Artwork Systems Announces Q1 Results, Evaluating Strategic Options Including Possible Sale

GENT, BELGIUM—2/16/07—Artwork Systems Group N.V. (EURONEXT: ARTS), a world leader in professional pre-press software, announces the financial results for the first quarter of its financial year 2007, ended December 31, 2006. Consolidated revenues for the quarter amounted to 11.15 million euro, a decrease of 7.18% compared to 12.01 million euro in the first quarter of fiscal year 2006, and net income amounted to 2.55 million euro, a decrease of 23.55% compared to 3.34 million in the first quarter of fiscal year 2006.

First quarter highlights

On October 16, 2006, Artwork Systems announced that it had confirmed an OEM agreement with Screen. Under the agreement, Screen integrates ArtPro, Artwork Systems’ specialized packaging software, within its Trueflownet prepress environment to give users powerful packaging production capabilities.

At the same time, the company announced excellent sales results at the Graph Expo trade show in Chicago, Illinois (October 15-18, 2006). Order intake amounted to 2.1 million USD during the four days show. It was also the occasion to launch Equinox, a revolutionary color management system for the packaging industry. The launch was successful and the first substantial revenue is expected in fiscal year 2008.

During the first quarter of fiscal year 2007, the split in revenue was as follows: products amounted to 64% and services amounted to 36%. The gross margin amounted to 83.19%. The company’s management confirms that these results indicate a slow start for the year, but this was expected, as business remains weak. Management, however, confirms the outlook for FY2007.

The percentage of revenues for each regional market changed slightly. The share of the Americas increased from 39% to 41% while Europe decreased from 54% to 49%.

Asia’s share increased from 5% to 8% while the Rest of the World remained stable at 2%.