JoWooD Productions Software AG

euro adhoc: JoWooD Productions Software AG
Quarterly or Semiannual Financial Statements
JoWooD Productions Software AG reports financial results for the six-month-period ended 30th June 2005.

-------------------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. -------------------------------------------------------------------------------- 18.08.2005 • Total results considerably dampened by liabilities carried forward from 2004. • Performance-oriented restructuring measures largely completed. • Q2 operative cash flow slightly negative. Financial situation The company managed to preserve a stable cash flow situation despite the high financial burdens related to the performance-oriented restructuring measures (studio closures, severance pays, burdens from storage value adjustments). Even though the Q2 operative cash flow compared with Q1 2005 (TEUR 544) turned slightly negative (TEUR -523) the development must be considered positive compared against the previous year. The operative cash flow during the comparative period of the previous year was TEUR - 9.571. During the six-month-period ended 30th June the company thus managed to almost completely finance its activities without third party funds. Profit situation Sales proceeds total TEUR 4.555. All these proceeds were generated from the sale of titles already published during the previous year (back catalogue) as the titles will be published during Q4 2005 or the first quarters of 2006 from the planned new line-up for which new distribution contracts were signed during recent months. The results of the first six months 2005 therefore do not yet reflect any effects from the newly signed distribution contracts on sales. For reasons of the better transparency of the profit situation the depreciation of the games titles will be shown separately as from the shareholder letter of the first six months 2005. The gross sales results before depreciation of the games titles is TEUR 2.135. The EBIT for the first six months ended 30th June totals TEUR -2.515 including depreciations for games titles published in 2004 of a total of TEUR -1.913. Q2 2005 saw the introduction of the matching principle depreciation method for games titles. The values of the titles published in 2004 were entered on a loss-free basis and then depreciated on a quarterly basis. The depreciation total (sales-related and depreciation from loss-free evaluation) was established according to the depreciation method applied in 2004. The sales and management costs of the first six months do not yet reflect the lower cost structure realised since Q3. Attached to the semi-annual results are pro forma semi-annual results depicting a profit situation under the assumption that the operative cost efficiency measures carried out had already applied for the total period of the first six months of 2005. Asset situation The reduction of the semi-finished and finished goods compared to the year end 2004 by TEUR 7.292 reflects the depreciation of the sales titles and the effects of the discontinuation of the unprofitable product developments of the past. The considerable reduction in the receivables from supplies and services totalling approx. TEUR 8.300 compared to the year end 2004 is due both to an above-average deadline-related receivables situation at the year end 2004 as well as to the set-off against reserves and liabilities. Considerable price credits for games deliveries in 2004 also had to be taken into account. The high losses during the first six months ended 30th June 2005 also translated into a sharp drop in the equity ratio by 4% compared to the end of 2004. The increase in the liabilities from supplies and services compared to the year end 2004 is the result of an average extension of the due dates. The decline in other liabilities as well as prepaid expenses and deferred revenues compared to the balance sheet date of the previous year is mainly the result of the repayment of a supplier loan. For the sake of caution latent taxes were adjusted. This is not cash effective. Restructuring result The total result of the second six months is marked by significant restructuring expenses and repayments outside the operative business with a focus on the restructuring and redemption of liabilities from transactions and projects made and initiated long before the current management. The major items are price credits from supplies during Q3 and Q4 of the previous year with results both on the expenditure side and financial liabilities of the company. The total amount of the price credits booked during the second six months is TEUR 2.308. To date price credits of a total of approximately TEUR 4.000 have already had to be accepted by contract during the current year; of which TEUR 1.698 were already considered when establishing the annual accounts 2004 in April of the present year. More than TEUR 2.200 had to be entered as effective on the result from the title of studio closures. The discontinuation of an unprofitable development project from the past is entered at TEUR 970. Depreciations from the title of loss-free evaluation concerning games published during 2004 total TEUR 4.489. Apart from the sales these restructuring expenditures still pose a liability to the company’s liquidity situation. Despite the termination of the Stargate SG-1™: The Alliance development contract necessary for major quality deficiencies the Management of JoWooD sees a positive development in the company’s operative results. This is underlined by the fact that the monthly EBIT for the month of June was the first since the beginning of the year to turn positive. Independently thereof, however, due to the significant rise in short-term financial liabilities last year as well as the continuing burden of liabilities for price credits immediate action is required with regard to the company’s balance sheet structure. Key Figures in EUR 000 Jan - Jun 2005 Sales 4,555 Costs of goods sold -1,370 Development costs -1,049 Gross profit before depriciation of games 2,135 Depriciation of games -1,913 Gross profit after depriciation of games 222 EBIT before restrukturing activities -2,515 Restrukturing Result -10,989 EBIT after restrukturing activities -13,505 Ordinary result -13,726 Income before minorities -16,389 Group result -16,389 Cash flow from operating activities -523 30.06.2005 Non- current assets 4,631 Cash 456 Other current assets 15,528 Total assets 20,615 Shareholders' equity 752 Minority interests 0 Longterm payables 3,909 Shortterm debts to banks 5,776 Other short term payable 10,178 thereof advanced payment 1,069 equity ratio 4% end of announcement euro adhoc 18.08.2005 15:18:32 -------------------------------------------------------------------------------- ots Originaltext: JoWooD Productions Software AG Im Internet recherchierbar: http://www.presseportal.de Further inquiry note: JoWooD Productions Software AG Dr. Albert Seidl, Vorstand Matthias Rathammer, Investor Relations Tel.: +43 (0)3614 2966 1015 mailo:investor@jowood.com http://www.jowood.com Branche: Software ISIN: AT0000747357 WKN: 074735 Index: WBI, ATX Prime, ViDX Börsen: Berliner Wertpapierbörse / free trade Baden-Württembergische Wertpapierbörse / free trade Frankfurter Wertpapierbörse / free trade Bayerische Börse / free trade Wiener Börse AG / official dealing

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