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Subject:
Mediconsult Announces Record-Breaking Third Quarter 1999 Financial and Operating Results
Date:
Wed, 20 Oct 1999 18:13:41 -0700
From:
John Jennings <jjennings@mediconsult.com>
To:
investor@mediconsult.com
Mediconsult Announces Record-Breaking Third Quarter 1999 Financial and Operating Results
NEW YORK, October 20, 1999 -- Mediconsult.com, Inc. (NASDAQ: MCNS) today announced its financial and operating results for the third quarter ending September 30,
1999.
HIGHLIGHTS
- Revenues for the quarter reached $1.98 million, representing a 65% increase over revenues of $1.20 million reported last quarter, and a 733% increase over revenues of $0.24 million
during the same period last year. The revenue increase was largely the result of a significant physician-focused marketing initiative begun in this quarter for a pharmaceutical company
client. Additional revenue came from previous and several new marketing and content licensing agreements.
- The quarterly net loss per share (excluding expenses related to employee options) totaled $(0.16), representing an increase over a loss of ($0.05) in the second quarter and a loss of
($0.03) during the first quarter of the prior year. Negative operating cash flow for the quarter was $3.8 million.
- The cash balance on hand at September 30, 1999 was $34 million.
“Mediconsult reached several milestones this quarter that confirm its leadership position in the online health sector. These milestones include the agreement to acquire Physicians' Online
and, the significant technology upgrades made throughout our Web sites. Pending the close of the Physicians' Online acquisition Mediconsult will have more authenticated physicians and
patient visitors than any other Internet healthcare company. Furthermore, we believe we have the leading number of page-views and page-views per visitor in the sector. Our page-views
totaled 58.5 million for the third quarter and our average page-views per visitor reached 5.7. All these statistics confirm both our ability to provide value to our audiences and our
leadership position in the sector.” said Robert Jennings CEO of Mediconsult.
“Our large base of physician and patient users gives us a platform we can leverage to achieve commercial success. We created the Mediconsult Pharma divison to do just that. In
creating this new division we also increased the resources dedicated to clients. This division concentrates our client services resources from our subsidiary companies into a single division
to provide targeted Internet solutions to pharmaceutical companies. We are pleased that this effort was rewarded with a significant new physician-focused marketing initiative, which we
hope will be fully scoped during the fourth quarter.”
Acquisitions
On September 7, 1999, the company announced its intent to acquire Physicians' Online for approximately $180 million in stock. Physicians' Online has 206,000 physician subscribers,
80,000 of whom are active, and hosts approximately 1 million visitor sessions per month. The integration of Physicians' Online operations continues, with the identification of the
management team for the combined entity and continuing progress toward developing an integrated product line that leverages the best aspects of Mediconsult's and Physicians' Online
services. The transaction is expected to close during the fourth quarter 1999.
On October 18th, Mediconsult announced its intent to acquire Mood Sciences, Inc. founded by Dr. Joshua Freedman, who is a member of the clinical faculty
at the University of California at Los Angeles's School of Medicine. Mood Sciences is an online mental health company focused on the identification and
monitoring of individuals with clinical depression. Mood Sciences' sophisticated, interactive screening software helps users measure their well-being
against 12 major mental health conditions, including depression, anxiety disorder, borderline personality disorder and obsessive-compulsive disorder.
Depression is a pervasive, chronic, and recurring illness that is estimated to cost Americans $43 billion a year. Although approximately 80% to 90% of
cases could be treated effectively, two-thirds of the people afflicted with depression do not receive the help they need. During the fourth quarter the
company will launch a promotional campaign to raise awareness of depression and other neurological disorders.
Other Site Developments
Mediconsult's efforts to promote awareness about heart disease during the third quarter resulted in a substantial traffic increase at HeartInfo, which
received over 5.5 million hits in September, an increase of 96% from the levels reached prior to Mediconsult's June acquisition of HeartInfo. These
results corroborate our view that visitor traffic can be increased without launching major television and other expensive media campaigns. The company
will continue to offer visitors superior content and launch targeted marketing efforts to increase our customer base. During the quarter, “Ask Jeeves”
recognized HeartInfo as a Silver Platter Site, and Study Web cited it as one of the best educational resources available on the web.
