LAS VEGAS, Aug. 7, 2001 (PRIMEZONE) -- PurchasePro (Nasdaq:PPRO) today reported a pro forma net loss for the second quarter ended June 30, 2001 of $22.6 million, or $0.31 per share, on revenues of $16.8 million, compared with a pro forma net loss in the comparable quarter a year ago of $7.1 million, or $0.11 per share, on revenues of $9.5 million.
The company's second quarter results include special and non-cash charges totaling $38.5 million related to workforce reductions and associated costs, as well as write-downs and write-offs of certain fixed assets, investments, inventory, accounts receivable and other charges. The company's net loss including the special charges was $61.1 million, or $0.84 per share, compared with a net loss in the comparable quarter a year ago of $12.2 million, or $0.19 per share.
For the 2001 second quarter, network access, service and advertising revenue was $2.9 million compared with $4.8 million in the preceding quarter, and $5.5 million in last year's second quarter. Software license revenue totaled $4.5 million, compared with $11.0 million in the 2001 first quarter and $1.5 million in the 2000 second quarter. Revenues for the quarter also include $9.0 million in prepaid subscription revenue. In the second quarter, 80 percent of total revenues were derived from PurchasePro's relationship with America Online, Inc.
Gross margin for the 2001 second quarter was 85 percent, compared with 93 percent in the 2000 second quarter. At June 30, 2001, cash was $34.5 million.
Operating expenses, excluding special and non-cash charges, were $37.0 million, compared with $31.2 million in the prior quarter and $17.2 million a year ago. During the 2001 second quarter, the company reduced its workforce by more than 50 percent, streamlined its senior management team and implemented a cost control program. As a result of these initiatives, the company estimated annual savings of $20 to 25 million. The company is in the process of implementing additional cost cutting measures that when fully effected should significantly reduce its cash expense run rate to $10 to $12 million per quarter.
The company said more than 60,000 purchase orders, totaling more than $61 million, crossed its network during the second quarter, more than double the number of orders in the preceding quarter. The company also said its supplier base, which provides users with one of the largest community of suppliers in the world, grew by 97,000 to 251,000 companies.
Since the completion of the integration of e-Source into PurchasePro in May, buyers conducted 234 e-Source auctions purchasing approximately $110 million in products and services from nearly 1,800 suppliers, at a market spread, or implied savings of about $30 million. The company initiated 24 paid e-Source pilot programs in the past week and interest in this product continues to accelerate as a result of its rapid cost savings and quick return on investment.
Richard L. Clemmer, president and chief executive officer, said, "The realignment of the company we announced in June has moved us strongly into the first phase of our turnaround. The transition is gaining momentum at this point. This is evidenced by growth in sales activity, our network and purchase orders that moved across it, as well as the very public pronouncements by our customers of their successes with the PurchasePro solution. We are confident that we will achieve our vision of providing industry-leading software that gives organizations, regardless of size, access to the world's largest commerce network."
PurchasePro said that it will host a conference call to discuss its second quarter results in more detail at 1:45 PM, Pacific Time, on August 7, 2001. The conference call will be simultaneously Web cast, in real-time, and may be accessed through PurchasePro's corporate Web site, www.purchasepro.com.
ABOUT PURCHASEPRO
PurchasePro(r), www.purchasepro.com, is a business-to-business e-commerce leader with the stated goal of providing software to enable enterprises of all sizes to gain universal access to the world's largest commerce network. The PurchasePro commerce network comprises more than 251,000 businesses and powers hundreds of private-label marketplaces. PurchasePro provides the following business-to-business e-commerce solutions: e-Procurement for corporate procurement; e-Source for strategic sourcing, v-Distributor for online distributors; and e-MarketMaker for Internet market makers.
SAFE HARBOR
This news release may include 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 involve certain risks and uncertainties 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 are based on limited information available to us now, which is subject to change. 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 titled "Factors That May Affect Results" in its 10-K filing for the period ended December 31, 2000, and its 10-Q for the quarter ended March 31, 2001, which are available from the company on request and on the Internet at the SEC's Website, www.sec.gov. Note: PurchasePro is a servicemark of PurchasePro.com Inc. All other trademarks or registered trademarks are the property of their respective owners.
