Exhibit 99.1
BROKAT AG REPORTS THIRD QUARTER REVENUE INCREASE OF 143%
o Investments in emerging Mobile Business market
o Rapid integration of Blaze and Gemstone
o Strategic partnerships and new customers
STUTTGART AND SAN JOSE, OCTOBER 31, 2000. Brokat AG (Nasdaq: BROA, Neuer Markt:
BRJ), a leading provider of software for E-Business solutions, today announced
results for the third quarter ending September 30, 2000.
Revenues during the period increased by 143% to 56.9 million DEM, compared to
23.4 million DEM reported during the same period last year. Revenues increased
32% sequentially from the preceding second quarter. During the third quarter,
the contribution of international business to total revenues also increased from
43% in 1999 to 55% in 2000, largely attributable to organic growth. For the
first time in this quarter, 18% of Brokat total revenues were derived from
projects in the Mobile Business area.
During the third quarter, Brokat reported a loss from operations on EBITDASO
(Earnings before Interest, Tax, Depreciation and Stock Options) of 19.7 million
DEM, compared to a loss of 9.1 million DEM during the third quarter of 1999.
These results are attributable to increased investments in the emerging Mobile
Business (M-Business) market, as well as post-merger integration costs from
recent acquisitions. Entry into the M-Business market involves considerable
initial financing of marketing and sales efforts.
Brokat reported a total net loss of 56.5 million DEM during the third quarter
compared with a loss of 24.5 million DEM reported during the same period last
year. These results reflect increased costs of 11.4 million DEM associated with
the employee stock option program that is reported as a balance sheet entry, but
has no effect on the company's cash flow, as well as a amortization of 16.7
million DEM for goodwill and other intangible assets from acquisitions.
Due to increased expenditures for strategic projects in the area of M-Business,
the company reported a gross margin decline of 14.7% to 41.3% during the
quarter. This short term effect is mainly the result of comprehensive
professional services that result in higher cost of sales. These strategically
important projects are anticipated to make an ongoing contribution to future
revenue growth and are expected to be delivered by partners.
During the 9 month period from January through September 2000, Brokat revenues
increased by 109% compared to the first nine months of 1999. Over the same
period, the contribution of international business increased from 27% to 57%.
Effective September 30, 2000, the company employed a total of 1,267 people in 17
countries.
Charges for the employee stock option program resulted from the difference
between the stock option issue prices fixed in autumn of 1998 and 1999 and the
trading price of
Brokat shares as of September 30, 2000. Because the price of Brokat stock has
risen by 451 per cent between the IPO and September 30, 2000, the non
cash-relevant cost of employee participation reflect an overall increase.
Sales of licenses for Brokat software also increased to DM 22.0 million, which
represents a 207% increase over the comparable period last year. Revenue
generated through partners amounted to DM 10.8 million in the second quarter of
2000 representing an increase of 119% compared to the same period last year.
RAPID INTEGRATION OF U.S. COMPANIES
Brokat underscores its aggressive globalization efforts with the completion of
the two acquisitions announced in June. In both product and strategy,
integration of the two software providers Blaze Software, Inc., San Jose
(California), and GemStone Systems, Inc., Beaverton (Oregon), is already very
advanced. The Blaze Advisor Solutions Suite is already been integrated with the
GemStone/J Application Server and Brokat's E-Services platform Twister allowing
customers of all three companies to benefit from the interaction of these
products.
The acquisition of GemStone was formally completed on August 30, 2000 and the
acquisition of Blaze was formally completed on September 29, 2000. Both
companies will be consolidated from that day on forward. Thus far in 2000,
Brokat has derived 21% of its revenues from the USA alone. GemStone has already
contributed 5.6 million DEM to the growth of revenues in the USA, thus
strengthening Brokat's presence in this key
market. Effective September 30, 2000, 524 of Brokat's total 1,267 employees were
based in the USA.
NEW CUSTOMERS AND PARTNERSHIPS
German Landesbank Baden-Wurttemberg (LBBW), one of the world's 50 largest
financial institutions, is offering its customers a Mobile Banking service based
on Brokat's technology. This service relies on the Twister E-Services platform.
