Interim Report 1st quarter, 2000

INTERIM REPORT st 1 quarter, 2000 OPERATING RESULT BEFORE ITEMS AFFECTING COMPARABILITY AND WRITE-DOWN OF GOODWILL: -26.3 (-35.6) MSEK DIVESTMENT OF INTACTIX COMPLETED WHICH YIELDS PRICER AROUND 140 MSEK STILL WEAK ESL MARKET BRITT SANDBERG NEW PRESIDENT IN THE COMPANY OPERATION The market for Pricer's ESL systems was developing positively in the first quarter, however at a low level. The order inflow for Pricer's ESL systems increased to 27.0 (10.9) MSEK, primarily from the company's distributors in South Korea and Japan. The order backlog amounted to 149 (226) MSEK as per March 31, 2000. As announced earlier, a major part of the order backlog, 71 per cent, is from Pricer's partners, including Migros in Turkey, where the time for call-off has not been determined. Pricer still considers it uncertain if and when call-off orders could be received. During the quarter, Pricer and Netplex Group, Inc. have signed an agreement for distribution of Pricer's ESL systems, primarily on the American market. Netplex is a leading supplier of consulting and systems integration services to the retail industry with 15 years experience serving many of the major retailers throughout the U.S. Initially, the main focus will be the U.S. market, but the agreement allows for co- operation in a large number of geographical areas. Lawsuit In July 1999, the former owners of the subsidiary Intactix International, Inc. in the U.S. sued Pricer AB and others for 28 MUSD plus legal fees and punitive damages. The outcome of this litigation is uncertain and may lead to a future liability. However, Pricer still considers that the claim is ungrounded. Therefore, no accrual has been recorded for possible damages. Divestment of Intactix The divestment of Intactix to the American company JDA Software Group, Inc. was completed in April 2000. This will yield Pricer liquid assets of around 140 MSEK net after divested cash balance in Intactix. NET SALES AND RESULT The net sales during the first quarter amounted to 57.0 (73.5) MSEK. Deliveries of Pricer ESL systems were limited, amounting to 4.0 (20.7) MSEK. The Intactix operation had net sales of 53.0 (52.8) MSEK for the same period. The operating expenses for the first quarter amounted to 71.9 (81.3) MSEK and included one off costs of around 6 MSEK. The operating first quarter result before items affecting comparability and write-down of goodwill, market and industrial rights was -26.3 (-35.6) MSEK. The first quarter operating result was -31.8 (-46.8) MSEK and the net result was -30,4 (-56.4) MSEK. FINANCIAL POSITION The cash-flow from operations was -24.3 (-31.9) MSEK in the first quarter. The Group's disposable liquid assets - liquid funds and unutilized overdraft - amounted to 102.7 (35.3) MSEK as per March 31, 2000. A substantial additional cash injection was received after the end of the report period in connection with the divestment of Intactix. At the Annual General Meeting, a proposal will be made that the share capital of the parent company be reduced in order to obtain a better balance between share capital and shareholder´s equity. INTANGIBLE ASSETS The Group's intangible assets primarily consist of goodwill relating to Intactix, market rights for ESL systems in North America (Pricer, Inc.) and patents for the ESL operation. Intactix was divested after the end of the report period. The valuation of market rights is based on a forecast that supports the opinion that the market value is on a par with the booked value. The remaining booked value is not vital for the survival of the company. INVESTMENTS The total first quarter investments amounted to 0.7 (1.8) MSEK and pertained primarily to production tools, computers and office equipment. All product development has been expensed. PERSONNEL In the first quarter, the average number of employees in the Group amounted to 212 (288), while the number of employees as per March 31, 2000 amounted to 214 (296), 47 (97) of which in Pricer ESL. PARENT COMPANY The parent company's net sales for the first quarter was 4.0 (20.6) MSEK. The operating result for the period was -22.6 (-28.4) MSEK. The parent company's liquid assets amounted to 83.0 (7.2) MSEK at the end of the period. IMPORTANT EVENTS AFTER THE END OF THE REPORT PERIOD An agreement was made during the first quarter with the American company JDA Software Group, Inc. pertaining to a divestment of the Intactix operation. This will yield Pricer liquid assets of around 140 MSEK net after divested cash balance in Intactix. The transaction was completed on April 6, 2000. As of May 12, 2000, Britt Sandberg will be President of Pricer AB. Prior to this, she has been President of Pricer's core business, the ESL operation. In connection with the divestment of Intactix, President Thomas Landberg will leave his operating role in the company. It is proposed that he remain on the Board of the company. FORECAST After the divestment of Intactix, the Pricer result will only be affected by the development of the ESL market. It is estimated that the negative cash-flow will be reduced as a result of lower expenses, and also as an effect of increased sales. NEXT REPORT DATE The interim report for the period January - June 2000 will be published on August 23, 2000. Uppsala, May 11, 2000 Pricer AB (publ) Thomas Landberg President (This report has not been subject to a review by the company's auditors.) For further information, please contact: Thomas Landberg/Britt Sandberg, President and CEO, Pricer AB +46 18 188 100 Pricer AB (publ) was founded in 1991 in the city of Uppsala, Sweden and has built a leading position on the world market for electronic display- and information systems to the retail industry. Pricer offers electronic information systems with the purpose to considerably improve the customer benefit and improve the profitability of the retail market and its suppliers. Through the competent partners that Pricers cooperates with, the customer is offered a totally integrated solution together with the complementary products, applications and services offered by our partners. The share of Pricer is listed on the O-list of OM Stockholm Stock Exchange. For further information please visit Pricer´s website at www.pricer.se . It is also possible to register and automatically receive press releases via e-mail. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/05/11/20000511BIT01040/bit0001.pdf The full report http://www.bit.se/bitonline/2000/05/11/20000511BIT01040/bit0002.doc The full report