expenses amounting as of September 30, 2011 to EUR 941,741 (previous year: EUR 57,216). These essentially comprised impairments resulting from the intra-year valuation of gold and equities held as of September 30, 2011

11. Tax charge

Consolidated tax expenses to September 30, 2011 were comprised as follows:

EUR	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Eearnings before taxes (EBT)	6,599,139	5,316,128
Expected tax charge (2011: 32.98%, 2010: 32.98%)	-2,176,396	-1,753,259
Non-deductible operating expenses	-13,916	-10,296
Tax refunds for previous years	0	4,658
Differences in tax rates at consolidated companies	67,281	58,377
Actual Group tax charge	-2,123,031	-1,700,520

12. Earnings per share

The figure for earnings per share is arrived at by dividing the net income in the amount of EUR 4,476,108 by the weighted average number of shares outstanding. Between January 1 and September 30, 2011 there were an average of 3,975,121 shares in circulation. Thus earnings per share for this period amounted to EUR 1.13, in comparison with EUR 0.91 in the first nine months of the preceding year.

In order to calculate diluted earnings per share, the net income must be adjusted to allow for the interest cost relating to convertible bonds in the amount of EUR 22 (previous year: EUR 311). In addition the average number of shares outstanding is increased with the inclusion of shares potentially issued as a result of convertible bonds. Between January 1 and September 30, 2011 there were an average of 1,447 convertible bonds in circulation. Thus the diluted earnings per share for this period amounted to EUR 1.13, in comparison with EUR 0.91 in the preceding year.

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) and ATOSS Startup Edition (ASE):

ASES and ASE are working time management and personnel resource planning solutions for customers of all sizes in all industries. These software solutions are generally accompanied by other services covering implementation and training. In addition consulting services are rendered with the object 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 in conjunction 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 time and attendance 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 in association with standard SQL databases and is particularly user-friendly and convenient for small to medium-sized customers as well as large decentralized organizations.

EUR	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Sales
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	21,454,259	19,739,233
ATOSS Time Control (ATC)	1,891,862	1,704,082
Total Sales	23,346,121	21,443,315
Operating profit (EBIT)
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	5,049,181	4,924,911
ATOSS Time Control (ATC)	492,765	332,642
Total operating profit (EBIT)	5,541,946	5,257,553

14. Employees

On September 30, 2011 the company had 259 employees:

EUR	01.01.2011 - 30.09.2011	01.01.2010 - 30.09.2010
Development	117	105
Consulting	68	70
Sales and marketing	37	34
Administration	37	38
Total	259	247

15. Executive Board

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

Andreas F.J. Obereder	Chief Executive Officer
Christof Leiber	Executive Board

16. Supervisory Board

The company's Supervisory Board as of September 30, 2011 comprised three members:

Peter Kirn	Chairman
Richard Hauser	Deputy Chairman
Rolf Baron Vielhauer von Hohenhau	Member of the Supervisory Board

17. Board member shareholdings

On the reporting date of September 30, 2011 board members held the following numbers of ATOSS shares:

EUR	30.09.2011	30.06.2011	31.03.2011	31.12.2010	30.09.2010
Andreas F.J. Obereder	1,981,184	1,981,184	1,981,184	1,981,184	1,981,184
Peter Kirn	19,760	19,760	19,760	19,760	19,760

18. Convertible bonds held by board members

As of September 30, 2011 no board members held bonds convertible into ATOSS shares.

19. Convertible bonds

Up to September 30, 2011 some 7,000 convertible bonds had been exercised. As of that date there were no convertible bonds outstanding.

20. Notifiable participating interests

In the first nine months of financial year 2011 the company received no notifications regarding changes in participating interests pursuant to Sections 21 ff. of the German Securities Trading Act.

21. Business transactions with closely related persons

The wife of the Chief Executive Officer provides services to the company. In the first nine months of the financial year 2011 the value of these services amounted to EUR 4,316 (previous year: EUR 2,392).

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

22. Events after the reporting period

There have been no other reportable events of particular import subsequent to September 30, 2011.

Munich, November 14, 2011

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

of Management

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.

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.

Declaration by the Legal Representatives

Imprint

PHOTOGRAPHY Customers of ATOSS Software AG P. 10: Kastner & Öhler Warenhaus AG / Bernd Kammerer

Corporate Calendar

22.11.2011	Analysts conference, Deutsches Eigenkapitalforum,	RESPONSIBLE
	Frankfurt	ATOSS Software AG
31.01.2012	Press release announcing preliminary results for 2011	Am Moosfeld 3 D-81829 München Fon +49.89.4 27 71 - 0
12.03.2012 Publication of the annual report for 2011	Fax +49.89.4 27 71 - 100
12.03.2012	Balance sheet press conference	www.atoss.com INVESTOR RELATIONS
20.04.2012	General Meeting	ATOSS Software AG Investor Relations
25.04.2012	Press release announcing the 3-monthly statements	Christof Leiber Fon +49.89.4 27 71 - 265 Fax +49.89.4 27 71 - 100
16.05.2012	Publication of the 3-monthly financial statements	Christof.Leiber@atoss.com
23.07.2012	Press release announcing the 6-monthly statements
13.08.2012	Publication of the 6-monthly financial statements
22.10.2012	Press release announcing the 9-monthly statements
15.11.2012	Publication of the 9-monthly financial statements

OTHER OFFICES

Düsseldorf Fon + 49. 21 50. 9 65 - 0

Frankfurt Fon + 49. 69. 66 05 99 - 0

Hamburg Fon + 49. 40. 27 81 63 - 0

Stuttgart Fon + 49. 711. 7 28 73 20 - 0

SUBSIDIARIES

Germany ATOSS CSD Software GmbH, Cham Fon +49. 99 71. 85 18 - 0

Austria ATOSS Software Ges.mbH, Vienna Fon + 43. 1. 7 17 28 - 334

Switzerland ATOSS Software AG, Zurich Fon + 41. 44. 308 39 - 56

Romania ATOSS Software SRL, Timisoara Fon + 40. 356. 71 01 82

ATOSS Software AG

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

info@atoss.com www.atoss.com