Graphisoft Announces On Target Revenue and Income Growth
North America and Europe lead sales volume increase. Net income per share exceeds consensus expectations.
Budapest, Hungary - July 30, 1998
Graphisoft (Frankfurt Neuer Markt: GPH) today announced revenues for the three months and six months ended June 30, 1998, of TDM10,474 and TDM20,144 respectively, representing a 27.8% and 27.4% increase over the same periods last year. Operating income totaled TDM2,191 and TDM4,934 for the two periods, representing growth of 33.3% and 37.9% over 1997. Earnings per share exceeded consensus expectations at DM0.24 for the three months ended June 30, 1998 and DM0.57 for the six months ended June 30, 1998.
"We're very pleased with our year-to-date performance and all that we have achieved so far," states Gábor Bojár, president of Graphisoft. "We met our revenue and income targets in the second quarter, successfully completed our initial public offering and moved our headquarters to a larger facility. In addition, we shipped the new version 6.o of ARCHICAD two weeks early on June 28 in the US and Australia and on July 27 in Germany."
A summary of results follows (1):
ended June 30, 1998
|% to '97
ended June 30, 1998
|% to '97
|Operating Income per share:||0.22||27.8%||0.50||33.4%|
|Net Income per share:||0.24||(2)||0.57||(2)|
(1) Figures are in Thousand German Marks. Per share figures are in German Marks.
(2) Comparison not meaningful. See discussion below.
Sales growth was particularly strong in North America lead by more aggressive sales and marketing activities and the early adoption of ARCHICAD 6.o. Net revenues totaled TDM2,407 and TDM3,851 in the last three and six months respectively, representing 115.9% and 65.1% growth over the same periods last year. European sales also grew to TDM6,842 and TDM12,588 in the last three and six months, representing 42.2% and 32.4% growth compared to same periods last year. Sales in Germany continued to show strong growth as the company's public listing reinforced its reputation in the largest European market, while the largest sales increase was posted in the UK where the company opened its subsidiary only one year ago. The opening of new Graphisoft offices in Madrid and Dubai lead higher sales in Latin America and Middle East. Revenues in the Rest of the World were TDM709 in the first six months of 1998 representing a 55.1% increase compared with last year.
These results more than offset the effect of depressed building industry in the Asia/Pacific region where revenues were TDM1,328 and TDM2,995 in the last three and six months, representing declines of 39.3% and 14.8% compared to the same periods of 1997.
Graphisoft's operating expenses and cost of goods grew modestly in 1998 reflecting the company's conservative financial management. For the six months ended June 30, 1998 cost of goods grew only 10% and General Administration and Overhead grew only 8.4%. Research and Development grew 30.5% in the same period lead by new investment in R&D staff. Sales and Marketing costs grew 42.5% reflecting more aggressive activities in North America and costs associated with opening offices in London, Madrid and Dubai.
The low growth of general and administrative expenses and manufacturing costs offset the higher growth in R&D, sales and marketing. As a result, operating income was TDM2,191 in the three months and TDM4,934 in the six months ended June 30, 1998 or DM0.22 and DM0.50 per share respectively. The operating income growth is 33.3% and 37.9% while the operating income per share growth is 27.8% and 33.4%, after taking into effect the dilution from the initial public offering.
Graphisoft continues to enjoy net income which is approximately 15% higher than its operating income due to the company's advantageous tax climate in Hungary, interest income on cash reserves and significant foreign currency transaction gains. 1998 net income growth was lower than operating income growth, however, as the company's 100% tax holiday has now decreased to 60% for the next five years, depreciation of the Hungarian Forint and appreciation of the US dollar are declining and the newly completed headquarters have absorbed most pre-IPO cash and short term deposit reserves. Interest income on the net proceeds from the initial public offering received on June 15th will not appear until the second half of 1998, however.
"As we look into the second half of 1998," says Gábor Bojár, "We see ARCHICAD 6.o rolling out in all of our markets, generating both new product and upgrade sales. Our expenses are stable and we have put the initial public offering and headquarters move behind us. We will remain focused on growing our market for ARCHICAD, developing new opportunities for our technology within the building industry and maintaining conservative management control over our operations."
Graphisoft is a leading provider of computer aided design (CAD) software solutions for the architectural profession and the building industry and ranked by Dataquest among the largest AEC CAD software developers in the world. ARCHICAD is sold in more than 80 countries and 22 languages and used by more than 45,000 architects and building professionals worldwide. More information about Graphisoft and ARCHICAD is available on the Web at www.graphisoft.com.
This press release contains statements that are forward looking. These statements are based on current expectations that are subject to risks and uncertainties. Actual results may vary because of factors such as technological shifts; customer demand; competitive products and pricing; shipping schedules; litigation; and other issues.
Graphisoft and ARCHICAD are registered trademarks of Graphisoft R&D Rt. All other trademarks mentioned are the properties of their respective owners.
Graphisoft is a leading provider of computer-aided design (CAD) software solutions for the architectural profession and the building industry. Founded in 1982, Graphisoft is ranked today among the largest AEC CAD software developers in the world, with 12 offices all over the world in addition to its headquarters. Graphisoft's flagship product, ARCHICAD, is used by more than 75,000 architects worldwide and distributed in 25 languages and 80 countries. Shares of Graphisoft are traded on the Frankfurt Stock Exchange Neuer Markt under the symbol GPH. More information about Graphisoft is available at www.graphisoft.com.