Pivotal Announces Record Third Quarter 2001 Results with Revenue Growth of 82%

Pivotal Corporation today announced record financial results for its third fiscal quarter ended March 31, 2001.

Vancouver, BC, April 19, 2001 — Pivotal Corporation (NASDAQ:PVTL - news; TSE:PVT - news) today announced record financial results for its third fiscal quarter ended March 31, 2001.

Net revenues in the third quarter of fiscal 2001 increased 82 percent to $26.4 million compared to $14.5 million in the third quarter of fiscal 2000. Revenues from licenses were $16.4 million in the third quarter of fiscal 2001 compared to $10.1 million in the third quarter of fiscal 2000, representing 62 percent of total revenues for the quarter. Revenues from services and maintenance were $10.0 million in the third quarter of fiscal 2001, compared to $4.4 million in the same quarter last fiscal year, representing 38 percent of total revenues for the quarter.

Net income excluding amortization of goodwill in the third quarter of fiscal 2001 was $405,000 or $0.02 per share, compared to a net income of $321,000 or $0.01 per share in the third quarter of fiscal 2000.

Net loss after amortization of goodwill in the third quarter of fiscal 2001 was $5.7 million or ($0.24) per share, compared to a net income of $224,000 or $0.01 per share in the third quarter of fiscal 2000.

``Pivotal demonstrated an ability to execute and innovate in the midst of challenging economic conditions,' said Norm Francis, president and CEO, Pivotal. ``This quarter we completed an intense development cycle and shipped several new products. Companies around the world are selecting Pivotal for its commitment to innovation and ability to provide solutions that deliver fast return on investment.'

According to Vince Mifsud, COO, Pivotal, ``This is Pivotal's tenth consecutive quarter of record revenue. This quarter Pivotal developed alliances with additional systems integrators, advanced our industry solution strategy and expanded our international presence.'

New customers signed in the quarter include: ActiveState Corp., Belgacom France, CIBC World Markets, Commonfund, FLAG Telecom, GMO Woolley Ltd., Haldex Services Corporation, Knosys, Inc., Miller Heiman, Inc., National City Bank of Minneapolis, and 1201 Financial & Insurance Services, Inc.

Existing customers bought additional Pivotal solutions at a strong pace this quarter. Additional solutions were purchased by Blue Cross Blue Shield of Michigan, BoE Bank Limited, Crystal Decisions Corp., Harley-Davidson Financial Services, and KPMG.

Third Quarter Highlights

Global Alliance Momentum

In the quarter Pivotal continued its global expansion by signing strategic alliance agreements, and executing the first phase of its Microsoft business development initiative. Highlights included:

- Signed alliance agreement with Siemens Business Services for the French market

- Signed alliance agreement with Hewlett-Packard for Europe, the Middle East and Africa (EMEA)

- Signed China Hewlett-Packard for exclusive customer relationship management distribution and services agreement in the People's Republic of China

- Signed alliance agreement with CDM Tecnoconsulting SPA for the Italian market

- Signed an agreement to integrate Miller Heiman's best practices sales methodology into the Pivotal solution suite

- Signed a technology alliance with Evolve to combine project and workforce management capabilities with the Pivotal Demand Chain Network solution suite

- Initiated training program for Microsoft sales professionals on the Pivotal solution suite; began co-marketing and co-selling initiatives with Microsoft

New Products Shipped in Third Quarter

This quarter Pivotal shipped several new products to advance the Pivotal Demand Chain Network solution suite including:

- Pivotal ePower 2.0 featuring advanced capabilities for integration

and synchronization. The product leverages open-standard

technologies such as XML and SOAP to enable easy integration within

the enterprise (EAI) or outside the enterprise (B2BI).

- Pivotal eSelling 2.0 featuring new interactive selling and

configuration capabilities for global enterprises. The product

provides an XSL/T compliant eCommerce platform with enhanced

scalability, multi-lingual features and international capabilities.

- Pivotal PartnerHub 2.0 featuring extensive partner relationship

management (PRM) capabilities for sales, marketing and service

partners. The product provides a secure, collaborative Internet

environment that enables companies to empower their business


Pivotal also introduced Digital Intelligence 1.0 featuring the industry's first Web behavior analytics technology developed for demand chain management. Digital Intelligence 1.0 provides companies with meaningful insight into the interests and preferences of Web site visitors.

