SportsLine USA, Inc. Reports First Quarter Financial Results;
Record-High Revenue and Site Traffic Generated
Business Wire - April 20, 1999 16:41
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--April 20, 1999-- SportsLine USA, Inc. (Nasdaq:SPLN), the
publisher of CBS SportsLine (cbs.sportsline.com), today announced record revenue and site traffic for the
first quarter ended March 31, 1999. Revenue increased 63% to $11.1 million in the first quarter of 1999,
compared to $6.8 million in the same quarter last year.
The Company's net loss for the quarter was $10.1 million or $0.47 per share, compared to a net loss of $9.0
million or $0.56 per share in the same quarter last year. EBITDA (earnings before interest, taxes,
depreciation and amortization) loss was $5.3 million compared to $5.6 million in the same quarter last year.
Traffic to the Company's Web sites grew 58% over the same period last year, averaging approximately 6.8
million page views per day for the first quarter of 1999, compared to 4.4 million page views per day in the
same quarter last year. Record highs were set for the month of March with 9.0 million average page views
per day.
SportsLine USA's combined reach among users at home and at work also rose to record-high levels in
March. According to Media Metrix, SportsLine USA's combined reach among users at home and at work
was 7.5% in March, up from 4.7% in February. Approximately 4.6 million unique visitors to SportsLine USA
were reported for March, an increase of 64% over the number of unique visitors in February of approximately
2.8 million.
"We continue to see strong growth in all the key metrics, from traffic to advertising to e-commerce," said
Michael Levy, president and CEO of SportsLine USA. "We expect the extension of our CBS agreement and
the distribution arrangements we now have in place with America Online, Netscape, Excite and InfoSpace to
be significant drivers to our business model over time. These relationships, combined with the strong
momentum we built this quarter should serve as a solid foundation for future growth."
SPORTSLINE USA, INC.
Financial Highlights
(In thousands except per-share and member data)
(unaudited)
Three Months Ended
March 31,
1999 1998
---- ----
Revenue $ 11,057 $ 6,789
Net loss $ (10,128) $ (9,006)
Net loss per share $ (0.47) $ (0.56)
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Weighted average shares outstanding 21,694 16,088
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EBITDA $ (5,330) $ (5,592)
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Average page views per day (1) 6,813 4,223
Average visits per day (1) 599 583
Members at end of period:
Paying 57,003 54,469
SportsLine Rewards 133,628 N/A
(1) Based on I/Pro audited results
Revenue Surges on Major Events
Advertising revenue for the first quarter of 1999 reached a record high of $5.9 million, an increase of 33%
over the first quarter of 1998. Advertising revenue growth during the quarter was fueled by the NCAA
Basketball Championships and Super Bowl. Those same events, helped drive an increase in e-commerce
revenue to a record $2.2 million, a 376% increase over the same period last year. The Company's
e-commerce area, The Sports Store (www.TheSportsStore.com), recorded its three best single days ever
during the first quarter. February 1, the day following Super Bowl XXXIII, The Sports Store received more
than 1,100 orders, barely exceeding the orders received on March 30, following the NCAA Men's Basketball
Championship game. Both of those days passed the previous record day, January 5, 1999, which followed
the college football national championship game in the Fiesta Bowl. Revenue from content licensing for the
quarter also achieved a new high of $1.6 million.
Record Advertising and Traffic Set with NCAA Basketball Championships Coverage
SportsLine USA's sponsorships for the NCAA Basketball Championships in March totaled in excess of $3
million, representing SportsLine USA's largest sponsorship revenues for a single event. The first two days of
the 1999 Men's Basketball Championship resulted in SportsLine USA's top two days ever for page views
and visits. On Thursday, March 11, the opening day of the championship, the Company's Web sites received
approximately 21 million page views and 1.4 million visits, only to be topped the next day with approximately
21.5 million page views and 1.5 million visits. During the 23 days from CBS Sports's announcement of the
tournament brackets, through the championship game, the Company's Web sites averaged more than 9.2
million page views and more than 850,000 visits per day. Combined reach among SportsLine USA users at
home and at work also rose to record high levels in March.
CBS Agreement Amended and Extended
In February, SportsLine USA and CBS extended the original five-year agreement through 2006, with the
Company scheduled to receive an additional $100 million in on-air promotion from 2002 through 2006.
