Breakaway Solutions Announces Record Third Quarter Results
Full Service Provider of E-Business Solutions to Growing Enterprises Reports Revenue Increase of 61% from Previous Quarter
BOSTON, Oct. 26 /PRNewswire/ -- Breakaway Solutions, Inc. (Nasdaq: BWAY), a leading Full Service Provider (FSP) of e-business solutions that offers strategy, systems integration and application hosting to growing enterprises, today announced its financial results for the quarter ended September 30, 1999.
For the third quarter 1999, revenues were $7.2 million, an increase of 61% over revenues of $4.5 million over the second quarter ended June 30, 1999. Employee headcount increased by 31% to 276. Furthermore, the company's ASP revenue as a percent of total revenue increased from 1% in the second quarter of 1999 to 9% in the third quarter of 1999. Net operating loss was approximately $4.5 million. On a pro-forma basis, revenues increased 38%, while ASP revenues grew 205% over the previous quarter.
"We are extremely pleased with our performance this quarter. The combination of our innovative services, world-class delivery infrastructure and high level of client satisfaction has enabled us to achieve record revenue growth," said Gordon Brooks, president and chief executive officer of Breakaway Solutions. "Our results reflect the dynamic growth of the mid- market and underscores the power of our FSP model."
Recent Highlights
-- Received strategic financing from investors, including Internet Capital
Group, Intel, Crosslink Capital, GE Equity and Morgan Stanley.
-- Completed an Initial Public Offering of 3,450,000 shares of common
stock at $14 per share on October 5, 1999.
-- Began work with 22 new clients during the quarter, including Arbinet,
SiVault, David's Bridal, American Imaging Management, Cruise411.com and
eRisks.com.
-- Increased the application hosting client base from seven to 20
customers.
-- Added Sun Microsystems' StarOffice as a new application hosting client.
StarOffice's suite of products has been downloaded over 1 million times
through Breakaway Solutions' distributed global Application Hosting
Centers.
-- Recorded a gross margin of 52% and consultant utilization of 73%.
-- Opened Breakaway's tenth Application Hosting Center in Amsterdam.
-- Opened Breakaway's fourth Solution Center and seventh regional office
in Dallas, Texas.
-- Increased headcount from 210 employees in the second quarter of 1999 to
276 employees in the third quarter of 1999, representing a growth of
31%.
-- Strengthened the executive team with the addition of Adam Sholley, with
over 18 years of brand building experience as vice president of
marketing, and Joseph Johnson, who brings over 12 years of
organizational development management experience, as chief people
officer.
-- Formed new strategic alliances with Oracle and OrderTrust.
-- Expanded the company's partnership with Clarify by becoming Clarify's
first application solution provider.
-- Initiated a branding campaign in leading business, trade and online
media.
Breakaway Solutions will host a conference call on Tuesday, November 2, 1999 at 4:30 p.m. EST. The call will be broadcast via www.vcall.com.
About Breakaway Solutions
Breakaway Solutions Inc. is a Full Service Provider (FSP) of E-business solutions that allow growing enterprises to capitalize on the power of the Internet to reach and support customers and markets. As an application service provider (ASP), systems integrator and consulting firm, Breakaway Solutions offers four key services to its mid-market clients: strategy, eCRMS, E-business and application hosting. Headquartered in Boston, Mass., Breakaway Solutions has seven regional offices and four Internet solutions centers in the U.S., along with 10 application hosting facilities in North America, Europe, Asia and Australia. Breakaway Solutions can be reached at 617-960-3400 or at breakaway.com.
Except for the historical information contained in this announcement, the matters discussed in this announcement are "forward-looking statements" (as that term is used in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties, including risks of business change, product acceptance and customer demand and growth management detailed from time-to-time in Breakaway Solutions' filings with the Securities and Exchange Commission. Breakaway Solutions draws the reader's attention to the factors described in its final Prospectus dated October 5, 1999 under the heading "Risk Factors." Any such forward-looking statements speak only as of the date such statements are made, and the company undertakes no obligation to publicly release the results of any revision to these forward-looking statements or otherwise update or supplement this announcement or the risk factors contained herein.
Breakaway Solutions, Inc.
Consolidated Statement of Operations
For the Three Months Ended
Unaudited Unaudited
June 30, 1999 September 30, 1999
Revenues
Application Hosting $36,169 $668,496
Services 4,415,455 6,512,276
Gross Revenues $4,451,624 $7,180,772
Cost of Sales $2,063,821 $3,420,920
Gross Profit $2,387,803 $3,759,852
Sales, General and
Administrative $4,102,016 $7,040,053
Depreciation & Amortization $555,509 $1,220,778
Operating Income (Loss) ($2,269,722) ($4,500,979)
Other Income (Expense) ($12,229) $35,101
Net Loss ($2,281,951) ($4,465,878)
Net Loss per Share
Basic and Diluted ($0.50) ($0.97)
Weighted Average Common
Shares Outstanding (000's) 4,587 4,587
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SOURCE: Breakaway Solutions, Inc.
CONTACT: Joanna Bolles of Breakaway Solutions, 617-960-3458, jbolles@breakaway or Investors: Raymond Ruddy, Investor Relations of Breakaway Solutions, 617-960-3874, rruddy@breakaway.com
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