CPU Softwarehouse — Capital/Financing Update 1999

Nov 17, 1999

News Details

Ad-hoc | 17 November 1999 13:01

Ad hoc-Service: CPU Softwarehouse AG

Ad-hoc announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— Ad hoc report by CPU Softwarehouse AG Las Vegas/Augsburg 15/16.11.1999 CPU Softwarehouse AG press conferences at the Comdex 1999, in the USA. – new acquisitions announced – new target figures – market entry in the USA – presentation of NewsNetMedia AG At two press conferences held at the Comdex 1999, USA, CPU Softwarehouse AG announces, that: Acquisitions: CPU Softwarehouse AG is planning three further company participations/ take-overs by the end of 1999 and has already gained the approval of the Supervisory Board for these. A. 100% take-over of a softwarehouse, operating with leading European banks, with 32 employees and turnover of around 11 million DM. Expected revenue for 1999 is around DM 1.5 million. B. Acquisition of up to 70% of an internationally operating softwarehouse, focusing on brokerage applications. The expected turnover for 1999 will be approx. 3.9 million DM with revenue of approx. 1.2 million DM. C. A 10% participation in a German softwarehouse, operating in the field of risk management for financial service companies. The turnover is approx. 7.5 million DM with a negative revenue result. With these acquisitions, CPU Softwarehouse AG to admirably complement the standard product, CPU-C5. These steps will enable CPU to extend their business opportunities with existing and new customers. Furthermore, the CPU Board has reconfirmed their intention to take over an internationally operating softwarehouse with around 40 million DM turnover and revenue of around 12.5 million DM. CPU also reconfirms that the negotiations are at an advanced stage. Target figures On 30.11.1999, CPU Softwarehouse AG will report on the first three quarters of the current year. In addition, the CPU Board has issued a preview of the whole year at the a.m. press conferences. Year 1998 Turnover 7,0 Income after tax 1998 2,3 Target figures presented at flotation on the stock market Turnover 23,4 Income after tax 6,4 New target figures Turnover 36,1 income after tax -4,5 Furthermore, the CPU Board continues to reconfirm that the turnover plans for the business year 2000 have been raised to 75 million DM and to 140 million DM for 2001. Comments about the target figures: As was announced at the stock market flotation, acquisitions have been made which were not and could not be taken into account in the figures presented at the IPO. The goodwill amortisation of an expected 3,8 million DM, for 1999, as a result thereof, therefore reduces the results presented at the IPO. The acquisitions undertaken have made greater investment expenditure necessary. As regards the internationalisation strategy, it has also been necessary to employ more personnel (137) than originally planned at the flotation (100). Last but not least, these costs have been an additional burden on income. The successful expansion strategy of CPU Softwarehouse AG (five-fold increase of turnover in 1999) made it necessary to provide increased means of around 1.5 million DM for Due Diligence for the acquisitions targets. The Federal Banking Supervisory Authority has approved a so-called “frozen-zone” for the banking business due to the Year 2000 problem. The effects of this for financial software producers are that software installations planned for 1999 will now be delayed until the first quarter 2000. This also effects CPU Softwarehouse income. At the two a.m. press conferences the CPU Board also announced: considerable hidden reserves will be observed in the accounts for 1999, as of US-GAAP. A: The standard software, CPU-C5, has been completed and will increasingly contribute towards turnover from licences. CPU will not activate their in-company produced software themselves – in contrast to other companies quoted on the Neuen Markt of the Frankfurt Stock Exchange. B: The 32% participation in NewsNetMedia AG has been reported in the accounts for 1999 with 16.300 Euros. After the planned IPO in 2000, the Board expects a considerable improvement in the stock market value, through the accounting procedure prescribed then by US-GAAP. This effect has not been taken into account in the a.m. target figures. Furthermore, it was announced that the revenue from the flotation still remains, in its entirety, at the disposal of the company. Market entry USA At the a.m. press conferences, CPU Softwarehouse AG presented in detail the planned entry into the US-American market. With around 9000 banks, this is the largest target market for financial service companies world-wide. In the last few months, the products of the CPU Softwarehouse AG corporate group, CPU-C5 and Teledom, Telemax and PlanetCash from the subsidiary company, Telesoft, have been prepared for participation in the USA market with increased intensification of staff. With the participation at the Comdex 1999 and the keen interest in the CPU Softwarehouse AG trade fair stand, the course has been significantly set to enable earlier than planned market coverage. Presentation of NewsNetMedia AG At the second press conference, Roman Roell, from the NewsNetMedia AG Board presented the company to the press present, for the first time and reported on the current activities and plans as follows: NewsNetMedia AG has, since recently, been a content-provider operator of the T-Online Fun and Action portal. The product, ICMS (Integrated Content Management System), is the uniform, standard platform for presenting text, graphics and audio together on the internet and provides its users with a comprehensive, all-in-one technology for a content-oriented internet presentation. Users of this platform are not only internet providers but also e-commerce providers who, in addition to product and services portfolios, also provide their customers with content for convenient information design. NewsNetMedia AG, who are aiming for approx. 4 million DM turnover in 1999 and approx. 6 million DM in 2000, will expand their business through the acquisition of a leading provider of transaction technology and software on the internet. In addition, Roman Roell also forecasts entry to the stock market for News Net Media AG, in the third quarter of 2000. With the target figures presented above, CPU corrects the dpa report from 16.11.1999. With a planned five-fold increase in turnover for 1999 and the raised target figures for 2000 and 2001 the CPU Board considers the company to be harmony with the targets and acquisitions announced at the stock market entry. Compiled by: Kay Schleef Strategic Marketing Manager, M&A Further information about CPU Softwarehouse AG can be found under: www.cpu-ag.com End of Message