Worldwide Broadband Subscribers Surpassed 2.3 Million
Over 500,000 Subscribers Were Added During the Quarter
REDWOOD CITY, Calif., Oct. 24 /PRNewswire/ -- Excite@Home (Nasdaq: ATHM),
today reported third quarter 2000 pro forma revenues of $169.9 million, an
increase of 51% compared to pro forma revenues of $112.6 million in the third
quarter of 1999. Pro forma revenues increased 8% from $157.6 million in the
second quarter of 2000. Pro forma results for 2000 include the operations of
certain international subsidiaries in which majority ownership interests have
been obtained.
Pro forma loss for the quarter was $41.6 million, or $0.10 per share,
compared to a loss of $4.2 million, or $0.01 per share, in the third quarter
of 1999 and a loss of $45.3 million, or $0.11 per share, in the second
quarter of 2000. Pro forma loss for the quarter excludes net expenses of
$626.8 million for the amortization of goodwill and other intangible assets,
as well as the cost and amortization of distribution agreements and certain
non-operational and other expenses.
In the third quarter Excite@Home's residential broadband subscriber base
grew to 2,313,000, up 28% from approximately 1,803,000 at June 30, 2000. Total
subscribers increased 174% from 843,000 at September 30, 1999. Net subscriber
additions in the quarter totaled 510,000, including 415,000 net subscribers
added in North America.
Commenting on the quarter, Excite@Home Chairman and CEO George Bell said,
"We are very pleased with the growth we achieved this quarter in our most
important metric-broadband subscribers. Our domestic and international markets
each set records for subscribers added during the quarter as we extended our
market-share lead in broadband around the world.
"We are observing unprecedented levels of interest in and awareness of
broadband services, and we are moving aggressively to capitalize on these
trends. Our network build-out and our cable partners' plant upgrades have made
excellent progress, as more than half of our North American cable footprint is
now upgraded and marketable. This bodes well for our ability to continue to
drive subscriber growth going forward."
Broadband Footprint and Penetration
Excite@Home's addressable market for residential broadband services grew
to more than 35 million upgraded cable homes passed worldwide, including
30 million of the company's 59 million cable homes under contract in North
America. Worldwide upgraded homes were up 9% from 32 million homes at
June 30, 2000 and 67% from 21 million homes a year ago. Penetration in
Excite@Home's North American markets reached 7.1% of upgraded homes, up from
6.2% at June 30, 2000 and 4.0% a year ago. Global penetration was 6.6% of the
35 million upgraded homes at September 30. Subscriber and addressable-market
figures include areas served by Excite@Home affiliates that Excite@Home
expects to convert to the @Home service.
Broadband Network Traffic
Excite@Home's growing subscriber base and its subscribers' increasing
usage of the service continue to drive growth in traffic on Excite@Home's
broadband network. Peak downstream traffic levels on Excite@Home's backbone
reached nearly seven gigabits per second in September. This backbone traffic
represents less than half of all traffic generated by Excite@Home's broadband
subscribers, as the majority of broadband traffic is contained within
Excite@Home's regional networks through the use of caching and distributed
content feeds.
Excite Network
Media traffic on the Excite Network, which includes Excite@Home's
broadband and narrowband media properties, averaged 149 million daily page
views in September, an increase of 9% from 137 million in June 2000 and
67% from 89 million in September 1999. Cumulative registrations to Excite
services, including Bluemountain and Webshots, totaled 93 million as of
September 30, 2000, up 15% from 81 million last quarter and 111% from
44 million a year ago. In September the Excite Network reached 27 million
unique visitors, or 35% of U.S. web users according to Media Metrix, making
it the fifth-most widely visited Internet network in the U.S. for the
tenth-consecutive month.
Excite's Bluemountain maintained its lead in online greetings, with
69 million electronic cards sent during the quarter. New services introduced
on Bluemountain during the quarter included: Bluemountain Invites
(http://www.invites.bluemountain.com); video attachments
(http://www.videoshare.bluemountain.com), which allows users to create and
upload personal videos and attach them to Bluemountain cards; and Print Center
(http://www.bluemountain.com/printcenter), a partnership with Hewlett-Packard
which allows users to print stickers, wrapping paper, t-shirt designs and
other items using Bluemountain graphics. For merchants, Bluemountain has
introduced gift and offer attachments, enabling senders of electronic cards to
attach gifts or coupons from participating merchants.
