SEC report prepared by Stürtz AG

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the month of February 2004

INTERSHOP Communications Aktiengesellschaft

(Name of Registrant)

INTERSHOP Communications Stock Corporation
(Translation of registrant’s Name into English)

Intershop Tower
07740 Jena
Federal Republic of Germany
(011) 49-3641-50-0
(Address and Telephone Number of registrant’s Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F [X]

Form 40-F [_]

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the SEC pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes [ ]

No [X]

If “Yes”is marked, indicate the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

Intershop Communications Reports
Fourth Quarter and Full Year 2003 Financial Results

Positive Net Result For the Fourth Quarter 2003

Jena, Germany –February 13, 2004 - Intershop Communications AG (Prime Standard: ISH1, Nasdaq: ISHP) today announced financial results for the fourth quarter and full year 2003, ended December 31, 2003.

Revenue totaled Euro 4.6 million in the fourth quarter of 2003, as compared to Euro 6.5 million in the third quarter of 2003 and Euro 12.0 million in the fourth quarter of 2002. License revenue totaled Euro 1.5 million in the fourth quarter of 2003, as compared to Euro 2.2 million in the third quarter of 2003 and Euro 6.5 million in the fourth quarter of 2002. Revenue for the full year of 2003 totaled Euro 23.2 million, as compared to Euro 45.1 million for the full year of 2002.

Intershop further reduced its total operational cost (cost of revenue plus operating expense) in the fourth quarter of 2003, with total operational cost declining 33% sequentially to Euro 7.2 million. Compared to the fourth quarter of 2002, Intershop reduced its total operational cost by Euro 6.3 million or 47%. Due to significant restructuring and efficiency measures implemented throughout 2003, Intershop reduced its total annual operational cost in 2003 by 39%, to Euro 45.0 million.

As a result of the continued reduction in total operational cost and other income in connection with terminating business operations in France, Intershop recorded Euro 0.1 in net income in the fourth quarter of 2003 million or Euro 0.00 per share, compared to a net loss of Euro 3.8 million or a net loss of Euro 0.17 per share in the third quarter of 2003. In comparison, Intershop’s net loss in the fourth quarter of 2002 was Euro 1.0 million or a net loss of Euro 0.05 per share. For the full year of 2003, Intershop’s net loss totaled Euro 18.6 million or a net loss of Euro 0.90 per share, compared to a net loss of Euro 27.6 million or a net loss of Euro 1.47 per share for the full year of 2002, a year-over-year reduction of 32%.

Total cash including cash, cash equivalents, marketable securities, and restricted cash declined from Euro 10.9 million as of September 30, 2003 to Euro 8.8 million as of December 31, 2003. Total cash includes freely available cash, which decreased from Euro 4.2 million as of September 30, 2003 to Euro 2.6 million as of December 31, 2003.

 

Operational Highlights for the Fourth Quarter of 2003

Management Review

Dr. Juergen Schoettler, Chief Executive Officer commented, “Faced with challenging market conditions, Intershop ended the fourth quarter of 2003 with total revenues of Euro 4.6 million, resulting in full year 2003 total revenue of Euro 23.2 million. In response to the lower sales levels, Intershop has realigned the Company’s business operations throughout 2003. In the course of these restructurings, Intershop shifted its European sales activities outside Germany to local distributors and reduced its total operational expenses by 39% year over year. As a result, Intershop reduced its full year 2003 net loss by 32% year over year.”

“Stabilizing the Company’s cash position and generating positive operating cash flows remain top priorities. Parallel to these efforts, the Company is exploring external funding opportunities from financial as well as strategic investors. Through these activities and by executing on the planned delisting of Intershop’s American Depositary Receipts (ADRs) from the Nasdaq National Market on February 17, 2004, we expect to facilitate our search for potential investors while at the same time further reducing operational costs.”

“Looking ahead, Intershop will launch Enfinity Suite 6, the latest version of its multi-channel e-commerce software, on March 18, 2004 at CeBIT in Hannover, Germany. The new Enfinity Suite 6 package will include six function modules, which could be deployed as a unified commerce solution or as separate applications, including: Consumer Channel, Business Channel, Partner Channel, Supplier Channel, Procurement Channel, and Content Channel. Each individual package will be optimized for the use of web services and fully supports both Linux and blade systems. With Enfinity Suite 6, Intershop continues its tradition as an innovator in e-commerce software.”

Business Outlook

Based on a reduced total operational cost base achieved in 2003 and against the backdrop of renewed signs of a recovery in corporate IT spending patterns in 2004, the Company expects to break even on an annual net income basis in 2004.

