Artemis reports second quarter 2003 financial results

NEWPORT BEACH, CA – August 14, 2003 -- Artemis International Solutions Corporation (OTCBB: AMSI), one of the leading providers of enterprise portfolio and project management software solutions, today reported its financial results for the second quarter 2003.

Artemis reported $13.5 million in total revenue for the second quarter of 2003, compared with $17.6 million for the second quarter of 2002. Software license revenue totaled $3.1 million in the second quarter of 2003, remaining consistent with the same quarter of 2002. US GAAP reported net loss for the quarter ended June 30, 2003, was $4.0 million, or $(0.40) per common share; as compared to the net loss of $(0.6) million, or $(0.06) per common share, for the comparable 2002 period. The Company incurred a loss before interest, taxes, depreciation and amortization (EBITDA) of $2.4 million for the quarter ended June 30, 2003, compared with positive EBITDA of $1.5 million for the prior year quarter. Year-to-date software revenue increased to $7.7 million, compared to $6.3 million, for the comparable 2002 period.

"The loss is largely attributed to a decrease in professional services revenue and the company’s migration towards its newly introduced web-based Artemis 7 application," stated Mike Rusert, President & CEO of Artemis International. "We anticipate additional reductions in future operating expenses to match the reduction in overall revenue."

Artemis 7 was released in late July and is a Web-based, enterprise portfolio management software, designed to provide operational transparency to corporate executives both vertically and horizontally through the organization. The Artemis 7 management framework provides transparency into corporate assets, capital investments and all related transactions.

The revenue shortfall was seen primarily in the Company’s consulting services business. During 2002 the Company earned approximately 26% of worldwide revenues under contracts with several significant customers in the United States. The software implementation and related services for these customers were completed earlier than expected in 2003, reducing ongoing consulting services correspondingly.

The Company has secured a $5 million accounts receivable-based debt facility with Laurus Master Fund Ltd. The agreement contains a unique put and call equity conversion feature at a set premium to today’s market price subject to certain limitations.

About Artemis International Solutions Corporation

Artemis International Solutions Corporation is one of the world’s leading providers of enterprise project and portfolio management software solutions for all levels of the enterprise -- from the executive to the knowledge worker. Artemis’ solutions are supported by industry-leading consulting services and an international distribution network of 40 offices in 27 countries. Artemis has over 500,000 users around the world, and services key vertical markets such as Aerospace and Defense, Energy & Telecom, High Technology, Pharmaceutical, Government, Automotive and Financial Services. The common stock of the company trades under the symbol "AMSI" on the OTCBB.

Forward Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains or may contain forward-looking statements such as statements regarding the Company’s growth and profitability, growth strategy, liquidity and access to public markets, operating expense reduction and trends in the industry in which the Company operates. These forward-looking statements are based on current expectations and are subject to a number of risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements are detailed in the documents filed by the Company with the Securities and Exchange Commission including but not limited to those contained under the Risk Factors section of Form 10-K for the year ended December 31, 2001. The Company assumes no obligation to update these forward-looking statements to reflect actual results, changes in risks, uncertainties or assumptions underlying or affecting such statements or for prospective events that may have a retroactive effect.

ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

Consolidated Financial Highlights (unaudited)

			Three Month Ended June 30,				Six Months Ending June 30,
			2003	% Total	2002	% Total	2003	% Total	2002	% Total
			(in thousands except per share data)
Statement of Operations Data:
Revenues:
	Software		$3,063	22%	$3,157	18%	$7,673	26%	$6,309	19%
	Support		4,026	30%	4,119	23%	8,320	28%	8,092	24%
	Services		6,379	47%	10,316	59%	13,670	46%	18,927	57%
			13,468	100%	17,592	100%	29,663	100%	33,328	100%
Cost of revenue:
	Software		165	1%	440	3%	425	1%	925	3%
	Support		1,285	10%	1,518	9%	2,628	9%	3,195	10%
	Services		5,148	38%	6,253	36%	10,772	36%	11,995	36%
			6,598	49%	8,211	47%	13,825	47%	16,115	48%
	Gross margin		6,870	51%	9,381	53%	15,838	53%	17,213	52%
Operating expenses:
	Selling and marketing		4,154	31%	3,012	17%	8,117	27%	5,724	17%
	Research and development		2,007	15%	1,978	11%	4,149	14%	4,042	12%
	General and administrative		3,349	25%	3,675	21%	6,018	20%	7,335	22%
	Amortization expense		1,029	8%	1,050	6%	2,058	7%	2,086	6%
			10,539	78%	9,715	55%	20,342	69%	19,187	58%
		Operating loss	(3,669)	-27%	(334)	-2%	(4,504)	-15%	(1,974)	-6%
Non Interest Expense			19	0%	55	0%	45	0%	81	0%
Other non-operating (income) expense, net			113	1%	(107)	-1%	56	0%	291	1%
			132	1%	(52)	0%	101	0%	372	1%
Loss before income taxes			(3,801)	-28%	(282)	-2%	(4,605)	-16%	(2,346)	-7%

Income tax expense			201	1%	321	2%	305	1%	370	1%

		Net loss	$(4,002)	-30%	$(603)	-3%	$(4,910)	-17%	$(2,716)	-8%

		Basic and diluted loss per common share	$(0.40)		$(0.06)		$(0.49)		$(0.27)
		Weighted average common shares used in computing basic and diluted loss per common share	9,965		9,965		9,965		9,965

Reconciliation of Net loss to EBITDA:
Net loss			$(4,002)		$(603)		$(4,910)		$(2,716)
Deprecieation and Amortization			1,414		1,693		2,759		3,262
Interest			16		55		45		81
Taxes			201		321		305		370
EBITDA (1)			$(2,368)		$1,466		$(1,801)		$997

Net cash provided by (used in) operations			$(1,889)		$113		$(502)		$(717)

(1)	Represents net income (loss) before depreciation and amortization, interest income and expense, and income tax expense/benefit. EBITDA is not determined in accordance with generally accepted accounting principles, is not indicative of cash provided by or used in operating activities and should not be considered in isolation, as an alternative to, or more meaningful than measures of performance determined in accordance with generally accepted accounting principles