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EXHIBIT 99.1
BROADBASE SOFTWARE ANNOUNCES EXPECTED TIMING OF SERVICESOFT ACQUISITION;
ISSUES COMBINED GUIDANCE
MENLO PARK, Calif., Nov. 16 -- Broadbase Software, Inc. and Servicesoft, Inc.
today announced that they have received the necessary regulatory approvals to
proceed with the planned merger of the two entities, and accordingly have
announced respective stockholder meetings to approve the merger, to be held on
December 14, 2000. For more information regarding the details of these
shareholder meetings and other merger-related information, please refer to the
Form S-4 filed by Broadbase Software with the Securities and Exchange
Commission. Subject to shareholder approval and satisfaction of customary
closing conditions, the companies anticipate that the merger will be consummated
shortly after the stockholder meetings in mid-December 2000.
In light of the planned closing date, Broadbase Software has updated its revenue
and earnings expectations to incorporate Servicesoft for the fourth quarter of
2000 and for 2001. These updated pro forma expectations exclude charges
associated with acquisition-related costs, including merger expenses and
amortization of purchased intangibles, and also exclude stock-based compensation
expense.
For 2001, it is expected that the inclusion of Servicesoft will be accretive to
forecasted annual revenue, and will not delay Broadbase Software's anticipated
achievement of profitability on a pro forma earnings per share ("EPS") basis
during the third quarter of 2001. Broadbase currently expects that its revenues
for the full year of 2001 will approximate $145 million.
More specifically, Broadbase Software's expectations for 2001 operating results
in view of the planned Servicesoft acquisition are as follows:
-- Annual revenue expectations of approximately $145 million,
reflecting first quarter 2001 sequential quarter growth of
approximately 50% and sequential quarterly growth of 20-25% in
the three quarters thereafter.
-- Gross margins to approximate 65-67% in the first quarter and
improving sequentially over the next three quarters.
-- Research and development expenses, sales and marketing expenses,
and general and administrative expenses as a percent of total
revenue trending down from current levels to approximately 20%,
41%, and 7% by fourth quarter of 2001.
-- Pro forma EPS loss of approximately $0.05 for the year, with
anticipated losses of $0.08 and 0.04 in the first and second
quarter, respectively, and anticipated profitability in the
third and fourth quarter of $0.01 and $0.05, respectively. The
share count for pro forma EPS is expected to increase by
approximately 16 million shares
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during the third quarter of 2001 to reflect a full dilution
methodology by reason of the pro forma profits.
With respect to the fourth quarter of 2000, it is anticipated that the revenue
contribution from Servicesoft during the post-closing stub period will be
nominal due to revenue recognition principles and purchase accounting
restrictions. More specifically, the combination of Broadbase Software's general
policy of recognizing direct license revenue only upon customer installation
(i.e., when no significant implementation obligations remain) and the purchase
accounting implications of eliminating a significant portion of Servicesoft's
deferred revenue will act to limit the revenue contribution during this period
of December. Accordingly, the inclusion of Servicesoft post-closing expenses
without commensurate revenue will, as expected, have a dilutive effect on fourth
quarter pro forma earnings per share ("EPS"). Broadbase expects this dilution of
fourth quarter pro forma EPS to approximate $0.08-0.10 from previous consensus
estimates for Broadbase stand-alone.
For the fourth quarter of 2000, Broadbase Software's expectations are as
follows:
-- Revenue of approximately $17 million expected for the quarter.
-- Gross margins on revenues expected to be relatively flat (i.e.,
60-62%) from the third quarter, as improvements gained from
Broadbase's core business will be offset by inclusion of
Servicesoft costs.
-- Pro forma EPS loss of $0.15-0.17 for the quarter.
"The progress we have made in formulating the integration plans with Servicesoft
is very exciting," said Rusty Thomas, Broadbase Software's Chief Financial
Officer. "Upon consummation of the transaction, we believe the combined
enterprise will hit the ground running, and that viewpoint is reflected by our
aggressive financial forecasts. We look forward to completing the merger in
mid-December and to start realizing the synergies that exist between the two
companies."
About Broadbase
Broadbase Software is the leading provider of customer-focused analytic and
marketing automation applications that analyze customer data from multiple touch
points, and use that information to execute marketing campaigns, improve online
merchandizing and content, increase site stickiness and personalize all customer
interactions. Broadbase applications are designed for rapid time to value and
have been implemented in as few as fifteen days. Broadbase has provided critical
e-commerce infrastructure to more than 275 customers, including ADP, BEA
Systems, Cisco Systems, Fidelity Investments, Hewlett-Packard, InsWeb, Kodak,
LoanCity.com, Mercata.com, Onvia.com and United Airlines. Headquartered in Menlo
Park, CA, Broadbase has a rapidly growing global presence with locations
throughout North America, Europe and Asia.
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Information in this release that involves Broadbase's expectations, beliefs,
hopes, plans, intentions or strategies regarding the future are forward-looking
statements that involve risk and uncertainties. These forward-looking statements
include statements regarding expected growth in our revenues, expected
improvements in our gross margins, expected reductions in expenses as
percentages of revenues, and expected improvements in pro forma EPS, and
expected synergies between Broadbase and Servicesoft. All forward-looking
statements included in this release are based upon Broadbase's current
expectations as of the date of this release, and Broadbase assumes no obligation
to update any such forward-looking statement. These statements are not
guarantees of future performance and actual results could differ materially from
Broadbase's current expectations and from these forward-looking statements.
Factors which could cause actual results to differ include uncertainty regarding
our ability to achieve increased market acceptance of our products generally and
of our new product releases in particular, potential delays or difficulties with
integrating the operations and technologies of Servicesoft, potential inability
to achieve anticipated benefits of our acquisition of Servicesoft and the risk
of increased competition in our markets, which would adversely affect our
revenues, gross margins and pro forma EPS. These and other risks associated with
the merger and Broadbase's business are discussed in Broadbase's most recent
registration statement on Form S-4, annual report on Form 10-K and quarterly
report on Form 10-Q filed with the Securities and Exchange Commission