During the quarter, Excite@Home announced plans to acquire Pogo.com, the
leading online family games network. The acquisition builds on the overall
content strategy of securing leadership positions in key broadband-enabled
categories including games, entertainment, music, news, photos and video.
Excite@Home intends to leverage the Pogo.com technology platform for creating
next-generation broadband games and will develop Pogo.com to become a key
asset of Excite@Home's broadband TV initiative. The company expects the
acquisition to be completed during the fourth quarter of 2000.
Multimedia usage by Excite users rose significantly during the quarter as
the company increased its focus on leveraging the speed of the broadband
connection. Excite@Home's broadband subscribers downloaded more than
14 million minutes of short-form video and animation during the quarter. In
excess of six million minutes were downloaded in September, more than triple
the amount downloaded inJune and up 33% compared to August. Videos offered
through the ClickVideo channel of the Excite broadband portal are delivered to
subscribers via download rather than streaming, offering a superior viewing
quality compared to most video available on the web. Users of Excite's
Webshots, the leading photo-download site on the web, downloaded 290 million
digital photos during the quarter, up 41% from 205 million in the second
quarter. The Webshots client software was downloaded 5.5 million times during
the quarter, up 15% from 4.8 million downloads in the second quarter. Excite's
Webshots is the second-most frequently downloaded program on the web according
to download.com.
A recent study performed by Harris Interactive indicates that broadband
users spend 55% more time online and visit 58% more websites than dial-up
users. According to the study, broadband consumers are also more likely to
purchase online-those who do spend an average of 91% more than dial-up users.
Among other behaviors, broadband users have a higher tendency to watch movie
trailers and streaming video and get software on demand. The study also
indicated that Excite@Home subscribers are more loyal than any other ISP's
subscribers, with 93% of Excite@Home subscribers surveyed indicating that they
are not likely to switch to another ISP.
Commercial Services
Excite@Home Business Solutions, the company's commercial services
division, provides high-speed access to businesses, with approximately
8,950 total accounts activated as of September 30, 2000, up 18% from the
second quarter and 113% from a year ago. The division has also introduced a
line of services enabling content providers and distributors to connect
directly to the Excite@Home network. These direct connections allow content
from these clients to reach Excite@Home's broadband subscribers more quickly,
without the latency introduced by traveling through peering connections.
Excite@Home now has five of these clients on its network: Akamai, iBEAM,
Microcast, Streaming Media and WebUseNet. A sixth contract, with PanAmSat's
Net36 subsidiary, is scheduled for activation in the fourth quarter. Due
largely to the high-bandwidth nature of these contracts, total commercial
bandwidth sold in the quarter grew by 62% from 1.1 gigabits sold in the second
quarter to 1.8 gigabits sold this quarter. Bandwidth sold was up more than
eight times from the third quarter of 1999.
International Services
Excite@Home's international operations include broadband subscriber
services through the joint ventures in @Home Japan, Excite@Home Australia and
@Home Benelux, as well as fourteen local versions of Excite outside the U.S.
These include versions of Excite launched in the third quarter in Austria,
Denmark and Switzerland. International versions of Excite generated
25 million average daily page views during September, up 23% from June and
more than 200% from September 1999. Excite@Home's international operations
added approximately 95,000 broadband subscribers during the quarter, including
the subscribers of a new affiliate, and ended the quarter with about
175,000 total subscribers.
In July, Excite@Home announced that it plans to merge its international
operations with chello broadband, a subsidiary of United Pan-Europe
Communications (UPC). Pending regulatory approval, the merger is expected to
create Excite Chello, the leading provider of broadband services in the world
with over 30 million homes under contract for broadband services, 10.5 million
homes with exclusive distribution rights for set-top-box services and
14 international versions of Excite. Excite@Home and UPC are expected to own
equal stakes in Excite Chello.
