[GRAPHIC OMITTED] Contact: Alla Iaquinto
APPNET Media/AppNet
(301) 581-2489
[email protected]
Kevin Taback
Investors/AppNet
(877) 551-2323
[email protected]
APPNET CONTINUES EXCEPTIONAL GROWTH
IN SECOND QUARTER 2000
Revenue Doubles, Margins Improve, Momentum Builds in e-Marketplaces
Second Quarter 2000 Highlights
o Revenue of $51.2 million, up more than 100% over second quarter 1999 and up
14% sequentially, exceeding analysts' estimates
o Billable employees up nearly 9% sequentially to 965 at the end of the
quarter
o Annualized revenue per billable employee up nearly 40% from last year to
$220,000
o Adjusted EBITDA up 150% from second quarter 1999 to $3.2 million
o 7 cents positive fully-taxed cash EPS, versus breakeven fully-taxed cash
EPS in the second quarter of 1999
BETHESDA, MD - July 24, 2000 - AppNet, Inc. (Nasdaq: APNT), a premier provider
of end-to-end e-business solutions, today announced strong second quarter
financial results that demonstrate growth and expanding momentum in the
execution of large B2B engagements, particularly around Internet-based
e-Marketplaces.
For the three months ended June 30, 2000, revenue was $51.2 million, 104% higher
than revenue of $25.1 million for the second quarter of 1999 and 14% higher than
revenue of $44.7 million in the first quarter of 2000. Gross margin improved to
46.9%, an increase of 230 basis points from the first quarter of 2000 and an
increase of 360 basis points from the second quarter of 1999. Earnings before
interest, taxes, depreciation, amortization and stock-based and
acquisition-related compensation (adjusted EBITDA) were $3.2 million, or 6.2% of
revenue in the quarter. Fully-taxed (35% effective tax rate) cash EPS was 7
cents in the quarter, including expenses related to the pending merger with
Commerce One (Nasdaq: CMRC), compared to breakeven cash EPS in the second
quarter of 1999. These results exceeded analysts' consensus expectations.
<PAGE>
"These stellar results demonstrate our surge of momentum as we strive to become
the de facto B2B e-business solutions provider," said Ken Bajaj, chairman and
CEO of AppNet. "We are now the architects of a dozen B2B e-Marketplaces, the
e-business consultants to 25 of the Fortune 50 companies, and the builders of
enterprise portals for global players like BP Amoco."
Recent Customer Wins and Major Announcements
In the second quarter of 2000, the company announced a string of major
engagements, positioning itself as a leader in building e-Marketplaces and
helping global companies become players in that exciting new business model.
During the quarter, AppNet announced:
o Strategic alliances with Commerce One, eCredit, Intershop and Web Methods
that strengthen its e-Marketplace solutions offering.
o The launch of ProcureZone, a B2B e-Marketplace for the $600 billion
construction industry.
o The launch of TelecomSmart, a B2B e-Marketplace for small and medium
businesses in the telecommunications industry.
o The selection by MortgageRamp, a GMAC company, to construct the first
comprehensive commercial mortgage e-Marketplace.
o The selection by BP Amoco's natural gas and liquids division, to implement
a corporate portal to create real time communications and transactions with
its employees, partners, and customers.
o The receipt of 17 International Web Page Awards in recognition of its
strong design and user experience capabilities, the most awarded to a
single company in 2000.
o The execution of a definitive agreement to be acquired by Commerce One on
June 20, 2000. The combined companies will create the first fully
integrated e-commerce applications, strategy consulting, and Internet
professional services firm in the industry.
"We have increased our lead in the critical B2B and e-Marketplace arenas in the
second quarter of this year," concluded Mr. Bajaj. "Our pending acquisition by
Commerce One positions us very well for the long-term as together we will create
the backbone for B2B trade on the Internet in building the Global Trading Web."
About AppNet, Inc.
