AppNet Delivers Strong Growth in First Quarter 2000; End-to-End Service Model Generates More than 100% Revenue Growth.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)--April 24, 2000 First Quarter 2000 Highlights -- Revenue of $44.7 million, up more than 100% over 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 first quarter 1999 and up 28% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , representing significant acceleration over fourth quarter 1999 growth and exceeding analysts' estimates -- Billable employees up 11% sequentially to 890 at the end of the quarter -- Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenue per billable employee jumped 40% from last year and 16% sequentially to $211,000 -- 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 over 800% from pro forma first quarter 1999 to $3.5 million, excluding non-recurring charges, -- 8 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. , fully-taxed and excluding non-recurring charges, versus a fully-taxed pro forma loss of 3 cents in the first quarter of 1999 AppNet, Inc. (Nasdaq: APNT APNT Association of Physical and Natural Therapists ), 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 strong first quarter financial results that demonstrate industry leading, accelerating growth and increases in large 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 engagements. For the three months ended March 31, 2000, revenues were $44.7 million, over 100% higher than pro forma revenue of $22.3 million for the first quarter of 1999. Earnings before interest, taxes, depreciation, amortization and stock based and acquisition related compensation (adjusted EBITDA) were $0.1 million. Excluding a non-recurring bad debt charge associated with a significant customer (announced previously on April 13, 2000), adjusted EBITDA was $3.5 million or 7.8 percent of revenue, up more than 800% from $0.4 million in pro forma first quarter 1999. Cash EPS was 2 cents in the quarter, compared to a loss of 6 cents in the first quarter of 1999. Excluding the non-recurring bad debt charge, fully-taxed (35% effective tax rate) cash EPS was 8 cents, which exceeded consensus expectations. "In the first quarter of the new millennium we have seen our end-to-end e-business model deliver outstanding growth and scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it ," said Ken Bajaj The word Bajaj can mean several things Names
prime mover a muscle that acts directly to bring about a desired movement. advantage in the B2B space with exciting new work for premier Global 1000 clients and nine eMarketplace engagements." Operational Highlights -- The MCIWorldCom partnership announced in January January: see month. 2000 has already resulted in four new customers. -- AppNet was named a global alliance partner for Commerce One, and has already begun the process of training 125 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 technologists to work on Commerce One engagements. -- Average engagement size increased 30% sequentially to nearly $1 million. -- Strong hiring trends resulted in 90 net billable employee adds during the quarter. AppNet now has 890 billable employees, 45% higher than 12 months ago. -- Continued improvements in average hourly bill rates, up 9% sequentially to $134, due to increased mix of revenue from strategic consulting and strong demand from the market. "Accelerating sequential One after the other in some consecutive order such as by name or number. growth in our key financial measures shows that our business model is working, the market for our services is robust, and our management team is executing," said Jack Pearlstein, chief financial officer of AppNet. "Given the visibility in our business and strength of the pipeline, we do not see a slow down in sight." Recent Customer Wins With its full service capabilities and depth of expertise, the Company is seizing exciting opportunities that are increasing in size and complexity. In the eMarketplace area, AppNet is currently working on eight projects to establish Internet-based trading hubs across a number of diverse vertical industries. AppNet also announced exciting portal and B2B engagements in the first quarter, including VEBA VEBA Voluntary Employees' Beneficiary Association Electronics, the third largest electronics distributor in the world; Great Plains, a leading global e-business applications company; BET.com, the leading online portal for the African American African American Multiculture A person having origins in any of the black racial groups of Africa. See Race. community; and UCCnet, the largest eMarketplace on the Internet. "Demand for our services has never been stronger, and our pipeline has never been so full. We believe this is just the beginning of the market growth curve - our B2B engagements and our customers' Internet initiatives continue to multiply mul·ti·ply v. 1. To increase the amount, number, or degree of. 2. To breed or propagate. in size and complexity," concluded Mr. Bajaj. About AppNet, Inc. AppNet, Inc. (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 Global 1000 and dot.com See dot-com. companies. Customers include UCCnet, Baxter Bax´ter n. 1. A baker; originally, a female baker. Healthcare, Dial, Ford, Sprint, Hyundai, BET.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. , Hewlett Hewlett may refer to: People with the surname Hewlett:
NASA in full National Aeronautics and Space Administration Independent U.S. , and Unilever Unilever Either of two linked companies, Unilever PLC (based in London) and Unilever NV (based in Rotterdam). They are the holding companies for more than 500 firms worldwide that manufacture and sell soaps, foods, and other products. . This press release may include "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. " 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Actual results or events may differ materially from those projected in such forward-looking statements. Information regarding the factors that could cause such differences is contained in AppNet's filings with the Securities and Exchange Commission.