New Board and Corporate Governance Structure
In August, Excite@Home completed the transaction to extend and modify its
distribution relationships with AT&T, Cox and Comcast and to restructure of
its governance. Shortly afterward, the company announced a new board of
directorsthat includes six representatives of AT&T Corp., Excite@Home's chief
executive officer, three independent directors and one seat yet to be filled.
Also, AT&T converted 50 million of its Series A shares, each of which carries
one vote, into Series B shares, each of which carries 10 votes. AT&T now owns
approximately 25% of the equity value of Excite@Home and 74% of the voting
power of the outstanding shares. In conjunction with these changes,
Excite@Home will be the provider of platform/connectivity services used by its
principal cable partners in delivering their high-speed Internet services.
Excite@Home's portal will be featured on AT&T's high-speed Internet service
start page for the duration of the agreement. AT&T has agreed to distribute
Excite@Home's broadband services through 2008, and Cox and Comcast have agreed
to distribute the service through 2006 subject to certain rights to terminate
the distribution agreement beginning in 2001.
Financial Outlook
Excite@Home indicated that it expects its broadband subscriber base to
grow in the fourth quarter by 25% to 30%. The company further indicated that
it anticipates revenue growth at a low-double-digit rate in the fourth quarter
compared to the third quarter, and that it expects its loss per share prior to
amortization of goodwill and other intangible assets, as well as the cost and
amortization of distribution agreements and certain non-operational and other
expenses, to fall in a range of $0.08 to $0.10. These projections exclude the
impact of the Excite Chello transaction, which would result in a greater
global subscriber total and, due to the fact that Excite@Home expects to own a
minority stake in Excite Che approximately 10% of
the company's pro forma revenues and related costs and expenses.
Conference Call Scheduled for October 24
Excite@Home will host a conference call to discuss its results at 2:00 PM
Pacific Time on October 24. The call will be available to the public via a
live audio webcast at the company's investor relations website,
excitehome.net. A replay of the call will also be archived on
the website.
Cautionary Note Regarding Forward-looking Statements
This press release contains forward-looking statements that involve risks
and uncertainties, including those relating to the company's financial outlook
for future periods, including revenue and operating losses; its goals for the
growth of its broadband subscriber base and footprint; the completion of
proposed transactions including the Excite Chello joint venture and Pogo.com
acquisition; the statistics regarding broadband users generally and
Excite@Home's subscribers in particular as reported by Harris Interactive.
Actual results may differ materially due to a number of factors, including the
rate of increased spending to stimulate growth in broadband subscribers and
expand international operations; the effectiveness those efforts, which cannot
be assured; of the increasingly competitive environment for Internet
advertising sales and e-commerce services, which can be expected to limit the
growth of media revenues; the company's dependence on the actions of its cable
partners to upgrade the cable plant and market and install the @Home service;
the company's ability to successfully integrate its acquired companies; the
company's ability to successfully expand its online marketing programs; and
the company's ability to expand its international operations and
relationships. In addition, the company's proposed Excite Chello joint venture
and its acquisition of Pogo.com are each subject to satisfaction of several
closing conditions, and the company cannot guarantee that the transactions
will be completed on a timely basis or at all. Reported results should not be
considered as an indication of future performance. In particular, Excite@Home
anticipates that its increased investments designed to stimulate growth of its
broadband subscriber base and to expand its international activities will
result in operating losses for the current year. The matters discussed in this
press release also involve risks and uncertainties described in Excite@Home's
form 10K, its latest form 10Q and other filings with the Securities and
Exchange Commission. Excite@Home assumes no obligation to update the
forward-looking information contained in this press release.
About Excite@Home
Excite@Home (Nasdaq: ATHM) is the leading broadband online service
provider, offering residential and commercial broadband services, with a
global footprint of 105(1) million homes under long-term cable and DSL
contract. Excite@Home offers consumers broadband services over cable-modem,
DSL and other 'last-mile' connections and businesses high-speed commercial
services. Excite@Home has over 30(1) million cable franchise homes under
contract outside of North America and localized versions of the Excite service
in 10 leading international markets.
