Company Resets Financial Projections;
Expects to Become Profitable Sooner Than Previous Estimates
SAN FRANCISCO, Oct. 26 /PRNewswire/ -- NBC Internet, Inc. (Nasdaq: NBCI)
today announced its financial results for the third quarter ended
September 30, 2000. NBC Internet (NBCi) reported revenue totaling
$31.3 million for the third quarter of 2000, an increase of approximately
58 percent over pro forma* revenue of $19.8 million for the third quarter of
1999.
(Photo: newscom.com )
NBCi incurred a pro forma net loss of $54.8 million, or $0.88 per share,
for the third quarter of 2000. This compares to a pro forma net loss of
$17.1 million, or $0.87 per share, for the third quarter of 1999. Pro forma
net loss excludes the effects of acquisition-related amortization of goodwill
and other intangible assets, amortization of deferred compensation, and other
non-recurring charges.
The recently announced transaction involving NBCi's AllBusiness.com
combined with the affects of other financial measures NBCi has undergone, such
as scaling back international operations and reducing employee headcount, is
expected to impact NBCi's earnings per share projections. As a result, the
company anticipates becoming profitable before non-cash charges and NBC
promotion in the fourth quarter of 2001 or the first quarter of 2002,
approximately two quarters ahead of previous expectations. Based on expected
cash uses, the company anticipates that its cash and investment balances will
approximate $200 million, and its NBC promotion will be approximately
$175 million at that time.
NBCi is resetting estimated earnings for the fourth quarter ending
December 31, 2000 to a range of $0.75 to $0.85 loss per share on a pro forma
basis. The current First Call consensus estimate is a loss per share of
$1.11. For the fiscal year ending December 31, 2001, NBCi estimates earnings
to come within a range of $2.05to $2.25 loss per share on a pro forma basis,
compared to the current First Call consensus estimate of $3.01 loss per share.
NBCi is also resetting its revenue estimates for the fourth quarter of
2000 and the fiscal year 2001. For the fourth quarter of 2000, the company
anticipates revenue to be consistent with its third quarter 2000 revenue. For
the fiscal year 2001, it expects revenue to approximate $150 million.
NBCi's new revenue projections are a result of the company's refined focus
on what it believes is its greatest opportunity -- the U.S. consumer Internet
market. As a result, NBCi will no longer recognize revenue generated from
AllBusiness.com, which NBCi recently agreed to contribute to the formation of
a new company focused on the business-to-small-business market. The
AllBusiness transaction, combined with our decision to exit other
non-profitable, non-core businesses, such as expanding international
operations, coupled with the current challenges within the advertising market,
requires NBCi to reset its revenue projections.
"In June, when we announced our refined strategy, we said loudly and
clearly that we are focusing on the domestic, consumer Internet market," said
Will Lansing, NBCi's CEO. "With this narrowed focus, we've been able to
significantly streamline our business, and we are expecting to advance
profitability by approximately two quarters. This, combined with our more
than $600 million in cash and NBC promotional credits, puts us in better shape
to grow the company moving forward."
On a basis consistent with GAAP, revenue earned by Snap.com and the NBC
Multimedia Division prior to the NBCi merger in November of 1999 is excluded
from total revenue reported by NBCi. NBCi's revenue of $31.3 million for the
third quarter of 2000 represents an increase of approximately 250 percent over
GAAP revenue of $9.0 million for the third quarter of 1999.
GAAP net loss, which includes the effects of acquisition-related
amortization of goodwill and other intangible assets, amortization of deferred
compensation, and other non-recurring charges for the third quarter of 2000,
was $157.8 million, or $2.52 per share. This compares to a net loss of
$8.6 million, or $0.44 per share, reported in the third quarter of 1999.
NBCi will host a conference call on Thursday, October 26 at 4:30 p.m. EDT
to discuss its third quarter 2000 financial results. The conference call will
be open to the public, accessible live on the Internet at
www2.vcall.com . A replay of
the call will also be available from 8:00 p.m. EDT on October 26 until end of
day, November 2, 2000. The dial-in number for the replay is 800-475-6701, and
the pass code is 543546.
About NBC Internet, Inc.
NBC Internet, Inc. (NBCi) is a leading Internet company that helps
consumers access Internet resources, leveraging user data to broker
information, commercial, and entertainment transactions between consumers and
marketing partners. NBCi's flagship consumer Internet portal, NBCi.com,
provides Internet search and directory, information, community, personal file
storage, e-commerce, and entertainment services for both narrowband and
broadband users.
