Brainpower reduced operating costs from the previous quarter by EUR1 million, in line with company targets. Net cash flow used in operations decreased by EUR1.3 million.

Contract revenue backlog decreased slightly during the quarter to EUR9.3 million which, according to chairman and CEO Rocco Pellegrinelli, reflects the fact that IT budgets remain tight with long sales cycles. Taking a positive stance, Pellegrinelli says: "We expect, however, that StockXceed and FundXceed, our new product offering announced last week, and our recently announced collaboration with Lipper will contribute to an increased number of contracts signed over the remainder of the year."

During the quarter two clients, Redsafe.com and Easybroker, went live with online services that incorporate Brainpower's analytics software. Brainpower also expanded its portfolio of third party sales and marketing agreements by executing an arrangement with Epheso, a CRM (customer relationship management) technology specialist based in Italy. New clients landed during the first three months include, among others, Skandia Leben in Switzerland and extended contracts with Commerzbank and Schroder Investment Management in Italy.

EBITDA losses (earnings before interest, taxes, depreciation and amortisation) before restructuring costs were EUR1.8 million for the first quarter, a modest improvement over the EBITDA losses in the fourth quarter of last year. This represents the fourth consecutive quarterly improvement and the company looks set to see continued improvements as revenue increases are predicted for the coming year.

Brainpower ended the quarter with a cash and cash equivalents position of EUR11.2 million, which is sufficient to fund operations until the company reaches EBITDA breakeven, says Bill Holwell, chief financial officer. Shareholders equity as of March 31, 2002 was EUR13.2 million. Company net loss was EUR2.2 million for the quarter, which includes EUR0.1 million of restructuring costs.