Additionally, to help provide greater and more effective reach for advertisers, CBS agreed to expand the
integration and packaging of advertising for the CBS SportsLine brand with CBS Sports sales and CBS
Plus, CBS's cross-media sales organization. As a result of the amended agreement, CBS's ownership
stake in SportsLine USA increased to approximately 20% with an increase in the future (depending on the
Company's stock price and other share issuances) to as much as 25%.
$150 Million in Convertible Subordinated Debentures Issued
In March, the Company raised $150 million in additional capital through a rule 144A offering of seven-year
5% convertible subordinated notes. The notes are convertible into shares of SportsLine USA's common
stock at a price of $65.125 per share. Proceeds from the convertible debt will be used for working capital
and other general corporate purposes, including expansion of the Company's marketing and sales efforts,
international expansion, and capital expenditures.
Co-branded Store Launched with Amazon.com
In January, the Company and Amazon.com, the Internet's number one book and music retailer, launched a
co-branded store on the CBS SportsLine site. SportsLine USA built and maintains the store, which
highlights sports-related books, videos and CDs, in addition to Amazon.com's complete catalog of more
than 4.7 million titles.
SportsLine USA Begins Sports Programming for America Online, Excite and Netscape; Content also to be
Distributed via InfoSpace
In January, SportsLine USA began programming sports news for AOL's SportsChannel and CBS
SportsLine is an anchor tenant in the Sports Web Center on AOL.COM and the Sports Channel on
CompuServe. SportsLine USA is also the premier national sports provider for AOL's Digital City local
services and the premier provider of country-specific sports content to AOL's international services. The
Company is also the premier provider of sports merchandise within the AOL Sports Channel.
In February, the Company also officially launched Excite Sports by SportsLine, providing Excite users with a
co-branded, comprehensive version of all SportsLine USA content, greatly expanding the depth of sports
coverage available on the Excite Sports Channel and through Excite's distribution partners, including Dell,
Prodigy, AT&T Worldnet and others. The Excite Sports Channel also contains co-branded versions of
SportsLine USA's popular suite of fantasy products and The Sports Store, the Company's online
e-commerce area.
SportsLine USA also became the premier sports content provider for Netscape's Netcenter Sports Channel
in January, as well as the exclusive provider for news, information and merchandise for NFL, NBA, NHL,
MLB, golf, soccer, tennis, auto racing and NCAA basketball and football. In addition to programming most of
the Netcenter Sports Channel, SportsLine is responsible for selling all advertising and sponsorships
associated with the content, as well as offering Netscape users a co-branded comprehensive version of The
Sports Store.
SportsLine USA also announced an agreement in February to have its content distributed by InfoSpace.com,
a leading provider of private label solutions for content and commerce. The new sports channel, InfoSpace
Sports by SportsLine, will be available to InfoSpace's broad affiliate network of 1,500 Web sites. The
Company will place all advertising and sponsorship sales on the sports channel in addition to becoming the
exclusive provider of sports merchandise and collectibles through The Sports Store.
SportsLine Begins Providing Broadband Content
In February, the Company and Road Runner, the national high-speed online service, entered an agreement
for SportsLine USA to provide sports content to Road Runner customers, designed to optimize the online
sports experience by capitalizing on the increasing popularity of high-speed access to the Internet. This
initiative features special content built by SportsLine USA specifically to provide Road Runner customers
with the ultimate experience in online sports information and entertainment, including state-of-the-art
multimedia video, audio and original broadband programming.
"SportsLine Rewards" Program Launched
In January, the Company launched "SportsLine Rewards," a free membership program that rewards
members for every CBS SportsLine page they view. Through the end of the first quarter, the Company had
enrolled more than 133,000 members. Members earn points for viewing pages and can earn additional
bonus points for viewing highlighted areas within the site and for purchasing fantasy products or
merchandise. Members can redeem their points for everything from merchandise to private online chats with
sports celebrities to preferred seating at special events. The launch is supported by a million-dollar
sweepstakes, allowing members an exclusive opportunity to earn sweepstakes entries throughout 1999 to
win a $1 million cash prize for viewing pages on CBS SportsLine. The Company is also offering a premium
program, "SportsLine Rewards Plus," for $39.95 per year. The premium program provides additional
benefits, including bonus points for signing up, double points for page views, exclusive columns, additional
discounts on merchandise and savings on fantasy sports products.
