More news. can you believe these numbers ? Gotta admit though they
sure have a lottta cash hangin around. Almost enough for the next
quarters loss!!! Then with the weight of both of these two losers
anchored together.... TOAST!!!!!!!!!!!!!!
(COMTEX) B: N2K INC. ANNOUNCES 1998 THIRD QUARTER, NINE MONTH RESULTS
B: N2K INC. ANNOUNCES 1998 THIRD QUARTER, NINE MONTH RESULTS
NEW YORK, Oct. 23 /PRNewswire/ -- N2K Inc. (Nasdaq: NTKI), a leading
online music entertainment company, today reported financial results
for the third quarter and nine months ended September 30, 1998.
Net revenues for the third quarter ended September 30, 1998 were
$10,506,000, a 194% increase from revenues of $3,570,000 reported for
the third quarter of 1997. Of the 1998 third quarter revenues, Music
Boulevard Network and Encoded Music reported revenues of $9,497,000 and
$1,009,000 respectively. The loss for the third quarter, excluding a
one-time previously announced restructuring charge of $4,304,000
related to Encoded Music, was $19,744,000, or $1.39 per share, compared
to a loss from continuing operations of $6,949,000, or $2.25 per share,
for the third quarter of 1997. The third quarter 1998 net loss
including the charge was $1.69 per share, compared to a net loss of
$1.74 per share for the third quarter of 1997.
For the nine month period ended September 30, 1998, the Company
reported net revenues of $27,644,000, a 325% increase from revenues of
$6,507,000 reported in the same period last year. Of the nine month
period revenues, Music Boulevard Network and Encoded Music had revenues
of $24,890,000 and $2,754,000, respectively. The loss for the nine
month period, excluding a one-time previously announced restructuring
charge of $4,304,000 related to Encoded Music, was $49,879,000, or
$3.71 per share, compared to a loss from continuing operations of $16,
698,000, or $5.58 per share, reported for the same period last year.
For the nine month period of 1998, the net loss was $4.03 per share,
compared to a net loss of $5.19 per share for the nine month period of
1997.
At September 30, 1998, the Company had approximately 526,000 customers,
of which 174,000 were first time customers added in the third quarter,
which represents a customer acquisition ramp up of almost 50%.
Approximately 52% of revenues in the third quarter came from existing
customers. In the first nine months of 1998, N2K has added 395,000 new
customers.
The number of pages carrying advertisements increased to 73.7 million
pages in the third quarter, a 17% increase over the second quarter of
1998, resulting in ad revenue of $1,112,000. During the third quarter,
page views on N2K's music channels increased to 92.1 million from 84.2
million in the second quarter of 1998 and 39.6 million in the third
quarter of 1997. In September of 1998, Media Metrix, the PC Meter
Company reported that the Music Boulevard Network had a combined at
home/at work reach of 4.6% compared with a combined reach of 3.2% in
June of 1998.
Larry Rosen, Chairman and CEO of N2K, commented, "Results for the third
quarter clearly reflect strong growth in our market position, coupled
with the expenses necessary to build our customer base through key
alliances, prominent Internet positioning as well as strategic
marketing and brand building."
Jon Diamond, Vice-Chairman of N2K said, "During the third quarter, the
company announced several key strategic alliances and new customer
benefits. N2K announced a marketing alliance with Visa U.S.A. making
Visa the preferred form of payment on N2K's Music Boulevard. We also
unveiled an improved program for the affiliate partner sites that link
to Music Boulevard for music content, community and commerce. In the
third quarter, the Music Boulevard Affiliate Program surpassed the 10,
000-member mark. The company also announced a global marketing and
promotion alliance with Internet portal, Infoseek to become the
exclusive online music retailer in their Entertainment channel and on
relevant search result pages. Continuing our strategy of partnering
with major media companies including print, radio and television, N2K
also announced a partnership with radio programming supplier MJI
Broadcasting to make Music Boulevard the exclusive online music
retailer for all of MJI Broadcasting's syndicated content services for
radio stations. And, as part of our ongoing effort to provide the best
customer experience, Music Boulevard introduced customer-created CD
compilations and a new and improved classical search function during
the third quarter."
Earlier today, N2K Inc. (Nasdaq: NTKI) and CDnow, Inc. (Nasdaq: CDNW)
jointly announced the signing of a definitive merger agreement. The
strategic merger will create a leader in e-commerce, as measured by
customer base, market share, transactions, positioning with key
partners and breadth of offerings.
