JoWooD Productions Software AG
euro adhoc: JoWooD Productions Software AG
Financial Figures/Balance Sheet /
JoWooD Productions Software AG announces its quarterly results for the 3.
quarter 2005
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
03.11.2005
First positive EBIT before restructuring within 2005 Restructuring costs still damp the results Balanced operative cash-flow
Profit situation
Sales proceeds total TEUR 1.757 within Q3 2005 (comparison period 2004: TEUR 5.111). As in the first 6 months 2005 these are mainly generated from the sales of titles already published in 2004 (back catalogue). In this Industry the months of July and August show traditionally small turnover. Thus sales of Q3 are mostly generated in September.
Titles of the planned line-up 2005/2006, for which new distribution agreements were closed within the past months and which will be released during Q4 2005 respectively during the first quarters of 2006, are therefore not included in the results of cumulated Q3 2005.
Compared to the comparison period the reduced turnover is mainly the result of the fact that a total of 8 titles was published and sold within Q3 2004.
The gross profit after depreciation of the game titles is TEUR 985 (comparison period 2004: TEUR 2.510). The gross margin of 56 % is higher than in the comparison period of 2004 (49 %).
Within the sales and management costs the realised reduction of the cost structure during Q3 2005 is now apparent for the first time. The total of the cost reductions will be fully effective in Q4 2005. The further reduction of sales and management costs within Q3 2005 (TEUR 1.147) compared to the comparison period of 2004 (TEUR 2.307) is principally generated by the cost reductions within personnel in the course of the final consolidation of the German subsidiaries Neon and Massive. As of September 30, 2005, the cumulated sales and management costs thus could be reduced from TEUR 5.987 to TEUR 4.758, compared to the expenses of the comparison period of 2004.
The sales results of back catalogue titles during Q3 2005 as well as the strict reduction of sales, management and other costs show a positive EBIT before restructuring of TEUR 85 (comparison period 2004: TEUR 184). The EBIT expressed in percentage of the turnover could be increased to 5 % (comparison period 2004: 4 %).
Within restructuring and extraordinary expenses of total TEUR 16.594, the positions that are not directly connected to the operative business of 2005 are listed. These are expenses which became necessary due to the renewed restructuring of the company as well as expenses which concern events of 2004 but became evident only during 2005.
For the sake of caution and due to the latest developments the game title "Stargate SG-1TM: The Alliance" was completely depreciated. In order to avoid further loss of cash to subsidiaries, the German development studios Massive and Neon were finally consolidated. The closing of the German Studio Wings is in progress and will be completed in Q4 2005. In Q3 a total of TEUR 5.606 had therefore to be considered, TEUR 5.536 of which to the depreciation of the game "Stargate SG-1TM: The Alliance".
The main positions comprise value adjustments of accounts receivable (TEUR 210), closing respectively final consolidation of studios and the connected stop of game developments (TEUR 2.340), discontinuation of game developments due to unprofitability (TEUR 921), loss-free evaluation without "Stargate SG-1TM: The Alliance" (TEUR 4.489), value adjustment game title "Stargate SG-1TM: The Alliance" (TEUR 6.196), price credits for deliveries out of 2004 due to lack of usability in the retail market (TEUR 2.308) and other restructuring expenses (TEUR 130).
For the sake of caution a further depreciation of deferred taxes was effected in Q3 2005. Because of the positive results of the going concern prognosis the tax savings of the coming years were calculated and the difference was depreciated (TEUR 2.440). These expenses are not cash relevant.
Asset situation
The reduction of the semi-finished and finished goods compared to the year end 2004 by TEUR 11.365 as well as compared to the comparison period by TEUR 19.872 to TEUR 5.503 is caused by the depreciation method now applied, necessary discontinuation of the unprofitable product developments, the consideration of loss- free evaluations, the value adjustment of the game title "Stargate SG-1TM: The Alliance" and the increased balancing of advances. The reduction in the position goods concerns mainly titles of the back catalogue.
The considerable reduction in the receivables from supplies and services totalling approximately TEUR 8.750 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 issued.
The high losses result in a negative equity of TEUR 7.212 as of September 30, 2005. Negotiations with creditors concerning the correction of the balance sheet structure and improvement of the liquidity situation are ongoing. Furthermore JoWooD negotiates with investors who shall participate in the company and strengthen the equity basis. These negotiations are under the assumption that no mandatory offer according to the Austrian take-over law will be caused by the participation of an investor. The management acts on the assumption of a positive going concern prognosis.
The increase in the liabilities from supplies and services compared to the year end 2004 is the result of a conversion of accruals into liabilities and the disclosure of incoming debtors as liabilities.
Financial situation
The cumulated operative cash flow as of September 30, 2005 (TEUR -544) remained almost unchanged compared to the first half year 2005. (TEUR -523). The operative cash flow of Q3 2005 is therefore almost balanced. So the positive development compared to the comparison period of last year is ongoing. The cumulative operative cash flow in the comparison period 2004 was TEUR -17.284. During the nine-month-period ended September 30, 2005 the company thus managed to almost completely finance its activities without third party funds, although the overall conditions (reduced turnover, high restructuring expenses) were very unfavourable.
The payments of investments of TEUR 119 are within usual bounds and due to the closing of studios significantly lower than in the comparison period of 2004 (TEUR 473).
The financing cash flow of TEUR 411 comprises repayments of long-term financial liabilities and the taking of short-term cash.
Key Figures
in EUR 000 Jan - Sep 2005 Jan - Sep 2004
Sales 6.312 12.414
Costs of goods sold -1.643 -2.037
Development costs -1.300 -910
Gross profit before depreciation of games 3.369 9.467
Depreciation of games -2.162 -2.890
Gross profit after depreciation of games 1.207 6.577
EBIT before restructuring activities -2.430 1.191
Restructuring Result -16.594 -
EBIT after restructuring activities -19.024 1.191
Ordinary result (EBT) -19.300 446
Income before minorities -24.403 -1.536
Group result -24.403 -1.474
Cash flow from operating activities -544 -17.284
in EUR 000 Jul - Sep 2005 Jul - Sep 2004
Sales 1.757 5.111
Costs of goods sold -273 -1.007
Development costs -251 -294
Gross profit before depreciation of games 1.233 3.810
Depreciation of games -249 -1.300
Gross profit after depreciation of games 985 2.510
EBIT before restructuring activities 85 184
Restructuring Result -5.605 -
EBIT after restructuring activities -5.519 184
Ordinary result (EBT) -5.574 1
Income before minorities -8.014 -1.997
Group result -8.014 -2.002
Cash flow from operating activities -21 -7.713
30.09.2005 30.09.2004
Non- current assets 2.063 13.079
Cash on hand and in banks 420 1.129
Other current assets 10.026 40.450
Total assets 12.509 54.658
Shareholders' equity -7.212 39.801
Minority interests - 24
Longterm payables 3.867 7.452
Shortterm debts to banks 5.626 1.809
Other short term payable 10.228 5.572
thereof advanced payment 1.021 2.491
equity ratio k.A. 73%end of announcement euro adhoc 03.11.2005 08:19:10
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