2003 CEO's Message to Shareholders Features AspenTech Partnership
March 17th, 2004 - Calgary, Canada -- Sterne Stackhouse Inc. ("SSI") (SSX:TSX) today announced its audited financial results for the year ended October 31st, 2003. Complete financial results can be found in SSI's 2003 Annual Report available at www.sternestackhouse.com.
The Test of Time
Having incorporated in January 1981, and retained its core people through some very tough runs, the Company has stood the test of time. And, the story of the Company is really a story about its people and its technology. Accordingly, management is requesting shareholder approval at the Annual and Special Meeting, on April 15 th, 2004, to change the company name to Labrador Technologies Inc. Last year's Annual Report provides a complete summary of the Company's ongoing Labrador© software offerings, as well as its rigorous approach to software development, which does not bear repeating here. However, the Company's software is well documented on its new website, which features Data-Flow Management™.
The Sale of Canadian Petro-LAB in Retrospect
The summary of the sale of Canadian Petro-LAB does bear repeating. As Peter Huggard, President of Qbyte/IBM Canada, recently summed up to me, "…it has never let us down." Sterne Stackhouse Inc. (SSI) received approximately $8,200,000, over a little less than a three-year period. Qbyte/IBM Canada has the source code, and has the flexibility to respond quickly to client requirements. The SSI/Qbyte relationship remains exceptionally cordial. As a result, should Qbyte/IBM Canada require additional assistance with database modeling projects or ongoing Petro-LAB™ development, SSI is not far away.
Effective Distribution is the Key to SSI Profitability
The foregoing title and the following text come directly from the 2002 Annual Report, and are particularly relevant to this reporting:
"Although the Company has a well-rounded suite of products, it did not set itself up to be a direct marketing/sales and distribution vehicle when it went public in 1997. SSI's business model has been to prove out, as much as necessary, the value of its products by working directly with clients and partners, and then create/negotiate an appropriate distribution agreement"
"The Company has every reason to believe that its other products are equal to the quality and potential of Canadian Petro-LAB™"
"Finding the right distribution partner is a difficult, but achievable, undertaking"
"Management has learned to be patient, as it believes that the Company's software products offer immense upside if the Company can find the 'right' distribution partner(s)."
Finding the Right Distribution Partners
Our shareholders are aware that it seems to take a long time to find the "right" distribution partners. With that in mind, let's review the search criteria management employs to determine the right "fit" for SSI:
- An international software/consulting company with an aggressive marketing/sales approach and long-standing customer relationships.
- An ambitiously expansive oil and gas division, with a presence in other industries such as healthcare and/or pharmaceuticals.
- A "work-with" culture. This must extend well beyond sales management. If software companies are going to work together effectively and profitably, they need a firm technical foundation, with considerable cooperation. Ready, practical access to key software developers is important for establishing a sound beginning. This is a heady challenge that is rarely overcome, but it is fundamental to success. Some Calgary-based Research and Development can be very helpful.
- The financial depth and wherewithal to "make things happen", and stay the course.
Aspen Technology, Inc.
Since the summer of 2003, we have been working diligently with Aspen Technology, Inc. (AspenTech). There have been no dramatic developments to report on, until now. Trite as it is to say, the building of good, solid relationships is often done in many "baby-steps". Cultures have to be compatible, and the only way to find that out is to actually work together.
Working with AspenTech became more practical and compelling since AspenTech acquired a strong, Calgary-based company, Hyprotech, Ltd., in 2002. Hyprotech, more than 25 years old, was exceedingly successful specializing in oil and gas software and services on an international basis. For more information about AspenTech's acquisition of Hyprotech, Ltd. and AspenTech's world-wide annual revenues, which in fiscal 2003 exceeded $320 Million USD, please refer to www.aspentech.com.
The consolidated Calgary offices of AspenTech/Hyprotech are only three blocks from ours, creating easy, mutual access to each other's personnel. AspenTech develops in a Microsoft .Net environment, and we are continuing to port our Labrador tools to .Net, in addition to our existing Labrador© JAVA versions.