NBCi was launched in November 1999 through the combination of NBC and
CNET's Snap.com, Xoom.com, NBC.com, NBC Interactive Neighborhood, VideoSeeker,
and a 10 percent equity stake in CNBC.com. NBC Internet publicly trades under
the ticker NBCI on The Nasdaq Stock Market(R). NBC, a subsidiary of General
Electric Company (NYSE: GE), holds a 39.2 percent ownership stake in NBCi.
NBCi is headquartered in San Francisco and has offices in New York City,
Los Angeles, and Chicago.
*Pro forma revenues represent the combination of XOOM.com, Snap.com, and
the NBC Multimedia Division (which consists of NBC.com, NBC Interactive
Neighborhood, and VideoSeeker), as if they had been combined at the beginning
of the periods presented. Pro formarevenues, which are not presented on a
basis consistent with generally accepted accounting principles (GAAP), exclude
certain non-recurring revenues earned from equity instruments by the NBC
Multimedia Division, as well as revenues earned by companies acquired prior to
their acquisition dates. Pro forma revenues have been provided for
illustrative purposes only.
This press release contains statements that are forward-looking. These
statements are based on NBCi's expectations of its future results as of the
date of this press release. Actual results may differ materially from those
projected because of a number of risks and uncertainties, including those
listed from time to time in NBC Internet Inc.'s SEC reports, including but not
limited to XOOM.com, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1998; XOOM.com's Quarterly Reports on Form 10-Q for the periods
ended March 31, 1999, June 30, 1999 and September 30, 1999; the Registration
Statements on Form S-4 and Form S-1 filed by NBC Internet, Inc., as amended.
Important factors that could cause the results to differ materially from those
in any such forward-looking statements include: NBCi's limited operating
history; unpredictability of its quarter-to-quarter results; its unproven
business model and dependence on members; risks associated with its
international operations; its reliance on a network infrastructure; its
dependence on vendors and suppliers; management of its growth and expansion;
risks associated with brand development; its reliance on advertising revenue;
intense competition with other Web communities and businesses; the risks of
infringement of intellectual property rights; risks associated with
acquisitions; and reliance on strategic relationships.
NBC Internet, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
Net revenue:
Advertising $26,160 $15,390 $75,882 $36,372
E-commerce 5,142 4,404 16,004 10,376
Total net revenue 31,302 19,794 91,886 46,748
Cost of net revenue 10,299 6,863 32,618 22,026
Gross profit 21,003 12,931 59,268 24,722
Operating expenses:
Operating and development 18,035 5,701 46,094 12,781
Sales and marketing 21,675 12,279 63,419 34,329
General and administrative 14,876 7,741 43,063 18,591
Promotion and advertising
provided by NBC 26,659 6,913 64,732 32,950
Total operating expenses 81,245 32,634 217,308 98,651
Loss from operations (60,242) (19,703) (158,040) (73,929)
Other income (expense):
Interest income 9,442 3,205 29,265 6,213
Interest expense (4,028) (555) (11,875) (1,215)
Net loss $(54,828) $(17,053) $(140,650) $(68,931)
Net loss per share -
basic and diluted $(0.88) $(0.87) $(2.34) $(4.11)
Number of shares used
in per share calculation -
basic and diluted 62,579 19,655 60,009 16,780
The pro forma statement of operations information for the three and nine
months ended September 30, 2000 and 1999 is for illustrative purposes only and
is not prepared in accordance with generally accepted accounting principles.
For the three and nine months ended September 30, 1999, it combines the
operating results of Xoom.com, Snap! LLC and the NBC Multimedia Division
(which consists of NBC.com, NBC-IN.com and VideoSeeker) as if they had been
combined as of January 1, 1999.
(A) This pro forma statement of operations excludes the following items:
(i) acquisition-related amortization of intangible assets of $94.7
million and $5.5 million for the three months ended September 30,
2000 and 1999, respectively;
(ii) acquisition-related amortization of intangible assets of $259.2
million and $7.8 million for the nine months ended September 30,
2000 and 1999, respectively;
(iii) acquisition-related in-process research and development charges of
$3.8 million and $2.6 million for the nine months ended September
30, 2000 and 1999, respectively;
(iv) amortization of deferred compensation of $4.0 million and $90,000
for the three months ended September 30, 2000 and 1999,
respectively;
(v) amortization of deferred compensation of $8.8 million and $495,000
for the nine months ended September 30, 2000 and 1999,
respectively;
(vi) non-recurring charges of approximately $1.9 million related to the
pending disposition of certain assets and liabilities of
AllBusiness.com for the three and nine months ended September 30,
2000;
(vii) losses related to equity investments of $2.5 million for the three
and nine months ended September 30, 2000;
(viii) historical advertising revenues of $2.6 million and $8.6 million
for the three and nine months respectively. Such non-recurring revenue was earned from the
receipt of equity instruments in connection with the NBC Multimedia
Division's outsourcing agreements; and
(ix) the historical results of operations for the periods prior to the
dates of acquisition for all acquired businesses of Xoom.com, other
than those listed above for the three and nine months ended
September 30, 2000 and 1999.
