US GAAP financial statements 2001

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 US GAAP financial statements 2001 (previous year):
– Net sales: EUR 9.4 million (EUR 15.3 million)
– Net earnings per share: EUR -1.20 (EUR -1.66)
– Restructuring successfully concluded
Outlook for 2002: substantially improved earnings

Hoofddorp, The Netherlands, March 21, 2002
ad pepper media, one of the leading European online advertising marketers, successfully concluded its restructuring program during fiscal year 2001. The weak markets and the simultaneous focus on profitable products and countries caused group sales to fall by 39% to a total of EUR 9.4 million after EUR 15.3 million in 2000. High restructuring and one-off costs also depressed earnings. EBIT (without restructuring costs of EUR 0.8 million) fell by 32% to EUR -14.0 million, the consolidated net loss for the year increased by 38% to EUR -13.3 million.

The online advertising market has picked up again slightly over the last few months. In view of this, the perceivable success of the new products and services and the strong reduction in costs allow a substantial improvement in all of the company’s key indicators – with the aim of breaking even in the foreseeable future.

Sales downturn:
2001 was marked by both a weak industry and also by active corporate restructuring by ad pepper media. The company withdrew from six unprofitable countries and drastically reduced its sales from pure advertising banners – which are facing enormous pressure, both from competitors and on prices. As a result, consolidated sales fell by 39% during fiscal year 2001 to EUR 9.4 million, after totaling EUR 15.3 million in 2000.

Restructuring measures successfully concluded:
ad pepper media significantly improved its cost structures last year, although the effects will only really bear fruit during the current fiscal year 2002. The company’s international competitive ability was not affected by its withdrawal from several countries, as ad pepper media concluded several global sales cooperation agreements. In terms of products and services, ad pepper media improved its position significantly last year. The company was able to develop from its role as a pure marketer of advertising space to become a full-service provider for complex online marketing solutions thanks to numerous innovative products – such as iLead and iOptin. This will also help to significantly revitalize the company from 2002.

Earnings down due to extraordinary costs:
The company’s withdrawal from various countries, the reduction in administrative costs, the heavy staff cuts from 185 employees in 2000 to 101 in 2001 and one-off expenses for redundancy payments and the annulment of contracts depressed earnings substantially in 2001. EBIT (without restructuring costs of EUR 0.8 million) fell by 32% to EUR –14.0 million (EUR -10.6 million). The consolidated net loss for the year increased by 38% to EUR -13.3 million (EUR -9.6 million). The net earnings per share totaled EUR -1.20 after EUR -1.66 in 2000.

Strong balance sheet allows further expansion:
Despite its loss-making situation in 2001, ad pepper media still has a very solid balance sheet structure: the equity ratio totaled 87% on December 31, 2001, and its cash position totaled EUR 39.6 million, or 81% of total assets. The cash and cash equivalents thus totaled EUR 32.1 million, or EUR 2.90 per share. The book value (equity) totaled EUR 34.4 million or EUR 3.11 per share, with a current share price of around EUR 1.20. This extremely solid cushion will allow further targeted expansion – as underscored by the recent acquisition of the Danish company Pentamind A/S (61.6% on December 1, 2001).

Positive outlook for 2002:
A substantial upturn on the advertising market for the current fiscal year 2002 has been forecasted; the first positive signs can already be seen. ad pepper media is forecasting strong improvement for all of its key indicators and a substantial increase in sales thanks to its reinforced market position and new products. However the earnings situation is even more important for ad pepper media: significantly higher gross profits, a lean organizational structure and the elimination of restructuring costs will perceptibly reduce losses.

Reaching Break-even has highest priority.

General Shareholder Meeting: April 25, 2002
Quarterly reports: May, August and November 2002