PURCHASEPRO.COM, INC. REPORTS 109 PERCENT SEQUENTIAL REVENUE GROWTH FOR THE SECOND QUARTER OF FISCAL 2000
Beats Consensus by Eight Cents Per Share
LAS VEGAS (July 19, 2000) - PurchasePro.com, Inc. (Nasdaq: PPRO), the leader in browser-based, business-to-business e-commerce solutions, today announced record financial results for the second quarter ended June 30, exceeding analyst consensus estimates by eight cents per share. The company posted record revenue of $9.5 million for the quarter with a gross profit margin of 93 percent, an 846 percent increase over revenues of $1.0 million for the second quarter of 1999, and an increase of $5.0 million, or 109 percent, over revenues of $4.5 million for the first quarter of 2000. The net loss for the quarter, excluding charges for stock-based compensation, was $7.1 million, or $0.22 per diluted share, compared to a net loss of $8.3 million, or $0.28 per diluted share for the first quarter of 2000.
"This quarter we have shown our ASP, recurring revenue business model’s strength in delivering top line revenue with only moderate expense growth," said Charles E. Johnson, Jr., chairman and chief executive officer of PurchasePro.com. "With our continued high growth, low attrition rates, and excellent cash position of $120 million, we are well positioned to achieve profitability in the second quarter of 2001, significantly earlier than the market’s expectations."
"We are now the dominant player in the ‘exchange to exchange’ space, linking all our marketplaces into a universal platform to deliver a critical mass of businesses," he added. "At the same time we are delivering a liquid marketplace where these companies can participate as both buyers and suppliers, bringing maximum value to both. Much of our growth is attributable to the network effect surrounding buyers and suppliers. As we move forward, growth will be enhanced by programs with key channel partners. As we expand these relationships and continue our strategy of partnering with dominant players in a multitude of vertical and horizontal sectors, we expect to see our current high growth continue into future quarters."
"A portion of the company’s healthy revenue growth is attributable to the second quarter release of PurchasePro.com’s new suite of private label e-marketplace solutions," said James P. Clough, senior executive vice president and chief financial officer of PurchasePro.com. "Our continuing success in selling this suite of solutions will add substantially to our recurring revenue mix, with revenue contribution coming from monthly hosting and maintenance, as well as subscriber, transaction and advertising fees."
Rapid Increase in Members, Suppliers and Purchase Orders
During the quarter, PurchasePro.com delivered 19 private label marketplaces and added 3,919 individual companies to the network. A full 39 percent of the companies added during the quarter signed on directly through the web.
More than 121,000 bids and bid recipients with more than 8,000 purchase orders were executed during the quarter. The total number of purchase orders submitted in the first and second quarter surpasses the number sent during the entire 1999 fiscal year.
The company also made the following business announcements during the second quarter:
- PurchasePro.com announced 19 new marketplaces powered by the company’s new suite of industry-leading, private label e-marketplace solutions that are customized for each customer and launched within 45 days. The solutions focus on three major market segments: e-Procurement, to streamline company purchasing processes; v-Distributor, to electronically simulate a global distribution center; and e-MarketMaker, for the creation of a custom-branded electronic marketplace where proprietors profit from each and every transaction. True to PurchasePro.com’s system architecture, these three products are browser-based, requiring no software installations. They position the company as the continued leader in browser-based e-commerce engines.
The unique differentiating factor about PurchasePro.com’s suite of private e-marketplace solutions is the exchange-to-exchange (E2E) interconnection into one global e-marketplace where all buyers and suppliers can interact. This powerful interconnection often brings together buyers and suppliers who have never conducted business. It also provides procurement cost efficiencies.
- PurchasePro.com and Sprint announced the launch of their co-branded business-to-business e-commerce portal at Spring Internet World in Los Angeles. The new live site is located at www.sprint.com/purchasepro. Later this month, the companies will launch their first wide-scale marketing campaign. Featuring direct mail, banner advertising and telemarketing, the program is expected to add a significant number of subscribers to PurchasePro.com.
- During the final two weeks of the second quarter, PurchasePro.com and Office Depot launched their first major joint marketing program. Using direct mail, advertising and telemarketing, the campaign added hundreds of subscribers. The majority of subscriber additions through the program will occur in the third quarter.
- Development of the company’s new product with AOL continues on schedule. During the quarter the first phase of the joint marketplace was successfully launched. The second phase will go to market in early August, with work continuing on the entirely new, jointly developed platform slated for launch in early 2001.
- PurchasePro.com extended its initiative to build the most complete business-to-business e-commerce exchange for the hospitality industry. The company forged strategic agreements with Hilton Hotels Corp., a leading worldwide hotel chain with 1,800 hotel properties and $1.5 billion in annual procurement; AlliantLink.com, the web-based subsidiary of Alliant Exchange, one of the nation’s largest business-to-business e-commerce companies and a leading broadline foodservice distributor; and eSkye.com, a leading beverage marketplace provider.
- Continuing its dominance of the AEC (Architects, Engineers and Construction) vertical, PurchasePro.com and AEC Connect announced partnerships with industry e-commerce leaders Bidcom, Bricsnet and WinEstimator.
- PurchasePro.com announced the launch of a new wireless initiative to bring business-to-business e-commerce procurement to mobile phones, personal digital assistants (PDAs) and pocket PCs. PurchasePro.com will provide buy-side and sell-side wireless solutions such as auctions and bidding, purchase order creation, notification of requisitions and purchase orders, and instant messaging for its members. In addition, PurchasePro.com intends to establish strategic alliances with leading handheld device manufacturers to become their wireless B2B solution.
About PurchasePro.com
PurchasePro.com, Inc. (Nasdaq: PPRO), a leader in Internet business-to-business e-commerce, operates the PurchasePro.com exchange and powers private marketplaces with its highly scalable, browser-based e-commerce engine. The PurchasePro.com exchange and the private marketplaces employing its technology make it easy for businesses of all sizes to buy and sell a wide range of products and services. PurchasePro.com enables businesses to compete more efficiently by meaningfully reducing procurement costs and greatly increasing employee productivity. A key element of PurchasePro.com’s strategy is to develop sales and marketing relationships with industry leaders including AOL, IBM, Sprint Corp., and Office Depot, Inc. The company provides extensive support and training programs. For information call toll free at 1-888-830-4600 or in Las Vegas at 702-316-7000 or visit www.purchasepro.com.
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NOTE TO EDITORS: PurchasePro.com is a servicemark of PurchasePro.com, Inc. All other trademarks or registered trademarks are the property of their respective owners.
This press release includes forward-looking statements which are subject to the "Safe Harbor" created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements (which involve the company's plans, beliefs and goals, refer to estimates or use similar terms) involve certain risks and uncertainties, including the risks and uncertainties associated with rapidly changing technologies such as the Internet, the risks of technology development and the risks of competition that can cause actual results to differ materially from those in the forward looking statements. The company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. For more information about these risks and uncertainties, see the SEC filings of PurchasePro.com, Inc., including the section entitled "Factors That May Affect Results" in its 10-K filing for the period ended December 31, 1999 and its 10-Q for the quarter ended March 31, 2000, which is available from the company on request and on the Internet at the SEC’s Website, www.sec.gov.
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