Ariba Announces Second Quarter 2001 Results

Q2 Fiscal 2001 Revenues Up 126 Percent Year Over Year



Apr 20, 2001, 01:00 ET from Ariba, Inc.

    MOUNTAIN VIEW, Calif., April 20 /PRNewswire Interactive News Release/ --
 Ariba, Inc. (Nasdaq:   ARBA), the leading business-to-business (B2B) eCommerce
 platform and network services provider, today announced results for the fiscal
 second quarter ended March 31, 2001.
     Revenues for the second quarter of fiscal 2001 were $90.7 million, up
 126 percent from the same period last year. Pro forma net loss for the quarter
 excluding certain special charges was $48.3 million, or a loss of $0.20 per
 share. During the corresponding quarter in fiscal 2000, the comparable pro
 forma net loss was $11.5 million, or a loss of $0.06 per share, excluding
 certain special charges.
     "Even though Ariba is feeling the effects of this difficult economy, the
 proven time to benefit and return on investment value proposition our products
 offer allowed us to sign several notable customers during the quarter
 including:  AT&T, British Airways, Exxon-Mobil, Herman Miller, HSBC Holdings,
 Saks Inc., Seven-Eleven Japan Co., Ltd, State of North Carolina, Unilever and
 Zurich Financial Services," said Keith Krach, Ariba's chairman and CEO. "We
 now have over 240 customers live including the Commonwealth of Virginia,
 Pillsbury, State of California, Sunoco, and many others this quarter. We
 remain confident that Ariba's set of solutions will enable us to manage and
 execute through this economic environment and emerge even stronger in the
 long-term."
     On April 2 the company revised its guidance for the quarter, reflecting
 the weakening macroeconomic climate. The Company also announced a plan to
 reduce spending across all major areas, including a reduction in workforce by
 approximately 30 percent of the total employee base.
     "The slowdown in both the economy and technology spending impacted our
 business more dramatically than we had expected," said Bob Calderoni, Ariba's
 CFO. "While the current uncertain market conditions provide low visibility
 going forward, we took decisive and immediate actions to realign our expense
 structure to reflect today's economic realities. We believe a strong focus on
 operational efficiencies and financial discipline will help us weather the
 current environment and should position us well as the economy recovers."
     As a result of the difficult economic conditions and other factors, Ariba
 has incurred a total of approximately $33.6 million in special charges
 relating to, among other things, equity investments, and costs related to the
 cancelled Agile acquisition. The Company also has written down approximately
 $1.4 billion of goodwill related to an acquisition.
 
     Delivering Results Worldwide
     To help meet the worldwide demand of mid-size businesses for hosted
 eProcurement solutions, last quarter IBM announced the IBM eMarketplace
 hosting Service for Ariba Buyer. The IBM-managed Ariba Buyer service will
 deliver full Ariba Buyer application function, IBM help-desk support and
 application hosting. Customers will choose from a set of reliable, flexible
 and secure hosting options that meet their specific eProcurement needs. This
 will address the many mid-sized companies that require an eProcurement
 solution that is structured according to their purchasing requirements and
 staffing resources.
     Ariba LIVE 2001 events in Sydney and Hong Kong last quarter attracted
 1,500 and 1,400 registered attendees respectively, indicating the growth and
 interest of B2B in the Asia Pacific region. Second quarter product
 enhancements for the Asia Pacific market included the addition of Chinese and
 Korean languages for Ariba Buyer and Ariba Marketplace solutions. Regional
 customers to go live in the past quarter include Orica Limited which conducted
 their first live reverse auction in February, NRMA which went live with Ariba
 Buyer and Sparkice which became the first Greater China customer to go live
 with Ariba Marketplace and Ariba Dynamic Trade. Lawrence Wee was also
 appointed vice president and managing director for Asia Pacific, bringing
 immense industry and regional experience to the Ariba team.
     In Canada, Ariba hosted a supplier summit attracting nearly 500 attendees.
 Hydro One Inc., an Ontario energy company also went live on Ariba Buyer in
 just 67 days and estimates their new online procurement system can save them
 Cdn$5 million in its first full-year of operation.
     Ariba continues to invest resources to expand and strengthen its position
 in key European, Middle East and African (EMEA) markets. In Europe the
 company's growth has been fueled by major customer wins in retail/consumer
 packaged goods, transportation and financial services industries, and solid
 growth in horizontal and vertical marketplaces. Recent customer wins in EMEA
 include British Airways, HSBC Holdings and Zurich Financial Services. Recent
 customers to go live include Novartis, Standard Bank of South Africa, Transnet
 and Bezeq-Zahav (GoldNet), an Israeli B2B company which launched "The Ring,"
 the first Hebrew deployment of the Ariba solutions.
 
