Company Signs Up 87,360 Customers in Just 10 Weeks

SANTA MONICA, Calif. – January 27, 2000 – (Nasdaq: STMP), the leader in Internet Postage(TM), today reported an operating loss of $34.8 million for the fourth quarter ended Dec. 31, 1999. Net loss applicable to common shareholders was $33.4 million, or $0.91 per share, based on the weighted average number of 36.6 million common shares outstanding. Excluding the non-cash deferred compensation charge of $3.2 million, net loss would have been $30.2 million, or $0.82 per common share.

“ finished 1999 with a lot of positive momentum and is very well positioned entering into the new millennium,” said CEO John Payne. “Following the national launch of our service during the fourth quarter, we signed up 87,360 licensed customers in only 10 weeks. The acquisition of doubles our market opportunity to include all Internet shipping and mailing services. The formation of our EncrypTix subsidiary positions us to expand the use of our technology and our addressable market to include the authenticated online printing of tickets, vouchers, and certificates. In 1999, we firmly established ourselves as unique in the marketplace.”

Summary of Recent Events

Jan. 18, 2000 – announced a distribution and marketing alliance with Hewlett-Packard Company to provide the cost-effectiveness and time savings of Internet Postage to new HP customers and the more than 100 million existing HP printer owners.

Jan. 13, 2000 – announced a marketing alliance with US WEST, the largest DSL supplier in the country, to provide’s service to small businesses and consumers across the country.

Dec. 13, 1999 – announced that its follow-on public offering, which closed on Dec. 10, 1999, resulted in net proceeds of $309.2 million through the sale of five million shares of common stock. also announced that the underwriters exercised their option to purchase 750,000-shares to cover over-allotments, which resulted in additional net proceeds to of $46.3 million.

Nov. 22, 1999 – announced a new, consolidated pricing plan for its Internet Postage service. The new plan combined’s existing two-tiered pricing structure into one “Simple Plan” under which customers pay a service fee of 10 percent of the monthly postage printed, with a $1.99 minimum and $19.99 maximum per month.

Nov. 16, 1999 – announced the formation of EncrypTix Inc., a new subsidiary created to focus on highly secure, authenticated online printing of tickets, vouchers, certificates and other forms of bearer value for the events, travel and financial services industries.

Oct. 25, 1999 – announced an agreement to acquire privately-held, a leading provider of Internet-based shipping technology. The acquisition will establish as the only online service that can offer small business, consumer and corporate enterprise customers a single source for all their mailing and shipping needs.’s investors and strategic partners include Mail Boxes Etc., eBay and UPS.


Founded in 1996, Santa Monica-based is the only commercially approved true Internet Postage service. The company’s innovative technology eliminates the need for specialized hardware by giving customers the flexibility to print postage over the Internet – securely, accurately and fast. Through partnerships with major companies like America Online, Hewlett-Packard, IBM, Microsoft, Office Depot, and 3M, has tremendous reach into the small office/home office and consumer markets. More information about the company can be found at


“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release may contain forward-looking statements that involve risks and uncertainties. Important factors, which could cause actual results to differ materially from those in the forward-looking statements, are detailed in filings with the Securities and Exchange Commission made from time to time by, including its Form 10-Q for the quarter ended September 30, 1999 and its registration statement on Form S-4, as amended, that was filed with the SEC on January 7, 2000. undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Internet Postage, and the logo are trademarks of Inc. All other brands and names are property of their respective owners.

                           STAMPS.COM INC.
                    (A DEVELOPMENT STAGE COMPANY)


                              Three Months Ended      Year Ended
                              Dec. 31,  Dec. 31,   Dec. 31,   Dec. 31,
                               1999       1998       1999       1998

Net revenues              $  357,738     $  -    $  357,738    $  -
Cost of net revenues      $2,429,658     $  -    $2,429,658    $  -
Gross profit             ($2,071,920)    $  -   ($2,071,920)   $  -
Operating expenses:
 Research and
  development              2,313,981   983,611    7,363,439 1,531,811
 Sales and marketing      24,351,601   632,349   35,207,688   632,349
 General and
  administrative           6,058,136   890,346   14,333,830 2,015,930
Total operating
 expenses                 32,723,717 2,506,306   56,904,957 4,180,090
Loss from
 operations       (34,795,638)   (2,506,306)  (58,976,877) (4,180,090)

Other income (expense):
Interest expense      (50,689)      (22,810)     (172,657)    (27,624)
Interest income     1,462,005         9,152     2,662,128      11,834
Net loss         ($33,384,322)  ($2,519,964) ($56,487,406)($4,195,880)
Basic and diluted
 net loss per share    ($0.91)       ($0.44)       ($2.59)     ($0.85)
Weighted average
 shares outstanding
 used in basic and
 diluted per-share
 calculation       36,611,000     5,788,000    21,823,600   4,955,913

                 Condensed Consolidated Balance Sheets

                             December 31, 1999      December 31, 1998
Current assets:
  Cash and cash equivalents     $326,820,158         $  3,470,207
  Short-term investments          47,925,751                    -
  Prepaid advertising             21,529,665                    -
  Prepaid expenses
   and other current assets        2,487,436               48,118
Total current assets             398,763,010            3,518,325
Property and equipment, net        9,701,679              670,301
Other assets                       1,977,354              237,193
Total assets                    $410,442,043         $  4,425,819

Total current liabilities          8,406,636            2,133,525
Capital lease obligations,
 less current portion                438,537              265,070
Redeemable preferred stock                 -            5,978,344
Total stockholder's equity
 (deficit)                       401,596,870           (3,951,120)
Total liabilities and
 stockholders' equity
 (deficit)                      $410,442,043         $  4,425,819