Razorfish, Inc. Revenues Jump 97% in First Quarter - Company Financial Information

Edge: Work-Group Computing Report, May 1, 2000

Razorfish, Inc. (NASDAQ: RAZF), the global digital solutions provider, Tuesday reported record financial results for the quarter ended March 31, 2000. The company also announced the appointment of John Roberts as its new chief financial officer (See related announcement of April25 2000).

Razorfish 2000 first quarter revenues rose to $64,116,000, a 97% increase over the revenue for the same period a year ago of $32,612,000, and an increase of 22% over the revenue for the previous quarter of $52,705,000.

2000 first quarter net income before amortization of intangibles, and non-cash compensation expense was $6,479,000 or cash EPS of $0.07, compared to $3,739,000 or cash EPS of $0.04 in the first quarter of 1999. Net income for the quarter (including the above costs) totaled $4,493,000 or $0.05 per share, compared to net income of $3,100,000 or $0.04 per share for the first quarter of 1999.

"Our strong sequential, quarter-over-quarter growth of 22% has Razorfish hitting on all cylinders now that we have successfully integrated our acquisitions and built global, scaleable capabilities that will harness the wireless and broadband explosion and keep Razorfish at the forefront of the digital revolution," said Jeff Dachis, chief executive officer and president of Razorfish. "Razorfish is winning because we continue to invent new businesses and reinvent Fortune 1000 businesses with cutting-edge solutions executed through the passion and talent of over 1,600 of the industry's brightest leaders. Through the deep technology capabilities, creative skills and business strategy of our employees, we are able to transform businesses that are committed to winning through a focus on user design."

Founded in 1995, Razorfish, Inc. leverages digital technologies to help companies invent and reinvent the way they do business. The company delivers a complete set of end-to-end solutions including strategy, design, and technology services across platforms, devices, and networks. With offices in Amsterdam, Boston, Hamburg, Helsinki, Los Angeles, London, Mannheim, New York, Oslo, San Francisco, and Stockholm, Razorfish employs more than 1,600 people and is headquartered in New York. Recent Razorfish clients include Nissan, Nokia, Excite, Vodafone Airtouch, and Charles Schwab. For further information visit: http://www.razorfish.com.

                         Razorfish, Inc.

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CONSOLIDATED STATEMENTS OF INCOME
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(in thousands, except per share amounts)      Three Months Ended
(unaudited)                                       March 31,
                                               1999        2000
                                          -------------------------
Revenues                                      $ 32,612    $ 64,116
Project personnel                               15,675      29,863
                                          ------------- -----------
      Gross profit                              16,937      34,253
Sales and marketing                              2,207       4,080
General and administrative                       8,902      20,381
                                          ------------- -----------
      Total ordinary operating expenses         11,109      24,461
                                          ------------- -----------
Income from ordinary operations                  5,828       9,792
Non-cash compensation expense                       27           -
Amortization of intangibles                        792       1,986
                                          ------------- -----------
Income from operations                           5,009       7,806
Other income, net                                  404       1,006
                                          ------------- -----------
      Income before income taxes                 5,413       8,812
Provision for income taxes                       2,313       4,319
                                          ------------- -----------
      Net income                               $ 3,100     $ 4,493
                                          ============= ===========

Net income per share
Basic                                           $ 0.04      $ 0.05
                                          ============= ===========
                                          ============= ===========
Diluted                                         $ 0.04      $ 0.05
                                          ============= ===========

Weighted average shares outstanding
Basic                                           74,441      91,027
Diluted                                         85,891      99,537

Earnings per share cash basis
 (tax effected at 40% rate)                     $ 0.04      $ 0.07
                                          ============= ===========

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)                       December 31,        March 31,
                                      1999              2000
                                  --------------    --------------
ASSETS
Current assets
 Cash, cash equivalents,
  and short-term investments           $ 98,798          $ 89,623
 Accounts and unbilled receivables       46,087            58,545
 Other current assets                     8,479             8,229
                                  --------------    --------------
      Total current assets              153,364           156,397

Net fixed assets                         15,428            16,538
Other assets                             82,798           178,959
                                  --------------    --------------
      Total assets                    $ 251,590         $ 351,894
                                  ==============    ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
 Accounts payable and
  accrued expenses                       45,919            32,739
 Current portion of
  long-term obligations                     682               105
 Deferred revenues                        2,464             3,543
                                  --------------    --------------
      Total current liabilities          49,065            36,387

Long-term obligations                     4,172             9,500
                                  --------------    --------------
      Total liabilities                  53,237            45,887

Stockholders' equity                    198,353           306,007
                                  --------------    --------------
Total liabilities and
  stockholders' equity                $ 251,590         $ 351,894
                                  ==============    ==============