International Business Experiences Strong Growth; BROKAT Reports Revenues Up 118% in the First Quarter of 2000; 67% of Business is From Abroad.

Business/Technology Editors

STUTTGART, Germany--(BUSINESS WIRE)--May 18, 2000

BROKAT Infosystems AG announced continued growth for the first quarter of fiscal year 2000. The leading provider of software for e-business solutions increased revenues to $17.9 million, an increase of 118 percent over the same period in the previous year ($8.2 million). International growth increased by 880 percent; percentage of total revenues accounted for by international business increased from 15% to 67%; and license revenues for BROKAT software doubled, from $4.2 million during the same quarter of the previous year to $8.9 19 million.

Operating results, EBITDASO (earnings before interest, taxes, depreciation, amortization and stock options) amounted to -$2.5 million, as compared with -$0.9 million during the same period. Earnings growth exceeded company expectations, reflecting the high costs of successfully expanding international business operations and adding staff in the area of research and development. At the end of the first quarter, the BROKAT Group employed 753 people--441 more employees than in the same period in 1999--at four offices in Germany and 15 offices around the world, including the 110 employees of Fernbach S.A., acquired in February.

Given the extraordinarily positive performance of BROKAT stock, expenses from the employee profit-sharing directly related to a change in the stock price increased from -$2.4 million in the same quarter of the previous year to -$9.5 million. Amortization of goodwill from acquisitions amounted to -$3.4 million. Including this non-cash item, BROKAT posted net earnings of -$16.9 million, versus -$3.5 million in the same period in 1999.

Business in the United States Successful

The significant increase in revenues from abroad is the result of a successful international growth strategy. Orders from the United States, Great Britain and Scandinavia made significant contributions in this regard. "We are now enjoying the payoff of a planned global expansion. The growth in sales in our core market, the United States, particularly confirms our strategy," said Stefan Rover, BROKAT CEO and board spokesman. The U.S. accounted for 10% of gross sales in the first quarter of the fiscal year and grew from $0.2 million to $1.8 million.

Revenues from business with partners amounted to $4.8 million in the first three months of the current fiscal year. These remained about the same when compared to the same period in the previous year ($5.0 million). International sales remain a high percentage of total sales, because in order to enter international markets quickly and successfully, BROKAT still handles its own product distribution abroad.

Global Market Position Solidified 

In the first quarter of Fiscal Year 2000, BROKAT took a significant step towards financing further growth: The Company placed a high-coupon bond in the amount of $113.9 million on the capital market. In so doing, BROKAT is the first European producer of e-business software to obtain outside financing through a high-coupon bond. "This will help us to continue over the long run the successful course of expansion that we have experienced during the past few years," commented Stefan Rover. The acquisition of the Luxembourg-based banking software specialist Fernbach S.A. and new partnerships with well-known companies in the IT industry--including Nokia, Cap Gemini, Vignette and FirstQuote--also helped solidify BROKAT's global market position.

BROKAT Infosystems AG

BROKAT is one of the leading international providers of e-business solutions. In the Internet banking market segment, BROKAT is the worldwide market leader. Its key product is a modular e-services platform called Twister. This multi-industry software integrates existing IT systems and applications and sets up secure links to various electronic channels such as the Internet and mobile communications. Twister provides comprehensive functionality for customer relationship management and enterprise application integration. Twister solutions are already used by more than 2000 BROKAT customers, including Deutsche Bank 24, Allianz, ABN Amro, Advance Bank, debitel, the Swiss postal service and Primus-Online. BROKAT was founded in 1994 and currently employs more than 700 people in fourteen countries. In calendar year 1999, the company posted revenues of DM 94 million DM. BROKAT Infosystems AG is headquartered in Stuttgart. Information on BROKAT and its products can also be found online at www.brokat.com.

BROKAT, BROKAT Infosystems, and Twister are trademarks of BROKAT Infosystems, AG in the United States and other countries. All other trademarks are properties of their respective company.