artnet.com reached revenue target

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About Us | Press Releases | March 30, 2001

artnet Reached Revenue Target

Growth Accelerated in 2000 -- Continued Cost-Cutting Measures Lead to Positive Cash Flow in Q4 2001

New York/Frankfurt, March 29, 2001 -- artnet AG (WKN:690950) released its annual results for 2000, announcing it had reached its target revenue for the year. Revenue reached $3.7 million in 2000, up 40% from $2.6 million in 1999. However, taking into account artnet's implementation of changes to US-GAAP and revenue from Discontinued Operations, artnet would have reported $4.9 million of revenue on a basis comparable to 1999, near its target of $5 million and an increase of 87% over the prior year.

The online Gallery Network was particularly effective as a medium for art transactions for its customers, therefore revenues of this business increased 35% to $2.6 million compared to last year's of $1.9 million. The number of galleries increased by 39% to 1,200, revenue per customer increased, and the contract renewal rate remained high at 83%. Page views to the online Gallery Network increased by 95% in 2000 proving increased market acceptance and name recognition.

The Fine Art Auctions Database showed revenue growth of 69% to $0.89 million on customer growth of 23%. As a result of its strong market position among art professionals, the company instituted a significant price increase in the third quarter.

Despite strong revenue growth, artnet showed cash loss of $14.1 million and an accounting loss of $18.2 million, including a discontinued operations loss of $4.9 million. Therefore the cash loss on continuing operations was $9.2 million. artnet's cash reserves were $1.3 million at the end of the year. In February 2001, the CEO Hans Neuendorf invested 400,000 Euro at Euro 3.59 per share to fund operations until positive cash flow is reached.

The company expects to continue strong revenue growth in 2001, based on early results for the first quarter. Together with continued cost-cutting measures the company expects to generate positive cash flow by the fourth quarter of 2001 and achieve profitability in 2002.

Given the history of negative cash flows and adverse funding environment, artnet auditors issued a qualified opinion on the financial statements due to concern over the ability to raise funding should the need arise. The Supervisory Board acknowledged the concern and stated that it would assist the management in obtaining funding if required.

Contact:
Hans Neuendorf
Chief Executive Officer
61 Broadway, 23rd Floor
New York, NY 10006

Tel: 001-212-497-9700 x638
Fax: (1) 212-497-9707
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