Provisional annual balance 2003: update announces positive annual cashflow!

Provisional annual balance 2003: update announces positive annual cashflow!
…for the first time since IPO operative balanced annual result…
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Vienna, Frankfurt, January 22, 2004 +++ Vienna-based update software AG, Europe’s leading vendor of CRM solutions, has announced provisional figures for the financial year 2003. According to this, the revenues amount to 13.648 million Euro. With cost reductions of 37 per cent in 2003, the company achieved an operating profit of 102,000 Euro. This is equivalent to an increase of 101.5 per cent compared to the operating loss of 2002. The net income increased by 94 per cent. For the first time since going public, the revenue, as well as the net income was increasing 3 quarters in series.

update achieved revenues of 3.845 million Euro in the fourth quarter which is equivalent to a plus of 11.7 per cent compared to the third quarter 2003 and an increase of 14.2 per cent compared to the same period 2002. The reduction in COGS (cost of goods sold) of 21 per cent (compared to Q4/2002) successfully resulted in an increase of the gross margin to 2.952 million Euro (+ 15.6 per cent). The operating profit amounted to 345.000 Euro, the net income to 473,000 Euro. This means an increase of 120 per cent respectively compared to the fourth quarter 2002.

The provisional annual result of update software AG is characterised by an increase of operating profit in all quarters, a stable customer base and healthy cost reductions. The revenue in 2003 amounted to 13.648 million Euro. This is a reduction of 7.8 per cent compared to 2002. This reduction is due to the closure of three foreign offices. The increase in efficiency shows itself in a gross margin plus of 9.4 per cent. The COGS were reduced by 26 per cent, the operating expenses by 40 per cent. The net income of the company could be improved by 94 per cent compared to the net income last year: from minus seven million Euro to minus 400,000 Euro. The non-operating results were affected by exchange rate differences which were realised when the offices were closed. Nevertheless, the company generated a positive cash flow of 634,000 Euro for the first time since going public. This is equivalent to an increase of 116 per cent compared to the previous year.

IR contact:
Jochen Zemroser
update software AG
Operngasse 17-21
A-1040 Wien
Tel: +43 1 878 55 512
Fax: +43 1 878 55 505
Jochen.Zemroser@update.com  
www.update.com

This is a translation from German into English.