@Home received the 'Best On-line Journalism for Innovation' at the Net
Media European Awards on July 11, 2000.
(1) Effective upon the closing of Excite Chello.
Excite@Home, @Home, @Work, Excite, Blue Mountain, the stylized "@" logo
and MatchLogic are trademarks of or licensed to At Home Corporation and may be
registered in certain jurisdictions. All other brand names are trademarks of
their respective owners.
AT HOME CORPORATION
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(In thousands, except per share data)
Three Months Three Months Nine Months
Ended September 30, Ended June 30, Ended September 30,
2000 1999 2000 2000 1999
Revenues
(1) $169,946 $112,562 $157,613 $465,622 $291,743
Costs and expenses:
Operating
costs 86,610 45,260 74,417 218,266 112,033
Product development and
engineering 25,673 16,834 29,065 75,713 47,718
Sales and
marketing 84,413 48,179 80,921 222,260 125,947
General and
adminis-
trative 20,511 9,028 19,441 50,676 28,341
Total costs
and
expenses
(2) 217,207 119,301 203,844 566,915 314,039
Loss from
operations (47,261) (6,739) (46,231) (101,293) (22,296)
Interest income,
net 5,670 2,556 980 9,843 7,162
Pro forma net
loss $(41,591) $(4,183) $(45,251) $(91,450) $(15,134)
Pro forma net loss
per share - basic
and diluted $(0.10) $(0.01) $(0.11) $(0.23) $(0.04)
Shares used in pro
forma per share
calculation 401,191 362,885 396,092 394,976 360,306
(1) Revenue from
related
parties $5,221 $8,916 $11,030 $28,345 $28,411
(2) Depreciation and
amortization included
in costs and
expenses $32,188 $15,293 $23,981 $75,758 $40,323
NOTE:
The results for all periods presented have been restated to reflect the
pro forma combined operations of At Home and Excite. At Home's
acquisition of Excite was completed during the quarter ended June 30, 1999
and was accounted for as a purchase.
The results for the periods in 2000 include the Excite UK and Excite Japan
operations for the quarters ended June 30, 2000 and September 30, 2000 to
reflect the pro forma combined operations of international joint ventures
in which majority ownership interests have been obtained.
The above unaudited pro forma condensed consolidated statements of
operations exclude the effects of the following:
-- Realized gain on strategic investment held ($12,566 during the nine
months ended September 30, 1999).
-- Equity losses from affiliated companies accounted for under the equity
method ($13,192 and $2,876 during the quarters ended September 30, 2000
and 1999, respectively; $8,323 during the quarter ended June 30, 2000;
and $26,330 and $4,438 during the nine months ended September 30, 2000
and 1999, respectively).
-- Minority interest in the losses of subsidiaries consolidated for pro
forma purposes ($1,771 and $4,182 during the quarter and nine months,
respectively, ended September 30, 2000 and $2,411 during the quarter
ended June 30, 2000).
-- Cost and amortization of distribution agreements issued to various
cable partners in connection with their roll-out of the @Home service
($24,350 and $43,932 during the quarters ended September 30, 2000 and
1999, respectively; $28,166 during the quarter ended June 30, 2000; and
$146,481 and $77,655 during the nine months ended September 30, 2000
and 1999, respectively).
-- Costs and amortization of goodwill, intangible assets, deferred
compensation and other acquisition-related amounts including purchased
in-process research and development and other business combination
costs ($591,042 and $447,569 during the quarters ended September 30,
2000 and 1999, respectively; $589,317 during the quarter ended June 30,
2000; and $1,753,492 and $660,933 during the nine months ended
September 30, 2000 and 1999, respectively).
