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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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Contact: Gretchen Sorensen Don Bowler David Hagan
VP Corporate Affairs VP Investor Relations CEO, firstsource corp
(206) 373-9082 (206) 373-9506 (714) 445-6288
[email protected] [email protected] [email protected]
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Onvia Moves Product Offering to firstsource corp
through Strategic Partnership Agreement
Onvia continues move toward profitability
SEATTLE, WA and SANTA ANA, CA, -- Monday, December 19, 2000 -- Onvia.com, Inc.
(Nasdaq: ONVI), the leading small business exchange and firstsource corp, the
leading provider of e-procurement solutions today announced a definitive
partnership and investment agreement whereby firstsource will provide Onvia's
computer hardware, software, and office products offering. The agreement will
allow Onvia to further accelerate its financial performance by significantly
reducing operating expenses and focusing its resources on its online exchange
services.
Under the terms of the agreement, Onvia will invest $2 million in firstsource,
which will manage, operate and be responsible for all aspects of Onvia's
products business under a private label that maintains the Onvia name and
service levels. The move will benefit Onvia's customers, as the firstsource
agreement will immediately expand the product inventory six fold, to more than
240,000 products. Onvia will no longer report gross revenues for products sold
through PurchaseNow but will receive a commission on customer purchases through
a revenue-sharing arrangement.
"This action will enable us to focus on acquiring and converting customers to
our more profitable business-to-business and business-to-government exchange,"
stated Glenn Ballman, Onvia's chairman and chief executive officer.
Dave Hagan, the chief executive officer of firstsource corp, said; "We're
excited about the opportunity to partner with Onvia, the leading small business-
to-business exchange, and this partnership will quickly give us the ability to
gain economy of scale for our business."
The agreement means Onvia will record an estimated $4 million charge in the
fourth quarter and the company's operating expenses will decrease by
approximately $10 million in the first quarter of 2001 compared to third quarter
2000. This will be accomplished through reductions in staffing of approximately
180 employees over the next 90 days and reductions in marketing expenditures.
Employees whose jobs are eliminated will be offered severance packages and
outplacement services.
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"While it's unfortunate that we will be reducing our staffing levels, this
partnership with firstsource allows us to dramatically reduce our cash burn rate
while continuing to enhance the offering we provide to small businesses in the
exchange," said Mike Pickett, president and chief operating officer of Onvia.
"We are well positioned to reach profitability with our available cash
resources."
Onvia also announced that Mark Calvert, chief financial officer is resigning,
effective December 31, 2000. Mike Jacobsen, Onvia's vice president of finance
has been promoted to acting chief financial officer.
About Onvia
Onvia.com, Inc. (Nasdaq: ONVI), is the leading exchange helping small businesses
succeed. Onvia is the way to find new customers in the new economy. The company
is valued as a small business matchmaker, helping hundreds of thousands of small
businesses generate additional revenue and find what they need through online
exchange. Through Onvia's website, small businesses sell services and products
to other businesses and government agencies. For more information, contact
Onvia.com, Inc: 1260 Mercer St, Seattle, WA, 98109. Tel: 206/282-5170, fax:
206/373-8961, or visit www.onvia.com (http://www.onvia.com).
About firstsource corp
firstsource corp is a leading B2B e-commerce provider of innovative business
procurement solutions for small and medium-sized companies and Internet
resellers. Customers of firstsource corp's three product offerings, inpowr,
firstsource connect and firstsource community, utilize its proprietary end-to-
end sourcing/purchasing/fulfillment online management system, the inpowr FSP
platform, to connect directly with multiple distributors of business products.
The inpowr FSP platform can be licensed in whole or in part to companies who
desire to build online e-businesses, and firstsource connect creates customized
Web-based purchasing centers for companies seeking to reduce procurement costs,
streamline internal requisition processes and improve service delivery. With
over 1.2 million products to choose from, businesses can search, compare, price,
and purchase business products and services 24 hours a day, seven days a week.
Onvia to WEBCAST Acquisition Announcement
Onvia will broadcast its conference call in conjunction with the announcement of
this partnership over the Internet at 9:00 a.m. PST, on Tuesday, December
19,2000. Glenn Ballman, chairman and chief executive officer, Mike Pickett,
president and chief operating officer will lead the call. Please visit the
"Investor Relations" section at www.corporate.onvia.com and click on the
microphone icon to register, test connections and obtain any necessary software.
Participants may submit questions prior to the broadcast by e-mailing
[email protected].
For those unable to participate during the live Webcast, the call will be
archived on the Web site for future reference.
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This release contains, in addition to historical information, forward-
looking statements within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. These statements are based on
management's current expectations or beliefs, and involve risks and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. The forward-looking statements in
this release address the future financial results of Onvia and firstsource, new
markets and product and service offerings, and timing and benefits of the
outsourcing agreement.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: firstsource's
failure to leverage the Onvia brand in retaining and attracting customers or
firstsource's failure to attract sufficient investment capital as required
pursuant to the partnership agreement; Onvia's failure to realize all the
intended cost-saving benefits of the reduced headcount and marketing
expenditures; Onvia's inability to retain and/or motivate remaining personnel,
including key executives and technical personnel; Onvia's failure to launch a
government bid-matching and web hosting service; Onvia's inability to obtain the
approval or acquiescence by third parties of the outsourcing agreement and their
dissatisfaction with firstsource's performance under the outsourcing agreement;
Onvia's failure to take advantage of growth in its target markets, such as the
provision of high margin services and aggregating small business buyers and
sellers; the difficulty the market may have in valuing Onvia's evolving business
model; Onvia's failure to realize the anticipated benefits of the outsourcing
agreement; and Onvia's failure to further identify, develop, and achieve
commercial success for new products and services.
For a detailed discussion of these and other cautionary statements, please
refer to Onvia's filings with the Securities and Exchange Commission at
http://www.sec.gov. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this release.
Onvia undertakes no obligation to update publicly any forward-looking statements
to reflect new information, events or circumstances after the date of this
release or to reflect the occurrence of unanticipated events.
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