Clarus Expands Business Strategy and Model; Clarus Announces Initiatives To Serve the Growing Large to Mid-Sized Enterprise Market.

Business/High-Tech Editors

ATLANTA--(BUSINESS WIRE)--Dec. 15, 2000

Clarus (NASDAQ:CLRS), a leading business-to-business (B2B) e-commerce solution provider, today announced its strategy to meet the growing demand in the large to mid-size enterprise (LME) market. This expansion of its market strategy is designed to accelerate adoption and results in a business model with a greater emphasis on recurring revenue.

Clarus has focused on the LME market and has established itself as a leader in B2B e-commerce solutions on the Microsoft platform. Industry experts such as IDC and American Express report the LME market is entering a period of accelerated adoption. The Clarus solutions are designed to meet the needs of this target market by offering lower cost of ownership and speed of deployment advantages. As Clarus intensifies its focus on the needs of the LME market it will leverage key strategic partners such as Microsoft, Compaq and Deloitte & Touche to deliver "turnkey" packages and fixed-fee offerings.

"Global market adoption of electronic procurement solutions is less than one percent and even lower in the LME space," said Steve Jeffery, president and CEO of Clarus. "Clarus is positioned to meet this market opportunity with the right mix of products, services, partnerships and pricing."

Key to meeting the demand in this market will be breaking down the barriers to widespread adoption by reducing the risks and costs associated with traditional licensing and implementation of software. Clarus will move to a business model that will provide its customers greater flexibility to choose the way in which they procure their e-commerce solutions. Under this model, Clarus will recognize revenue from the sale of its products over a fixed period of time, reducing the upfront revenue recorded as compared with its traditional model, while generating an increase in the amount of sales backlog.

"This business model and strategy is an evolution of Clarus' longtime focus on the LME market," stated Jeffery. "We believe this shift will not only allow us to drive rapid customer adoption through directly addressing the needs of this target market, but will also provide a more stable and predictable financial model."

In order to meet the unique needs of the LME market, the majority of future Clarus contracts with customers will not meet the criteria for immediate revenue recognition. Instead, a recurring, predictable revenue stream will be recognized over an estimated 12 to 24 month period. Clarus anticipates that approximately 90 percent of its license business will be contracted under agreements requiring ratable revenue recognition.

Clarus also provided guidance for fourth quarter 2000 and for its fiscal year 2001 and 2002. Under the ratable revenue recognition model, the company expects fourth quarter 2000 revenue to be in the range of $4 million to $4.5 million, with an operating loss per share, excluding non-cash charges, of approximately $1.40. For fiscal year 2001, the company expects revenue to be in the range of $45 million to $50 million, and EPS, excluding non-cash charges, of ($2.14). Fiscal year 2002 projections are for revenues in the range of $115 million to $120 million, and EPS, excluding non-cash changes, of $1.08. The company plans to reach breakeven on a cash basis in the first quarter 2002, with profitability on a cash basis projected for the second quarter 2002.

In addition, Clarus announced the appointment of Jim McDevitt, as chief financial officer replacing Mark Gagne who will be leaving the company. Mr. McDevitt was previously VP of Finance.

Clarus will host an investor conference call to discuss this announcement today at 11:00 a.m. EST. To access the call, dial 888-390-6125 ten minutes before the scheduled start of the call. The pass code is "Clarus". Complete instructions for call access may also be found at www.claruscorp.com. A replay of the call will be provided at www.claruscorp.com shortly after the completion of the call and will be available until December 29, 2000 at 5 p.m. EST.

About Clarus Corp.

Atlanta-based Clarus Corporation (www.claruscorp.com; NASDAQ: CLRS), a leader in business-to-business (B2B) e-commerce, provides B2B procurement software and trading services that exploit the global marketplace of the Internet to manage corporate purchasing and enable digital marketplaces. ClarusNet(TM), a fully managed service portal, provides a comprehensive range of critical trading services such as payment settlement, supplier enablement, auctions, integration, and analytics. Designed to provide unprecedented interoperability, ClarusNet enhances the value and speeds delivery of any B2B trading platform including Clarus(TM) eProcurement and Clarus eMarket(TM). Microsoft recently honored Clarus as its Worldwide E-commerce Solution of the Year. Clarus solutions are being deployed at customer sites including Burlington Northern Santa Fe Corp., Comcast Corporation, AvidXchange, HispanB2B, Gjensidige NOR, MasterCard International, MetLife, Parsons Brinckerhoff, Perot Systems and Wachovia.

THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE EXCHANGE ACT. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN RISKS INCLUDING THAT THE BENEFITS EXPECTED BY THE COMPANY AS A RESULT OF THIS ANNOUNCEMENT MAY NOT OCCUR.

Clarus and ClarusNet are trademarks of Clarus Corporation. Throughout this release, software and hardware products are mentioned by name. In most, if not all, cases, these product names are claimed as trademarks by the companies that manufacture the products. It is not our intention to claim these names or trademarks as our own.