Broadbase Falls on Expected Q4 Loss

Broadbase Software, Inc. (Nasdaq:BBSW) fell in early trading Friday, losing 2 5/16 to 11 11/16 after thecompany said the closing next month of a planned acquisition will result ina bigger-than-expected loss for the fourth quarter.

Broadbase also said it expects a fourth-quarter loss of 15 to 17 cents pershare on revenue of about US$17 million. Gross margins will be “relativelyflat” with the third quarter, at 60 to 62 percent, as improvements thecompany has made during the quarter are offset by the inclusion of costsfrom soon-to-be-acquired Servicesoft, Inc.

The Servicesoft acquisition will dilute fourth-quarter pro forma earnings by8 to 10 cents per share, the company said.

According to Broadbase, it has received regulatory approval to go ahead with theServicesoft acquisition, which is on schedule to be completed inmid-December after shareholders of both companies vote on the plan. As aresult, Broadbase will include Servicesoft in its fourth-quarter results.

Servicesoft is likely to boost results next year, however, Broadbase said.Revenue for 2001 is likely to total $145 million, aided by the combination.The company expects a loss before extraordinary items of about 5 cents pershare for the year, with losses of 8 cents in the first quarter and 4 centsin the second. In the third quarter, the company expects a 1 cent profitbefore extraordinary items, and in the fourth quarter, it aims to earn 5cents per share.

Broadbase chief financial officer Rusty Thomas said the merged company “willhit the ground running.”

Menlo Park, California-based Broadbase provides e-commerce software and services to companies includingBEA Systems, Cisco Systems, and United Airlines.

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