ots Ad hoc-Service: INTERSHOP Communications <DE0006227002> Intershop Reports Fourth Quarter 2000 Results
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Intershop Reports Fourth Quarter 2000 Results
2000 revenue increased by 166 percent over 1999 Intershop launches corporate restructuring initiative
Intershop Communications AG (Neuer Markt: ISH, NASDAQ: ISHP), a leading provider of e-business software, today announced financial results for the fourth quarter and the full year 2000, which ended December 31, 2000.
Fourth quarter revenues increased 56 percent to Euro 30.2 million ($28.1 million) from Euro 19.3 million ($17.9 million) for the same period in 1999 and decreased 14 percent sequentially from Euro 35.2 million ($32.7 million) in the third quarter 2000. For the full year, revenues increased by 166 percent to Euro 123.0 million ($114.4 million) as compared to Euro 46.3 million ($43.0 million) in 1999.
The company reported a fourth quarter 2000 net loss of Euro 32.5 million ($30.2 million), compared to a loss of Euro 7.4 million ($6.9 million) in Q4 1999. Intershop announced a fourth quarter loss of Euro 0.38 ($0.36) per share, compared to a loss of Euro 0.09 ($0.08) per share a year ago. Net loss for the full year 2000 was Euro 39.3 million ($36.5 million) compared to a net loss of Euro 18.4 million ($17.1 million) in 1999, representing a net loss per share of Euro 0.47 ($0.44), compared to a loss of Euro 0.23 ($0.22) per share a year ago.
Intershop CEO Stephan Schambach commented, "We bring the year 2000 to a close having made significant advances but we also face new challenges as we look ahead to 2001. With our industry-leading Enfinity technology, our first class- customer base, our worldwide network of integration and technology partners, and our international presence, Intershop is well positioned for the long-term success in the e-commerce software market. But we need to take better advantage of these assets. The fourth quarter marked the addition of an impressive number of first-class customers with Nextra, Pechiney, Tele Danmark, American Express UK, and Compaq Computer Japan choosing Intershop as their e- business platform. Despite adding numerous world class customers, fourth quarter results compared to our original estimates were clearly disappointing. Intershop posted solid quarterly sequential revenue growth within its core European home market, with European sales increasing sequentially 22 percent to Euro 24.7 million. A strong European performance was offset by a noteable slowdown in the North American market. The weakness in the U.S. market was related to two factors. First, several large U.S. deals that we expected to close in the final weeks of the quarter were postponed as clients' fears of a slowdown in the U.S. economy lengthened the sales cycle. In many cases, large U.S. platform purchases were pushed out from the fourth quarter of 2000 to 2001. The second factor impacting growth was the under penetration of the North American markets where Intershop is still building brand awareness, extending the direct sales force and broadening the network of integration partners."
"Despite the weak fourth quarter we are still pleased with our annual top line growth of 166 percent, which exceeds our original target of 100 percent from the beginning of the year by far," stated Wilfried Beeck, Intershop's CFO. "After experiencing higher than expected revenue growth in the first six months of the year, we decided to accelerate our investments in marketing, engineering and headcount. Unfortunately the sales growth in the second half of 2000 did not meet our expectations, especially in the U.S. market."
Mr. Schambach added, "In response to this U.S. shortfall in the fourth quarter, we intend to re-focus our U.S. operations. We are fully dedicated to strengthening our presence in the American market by concentrating the U.S. organization on revenue generating activities. While continuing to offer the full range of products we are focusing our U.S. go-to- market-strategy on selected B2B markets where Intershop has clear advantages over the competition, such as the "supplier enablement" segment targeting companies that want to sell through electronic marketplaces and exchanges. Our relationship with CommerceOne and our first successful reference customers in this area will definitely support this strategy. Further we intend to strengthen our relationships with our strategic sales partners and intend to selectively increase our existing sales and marketing capacities to support key partners."
He continued, "The second area of change is a corporate- wide restructuring to streamline our worldwide organization. In January we reduced our staff by approximately 200 positions globally. We are consolidating some of our global functions, mainly U.S. based functions that we are relocating to Germany, in order to take advantage of synergetic opportunities with our existing operations there. And we will continue to add experienced senior management to the existing executive team to manage the Company's growth."
Mr. Schambach added, "Finally, we will improve the effectiveness of our global sales strategy by strengthening the relationships with our top implementation and technology partners as well as with our customers. This also means new product offerings. Intershop will launch a number of cross-industry offerings that will take advantage of Enfinity superior technology and complement the product's built-in functionality with critical features needed to integrate business partners across the value chain, specifically in the B2B market. Also, Intershop and its partners will offer industry-specific bundles developed by partners."
"We have actively taken these measures to bring our financial performance back on track," said CFO Wilfried Beeck. "We are committed to achieving profitability on a quarterly basis by the end of 2001. We expect that these initiatives, which we are now implementing, will start to become fully effective in the second quarter of this year. Currently we expect to achieve annual revenue for 2001 in the range of 140 to 160 million Euro with a net loss in the range of the year 2000 result. After we have executed our turnaround program we expect continuing substantial growth for Europe while revenue growth in the Americas and Asia is expected to be lower with regard to the difficulties that we have experienced during the last quarter."
Conference Call Information:
The Company will hold a conference call (with audio webcast at http://www.intershop.com) with CEO Stephan Schambach and CFO Wilfried Beeck to discuss more details regarding Q4 results, the restructuring program and the Company's outlook. The conference call is scheduled for Wednesday, January 31, 2001, 05:00 p.m. CET (11:00 p.m. EST).
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