Pivotal Announces Record Quarter with Revenue Growth of 143%

Pivotal Corporation (NASDAQ: PVTL, TSE: PVT) today announced record financial results for its fiscal first quarter 2001 ended September 30, 2000.

Vancouver, British Columbia, October 12, 2000 — Pivotal Corporation (NASDAQ: PVTL, TSE: PVT) today announced record financial results for its fiscal first quarter 2001 ended September 30, 2000.

Pivotal's net revenues in the first quarter of fiscal 2001 increased 143 percent to $21.1 million compared to $8.7 million in the first quarter of fiscal 2000. License revenues increased 126 percent to $13.8 million in the first quarter of fiscal 2001 compared to $6.1 million in the first quarter of fiscal 2000. Revenues from services and maintenance increased 183 percent to $7.3 million in the first quarter of fiscal 2001, compared to $2.6 million in the same quarter last fiscal year.

Net loss excluding amortization of goodwill in the first quarter of fiscal 2001 was $459,000 or $0.02 per share, compared to $686,000 or $0.04 per share in the first quarter of fiscal 2000.

Net loss after amortization of goodwill in the first quarter of fiscal 2001, was $5.5 million or $0.24 per share, compared to a net loss of $686,000 or $0.04 per share in the first quarter of fiscal 2000.

"This quarter Pivotal delivered a new suite of demand chain network solutions that bring together the benefits of CRM, eCommerce and eSelling to provide companies with faster time to success," said Norm Francis, president and CEO, Pivotal. "Pivotal's integrated solutions offer large and medium-sized enterprises a compelling alternative to integrating numerous point solutions that require lengthy deployment cycles."

According to Vince Mifsud, executive vice-president and CFO, Pivotal, "Pivotal posted record revenue growth for the first quarter of fiscal 2001, up 143 percent from last year and successfully integrated two recent acquisitions, Exactium and Simba Digital Conversations. These acquisitions effectively expanded our solution suite, requiring Pivotal to focus on training our sales and service organizations to deliver Pivotal's new demand chain network solutions."

New customers signed in the quarter included American First Federal Credit Union, MarchFirst Inc., Hitachi Telcom USA Inc., Novartis de Columbia, Panasonic SA, Telstra, Western Bank, Toshiba Information System Corporation, Kikkoman Corporation, Hot Ship Inc, Evolve Software Inc., Medical Principal Co. Ltd., Amazon.com Inc. and Netvendor Inc.

Additional purchases from existing customers continued at a strong pace this quarter. Customers that ordered additional Pivotal solutions this quarter included Lucent, KPMG, Intrawest Corporation, WebEx, Research in Motion, SoftLab GmbH, Mercer Management Consulting, Inc., CareerBuilder Inc. and Savills PLC.

First Quarter Highlights:

Industry Recognition

Selected as "Hottest Company" for a third year in a row by Start Magazine
Named Microsoft North American "Packaged Application Partner of the Year"
Named Canada's fastest growing technology company on the 'Canadian Technology Fast 50 List' by Deloitte & Touche
Corporate Expansion
This quarter Pivotal continued to expand its team of executives and staff by adding the skills, reputation and industry knowledge to target the large and medium-sized enterprise market.

Appointed Sandy Blyth, vice president of strategic alliances, to expand global alliances with major consulting firms and systems integrators
Appointed David Langston, a former Oracle executive, as vice president of sales for North America
Appointed Pivotal veteran, Peter Callaghan, as vice president of industry solutions, to manage vertical sales initiatives
Expanded management team in Germany
Fourth global research and development center launched in Toronto, Canada

Pivotal eSelling 2000 Ships
Pivotal eSelling 2000 began shipping to customers worldwide in July 2000. This state-of-the-art eSelling solution offers intelligent features that enable global enterprises to perform in-depth needs analysis, provide targeted recommendations on products and services, advise customers on features and options, and configure complex orders with ease and accuracy.

Intrawest Delivers Personalized Customer Service with Pivotal Solution
Intrawest is leveraging Pivotal's demand chain network solutions to deliver personalized customer service in person and over the Internet. The company's innovative strategy empowers customers with Web self-service, and empowers employees with real-time Internet collaboration.

Headhunter.net Selects Pivotal Demand Chain Network Solution
Pivotal's demand chain network solution will enable Headhunter.net to enhance online brand loyalty and brand differentiation by delivering personalized support, customer interaction and communication across every touch point in real-time.

Pivotal Hosts Worldwide Customer and Alliance Conference
The company's fourth annual customer and alliance conference, held in Whistler, Canada, attracted more than 600 executives from around the world.