The bank's customers can use their mobile phones to keep current on stock prices
and to review balances and current deposit values. In addition, the bank can
inform them about new stock issues, investment opportunities or new services.
In order to expand its activities in the M-Business market, Brokat took an
interest valued at US$12 million in MyAlert.com. The Spanish company offers its
customers personalized services via an Internet portal. Customers can receive
information about various topics such as stock exchange news and stock prices in
SMS (Short Message Service) or email format.
During the past quarter, several more international customers have chosen
Brokat's advanced technology. The Asian financial service provider 2cube.com as
well as the German MLP AG, leading in Europe in the Private Finance sector for
academics and sophisticated private clients, built their business on Brokat's
Twister E-Services platform and associated applications. Brokat also announced a
reseller agreement for the U.S. market with Compaq, the world's largest supplier
of computing systems.
OUTLOOK
Investments in project business completed during the third quarter are expected
to result in increased license revenues over the next quarters. Through its
cooperation with Siemens, Brokat has won a strong partner who is expected to
deliver these services in follow-up projects. This will enable Brokat to
increase its license business in the emerging M-Business market.
"We have completed considerable investments to support our successful entry into
the M-Business market, especially during the third quarter," stated Stefan
Rover, Chief Executive Officer (CEO) "This puts us in a very good position to
rapidly establish ourselves as the market leader in this growth market. We
firmly believe that this strategy will pay off in the medium to long term",
concludes Rover.
CONFERENCE CALL
Brokat will hold a conference call for investors and analysts twice on October
31, 2000 at 4 a.m. and 11 a.m. EST, respectively. You are invited to participate
by dialing 1-800 521-5431 (for 11 a.m. ) or 1-800 482-5519 (for 4:00 a.m. EST).
Participants will be Stefan Rover, CEO and Michael Jan(beta)en, CFO. After The
conference call, we will provide a recording of the entire call for 48 hours for
your convenience. For the replay number and further details on the conference
call, please refer to our IR section on our Web site www.brokat.com
BROKAT AG
Brokat is among the world's leading suppliers of software for E-Business
solutions and is the worldwide market leader in the Internet banking segment.
Its key product is the modular E-Services platform Twister. This multi-industry
software package integrates existing IT systems and applications within
companies and provides secure links to various electronic channels like the
Internet and mobile communications. Twister incorporates extensive Customer
Relationship Management and Enterprise Application Integration functionalities.
Twister solutions are already being used by more than 2,000 customers, including
Allianz, Axa, Deutsche Bank, 24, ABN Amro, Cable & Wireless HKT, Consors,
DBS-Bank Singapore, debitel, Swiss Post, SE-Banken, Toronto Dominion Band, and
Union Bank of California. Founded in 1994, Brokat currently employs more than
1,300 people in 17 countries. In calendar year 1999, the company reported
revenues of 94 million DEM. Brokat AG is headquartered in Stuttgart, Germany and
in San Jose, California. Further information about Brokat and its products is
also available in the Internet at www.brokat.com.
FOR FURTHER CONTACTS:
Reiner Jung Silke Simon
Company Spokesman Head of Investor Relations
Brokat AG Brokat AG
Industriestr. 3 Industriestr.3
70565 Stuttgart 70565 Stuttgart
T: 0711/ 78 844- T: 0711/78844-298
F: 0711/ 78 844-772 E-Mail: silke.simon@brokat.com
E-Mail: reiner.jung@brokat.com
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that relate to
anticipated increased license revenues in project business and Siemens' support
in that area and other matters. These forward-looking statements involve risks
and uncertainties, and actual results may differ materially from expectations.
Additional information on these and other risks and uncertainties related to the
forward-looking statements is included
in the "Risk Factors--Risks Relating to Brokat's Business" section of Brokat's
registration statement (No. 333-45430) on Form F-4 on file with the U.S.
Securities and Exchange Commission. The forward-looking statements in this press
release are based on management's reasonable beliefs as of the date of this
release, and Brokat assumes no obligation to update them to reflect subsequent
information or events. Reported results should not be considered as an
indication of future performance.