AppNet, Inc.
Condensed consolidated statements of operations
(as adjusted for non-recurring, non-cash items and taxes)
(Amounts in thousands, except per share data)
Three months ended
Mar 31, 1999 Mar 31, 2000
-----------------------------
Pro Forma (a)
-----------------------------
(as adjusted)
(Unaudited)
Revenues $ 22,271 $ 44,731
Cost of revenues 13,132 24,762
-------- --------
Gross profit 9,139 19,969
-------- --------
Selling and marketing 1,353 3,536
General and administrative (b) 7,402 12,897
-------- --------
Adjusted EBITDA (c) 384 3,536
-------- --------
Interest income - (873)
Interest expense 1,473 167
Other expense, net - -
-------- --------
Loss before income taxes (1,089) 4,242
-------- --------
Fully-taxed income tax (benefit) expense (d) (381) 1,485
-------- --------
Fully-taxed cash net income (loss) $ (708) $ 2,757
======== ========
-------- --------
Fully-taxed cash net income (loss) per share $ (0.03) $ 0.08
======== ========
-------- --------
Weighted average common shares outstanding 20,285 33,842
======== ========
(a) Pro forma results of operations give effect to the acquisitions we
made in 1999 as if these transactions had occurred on January 1, 1999.
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) General and administrative expenses for the three months ended
March 31, 2000 does not include a non-recurring bad debt charge.
(c) Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation and amortization, stock-based and other
acquisition-related compensation and non-recurring bad debt charge.
(d) In order to demonstrate the future impact of taxes when the
Company has utilized its tax net operating losses, the fully-taxed
income tax (benefit) expense has been calculated using an effective
tax rate of 35%.
AppNet, Inc.
Consolidated statements of operations
(Amounts in thousands, except per share data)
Three months ended
Mar 31, 1999 Mar 31, 2000
------------------------------
Actual Actual
------------------------------
(Unaudited)
Revenues $ 19,643 $ 44,731
Cost of revenues 11,457 24,762
-------- --------
Gross profit 8,186 19,969
-------- --------
Selling and marketing 1,190 3,536
General and administrative 6,754 16,297
-------- --------
Adjusted EBITDA (a) 242 136
-------- --------
Stock-based and other
acquisition-related compensation 2,487 5,115
Depreciation and amortization 12,735 14,847
-------- --------
Loss from operations (14,980) (19,826)
-------- --------
Interest income (4) (873)
Interest expense 1,266 167
Other expense, net - -
-------- --------
Loss before income taxes (16,246) (19,120)
-------- --------
Income taxes 100 270
-------- --------
Net loss $(16,346) $(19,390)
======== ========
Dividends on and accretion of
preferred stock (1,039) -
-------- --------
Net loss attributable to common
stockholders $(17,385) $(19,390)
======== ========
-------- --------
Basic and diluted net loss per common
share $ (0.88) $ (0.57)
======== ========
-------- --------
Weighted average common shares
outstanding 19,723 33,842
======== ========
-------- --------
Cash net income (loss) (b) $ (1,124) $ 572
======== ========
-------- --------
Cash net income (loss) per share $ (0.06) $ 0.02
======== ========
(a) Adjusted EBITDA is defined as earnings before interest, taxes
depreciation and amortization and stock-based and other
acquisition-related compensation.
(b) Cash net income (loss) is defined as net income (loss) before
depreciation and amortization and stock-based and other
acquisition-related compensation.
AppNet, Inc.
Condensed consolidated balance sheets
(Amounts in thousands)
12/31/99 3/31/00
-------- -------
(Unaudited)
Current assets
Cash and cash equivalents $ 66,549 $ 55,105
Accounts receivable, net 31,661 36,010
Other current assets 1,300 3,255
-------- --------
Total current assets 99,510 94,370
-------- --------
Property and equipment, net 8,958 10,585
Intangible assets, net 97,247 83,517
Other assets 2,111 2,636
-------- --------
Total assets $ 207,826 $ 191,108
======== ========
Total current liabilities $ 38,204 $ 36,109
Long term debt and other liabilities 4,780 4,922
-------- --------
Total liabilities 42,984 41,031
-------- --------
Stockholders' equity 164,842 150,077
Total liabilities, redeemable stock and
stockholders' equity $ 207,826 $ 191,108
======== ========
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