MSCP...number one health site utilized by professionals...
Medscape Reports Triple-Digit Revenue Growth for
Fourth Quarter and Fiscal 1999
Both Periods Marked By Major Content Buildup; Launch and Promotion of New Consumer Site;
Alliances with CBS, AOL and Women.com; and EDI Transaction Initiatives
NEW YORK--(BW HealthWire)--Feb. 9, 2000-- Company Cites New Plans for International Expansion
Medscape, Inc. (NASDAQ NM:MSCP - news), the leading provider of health and medical information on the Internet since
1995, today announced triple-digit revenue growth during a record quarter and year ended December 31, 1999 that was
marked by a significant buildup of new content; the launch and promotion of a major new consumer site; implementation of
previously announced relationships with CBS Corporation, America Online and Women.com; and pursuit of initiatives directed
toward EDI transactions.
In a separate news release, Medscape, Inc. also announced the creation of a new European team to take Medscape to
international markets in a push to meet the growing informational needs of international physicians, allied healthcare
professionals and consumers, and to meet the global advertising and sponsorship needs of companies, especially those in the
pharmaceutical industry.
Following are financial and statistical highlights for the quarter and the year:
Revenue for the quarter rose to $4 million, a 166% increase over the $1.5 million generated in the fourth quarter of 1998, due
primarily to strong advertising and sponsorship sales. As a result, Medscape closed the year with revenue of $11.2 million, up
264% from 1998's figure of $3.1 million.
- The number of advertisers and sponsors doubled during 1999.
Registered membership for all of Medscape reached more than 1.7 million worldwide, up 81% versus the fourth quarter
of last year and 22% compared to the third quarter of 1999. At the close of the fourth quarter, registered physicians had
risen to over 280,000, allied healthcare professionals to more than 860,000 and consumers to over 630,000, all new
records for the Company. International member registration continued to be strong, yet another sign of support for the
Company's new overseas initiatives.
Total fourth quarter page views reached 33 million, and according to Media Metrix, the Company in December had the
No. 1 ``stickiest' site in the eHealthcare industry, with visitors spending an average of more than 15 minutes per month
on Medscape.
The Company now has over 8,500 Web sites built for medical practices across the United States.
For the fourth quarter, Medscape reported a loss -- excluding amortization of deferred stock compensation -- of $22.5
million, or $0.50 per share, versus a fourth quarter 1998 loss of $1.3 million, or $0.22 per share. Including non-cash
charges for deferred stock compensation, the loss for the quarter was $23.2 million. For fiscal 1999, the loss, excluding
amortization of deferred stock compensation, was $34.6 million, or $1.78 per share, versus a loss of $3.7 million, or
$1.00 per share for the prior year. Including non-cash charges for deferred stock compensation, the loss for 1999 was
$36.7 million, or $1.89 per share.
``Our better-than-anticipated financial results, including strong sales and membership numbers, show that our strategies are on
track as we closed the most exciting year in Medscape's history,' said President and CEO Paul Sheils. ``Our editorial content
continues to receive critical acclaim and our sales team is in high gear to take advantage of new opportunities in the months
ahead. During the fourth quarter and into 2000, we have been aggressive in the pursuit of a number of initiatives related to
content, our new consumer site, EDI transactions and international expansion. These initiatives are designed to strengthen our
position as the industry's content leader, capitalize on advertising and sponsorships as a key revenue source and take advantage
of opportunities for revenue from other sources. As a result, Medscape continues on its path of differentiation from the
thousands of other medical sites on the Internet.'
Following are some of the key achievements and differentiators cited by Sheils:
Medscape.com, www.medscape.com, the Company's professional site, has recently added new specialty areas for
rheumatology and transplantation, and now boasts 30 different specialty areas or sites covering a wide range of medical
topics and a number of key audiences beyond physicians, including medical office managers, nurses and others. The
recently launched Medical Office Management site, developed with National Data Corporation, addresses an
overlooked, but highly influential audience. It is rich in content and features, as well as a vast range of NDC services,
including electronic verification of insurance coverage, and claims submission to all payers for reduced paperwork and
faster payment.
Medscape General Medicine, the pioneering peer-reviewed online general medical journal launched just last spring, has
continued to make news with groundbreaking articles on medical advances and issues, and is taking its place among the
world's leading peer-reviewed medical publications. At the same time, Medscape and its Editor in Chief George D.
Lundberg, MD, have taken a leadership role in pushing for stronger medical ethics on the Internet, and were the first in
the industry to publish an advertising policy.
CBSHealthWatch by Medscape has nearly doubled its number of Health Channels to 39, and is now reporting its own
original health news. Each of those Health Channels provides consumers with three levels of information, the broadest
and most sophisticated content offering in eHealthcare today. The new site was recently named best medical hub by
Yahoo! Internet Life magazine and has received a number of other such accolades and awards.
Through an exchange of content with CBS News, CBSHealthWatch by Medscape is now receiving prominent and
regular editorial mentions on CBS' nationally televised ``Early Show,' ``48 Hours' and the ``CBS Evening News with
Dan Rather,' on CBS Radio and on CBS News' Web site, www.cbsnews.com. Medscape has been promoting the new
consumer site through national television and radio commercials, and outdoor advertising, much of it made possible
through the previously announced $150 million in promotion provided by CBS Corporation. Since the third quarter,
CBSHealthWatch has also launched co-branded content on five different channels operated by America Online that
reach millions of visitors, and is also providing health content to Women.com.
Medscape teams covering both the professional and consumer sites have continued to generate significant advertising
and sponsorship sales, particularly among global pharmaceutical companies, and are now aggressively bundling and
cross-selling promotional opportunities on Medscape's multiple sites.
