Intentia International AB

Intentia: January-September 2004 Interim Report

Stockholm, Sweden (ots/PRNewswire) - - Corporate Streamlining Actions Generate Loss for Quarter, Set Stage for Future Operating Profitability Intentia International AB (XSSE: INT B), the global enterprise solutions provider for the manufacturing, distribution and maintenance industries, announced its results for the third quarter of 2004. Third quarter 2004 earnings summary - Net revenue declined 3 per cent compared to the prior year period, with license revenue down 7 per cent and service revenue steady. Adjusted for exchange rates, net revenue was in line with the previous year period. - Implementation of corporate streamlining measures produced nonrecurring charges of SEK 260 million (8) in the third quarter, contributing to net loss of SEK 310 million. EPS for the quarter was SEK -2.0 versus -0.8 last year. - Head count fell 19 per cent in the past 12 months. The actions taken in the latter part of 2003 and in 2004 are expected to reduce costs by close to SEK 500 million on an annualised basis. - Intentia signed 16 new customers during the quarter, and license orders received increased 18 per cent year-over-year. - Intentia received SEK 365 million in new equity and long-term debt capital, strengthening liquidity and the balance sheet. Third Quarter 2004 Earnings Highlights SEK million Jul-Sep 2004 2003 Change Net revenue 581 601 -3% of which license revenue 169 181 -7% Operating earnings -314 -82 n.m. (NOTE A) Profit/loss for the period -310 -74 n.m. (NOTE A) Earnings per share (SEK) -2.0 -0.8 n.m. (NOTE A) Cash flow from operating activities -82 -42 n.m. (NOTE A) Cash flow from investing activities -16 -42 n.m. (NOTE A) (NOTE A) not meaningful The results reflect the implementation of corporate streamlining measures announced in July to reduce the cost base and establish a strong foundation for future operating profitability. These measures resulted in nonrecurring charges of SEK 260 million, in line with previous estimates. Operating earnings were SEK -314 million, compared to SEK -82 million in last year's third quarter. The net loss for the quarter was SEK -310 million, compared to SEK -74 million in the third quarter of 2003. License revenue decreased 7 per cent in the quarter compared to the same period of 2003. Service revenue continued to stabilise, increasing by SEK 1 million to SEK 404 million. Net of nonrecurring charges, Intentia's operating earnings improved by approximately SEK 20 million compared to the prior year period. The total annualised reduction in service cost and indirect expenses, including measures taken since the second half of 2003, is estimated at almost SEK 500 million. Head count was reduced by 234 people during the third quarter to 2,475, a 19 per cent reduction compared to September 30, 2003, and an additional 106 persons were under termination notices. "Intentia's results reflect the implementation of the corporate streamlining program announced in July," noted CEO Bertrand Sciard. "We are making a sharp reduction in our cost base that is setting the stage for sustained operating profitability, beginning in the fourth quarter. Our marketing and product development is more focused. All of our initiatives are on track and will produce significant benefits for the company's market position and shareholder value in the future." Intentia signed 16 new customers during the quarter The Northern Europe, Southern Europe, and Asia and Australia/New Zealand regions were noteworthy in generating new customers. New customers include: Atria (Northern Europe), Confiseur Läderach (Central Europe), Baxi (Northwestern Europe), Fenwick (Southern Europe), Colony Liquor (The Americas), and GWA International (Asia and Australia/New Zealand). Results dominated by effects of corporate streamlining License orders received reached SEK 118 million, 18 per cent above the third quarter of 2003. The closing order backlog was SEK 493 million, an increase of SEK 12 million compared to the same quarter of last year. Net revenue in the quarter reached SEK 581 million, down from SEK 601 million in third quarter of 2003. Service costs and indirect expenses, net of nonrecurring charges, fell by 7 per cent to SEK 613 million from SEK 661 million in the third quarter of 2003. This reflects both the streamlining measures implemented during the quarter and earlier head count reductions. Financial position remains strong During the quarter, Intentia received, net after expenses, SEK 365 million from Tennenbaum Capital Partners: SEK 168 million in new equity and SEK 197 million in a five-year term loan. This fresh capital, in addition to the SEK 248 million in equity capital raised in the first quarter, compensated for the nonrecurring charges and the operating losses incurred as the new business plan is being put in place. The equity/assets ratio decreased to 33 per cent as of September 30, 2004 compared to 38 per cent 12 months earlier. Liquidity was SEK 479 million, compared to SEK 332 million in the prior year period, while interest bearing liabilities including convertible notes were SEK 321 million, compared to SEK 386 million one year ago. Outlook CEO Bertrand Sciard concluded, "The cost structure is improving rapidly as a result of completed and planned ­measures. Intentia expects to record an operating profit during the fourth quarter of 2004. Our organisation is undergoing significant changes and we are now on the path to an intelligent future." The full report including tables can be downloaded from the following link: http://hugin.info/1103/R/965854/140251.pdf ots Originaltext: Intentia International AB Im Internet recherchierbar: http://www.newsaktuell.ch Contact: Bertrand Sciard, Chief Executive Officer, Intentia International AB, Telephone: +46-8-5552-5757, Fax: +46-8-5552-5999, Cell phone: +46-733-27-5757, e-Mail: bertrand.sciard@intentia.se. Hakan Gyrulf, Chief Financial Officer, Intentia International AB, Telephone: +46-8-5552-5825, Fax: +46-8-5552-5999, Cell phone: +46-733-27-5825, e-Mail: hakan.gyrulf@intentia.se

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