Tanning Technology Reports Fourth Quarter Results and Record Revenue; Company Reports Q4 Revenue of $17.9 Million, and Earnings Per Share of $.04 - Company Financial Information

Cambridge Telcom Report, Feb 14, 2000

Tanning Technology Corporation (Nasdaq: TANN) Wednesday announced financial results for the fourth quarter and year ended December 31, 1999.

For the fourth quarter of 1999, net revenue totaled $17.9 million, a 63% increase over fourth quarter 1998 net revenue of $11.0 million. The company reported net income for the quarter of $894,000, or $0.04 per basic and diluted share, compared to net income of $1.1 million, or $0.07 per basic and diluted share, for the fourth quarter of 1998. Income from operations for the fourth quarter of 1999 was $693,000, compared to $1.7 million in 1998.

For the year ended December 31, 1999, net and services revenue was $58.5 million, a 93% increase compared to services revenue of $30.3 million for the year ended 1998, and a 76% increase compared to net revenue of $33.3 million for the same period. Net income for the year ended December 31, 1999 totaled $2.4 million, or $0.12 per diluted share, compared to $2.3 million, or $0.15 per diluted share, for the year ended 1998. Income from operations for the year ended December 31, 1999 was $2.5 million, compared to $3.4 million for the year ended 1998.

Larry Tanning, President and Chief Executive Officer said: "We are very pleased with the results for the quarter and the year. We are continuing to help our clients face the challenges of e-business success -- the need for scalable and reliable solutions that deliver meaningful value in extremely complex and demanding business and technology environments. For many large businesses, we're now starting to see a whole new area of technical, and financial, challenges coming into play. These challenges relate to meeting service levels, and delivering cost effectiveness, in truly global distributed solutions. In order to meet these accelerating challenges, we are continuing to invest in our infrastructure, and particularly in our people, to build a foundation for long term growth."

Tanning Technology: Building the Global Business Infrastructure for the New Economy

Tanning Technology (Nasdaq: TANN) is an information technology solutions provider that architects, builds and deploys enterprise solutions for companies throughout the world. Tanning specializes in large, complex, integrated solutions that incorporate online transaction processing and very large databases. Internet technologies are central to Tanning's solutions, enabling direct interaction among customers and business partners on the World Wide Web and among employees within organizations on their private intranets. Tanning provides customer solutions in the areas of Customer Relationship Management, Supply Chain Management and Core Operations Processing, and provides customers with project teams composed of industry leading talent and experience. More information about Tanning can be found at http://www.tanning.com.

Consolidated Statements of Income
(in thousands except per share data)

                       Three months ended         Year ended
                          December 31,            December 31,
                    --------------            -------------------
                       1999         1998        1999       1998
                       ----         ----        ----       ----
Revenues:                  (unaudited)
 Services revenue     $17,940      $10,941     $58,464    $30,313
 Product sales              0           39           0      2,976
                      -------      -------     -------    -------
  Net revenues         17,940       10,980      58,464     33,289
 Project personnel costs8,533        5,176      28,148     14,941
                      -------      -------     -------    -------
  Gross profit          9,407        5,804      30,316     18,348
 Selling and
  marketing costs       2,076          807       7,470      2,531
 Administrative costs   6,638        3,189      20,363      9,647
 Product
  development costs         0           82           0      2,786
                      -------      -------     -------    -------
  Income from operations  693        1,726       2,483      3,384
 Interest income
  and other, net          916           53       1,681        285
                      -------      -------     -------    -------
  Income before
income taxes            1,609        1,779       4,164      3,669
 Income tax provision     715          662       1,715      1,366
                      -------      -------     -------    -------
  Net income             $894       $1,117      $2,449     $2,303
                      =======      =======     =======    =======
Basic earnings
 per share              $0.04        $0.07       $0.14      $0.15
                      =======      =======     =======    =======
Diluted earnings
 per share              $0.04        $0.07       $0.12      $0.15
                      =======      =======     =======    =======

Consolidated Balance Sheets
(in thousands)                   December 31,          December 31,
                                    1999                   1998
                                    ----                   ----
Assets:
 Cash and cash equivalents         $68,617               $10,446
 Accounts receivable, net           16,727                 9,225
 Other current assets                2,148                   915
                                   -------               -------
  Total current assets              87,492                20,586
 Property and equipment, net         5,238                 3,215
 Other long-term assets              1,638                   122
                                   =======               =======
Total assets                       $94,368               $23,923
                                   =======               =======

Liabilities and stockholders' equity:
 Accounts payable                   $2,656                $1,555
 Accrued compensation                4,918                 2,281
 Other current liabilities           1,682                 2,745
                                   -------               -------
  Total current liabilities          9,256                 6,581
 Long-term debt and other liabilities  510                   570
 Stockholders' equity               84,602                16,772
                                   -------               -------
Total liabilities and
 stockholders' equity              $94,368               $23,923
                                   =======               =======