Financial performance

Gross profit margin achieves 29% growth, O&B becomes the first Filipino SpringSource partner, and new officers added to the company’s executive team. Philippine SpringSource partner Orange & Bronze Software Labs bannered another successful revenue quarter as it closed off Q2 2009 with revenues of Php 14 million, with a gross profit of Php 14 million or a margin of 29%.

In the previous quarter, the company’s revenue hit Php 10.8 million, with a gross profit of Php 1 million or 9.3%. In the midst of the ongoing global recession, Orange & Bronze Software Labs also continued to expand internal operations as existing software-development teams increased in size to accommodate new projects.

New clients also came in as well as enterprise application projects being built on the Grails Framework. In addition to this, Q2 also marked the official inclusion of Orange & Bronze as the first Filipino SpringSource partner. According to O&B Chief Executive Officer Calen Legaspi, this partnership aims to strengthen O&B’s position as the source of expertise in the Spring Framework, and related technologies such as AppFuse and Grails. To keep up with the developments happening within the company, new officers have also been formally included within its executive team. Silicon Valley entrepreneur Arthur Tyde III officially became part of O&B’s board or directors while longtime business intelligence professional Chris Reynolds joined O&B as Vice President for North American Sales and Marketing.

Amidst the ongoing global recession, Orange & Bronze continues to grow and position itself strategically as one of the most-reliable offshore software development firms in the Philippines. “Clients would find that outsourcing critical IT services to an offshore software development company like Orange & Bronze would give them a lot of advantage.” Legaspi said. “Instead of preparing additional resources for new people and new infrastructures that can would accommodate upgrades and new projects alike, clients can devote their efforts to accomplishing their core functions while letting an expert offshore software development team facilitate back-office support.” In a 2009 study released by Gartner, outsourcing deals were expected to increase in competition especially for the IT sector. Their study also showed a forecast wherein organizations who are yet to go into outsourcing will most likely consider aggressively outsourcing their IT or business processes this year so that they can concentrate on their core business functions.

Alternative Delivery and Acquisition Models (ADAMs) are expected to generate some net boost in adoption because of the current economic climate. In line with this, the Philippines remains one of the steady industry players in the outsourcing trend. According to the Business Process Association of the Philippines (BPAP), the Philippine BPO industry’s export revenues are expected to grow around 20-30% this 2009. Other critical back support services such as IT, Finance, and Legal are also expected to generate new venues for revenue growth aside from Customer Support services which started the outsourcing trend in the country. “Orange & Bronze will remain at the forefront of these exciting industry developments by continually building on our technologies and services.” Legaspi said. “Our training also continued to be a steady contributor to revenues, even as many software companies have placed a halt to hiring.

Many software companies have taken the slow down in business as an opportunity to upgrade the skills of their senior people, as evidenced by an uptick in O&B’s advanced software development courses, such as the Enterprise Architect’s Boot Camp, the Spring Framework, Hibernate, Agile Project Management, Agile Business Analysis, Effective Use Case Writing, and even Groovy and Grails.”

Interest rates

Payout

Interest may be paid monthly, yearly or compounded, depending on the investors preference.

Principal is paid at maturity.

Adding to or Extending an Existing Investment

If an investor has an existing investment and wishes to add to that investment or wishes to extend his/her investment, the old investment is considered terminated without penalties, and a new investment will begin with the new terms.

If the investment is compounded, any interest earned can either be included as part of the principal of the new investment, or be awarded to the investor, depending on the investor's preference.

Services and Markets Served

Offshore Software Development (72% of revenues)

Most of O&B's revenues come from retainer relationships with US software development companies. O&B designs and develops systems which are at the core of its clients products and services. Its number one client is in the medical billing industry, while its number two client is in the medical insurance industry.

Orange & Bronze targets mid-sized software development companies which require very high technical competence from its outsourcing partner, yet do not require large numbers of people. The volumes are too small for large outsourcing companies like Accenture, Infosys and Wipro, while at the same time have too high capability requirements for most outsourcing companies. O&B meets this niche.

Training (15% of revenues)

In the local market, O&B is known mainly as a training institution. O&B conducts training courses in software development for beginner, intermediate and advanced software developers and analysts. Courses include core Java technology, specialized Java technologies, software development processes and best practices, software design, and requirements analysis.

Most of O&B's clients in this area are other software outsourcing companies similar to O&B, but its clients include in-house software development groups as well, such as those from banks, insurance companies, and telcos.

While a lot of IT training academies abound, O&B's differentiator is that it is mainly a software development company. Courses are taught by practicing software professionals, and curricula and material are kept up-to-date through the ongoing experience of O&B's engineers.

Local Software Development (13% of revenues)

Due to the price-sensitivity of Philippine companies, only the top Philippine companies are able to afford “enterprise”-level software development services. Because of the small size of this market, O&B's local software development is only a fraction of the size of its offshore software development. Some of the local clients that O&B has implemented projects for are a broadcasting company, insurance companies, and specialized sub-contracting for other software companies.

Other Consulting Services (less than 1% of revenues)

O&B has other consulting services that constitute a small portion of its income. O&B has done “Project Rescue” engagements where it assists other software development teams to resolve issues in an ongoing software development project. It has done initial design and prototyping for software projects to be implemented by in-house teams.

It has also developed Business Requirements Specification documents, which capture the requirements for a proposed software project.