EXHIBIT 99
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PRESS RELEASE
INTERSHOP REPORTS THIRD QUARTER 2000 RESULTS
REVENUES INCREASED 235 PERCENT COMPARED TO Q3 1999
INTERSHOP ENFINITY DRIVES THE GROWTH
HAMBURG/SAN FRANCISCO, OCTOBER 31, 2000 - Intershop Communications AG (Neuer
Markt: ISH, NASDAQ: ISHP), one of the world's leading providers of e-commerce
applications and software solutions, today announced financial results for the
third quarter of 2000, which ended September 30, 2000.
Third quarter revenues increased 235 percent to Euro 35.2 million ($31.0
million) from Euro 10.5 million ($9.2 million) for the same period in 1999 and 8
percent sequentially from Euro 32.6 million ($28.7 million) in the second
quarter. On a year to date basis, revenues increased by 244 percent to Euro 92.8
million ($81.6 million) as compared to Euro 27.0 million ($23.7 million) in the
prior year period.
The company reported a third quarter 2000 net loss of Euro 9.8 million ($8.6
million), compared to a loss of Euro 3.4 million ($2.9 million) in Q3 1999.
Intershop announced a third quarter loss of Euro 0.12 ($0.10) per share,
compared to a loss of Euro 0.04 ($0.04) per share a year ago. Year to date net
loss was Euro 6.8 million ($6.0 million) compared to a net loss of Euro 11.0
million ($9.7 million) in the first nine months of 1999. Nine month year to date
earnings posted a loss of Euro 0.08 ($0.07) per share, compared to a loss of
Euro 0.14 ($0.12) per share a year ago.
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In millions, except per share Q3, 2000 Q3, 1999 % Annual Q2, 2000 % Sequential
data and percentages Growth Growth
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Total Revenue Euro 35.2 Euro 10.5 235% Euro 32.6 8%
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Operating Income (Loss) Euro (9.2) Euro (3.5) 164% Euro 0.8
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Net Income (Loss) Euro (9.8) Euro (3.4) 193% Euro 1.3
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Diluted Net Income (Loss) Per Euro (0.12) Euro (0.04) 200% Euro 0.02
Share
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In millions, except per share Nine months ended Nine months ended % Growth
data and percentages 9/30/00 9/30/99
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Total Revenue Euro 92.8 Euro 27.0 244%
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Operating Income (Loss) Euro (7.4) Euro (12.0) -39%
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Net Income (Loss) Euro (6.8) Euro (11.0) -38%
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Diluted Net Income (Loss) Per Euro (0.08) Euro (0.14) -43%
Share
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Total license revenues increased 245 percent to Euro 19.6 million ($17.3
million) from the comparable third quarter 1999 figure of Euro 5.7 million ($5.0
million), but decreased sequentially by 13 percent compared to Euro 22.5 million
in the second quarter of 2000 due to seasonality impacts. The main growth driver
in the quarter was INTERSHOP Enfinity, launched in Q4 1999. INTERSHOP Enfinity
is a complete enterprise sell side e-commerce solution that allows businesses to
sell anywhere over the Internet. Enfinity sales rose 39 percent compared to Q2
2000, with the most significant growth coming in the United States market where
Enfinity revenues increased by 159 percent sequentially.
MANAGEMENT REVIEW
INTERSHOP chief executive officer Stephan Schambach commented, "We are very
pleased with the record revenues for the third quarter, especially the revenue
growth within our flagship Enfinity enterprise e-commerce solution. The Enfinity
product line set records during the third quarter in terms of revenue, number of
licenses sold and average deal size. Enfinity is the only true packaged, global
e-commerce solution available on the market. The superior architecture, speed to
market implementation and low cost of ownership helped differentiate our
Enfinity
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product from our competitors during the quarter. Major customer and partner
wins, intensified marketing activities and our listing on NASDAQ have clearly
increased our brand visibility in the United States."
"Third quarter revenues reflect our eleventh consecutive quarter of revenue
growth. On an annual comparison basis, we more than tripled our quarterly
revenues for the fourth time in a row." stated Wilfried Beeck, INTERSHOP's chief
financial officer. He continued, "We traditionally experience a slowdown in
license revenue growth in the third quarter, mainly due to reduced business
activity in the software industry in Europe during the summer months. INTERSHOP
responded to higher than anticipated market growth by increasing spending on
marketing, product development and consulting services. Extraordinary expenses
during the quarter were primarily related to a Euro 7 million ($6.2 million)
advertising campaign and acquisition related costs of Euro 1.2 million ($1.1
million)."
