HearMe Reports 111% Increase in Fourth Quarter Revenues
Tuesday January 18, 4:11 pm Eastern Time
New Products and Technologies Drive Increased Usage and Live Voice
Adoption
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 18, 2000--HearMe (Nasdaq:HEAR - news)
today reported record results for the fourth quarter ended December 31, 1999.
Revenues increased to $6.0 million, a 111% increase over revenues of $2.9 million reported for the
fourth quarter of 1998 and 46% higher than the third quarter of 1999. The pro forma net loss for the
fourth quarter was $6.1 million or $.27 per diluted share, excluding the effects of amortization of
intangible assets and a one-time charge of $850,000 for in-process research and development purchased
in connection with the October 1999 acquisition of Resounding Technologies, Inc. This compares with a
net loss of $2.5 million or $.19 per diluted share on a pro forma basis for the fourth quarter of 1998.
Including the amortization of intangible assets and the one-time charge, the Company had a net loss of
$9.1 million for the quarter, or $.41 per diluted share, compared to a net loss of $2.5 million, or a pro
forma loss of $.19 per diluted share, in the same quarter last year.
The Company's strong revenues for the quarter were driven by continued success in providing a broad
range of scalable, interactive Web technologies to a diverse customer base of both consumers and
Internet businesses. HearMe's consumer Web site businesses delivered solid advertising revenues,
capitalizing on increased membership and ''stickiness'' and holiday advertising. The Company also
realized revenue gains through licensing its technology products -- including its HearMe(TM)
POP.X(TM) product, a leading platform for providing real-time, multi-user interaction - further
demonstrating the strength of its technology offering.
Revenues for the full year were $15.5 million, a 93% increase over the $8.0 million reported in the prior
year. The pro forma net loss for 1999 was $22.1 million, or $1.13 per diluted share on a pro forma basis,
excluding amortization of intangibles and the aforementioned fourth quarter one-time charge. These
results compared to a fiscal 1998 net loss of $12.0 million or a pro forma net loss of $.95 per diluted
share. Including the amortization of intangible assets and the one-time charge, the net loss for fiscal 1999
was $25.0 million or $1.29 per diluted share on a pro forma basis, compared to a net loss of $12.0 million,
or a pro forma net loss of $.95 per diluted share, in the same period last year.
Driving the Ubiquity of Live Voice on the Internet
During the fourth quarter, HearMe continued to build a leadership position as a driving force for real-time
experiences centered around live voice. ''Towards the end of the year, we implemented aggressive new
programs to meet and advance the increasing demand for Web-based voice interaction,'' said Paul
Matteucci, Chief Executive Officer of HearMe. ''In November, we released VoicePresence(TM) for
Web sites, a product that makes it simple for any type of Web site to add live voice to their site in
minutes. Rapid uptake in registrations and downloads of the product have already begun to spread live
voice across the Web.'' Some of the industry's most popular Web sites are already making the product
easily accessible to their members including recently announced partners: theglobe.com, Talk City, and
FortuneCity.com.
As of the end of 1999, more than 50,000 Web sites had requested and received HearMe software to
bring live voice to their Web pages. In addition, there have already been more than 1.4 million downloads
of the VoicePresence plug-in by consumer users.
Throughout the year, HearMe also introduced advanced products to support more sophisticated levels of
live voice and real-time interaction on Web sites. HearMe SDK, HearMe Starter Applications, and
HearMe POP.X 2.0 leverage third-generation technology to offer one of the most flexible and
comprehensive solutions for real-time Web interactivity available.
Continued Strength of Consumer Web Site Properties
HearMe's consumer Web network, including HearMe.com(TM) and Mplayer.com(TM), continued to
realize strong sequential growth in member registrations, unique monthly visitors and usage. By the end
of the fourth quarter, registered members reached 6.6 million, up from 5.4 million at the end of the third
quarter. Further validating this growth, data from Nielsen/NetRatings indicates that during
December1999, HearMe Web sites hosted over 3.8 million unique visitors from U.S. households, up from
1.6 million unique visitors during September 1999.
