BOUT beats earnings expectations
July 29, 1999 16:57
About.com Reports Second Quarter 1999 Financial Results
Revenue Increases Nine Fold Over Second Quarter 1998 And 57% Over First Quarter 1999
Fastest Growing Web Property in Media Metrix Top 25 in June - Unique Visitors Up 35%
NEW YORK, July 29 /PRNewswire/ -- About.com, Inc. (Nasdaq: BOUT), the leading network of niche vertical sites, announced today financial results for the three and six months ended June 30, 1999. Revenue for the second quarter ended June 30, 1999 increased to $3.7 million, over nine times greater than the second quarter of 1998, and an increase of 57% over revenue of $2.4 million in the first quarter of 1999.
The pro forma net loss for the quarter ended June 30, 1999, excluding non- cash compensation charges, was $20.4 million, or ($1.69) per share. This compares to a pro forma net loss of $2.8 million, or ($0.35) per share, for the comparable period in 1998, and a pro forma net loss of $7.9 million, or ($0.91) per share, for the first quarter of 1999, both excluding the effects of non-cash compensation charges.
The pro forma net loss for the quarter ended June 30, 1999, including the non-cash compensation charges, was $20.7 million, or ($1.71) per share, compared to a pro forma net loss of $2.8 million, or ($.36) per share, including the non-cash compensation charges for the comparable period in 1998. Pro forma net loss for the first quarter of 1999 was $11.9 million, or ($1.37) per share, including the non-cash compensation charges.
Revenue for the six months ended June 30, 1999 was $6.1 million, over 11 times greater than revenue for the six months ended June 30, 1998. The pro forma net loss for the six months ended June 30, 1999, excluding non-cash compensation charges, was $28.4 million or ($2.73) per share. Including non- cash compensation charges, the net loss for the six month period was $32.6 million, or ($3.14) per share.
During the first quarter of 1999, the non-cash compensation charges included a non-recurring charge for guide compensation as a result of the company granting to its network of over 650 expert guides options to purchase approximately 200,000 shares of common stock in connection with its March 1999 IPO. The $3.6 million charge reflected the fair market value of the options on the date of grant.
Cash and short-term investments totaled $61.5 million at June 30, 1999, compared to $85.0 million at March 31, 1999. Capital expenditures in the second quarter of $3.2 million were used to build up the infrastructure necessary to support the growth in the company's service and for basic office administrative needs.
Scott Kurnit, Chairman and CEO of About.com, stated, "During the second quarter we achieved record growth in all key metrics including unique users, page views and revenues. We have great momentum in our unique business model as demonstrated by these results which is reinforced by having entered Q3 with a sales backlog in excess of our Q2 revenues. I'm especially proud of our staff and 650 Guides for doing the job on both the branding and product fronts to make us the fastest growing of the top 25 worldwide web properties in the past month."
Key Metrics/Monetizing the Growth:
In June 1999, About.com ranked 2nd among all news, information and entertainment sites and 20th among all web properties, according to Media Metrix.
Unique visitors grew 35% as compared with May 1999, to 7.2 million for the month of June 1999, which represented the fastest growing web property in the Top 25 (Media Metrix, June 1999).
Average daily page views grew 64% to 4.1 million for the month of June, compared to 2.5 million for the month of March, 1999.
Members grew 83% to 1.1 million in June, from 600,000 in March, 1999.
We increased the CPM (cost per thousand ad impressions) of niche site sales to $45 in June from $35 in March while increasing the 7.
The company continued at the top of industry measures for RPM (revenue per thousand page views) which was up significantly to $13.33 for the second quarter from $10.76 in the first quarter.
Significant Operational Accomplishments include:
New Services/Enhancing the network of 650 niche verticals:
-- In May, we entered into an e-commerce alliance with Borders.com to
develop co-branded bookstores across the About.com network.
Borders.com will have access to About.com's content, including
thousands of book reviews and feature articles created by the guides.
Additionally, About.com will create online opportunities for Borders'
network of authors; and Borders will create offline opportunities in
local markets for About.com's network of expert guides.
-- In July, we launched polling using a leading polling technology
(through an acquisition discussed in this release) with polls currently
running across the network.
-- In June, through an agreement with Broadcast.com, About.com launched a
live, all-talk Internet radio program "Talking ABOUT This Week"
showcasing the expertise of About.com's network of human guides in an
exciting new format. The program's initial success underscores the
potential for About.com to simultaneously leverage its network of
experts across a variety of formats. .
Kurnit said, "The action for this company is in our 650 niche verticals and with the Guides who oversee them. The quality of our professional Guides has never been stronger and with the addition of "polling everywhere," Borders/AboutGuide bookstores, and AboutRadio, our niche sites continue to demonstrate industry leadership. The company's ownership of so many niches is unmatched and the increase in targeted sites sold from 7 to 77 in June over March bodes very well for our future revenue opportunities as we extend our high CPM targeted model to all of our 650 sites."
Channel Strategy Hitting Stride:
-- In July, we entered into an agreement to enhance our AboutFinance
Channel by co-branding content with The MotleyFool. Our users will
have access to increased news, features and commentary through this
arrangement while our AboutFinance Guides will become active
participants in The MotleyFool forums.
-- In July, we announced enhancements to AboutShopping (The About.com
shopping channel) through a co-branded agreement with ShopNow.com.
The Channel will now offer About.com's customers access to nearly
29,000 merchant stores underscoring the company's commitment to
providing users a full range of superior, in-network content, community
and commerce opportunities.