AT HOME CORPORATION
UNAUDITED CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(In thousands, except per share data)
Three Months Three Months Nine Months
Ended September 30, Ended June 30, Ended September 30,
2000 1999 2000 2000 1999
Revenues
(1) $160,533 $112,562 $148,721 $447,317 $208,202
Costs and expenses:
Operating
costs 80,365 45,260 69,363 206,967 92,944
Product development
and
engineering 23,818 16,834 26,813 71,606 34,582
Sales and
marketing 79,244 48,179 74,254 210,424 81,129
General and
adminis-
trative 19,535 9,028 17,798 48,057 19,554
Total costs and
expenses before
investment gain,
equity losses,
and costs and
amortization of
distribution agreements
and acquisition-related
amounts
(2) 202,962 119,301 188,228 537,054 228,209
Loss from operations
before investment gain,
equity losses, and costs and
amortization of distribution
agreements and acquisition-
related
amounts (42,429) (6,739) (39,507) (89,737) (20,007)
Interest income,
net 5,700 2,556 858 9,751 7,839
Net loss before investment
gain, equity losses, and
costs and amortization
of distribution agreements
and acquisition-related
amounts (36,729) (4,183) (38,649) (79,986) (12,168)
Realized gain on
investment held -- -- -- -- 12,566
Equity share of losses of
affiliated
companies (16,589) (2,876) (12,131) (33,535) (3,618)
Cost and amortization of
distribution
agreements (24,350) (43,932) (28,166) (146,481) (77,655)
Costs and amortization of
goodwill, intangible assets, deferred
compensation and other
acquisition-related
amounts (591,042) (447,569) (589,317) (1,753,492) (653,753)
Net loss $(668,710) $(498,560) $(668,263) $(2,013,494) $(734,628)
Net loss per share before
investment gain, equity losses,
and costs and amortization of
distribution agreements and
acquisition-related amounts
- basic and
diluted $(0.09) $(0.01) $(0.10) $(0.20) $(0.04)
Net loss per share - basic
and diluted $(1.67) $(1.37) $(1.69) $(5.10) $(2.47)
Shares used in per
share
calcul-
ations 401,191 362,885 396,092 394,976 297,002
(1) Revenue from related
parties $6,647 $8,916 $12,144 $30,885 $21,321
(2) Depreciation and
amortization included in
costs and
expenses $31,921 $15,293 $23,638 $75,148 $31,563
AT HOME CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2000 1999
ASSETS
Current Assets:
Cash and cash equivalents $152,512 $224,548
Short-term investments 180,369 300,675
Total cash, cash equivalents and
short-term investments 332,881 525,223
Accounts receivable, net 69,136 52,200
Accounts receivable - related parties 34,704 18,332
Other current assets 51,833 35,151
Total Current Assets: 488,554 630,906
Property, equipment and improvements, net 336,494 176,077
Investments in affiliated companies 36,127 19,015
Strategic investments 192,104 273,005
Distribution agreements, net 676,755 313,557
Goodwill and other intangible assets, net 6,100,490 7,615,062
Other assets 125,801 76,657
Total Assets: $7,956,325 $9,104,279
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $114,160 $44,491
Accounts payable - related parties 12,710 23,206
Accrued compensation and related expenses 22,608 15,632
Deferred revenue 46,308 56,844
Other accrued liabilities 89,209 62,540
Current portion of capital lease and
other obligations 61,923 38,666
Total Current Liabilities: 346,918 241,379
Convertible notes and debentures 741,678 736,294
Capital lease and other obligations,
less current portion 75,341 52,552
Other liabilities 9,936 7,037
Stockholders' Equity:
Preferred stock 311,410 397,019
Common stock 10,199,733 9,312,700
Deferred compensation (39,605) (50,493)
Accumulated other comprehensive income 9,211 92,594
Accumulated deficit (3,698,297) (1,684,803)
Total Stockholders' Equity: 6,782,452 8,067,017
Total Liabilities and Stockholders'
Equity: $7,956,325 $9,104,279
SOURCE Excite@Home
-0- 10/24/2000
/CONTACT: Joe Shiffler, Investor Relations, 650-556-6060, or Melissa
Walia, Public Relations, 650-556-2213, both of Excite@Home/
/Web site: home.net
(ATHM)
CO: Excite@Home
ST: California
IN: MLM RLT
SU: ERN
SL
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