LAS VEGAS, April 26, 2001 (PRIMEZONE) -- PurchasePro (Nasdaq:PPRO) today reported results for its first quarter ended March 31, 2001.
For the 2001 first quarter, PurchasePro's revenues totaled $29.8 million compared with $33.6 million posted in the fourth quarter of 2000 and, $4.6 million posted in last year's first quarter.
Excluding non-cash charges of $16.7 million for strategic marketing expense, and amortization of equity-based compensation and goodwill, PurchasePro reported a cash operating loss for the first quarter of $1.4 million, or $0.02 per share. Net loss for the 2001 first quarter was $18.1 million, or $0.26 per share, compared to net loss of $36.8 million, or $0.55 per share, in the fourth quarter of 2000, and $15.7 million, or $0.27 per share, in the corresponding year earlier quarter.
Charles E. Johnson, Jr., chairman and chief executive officer, said, "While we recognize that our results are below expectations, we achieved a number of milestones in the quarter that are broadening our reach, strengthening our network and setting us up for solid growth into the future. Our focus continues to be on driving transactions, revenues and growth to further our position as a leading business-to-business e-commerce company."
The company said that the difference between estimates and reported revenues resulted principally from deferral of revenues associated with the sale of several marketplaces.
Mr. Johnson noted that in PurchasePro's first quarter there was continued growth of its strategic alliances, including the enhanced development of the company's relationship with AOL. AOL also announced a significant commitment for marketing and sales programs for both the Netbusiness Marketplace and to fund marketplace sales. Further, PurchasePro trained approximately 200 AOL sales people - all driven to produce more sales - and is working jointly with AOL on a next generation product.
Including 13 referrals from AOL, PurchasePro signed a total of 21 marketplace software licenses during the quarter with industry-leading companies such as Hewlett Packard, Spherion, Monster.com and Homestore.com, underscoring the growing mainstream acceptance of PurchasePro's business services. The company added more than 20,000 businesses to its global marketplace during the quarter, bringing the total to approximately 160,000. Purchase orders submitted over the global marketplace nearly doubled over the fourth quarter, bringing the total for the quarter to more than 46,000.
During the quarter, PurchasePro also announced the acquisition of BayBuilder, providing the company with an immediate presence in the strategic sourcing industry. The company also closed the purchase of Stratton Warren.
Additionally, PurchasePro and Hilton's e-Procurement marketplace continued to scale. At the close of the first quarter, there were more than 500 Hilton hotels participating in the marketplace.
Strengthened Management Team
On Tuesday, the company announced the appointment of Richard L. Clemmer, currently chief financial officer of Quantum Corporation (NYSE:DSS)(NYSE:HDD), as its next chief financial officer and vice chairman of the board, continuing the company's ongoing process of building its leadership team. In the first quarter, Shawn McGhee, chief operating officer, assumed the additional role of president, and former J.D. Edwards (Nasdaq:JDEC) executive, Allen Winder, was named senior vice president of worldwide field operations.
About PurchasePro
PurchasePro (Nasdaq:PPRO), a leader in business-to-business e-commerce, operates the PurchasePro global marketplace that encompasses more than 160,000 businesses and powers hundreds of marketplaces with its highly scalable, browser-based e-commerce engine.
PurchasePro enables businesses of all sizes to easily buy and sell products and services, competing more effectively by enhancing sales opportunities, reducing procurement costs, and greatly increasing employee productivity. PurchasePro offers the following e-commerce solutions: e-Procurement for corporate procurement, v-Distributor for online distributors, and e-MarketMaker for Internet market makers.
The company provides extensive support and training programs. For information, call toll free at (888) 830-4600 or in Las Vegas at (702) 316-7000 or visit www.purchasepro.com.
NOTE TO EDITORS: PurchasePro 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. These forward-looking statements represent only the views of certain members of management and do not necessarily represent a consensus of all employees and managers within the company. Moreover, those forward-looking statements are based on limited information available to us now, which is subject to change. It should be clearly understood that the factors and perceptions on which these forward-looking statements are based are highly likely to change over time and that we have no current plan to update these statements. Actual results may differ substantially from what we say today and no one should assume at a later date that the forward-looking statements provided herein are still valid. They speak only as of today. For more information about these risks and uncertainties, see the SEC filings of PurchasePro, Inc., including the section entitled "Factors That May Affect Results" in its 10-K filing for the period ended December 31, 2000 which is available from the company on request and on the Internet at the SEC's Website, www.sec.gov.
