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US INTERACTIVE [LOGO] (R) NEWS RELEASE
WWW.USINTERACTIVE.COM
FOR IMMEDIATE RELEASE
US INTERACTIVE(R) REPORTS ON FINANCIAL
PERFORMANCE; ANNOUNCES RENEWED MARKET
STRATEGY AND COST REDUCTIONS
PHILADELPHIA, PA, September 20, 2000 -- U.S. Interactive, Inc., (Nasdaq: USIT),
a leading Internet infrastructure solutions company that provides businesses
with customer focused Internet strategy, technology, marketing, and creative
services, today announced that its financial performance for the third quarter
will be lower than expectations.
The Company expects its revenues for the third quarter ending September 30, 2000
will be in the range of $21 million to $23 million, more than double third
quarter 1999 revenues of $9.9 million but below the $29.5 million reported for
the second quarter 2000. William C. Jennings, recently appointed CEO, US
Interactive, said, "After a track record of double-digit sequential growth each
quarter, this quarter's performance is principally due to the rapid changes in
the Internet professional services market, including lengthening sales cycles,
re-evaluation of e-business initiatives by our clients and prospects, and
reduced funding available to dot-com clients."
Jennings stated, "Because the Company, like so many companies in this sector,
did not identify and respond to these market conditions with sufficient speed,
US Interactive today announces both a renewed market strategy and tactical cost
reductions in the third quarter. We believe these decisions will enhance US
Interactive's competitive position. We are now focusing our resources to
capitalize on the growing demand for scalable customer-driven solutions and
services. As a result, we will implement strategic reductions in staff of
approximately 15 percent and general, administrative, and other expenses not
integral to this strategy."
"As we continue to evaluate our resources, we believe our Company is poised to
maximize our proven strategic consulting, user experience, technology
integration, and solution implementation skills," Jennings said. "By leveraging
our existing eCRM strengths in the telecommunications market and extending them
across additional vertical markets, we believe that we are aggressively
positioning the Company to capture a major share of the growing market for
customer-driven solutions."
"We count among our clients many well-established, highly-diversified companies
and we expect our client base will continue to grow, especially across rapidly
expanding wireless and broadband initiatives," Jennings continued. "US
Interactive recognizes the value in delivering to our clients a single, unified
view of their customers across all emerging digital delivery networks and
platforms. We believe our client base, integrated technology platforms, and
proven speed-to-market methodology positions US Interactive to capture this wide
opportunity."
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Additionally, the Company announced today, Mohan Uttarwar, currently President
of the Company's subsidiary U.S. Interactive Corp. (Delaware) also has been
appointed to the office of President of the Company. Mr. Uttarwar will be
responsible for the Company's sales, marketing and technology initiatives.
Jennings, as the Company's new CEO, stated, "I am excited about leading this
Company because of my belief that the successful execution and implementation of
these current initiatives will return US Interactive to healthy growth."
About U.S. Interactive, Inc.
----------------------------
US Interactive (Nasdaq: USIT) is a leading Internet professional services
company that provides businesses with customer focused Internet strategy,
technology, marketing and creative services. US Interactive helps companies
leverage Internet and emerging technologies, including broadband and wireless,
to transact business, communicate information and share knowledge across
employees, customers and suppliers to create thriving businesses. Founded in
1994, US Interactive has served some of the world's leading companies including
adidas, AIG, Asia Online, Dairy Farm International, Deloitte Consulting, Disney
Online, Sprint, Thomson Consumer Electronics and Toyota.
Forward Looking Statements
--------------------------
Certain statements made in this press release are not historical facts but are
"forward looking statements" and may involve risks and uncertainties that could
cause actual future results to differ materially and adversely from those
anticipated by such statements. Included among the factors that could affect the
Company's performance are the recent downturn in the Internet professional
services market; the ability of the Company to meet it obligations under, or
refinance, its present indebtedness, including the 80 million dollar note, most
of which is owed to certain stockholders of the Company; the acceptance of the
Company's renewed strategy; the successful execution of the current initiatives;
concerns of our clients and prospects regarding our financial results; general
economic conditions; fluctuations in operating results; our ability to
effectively manage future growth, to retain and efficiently integrate our new
executive management, and to identify, hire, train and retain, in a highly
competitive market, individuals highly skilled in the Internet and its rapidly
changing technology; significant revenue concentration in a limited number of
clients; the lack of long-term contracts; our ability to enter into, and retain
our existing, strategic relationships; market acceptance, rapid technological
change, a decline in Internet usage, and intense competition in our market; our
ability to effectively integrate the operational, managerial and financial
aspects of prior and future acquisitions; and our ability to obtain financing
when required. For a discussion of these and other risk factors that could
affect the Company's business, see "Risk Factors" in the Company's Prospectus
dated April 12, 2000 and the information set forth in the Company's Quarterly
Report on form 10-Q
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The US Interactive name, design, and e-Roadmap are registered service marks of
U.S. Interactive, Inc. IVL Methodology, CAPTURE, and e2e Solution are service
marks of U.S. Interactive, Inc. All other company names and products are
trademarks of their respective companies.
EDITOR'S NOTE: Additional information, including other announcements, about U.S.
Interactive, Inc. is available at www.usinteractive.com.
Public Relations Contacts:
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Amy Goldsmith, U.S. Interactive, Inc., phone: 310-889-3191, e-mail:
[email protected]
Investor Relations Contact:
---------------------------
Shawn Southard, U.S. Interactive, Inc., phone: 610-382-8879, e-mail:
[email protected]