Through its Cyberdiet site, Mediconsult launched three new programs aimed at helping visitors control their weight. These programs include “Eating
Smart for a Healthy Heart”, the “Smart Kids Health Zone” and the first ever Internet weight loss program combining personalization and support. The
programs are part of our ongoing effort to foster customer loyalty and sticky traffic by giving patients personalized, useful services and tools.
Quarterly and Year-To-Date Operating Results
Revenues for the quarter reached $1.98 million, representing a 65% increase over revenues of $1.20 million reported in the second quarter, and an 733%
increase over revenues of $0.24 million during the same period last year. Expenses for the quarter were $8.36 million. This compares with expenses of
$5.90 million in the second quarter of this year and $.90 million in the third quarter of 1998. Net losses per share for the quarter were ($0.20), or ($0.16)
excluding a $1.12 million charge related to the fair value of stock options and warrants. For the first nine months of 1999 net losses were ($7.86) million
or ($0.32) per share before inclusion of expenses of $3.96 million related to the fair value of stock options and warrants, which resulted in a total loss for
the period of ($11.83) million or ($0.48) per share. This compares to net losses in the first nine months of last year of ($1.87) million or ($0.11) per share
before inclusion of expenses of $0.09 million related to the fair value of stock options and warrants, which resulted in a total loss for the period of ($1.96)
million or ($0.11) per share.
The increase in expenses and losses is mainly attributable to increased investments in infrastructure. During the quarter, the Company increased expenses
to execute on some previously disclosed plans which included: $750,000 on the re-design of the main website, $500,000 on marketing and advertising,
and approximately $1,000,000 on the new Mediconsult Pharma division. The Company increased the number of employees on payroll from 67 in the
second quarter to 119 at the end of the third quarter.
SUMMARY FINANCIAL STATEMENTS
Income Statement (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
Revenues $1,984,256 $238,203 $3,887,832 $658,972
Expenses:
Product and content
development 2,368,609 400,693 4,641,565 911,085
Marketing, sales and
client services 2,764,441 234,153 4,338,948 914,289
General and
administrative 1,225,085 183,969 2,546,875 491,957
Depreciation and
amortization 885,339 44,504 1,392,204 209,920
Expenses Before Fair
Value of Options 7,243,474 863,319 12,919,592 2,527,251
Fair value of options
granted to employees 1,120,057 26,097 1,695,425 95,406
Fair value of warrants
granted to third parties -- -- 2,269,104 --
Total 8,363,531 889,416 16,884,121 2,622,657
Loss from operations(6,379,275) (651,213) (12,996,289) (1,963,685)
Interest income 592,272 -- 1,168,308 --
Net loss $(5,787,003) $(651,213) $(11,827,981) $(1,963,685)
Net loss per share
- basic $(0.20) $(0.04) $(0.48) $(0.11)
Net loss per share - basic,
before Fair Value $(0.16) $(0.03) $(0.32) $(0.11)
of Option & Warrant
Expense
Weighted average number
of shares - basic 28,559,488 18,097,400 24,882,258 17,763,525
Balance Sheets - September 30, 1999 and December 31, 1998 (unaudited)
September 30 December 31
1999 1998
ASSETS
Current assets
Cash & Equivalents $33,947,811 $135,053
Other Current Assets 13,789,568 135,790
Non-current assets 15,059,813 871,540
Total assets $62,797,192 $1,142,383
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $1,956,973 $864,002
Stockholders' equity 60,840,219 278,381
Total Liabilities and Shareholders' Equity $62,797,192 $1,142,383
Number of Shares Outstanding at end of Period 28,721,163 18,519,950
General Comments on Revenue Recognition and Treatment of Certain Expenses
Mediconsult.com does not include any “barter” advertising or “contra” transactions in its revenues. This fiscally conservative policy has been adopted by
the Company to assure shareholders that the Company reports appropriate information with regard to its commercial transactions and not potentially
inflated results. We are aware that some Internet companies record “barter” and “contra” revenues and direct the reader's attention to this practice so that
comparable revenue figures are used.
