Mecklermedia, The Internet Media Company, Reports Operating Income
Growth of 79% and Net Income Growth of 45% for Second Quarter
Fiscal 1998
WESTPORT, Conn.--(BUSINESS WIRE)--May 7, 1998--Mecklermedia Corporation, The Internet Media Company
(Nasdaq: MECK - news), today reported results for the second quarter ended March 31, 1998. Revenues for the second
quarter of fiscal 1998 increased to $20.7 million compared to $20.5 million for the same period last year as a result of higher
trade show and Web site revenues, offset by lower print publishing revenues. (In December 1997, the Company announced a
strategic magazine initiative whereby Internet World became the new name of Web Week, effective with the February 2, 1998
issue. The paid circulation magazine previously known as Internet World ceased publishing effective with the February 1998
issue and Internet Shopper magazine ceased publishing effective with the January 1998 issue. These changes were effected to
enable the Company to concentrate its print publishing efforts into a single business-to-business publication, leveraging the
Internet World brand name and further aligning the publishing focus with its Internet World trade shows. Revenues from print
publishing for the three months ended March 31, 1998 decreased due to these changes.) Operating income for the second
quarter of fiscal 1998 increased 79% to $6.1 million from $3.4 million for the comparable 1997 period. Net income for the
second quarter was $5.1 million, or $0.61 per share, compared to $3.5 million, or $0.41 per share, in the same period of the
prior year. Net income for the second quarter reflects a $2.0 million gain related to the sale of the active subscriber list of the
paid monthly print publication formerly known as Internet World. Net income for the second quarter of fiscal 1998 reflects a
provision for income taxes of $3.3 million, while net income for the same period of fiscal 1997 only reflects a provision of
$158,000 due to the utilization of available net operating loss carryforwards.
For the six months ended March 31, 1998, revenues increased 16% to $44.0 million from $38.0 million for the comparable
period in fiscal 1997. Operating income for the six months ended March 31, 1998 increased 103% to $10.8 million from $5.3
million for the same period in the prior fiscal year. Net income for the six months ended March 31, 1998 was $8.1 million, or
$0.97 per share, compared to net income of $5.6 million, or $0.66 per share, in the same period of the prior year.
For the second quarter, trade show revenues increased from $14.9 million to $16.8 million, reflecting the growth of Spring
Internet World 1998. Web site revenues also contributed to the increase rising to $830,000 for the three months ended March
31, 1998 from $344,000 for the comparable period in fiscal 1997, due to increased advertising revenue for Internet.com, the
Company's network of Web sites for Internet news and information. Revenues from print publishing for the three months
ended March 31, 1998 decreased as a result of the Company concentrating its print publishing efforts into a single
business-to-business publication as described above.
Advertising, promotion and selling expenses decreased from $3.7 million for the second quarter of fiscal 1997 to $2.0 million
for the second quarter of fiscal 1998 as a result of the Company concentrating its print publishing efforts into a single
business-to-business publication. General and administrative expenses also decreased due to the changes in the Company's
print publishing. -more-
''We are pleased with our performance during the second quarter with the achievement of record operating income and net
income,'' said Alan M. Meckler, Chairman and CEO of Mecklermedia. ''During this period we continued our domestic trade
show growth while expanding our trade show operations internationally with an Internet World show being produced for the
first time in the United Arab Emirates. During our second quarter, we also announced the launch of future Internet World
shows in India, China, and Italy. We also continued the expansion of our network of Web sites, with the acquisition of Web
Developer's Virtual Library (wdvl.com) and PCWebopaedia.com during the second quarter. Our Internet.com network of
Web sites now receives nearly 15 million page views on a monthly basis--making Internet.com one of the leading
business-to-business content sites on the Web. Continued expansion of our trade shows, print publishing and Web sites will
enable us to maintain our leadership position in the Internet media business,'' stated Meckler.
Certain of the Company's operations are cyclical in nature. The number and size of trade shows in a particular quarter has and
will continue to significantly impact the Company's quarterly results. Accordingly, presentation of quarterly results of operations
is not necessarily indicative of annual results or trends.