N2K Inc. is a leading online music entertainment company and the
Internet's complete resource for music content, community and
commerce. The Music Boulevard Network, the company's online division
combines Music Boulevard, the world's #1 online music store and the
award-winning music channels: Rocktropolis, Jazz Central Station,
Classical Insites and the Star Sites including Stones World and the
official sites for Leonard Bernstein and Miles Davis. Music Boulevard
(musicblvd.com) offers a choice of more than 470,000 music titles and
over 350,000 sound samples. The Music Boulevard Network is the
preferred or exclusive music partner for America Online (AOL Keyword:
MB), AOL Japan, AOL Europe, Netscape, Excite, Disney.com, ABC.com, ABC
Radio Networks, MJI Broadcasting, Infoseek, Ticketmaster, Microsoft
Plaza, iVillage, WebTV, @Home, AT&T WorldNet, StarMedia, CBS Cable's
TNN, CMT and country.com and MTV International sites in Europe, Japan,
Asia and Brazil. N2K also owns N2K Encoded Music, an independent
record label and provider of original music content. Traded on Nasdaq
under the symbol "NTKI," N2K Inc. is based in New York at 55 Broad
Street, New York, NY 10004. Internet address: n2k.com.
Telephone: 212-378-5555.
This release may contain forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those projected. Such risks and uncertainties
include, but are not limited to the impact from competition for
Internet content and merchandise and recorded music; dependence on
strategic alliance partners, suppliers and distributors; market
acceptance of the Internet for commerce and as a medium for
advertising; technological changes and difficulties; and other risks
detailed in the Company's Securities and Exchange Commission filings.
N2K Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Net Revenues $10,506 $ 3,570 $27,644 $ 6,507
Cost of Revenues 8,171 2,792 21,752 4,917
Gross Profit 2,335 778 5,892 1,590
Operating Expenses:
Operating and
development 7,707 3,514 19,873 9,339
Sales and marketing 14,210 2,632 34,669 5,370
General and
administrative 1,131 1,228 3,609 3,261
Restructuring charge 4,304 -- 4,304 --
Operating Loss (25,017) (6,596) (56,563) (16,380)
Interest and Other Income 988 81 2,446 166
Interest Expense (19) (434) (66) (484)
Loss From Continuing
Operations (24,048) (6,949) (54,183) (16,698)
Loss from Discontinued
Operations -- -- -- (416)
Gain on Disposal of Discontinued
Operations -- 1,574 -- 1,574
Net Loss $(24,048) $ (5,375) $(54,183) $(15,540)
Basic and Diluted Loss Per Common Share:
Loss from continuing
operations $(1.69) $ (2.25) $(4.03) $(5.58)
Loss from discontinued
operations -- -- -- (0.14)
Gain on disposal of
discontinued operations -- 0.51 -- 0.53
Net loss per Common
Share $(1.69) $ (1.74) $(4.03) $(5.19)
Shares Used in Computing Basic
and Diluted Loss Per
Common Share 14,221 3,083 13,435 2,995
N2K Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share data)
(UNAUDITED)
September 30, December 31,
1998 1997
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 54,277 $ 36,832
Receivable for Common stock
subject to put rights 3,000 3,000
Accounts receivable, net 1,806 892
Prepaid expenses 9,679 16,787
Inventory 314 90
Advances and recoupable costs 171 203
Total current assets 69,247 57,804
PROPERTY AND EQUIPMENT:
Computer equipment 10,328 4,638
Office furniture and
equipment 1,682 1,147
Leasehold improvements 2,245 1,883
Property and equipment under
capital leases 1,802 1,802
16,057 9,470
Less- Accumulated
depreciation and amortization (4,536) (2,291)
Net property and equipment 11,521 7,179
OTHER ASSETS:
Intangible assets, net 187 244
Restricted cash 167 167
Other assets 1,083 138
Total other assets 1,437 549
$ 82,205 $ 65,532
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital
lease obligations $ 374 $ 464
Accounts payable 1,899 1,504
Accrued merchandise costs 1,469 1,170
Accrued compensation 1,394 1,341
Accrued royalties 585 630
Other accrued liabilities 11,571 3,252
Total current liabilities 17,292 8,361
CAPITAL LEASE OBLIGATIONS 393 653
OTHER LONG-TERM LIABILITIES 394 370
COMMON STOCK SUBJECT TO PUT RIGHTS 3,000 3,000
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
100,000 shares authorized,
14,229 and 12,118 shares
issued and outstanding 14 12
Additional paid-in capital 171,357 109,198
Accumulated Deficit (110,245) (56,062)
Total stockholders' equity 61,126 53,148
$ 82,205 $ 65,532
SOURCE N2K Inc.
-0- 10/23/98 /CONTACT: Paula Batson,
Senior Vice President, Public Relations of N2K Inc., 212-378-0331;
Andrea Kaimowitz, 212-850-5634, Katherine Mittelbusher, Press: Lee
Foley, or Evan Goetz of Morgen-Walke Associates, 212-850-5613, for N2K
Inc./
/Web site: n2k.com; www.musicblvd.com/ (NTKI CDNW)
CO: N2K, Inc.; CDnow, Inc. ST: New York IN: ENT SU: ERN
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