BROKAT Announces Record Year With 107% Increase in Earnings.

ATLANTA--(BUSINESS WIRE)--Sept. 17, 1999--

World's Leading E-business Solution Provider Increased Licensing

Revenue by 197%, Plans Corporate Restructuring to Focus on

US Market and Prepares for NASDAQ Listing

BROKAT Infosystems AG, the world's leading provider of secure Internet banking and e-business software solutions, announced record year-end results for the 1998/99 fiscal year, ended June 30, of $34.4 million, a 107 percent increase over the previous year ($16.6 million).

The company's earnings more than doubled as a result of overall organizational growth, including BROKAT's acquisition of two leading technology providers, and a 197 percent increase in licensing revenue, which totaled $11.8 million, compared with $4.0 million a year ago. Earnings derived through the acquisition of Atlanta-based Transaction Software Technologies, Inc. (TST), a leading supplier of full-service cash management solutions, totaled $1.1 million. BROKAT is listed on the German Neuer Market under the symbol "BRJ."

BROKAT incurred cash earnings (net loss excluding goodwill amortization and one-time charges, of $11.1 million, compared with a loss in the previous year of $4.5 million. The results met analyst estimates and were attributable to investments including international business expansion and personnel increases in the areas of research and development and professional services. In keeping with BROKAT's aggressive growth strategy, the company increased personnel by 120 percent during the year, bringing the total number of employees worldwide to 512, operating out of six locations in Germany and 19 international offices.

Goodwill amortization and one-time charges were approximately $9.2 million. These costs include goodwill write-offs from the company's acquisition of cash management specialist TST ($.4 million), as well as costs associated with employee stock option compensation ($8.8 million), derived in direct correlation to the company's stock price of 130 euros as of June 30, 1999. As a result, the company reported a total operating loss for the fiscal year of $20.4 million.

Fourth quarter results, ended June 30, 1999, marked a record growth of 182 percent or $13.6 million, compared to $4.8 million for the same period in the previous year.

"BROKAT's record revenues continue to represent increasing worldwide recognition of the power and value offered by our Twister(tm) e-services software platform and growing suite of e-business applications, and further validates our growth strategy," said Stefan Rover, chief executive officer of BROKAT Infosystems AG. "In addition to expanding our international presence, particularly in the US, and completing a number of significant acquisitions during the past year, BROKAT also has developed several key partnerships to extend our development and marketing reach, including our recently announced relationship with SAP."

Corporate Restructuring to Enhance U.S. Focus (NASDAQ Listing)

In order to facilitate BROKAT's rapid expansion, a corporate restructuring plan has been devised to separate the development of platform software from vertical market application software for e-services. As a result, BROKAT Financial Services was formed in the fourth quarter to concentrate on serving the North American financial services market. Continuing in this direction, additional internal business units will be formed for the further development of the core product Twister as well as for the development and marketing of applications in key vertical markets within e-finance, e-commerce and e-public services. Also among the company's top priorities is the expansion of its U.S. operations, which will be strengthened by increased internal development resources and the local presence of managing board members. To further support its U.S. operations, BROKAT is preparing to list its company stock with NASDAQ in the first half of the year 2000.

Partner Expansion Exceeds Expectations

Partner revenue greatly exceeded expectations, making up 32 percent of the company's total earnings, compared with 11 percent in the previous year. This growth also is reflected in the increase in licensing revenue, which climbed from 24 percent in the previous year to 34 percent, or $11.8 million. Correspondingly, professional services earnings fell, as planned, from 55 percent to 34 percent, or $11.6 million. Cost of sales totaled $17.3, compared with $8.7 in the previous year, while operating expenses grew slightly, from 87 percent of total revenue a year ago to 91 percent of total revenue in the fiscal year ended June 30, 1999. Again, total operating expenses, which equaled $31.4 million versus $14.4 million a year ago, were due in great part to the company's dramatic international expansion.

Acquisitions Strengthen US and International Presence

Aggressively moving forward in its plans for international expansion, BROKAT's international earnings increased from $5.8 million to $9.6 million. Through the acquisition of Atlanta-based TST and the opening of five sales offices throughout the U.S., BROKAT was able to considerably strengthen its North American presence and lay the foundation for future U.S. expansion.

Further complying with the company's goal to maintain its leadership position in the field of e-services platforms, BROKAT acquired German-based MeTechnology AG, one of Europe's leading providers of electronic banking and e-commerce solutions. By combining the complementary technologies of both organizations, BROKAT was able to widen its range of services in a short period of time.

Personnel More Than Doubled

BROKAT was again able to increase its personnel during the past 12 months, with the number of employees growing from 233 to 512. The largest growth in personnel resulted from the acquisition of MeTechnology, with 142 employees, followed by the TST acquisition, with 55 employees. The company's corporate headquarters added 26 new employees in the areas of research and development, marketing and product management, while the other international offices increased by 46 employees, with the largest increases recorded in the U.S. and Great Britain.

Forecast

As of January 1, 2000, BROKAT will adjust its fiscal year to correspond to the calendar year in order to facilitate comparisons for analysts and investors. BROKAT expects the positive earnings increases of the past year to continue through the next business year, ending December 31, 2000. The company also anticipates that revenue derived through product licensing will continue to grow to represent an increased share of total earnings in the next fiscal year. In addition to furthering its international business expansion in the coming year, with an emphasis on the US, BROKAT also will focus on developing a growing number of strategic partnerships.

"We expect strong growth in the field of e-business solutions, particularly as they relate to our recently announced relationship with SAP," continued Rover. "In this regard, one of BROKAT's main goals as a certified SAP partner is the expansion of partnerships with system integrators which implement e-business solutions using Twister and SAP applications."

Important background information:

Expenses Due to Employee Investments

At the time of market listing (September 17, 1998), BROKAT had established an employee stock option program that, according to German law, must include an exercise limit. This means that employees can only redeem their options after certain criteria are fulfilled. Simply stated, according to U.S. GAAP accounting, the higher the share price, the higher the extraordinary expenditure that must be posted. Conversely, a low share price reduces the losses as shown on the balance sheet because the options are posted as proceeds. This extraordinary expenditure must be recorded, although it is in no way related to the operating business. In the business year 1998/99, BROKAT's share price of 130 euros (recorded on June 30, 1999) results in an extraordinary expenditure of $8.8 million.

About BROKAT Infosystems AG

BROKAT is one of the leading international providers of software for e-business solutions. According to a study carried out by Meridien Research, the company is the market leader in the Internet banking segment worldwide. The main product is the modular e-services platform Twister. This software, which can be used in all lines of business, integrates existing company IT systems and applications (Enterprise Application Integration) and links these securely to various electronic channels like the Internet, mobile phone networks and call centers (Customer Interaction). With this platform, companies and institutions can offer their services to customers via the Internet, for example, and can also conduct secure electronic transactions. More than 2000 companies worldwide already use Twister solutions, among them Deutsche Bank, Allianz, ABN Amro, Consors, debitel, VSA and primus-online. BROKAT was founded in 1994, and currently has 512 employees in 14 countries. BROKAT Infosystems AG is based in Stuttgart. You can also find information on BROKAT and their products on the Internet at www.BROKAT.com.