As AspenTech trades on the NASDAQ Exchange (AZPN:NASDAQ), and information dissemination is governed accordingly, the following information has been prepared by AspenTech for release in this 2003 Annual Report:
"AspenTech Partnership with Labrador Technologies"
"Aspen Technology has established a new partnership with Labrador© Technologies, a division of Sterne Stackhouse Inc., to provide enhanced capabilities for AspenTech's production asset management solution for the oil & gas industry. Under the partnership agreement, Labrador's Well-LAB™ production and well test data-flow system will be available as an add-on module for the Aspen AssetBuilder™ modeling software.
Well-LAB™ will enable companies using Aspen AssetBuilder™ to access a wide range of commercial and proprietary oil & gas production data sources to feed its integrated asset simulation models. It automates the process of connecting to real-time production and well test databases that exist within, or external to, an organization. The Well-LAB™ module is currently in beta test."
An Experienced "Start-Up" Looking Forward to Fiscal 2004
Although the effective date of the sale of Canadian Petro-LAB was August 1st, 2003, the sale was not closed until December 18th, andthe proceeds do not show up in our financials until the 1st Quarter of 2004. Since October 31th, 2003, expenses have been again reduced, as management took a further reduction in salary.
In effect, even though we have been around for over 20 years, we are treating our company as a "start-up". Yes, we have robust, innovative software offerings, and, yes, we have a great deal of experience - but still, we are moving forward carefully and methodically. With the recent Qbyte/IBM Canada income, our cash position is sound. We have no debt. Yet, although management is extremely pleased with current developments, it continues to be focused and committed to growing and evolving distribution partnerships into immediate revenue generating initiatives.
On Behalf of the Board of Directors
H. Ronald Sterne
C.E.O., Sterne Stackhouse Inc.
Financial Summary
As mentioned above, complete financial results can be found in SSI's 2003 Annual Report available at www.sternestackhouse.com. Please note that the following summary does not reflect the $1.591 Million payment received by SSI from Qbyte/IBM Canada on December 18th, 2003, with respect to the accelerated sale of Canadian Petro-LAB™. These proceeds will appear in the 1st Quarter, 2004 statements, to be released on or before March 31st, 2004.
| Years Ended | |||||
|---|---|---|---|---|---|
| October 31 2003 | October 31 2002 | ||||
| Revenue | $ | 883,605 | $ | 1,817,395 | |
| Expenses | 1,850,067 | 2,562,484 | |||
| Loss | (966,462) | (745,089) | |||
| Loss per share | (0.12) | (0.09) | Outstanding shares | 8,249,685 | 8,549,685 |
About SSI
Sterne Stackhouse Inc. specializes in building connections between companies and the data they invest in. Since 1981, SSI has been developing Data-Flow Management™ and data retrieval, reporting, and analysis software for the Oil and Gas industry.
Focused on Data-Flow Management™ (DFM), Labrador Technologies, a division of SSI, has the ability to retrieve and deliver data to the right place, at the right time. Whether delivering data to a Labrador application, a third-party application, an enterprise service bus, or a portal, Labrador© gets the job done efficiently. Labrador Technologies' DFM™ software and services help software vendors, data vendors, and company developers deliver data to their target audiences by 'plugging' users in, and eliminating the need for expensive and ongoing manual intervention.
SSI (www.sternestackhouse.com) trades on the TSX Venture Exchange (TSX.V) under the ticker symbol SSX.
For more information contact:
Darryl Stackhouse
President & CFO
Sterne Stackhouse Inc.
403.263.6325
Labrador is a registered trademark of Sterne Stackhouse Inc. in Canada and the United States and/or other countries, and Petro-LAB is a registered trademark of IBM Canada.
This release may contain forward-looking statements with risks and uncertainties that may cause the actual results to differ materially from those intended or anticipated by the Company. The Toronto Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA