AppNet Continues Strong Organic Growth in the Fourth Quarter and Fiscal Year 1999; Results Demonstrate Execution of Superior End-to-End e-business Model.Business Editors/Hi-Tech Writers BETHESDA Bethesda, city, United States Bethesda, uninc. city (1990 pop. 62,936), Montgomery co., W central Md., an affluent residential and commercial suburb of Washington, D.C. The area was settled in the late 17th cent. , Md.--(BUSINESS WIRE)--Feb. 9, 2000 AppNet(APNT APNT Association of Physical and Natural Therapists ): Fourth Quarter, 1999 Highlights -- Revenue of $34.9 million, up 60% over fourth quarter 1998 and up 16% sequentially -- Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become up 400% from the fourth quarter of 1998 -- 5 cents positive cash EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. , versus a loss of 7 cents in the fourth quarter of 1998 Fiscal Year 1999 Highlights -- Revenue of $112.3 million, up 62% over 1998 -- 50% growth in employee base and nearly 30% increase in bill rates since 1998 -- 7 cents positive cash EPS, versus a loss of 9 cents in 1998 -- Results beat the consensus of analysts' expectations AppNet, Inc. (Nasdaq: APNT), a premier provider of end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. solutions, today announced record fourth quarter and 1999 year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. financial results that continue to demonstrate strong organic growth and execution ahead of plan. For the three months ended December December: see month. 31, 1999, revenues were $34.9 million, 60% higher than pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma revenue of $21.8 million for the fourth quarter of 1998. For the full year, on a pro forma basis, 1999 revenue grew 62% to $112.3 million from $69.2 million in 1998. Earnings before interest, taxes, depreciation, amortization and stock based and acquisition related compensation (adjusted EBITDA) were $2.0 million, or 5.6% of revenue this quarter, and $5.5 million for 1999, on a pro forma basis. Cash EPS was 5 cents in the quarter compared to a pro forma loss of 7 cents in the fourth quarter of 1998. For the full year, on a pro forma basis, cash EPS was 7 cents in 1999, compared to a loss of 9 cents in 1998. These results beat the consensus of analysts' expectations. &uot;Throughout 1999 we have maintained a relentless focus on our end-to-end e-business model, and these excellent results clearly demonstrate that our model has been validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. by our customers and the industry,&uot; said Ken Bajaj The word Bajaj can mean several things Names
Operational Highlights -- During the quarter, AppNet won five engagements worth $5 million or more, compared to two in the third quarter. -- Nearly 50% of AppNet's new customer wins in the quarter have estimated contract values of $1 million or more. -- Strong hiring trends exceeded internal targets, resulting in 85 net new billable employees during the quarter to reach 800 billable employees. -- AppNet named three new General Managers to strengthen its regional business-to-business (B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business ) delivery capabilities. These three individuals were formerly the president of the e-Business unit of EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. , the Managing Principal for Unisys' Financial Services Consulting Practice, and a former AppNet Division President. -- AppNet also completed a successful $230 million follow-on offering of common stock, strengthening the balance sheet with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $70 million to the company. &uot;Our strong organic growth reflects the financial success of our business model,&uot; said Jack Pearlstein, chief financial officer of AppNet. &uot;This was a breakthrough quarter for us - we executed ahead of expectations and our metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. continued to show strong positive trends.&uot; Recent Announcements In the past few months, AppNet announced a number of exciting new contract wins and strategic relationships that position the company for the exploding B2B marketplace. These new relationships demonstrate the growing size, scope, and complexity of AppNet's engagements. -- UCCnet - UCCnet awarded AppNet a multi-year contract to develop, build and maintain the world's largest electronic platform for executing B2B transactions. AppNet will design and build all the creative user interfaces, and perform supply chain integration, implementation, and consulting. Responsibility for maintaining the online trading community An online trading community exists to provide its members with a structured method for trading, bartering, or selling goods or services. These communities often have forums and chatrooms designed to facilitate communication between the members. will be outsourced to AppNet, which will host the massive platform. The first of 23 industries to be part of UCCnet, grocery and packaged goods Noun 1. packaged goods - groceries that are packaged for sale foodstuff, grocery - (usually plural) consumer goods sold by a grocer plural, plural form - the form of a word that is used to denote more than one companies who represent more than $400 billion in supply chain revenues, have already signed letters of intent to use the electronic marketplace. -- AppNet continued to demonstrate its creative capabilities with six new interactive marketing engagements with top companies such as Sprint and EDGAR Edgar or Eadgar (both: ĕd`gər), 943?–975, king of the English (959–75), son of Edmund, king of Wessex. In 957 the Mercians and Northumbrians rebelled against Edgar's brother Edwy and chose Edgar as their king. Online. AppNet is helping Sprint acquire new consumer long distance customers by developing interactive marketing programs such as opt-in email, promotions, banner advertising, cooperative marketing and distribution partnerships. -- primeoutlets.com - AppNet and primeoutlets.com announced a comprehensive end-to-end (E2E E2E End To End E2E Entry to Employment (UK Government training) E2E Engineer to Engineer E2E Enterprise to Enterprise E2E Employee-to-Employee (enterprise software) ) initiative to construct a large online outlet mall An outlet mall (or outlet centre) is a type of shopping mall, in which manufacturers sell their products directly to the public through their own branded stores. Clothing, sporting goods, electrical products, cosmetics, and toys are among the types of items sold at outlet for name brand merchandisers. AppNet is designing cutting-edge customer interfaces as well as integrating the site with fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. , inventory management, and merchandisers' systems. -- MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device. (2) (Microwave Communications Inc. WorldCom The former name of MCI. Based in Jackson, MS, WorldCom, Inc. was a major, international telecommunications carrier. It was founded in 1983 by Bernard Ebbers as Long Distance Discount Service (LDDS), a reseller of AT&T WATS lines to small businesses. - AppNet and MCI WorldCom announced a strategic relationship to deliver comprehensive E2E e-business services into the B2B marketplace, targeted toward MCI WorldCom's Global and Corporate National accounts. These services will offer customers the ability to leverage the E2E e-business solutions provided by AppNet with the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the infrastructure and network services they receive from MCI WorldCom. &uot;This has been our most exciting quarter to date in terms of customer wins and strategic alliances. We have become the go-to partner in the B2B market,&uot; concluded Mr. Bajaj. &uot;While we continue to invest in our delivery infrastructure and scale the organization to execute ever larger, more complex projects, we also continue to deliver record results to our shareholders.&uot; AppNet (Nasdaq: APNT) is a premier provider of end-to-end e-business solutions, from interactive marketing to back-office integration. For companies transforming themselves for the new Internet See Web 2.0 and Internet2. economy, the firm offers a unique mix of Internet strategy, marketing, and technology services. AppNet is the fourth largest interactive marketing agency according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Ad Age and one of the 50 largest pure Internet companies, according to Internet World. AppNet works with Fortune 1000 and dot.com companies. Customers include UCCnet, Baxter Healthcare, Dial, Ford, Ralston Purina, Hyundai, multex.com, primeoutlets.com, UNICEF UNICEF (y  `nĭsĕf'), the United Nations Children's Fund, an affiliated agency of the United Nations. , KB Toys K•B Toys (previously known as Kay Bee Toys) is a chain of mall-based retail toy stores in the United States. It was founded in 1922 by the Kaufman brothers. It currently operates 605 stores in 44 U.S. states, Puerto Rico as well as Guam. , NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98).NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. , and Unilever. For more information about how AppNet can bring the power of e-business to your business, visit http://www.appnet.com. This press release may include &uot;forward-looking statements&uot; for purposes of the Securities Exchange Act of 1934. All statements herein, other than those of historical fact, including statements regarding future contractual arrangements or performance, competitive strengths, and business strategy, are forward-looking. Actual results or events may differ materially from those projected in such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Information regarding the factors that could cause such differences are contained in AppNet's Prospectus dated November 10, 1999 contained in the Registration Statement on Form S-1 filed in connection with AppNet's November 1999 follow-on offering Follow-On Offering An offering of additional shares after a company has had an initial public offering. Notes: This sometimes means the company is strapped for cash. So they need to issue more shares to pay bills or finance a new project. and on the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 1999.