(B) Basic and diluted net loss per share has not been adjusted to reflect
the issuance of (i) 7,245,063 shares of Class A common stock to CNET and an
unaffiliated third party; and (ii) 23,590,680 shares of Class B common stock
to an affiliate of NBC for the three and nine months ended September 30, 1999.
Certain prior period amounts have been reclassified to conform to current
period presentation. These reclassifications had no effect on the Company's
previously reported financial positions or results of operations.
NBC Internet, Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
Net revenue:
Advertising $26,160 $4,552 $75,882 $9,527
E-commerce 5,142 4,404 16,004 10,376
Total net revenue 31,302 8,956 91,886 19,903
Cost of net revenue 10,299 4,075 32,618 10,574
Gross profit 21,003 4,881 59,268 9,329
Operating expenses:
Operations and development 18,035 2,206 46,094 3,980
Sales and marketing 21,675 5,617 63,419 12,306
General and administrative 14,876 3,180 43,063 6,846
Promotion and advertising
provided by NBC 26,659 -- 64,732 --
Purchased in-process
research and development -- -- 3,768 2,603
Amortization of deferred
compensation 3,958 90 8,826 495
Amortization of intangible
assets 94,688 5,532 259,239 7,836
Non-recurring expenses 1,873 -- 1,873 --
Total operating expenses 181,764 16,625 491,014 34,066
Loss from operations (160,761) (11,744) (431,746) (24,737)
Other income (expense):
Interest income 9,442 3,205 29,265 6,213
Interest expense (4,028) (25) (11,875) (90)
Loss on investments (2,493) -- (2,493) --
Net loss $(157,840) $(8,564) $(416,849) $(18,614)
Net loss per share -
basic and diluted $(2.52) $(0.44) $(6.95) $(1.11)
Number of shares used
in per share calculation -
basic and diluted 62,579 19,655 60,009 16,780
NBC Internet, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2000 1999
ASSETS (unaudited)
Current assets:
Cash, cash equivalents
& marketable securities $262,804 $166,873
Accounts receivable, net 15,879 17,223
Note receivable from NBC, current portion 81,502 78,288
Other current assets 42,956 46,807
Total current assets 403,141 309,191
Fixed assets, net 66,047 18,096
Goodwill and other intangible assets, net 1,828,277 1,759,473
Marketable securities, including
restricted cash of $3,494 and $8,990
in 2000 and 1999 respectively 51,317 26,173
Note receivable from NBC, net of
current portion 200,177 261,712
Other assets 127,794 119,451
Total assets $2,676,753 $2,494,096
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other
accrued liabilities $46,584 $50,607
Amount due to related party 27,144 41,792
Deferred revenue 22,712 18,943
Total current liabilities 96,440 111,342
Convertible notes payable due to
NBC and its affiliates 370,000 370,000
Other long-term liabilities 28,046 12,970
Total long-term liabilities 398,046 382,970
Stockholders' equity:
Common stock 2,748,505 2,100,111
Accumulated other comprehensive
income (loss) (33,380) 4,994
Deferred compensation (14,809) (4,121)
Accumulated deficit (518,049) (101,200)
Total stockholders' equity 2,182,267 1,999,784
Total liabilities and stockholders' equity $2,676,753 $2,494,096
SOURCE NBC Internet, Inc.
-0- 10/26/2000
/CONTACT: investors, Roger Maes, 415-375-5109, or roger.maes@nbci.com, or
media, Robert Silverman, 212-664-2756, or robert.silverman@nbci.com, both of
NBCi Corporate Communications/
/Photo: NewsCom: newscom.com
AP Archive: photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 201-369-3467/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 139295/
/Web site: nbci.com
(NBCI GE)
CO: NBC Internet, Inc.; General Electric Company
ST: California
IN: MLM
SU: ERN
JD-ND
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