PURCHASEPRO.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
December 31, March 31,
--------- ---------
2000 2001
--------- ---------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 86,335 $ 54,863
Trade accounts receivable, net 23,171 44,410
Other receivables 859 1,624
Prepaid expenses and
other current assets 9,378 13,991
--------- ---------
Total current assets 119,743 114,888
Property and equipment:
Computer equipment and software 49,620 52,446
Furniture and fixtures 2,327 2,784
Leasehold improvements 6,244 6,605
--------- ---------
58,191 61,835
Less-accumulated depreciation
and amortization (7,940) (12,529)
--------- ---------
Net property and equipment 50,251 49,306
Other assets:
Intangibles, net 128,926 134,423
Investments in other companies 15,718 13,926
Deposits and other 5,584 473
--------- ---------
Total other assets, net 150,228 148,822
========= =========
Total assets $ 320,222 $ 313,016
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,248 $ 3,911
Accrued and other current
liabilities 3,421 3,690
Deferred revenues 3,030 9,863
Current portion of long-term
liabilities 22,255 24,658
--------- ---------
Total current liabilities 48,954 42,122
Long-term liabilities 10,348 7,150
--------- ---------
Total liabilities 59,302 49,272
Stockholders' equity:
Common stock 667 702
Additional paid-in capital 414,667 436,305
Deferred stock-based compensation (4,390) (3,362)
Accumulated deficit (151,552) (169,636)
Accumulated other comprehensive
income (loss) 1,528 (265)
--------- ---------
Total stockholders' equity 260,920 263,744
========= =========
Total liabilities and
stockholders' equity $ 320,222 $ 313,016
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PURCHASEPRO.COM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months
Ended,
March 31,
--------------------
2000 2001
-------- --------
(In thousands except
per share amounts)
Revenues:
Software licenses $ -- $ 12,132
Network access and service fees 3,431 12,465
Advertising 750 1,381
Other 369 3,801
-------- --------
Total revenues 4,550 29,779
Cost of revenues 313 2,178
-------- --------
Gross profit 4,237 27,601
Operating expenses:
Sales and marketing 7,495 14,954
Programming and development 1,460 3,160
General and administrative 4,755 11,434
Strategic marketing expense -- 14,845
Amortization of stock-based compensation 7,387 1,664
Amortization of goodwill -- 197
-------- --------
Total operating expenses 21,097 46,254
-------- --------
Operating loss (16,860) (18,653)
Other income (expense):
Interest income (expense), net 1,192 569
Other -- --
-------- --------
Total other income (expense) 1,192 569
-------- --------
Net loss before benefit for income taxes (15,668) (18,084)
Benefit for income taxes -- --
-------- --------
Net loss $(15,668) $(18,084)
======== ========
Net loss per share:
Basic $ (0.27) $ (0.26)
======== ========
Diluted $ (0.27) $ (0.26)
======== ========
Weighted average number of common shares
outstanding
Basic 59,017 68,677
======== ========
Diluted 59,017 68,677
======== ========
Excluding strategic marketing expense and
amortization of stock-based compensation:
and goodwill
Net income (loss) $ (8,281) $ (1,378)
======== ========
Basic $ (0.14) $ (0.02)
======== ========
Diluted $ (0.14) $ (0.02)
======== ========
PURCHASEPRO.COM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months
Ended March 31,
2001
---------
(In Thousands)
Cash flows from operating activities:
Net loss $ (18,084)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 12,395
Amortization of stock-based compensation 1,664
Imputed interest 452
Provision for doubtful accounts 1,930
Non-cash sales and marketing expense 14,845
(Increase) decrease in:
Trade accounts receivable (22,126)
Other receivables (608)
Other current assets (4,574)
Increase (decrease) in:
Accounts payable (1,299)
Accrued liabilities 269
Deferred revenues 6,197
---------
Net cash used in operating activities (8,939)
---------
Cash flows from investing activities:
Purchase of property and equipment (17,140)
Acquisitions, net of cash acquired (41)
Other assets (4,062)
---------
Net cash used in investing activities (21,243)
---------
Cash flows from financing activities:
Issuance of common stock, net 1,837
Repayment of notes payable and advances -
Payments under marketing and technology agreements (3,127)
---------
Net cash used in financing activities (1,290)
---------
Decrease in cash and cash equivalents (31,472)
Cash and cash equivalents:
Beginning of period 86,335
---------
End of period $ 54,863
=========