Intershop Communications AG | Press Release |

Intershop Reports Third Quarter 2001 Financial Results

Hamburg, Germany – October 31, 2001 - Intershop Communications AG (Neuer Markt: ISH, Nasdaq: ISHP), a global provider of e-business software, today announced financial results for the third quarter of fiscal 2001, ended September 30, 2001.

Third quarter revenue totaled Euro 14.7 million compared with revenue of Euro 22.0 million in the second quarter of 2001. The decline in revenue was primarily related to the weak corporate IT spending environment and seasonal effects in Europe. Sales were also impacted by Intershop’s migration from a pure eCommerce platform provider to a vendor of higher-value industry-specific solutions.

Excluding 21.1 million Euros in one-time charges – primarily related to restructuring -, Intershop recorded a third quarter net loss of Euro 23.1 million or a net loss of Euro 0.26 per share during the third quarter of 2001. This compares to a net loss of Euro 24.7 million or a net loss of Euro 0.28 per share in the second quarter of 2001, excluding one-time charges of Euro 3.6 million. Continued cost reduction reduced Intershop’s quarterly cash burn to Euro 10.4 million in the third quarter of 2001, compared to Euro 20.1 million in the second quarter of 2001. Intershop ended the third quarter of 2001 with total liquidity including cash, cash equivalents, marketable securities, and restricted cash at Euro 45.2 million compared with Euro 55.6 million as of June 30, 2001.

Intershop expects its cost base excluding depreciation and amortization will be below 25 million Euros in the fourth quarter. At this reduced cost level, Intershop is now able to break even with revenues of 22 to 25 million Euros. Even though Intershop expects that total revenues for the fourth quarter 2001 will be higher than third quarter 2001 total revenues, Intershop cautions that in light of the current IT spending weakness, EBITDA breakeven on a quarterly basis will not be achieved before 2002.

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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 Public Relations

Heide Rausch

Head of Corporate Communication

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