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The Reward and the Price of Expansion: Graphisoft revenues up by 24.1%, operating income down by 13.3%

BUDAPEST, February 14, 2001 -- Graphisoft announced today revenues for the three and 12 months ended December 31, 2000, at 9.2 million EUR and 31.9 million EUR, respectively, representing a 24.1 percent growth over the previous year.

"While the Company just completed its 19th year of uninterrupted double-digit profitability, the smaller than usual sales boost at the close of the year, coupled with the costs associated with our expansion into new markets, resulted in a lower operating profit," reports Gábor Bojár, president and CEO of Graphisoft. "But we are pleased that the market confirmed the viability of the Company's strategy. We have already seen very encouraging results."

Key figures*

12 months ended December 31

3 months ended December 31

Organic business

With new acquisitions

Organic business

With new acquisitions

2000

Change

2000

Change

2000

Change

2000

change

Revenues

28,970

12.6 %

31,914

24.1%

8,098

-4.8%

9,201

8.1%

Gross profit

24,309

15.2%

27,001

27.9%

7,011

2.2%

7,982

16.4%

Operating expenses

19,461

18.5%

22,936

39.7%

5,683

24.0%

6,780

48.0%

Operating income

4,848

3.3%

4,065

-13.3%

1,328

-41.6%

1,202

-47.2%

EBITDA**

6,401

6.7%

5,985

-0.2%

1,723

-36.1%

1,721

-36.1%

Net income

5,035

-9.7%

4,268

-23.5%

569

-75.6%

453

-80.6%

Net income per share (€/share)

0.48

-8.3%

0.40

-22.2%

0.05

-75.6%

0.04

-80.6%

* All amounts in thousands of EUR, earnings per share in EUR. Unaudited.
** Earning Before Interest, Tax, Depreciation and Amortization

The low fourth quarter revenue increase over 1999 figures reflects to a large extent the upgrade cycle of ARCHICAD - ARCHICAD 6.5 was released in Q4 1999, and Graphisoft earned close to 50% of its operating income for the year in that quarter.

Overall, sales in Europe increased by 7.5% and 18.6%, respectively, in the three and 12 month terms, contributing close to two thirds of the Company's worldwide revenues in 2000. North America and the Asia/Pacific region grew more dynamically, by 35.1% and 31.3%, respectively, and made up 19.7% and 15.6% of consolidated sales.

The Group's new building management, building services software and GDL object tools achieved 11.9% of revenues, or 3.8 million EUR.

Research and development costs almost doubled this year, to 5.1 million EUR, as a result of a 33% staff expansion, higher compensation levels and the realization of previously capitalized software development costs. Sales and marketing charges grew by 29.7% through the year and by 36.2% in the last quarter due to a 30% increase in staffing levels as well as to higher spending necessary to market the Company's new products.

In line with its expansion strategy, Graphisoft initiated several major changes in its corporate and management structure in 2000. In order to streamline its US operations, the company placed its ARCHICAD and facility management businesses under common control as of February 01, 2001. This way the synergic effects of the two businesses can be better utilized, coupled with more effective cost control. Graphisoft UK has been relocated to Bristol, where CYMAP, the Company's recently acquired building services subsidiary is operating. As for the object publishing business, a new subsidiary was established at the end of the year with all rights and obligations to expand GDL technology worldwide.

The complete Fourth Quarter Results can be found here.