Intershop Communications AG | Press Release |
Intershop Communications AG Announces Q2 2007 Results
Total revenues rose by 38% as against the previous quarter
- Significant increase in revenues as against previous quarter
- revenues doubled year-on-year
- positive cash flow
- restructuring costs due to resolution of legacy issues
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.
Operating activities in the second quarter of 2007
- Intershop received a major order for licenses, service, and maintenance from an overseas telecommunications group.
- Intershop was contracted to create an e-commerce platform for a global leading automobile manufacturer in the premium segment. The multi-year agreement is for the global rollout of a client-enabled, highly scalable system.
- New license customers in the second quarter included several European companies, such as the Omega Pharma subsidiary Arseus, a healthcare service provider, and Areva, an energy utility supplier.
- In the Online Marketing area, Intershop gained four new Italian customers via its partner, Display.
- As of June 30, 2007, Intershop employed 229 full-time equivalents worldwide (212 full-time excluding Online Marketing) as against 247 full-time equivalents as of December 31, 2006 (234 full-time equivalents excluding Online Marketing). As of June 30, 2006, Intershop had 234 full-time equivalents worldwide (excluding Online Marketing).
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.
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.