"Looking ahead, and assuming similar business conditions and relatively stable
currency rates for the fourth quarter, we expect revenues in a range of Euro 40
million ($35 million) to Euro 50 million ($44 million). INTERSHOP's strategy of
investing in prospective growth as well as extraordinary expenses resulting from
the acquisitions of Subotnic and Owis are expected to prevent the Company from
achieving break-even for the year 2000 as a whole."
QUARTERLY HIGHLIGHTS
CUSTOMERS
o INTERSHOP continued to expand its client base through 281 new customer
wins. Total third quarter customers were 567 including world class
enterprises such as Bertelsmann, ABB Motors, Otto Group, Motorola, Shell
Chemical, Intel, Wella, Deutsche Telekom, Time Life, Mobilcom, Homebase,
Playmobil, Spiegel, Vobis, Electronic Partners, Terranetworks, Sparkasse,
rooster.com and Altodigital. Repeat business from existing customers
accounted for 59 percent of revenues during the quarter.
o 64 INTERSHOP Enfinity platforms were sold during the quarter bringing the
cumulative number of Enfinity platforms sold to date to 195.
CHANNEL DEVELOPMENT
o INTERSHOP attracted new integration and consulting partners such as EDS,
Etensity, Agility and PSI. Concurrently, the Company also expanded its
existing relationships with leading eServices companies like IBM Global
Services, Hewlett-Packard, PriceWaterhouseCoopers, Andersen Consulting,
Unisys, Sapient, Pixelpark and Icon Medialab. During the third quarter,
revenues generated through channel partners totaled 45 percent of total
revenues. INTERSHOP trained a record number of 3,840 external consultants
during the quarter compared to 2,675 in the previous quarter.
o INTERSHOP successfully executed its partnerships with Hewlett-Packard and
Intel, and expanded its global alliance with CommerceOne to connect
suppliers to e-marketplaces. As part of the agreement, CommerceOne and
INTERSHOP will jointly promote and market e-commerce solutions in addition
to aligning, educating and compensating their global sales forces to offer
complementary solutions. Enfinity Cartridges for CommerceOne MarketSite and
CommerceOne GalerieConnector have already been developed.
NEW PRODUCTS
o In July, INTERSHOP launched the new release INTERSHOP 4.2 product line for
hosted e -commerce services including the INTERSHOP Universal Marketplace
Enabler for easy integration of online storefronts into electronic
marketplaces.
o INTERSHOP was also focused on the development and the preparation of the
launch of the new INTERSHOP Enfinity 2.0 release which was introduced at
the INTERSHOP Open 2 event in New York at October 30.
CORPORATE STRUCTURE
o INTERSHOP continued its organizational expansion around the world with the
total number of employees increasing by 252 to 1,017.
o INTERSHOP established new office locations in Seoul, Taipei, Berlin and
Ilmenau, and existing offices were expanded.
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ACQUISITION ACTIVITY
o In August, INTERSHOP acquired Subotnic GmbH. Berlin-based Subotnic
specializes in the development of content management software and solutions
designed to integrate with electronic commerce systems. With this
acquisition, INTERSHOP plans to expand its product offering by adding
Content Integrated Commerce functionality to our INTERSHOP Enfinity product
suite.
o Effective on July 1st, INTERSHOP acquired Owis GmbH gaining over 70
engineers with expertise and project experience in object oriented software
development.
CAPITAL STRUCTURE
o On September 29, 2000 INTERSHOP successfully completed its listing on the
NASDAQ stock exchange. In conjunction with the American Depositary Shares
(ADS) listing, INTERSHOP placed 1,675,000 shares or the equivalent of
3,350,000 ADS's yielding the Company net proceeds of Euro 116 million ($102
million). On August 15, the Company placed 100,000 shares (pre-split) with
institutional investors and gained net proceeds of Euro 39 million ($ 34
million).
ABOUT INTERSHOP:
Intershop Communications, Inc., is a leading provider of sell-side eBusiness
applications for enterprises selling through multiple channels. Intershop's
feature-rich eBusiness applications enable companies to sell direct, through
distributors and marketplaces, and integrate with brick and mortar operations.
Specifically designed to support the many ways that organizations sell,
Intershop's solutions are designed for quick implementation and seamless
integration into existing systems. Intershop provides applications and solutions
to some of the world's largest enterprises, including Hewlett -Packard, Intel,
Motorola, Shell and Time Warner. Founded in 1992, Intershop is headquartered in
San Francisco with offices in the U.S., Germany, France, Australia, Canada,
Brazil, Sweden, Finland, Korea, Hong Kong, Singapore and the United Kingdom and
can be found on the World Wide Web at HTTP://WWW.INTERSHOP.COM.