     Launching New Products and Building the Ariba Community
     Paramount to the Ariba Sourcing platform is the availability of multiple
 bidding formats. Ariba introduced this new functionality providing customers
 with a broader command of their strategic sourcing initiatives. These include:
 reverse auction, closed bidding, sealed bids and absentee bidding. These
 multiple bidding formats, applicable for a wide range of materials, products,
 and services, underscore the flexibility of the Ariba Sourcing platform for
 RFQ-based procurement. Ariba Sourcing has helped to bring new business to
 Royal Plastics, a $35 million privately-held plastics injection molding
 company outside Cleveland, Ohio. In the recent quarter, Ariba Sourcing allowed
 Royal Plastics to participate in nine separate request for quotation
 opportunities. The supplier bid on four and won a new contract worth $750,000.
     Ariba announced several enhancements to the Ariba Commerce Services
 Network(TM) (Ariba CSN) that will enable buyers and suppliers to more
 efficiently and cost-effectively create and maintain relationships, move
 business transactions online and conduct business with trading partners
 worldwide. These include:  multiple language and localization capabilities,
 increased transaction capabilities and improved scalability.
     Since it was first launched in March 1999, Ariba CSN has experienced
 significant growth in adoption and liquidity -- with individual companies
 bringing billions of dollars of spend, and trading directly with more than
 8,000 network enabled suppliers, and providing access to an additional
 30,000 suppliers. Commerce relationships and transaction volumes have doubled
 every quarter since the launch of Ariba CSN and Ariba now has over
 220 suppliers that have each received more than $1 million in spend through
 the Ariba CSN. Suppliers such as Boise Cascade, Corporate Express, Dell
 Computer, Grainger, Office Depot, and Software House International each have
 over 25 buyers accessible via the Ariba network.
 
     Established Market Leadership
     Ariba continued to build on its established market leadership position for
 the year 2000. According to the February 2001 IDC Report, "eProcurement
 Applications Market Forecast and Analysis, 2000-2004," Ariba was named the
 undisputed leader in the eProcurement arena by seizing 36 percent of the
 worldwide buy-side eProcurement market segment -- more than twice that of its
 closest competitor.
 
     Conference Call Information
     The company will be holding a conference call today at 7:00 am PT. The
 dial-in number is 719-457-2662. There will be a live web broadcast available
 on the investor relations web site at www.ariba.com. A replay of this call
 will be available at noon PT by dialing 719-457-0820, passcode 650-898,
 through 5:00 p.m. PT on April 27, 2001.
 
     About Ariba
     Ariba, Inc. is the leading business-to-business (B2B) eCommerce platform
 and network services provider. Through the Ariba B2B Commerce Platform -- an
 open, end-to-end infrastructure of interoperable software solutions and hosted
 Web-based commerce services -- the company enables efficient online trade,
 integration and collaboration between B2B marketplaces, buyers, suppliers and
 commerce service providers. The global reach and best-of-breed functionality
 of the Ariba B2B Commerce Platform create Internet-driven economies of scale
 and process efficiencies for leading companies around the world. Ariba can be
 contacted in the U.S. at 650-930-6200 or at www.ariba.com.
 