PURCHASEPROCOM, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
--------------------------------
2000 2001
-------- --------------------
Actual Actual Pro forma
-------- -------- ---------
(In thousands, except per share amounts)
Revenues:
Software licenses $ 1,485 $ 4,518 $ 4,518
Network access and service fees 4,831 11,125 11,125
Advertising 704 815 815
Other 2,494 326 326
-------- -------- --------
Total revenues 9,514 16,784 16,784
Cost of revenues 700 2,560 2,560
-------- -------- --------
Gross profit 8,814 14,224 14,224
Operating expenses:
Sales and marketing 9,685 16,166 16,166
Programming and development 1,756 4,031 4,031
General and administrative 5,719 25,718 16,766
Strategic marketing expense -- 4,770 --
Amortization of stock-based
compensation 5,050 2,274 --
Amortization of goodwill -- 336 --
Asset impairments and abandonments -- 17,800 --
Employee termination benefits
and other -- 4,380 --
-------- -------- --------
Total operating expenses 22,210 75,475 36,963
-------- -------- --------
Operating loss (13,396) (61,251) (22,739)
Other income (expense):
Interest income (expense), net 1,242 189 189
-------- -------- --------
Total other income 1,242 189 189
-------- -------- --------
Net loss before benefit
for income taxes (12,154) (61,062) (22,550)
Benefit for income taxes -- -- --
-------- -------- --------
Net loss $(12,154) $(61,062) $(22,550)
======== ======== ========
Net loss per share:
Basic $ (0.19) $ (0.84) $ (0.31)
======== ======== ========
Diluted $ (0.19) $ (0.84) $ (0.31)
======== ======== ========
Weighted average
number of common
shares outstanding
Basic 63,414 72,349 72,349
======== ======== ========
Diluted 63,414 72,349 72,349
======== ======== ========
* Pro forma excludes special and non-cash charges
PURCHASEPROCOM, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
--------- ---------
2000 2001
--------- ---------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 86,335 $ 34,547
Trade accounts receivable, net 23,171 5,263
Other receivables 859 580
Prepaid expenses and other current assets 9,378 3,573
--------- ---------
Total current assets 119,743 43,963
Property and equipment:
Computer equipment and software 49,620 53,306
Furniture and fixtures 2,327 3,294
Leasehold improvements 6,244 6,975
--------- ---------
58,191 63,575
Less--accumulated depreciation
and amortization (7,940) (17,312)
--------- ---------
Net property and equipment 50,251 46,263
Other assets:
Intangibles, net 123,410 107,705
Capitalized software development costs, net 5,516 33,993
Investments in other companies 15,718 4,077
Deposits and other 5,584 455
--------- ---------
Total other assets, net 150,228 146,230
--------- ---------
Total assets $ 320,222 $ 236,456
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,248 $ 3,527
Accrued and other current liabilities 3,421 9,735
Deferred revenues 3,030 2,064
Current portion of long-term liabilities 22,255 21,093
--------- ---------
Total current liabilities 48,954 36,419
Long-term liabilities 10,348 5,186
--------- ---------
Total liabilities 59,302 41,605
Stockholders' equity:
Common stock 667 731
Additional paid-in capital 414,667 443,203
Deferred stock-based compensation (4,390) (3,105)
Accumulated deficit (151,552) (246,081)
Accumulated other comprehensive
income (loss) 1,528 103
--------- ---------
Total stockholders' equity 260,920 194,851
--------- ---------
Total liabilities and
stockholders' equity $ 320,222 $ 236,456
========= =========
*T*T
CONTACT: PurchasePro, Las Vegas
Steven D. Stern, Vice President Corporate Communications
702.316.7000
steve.stern@PurchasePro.com
Matthew Brimhall, Manager of Marketing and Public Relations
702.316.7000
matthew.brimhall@PurchasePro.com