TIE Kinetix N.V. (“TIE”) reports the following highlights with regard to Q4 of 2013 (July 1, 2013 – September 30, 2013) and full year 2013 (October 1, 2012 – September 30, 2013).

Operational Performance:
• Revenue for the Q4, 2013 amounts to € 3,323k, a decrease of 3.7% compared to the same period in 2012 (€ 3,451k) caused by the loss of customer CNETearlier in the year.

• Net Income for the Q4, 2013 amounts to a loss of € 690k, which includes an impairment loss of € 679k. (Q4, 2012: net income profit of €560k, consisting of an impairment gain of € 64k and an operational profit of € 448k).
• SaaS revenue is € 1,230k for Q4, 2013 (37% of revenue), a decrease of 1% compared to € 1,237k in the same period in 2012 (36% of revenue). Many new SaaS accounts have been signed, which has almost completely balanced the loss of CNET revenue earlier in the year.

• Revenue for 2013 amounts to € 14,293k an increase of 14% compared to 2012 (€12,494k).
• Net Income for 2013 amounts to a loss of €1,280k, compared to a profit of € 652k for 2012; this partly caused by higher one time legal fees (€ 120k), office integration and moving costs (€ 77k), higher costs of investor relations activity (€ 105k), severance payments and temporary staff (€ 203K), other non-recurring costs (€ 46k) and an impairment loss (€ 679k).
• The net cash flow from operating activities for 2013 amounts to € 992k (2012: € 1,030k).

Mr. Jan Sundelin, CEO of TIE, comments:

“The 2012 acquisition of Ascention did not bring TIE what we expected. Sales performance both on the acquired product suite and on the TIE products was disappointing and key staff was lost after the acquisition. We have taken action to improve the functionality of the acquired products and have rolled out a marketing campaign for the TIE products. Our action plan will result in improved performance in 2014.

The loss of customer CNET has made us reconsider our solution offering in the US. With our modular packaging of the CSP solution, we are now able to speed up considerably our US sales whilst at the same time we are reducing the sales cycle. Our lead generation program looks promising and in Q4, 7 new accounts have been signed.

In The Netherlands our business developed well as our E-commerce revenue continues to steadily increase with 16% this year. The relation with our large customers KPN and T-Mobile developed according to plan.

The acquisition of TFT will bring the required expansion for our company. TFT has valuable knowledge on hosting large customers in a complex environment and has ample experience with Google Search Engine Optimization. We will add this knowledge to the current TIE solutions. We have comprised an elaborate integration plan covering both the front end of our business, selling TIE products in the TFT customer base, the back office of our operations.”

Starting fiscal year 2013 and up to this moment, the Company reported the following highlights on:
01-10-2012 TIE acquires ascention and expands coverage to DACH region
10-10-2012 Court dismisses six of the seven grievances but orders Samar to repay €250k to TIE
15-10-2012 TIE is technology provider in European Union Project “ARUM” and receives funds amounting to € 964k
23-10-2012 TIE Investor Event
21-11-2012 Trading Update Q4: Total Comprehensive Income up 79% for the year 2012 and up 51% for the fourth quarter
21-11-2012 TIE: 2012 Annual Results €703k (2011 €393k), due to an improvement in operating activities and due to capitalization of deferred tax assets

10-12-2012 TIE is technology provider in European Union Projects “SIMPLI-CITY” and INTUITEL” and received funds amounting to € 866k
30-01-2013 TIE: Publication of Annual Report and Agenda for the Annual General Meeting of Shareholders, including the first time provision of financial guidance
13-02-2013 TIE: Q1 2013 Trading Update: Profitable Q1, Total Comprehensive Income €16k (2011: €113k)
12-03-2013 Update pending litigation: Samar requests for suspension of payments (‘surseance van betaling’)
12-03-2013 TIE assigns SNS Securities as Liquidity Provider
18-03-2013 TIE signs four year contract with Leaseweb to host European infrastructure

26-04-2013 TIE maintains 2013 annual guidance but revises net income guidance due to expiration of the three year content syndication contract with CNET per May 1, 2013
05-08-2013 TIE launches Social Media Syndication for impactful channel marketing

22-05-2013 TIE announces 1st half year results FY2012 on investor and analyst event
13-06-2013 TIE launches self-service content syndication solution
14-08-2013 Trading update Q3
14-08-2013 TIE appoints new CFO
20-09-2013 Update pending litigation: court reverses previous ruling
24-09-2013 TIE selected to empower the Infor Partner Network with content syndication

Subsequent Event
11-10-2013 TIE announces major acquisition in Germany (TFT)

15-10-2013 TIE convenes Extra Ordinary general Meeting of shareholders on November 28, 2013.

29-10-2013 TIE is technology provider in EU projects SAM and ALFRED

Financial and Cash Position:
Shareholders’ Equity amounts to € 4,044k on September 30, 2013 (€ 5,357k on September 30, 2012). On September 30, 2013 the Company held a net cash position of € 204k (September 30, 2012 € 747k).

