PurchasePro Reports First Quarter Results

LAS VEGAS, April 26, 2001 (PRIMEZONE) -- PurchasePro (Nasdaq:PPRO) today reported results for its first quarter ended March 31, 2001.

For the 2001 first quarter, PurchasePro's revenues totaled $29.8 million compared with $33.6 million posted in the fourth quarter of 2000 and, $4.6 million posted in last year's first quarter.

Excluding non-cash charges of $16.7 million for strategic marketing expense, and amortization of equity-based compensation and goodwill, PurchasePro reported a cash operating loss for the first quarter of $1.4 million, or $0.02 per share. Net loss for the 2001 first quarter was $18.1 million, or $0.26 per share, compared to net loss of $36.8 million, or $0.55 per share, in the fourth quarter of 2000, and $15.7 million, or $0.27 per share, in the corresponding year earlier quarter.

Charles E. Johnson, Jr., chairman and chief executive officer, said, "While we recognize that our results are below expectations, we achieved a number of milestones in the quarter that are broadening our reach, strengthening our network and setting us up for solid growth into the future. Our focus continues to be on driving transactions, revenues and growth to further our position as a leading business-to-business e-commerce company."

The company said that the difference between estimates and reported revenues resulted principally from deferral of revenues associated with the sale of several marketplaces.

Mr. Johnson noted that in PurchasePro's first quarter there was continued growth of its strategic alliances, including the enhanced development of the company's relationship with AOL. AOL also announced a significant commitment for marketing and sales programs for both the Netbusiness Marketplace and to fund marketplace sales. Further, PurchasePro trained approximately 200 AOL sales people - all driven to produce more sales - and is working jointly with AOL on a next generation product.

Including 13 referrals from AOL, PurchasePro signed a total of 21 marketplace software licenses during the quarter with industry-leading companies such as Hewlett Packard, Spherion, Monster.com and Homestore.com, underscoring the growing mainstream acceptance of PurchasePro's business services. The company added more than 20,000 businesses to its global marketplace during the quarter, bringing the total to approximately 160,000. Purchase orders submitted over the global marketplace nearly doubled over the fourth quarter, bringing the total for the quarter to more than 46,000.

During the quarter, PurchasePro also announced the acquisition of BayBuilder, providing the company with an immediate presence in the strategic sourcing industry. The company also closed the purchase of Stratton Warren.

Additionally, PurchasePro and Hilton's e-Procurement marketplace continued to scale. At the close of the first quarter, there were more than 500 Hilton hotels participating in the marketplace.

Strengthened Management Team

On Tuesday, the company announced the appointment of Richard L. Clemmer, currently chief financial officer of Quantum Corporation (NYSE:DSS)(NYSE:HDD), as its next chief financial officer and vice chairman of the board, continuing the company's ongoing process of building its leadership team. In the first quarter, Shawn McGhee, chief operating officer, assumed the additional role of president, and former J.D. Edwards (Nasdaq:JDEC) executive, Allen Winder, was named senior vice president of worldwide field operations.

About PurchasePro

PurchasePro (Nasdaq:PPRO), a leader in business-to-business e-commerce, operates the PurchasePro global marketplace that encompasses more than 160,000 businesses and powers hundreds of marketplaces with its highly scalable, browser-based e-commerce engine.

PurchasePro enables businesses of all sizes to easily buy and sell products and services, competing more effectively by enhancing sales opportunities, reducing procurement costs, and greatly increasing employee productivity. PurchasePro offers the following e-commerce solutions: e-Procurement for corporate procurement, v-Distributor for online distributors, and e-MarketMaker for Internet market makers.

The company provides extensive support and training programs. For information, call toll free at (888) 830-4600 or in Las Vegas at (702) 316-7000 or visit www.purchasepro.com.

NOTE TO EDITORS: PurchasePro is a servicemark of PurchasePro.com, Inc. All other trademarks or registered trademarks are the property of their respective owners. This press release includes forward-looking statements which are subject to the "Safe Harbor" created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements (which involve the company's plans, beliefs and goals, refer to estimates or use similar terms) involve certain risks and uncertainties, including the risks and uncertainties associated with rapidly changing technologies such as the Internet, the risks of technology development and the risks of competition that can cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements represent only the views of certain members of management and do not necessarily represent a consensus of all employees and managers within the company. Moreover, those forward-looking statements are based on limited information available to us now, which is subject to change. It should be clearly understood that the factors and perceptions on which these forward-looking statements are based are highly likely to change over time and that we have no current plan to update these statements. Actual results may differ substantially from what we say today and no one should assume at a later date that the forward-looking statements provided herein are still valid. They speak only as of today. For more information about these risks and uncertainties, see the SEC filings of PurchasePro, Inc., including the section entitled "Factors That May Affect Results" in its 10-K filing for the period ended December 31, 2000 which is available from the company on request and on the Internet at the SEC's Website, www.sec.gov.

