Artwork Systems Evaluates Strategic Options

GENT, Belgium—Artwork Systems Group announced that it will evaluate its strategic options for the future of the company, after its first quarter 2007 financial revenues decreased by 7.18 percent from the first quarter of 2006. Consolidated revenues for the quarter amounted to 11.15 million euro, 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 percent compared to 3.34 million.

The company’s board of directors has mandated ING Corporate Finance to review all strategic options, such as a capital restructuring, a partnership, and/or a sale to a strategic partner. The strategic exercise is currently only in a preliminary phase.

“Being a referential shareholder, we continuously evaluate all strategic options to safeguard the future of the company in the interest of all stakeholders—staff, management, shareholders, and customers,” says Guido Van der Schueren, chairman of the board of directors.

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 during the four-day 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 percent and services amounted to 36 percent. The gross margin amounted to 83.19 percent. The company’s management confirms that these results indicate a slow start for the year, but this was expected, as business remains weak.The percentage of revenues for each regional market changed slightly. The share of the Americas increased from 39 percent to 41 percent while Europe decreased from 54 percent to 49 percent. Asia’s share increased from 5 percent to 8 percent while the rest of the world remained stable at 2 percent. Artwork Systems says the decrease of the U.S. dollar had a negative impact of 3.4 percent on net revenue for the first quarter of fiscal year 2007.

Artwork Systems confirms its outlook for this fiscal year of annual revenue between approximately 46 and 47 million euro, with a net profit between approximately 11 and 11.5 million euro.