Archive
25.01.1999
Preliminary results 1998
Fourth-Quarter INTERSHOP Revenue Soars
Hamburg-based INTERSHOP Communications AG, one of the three worldleading vendors in the booming market of electronic-commerce software, today presented preliminary data for the fourth quarter and fiscal year 1998 at an analysts workshop held in Hamburg.
Dramatic Increase in Fourth-Quarter Revenue INTERSHOP reported revenues of DM 12.4 million in the fourth quarter of 1998, which represented an increase of 48 % over third-quarter revenues of DM 8.4 million and a dramatic increase of 170 % over the comparable 1997 figure of DM 4.6 million.
Fourth quarter operating expenses were up only slightly over the third quarter and operating results improved substantially, going from DM –7.1 million in the third quarter to DM -4.4 million. As a result, the fourth quarter of 1998 continued to reflect continued improvement in operating results.
The above average increase in license revenue was especially encouraging. According to Stephan Schambach, INTERSHOP’s San Francisco-based CEO, “INTERSHOP’s strategy of offering universal standard software has really paid off. In the fourth quarter, INTERSHOP licence sales accounted for over 70 % of revenues. Product sales enable us to take maximum advantage of the boom in electronic commerce without a commensurate increase in personnel expense or investment in locations, which is the case of service-oriented companies.” For Schambach, the substantial increase in income from licenses in the fourth quarter can be mainly attributed to both the growing demand for standard products that enjoy a position of leadership in the market and the successful performance of two new products launched in the fall of 1998, the INTERSHOP Enterprise Edition and INTERSHOP ePages. Schambach added, “INTERSHOP is now expanding considerably faster than the market and our U.S. competitors. We are also very optimistic for 1999 and already have a number of interesting deals in the pipeline. ”
1998 Revenues Exceeds Expectations Worldwide 1998 revenues were DM 35 million from the comparable figure of DM 10 million a year ago, which represents an increase of over 250 %. During the same period, operating expense was up 166 % to DM 64 million from DM 24 million in 1997. As a result, INTERSHOP ended the year with a net loss of DM 29 million as compared with DM 14 for the previous year. Due to high startup investment costs, losses exceeded revenues in 1996 and 1997, and the company’s 1998 operating results mark a reversal of this trend. Revenues for the year increased faster than expense, and the revenues exceeded operating losses for the first time this year. INTERSHOP management consequently expects a substantially lower loss and continued strong growth in revenues for 1999.
Investment in Global Marketing Starts to Pay Off According to INTERSHOP CFO Wilfried Beeck, “We see the present trend in revenues and operating results as definite confirmation of our strategy to invest in global marketing. In fact, we even exceeded our ambitious revenue targets. Today, we are already generating a good two-thirds of our sales abroad, and the important U.S. market accounts for the majority of this figure. Our operating losses for 1998 resulted mainly from the investments made in the first half of the year in connection with the implementation of a global infrastructure to permit expansion at the international level. This strategy is paying off. In the second half of the year, we saw only a moderate increase in expense. As a result, operating results showed steady improvement throughout the second half of the year. We expect to reach the break-even point by year-end 1999 and are targeting revenues of approximately DM 200 million with a net profit of 15 % post taxes for the year 2000.
More detailed information will appear in the audited financial statements contained in INTERSHOP’s annual report, which will be available in late March. A DVFA analysts conference and a press conference to present the annual results will be held in April. Exact dates and times will be announced well ahead of time.
Approval of New Stock Issue from Conditional Capital The company also announced that the Deutsche Börse has approved an additional 827,200 shares from the company’s conditional capital to be traded on the Frankfurt Neuer Markt stock exchange. A total of 263,954 shares have been issued and will start to be traded on the market on January 27, 1999. As was already mentioned in the prospectus published prior to company’s listing on the stock market, the conditional capital was created before the company went public in order to convert options held by U.S. employees and minority holdings of founder Stephan Schambach and venture-capital investor J. Burgess Jamieson in INTERSHOP Communications, Inc. into shares in INTERSHOP Communications AG.
Investor Relations:
Annett Körbs
T: +49-3641-50-1370
F: +49-3641-50-1309
ir@intershop.de
Public Relations:
Dr. Ute Danz
T: +49-3641-50-1000
F: +49-3641-50-1002
pr@intershop.de
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