Intershop Communications AG | Ad Hoc Announcement |

Intershop Communications AG Announces Q2 2007 Results

The company increased its revenues significantly

Jena, Germany, July 26, 2007 - Intershop Communications AG (Prime Standard: ISH2) today announced its results for the second quarter of 2007 ended June 30, 2007, and revised its full-year forecast due to extraordinary restructuring costs.

In the second quarter of 2007, Intershop increased its revenues significantly. Total revenues rose by 38% as against the previous quarter from EUR 6.1 million to EUR 8.5 million, double the figure for the second quarter of 2006.
License revenues included in the total revenues rose from EUR 0.8 million in the previous quarter to EUR 2.1 million (+154%), double the figure for the second quarter of 2006. License revenues in the second quarter of 2007 included EUR 1.4 million in revenues from a major order.
Service revenues increased from EUR 5.3 million in the previous quarter to EUR 6.4 million (+20%). By comparison, service revenues were EUR 3.2 million in the second quarter of 2006, not including online marketing revenues. These online marketing revenues amounted to EUR 1.5 million in the second quarter of 2007.

Total operating costs (cost of revenues plus operating expenses and income) amounted to EUR 10.1 million, as compared with EUR 7.5 million in the previous quarter. Adjusted for EUR 2.1 million in restructuring costs included in this amount, this represents an increase of 7% for a revenue increase of 38%. The restructuring costs include an extraordinary increase of EUR 1.4 million in provisions for litigation risks relating to the dispute with the landlord of the Intershop Tower headquarters in Jena, final settlement of which is being sought in the short term. Also included are EUR 0.7 million in personnel-related costs for the implementation of the restructuring program that was announced in April.
In the second quarter of 2006, total operating costs amounted to EUR 5.4 million; however, no online marketing costs were incurred in the corresponding quarter (in Q2 2007: EUR 1.4 million). In addition, other operating income from a legal dispute in the amount of EUR 1.0 million was reported.

Intershop’s net loss including restructuring costs in the second quarter of 2007 was EUR 1.7 million, or EUR 0.08 per share. Before adjustment for the restructuring costs, the company reported a net profit of EUR 0.4 million, or EUR 0.02 per share, in the quarter under review. In the first quarter of 2007, Intershop’s net loss was EUR 1.4 million, or EUR 0.07 per share. In the second quarter, the net loss was EUR 1.3 million, or EUR 0.06 per share.

Cash flow in the second quarter is positive. The Company’s total liquidity (cash, marketable securities, and restricted cash) rose from EUR 8.1 million as of March 31, 2007 to EUR 9.0 million as of June 30, 2007. As of December 31, 2006, total liquidity was EUR 11.2 million. Unrestricted cash increased from EUR 1.8 million as of March 31, 2007 to EUR 2.7 million as of June 30, 2007. As of December 31, 2006, it was EUR 3.6 million.
Outlook
The Company expects to break even and generate a positive cash flow in the second half of 2007. This positive assessment is based on significant cost reductions and clear increases in revenue. The order situation at the beginning of the third quarter is encouraging.
Due to the high net loss in the first quarter of 2007 and the net loss in the second quarter of 2007 resulting from the substantial restructuring costs, the Company currently does not expect to meet its positive net earnings forecast for fiscal year 2007.

The full press release relating to this adhoc disclosure is available at www.intershop.com.

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About Intershop

Intershop Communications AG (founded in Germany 1992; Prime Standard: ISH2) is the leading independent provider of omni-channel commerce solutions. Intershop offers high-performance packaged software for internet sales, complemented by all necessary services. Intershop also acts as a business process outsourcing provider, covering all aspects of online retailing up to fulfillment. Around the globe more than 300 enterprise customers, including HP, BMW, Würth, and Deutsche Telekom run Intershop solutions. Intershop is headquartered in Jena, Germany, and has offices in the United States, Europe, Australia, and China. More information about Intershop can be found online at www.intershop.com.

This news release contains forward-looking statements regarding future events or the future financial and operational performance of Intershop. Actual events or performance may differ materially from those contained or implied in such forward-looking statements. Risks and uncertainties that could lead to such difference could include, among other things: Intershop's limited operating history, the unpredictability of future revenues and expenses and potential fluctuations in revenues and operating results, significant dependence on large single customer deals, consumer trends, the level of competition, seasonality, risks related to electronic security, possible governmental regulation, and general economic conditions.

Intershop Investor Relations

Heide Rausch

Head of Corporate Communication

Phone: +49 3641 50-1000
Fax: +49 3641 50-1309