                                     December 31,         March 31,
                                      ---------          ---------
                                        2000               2001
                                      ---------          ---------
                                              (In thousands)
 Current assets:
 Cash and cash equivalents                   $  86,335     $  54,863
 Trade accounts receivable, net                 23,171        44,410
 Other receivables                                 859         1,624
 Prepaid expenses and
  other current assets                           9,378        13,991
                                             ---------     ---------
    Total current assets                       119,743       114,888
 Property and equipment:
 Computer equipment and software                49,620        52,446
 Furniture and fixtures                          2,327         2,784
 Leasehold improvements                          6,244         6,605
                                             ---------     ---------
                                                58,191        61,835
 Less-accumulated depreciation
  and amortization                              (7,940)      (12,529)
                                             ---------     ---------
   Net property and equipment                   50,251        49,306
 Other assets:
 Intangibles, net                              128,926       134,423
 Investments in other companies                 15,718        13,926
 Deposits and other                              5,584           473
                                             ---------     ---------
    Total other assets, net                    150,228       148,822
                                             =========     =========
    Total assets                             $ 320,222     $ 313,016
                                             =========     =========
 Current liabilities:
 Accounts payable                            $  20,248     $   3,911
 Accrued and other current
  liabilities                                    3,421         3,690
 Deferred revenues                               3,030         9,863
 Current portion of long-term
  liabilities                                   22,255        24,658
                                             ---------     ---------
    Total current liabilities                   48,954        42,122
 Long-term liabilities                          10,348         7,150
                                             ---------     ---------
    Total liabilities                           59,302        49,272
 Stockholders' equity:
 Common stock                                      667           702
 Additional paid-in capital                    414,667       436,305
 Deferred stock-based compensation              (4,390)       (3,362)
 Accumulated deficit                          (151,552)     (169,636)
 Accumulated other comprehensive
  income (loss)                                  1,528          (265)
                                             ---------     ---------
    Total stockholders' equity                 260,920       263,744
                                             =========     =========
    Total liabilities and
     stockholders' equity                    $ 320,222     $ 313,016
                                             =========     =========
                                                   Three Months
                                                     March 31,
                                                  2000       2001
                                                --------    --------
                                                (In thousands except
                                                 per share amounts)
   Software licenses                            $   --      $ 12,132
   Network access and service fees                 3,431      12,465
   Advertising                                       750       1,381
   Other                                             369       3,801
                                                --------    --------
     Total revenues                                4,550      29,779
 Cost of revenues                                    313       2,178
                                                --------    --------
 Gross profit                                      4,237      27,601
 Operating expenses:
   Sales and marketing                             7,495      14,954
   Programming and development                     1,460       3,160
   General and administrative                      4,755      11,434
   Strategic marketing expense                      --        14,845
   Amortization of stock-based compensation        7,387       1,664
   Amortization of goodwill                         --           197
                                                --------    --------
     Total operating expenses                     21,097      46,254
                                                --------    --------
 Operating loss                                  (16,860)    (18,653)
 Other income (expense):
   Interest income (expense), net                  1,192         569
   Other                                            --          --
                                                --------    --------
     Total other income (expense)                  1,192         569
                                                --------    --------
 Net loss before benefit for income taxes        (15,668)    (18,084)
 Benefit for income taxes                           --          --
                                                --------    --------
 Net loss                                       $(15,668)   $(18,084)
                                                ========    ========
 Net loss per share:
   Basic                                        $  (0.27)   $  (0.26)
                                                ========    ========
   Diluted                                      $  (0.27)   $  (0.26)
                                                ========    ========
 Weighted average number of common shares
   Basic                                          59,017      68,677
                                                ========    ========
   Diluted                                        59,017      68,677
                                                ========    ========
 Excluding strategic marketing expense and
  amortization of stock-based compensation:
  and goodwill
   Net income (loss)                            $ (8,281)   $ (1,378)
                                                ========    ========
   Basic                                        $  (0.14)   $  (0.02)
                                                ========    ========
   Diluted                                      $  (0.14)   $  (0.02)
                                                ========    ========
                                                        Three Months
                                                       Ended March 31,
                                                       (In Thousands)
 Cash flows from operating activities:
  Net loss                                                 $ (18,084)
  Adjustments to reconcile net loss to
   net cash used in operating activities:
    Depreciation and amortization                             12,395
    Amortization of stock-based compensation                   1,664
    Imputed interest                                             452
    Provision for doubtful accounts                            1,930
     Non-cash sales and marketing expense                     14,845
     (Increase) decrease in:
        Trade accounts receivable                            (22,126)
        Other receivables                                       (608)
        Other current assets                                  (4,574)
     Increase (decrease) in:
        Accounts payable                                      (1,299)
        Accrued liabilities                                      269
        Deferred revenues                                      6,197
          Net cash used in operating activities               (8,939)
 Cash flows from investing activities:
     Purchase of property and equipment                      (17,140)
     Acquisitions, net of cash acquired                          (41)
     Other assets                                             (4,062)
          Net cash used in investing activities              (21,243)
 Cash flows from financing activities:
     Issuance of common stock, net                             1,837
     Repayment of notes payable and advances                      -
     Payments under marketing and technology agreements       (3,127)
         Net cash used in financing activities                (1,290)
 Decrease in cash and cash equivalents                       (31,472)
 Cash and cash equivalents:
     Beginning of period                                      86,335
     End of period                                          $ 54,863


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