     Ariba Safe Harbor
     Safe Harbor Statement Under the Private Securities Litigation Reform Act
 1995:  Information and announcements in this release involve Ariba's
 expectations, beliefs, hopes, plans, intentions or strategies regarding the
 future and are forward-looking statements that involve risks and
 uncertainties. All forward-looking statements included in this release are
 based upon information available to Ariba as of the date of the release, and
 we assume no obligation to update any such forward-looking statements. These
 statements are not guarantees of future performance and actual results could
 differ materially from our current expectations. Factors that could cause or
 contribute to such differences include, but are not limited to:  delays in
 development or shipment of new versions of our Ariba B2B Commerce Platform;
 lack of market acceptance of the Ariba B2B Commerce Platform or other new
 products or services; inability to continue to develop competitive new
 products and services on a timely basis; introduction of new products or
 services by major competitors; our ability to attract and retain qualified
 employees; difficulties in assimilating companies previously acquired,
 including Tradex, Trading Dynamics, and SupplierMarket.com; inability to
 expand our operations to support increased growth; lengthening sales cycles
 and the recognition of an increasing portion of revenues at the end of the
 quarter; declining economic conditions, including a recession; inability to
 control costs; changes in our pricing or compensation policies; inability to
 successfully manage a reduction in the company's workforce; and significant
 fluctuations in our stock price. These and other factors and risks associated
 with our business are discussed in the Company's Form 10-K filed
 December 29, 2000 and Form 10-Q filed February 14, 2001.
 
     NOTE:  Ariba and the Ariba logo are registered trademarks and Ariba B2B
 Commerce Platform is a trademark of Ariba, Inc. All other products or company
 names mentioned are used for identification purposes only, and may be
 trademarks of their respective owners.
 
 
                          ARIBA, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
                                  (unaudited)
 
                                                     March 31,   September 30,
                                                       2001            2000
 
     ASSETS
 
       Cash, cash equivalents and investments        $344,379       $334,189
       Restricted cash                                 45,097         32,037
       Accounts receivable, net                        57,026         61,892
       Prepaid expenses and other assets               44,547         44,573
       Property and equipment, net                    104,352         56,049
       Goodwill and other intangible assets, net    1,199,100      3,287,138
           Total assets                            $1,794,501     $3,815,878
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
       Accounts payable                               $22,157        $11,235
       Accrued compensation and related liabilities    65,836         54,439
       Other accrued liabilities                       70,787         51,372
       Deferred revenue                               210,425        199,702
       Capital leases and other obligations            14,550            938
           Total liabilities                          383,755        317,686
 
     Stockholders' equity
       Common stock                                       506            495
       Additional paid-in capital                   4,509,883      4,466,325
       Deferred stock-based compensation              (74,878)      (130,003)
       Accumulated other comprehensive loss            (4,258)          (918)
       Accumulated deficit                         (3,020,507)      (837,707)
           Total stockholders' equity               1,410,746      3,498,192
             Total liabilities and
              stockholders' equity                 $1,794,501     $3,815,878
 
 
                          ARIBA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                  (unaudited)
 
                              Three Months Ended           Six Months Ended
                                  March 31,                   March 31,
                              2001         2000           2001         2000
 
     Revenues:
       License              $58,605       $26,187     $187,516       $41,971
       Maintenance and
        service              32,048        13,855       73,370        21,550
         Total revenues      90,653        40,042      260,886        63,521
     Cost of revenues        26,791         6,447       58,122         9,889
       Gross profit          63,862        33,595      202,764        53,632
     Operating expenses:
       Sales and marketing   79,954        35,020      163,642        54,794
       Research and
        development          25,579         7,124       46,368        11,567
       General and
        administrative       18,772         5,327       35,167         8,748
         Total operating
          expenses          124,305        47,471      245,177        75,109
     Income (loss) before
      amortization, other
      income and taxes      (60,443)      (13,876)     (42,413)      (21,477)
       Amortization of
        goodwill and other
        intangible assets   327,571        98,287      656,099        98,287
       In-process research
        and development          --        12,750           --        12,750
       Business partner
        warrants              1,160            --       13,943            --
       Impairment of
        intangible assets
        and equity
        investments       1,433,292            --    1,433,292            --
       Merger related
        expenses              9,185            --        9,185            --
       Amortization of
        stock-based
        compensation         15,697         3,371       36,028         8,090
     Loss before other
      income and taxes   (1,847,348)     (128,284)  (2,190,960)     (140,604)
       Other income/
        (loss), net           6,132         2,713       10,712         4,772
     Pre tax loss        (1,841,216)     (125,571)  (2,180,248)     (135,832)
       Provision for
        income taxes          6,040          (369)      (2,552)         (442)
     Net loss           ($1,835,176)    ($125,940) ($2,182,800)    ($136,274)
 