Conference call details:

Date: Thursday, October 12, 2000
Start Time: 5:30 p.m. ET (2:30 p.m. PT)
Dial-In Phone Number: 1-415-247-8525
Conference Call Name: 1st Quarter 2001 Earnings Call
Live Audio Streaming: www.pivotal.com

If you are unable to participate, a replay will be available from 7:30 p.m. ET October 12th through to 7:30 p.m. ET October 15th, 2000. For callers within the U.S. or Canada, the replay number is 1-800-633-8284. The replay pass code for all callers is 16428769. In addition, the replay will be available via our website at www.pivotal.com.

(Expressed in United States dollars; all amounts in thousands except per share data)

Three Months ended September 30, 2000 Three Months ended September 30, 1999
Licenses $ 13,768 $ 6,097
Services and maintenance 7,290 2,578
Total revenues 21,058 8,675
Cost of revenues:
Licenses 866 284
Services and maintenance 3,870 1,368
Total cost of revenues 4,736 1,652
Gross profit 16,322 7,023
Operating expenses
Sales and marketing 11,498 5,715
Research and development 3,917 1,569
General and administrative 1,776 707
Total operating expenses 17,191 7,991
Loss before amortization, other income and taxes (869) (968)
Amortization of goodwill (4,995) -
Loss from operations (5,864) (968)
Interest and other income 343 357
Loss before income taxes (5,521) (611)
Income taxes 67 (75)
Net loss $ (5,454) $ (686)
Loss Per Share :
Basic and diluted $ (0.24) $ (0.05)
Pro-forma basic and diluted $ (0.04)
Weighted average number of shares used to calculate loss per share:
Basic and diluted 22,375 13,693
Pro-forma basic and diluted 18,380
Excluding amortization of goodwill:
Net loss $ (459) $ (686)
Loss per share excluding amortization of goodwill:
Basic and diluted $ (0.02) $ (0.05)
Pro-forma basic and diluted $ (0.04)
Weighted average number of shares used to calculate loss per share
Basic and diluted 22,375 13,693
Pro-forma basic and diluted 18,380
September 30, 2000 June 30, 2000
Current Assets
Cash and cash equivalents $ 13,915 $4,734
Short term investments 22,247 30,788
Accounts receivable 17,622 16,764
Prepaid expenses 1,931 1,859
Total current assets 55,715 54,145
Property and equipment, net 7,720 7,231
Goodwill, intangibles and other assets, net 55,978 60,569
Total assets $ 119,413 $ 121,945
Current Liabilities
Accounts payable and accrued liabilities $ 16,919 $ 16,877
Deferred revenue 10,155 8,971
Total current liabilities 27,074 25,848
Shareholders' Equity 92,339 96,097
Total liabilities and shareholders' equity $ 119,413 $ 121,945

Pivotal Corporation enables large and medium-sized businesses worldwide to make, serve, and manage customers with superior speed and efficiency by providing XML-based demand chain networks that deliver personalized customer experiences across every touch point in real-time. These networks unify Internet commerce, CRM, eSelling, and wireless technologies to manage collaborative relationships between customers, business partners, and employees; guide intelligent commerce transactions across multiple channels; seamlessly integrate the demand chain with the supply chain; and fully exploit Microsoft platform standards.

Pivotal solutions are sold in 35 countries and are available in English, French, German, Spanish, Portuguese, Swedish, Japanese and Chinese. Pivotal's worldwide customer base includes more than 1,000 organizations in traditional, commercial and public market sectors and the new digital economy, including KPMG, Intrawest Corporation, Emerson Electric, US Filter, Ericsson, Nissan Motor Corp., HarperCollins Publishers, Qiagen Inc., Deutsche Bank, Trader.com, Southern Company, Lucent Technologies, Inc., NEC, Deloitte & Touche, Principal Financial Group and Red Cross Australia.

Pivotal is a public company traded on the NASDAQ under the symbol “PVTL” and the Toronto Stock Exchange under the symbol “PVT.” More information can be found on the corporate Web site at http://www.pivotal.com.

This press release contains forward-looking statements including the ability of the demand chain network solutions to provide the anticipated benefits to third parties, its ability to maintain leadership in the eBusiness marketplace and the anticipated benefits of relationships with a number of third parties. These statements are based on management's current projections, beliefs and opinions at the date of this press release. Actual results could differ materially from those anticipated in these statements based upon a number of factors including the possible failure of the demand chain network solution and eBusiness markets to grow as anticipated; the ability to train the sales and service organizations to deliver the demand chain network solution; the retention and hiring of qualified employees; the possibility of technical difficulties or delay in future product introductions, improvements and customer implementations; product pricing or other initiatives of Pivotal's competitors; successful integration of recent acquisitions; and the continued interest, cooperation and performance of important third parties with whom Pivotal has business relationships. Pivotal undertakes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change. Investor Contact:
Vincent Mifsud
Tel: 604/904-5850
Email: vmifsud@pivotal.com

Jacqueline Voci
Tel: 425.897.6992
Fax: 425.897.8401
Email: jvoci@pivotal.com