Inquiries U.S.: Press Inquiries U.S.:
Phil Oreste Kathleen O'Boyle
VP Finance of the Americas VP Corp. Communications
Intershop Communications. Inc. Intershop Communications, Inc.
T: +1-415-844-3794 T: +1-415-844-3796
F: +1-415-449-3573 F: +1-415-844-3800
Inquiries Europe: Financial Press Inquiries Europe:
Dr. John Lange Heiner Schaumann
Director Investor Relations Director Executive Communications
Intershop Communications AG Intershop Communications AG
T: +49-40-23709-128 T: +49-3641-894-120
F: +49-40-23709-111 F: +49-3641-894-444
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS ABOUT EXPECTED FOURTH
QUARTER REVENUE AND EARNINGS, CHANGING MARKET STRATEGIES, DEMAND FOR ELECTRONIC
COMMERCE SOFTWARE AND RELATED SERVICES, EXPANDING SALES IN THE COMPANY'S
TRADITIONAL MARKET AND ANTICIPATED DEMAND FOR NEW OFFERINGS. THESE
FORWARD-LOOKING STATEMENTS INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. THE RISKS AND UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: BUSINESS CONDITIONS AND THE
GENERAL ECONOMY; CHANGES IN DISTRIBUTION CHOICES AND CHANNEL PARTNERS;
COMPETITIVE FACTORS; SALES AND MARKETING EXECUTION; SHIFTS IN TECHNOLOGIES OR
MARKET DEMAND. ADDITIONAL INFORMATION COVERING FACTORS THAT COULD CAUSE RESULTS
TO DIFFER MATERIALLY FROM PROJECTED STATEMENTS CAN BE FOUND IN INTERSHOP'S 1999
ANNUAL REPORT, PRIOR QUARTERLY FILINGS AND OTHER DOCUMENTS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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INTERSHOP COMMUNICATIONS AG
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS EURO; UNAUDITED)
September 30, December 31,
2000 1999
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ASSETS
Current assets:
Cash and cash equivalents Euro 32.651 Euro 12.065
Restricted cash 1.485 1.437
Trade receivables, net 48.039 23.333
Receivable for secondary offering proceeds 115.857 -
Prepaid expenses and other current assets 15.022 3.870
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Total current assets 213.053 40.705
Property and equipment, net 17.496 5.610
Investments 2.470 6.222
Other assets 6.650 1.252
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Total assets Euro 239.669 Euro 53.789
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current debt and current maturities of long-term debt Euro - Euro 33
Notes payable to shareholder 16.489 7.000
Accounts payable 6.143 5.149
Accrued liabilities 30.919 9.960
Deferred revenue 8.646 8.542
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Total current liabilities 62.198 30.685
Long-term debt - 20
Deferred revenue 37 220
Total liabilities 62.235 30.925
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Shareholders' equity
Common stock 87.728 16.878
Paid-in capital 151.139 48.169
Notes receivable from shareholder - (141)
Deferred compensation (42) (273)
Accumulated deficit (63.426) (45.406)
Accumulated other comprehensive income 2.035 3.636
Total shareholders' equity 177.435 22.864
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Total liabilities and shareholders' equity Euro 239.669 Euro 53.789
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INTERSHOP COMMUNICATIONS AG
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EURO, EXCEPT PER SHARE AMOUNTS; UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
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Revenues:
Licences Euro 19.618 Euro 5.690 Euro 59.568 Euro 16.205
Services, maintenance and other revenue 15.594 4.812 33.186 10.767
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Total revenues 35.212 10.502 92.753 26.972
Cost of revenues:
Licences 705 1.191 3.986 2.537
Services, maintenance and other revenue 11.825 1.764 26.031 5.069
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Total costs of revenues 12.530 2.955 30.017 7.606
Gross Profit 22.683 7.547 62.737 19.366
Operating Expenses:
Research and development 3.178 2.149 6.712 5.128
Sales and marketing 23.227 6.321 48.545 18.768
General and administrative 5.047 2.537 14.356 7.448
Goodwill and intangible asset amortization 442 24 475 56
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Total operating expenses 31.893 11.031 70.088 31.399
Operating Loss (9.211) (3.484) (7.351) (12.034)
Other income (expense), net:
Interest income 213 106 438 395
Interest expense (347) (29) (486) (24)
Other income (464) 57 551 647
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Total other income (expense) (598) 134 503 1.018
Net Loss Euro (9.808) Euro (3.350) Euro (6.849) Euro (11.016)
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Basic and Diluted net loss per share Euro (0.12) Euro (0.04) Euro (0.08) Euro (14)
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Shares used in computing basic and
Diluted net loss per share 83.756 80.647 83.032 79.108
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