''We believe that solid growth of HearMe's consumer communities reflects the growing demand for
real-time experiences by Web users,'' explained Mattteucci. ''In addition, the Company's efforts to
strengthen its network of community sites through partnerships with leading companies such as
eUniverse, Interplay, and Eidos Interactive have also bolstered our content offering and brought new
visitors to our network.''
Increasing Usage of HearMe Voice-Enabled Services
HearMe's voice-enabled services continue to rank among the ''stickiest'' applications on the Internet,
generating more than 340 million minutes of usage during December 1999, up from an average of
approximately 260 million user minutes per month during the third quarter. This figure places HearMe
services in the top ten of all Internet properties in terms of total usage.
Growth in Technology Products Business
HearMe advanced its technology leadership position by strengthening its product offering and continuing
to sign new partners and customers. During the fourth quarter, HearMe expanded the accessibility of its
POP.X platform through release of the HearMe POP.X Shockwave (TM) Server. Developed through
its strategic partnership with Macromedia, POP.X Shockwave Server gives POP.X immediate access to
hundreds of thousands of Shockwave developers. During the fourth quarter, the Company recognized
licensing revenues from three new customers. In addition, leading Web companies, including Boxerjam
and Campus Pipeline, announced that they are working with HearMe technology.
Mr. Matteucci concluded, ''In 1999, the Company generated forward momentum by strategically
capitalizing on emerging market opportunities. We also completed our initial public offering, acquired and
developed new technologies, and further defined our strategic focus on interactive, Web-based voice
technologies. Additionally, we generated and then capitalized on increased user acceptance and reliance
on voice-based Web services, as evidenced by substantial growth in our user metrics and heightened
interest in our sites by mainstream advertisers.
''In the coming year, we look forward to further developing our leadership position in the Web-based
voice interaction market through aggressive new marketing programs and the introduction of new
innovative technologies to address this growing opportunity.''
About HearMe
HearMe is dedicated to reshaping today's Internet applications into real-time interactive experiences
through which large groups of people can interact and communicate using text, voice and video. The
Company develops, operates and licenses technology that enables real-time Internet communication and
communities where people can gather to share affinities, interests, or ideas. Communication tools such as
text chat applications and instant messengers are already incorporating HearMe technology to enable
real-time voice interaction among multiple people.
The Company operates its own real-time consumer Internet communities, HearMe.com(TM) and
Mplayer.com(TM). Through HearMe Technology Products, the Company provides software products
and services for leading third-party site operators building their own branded real-time experiences.
HearMe technologies can enhance a wide range of Internet applications including e-commerce, live
customer support, business-to-business collaboration, distance learning, entertainment and consumer
communities. Companies working with HearMe technology and services include MTV Online Networks,
Macromedia, theglobe.com, StarMedia Network, GTECH Corporation, LG InterNet and CSK Sega.
Founded in early 1995, Mpath Interactive, Inc., dba HearMe, is located in Mountain View, Calif. The
Company can be found on the Internet at www.hearme.com or reached at 650/429-3900.
Except for the historical information contained herein, the matters discussed in this news release are
forward-looking statements that involve risks and uncertainties that could cause actual results to differ
materially from those in such forward-looking statements. Potential risks and uncertainties include,
without limitation, the Company's dependence on its ability to significantly increase its membership base,
user minutes, advertising revenue and revenue from HearMe Technology Products customers; to launch
new products, to maintain and develop strategic relationships with media, Internet and technology
companies; and to compete effectively. These and other risk factors are described in detail in the
Company's Registration Statement on Form S-1, the Company's report on Form 10-Q for the periods
ended March 31, 1999, June 30, 1999, and September 30, 1999 and in the Company's other filings with
the Securities and Exchange Commission.