SportsLine USA and PGA TOUR Join Forces on the Internet
In April, the Company and the PGA TOUR joined forces to co-produce the largest most comprehensive golf
site on the Internet, pgatour.com. The site will continue to offer the only real-time scoring on the Internet from
PGA TOUR, SENIOR PGA TOUR and NIKE TOUR events, and contain other information concerning PGA
TOUR players and events. GolfWeb, SportsLine's leading golf site, will be integrated into the web site and
feature golf news from other organizations and international tours, while continuing to focus on recreational
golf, travel opportunities and golf instruction, as well as a variety of interactive tools. The site will also feature
a unique e-commerce opportunity, the PGA TOUR shop, the official online pro shop of the PGA TOUR, and
exclusive online source of TOUR-branded merchandise. GolfWeb will enhance the e-commerce product
assortment with a complete line of equipment, accessories, apparel and other golf products from the game's
top manufacturers.
About SportsLine USA, Inc.
SportsLine USA, Inc. (Nasdaq:SPLN) is a leading Internet-based sports media company that provides
branded, interactive information and programming as well as merchandise to sports enthusiasts worldwide.
The publisher of CBS SportsLine (http://cbs.sportsline.com), SportsLine USA's content includes more than
400,000 pages of multimedia sports information, entertainment and merchandise, covering all major
professional, collegiate and international sports with exclusive content from sports teams, organizations and
superstars such as Michael Jordan, Tiger Woods and Shaquille O'Neal. The Sports Store
(www.TheSportsStore.com) is SportsLine USA's electronic commerce arena offering a unique collection of
sports-related merchandise, memorabilia and licensed products. In 1998, the Company acquired two
golf-related properties, GolfWeb (www.golfweb.com) the Internet's premier golf site, and International Golf
Outlet (www.igogolf.com), a leading Internet retailer of fine golf products and equipment. SportsLine USA
was founded in 1994, and its flagship Internet sports service was renamed CBS SportsLine in March of
1997 as part of an exclusive five-year promotional and content agreement with CBS Sports which has been
extended through 2006.
Note: This press release contains forward-looking statements, which involve risks and uncertainties.
SportsLine USA's actual results could differ materially from those anticipated in these forward-looking
statements. Factors that might cause or contribute to such differences include, among others, competitive
pressures, the growth rate of the Internet, constantly changing technology and market acceptance of the
company's products and services. Investors are also directed to consider the other risks and uncertainties
discussed in SportsLine USA's Securities and Exchange Commission filings, including those discussed
under the caption "Risk Factors That May Affect Future Results" in SportsLine USA's latest Annual Report on
Form 10-K. SportsLine USA undertakes no obligation to publicly release the result of any revisions to these
forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
SportsLine USA, Inc.
Condensed Consolidated Statements of Operations
(in thousands except per-share data)
(unaudited)
Three Months Ended
March 31,
1999 1998
---- ----
Revenue:
Advertising $ 5,888 $ 4,419
E-commerce 2,221 467
Membership and premium services 1,340 1,009
Licensing and other 1,608 894
----- -----
Total revenue 11,057 6,789
Cost of revenue
5,383 4,414
Gross margin 5,674 2,375
Operating expenses:
Product development 357 389
Sales and marketing 6,786 4,363
General and administrative 3,861 3,215
Depreciation and amortization 5,844 3,828
Total operating expenses 16,848 11,795
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Loss from operations (11,174) (9,420)
Net interest income 1,046 414
----- -----
Net loss $ (10,128) $ (9,006)
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Net loss per share $ (0.47) $ (0.56)
Average shares outstanding 21,694 16,088
======== ========
EBITDA $ (5,330) $ (5,592)
======== ========
SportsLine USA, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, 1999 December 31, 1998
-------------- -----------------
Assets:
Cash and short-term marketable
securities $197,957 $ 59,075
Current deferred advertising and
content-CBS 15,037 413
Receivables, prepaids and other
current assets 19,302 15,232
Non-current marketable securities 39,466 39,205
Property and equipment, net 6,227 5,367
Long-term deferred advertising
and content-CBS 41,681 --
Other assets 20,490 18,363
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$340,160 $137,655
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Liabilities and Shareholders' Equity:
Current liabilities $ 10,703 $ 10,211
Long-term convertible notes 150,000 --
Other long-term liabilities 8,417 8,481
Shareholders' equity 171,040 118,963
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$340,160 $137,655
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CONTACT: SportsLine USA, Inc., Fort Lauderdale
Kenneth Sanders, Chief Financial Officer
954/351-2120, ext. 7900
or
Larry Wahl, Director of Investor Relations and
Corporate Communications
954/351-2120, ext. 7225
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