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Graphisoft announced 2003 third quarter results

Operating profit for the fourth consecutive quarter; € 1.6 million year-on-year revenue improvement in 2003 third quarter

Budapest, November 12, 2003 - Graphisoft announced today 2003 third quarter results. In the three-month period revenues grew by 36.8% to € 6.1 million, and nine-month revenues improved by 8.8% to € 19.2 million, compared to 2002 results. Following the operating loss of Q3 2002, Graphisoft made an operating profit of € 318 thousand and € 1.8 million in the three-, and nine-month periods, respectively.

Revenues deriving from the major localized versions of ARCHICAD 8 boosted third quarter revenues and, as a result, Graphisoft's sales performance showed an improvement in all geographic regions compared to the same reporting period of 2002.

In the facilities management (FM) business line, revenues grew both in the three-, and nine-month periods, primarily due to a more effective business strategy which was implemented and more streamlined operations.

In the third quarter of 2003, Graphisoft continued to focus on cost savings as well: costs of revenues decreased by 19.4% (from 813 thousand EUR to 655 thousand EUR) and 24.7% (from 2.7 million EUR to 2,0 million EUR) in the three-, and nine-month periods ended September 30, 2003, respectively. Operating expenses were reduced by 14.5% (from 6,0 million EUR to 5.1 million EUR) and 10.8 % (from 17.3 million EUR to 15.4 million EUR) in the three-, and the nine-month periods. The lower operating expense level is mainly attributed to effectively reduced sales, marketing and development costs.

Due to stronger sales results and decreased operating expenses, Graphisoft realized an operating profit of 318 thousand EUR and 1.8 million EUR in the three-, and the nine-month periods ended September 30, 2003, respectively.

On October 22, Graphisoft launched ARCHICAD 8.1, the new version of its flagship product. Since ARCHICAD 8.1 is not a major upgrade, revenues deriving from it are expected to influence the Company's fourth quarter results to a proportionally lesser degree than experienced in 2002.

"Taking into consideration the extremely low, 4.4 million revenues of the third quarter of 2002, we must not overrate increased revenues in the same reporting period of 2003" - said Dominic Gallello, CEO of Graphisoft. "However, revenue improvement realized during the nine-month period will likely help to achieve the slight revenue increase and profitability forecasted for 2003.

KEY FIGURES*
3 months ended
September 30
% of change
9 months ended
September 30
% of change
2003
2002
03/02
2003
2002
03/02
Revenues
6,072
4,438
36.8
19,218
17,666
8.8
Gross profit
5,417
3,625
49.4
17,196
14,982
14.8
Operating expenses
5,099
5,961
(14.5)
15,399
17,263
(10.8)
Operating income
318
(2,336)
n.a. ***
1,797
(2,281)
n.a. ***
EBITDA**
792
(1,867)
n.a. ***
3,249
(905)
n.a. ***
Net income (loss)
62
(1,937)
n.a. ***
1,639
(2,693)
n.a. ***
Net income (loss) per share (€/ share)
0.01
(0.19)
n.a. ***
0.16
(0.27)
n.a. ***

*All amounts are in thousand €, earnings per share are in €.
** EBITDA: Earnings Before Interest, Tax, Depreciation, Amortization
*** n.a.: the exact calculation is ambiguous

Telephone conference:

Graphisoft management will hold a telephone conference regarding this statement at 2:00 pm CET, Wednesday, November 12, 2003 for investors, analysts and journalists. To participate, please dial +49 69 27110 400. The telephone conference will be recorded and available at +49 69 920 53 444 for 24 hours after the conference call.

The complete report can be downloaded here.