INTEGRATED RESEARCH LIMITED — AGM Information 2008

Nov 10, 2008

Integrated Research Limited 2008 Annual General Meeting

11 November 2008

ABN: 76 003 588 449

Precise performance monitoring for business-critical systems

CEO Presentation

Mark Brayan

Precise performance monitoring for business-critical systems

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Overview
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• Solid result in a difficult year

• Net profit after tax up 6% on last year to $5.8m

• New licence sales up 1% to $19.6m

• Total revenue up 3% to $37.4m

• Result impacted by

• Higher $AUD

• Slowdown in US economy

• Substantial achievements

• Major wins against global competitors

• New product releases

• Improved product quality

• New management team in place

• Conducted business and strategy review

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Financial Results
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	30 June 2008 A$000’s	30 June 2007 A$000’s	% change
Licence fees	19,623	19,517	1%
Maintenance fees	16,344	15,856	3%
Other	1,417	1,004	41%
Total revenue	37,384	36,377	3%
R&D expenses	8,717	6,369	37%
Sales & Marketing	17,114	18,923	(10%)
General & Admin	4,345	4,103	6%
Interest Income	462	471	(2%)
PBT	7,670	7,453	3%
PAT	5,776	5,433	6%
EPS (cents)	3.4	3.3
Dividends for the year (cents)	3.0	3.0

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Major Wins
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• Financial Services

• $1.2m and $700k wins directly against billion dollar competitors

• Telecommunications

• Wins in all regions

• Managed Service Providers

• Multiple new and add-on deals

• Partners

• Strategic focus

• 68% IPT sales indirect

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Effect of Higher Rising $AUD
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• Movement in currency adversely impacted results

• Removing effects of currency:

• Revenue up 14% to $41.3m

• NPAT up 42% to $7.7m

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37,384
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Revenue by Region
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(‘000)
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(‘000)

• US scaling well

• Europe and Asia mixed results

• FY09:

• US will be impacted by economy – benefit from declining $AUD

• Europe and APAC profitable and ahead of budget YTD

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Balance Sheet and Cash Flow
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	30 June 2008 A$000’s	30 June 2007 A$000’s
Cash at bank	11,148	11,704
Receivables	10,157	11,300
Development cap.	12,641	11,365
Deferred revenue	9,293	10,741
Net assets	23,791	24,153

• No debt

• Cashflow from Operating Activities was A$5.9m (2007: A$7.6m)

• Capex for 2008 was A$0.4m (2007: A$2.4m)

• Blue chip customers

• Currency impact

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R&D Investment
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	30 June 2008 A$000’s	30 June 2007 A$000’s	% change
Gross spending	10,098	7,831	29%
Development – Cap.	7,255	5,454	33%
Capitalised %	72%	70%
Amortised	5,874	3,992	47%
Net expense	8,717	6,369	37%
% of revenue	23%	18%

• Major release of all products in FY08

• IPT: Avaya, Nortel, increased scalability, better reporting

• Windows / Unix: Increased compliance, VMware

• Improved quality and better processes

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R&D Investment Paying Off
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• Windows/UNIX and IPT revenue growing steadily

• HP NonStop sales down slightly (9%)

• Not adjusted for currency impact

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Business and Strategy Review
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• Markets for all products

• HP NonStop slowing but still active

• IPT and Payment Switches are growth areas

• Demand for value-added services

• Consulting, training and enhanced support

• Opportunities for business solutions

• Real-time management of mission critical business processes

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Focus Areas for FY09
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• Improve capabilities

• Scale go-to-market through solution providers

• Increase cross-selling

• Grow professional services

• Risk management

• Exercise caution in current environment

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Summary
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• Solid year

• Growth despite rising $AUD

• Opportunities for IR

• Performance monitoring

• Value-added services

• Real-time management of business processes

• Focus for 09

• Capabilities

• Risk Management

Precise performance monitoring for business-critical systems