DataDesign AG

ots Ad hoc-Service: DataDesign AG DataDesign AG\047s reorientation drive a resounding success: Superb Start into 2000 Confirms Company Expectations after 1999\047s Slump

The sender is solely responsible for the contents of this announcement. ----------------------------------------------------- Munich (ots Ad hoc-Service) - With revenues amounting to DM 12.2 million in fiscal year 1999, DataDesign AG's sales figures were on par with those of the previous year. Whereas incoming orders totaled DM 8.4 million for all of 1998, the enterprise reports a backlog of orders amounting to some DM 6.8 million in the first quarter of 2000 alone. This figure underscores the success of the company's new strategic direction and substantiates the forecasts made in its business plan for the year 2000. In 1999, license fees accounted for roughly 15% or DM 2 million of revenue, professional services for DM 8.1 million and product sales for DM 2.1 million. The past fiscal year saw a total net loss of DM 9.7 million, compared to a net profit of DM 0.8 million in the previous year. Despite a rise in commodity sales and increased investments in tangible assets (EDP equipment), cost of sales decreased by circa DM 1 million to DM 9 million. Consequently, the company's gross margin improved from DM 2.2 million in 1998 to 3.2 million DM in 1999. Operative losses amount to DM 13 million for the period under review, compared to roughly DM 1.1 million in 1998. Allowing for deferred tax assets related to tax loss carryforwards and on account of the expected future lower tax rates, an amount of DM 3.8 million has been capitalized. Whereas - on account of high project capacity utilization - the company reported no research and development costs in the previous year, these expenditures increased to approximately DM 6.5 million in 1999. At roughly DM 5.8 million, marketing and sales costs nearly tripled, an increase of almost 300% over the previous year's figure. By bringing aboard a significant number of new staff - from 110 at the beginning of the year to 160 by December 1999 (an increase 45%) - and establishing a second upper management level led to a disproportionate escalation of wage, salary and social security costs from some DM 6.6 million to approximately DM 13 million. Causes for stagnating sales in 1999 Poor sales and results for fiscal 1999 are attributable to, among other factors, as yet inadequate marketing and sales structures as well as a dearth of demand for state-of-the-art IT infrastructures for Internet business. Concerned with assuring smooth introduction of the EURO and overcoming year 2000 problems, financial institutes' investment activities were put on hold. Popularly known as the "frozen zone", this condition dramatically impacted sales. In 2000, the "frozen zone" looks to be thawing, with financial service providers busy playing catch-up in the field of IT investments: According to a company poll of more than 60 financial institutes, some 80% have budgeted for the introduction of the HBCI standard in 2000. Business developments in 2000 Although sales in Germany slacked off considerably, the enterprise nonetheless pursued its internationalization campaign persistently. The extensive, worldwide net of resellers that it has nurtured and last year's investments in research and development today put the company in the position to better offset regional risks. For the year 2000, the enterprise is expecting revenues to increase by some 150% to more than DM 30 million. The business plan calls for the majority of sales to be generated in the core line of business Internet applications and products for e-banking. DataDesign AG will thus reprise the success of the previous years and turn around 1999's slowdown in growth. DataDesign AG Christian Rademann Manager Public Relations Fürstenrieder Straße 267 D-81377 München Telephone: +49 (89) 7 41 19 312 Fax: +49 (89) 7 41 19 599 E-mail: End ----------------------------------------------------- Internet: Original-Content von: DataDesign AG, übermittelt durch news aktuell

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