The Company's announcement of its international expansion, especially its plan to launch sites in selected countries of
Europe, means that Medscape is capitalizing on regional and local business opportunities, and expanding its cross-selling
and bundling initiatives to appeal to its multinational and global advertisers and sponsors.
Medscape's management will conduct a conference call tomorrow morning at 10:00 a.m. Eastern Time to discuss fourth
quarter and 1999 results, as well as the Company's strategies. Investors and interested parties may listen to the call via a live
Webcast accessible through the Company's investor relations site, investor.medscape.com. To listen, please register and
download audio software at the site at least 15 minutes prior. The Webcast will be available on the site for approximately three
months, while a telephone replay of the call is available for 48 hours beginning at noon Eastern time, February 10, at
1-800-633-8284 or 1-858-812-6440, reservation No. 14177509.
ABOUT MEDSCAPE, INC.
Medscape, Inc. (NASDAQ NM:MSCP - news), the leading provider of authoritative health and medical information on the
Internet since 1995, currently operates two primary healthcare Web sites. Medscape.com, www.medscape.com, provides
comprehensive, authoritative and timely medical information and interactive programs to physicians, allied healthcare
professionals and consumers, and includes the following specialty sites and pages: Medscape Japan,
medscape.com, Medscape General Medicine, or MedGenMed,
www.medscape.com/journal/MedGenMed, believed to be the first and only peer-reviewed online general medical journal;
Medical Office Management, medoffice.medscape.com, Medscape Nursing, nursing.medscape.com; Medscape
Pharmacology, pharmacotherapy.medscape.com, for pharmacists; Medscape Med Students,
medscape.com; and Today on Medscape, medscape.com, featuring the latest health
and medical news. As of December 31, 1999, Medscape.com had more than 1.7 million registered members worldwide,
including over 280,000 registered as physicians, 860,000 registered as allied healthcare professionals and 630,000 registered
as consumers worldwide.
The Company also operates CBSHealthWatch by Medscape, cbs.healthwatch.com, the recently launched consumer site
designed to help families and individuals make better informed healthcare decisions and to simplify management of their
healthcare needs. Developed jointly with CBS Corporation, the site provides personalized, authoritative medical content written
for the consumer, access to professional content on Medscape.com and interactive personal health management tools, such as
health diaries. CBS and the CBS eye device are registered trademarks of CBS Broadcasting Inc.
The statements made in this press release contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve a number of risks and
uncertainties. Actual events or results may differ from Medscape, Inc.'s expectations.
Medscape, Inc.
Statements of Operations
(in thousands, except share data)
Fourth Quarter Fiscal Year
Ended Ended
12/31/99 12/31/98 12/31/99 12/31/98
Revenue $ 4,018 $ 1,513 $ 11,156 $ 3,069
-------- -------- -------- --------
Operating Expenses:
Editorial, Production,
Content and Technology 5,753 1,216 12,967 2,694
Sales & Marketing 18,149 1,006 26,944 2,520
General &
Administrative 2,713 432 6,048 1,469
Deferred Stock Comp.
Expense 784 249 2,101 249
Depreciation &
Amortization 592 140 1,010 287
-------- -------- -------- --------
Total Operating Expenses 27,991 3,043 49,070 7,219
-------- -------- -------- --------
Loss from Operations (23,973) (1,530) (37,914) (4,150)
-------- -------- -------- --------
Interest Income 716 28 1,203 249
-------- -------- -------- --------
Net Loss $(23,257) $ (1,502) $(36,711) $ (3,901)
======== ======== ======== ========
Basic and Diluted Net
Loss per Share $(.52) $(.26) $(1.89) $(1.07)
Weighted Average
Shares 44,860,132 5,825,033 19,400,443 3,636,558
Supplemental Information:
Net Loss, Excluding
Deferred Stock
Compensation Expense $(22,473) $(1,253) $(34,610) $(3,652)
Basic and Diluted Net
Loss per Share,
excluding Deferred
Stock Compensation
Expense $(.50) $(.22) $(1.78) $(1.00)
Medscape, Inc.
Balance Sheets
(in thousands)
12/31/99 12/31/98
Assets
Current Assets
Cash and Investment Securities $40,819 $ 1,595
Accounts Receivable 5,946 1,350
Prepaid Expenses and Other Assets 15,256 93
-------- --------
Total Current Assets 62,021 3,038
Fixed Assets - Net 7,568 380
Intangible Assets and Goodwill - Net 12,590 2,456
Investment in Softwatch 3,156 --
-------- --------
Total Assets $85,335 $ 5,874
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable and Accrued Liabilities $ 9,567 $ 871
Deferred Revenue 1,580 799
-------- --------
Total Current Liabilities 11,147 1,670
Stockholders' Equity
Preferred Stock -- 32
Common Stock 447 69
Additional Paid-In Capital 266,196 14,158
Deferred Stock Compensation (7,984) (715)
Treasury Stock (3) (3)
Contribution of Services (145,224) --
Warrants 6,840 --
Note Receivable from Stockholder (628) (628)
Unrealized Loss on Investment Securities
Available for Sale (36) --
Accumulated Deficit (45,420) (8,709)
-------- --------
Total Stockholders' Equity 74,188 4,204
-------- --------
Total Liabilities & Stockholders' Equity $85,335 $ 5,874
======== ========
Contact:
Medscape, New York
David Fluhrer
212/760-3138
david_fluhrer@mail.medscape.com
or
Lippert/Heilshorn & Associates, New York
John Nesbett
212/838-3777
jgn@lhai.com
Mary Ellen Adipietro
212/838-3777
mary@lhai.com |