Financial Services Momentum

Pivotal's industry-focused market strategy gained momentum in the financial services market. Financial services companies are selecting Pivotal for its specialized capabilities and expertise in the financial service sector. New financial services customers include: CIBC World Markets, GMO Woolley, National City Bank Of Minneapolis, 1201 Financial and Insurance Services, Inc., Commonfund and Valley First Credit Union.

Conference call details:

Date: Thursday, April 19, 2001

Start Time: 4:30 p.m. ET (1:30 p.m. PT)

Dial-In Phone Number: 1-415-908-4714

Conference Call Name: Fiscal 2001 3rd Quarter Earnings Call

Live Audio Streaming: www.pivotal.com

During the earnings call, we will be discussing the results as contained in this release and may be discussing forward looking statements and providing guidance.

If you are unable to participate, a replay will be available from 6:30 p.m. ET April 19th through 6:30 p.m. ET April 21st, 2001. For callers within the U.S. or Canada, the replay number is 1-800-633-8284. The replay pass code for all callers is 18458315. In addition, the replay will be available via our website at www.pivotal.com for 90 days


(Expressed in United States dollars; all amounts in thousands)
Three months ended Nine months ended
March 31, March 31,
2001 2000 2001 2000
Licences $ 16,368 $ 10,125 $ 46,482 $ 24,248
Services and maintenance 10,026 4,412 26,701 10,506
Total revenues 26,394 14,537 73,183 34,754
Cost of revenues:
Licenses 1,009 635 2,854 1,329
Services and maintenance 5,346 2,295 14,195 5,476
Total cost of revenues 6,355 2,930 17,049 6,805
Gross profit 20,039 11,607 56,134 27,949
Operating expenses :
Sales and marketing 12,689 8,214 37,101 20,846
Research and development 5,096 2,409 13,522 6,103
General and administrative 2,787 1,197 6,663 2,872
Total operating expenses 20,572 11,820 57,286 29,821
Loss before amortization, other income and taxes (533) (213) (1,152) (1,872)
Amortization of goodwill (6,068) (97) (16,468) (129)
Loss from operations (6,601) (310) (17,620) (2,001)
994 673 1,981 1,715
Income (loss) before income taxes (5,607) 363 (15,639) (286)
Income taxes 56 139 159 340
Net income (loss) $(5,663) $ 224 $(15,798) $(626)
Earnings (loss) per share :
Basic $ (0.24) $ 0.01 $ (0.66) $ (0.03)
Diluted $ (0.24) $ 0.01 $ (0.66) $ (0.03)
Pro forma basic and diluted $ (0.03)
Weighted average number of shares used to calculate earnings (loss) per share:
Basic 23,856 20,134 23,818 17,951
Diluted 23,856 21,470 23,818 17,951
Pro forma basic and diluted 19,513

Supplemental financial information excluding amortization of goodwill:
Net income (loss) $ 405 $ 321 $ 670 $ (497)
Earnings (loss) per share:
Basic $ 0.02 $ 0.02 $ 0.03 $ (0.03)
Diluted $ 0.02 $ 0.01 $ 0.03 $ (0.03)
Pro forma basic and diluted $ (0.03)
Weighted average number of shares used to calculate earnings (loss) per share:
Basic 23,856 20,134 23,818 17,951
Diluted 23,856 21,470 24,682 17,951
Pro forma basic and diluted 19,513

CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in United States dollars; all amounts in thousands)

March 31, 2001 June 30, 2000
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 15,107 $ 4,734
Short term investments 61,065 30,788
Accounts receivable 23,417 16,764
Prepaid expenses and other current assets 3,694 1,859
Total current assets 103,283 54,145
Property and equipment, net 8,616 7,231
Goodwill, intangibles and other assets, net 61,601 60,569
Total assets $ 173,500 $ 121,945
Current liabilities
$ 19,771 $ 16,877
Deferred revenue 11,974 8,971
Total current liabilities 31,745 25,848
Shareholders' equity 141,755 96,097
Total liabilities and shareholders' equity $ 173,500 $ 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; the continued interest, cooperation and performance of important third parties with whom Pivotal has business relationships; the ability to adequately protect the company's proprietary rights; and other factors as described in Pivotal's SEC filings. Pivotal undertakes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change. Jacqueline Voci

Tel: 425.897.6992

Fax: 425.897.8401

Email: jvoci@pivotal.com

Investor Contact:

Sophia Couspos, Pivotal Corporation

Tel: 604/904-5996

Email: scouspos@pivotal.com