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Graphisoft Announces Q2 Results

Soft sales in Europe, increased operational efficiency

Budapest, August 8, 2002 - Graphisoft announced today revenues of EUR 6.6 million and EUR 13.2 million for the second quarter and the six-month ended June 30, 2002 respectively. The 22.5% and 9.0% decrease compared to the same period last year were divided unevenly among the Company's regional markets and are attributable to the effects of the global economic slowdown and Graphisoft's product development cycle. Despite the difficult market situation, the Company remained financially strong and improved its operational efficiency.

Graphisoft's major target market, the A/E/C (architecture/engineering/construction) segment is clearly slowing down due to its sensitivity to macroeconomic difficulties in the major economies. This, coupled with the effects of the Company's product development cycle, set back sales in the second quarter, to a different degree in Graphisoft's individual markets. Considering the first six months of the year, lower sales in Europe (EUR 1.4 M) were partly offset by increased sales in North America (EUR 0.7 M).

Due to the product development cycle, seasonality distorts the quarter over quarter comparison. While in the first half of 2001 Graphisoft shipped a new version of ARCHICAD® and benefited from bustling customer demand, in 2002 the equivalent major product release is scheduled for the second half of the year.

The Group maintained cost-cutting measures that led to a reduction in operating expenses both in the first and in the second quarter, in comparison to the same previous year periods, and retained its positive operating income in the first half of the year. However, the impact of foreign exchange losses and a change in accounting principle related to accounting for goodwill made the Company realize a 756 thousand EUR net loss in the first half of the year.

"Management continues to monitor the situation and carry out the re-structuring of the Group," stated Ray Small, CEO of Graphisoft. "We will take the necessary measures to position Graphisoft for future growth and the regaining of consistent profitability."

Key figures*

3 months ended June 30

% of change

6 months ended June 30

% of change

2002

2001

02/01

2002

2001

02/01

Revenues

6,557

8,463

(22.5)

13,228

14,534

(9.0)

Gross profit

5,671

7,166

(20.9)

11,357

12,356

(8.1)

Operating expenses

5,813

6,170

(5.8)

11,302

11,875

(4.8)

Operating income (loss)

(142)

996

n.a.

55

481

(88.6)

EBITDA***

291

1,652

(82.4)

962

1,738

(44.6)

Income (loss) before cumulative effect of change in accounting principle**

(478)

707

n.a.

(404)

59

n.a.

Cumulative effect of change in accounting principle**

-

-

-

(352)

-

n.a.

Net income (loss)**

(478)

707

n.a.

(756)

59

n.a.

Net income (loss) per share (EUR /share)**

(0.05)

0.07

n.a.

(0.08)

0.01

n.a.

* All amounts are in thousand EURO, except net loss per share
** Because of the change from a gain to a loss, the exact calculation is ambiguous
*** EBITDA: Earnings Before Income Taxes, Depreciation, Amortization and impairment charge

Telephone conference:
Graphisoft management will hold a telephone conference regarding this statement at 2 p.m. CET, August 8, 2002 for its investors and analysts. To participate, please call: +49 69 27-11-0400.

The complete report can be downloaded here.