About Intershop

Intershop Communications AG (Nasdaq: ISHP; Prime Standard: ISH1) is a leading provider of software solutions that help organizations evolve their trading relationships with consumers and business partners online. Founded in 1992, Intershop has a long tradition of driving innovation in e-commerce by automating and simplifying sales and buying processes. Intershop Solutions enable organizations to consolidate and manage unlimited online commerce channels on a single platform. As a result, Intershop customers benefit from reduced operating expenses and competitive advantages in their online sales activities. More than 300 enterprise customers worldwide, including Hewlett-Packard, BMW and Homebase, run Intershop Solutions. Four of the five largest e-commerce sites in Germany rely on Intershop Solutions: Otto, Tchibo, Deutsche Telekom, and Quelle. Intershop is headquartered in Jena, Germany, and has branch offices in the United States, Europe and Asia. More information about Intershop can be found on the Web at http://www.intershop.com.

Investor Relations:

Klaus F. Gruendel
T: +49-3641-50-1307
F: +49-3641-50-1002
k.gruendel@intershop.com

Press:

Dana Schmidt
T: +49-3641-50-1000
F: +49-3641-50-1002

d.schmidt@intershop.com

This news release contains forward-looking statements regarding future events or the future financial and operational performance of Intershop. Actual events or performance may differ materially from those contained or implied in such forward-looking statements. Risks and uncertainties that could lead to such difference could include, among other things: Intershop's limited operating history, the unpredictability of future revenues and expenses and potential fluctuations in revenues and operating results, significant dependence on large single customer deals, consumer trends, the level of competition, seasonality, risks related to electronic security, possible governmental regulation, and general economic conditions. Additional information regarding factors that potentially could affect Intershop's business, financial condition and operating results is included in Intershop's filings with the Securities and Exchange Commission, including the Company's Form 20-F dated June 6, 2003.

 

 

Intershop Communications AG
Consolidated Balance Sheets (U.S.GAAP)
(in thousands €, except share and per-share amounts)

 

December 31,

December 31,

 

2003

2002

(unaudited) 

 

ASSETS

€

€

Current assets

 

 

Cash and cash equivalents

2,611

11,303

Marketable securities

-

4,172

Restricted cash

6,190

7,073

Trade receivables, net of allowances for doubtful accounts of

 

 

€5,254 at December 31, 2003 and €7,511 at December 31, 2002, respectively

3,418

11,131

Prepaid expenses and other current assets

1,297

7,427

Total current assets

13,516

41,106

Property and equipment, net

1,106

4,301

Other assets

557

2,268

Goodwill

4,473

4,473

Total assets

19,652

52,148

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Current liabilities

 

 

Current debt and current maturities of long-term debt

-

98

Accounts payable

249

840

Accrued restructuring costs

2,657

4,881

Other accrued liabilities

3,827

13,472

Deferred revenue

5,058

6,295

Total current liabilities

11,791

25,586

Long-term liabilities, net of current portion

-

152

Deferred revenue

23

38

Total liabilities

11,814

25,776

 

 

 

Shareholders' equity

 

 

Common share, stated value €1-authorized: 78,567,219 shares;

 

 

outstanding: 22,035,299 shares at December 31, 2003 and 19,306,400

 

 

shares at December 31, 2002, respectively

22,035

19,306

Accumulated deficit

(17,245)

4,124

Accumulated other comprehensive income

3,048

2,942

Total shareholders' equity

7,838

26,372

Total liabilities and shareholders' equity

19,652

52,148

 

Intershop Communications AG
Consolidated Statements of Operations (U.S.-GAAP)
(In thousands €, except per-share amounts, unaudited)

 

Three Months Ended

Twelve Months Ended

 

December 31,

December 31,

 

2003

2002

2003

2002

 

€

€

€

€

Revenues

 

 

 

 

Licenses

1,484

6,493

6,505

22,462

Services, maintenance, and other

3,134

5,462

16,654

22,635

Total revenues

4,618

11,955

23,159

45,097

 

 

 

 

 

Cost of revenues

 

 

 

 

Licenses

127

115

523

1,288

Services, maintenance, and other

2,139

3,751

11,522

17,814

Total costs of revenues

2,266

3,866

12,045

19,102

 

 

 

 

 

Gross profit

2,352

8,089

11,114

25,995

 

 

 

 

 

Operating expenses

 

 

 

 

Research and development

1,275

1,421

6,260

7,225

Sales and marketing

1,308

6,975

14,181

29,363

General and administrative

1,986

1,313

8,964

12,760

Restructuring costs and asset impairment

335

(115)

3,554

5,326

Total operating expenses

4,904

9,594

32,959

54,674

 

 

 

 

 

Operating loss

(2,552)

(1,505)

(21,845)

(28,679)

 

 

 

 

 

Other income (expense)

 

 

 

 

Interest income

406

218

609

651

Interest expense

-349

(7)

-374

(31)

Other income (expense), net

2,579

257

2,970

504

Total other income (expense)