The net cash flow from operating activities for the year amounted to € 992k (2012: €1,030k).

Impairment of Intangible Assets:
TIE performed an annual impairment test on the carrying value of its tangible and intangible assets. Based on the results of the impairment test, management decided to impair TIE Ascention for the full amount (€ 679k). Management considered that Ascention did not bring what was expected. Sales performance both on the acquired product suite and on the TIE products fell short of expectation and senior sales staff was lost after the acquisition.

The CGU’s are:
TIE Netherlands (Business Integration)

TIE France (Business Integration)

TIE Commerce (Business Integration)

TIE MamboFive (E-commerce)

TIE CSP (Content Syndication)

TIE Ascention

As in prior years a DCF valuation model was used to determine the value in use, with a 15% WACC and 10 years horizon.

Income Taxes:
TIE carrying value of the Deferred Tax Asset in the Netherlands amounts to € 353k (2012: € 376k) and amounts in the US to $ 1.290k in the US (2012: $ 1.318k).

3 years Contracted Value Projection per Oct 1 2012, January 1, April 1, July 1 and October 1, 2013 in Millions of €.

The Total Contracted Value is stable € 19,9 mln to October 1, 2013 (2012: € 19,8 mln) for the next 3 years.

In spite of the growth of SaaS Income for all TIE solutions from € 4,6 mln to € 4,8 mln for the year, the Contracted Value of SaaS increased from € 8,8 mln per October 1, 2012 to € 9.4 mln to October 1, 2013, for the next 3 years. The loss of CNET as customer was compensated by new CSP order in Q4 and contract extensions of KPN-Hi and T-Mobile.

Maintenance and Support Contracted Value stabilized at € 7,5 mln (2012: € 7,5 mln).

Consultancy shows a decrease from € 1,1 mln per October 1, 2012 to € 0,9 mln per October 2013, as the DACH region did not developed as expected.

License activities have been included based upon their current contract values.

EU projects (other income) are included based on the actual contracts and decreased slightly from € 2,2 mln per October 1, 2012 to € 2,1 mln per October 1, 2013.

Annual Accounts:
The financial results of TIE presented here are unaudited. The audit of the Financial Statements will not be completed until the publication thereof in January 2014.

Segmentation:
Based on the management information used and the relative share of the various operating segments the Company now recognizes the following operational segments:
-The Netherlands

-TIE MamboFive (E-commerce)

-North America

-France

-Rest of World

-DACH

Litigation: Samar claim:

On March 11, 2013 the Court granted Samar B.V. (Samar) request for suspension of payments. On June 28, 2013 the suspension of payments was ended and followed by declaration of bankruptcy. On September 20, 2013 the Higher Court reversed the declaration of bankruptcy. The case was referred back to the Lelystad Court implying that the period of Suspension of Payments should not have been revoked.

Since December 2007, the company has been involved in discussions and subsequently in legal proceedings with Samar. All claims in the summary proceedings were instantly dismissed at the court hearing of February 15, 2008. On July 7, 2010, the court of Haarlem unexpectedly granted all claims by Samar. In Q4 2010, TIE paid damages to Samar of € 804k. In April 2012, a hearing took place for which in advance both TIE and Samar have provided the court with substantiated findings.

On October 10, 2012 the High Court decided that Samar needs to repay TIE an amount of € 250k. However the High Court dismissed six out of seven grievances submitted by TIE. The Company is currently in the process of claiming back the € 250k. As the amount has not been recovered yet, the amount has not been recorded as a receivable in the Company’s books. Final settlement may be adjusted upwards or downwards in the procedure regarding the assessment of the damages.

Subsequent Events:

On October 11, 2013 TIE announced the acquisition of TOMMOROW FOCUS Technologies GmbH (TFT) per December 2, 2013. The acquisition is subject to approval of the Extraordinary General Meeting of Shareholders on November 28, 2013. TFT has around 50 employees and generated revenue of € 8.2 mln in its financial year 2012.

The acquisition will strengthen TIE’s position in the German e-commerce market and in other European countries. Together with TFT, TIE plans to generate further sustainable growth. TIE will take over the entire workforce at TFT and benefit from the expertise of the employees. Mr. Erik Jan Hengstmengel will retain his position as Managing Director at TFT, and the company will remain based in Munich. The seller (Tomorrow Focus, part of the Burda Group) signed a long-term framework agreement designed to maintain the successful collaboration with TFT.

The purchase price of TFT will be financed as follows:

• partly via a loan provided by seller under market conditions.

• partly via a non-recourse locally funded bank loan under market conditions.

• partly via private placement of new Tie Kinetix NV shares

On October 15, 2013 TIE announced the convocation of an Extraordinary General Meeting of Shareholders to obtain shareholder approval for the acquisition of TFT and the issuance of TIE Kinetix NV shares. The final purchase price will be determined based on the acquisition balance sheet as per December 2, 2013.

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