 
     Net loss per share
      - basic and diluted    ($7.60)       ($0.70)      ($9.16)       ($0.81)
 
     Shares used in
      computing net loss
      per share - basic
      and diluted           241,417       179,241      238,351       167,610
 
 
           PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                  (unaudited)
 
                              Three Months Ended           Six Months Ended
                                   March 31,                  March 31,
                               2001         2000         2001          2000
 
     Revenues:
       License              $58,605       $26,187     $187,516       $41,971
       Maintenance and
        service              32,048        13,855       73,370        21,550
         Total revenues      90,653        40,042      260,886        63,521
     Cost of revenues        26,791         6,447       58,122         9,889
       Gross profit          63,862        33,595      202,764        53,632
     Operating expenses:
       Sales and marketing   79,954        35,020      163,642        54,794
       Research and
        development          25,579         7,124       46,368        11,567
       General and
        administrative       18,772         5,327       35,167         8,748
         Total operating
          expenses          124,305        47,471      245,177        75,109
     Income (loss) from
      operating activities  (60,443)      (13,876)     (42,413)      (21,477)
       Other income, net      6,132         2,713       10,712         4,772
     Pre tax income (loss)  (54,311)      (11,163)     (31,701)      (16,705)
       Provision for
        income taxes          6,040          (369)      (2,552)         (442)
     Net income (loss)     ($48,271)     ($11,532)    ($34,253)     ($17,147)
 
     Pro forma net loss
      per share - basic
      and diluted            ($0.20)      ($0.06)       ($0.14)       ($0.10)
 
     Shares used in
      computing net loss
      per share - basic
      and diluted           241,417       179,241      238,351       167,610
 
 
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SOURCE Ariba, Inc.
    MOUNTAIN VIEW, Calif., April 20 /PRNewswire Interactive News Release/ --
 Ariba, Inc. (Nasdaq:   ARBA), the leading business-to-business (B2B) eCommerce
 platform and network services provider, today announced results for the fiscal
 second quarter ended March 31, 2001.
     Revenues for the second quarter of fiscal 2001 were $90.7 million, up
 126 percent from the same period last year. Pro forma net loss for the quarter
 excluding certain special charges was $48.3 million, or a loss of $0.20 per
 share. During the corresponding quarter in fiscal 2000, the comparable pro
 forma net loss was $11.5 million, or a loss of $0.06 per share, excluding
 certain special charges.
     "Even though Ariba is feeling the effects of this difficult economy, the
 proven time to benefit and return on investment value proposition our products
 offer allowed us to sign several notable customers during the quarter
 including:  AT&T, British Airways, Exxon-Mobil, Herman Miller, HSBC Holdings,
 Saks Inc., Seven-Eleven Japan Co., Ltd, State of North Carolina, Unilever and
 Zurich Financial Services," said Keith Krach, Ariba's chairman and CEO. "We
 now have over 240 customers live including the Commonwealth of Virginia,
 Pillsbury, State of California, Sunoco, and many others this quarter. We
 remain confident that Ariba's set of solutions will enable us to manage and
 execute through this economic environment and emerge even stronger in the
 long-term."
     On April 2 the company revised its guidance for the quarter, reflecting
 the weakening macroeconomic climate. The Company also announced a plan to
 reduce spending across all major areas, including a reduction in workforce by
 approximately 30 percent of the total employee base.
     "The slowdown in both the economy and technology spending impacted our
 business more dramatically than we had expected," said Bob Calderoni, Ariba's
 CFO. "While the current uncertain market conditions provide low visibility
 going forward, we took decisive and immediate actions to realign our expense
 structure to reflect today's economic realities. We believe a strong focus on
 operational efficiencies and financial discipline will help us weather the
 current environment and should position us well as the economy recovers."
     As a result of the difficult economic conditions and other factors, Ariba
 has incurred a total of approximately $33.6 million in special charges
 relating to, among other things, equity investments, and costs related to the
 cancelled Agile acquisition. The Company also has written down approximately
 $1.4 billion of goodwill related to an acquisition.
 