Under the Statement of Financial Accounting Standards No. 123 (“SFAS 123”) “Accounting for Stock-Based Compensation” stock options granted to
employees and consultants are expensed over their vesting period, based on their fair market value as at the date of the grant. These non-cash expenses
must be recognized in either the financial statements or in a note to the financial statements. Mediconsult.com recognizes such costs in its financial
statements, which has the effect of decreasing earnings during periods where options vest and the share price has risen. We are aware that most reporting
companies elect to recognize expenses under SFAS 123 in a note to their financial statements. Accordingly, for the benefit of shareholders and analysts,
we have provided numbers in the tables above that allow for a comparison to other public companies.
About Mediconsult, Inc.
Mediconsult.com, Inc. through its family of sites is a leading provider of physician and patient healthcare information and services on the World Wide
Web. Founded in 1996 with its flagship Web site, www.mediconsult.com, the Company's mission is to improve patient outcomes through information and
tools that educate doctors, empower patients and build on the doctor/patient relationship. By educating and empowering consumers to manage their health
with in-depth medical information, active support and interactive tools, Mediconsult prepares patients to work effectively with their healthcare provider.
By providing physicians with the most current healthcare information and a private community of peers, physicians can offer their patients a higher level of
care. This unique, integrated approach has resulted in the largest and most loyal following of medical Web site visitors and a leadership position in the
online health industry.
The Mediconsult family of sites and communities include:
Mediconsult.com (www.mediconsult.com), the medical destination patients use most
mydoctor.com (www.mydoctor.com), a directory of US physician web sites for patients
CyberDiet (www.cyberdiet.com), the leading diet and nutrition site
Heart Information Network (www.heartinfo.com), the leading heart health information site
PharmInfoNet (www.pharminfo.com), an online drug information resource
INCIID (www.inciid.org), the leading Web resource on infertility
Physicians' Online (www.pol.net), the world's largest online physician community
Mediconsultinc.com, (www.mediconsultinc.com), resources for healthcare marketers
On September 7, 1999 Mediconsult.com announced the acquisition of Physicians' Online. Physicians' Online operates the leading medical information
and communication network for physicians, the Physicians' Online Network. Since its inception, Physicians' Online has rapidly gained the membership of
more than one-quarter of the U.S. practicing physicians. Physicians' Online provides a secure, physicians-only environment featuring access to
MEDLINE and other medical databases, clinical symposia with peers and national experts, CME credits, daily medical news, recruiting services, private
e-mail accounts and Internet access, among many other services. Through its award-winning service, Physicians' Online connects its members the largest
online community of authenticated physicians with colleagues, professional associations, pharmaceutical manufacturers and others. Additional information
about Physicians' Online can be found at pol.net
Contact:
Kekst & Company
Caroline Gentile (212) 521-4883 (direct)
caroline-gentile@kekst.com
Lissa Perlman (212) 521-4830 (direct)
Lissa-perlman@kekst.com
Certain statements in this release, such as management's view of future revenues and expenses, may be forward-looking statements that are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. Potential risks and uncertainties include such factors as acceptance of the Company's products and services, competition and
other risks described in the Company's filings with the Securities and Exchange Commission.
*********************************************
Note to Recipients:
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John Jennings, CFA, MBA
Director, Investor Relations
Mediconsult.com Limited
Phone: (888) 316-1133 (toll free)
e-mail to: jjennings@mediconsult.com
Click Here to Visit Our Award Winning Consumer Health Sites
mediconsult.com - The Medical Web Destination Patients Use Most
cyberdiet.com - The Web's Best Fitness & Nutrition Resource
inciid.org - Infertility Information and Support
pharminfo.com - The Web's Most Complete Drug Information Resource
heartinfo.com - Comprehensive Resources for a Healthy Heart
mediconsultinc.com - Redefining Medicine Through the Internet |