2,636

468

3,205

1,124

 

 

 

 

 

Net loss

84

(1,037)

(18,640)

(27,555)

Basic and diluted result per share

0.00

(0.05)

(0.9)

(1.47)

 

 

 

 

 

Shares used in computing:

 

 

 

 

For basic and diluted result per share

22,035

19,306

20,749

18,731

 

Intershop Communications AG
Consolidated Statements of Cashflows (U.S.GAAP)
(in thousands €, unaudited)

 

Year Ended
December 31,

 

2003

2002

 

 

 

 

€

€

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

Net loss

(18,640)

(27,555)

Adjustments to reconcile net loss to cash used in operating activities

 

 

Depreciation and amortization

3,181

9,115

Non-cash effects from deconsolidation

(2,521)

 

Provision for doubtful accounts

(1,595)

(4,686)

(Gain) loss on disposal of marketable securities

(40)

152

(Gain) Loss on disposal of property and equipment

(114)

689

Changes in operating assets and liabilities

 

 

Accounts receivable

8,660

4,809

Prepaid expenses and other current assets

5,844

2,497

Other assets

1,599

1,104

Accounts payable

(483)

(2,643)

Deferred revenue

(504)

818

Accrued restructuring costs

(1,455)

(5,773)

Accrued expenses and other liabilities

(7,283)

(1,270)

Net cash used in operating activities

(13,351)

(22,743)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Restricted cash

882

800

Proceeds on disposal of equipment

286

536

Purchases of property and equipment, net of capital leases

(368)

(670)

Proceeds from sale of marketable securities

8,294

47,541

Purchases of marketable securities

(4,162)

(32,498)

Net cash (used in) provided by investing activities

4,932

15,709

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

Cash received for unregistered stock

-

10,005

Net cash provided by financing activities

-

10,005

Effect of change in exchange rates on cash

(273)

(775)

Net change in cash and cash equivalents

(8,692)

2,196

Cash and cash equivalents, beginning of period

11,303

9,107

Cash and cash equivalents, end of period

2,611

11,303

 

Intershop Communications AG
Consolidated Statement of Shareholders’ Equity
(in thousands €, except share data)

 

Common
Shares

Common Shares
Stated Value

APIC

Accumulated
Deficit

Accumulated Other Comprehensive
Income

Total Shareholders’
Equity

Balance, January 1, 2001

88,003,016

88,003

168,585

(84,329)

1,709

173,969

Other comprehensive loss:

 

 

 

 

 

 

Net loss

 

 

 

(131,798)

 

(131,798)

Foreign currency translation adjustments

 

 

 

 

837

837

Unrealized gain (loss) on available for sale security, net

 

 

 

 

348

348

Comprehensive loss

 

 

 

 

 

(130,613)

Exercise of stock options

188,306

188

330

 

 

518

Appropriation of paid in capital

 

 

(155,495)

155,495

 

 

Balance, December 31, 2001

88,191,322

88,191

13,420

(60,632)

2,894

43,874

Other comprehensive loss:

 

 

 

 

 

 

Net loss

 

 

 

(27,555)

 

(27,555)

Foreign currency translation adjustments

 

 

 

 

157

157

Unrealized gain (loss) on available for sale security, net

 

 

 

 

(109)

(109)

Comprehensive loss

 

 

 

 

 

(27,507)

Exercise of stock options

6,678

7

(3)

 

 

4

Private placement of common stock, net

8,334,000

8,334

1,667

 

 

10,001

Allocation of par value resulting from reverse stock split

(77,225,600)

(77,226)

77,226

 

 

 

Appropriation of additional paid-in capital

 

 

(92,310)

92,310

 

 

Balance, December 31, 2002

19,306,400

19,306

-

4,124

2,942

26,372

Other comprehensive loss:

 

 

 

 

 

 

Net loss (unaudited)

 

 

 

(18,640)

 

(18,640)

Foreign currency translation adjustments (unaudited)

 

 

 

 

(83)

(83)

Unrealized gain (loss) on available for sale security, net (unaudited)

 

 

 

 

189

189

Comprehensive loss

 

 

 

 

 

(18,534)

Conversion of common stock of subsidiary

 

 

 

 

 

 

to common stock of parent (unaudited)

2,499,999

2,500

 

(2,500)

 

 

Conversion of preferred stock of subsidiary

 

 

 

 

 

 

to common stock of parent (unaudited)

228,900

229

 

(229)

 

 

Balance, December 31, 2003

22,035,299

22,035

 

(17,245)

3,048

7,838

 

 

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INTERSHOP Communications Aktiengesellschaft

Date: February 13, 2004

By: /s/ Dr. Juergen Schoettler


Dr. Juergen Schoettler

Chief Executive Officer

(Vorstandsvorsitzender)