AppNet, Inc.
Consolidated statements of operations
(Amounts in thousands, except per share data)
------------------ ------------------
Three months ended Year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1999 1998 1999
-------- -------- -------- --------
Pro Forma Actual Pro Forma Pro Forma
(a) (a) (a)
-------- -------- -------- --------
(Unaudited) (Unaudited)
Revenues $ 21,826 $ 34,905 $ 69,182 $112,335
Cost of revenues 13,542 19,399 41,940 63,279
-------- -------- -------- --------
Gross profit 8,284 15,506 27,242 49,056
-------- -------- -------- --------
Selling and marketing 1,067 2,965 3,326 8,960
General and administrative 6,815 10,571 19,032 34,566
-------- -------- -------- --------
Adjusted ebitda (b) 402 1,970 4,884 5,530
-------- -------- -------- --------
Stock-based and other
acquisition-related
compensation 4,100 3,921 16,403 20,347
Depreciation and
amortization 15,132 15,167 60,277 58,055
-------- -------- -------- --------
Loss from operations (18,830) (17,118) (71,796) (72,872)
-------- -------- -------- --------
Interest income - (482) - (581)
Interest expense (c) 1,487 262 5,941 3,467
Other expense, net (d) 322 - 701 -
-------- -------- -------- --------
Loss before income taxes (20,639) (16,898) (78,438) (75,758)
-------- -------- -------- --------
Income taxes (25) 499 (100) 827
-------- -------- -------- --------
Net loss $(20,614) $(17,397) $(78,338) $(76,585)
======== ======== ======== ========
Dividends on and accretion
of preferred stock (1,038) - (3,603) (2,232)
-------- -------- -------- --------
Net loss attributable
to common stockholders $(21,652) $(17,397) $(81,941) $(78,817)
======== ======== ======== ========
Basic and diluted net loss
per common share $ (1.09) $ (0.54) $ (4.44) $ (2.99)
======== ======== ======== ========
Weighted average common
shares outstanding 19,923 32,354 18,465 26,360
======== ======== ======== ========
Cash net income (loss) (e) $ (1,382) $ 1,691 $ (1,658) $ 1,817
======== ======== ======== ========
Cash net income (loss)
per share $ (0.07) $ 0.05 $ (0.09) $ 0.07
======== ======== ======== ========
(a) Pro forma results of operations give effect to the acquisitions
we made in 1998 and 1999 as if these transactions had occurred on
January 1, 1998. The pro forma results of operations are not
adjusted to reflect certain financing transactions related to our
public offerings in June and November 1999.
(b) Adjusted ebitda is defined as earnings before interest, taxes
depreciation and amortization and stock-based and other
acquisition-related compensation.
(c) Year ended December 31, 1999 excludes a one-time interest charge
of $1.1 million recorded in the second quarter 1999 related to
beneficial conversion rights of certain convertible notes.
(d) Year ended December 31, 1999 excludes a one-time charge of $0.6
million recorded in the second quarter 1999 related to the
refinancing of our credit facilities.
(e) Cash net income (loss) is defined as net income (loss) before
depreciation and amortization and stock-based and other
acquisition-related compensation.
AppNet, Inc.
Consolidated balance sheets
(Amounts in thousands)
---------------- -----------------
12/31/98 12/31/99
---------------- -----------------
(Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 2,447 $ 66,549
Accounts receivable, net 11,238 31,661
Other current assets 1,118 1,300
---------------- -----------------
Total current assets 14,803 99,510
---------------- -----------------
Property and equipment, net 3,012 8,958
Intangible assets, net 99,380 97,247
Other assets 1,175 2,111
---------------- -----------------
Total assets $ 118,370 $ 207,826
================ =================
Total current liabilities $ 12,074 $ 38,204
Long term debt and other
liabilities 44,764 4,780
---------------- -----------------
Total liabilities 56,838 42,984
---------------- -----------------
Class A Preferred Stock 37,646 -
Common stock subject to
put rights 278 -
Stockholders' equity 23,608 164,842
---------------- -----------------
Total liabilities, redeemable
stock and stockholders' equity $ 118,370 $ 207,826
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