February 03, 2003

FOR IMMEDIATE RELEASE

SPS Commerce Reaches Profitability; Showcases Winning Formula for Hosting Supply Chain Integration Services for Small and Medium Enterprises.

Milestone Caps Successful Year When SME Market Matures into a Long-Term Sustainable Business Model

SPS Commerce, the leading provider of Supply Chain Integration Services to small and mid-sized enterprises (SME), has reached another milestone in their ascension to the market leadership position with the announcement of profitability entering the 2003 calendar year. The announcement caps another year of tremendous growth and activity for SPS Commerce, a year in which the hosted integration market has matured into a sustainable business model for today and the future. Through the execution of new services, partnerships, acquisitions, and revenue growth over the past 18 months, and by continuing its focus of developing a hosted integration service that is an attractive alternative to traditional integration software, SPS Commerce has solidified its standing as the leader in providing hosted integration services to SMEs.

The past year marked an acceleration of the lifecycle maturity of SMEs and their use of hosted integration services for electronic participation in supply chain activities with their trading partners. Initially, most SMEs adopted the use of a hosted integration service as a superior alternative to traditional EDI and/or UPC catalog software solutions to satisfy a mandate from one of their key customers as a condition of doing business. During the past year however, many of SPS Commerce's customers have realized quantifiable benefits beyond compliance, including reduced error rates in fulfilling products and increased sales due to streamlined processes making business with larger customers easier.

"Early on, SMEs were limited in their ability to comply with the EDI requirements of large customers. Now SMEs are selecting products based on how they can link their customer-facing systems to multiple customers with a suite of services that extends their investment beyond just EDI compliance," said Pete Abell in the AMR Research Alert, SPS Commerce Acquires fourthchannel, October 29, 2002.

With this market shift in mind, SPS Commerce designed and implemented a number of new programs specially designed for SMEs. These programs set the benchmark for supply chain integration suites for the SME market and include: ·

  • SPSCommerce.net Connection Factory, April 2002 - To help SME's currently utilizing SPS Commerce's service to consolidate on a single provider by accelerating the rate that SPS Commerce extended the reach of its network to additional retailers and distributors.
  • SPSCommerce.net Accessory Library, May 2002 - To improve the ease of use and productivity of SME's utilizing SPS Commerce's service for complex fulfillment operations and high transaction volumes. Accessories are optional tools that suppliers can easily drop into their environment to reduce the amount of data entry required to process advanced transactions such as Advanced Ship Notices (ASNs) or automated repetitive processes associated with turning around a high number of transactions in a short time period.
  • SPSCommerce.net Adapters, September 2002 - To simplify the setup and support required for SMEs to directly integrate their back-end system to SPSCommerce.net's data center. Adapters are pre-built connections that tie popular small business systems like Microsoft Great Plains eEnterprise, QuickBooks and PeachTree to SPSCommerce.net, making it easier and less costly for customers to implement a direct application to application solution utilizing a hosted integration service rather than a traditional software model.
  • fourthchannel Acquisition, October 2002 - SPS purchased this provider of product and order management services to help enable SPS' current SME clientele with a solution that extends their hosted service platform with an on-line order site to electronically integrate their smaller customers' orders into their back-end systems.

SPS Commerce's market leadership has also attracted several key partnerships that are helping the Company move its service beyond the retail and distribution industries. EasyLink, an established leader in the EDI and transaction processing market within the manufacturing, financial services and automotive arenas, is private labeling SPSCommerce.net as its solution for trading partner enablement and management for large enterprises and hosted EDI services for SMEs. Motherlode, a leader in supply chain management, is also private labeling SPSCommerce.net in a similar fashion within the forestry and mining markets.

SPS has also distinguished itself as an industry leader through many industry awards and speaking engagements. SPS was named to the 2002 Inc 500 list of fastest growing private companies, and was also named to the Minnesota Business Journal Growth 50, a listing of the fastest growing businesses in the state. SPS was also invited to lend their industry expertise to the marketplace through speaking engagements at the Collaborative Commerce Expo and the Fortune Small Business Forum at COMDEX. SPS concluded the year with the introduction of their Private Label Order Management Service in November 2002. The new product offering will enable large retailers to electronically automate their private label order management process with vendors and suppliers, providing access to the order status, next steps and real-time updates on SPSCommerce.net.

"Supply chain success in the SME market only comes when a complete understanding of the unique market needs and conditions is combined with 100% focus on meeting those needs," said SPS Commerce CEO Archie Black. "The execution of our offerings strategy, and the resultant market and financial success, is yet another example of how SPS Commerce is attuned to the needs of the SME market and is setting the standard for supply chain service providers in meeting those needs."

About SPS Commerce

SPS Commerce is the leading provider of hosted Supply Chain Integration Services. The Company specializes in managing trading partner enablement and management programs to increase the depth and/or breadth of integration with trading partners -- especially small and mid-sized partners. Our solution has helped key enterprises, including over 70 large retailers, electronically enable and integrate over 40,000 small and mid-sized trading partners into their e-supply chain. For more information, visit the Company at www.spscommerce.com or call (651) 603-4400.

Contacts:

SPS Commerce
Eric Chaffee
Tel: 651-603-4400
echaffee@spscommerce.com
SPS Commerce is a registered trademark of SPS Commerce Inc., SPSConnect, spscommerce.net and the SPS Commerce logo are the property of SPS Commerce, Inc. All other names and trademarks are the property of their respective holders.