-- In June, the company entered into a content alliance and advertising
agreement with HotJobs.com to enhance the AboutBusiness/Careers
Channel. Additionally, HotJobs.com will supply co-branded job listings
for our appropriate niche verticals across the About.com network.
Kurnit said, "While job one is to drive our traffic into our well defined 650 niche verticals, there is tremendous opportunity to work with partners and pull content from our niches into our 18 channels. We serve different customer needs at the channel level and are able to generate significant revenues for the company at the same time. These three partnerships demonstrate the strength of our channel strategy. Our rapid growth has made the company a magnet for working with the best 3rd party brands on the Net."
Marketing/Distribution:
-- In May, we successfully launched the About.com brand and enhanced our
membership program with the introduction of AboutMe pages. Our
membership offering allows customers to easily align themselves with
relevant niche sites, their favorite guides and other members
throughout the About.com Network.
-- During the quarter, we entered into an agreement with AltaVista to
include access to the About.com network in all search results on every
page.
Kurnit said, "Within two months of introducing the About.com brand we have better unaided recall than many well established brands such as GeoCities and equal recognition to Disney's GO Network."
About.com Investments:
-- During the quarter, About.com acquired Vantage Net, Inc., a leading
provider of polling services on the Internet. The company will operate
as a separate entity and offer polling technology and user generated
ad-purchasing software across the About.com Network, while continuing
to offer services to 3rd party web sites and creators of personal web
pages all around the Net.
About.com Management Team:
The company expanded the senior management team with several key appointments including: Alan Wragg was named President of About.com International; previously Alan was the President of Advertising and E- Commerce for About.com. Jon Spaet was named President of About.com Advertising Sales; previously Jon ran Ad Sales at MSNBC. Ron McCoy was named SVP of Technology; previously Ron was CTO and Director of Operations at Cox Interactive Media (CIM). Alan Blaustein was named Senior Vice President, previously Alan was with Brobeck, Phleger & Harrison L.P.
About About.com
About.com is the leading network of niche vertical sites for users and marketers. The network includes 650 highly targeted environments, each overseen by a professional guide. Each vertical niche provides a comprehensive consumer experience including the Internet's best link directories, original content, community features and commerce opportunities. Media Metrix (June 1999) ranks About.com as the 2nd largest news, information and entertainment site in the world.
This news release contains forward-looking statements that involve risks and uncertainties regarding About.com. Investors are cautioned that such results or events predicted in these statements may differ materially from actual future events or results. Factors that could cause actual events or results to differ from anticipated events or results include the company's limited operating history, history of losses and anticipation of continued losses, potential volatility of quarterly operating results, and other risks that are contained in About.com's reports and documents filed from time to time with the Securities and Exchange Commission.
About.com, Inc.
Consolidated Statements of Operations
Unaudited
(in thousands, except share and per share amounts)
Three months ended June 30, Six months ended June 30,
1999 1998 1999 1998
Revenues $3,707 $396 $6,074 $548
Cost of revenues 2,923 742 5,246 1,287
Non-cash compensation 5 2 3,621 20
Gross profit (loss) 779 (348) (2,793) (759)
Operating expenses:
Sales and marketing 18,346 1,059 23,784 1,377
General and
administrative 1,870 633 3,273 1,103
Product development 1,780 635 2,934 1,183
Amortization of goodwill 34 -- 34 --
Non-cash compensation 242 31 616 231
Total operating expenses22,272 2,358 30,641 3,894
Loss from operations (21,493) (2,706) (33,434) (4,653)
Other income (expense), net800 (93) 819 (571)
Net loss (20,693) (2,799) (32,615) (5,224)
Cummulative dividends
and accretion -- -- (660) --
Net loss attributable
to common stockholders $(20,693) $(2,799) $(33,275) $(5,224)
Pro forma net loss per common share:
Including non-cash
compensation $(1.71) $(0.36) $(3.14) $(0.67)
Excluding non-cash
compensation $(1.69) $(0.35) $(2.73) $(0.63)
Pro forma weighted average
shares
outstanding (1) 12,083,097 7,840,100 10,385,966 7,837,807
Historical net loss
per common share $(1.71) $(1.65) $(4.38) $(3.08)
Weighted average
shares outstanding 12,083,097 1,700,481 7,589,028 1,698,188
(1) Pro forma weighted average shares outstanding for all periods
presented assumes that the 6,139,640 shares of Common Stock issued upon
the automatic conversion of the Company's Preferred Stock in connection
with the initial public offering had been outstanding during each
period.
About.com, Inc.
Consolidated Condensed Balance Sheets
Unaudited
(in thousands)
June 30, 1999 December 31, 1998
Assets
Cash and cash equivalents $61,506 $10,644
Accounts receivable, net 3,037 917
Property and equipment, net 7,067 3,302
Other assets 3,359 795
Total assets $74,969 $15,658
Liabilities and Stockholders' Equity (Deficit)
Liabilities:
Accounts payable and accrued expenses $9,349 $6,413
Other liabilities 3,166 1,835
Total liabilities 12,515 8,248
Reedeemable convertible preferred stock -- 32,072
Total stockholders' equity (deficit) 62,454 (24,662)
Total liabilities and stockholders'
equity (deficit) $74,969 $15,658
SOURCE About.com, Inc.
/CONTACT: Press: Lee Foley, 212-849-2191, or lee@about.com; or Investors:
Lorraine Sahagian, 212-849-2192, or lorraine@about.com, both of About.com; or
Press & Investors, Chris Plunkett or John Buckley, buckley@braincomm.com, both
of Brainerd Communicators, 212-986-6667, for About.com/ |
