Ad-hoc | 6 August 2004 07:25

init revises prospects for 2004 after weak result in Q2

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– init revises prospects for 2004 after weak result in Q2 Burdened by a number of extraordinary trends toward the end of the second quarter, business at init innovation in traffic systems AG was hampered by customer-related and technical delays in major projects in the USA and in Europe. This lead to a loss of sales and an increase in production costs. In addition, the operating result was affected in particular by a further decline in sales exceeding 50 per cent on the domestic market in Germany. This was met by init with a catalog of measures and the closure of its branch offices in both Berlin and Essen, resulting in a one time cost burden in the second quarter. While provisional figures for April through June revealed that the revenue of init, on the whole, clearly increased as compared to the first quarter of 2004, from 3.6 to 5.3 million Euro, the operating result (EBIT) turned out negative, falling to -2.3 million Euro (2003: +0.8 million Euro). For the first six months of 2004, this adds up to an EBIT of -4.5 million Euro (2003: -0.1 million Euro) and sales amounting to 8.9 million Euro (2003: 12.3 million Euro). After an almost balanced result in 2003, the group deficit totaled -3.0 million Euro, while the net earnings per share stood at -0.30 Euro (2003: 0.00 Euro). However, due to a forced reduction in accounts receivable and an increase in advances received from customers, init managed to attain a positive cash flow of 1.0 million Euro as of the end of June (2003: -2.0 million Euro). Due to increasing hardware deliveries for major projects in the USA and in Europe, init anticipates sales to rise by the end of the year. In view of the lasting weakness of the German market, however, we believe that, as matters stand, our original growth targets of 33 million Euro in sales and an operating result (EBIT) of 1 million Euro are quite unlikely. Having weighed all the factors burdening the company, init anticipates sales over 30 million Euro and an EBIT of -2 million Euro for the entire year. Based on the record level of orders of currently 46 million Euro and potential contracts totaling in excess of 120 million Euro, the medium- and long-term growth prospects of init continue to be sound. The full interim report will be published on August 12. For further information please contact Ms. Weiss +49 721 6100 102, Mail ir@initag.de or Mr. Brunner +49 89 13959633 end of ad-hoc-announcement (c)DGAP 06.08.2004 ——————————————————————————– WKN: 575980; ISIN: DE0005759807; Index: Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 060725 Aug 04