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Artwork Systems Group Announces FY2006 Results: Profits Up by 9%

Press release from the issuing company

Ghent, Belgium – May 24, 2006 – Artwork Systems Group N.V., a world leader in professional pre-press software, today announces the financial results for the second quarter and the first semester of its financial year 2006, ended March 31, 2006. Consolidated revenues for the second quarter amounted to 12.55 million euro, an increase of 11.06% compared to the 11.30 million euro in the second quarter of fiscal year 2005, and net income amounted to 3.03 million euro, a decrease of 0.85% compared to the 3.05 million euro in the second quarter of fiscal year 2005. Consolidated revenues for the first semester amounted to 24.57 million euro, an increase of 4.04% compared to the 23.61 million euro in the first half year of financial 2005. Net income (*) amounted to 6.37 million euro, an increase of 8.10% compared to the 5.89 million euro for the first semester of financial 2005. Net income amounted to 6.37 million euro, an increase of 9.02% compared to the 5.84 million euro for the first semester of financial 2005. First Semester Highlights Artwork Systems announced sales results beyond expectation at Graphitec 2006, the French exhibition for the graphic arts industry. The exhibition took place in Paris, France from March 15-18, 2006, and welcomed 23,304 visitors from different French-speaking countries. Order intake for Graphitec amounted to 450,000 euro, primarily from sales of Odystar Packaging, which was officially launched in France during the exhibition. On March 27, Artwork Systems announced that the company had signed a commercial partnership with Punch Graphix N.V., who designs, develops and delivers digital printing and prepress solutions for the global graphics industry through its brands Xeikon and basysPrint. Under this partnership, Artwork Systems and Punch Graphix promote each other’s products and inform each other when prospects or clients are interested in investing in a basysPrint CtP or front-end packages for the packaging and high-end commercial printing segments. On March 30, Artwork Systems announced a partnership agreement with Stork Prints with the aim of enhancing the workflow in the pre-production stages of Stork's direct laser engraving process. Stork Prints develops and produces (as the only company in the world to do so) rotary screen-printing systems and digital systems for all process steps in the printing process, both for the textile and graphic printing market. Under the agreement, Stork Prints will enable all engraving systems to be fully compatible with Artwork Systems' Nexus comprehensive RIP (raster image processing) workflow solution for label and packaging environments. At the same time, both Artwork Systems and Stork Prints will establish a working group dedicated to further development of the software and workflow for laser engraving technology. During the first semester of fiscal year 2006, the split in revenue was as follows: the ArtPro product range amounted to 19%, the Nexus product range amounted to 23%, the Odystar product range amounted to 5%, the Enfocus product range amounted to 21%, and services amounted to 32%. The percentage of revenues for each regional market remained relatively stable. The share of the Americas decreased from 41% to 40% while Europe increased from 52% to 53%. Asia’s share increased from 4% to 5% while the rest of the world decreased from 3% to 2%. The increase in the U.S. dollar had a positive impact of 3.2% on the revenue during the first semester. The financial loss is due to the decrease in the U.S. dollar on balance sheet date with a direct impact on net profit. Guido Van der Schueren, Chairman of the Board, comments: "Driven by strong demand for our new products, our business groups continue to perform well. In addition to our healthy financial results, we are making rapid progress integrating Artwork Systems’ and Enfocus’ business, creating new prospects for future growth." Share Buy Back Program During the month of July 2005, Artwork Systems Group started implementing the share buy back program, approved by the annual shareholders' meeting on January 28, 2005. On March 31, 2006, 1,028,795 euro was accounted for as Treasury Stock (deducted from equity), representing 96,525 shares. Dividend Payment The shareholders’ meeting on January 27, 2006 approved a dividend payment of 1.00 euro gross per share, which was paid to the shareholders on April 3, 2006. New Headquarters At the end of April, Artwork Systems moved their Ghent headquarters to a new location, the Artwork Toren (previously known as the "UCO Toren") in Ghent. The Enfocus division moved to the same location during the month of May. All employees together occupy six floors in the building. An official opening will follow later in the year. Outlook 2006 The company confirms its outlook for this fiscal year of annual revenue between approximately 48.5 and 50 million euro, with a net profit between approximately 12 and 12.5 million euro.