Back with a Vengeance

PurchasePro shrugs off bad news, beats estimates

February 14, 2001 -- In a fitting move for a company that counts a funeral exchange as a partner, B2B enabler PurchasePro, which a short while ago was defending itself against a Barron's article that accused the company of possessing various and sundry problems, rose from the public relations grave (more on this grave business later) Monday when it reported operating positive cash earnings per share of $0.11 or $7.6 million of cash earnings, exclusive of non-cash charges and a one-time gain. The company reported revenue of $33.6 million for the fourth quarter ended December 31, 2000. Additionally, during the fourth quarter, the company posted a one-time net gain of $0.04 per share from the sale of an investment. The company's cash flow for the quarter was $10.3 million.

PurchasePro's revenues for the fourth quarter rose 94 percent from the $17.3 million posted in the preceding quarter and increased 1,160 percent to a record $33.6 million, from $2.7 million a year ago. For the full year, PurchasePro recorded revenues of $65.0 million, an increase of 983 percent versus last year's revenues. The company also reported that it has significantly narrowed its total cash loss to $12.6 million, or $0.20 per basic share for the year ended December 31, 2000, from a cash loss of $0.45 per basic share a year earlier.

Charles E. Johnson Jr., chairman and chief executive officer, said, We think our fourth-quarter results confirm the strength of our business model and validate, without qualification, our revenue model. This is further evidence of the leadership PurchasePro has established in the e-commerce industry.

If partnering with strong businesses is a sign of business-model strength, then PurchasePro can claim another positive sign. The company has strategic alliances with a number of heavyweight businesses, including AOL Time Warner (can't get much heavier than that), Gateway, Sprint and Office Depot. One of its strangest partners is the Funeral Exchange, a marketplace designed to bring a truly established and healthy profession into the New Economy. (We could make a bad pun about people dying to get in, but we won't.) Strange though it may be, it's hard to argue with the market potential there. People may someday quit using cell phones, computers and office supplies (I wouldn't bet the liposuction money on it, but it could happen), but there will never be a shortage of business for funeral homes.