August 15, 2002
artnet is cash positive for the first time since IPO expansion of sales efforts announced.
Frankfurt / New York, August 15, 2002 - In spite of a decrease in revenue mainly based on a worldwide recession, artnet AG experienced a net increase in cash in the second quarter of this year for the first time since its IPO in 1999. In the first half of 2002 operating expenses were reduced to EUR 3.19 mio as compared to EUR 8.21 in the first half of 2001. This reduction in expenses was particularly evident in the area of general and administrative, which fell to nearly a quarter of the expense level in the same period last year (EUR 1.18 mio. vs. EUR 4.44 mio).The number of employees was reduced by 31 % to 41 from 58 as of June 30, 2001.Thus, artnet reduced monthly operating expense to less than EUR 0.53 mio., mainly by refocusing its efforts on core services and products and exercising strict cost management.As a result, the company finished the period with EUR 0.41 mio. in cash resources, compared to EUR 0.16 mio at the end of 2001. At the same time, Accounts Payable and Accrued Expenses were reduced significantly from a total of EUR 3.04 as of the end of last year to EUR 1.85 mio. as of the end of the current period.Loss before taxes during the six months amounts to EUR 0.34 Mio., a vastly improved result, compared to the same period last year (EUR 4.75 mio.).Managements objective is for the Company to reach the break-even point in operating profit during the current year.
A difficult business environment, the burden of restructuring with reduced spending on sales and marketing, the weakness of the U.S. dollar, and the loss of sales as a result of discontinuation of the bookstore operation last year resulted in a decrease in revenue to EUR 2.75 mio. in the first half of 2002 from EUR 3.44 mio. in the same period last year, representing a decrease of 20 %.However, after adjusting for an accounting change implemented in the current period and for revenue produced by the bookstore in 2001, revenue decreased by only 14%. Of course, the appreciation of the Euro this past year relative to the U.S. dollar put further pressure on the Companys reported Euro revenue.
Having successfully restructured the Company, artnet now aims to further extend its market position under the leadership of a newly hired Vice President of Sales; the sales team will be enlarged and the marketing effort augmented. The recently completed database of 44,000 addresses of galleries and antique dealers will be used to launch the planned Decorative Arts Auctions Database.
Contact: Hans Neuendorf, CEO
Tel.: 001-212-497-9700 Ext.638
September 13, 2002
August 15, 2002
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November 30, 2001