Note to Editors: HearMe, POP.X, VoicePresence, HearMe.com, and Mplayer.com are trademarks of
Mpath Interactive, Inc., dba HearMe. All other product or service names mentioned herein are
trademarks of their respective owners.
Mpath Interactive, Inc. dba HearMe
Consolidated Statements of Operations
(In thousands, except per share amounts)
Three months ended Twelve months ended
December 31, December 31,
1999 1998 1999 1998
(Unaudited) (Unaudited)
Revenues:
Live Communities $ 3,739 $ 1,381 $ 8,422 $ 3,022
Technology Products 2,291 1,481 7,100 5,005
-------- -------- -------- -------
Total revenues 6,030 2,862 15,522 8,027
-------- -------- -------- -------
Cost of revenues:
Live Communities 1,132 607 4,473 2,221
Technology Products 339 198 1,118 790
-------- -------- -------- -------
Total cost of revenues 1,471 805 5,591 3,011
-------- -------- -------- -------
Gross profit 4,559 2,057 9,931 5,016
Operating expenses:
Research and development 2,770 807 7,937 3,132
Sales and marketing 5,564 2,041 15,505 7,847
General and administrative 1,989 902 6,594 3,274
In-process research and
development 850 850
Amortization of goodwill
and intangible assets 2,175 2,175
Stock based compensation 959 651 3,816 2,601
-------- -------- -------- --------
Total operating expenses 14,307 4,401 36,877 16,854
-------- -------- -------- --------
Loss from operations (9,748) (2,344) (26,946) (11,838)
Interest income
(expense), net 603 (157) 1,865 (113)
-------- -------- -------- --------
Net loss ($9,145) ($2,501) ($25,081) ($11,951)
======== ======== ======== ========
Net loss per share,
basic and diluted ($.41) ($.94) ($1.60) ($5.39)
======== ======== ======== ========
Weighted average shares,
outstanding basic and
diluted 22,325 2,662 15,673 2,217
======== ======== ======== ========
Pro forma net loss per
share, basic and
diluted ($.41) ($.19) ($1.29) ($.95)
======== ======== ======== ========
Number of shares used
in pro forma net
loss calculations(1) 22,325 13,079 19,503 12,643
(1) Pro forma share counts are computed using the weighted average
number of common shares outstanding, including the pro forma effects
of the automatic conversion of all of the Company's outstanding
preferred stock into common stock as of the beginning of the period.
Mpath Interactive, Inc. dba HearMe
Condensed Consolidated Balance Sheets
(In thousands)
Dec. 31, Dec. 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $ 2,573 $ 1,114
Short-term investments 66,756 --
Accounts receivable, net 6,713 2,226
Prepaid expenses and other 1,697 710
-------- --------
Total current assets 77,739 4,050
-------- --------
Property and equipment, net 4,500 1,878
Intangible assets 4,153 --
Goodwill 17,708 --
Other assets 456 249
Total assets $104,556 $ 6,177
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 3,194 $ 1,838
Accrued payroll and related liabilities 2,941 1,063
Current portion of capital lease obligations 322 458
Deferred revenue 396 332
Notes payable 255 2,426
-------- --------
Total current liabilities 7,108 6,117
-------- --------
Convertible note payable -- 1,864
Deferred tax liability 1,661 --
Capital lease obligations and notes payable,
net of current portion 19 326
Total liabilities 8,788 8,307
-------- --------
Redeemeable common stock 2,000 --
Stockholders' equity (deficit) 93,768 (2,130)
-------- --------
Total liabilities and stockholders'
equity (deficit) $104,556 $ 6,177
======== ========
Contact:
HearMe
Linda Palmor, 650/429-3778
investor_relations@hearme.com
or
Morgen-Walke Associates (Investor Relations)
Jonathan Schaffer/Jill Fatzinger, 415/296-7383
Alicia Nieva-Woodgate, 415/296-7383 (Media) |
