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10.02.2005

Intershop Communications Reports Fourth Quarter and Full Year 2004 Financial Results

Intershop cuts net loss year-on-year by 53%, despite one-time charges in Q4 2004 Jena, Germany – February 10, 2005 - Intershop Communications AG (Prime Standard: ISH1) today announced financial results for the fourth quarter and full financial year 2004, ended December 31, 2004.

Revenue totaled Euro 3.7 million in the fourth quarter of 2004, as compared to Euro 4.5 million in the third quarter of 2004 and Euro 4.6 million in the fourth quarter of 2003. License revenue totaled Euro 0.2 million in the fourth quarter of 2004, as compared to Euro 0.7 million in the third quarter of 2004 and Euro 1.5 million in the fourth quarter of 2003. Revenue for the full year of 2004 totaled Euro 17.6 million, as compared to Euro 23.2 million for the full year of 2003. Intershop recorded fourth quarter 2004 total operational cost (cost of revenue plus operating expense) of Euro 8.1 million. Total operational cost contain an amount of Euro 2.3 million for accruals for payments in connection with the settlement with the plaintiffs of the security class action in the United States. Therefore, total operational cost increased by 34% or Euro 2.0 million.

Compared to the fourth quarter of 2003, total operational cost increased by Euro 1.0 million or 13%. Due to final restructuring and efficiency measures implemented throughout 2004, Intershop reduced its total annual operational cost in 2004 by 40%, to Euro 27.0 million. As a result of the increased total operational cost due to extraordinary effects, Intershop reported Euro 4.8 million in net loss in the fourth quarter of 2004 million or Euro 0.19 per share, compared to a net loss of Euro 1.4 million or a net loss of Euro 0.06 per share in the third quarter of 2004. In comparison, Intershop’s net income in the fourth quarter of 2003 was Euro 0.1 million or a net income of Euro 0.00 per share.

For the full year of 2004, Intershop’s net loss totaled Euro 8.8 million or a net loss of Euro 0.37 per share, compared to a net loss of Euro 18.6 million or a net loss of Euro 0.90 per share for the full year of 2003, a year-over-year reduction of 53%. Total cash including cash, cash equivalents, marketable securities, and restricted cash declined from Euro 10.3 million as of September 30, 2004 to Euro 8.4 million as of December 31, 2004. Total cash includes freely available cash in the amount of Euro 1.6 million, as compared to Euro 3.6 million as of September 30, 2004. Inflows of funds from successful convertible bond issue boost Intershop’s liquidity in 2005 by EUR 11.3 million.

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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