Mecklermedia Corporation, The Internet Media Company, based in Westport, Connecticut, is a leading provider of Internet
information through its Internet World trade shows and conferences, its Internet World weekly print publication, and its
Internet.com network of Web sites at internet.com, which provides daily news and information resources for the
Internet community. Mecklermedia also publishes the ISDEX, the only 100% Internet stock index featuring 50 leading
companies at isdex.com. Mecklermedia's global presence includes Internet World trade shows and licensed
publications throughout Canada, Mexico, South America, Europe, the Middle East, Africa, Asia, and Australia.
MECKLERMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
( In thousands, except per share amounts)
Three Months Ended Six Months Ended
March 31, March 31,
1998 1997 1998 1997
REVENUES:
Trade shows 16,847 14,925 $34,065 $26,122
Print publishing 2,691 4,765 7,506 10,293
Web sites 830 344 1,599 668
Other 364 482 822 919
--------------------------------
20,732 20,516 43,992 38,002
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COST OF SALES AND DIRECT COSTS:
Trade shows 7,135 7,200 14,397 13,470
Print publishing 2,658 3,380 6,411 6,460
Web sites 541 322 860 561
Other 92 103 223 289
--------------------------------
10,426 11,005 21,891 20,780
--------------------------------
Gross profit after cost of sales
and direct costs 10,306 9,511 22,101 17,222
OPERATING EXPENSES:
Advertising, promotion and
selling 1,970 3,667 6,303 7,255
General and administrative 2,252 2,452 4,992 4,648
---------------------------------
Operating income 6,084 3,392 10,806 5,319
---------------------------------
Interest income 225 274 514 546
Gain on sale of assets 2,036 - 2,036 -
Income before income taxes 8,345 3,666 13,356 5,865
Provision for income taxes 3,255 158 5,209 273
Net income $5,090 $3,508 $8,147 $5,592
=================================
Basic earnings per share $0.61 $0.41 $0.97 $0.66
=================================
Diluted earnings per share $0.59 $0.40 $0.94 $0.64
=================================
Weighted average 8,340 8,500 8,427 8,494
shares
=================================
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MECKLERMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND SEPTEMBER 30, 1997
(In thousands)
March 31, September 30,
1998 1997
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $18,796 $23,971
Accounts receivable, net 5,754 3,960
Advanced billings for trade shows 8,952 9,497
Inventory 451 1,074
Prepaid trade show expenses 2,277 3,198
Deferred income taxes 518 1,715
Prepaid expenses and other 750 1,824
--------- ---------
Total current assets 37,498 45,239
PROPERTY AND EQUIPMENT, NET 2 [OTC BB:XXZYB - news],598 2,528
INTANGIBLE ASSETS, NET 6,991 3,760
OTHER ASSETS 486 254
--------- ---------
Total assets $47,573 $51,781
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $2,651 $4,219
Accrued expenses 6,747 3,708
Accrued income taxes 2,393 72
Deferred trade show revenue 11,952 21,406
Deferred magazine revenue 462 2,640
--------- ---------
Total current liabilities 24,205 32,045
DEFERRED MAGAZINE REVENUE - LONG-TERM - 320
--------- ---------
Total liabilities 24,205 32,365
STOCKHOLDERS' EQUITY:
Common stock 83 85
Additional paid-in capital 25,843 24,857
Treasury stock, at cost (5,272) (172)
Retained earnings (deficit) 2,841 (5,306)
Foreign currency translation adjustment (127) (48)
--------- ---------
Total stockholders' equity 23,368 19,416
--------- ---------
Total liabilities and stockholders'
equity $47,573 $51,781
========= =========
This press release contains statements which constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to risks and uncertainties, including but not limited to, risks
detailed from time to time in the Company's filings with the Securities and Exchange Commission.
Contact:
Dara Tyson
(203) 341-2972
dtyson@mecklermedia.com |