     Delivering Results Worldwide
     To help meet the worldwide demand of mid-size businesses for hosted
 eProcurement solutions, last quarter IBM announced the IBM eMarketplace
 hosting Service for Ariba Buyer. The IBM-managed Ariba Buyer service will
 deliver full Ariba Buyer application function, IBM help-desk support and
 application hosting. Customers will choose from a set of reliable, flexible
 and secure hosting options that meet their specific eProcurement needs. This
 will address the many mid-sized companies that require an eProcurement
 solution that is structured according to their purchasing requirements and
 staffing resources.
     Ariba LIVE 2001 events in Sydney and Hong Kong last quarter attracted
 1,500 and 1,400 registered attendees respectively, indicating the growth and
 interest of B2B in the Asia Pacific region. Second quarter product
 enhancements for the Asia Pacific market included the addition of Chinese and
 Korean languages for Ariba Buyer and Ariba Marketplace solutions. Regional
 customers to go live in the past quarter include Orica Limited which conducted
 their first live reverse auction in February, NRMA which went live with Ariba
 Buyer and Sparkice which became the first Greater China customer to go live
 with Ariba Marketplace and Ariba Dynamic Trade. Lawrence Wee was also
 appointed vice president and managing director for Asia Pacific, bringing
 immense industry and regional experience to the Ariba team.
     In Canada, Ariba hosted a supplier summit attracting nearly 500 attendees.
 Hydro One Inc., an Ontario energy company also went live on Ariba Buyer in
 just 67 days and estimates their new online procurement system can save them
 Cdn$5 million in its first full-year of operation.
     Ariba continues to invest resources to expand and strengthen its position
 in key European, Middle East and African (EMEA) markets. In Europe the
 company's growth has been fueled by major customer wins in retail/consumer
 packaged goods, transportation and financial services industries, and solid
 growth in horizontal and vertical marketplaces. Recent customer wins in EMEA
 include British Airways, HSBC Holdings and Zurich Financial Services. Recent
 customers to go live include Novartis, Standard Bank of South Africa, Transnet
 and Bezeq-Zahav (GoldNet), an Israeli B2B company which launched "The Ring,"
 the first Hebrew deployment of the Ariba solutions.
 
     Launching New Products and Building the Ariba Community
     Paramount to the Ariba Sourcing platform is the availability of multiple
 bidding formats. Ariba introduced this new functionality providing customers
 with a broader command of their strategic sourcing initiatives. These include:
 reverse auction, closed bidding, sealed bids and absentee bidding. These
 multiple bidding formats, applicable for a wide range of materials, products,
 and services, underscore the flexibility of the Ariba Sourcing platform for
 RFQ-based procurement. Ariba Sourcing has helped to bring new business to
 Royal Plastics, a $35 million privately-held plastics injection molding
 company outside Cleveland, Ohio. In the recent quarter, Ariba Sourcing allowed
 Royal Plastics to participate in nine separate request for quotation
 opportunities. The supplier bid on four and won a new contract worth $750,000.
     Ariba announced several enhancements to the Ariba Commerce Services
 Network(TM) (Ariba CSN) that will enable buyers and suppliers to more
 efficiently and cost-effectively create and maintain relationships, move
 business transactions online and conduct business with trading partners
 worldwide. These include:  multiple language and localization capabilities,
 increased transaction capabilities and improved scalability.
     Since it was first launched in March 1999, Ariba CSN has experienced
 significant growth in adoption and liquidity -- with individual companies
 bringing billions of dollars of spend, and trading directly with more than
 8,000 network enabled suppliers, and providing access to an additional
 30,000 suppliers. Commerce relationships and transaction volumes have doubled
 every quarter since the launch of Ariba CSN and Ariba now has over
 220 suppliers that have each received more than $1 million in spend through
 the Ariba CSN. Suppliers such as Boise Cascade, Corporate Express, Dell
 Computer, Grainger, Office Depot, and Software House International each have
 over 25 buyers accessible via the Ariba network.
 
