Member of Supervisory Board and former Managing Director, Global Sales of Reuters appointed Honorary President
Brainpower (Neuer Markt: BPW), provider of investment analysis and decision-support software tools for the investment community, today revised its revenue outlook reflecting weakened market conditions. The Company also announced cost reductions of approximately EU2.0 million per annum and the strengthening of its senior management team.
Management anticipates sales for the third quarter ending September 30, 2001 will equal approximately EU3.0 million. This revised outlook reflects overall negative market conditions. Specifically, the lengthening of the decision process on IT spending by financial service providers has had a much greater adverse impact on revenues for August and into September than anticipated.
While visibility is low, management believes adverse market conditions will continue through the fourth quarter. Consequently, revenues for the full year ending December 31, 2001 will be approximately 23% below analyst consensus estimates of EU10.4 million at EU8.0 million. While this revenue figure is lower than management’s expectations, it represents a 122% increase over full year revenue ended December 31, 2000.
Through the cost reduction program announced today, Brainpower is targeting savings of approximately EU2.0 million per annum. The cost reductions will include some non-sales related marketing activities as well as reductions in legal and accounting expenses, which will not impact the future growth of the Company. This action will lead to a minimal restructuring charge in the third quarter.
As a result of both the revised revenue forecasts and the cost reduction program, management believes Brainpower will now become EBITDA positive in the fourth quarter 2002.
A further action announced today sees senior management strengthened with the appointment of Mr. Maurizio Pescosolido to the position of Honorary President. Mr. Pescosolido is currently a member of Brainpower’s Supervisory Board and former Managing Director, Global Sales and Operations of Reuters. He brings a wealth of knowledge and experience with worldwide, high-level industry contacts, to Brainpower’s management team.
"Our business is still growing but at a slower pace due to extremely negative market conditions," stated Brainpower CEO, Rocco Pellegrinelli. "We believe this will not change our medium-term growth potential, as our products remain mission-critical to investment management by improving performance, increasing revenues and reducing costs. However, in this tougher environment we felt the need to adjust our cost base, as becoming EBITDA positive during 2002 remains our top priority. The cost cuts will not hinder our sales and marketing efforts, and we will continue to focus on large strategic partnerships as part of the Company’s strategy."
Brainpower is a developer and supplier of investment analysis and decision support tools for investment professionals and online financial service providers. Brainpower’s solutions are differentiated by their advanced capabilities to support enhanced decision-making for investment professionals and their clients, including retail investors.
The organisation’s high-end decision support tools for investment professionals, Brainpower Finest and Brainpower TOP FUNDS, support the analysis and management of stocks, mutual funds and portfolios. The technology is database-independent operating in a client/server environment. Based on recognised industry standards and solutions, the technology can be fully integrated into a client’s existing technological environment.
The newly developed Brainpower NetXceed supplies the key functionalities of Brainpower Finest and Brainpower TOP FUNDS offering for online financial service providers. Brainpower COMPETE! and Brainpower Friends are innovative tools for marketing and sales professionals in the financial services sector facilitating client acquisition and retention. Customers include leading players in the fields of asset management, private banking and online financial services.
Brainpower is currently represented in major financial centres through fourteen offices: Amsterdam, Dublin, Edinburgh, Frankfurt, Hong Kong, London, Lugano, Milan, Madrid, New York, Paris, Singapore, Stockholm and Zurich.
For further information see: http://www.brainpowerweb.com
Curtis E. Fox
Director, Communications & Investor Relations
Tel : +44 (0) 20 7392 7117
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