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 economy, the firm offers a unique
mix of Internet strategy, interactive marketing, and e-business technology
services. AppNet has been ranked one of the 10 largest interactive marketing
agencies by Advertising Age and Brand Week, and one of the 50 largest pure
Internet companies by Internet World. AppNet works with Fortune 1000 and dot.com
companies. Customers include Sprint, UCCnet, ProcureZone.com, BP Amoco, Ford,
Hyundai, bet.com, and NASA. For more information about how AppNet can bring the
power of e-business to your business, visit http://www.appnet.com.
<PAGE>
# # #
This press release may include "forward-looking statements" 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. Information regarding the factors
that could cause such differences is contained in AppNet's filings with the
Securities and Exchange Commission and in the Registration Statement on Form S-4
filed by Commerce One, Inc. on July 20, 2000.
<PAGE>
<TABLE>
AppNet, Inc.
Consolidated statements of operations
(Amounts in thousands, except per share data)
<CAPTION>
----------------------- ------------------------
Three months ended Six months ended
June 30, June 30, June 30, June 30,
1999 2000 1999 2000
----------------------- ------------------------
Actual Actual Actual Actual
----------------------- ------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 25,063 $ 51,157 $ 44,706 $ 95,888
Cost of revenues 14,220 27,174 25,677 51,936
----------------------- ------------------------
Gross profit 10,843 23,983 19,029 43,952
----------------------- ------------------------
Selling and marketing 1,594 5,625 2,784 9,161
General and administrative 7,957 15,203 14,711 31,500
----------------------- ------------------------
Adjusted EBITDA (a) 1,292 3,155 1,534 3,291
----------------------- ------------------------
Stock-based and other
acquisition-related compensation 5,464 5,439 7,951 10,555
Depreciation and amortization 15,104 14,461 27,839 29,308
----------------------- ------------------------
Loss from operations (19,276) (16,745) (34,256) (36,572)
----------------------- ------------------------
Interest income - (744) - (1,617)
Interest expense 2,479 144 3,741 311
Other expense, net 558 - 558 -
----------------------- ------------------------
Loss before income taxes (22,313) (16,145) (38,555) (35,266)
----------------------- ------------------------
Income taxes 50 122 150 392
----------------------- ------------------------
Net loss $ (22,363) $ (16,267) $ (38,705) $ (35,658)
======================= ========================
Dividends on and accretion
of preferred stock (1,100) - (2,139) -
----------------------- ------------------------
Net loss attributable
to common stockholders $ (23,463) $ (16,267) $ (40,844) $ (35,658)
======================= ========================
----------------------- ------------------------
Basic and diluted net
loss per common share $ (1.09) $ (0.48) $ (1.97) $ (1.05)
======================= ========================
----------------------- ------------------------
Weighted average common
shares outstanding 21,580 34,068 20,681 33,955
======================= ========================
----------------------- ------------------------
Cash net income (loss) (b) $ (1,795) $ 3,633 $ (2,915) $ 4,205
======================= ========================
----------------------- ------------------------
Cash net income (loss) per share $ (0.08) $ 0.11 $ (0.14) $ 0.12
======================= ========================
</TABLE>
(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.
<PAGE>
AppNet, Inc.
Condensed consolidated balance sheets
(Amounts in thousands)
-------------- -------------
12/31/99 6/30/00
-------------- -------------
(Unaudited)
Current assets
Cash and cash equivalents $ 66,549 $ 41,178
Accounts receivable, net 31,661 47,576
Other current assets 1,300 3,344
------------- -------------
Total current assets 99,510 92,098
------------- -------------
Property and equipment, net 8,958 14,800
Intangible assets, net 97,247 70,477
Other assets 2,111 5,033
------------- -------------
Total assets $ 207,826 $ 182,408
============= =============
Total current liabilities $ 38,204 $ 38,153
Long-term debt and other liabilities 4,780 4,926
------------- -------------
Total liabilities 42,984 43,079
------------- -------------
Stockholders' equity 164,842 139,329
Total liabilities, redeemable stock and ------------- -------------
stockholders' equity $ 207,826 $ 182,408
============= =============