     Established Market Leadership
     Ariba continued to build on its established market leadership position for
 the year 2000. According to the February 2001 IDC Report, "eProcurement
 Applications Market Forecast and Analysis, 2000-2004," Ariba was named the
 undisputed leader in the eProcurement arena by seizing 36 percent of the
 worldwide buy-side eProcurement market segment -- more than twice that of its
 closest competitor.
 
     Conference Call Information
     The company will be holding a conference call today at 7:00 am PT. The
 dial-in number is 719-457-2662. There will be a live web broadcast available
 on the investor relations web site at www.ariba.com. A replay of this call
 will be available at noon PT by dialing 719-457-0820, passcode 650-898,
 through 5:00 p.m. PT on April 27, 2001.
 
     About Ariba
     Ariba, Inc. is the leading business-to-business (B2B) eCommerce platform
 and network services provider. Through the Ariba B2B Commerce Platform -- an
 open, end-to-end infrastructure of interoperable software solutions and hosted
 Web-based commerce services -- the company enables efficient online trade,
 integration and collaboration between B2B marketplaces, buyers, suppliers and
 commerce service providers. The global reach and best-of-breed functionality
 of the Ariba B2B Commerce Platform create Internet-driven economies of scale
 and process efficiencies for leading companies around the world. Ariba can be
 contacted in the U.S. at 650-930-6200 or at www.ariba.com.
 
     Ariba Safe Harbor
     Safe Harbor Statement Under the Private Securities Litigation Reform Act
 1995:  Information and announcements in this release involve Ariba's
 expectations, beliefs, hopes, plans, intentions or strategies regarding the
 future and are forward-looking statements that involve risks and
 uncertainties. All forward-looking statements included in this release are
 based upon information available to Ariba as of the date of the release, and
 we assume no obligation to update any such forward-looking statements. These
 statements are not guarantees of future performance and actual results could
 differ materially from our current expectations. Factors that could cause or
 contribute to such differences include, but are not limited to:  delays in
 development or shipment of new versions of our Ariba B2B Commerce Platform;
 lack of market acceptance of the Ariba B2B Commerce Platform or other new
 products or services; inability to continue to develop competitive new
 products and services on a timely basis; introduction of new products or
 services by major competitors; our ability to attract and retain qualified
 employees; difficulties in assimilating companies previously acquired,
 including Tradex, Trading Dynamics, and SupplierMarket.com; inability to
 expand our operations to support increased growth; lengthening sales cycles
 and the recognition of an increasing portion of revenues at the end of the
 quarter; declining economic conditions, including a recession; inability to
 control costs; changes in our pricing or compensation policies; inability to
 successfully manage a reduction in the company's workforce; and significant
 fluctuations in our stock price. These and other factors and risks associated
 with our business are discussed in the Company's Form 10-K filed
 December 29, 2000 and Form 10-Q filed February 14, 2001.
 
     NOTE:  Ariba and the Ariba logo are registered trademarks and Ariba B2B
 Commerce Platform is a trademark of Ariba, Inc. All other products or company
 names mentioned are used for identification purposes only, and may be
 trademarks of their respective owners.
 
 
                          ARIBA, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
                                  (unaudited)
 
                                                     March 31,   September 30,
                                                       2001            2000
 
     ASSETS
 
       Cash, cash equivalents and investments        $344,379       $334,189
       Restricted cash                                 45,097         32,037
       Accounts receivable, net                        57,026         61,892
       Prepaid expenses and other assets               44,547         44,573
       Property and equipment, net                    104,352         56,049
       Goodwill and other intangible assets, net    1,199,100      3,287,138
           Total assets                            $1,794,501     $3,815,878
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
       Accounts payable                               $22,157        $11,235
       Accrued compensation and related liabilities    65,836         54,439
       Other accrued liabilities                       70,787         51,372
       Deferred revenue                               210,425        199,702
       Capital leases and other obligations            14,550            938
           Total liabilities                          383,755        317,686
 
     Stockholders' equity
       Common stock                                       506            495
       Additional paid-in capital                   4,509,883      4,466,325
       Deferred stock-based compensation              (74,878)      (130,003)
       Accumulated other comprehensive loss            (4,258)          (918)
       Accumulated deficit                         (3,020,507)      (837,707)
           Total stockholders' equity               1,410,746      3,498,192
             Total liabilities and
              stockholders' equity                 $1,794,501     $3,815,878
 
 
                          ARIBA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                  (unaudited)
 
                              Three Months Ended           Six Months Ended
                                  March 31,                   March 31,
                              2001         2000           2001         2000
 
     Revenues:
       License              $58,605       $26,187     $187,516       $41,971
       Maintenance and
        service              32,048        13,855       73,370        21,550
         Total revenues      90,653        40,042      260,886        63,521
     Cost of revenues        26,791         6,447       58,122         9,889
       Gross profit          63,862        33,595      202,764        53,632
     Operating expenses:
       Sales and marketing   79,954        35,020      163,642        54,794
       Research and
        development          25,579         7,124       46,368        11,567
       General and
        administrative       18,772         5,327       35,167         8,748
         Total operating
          expenses          124,305        47,471      245,177        75,109
     Income (loss) before
      amortization, other
      income and taxes      (60,443)      (13,876)     (42,413)      (21,477)
       Amortization of
        goodwill and other
        intangible assets   327,571        98,287      656,099        98,287
       In-process research
        and development          --        12,750           --        12,750
       Business partner
        warrants              1,160            --       13,943            --
       Impairment of
        intangible assets
        and equity
        investments       1,433,292            --    1,433,292            --
       Merger related
        expenses              9,185            --        9,185            --
       Amortization of
        stock-based
        compensation         15,697         3,371       36,028         8,090
     Loss before other
      income and taxes   (1,847,348)     (128,284)  (2,190,960)     (140,604)
       Other income/
        (loss), net           6,132         2,713       10,712         4,772
     Pre tax loss        (1,841,216)     (125,571)  (2,180,248)     (135,832)
       Provision for
        income taxes          6,040          (369)      (2,552)         (442)
     Net loss           ($1,835,176)    ($125,940) ($2,182,800)    ($136,274)
 
 
     Net loss per share
      - basic and diluted    ($7.60)       ($0.70)      ($9.16)       ($0.81)
 
     Shares used in
      computing net loss
      per share - basic
      and diluted           241,417       179,241      238,351       167,610
 
 
           PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                  (unaudited)
 
                              Three Months Ended           Six Months Ended
                                   March 31,                  March 31,
                               2001         2000         2001          2000
 
     Revenues:
       License              $58,605       $26,187     $187,516       $41,971
       Maintenance and
        service              32,048        13,855       73,370        21,550
         Total revenues      90,653        40,042      260,886        63,521
     Cost of revenues        26,791         6,447       58,122         9,889
       Gross profit          63,862        33,595      202,764        53,632
     Operating expenses:
       Sales and marketing   79,954        35,020      163,642        54,794
       Research and
        development          25,579         7,124       46,368        11,567
       General and
        administrative       18,772         5,327       35,167         8,748
         Total operating
          expenses          124,305        47,471      245,177        75,109
     Income (loss) from
      operating activities  (60,443)      (13,876)     (42,413)      (21,477)
       Other income, net      6,132         2,713       10,712         4,772
     Pre tax income (loss)  (54,311)      (11,163)     (31,701)      (16,705)
       Provision for
        income taxes          6,040          (369)      (2,552)         (442)
     Net income (loss)     ($48,271)     ($11,532)    ($34,253)     ($17,147)
 
     Pro forma net loss
      per share - basic
      and diluted            ($0.20)      ($0.06)       ($0.14)       ($0.10)
 
     Shares used in
      computing net loss
      per share - basic
      and diluted           241,417       179,241      238,351       167,610
 
 
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 SOURCE  Ariba, Inc.