StarMedia Network Announces Second Quarter 2000
Financial Results
PR Newswire - August 07, 2000 16:43
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12.0 Million Unique Users During the Month of June*, The Largest Online Audience in the Spanish-
and Portuguese-Speaking World
Revenues Reach $13.8 Million, a 255% Increase Over the Same Period in 1999, And a 37% Increase
Over the Previous Quarter
1.1 Billion Monthly Page Views Recorded in the Month of June*
NEW YORK, Aug. 7 /PRNewswire/ -- StarMedia Network, Inc., (Nasdaq: STRM), the leading
Internet media company targeting Spanish- and Portuguese-speaking audiences worldwide, today
announced financial results for the second quarter ended June 30, 2000.
-- Revenues for the second quarter reached $13.8 million, a 255% increase over the same period in
1999, and a 37% increase over the previous quarter
-- 12.0 million unique users during the month of June*, the largest online audience in the Spanish- and
Portuguese-speaking world
-- Page views during the quarter increased to 2.7 billion*, 300% higher than the same period in 1999,
and a 30% increase over the previous quarter
-- Active e-mail accounts grew to 4.4 million, a 267% increase over the same period in 1999, and a 35
% increase over the previous quarter.
* Unique user and page view figures have been audited by ABC Interactive,
in compliance with Internet Advertising Bureau (IAB) standards. ABC
Interactive is the interactive auditing unit of the Audit Bureau of
Circulations (ABC) that provides online auditing services for leading
Internet companies worldwide. StarMedia Network is the only Internet
company which publicly reports IAB-compliant audited traffic for its
Spanish and Portuguese language Web properties.
StarMedia Network reported $13.8 million in total revenues for the quarter ended June 30, 2000, a
37% increase over the $10.1 million in revenues reported for the quarter ended March 31, 2000, and a
255% increase over total revenues of $3.9 million for the quarter ended June 30, 1999.
StarMedia Network reported a net loss of $44.0 million, or a basic and diluted net loss per share of
$0.67, for the quarter ended June 30, 2000. This compares to a net loss of $35.1 million or a basic and
diluted net loss per share of $0.54 for the quarter ended March 31, 2000, and a net loss of $22.1
million, or a basic and diluted net loss per share of $0.43, on a pro forma basis, for the quarter ended
June 30, 1999.
"StarMedia Network's second quarter results show our continued ability to aggregate the largest
audience of online users in the Spanish- and Portuguese-speaking world and moreover, to monetize that
audience," said Fernando Espuelas, Chairman and Chief Executive Officer, StarMedia Network, Inc.
"StarMedia is omnipresent throughout the markets in which we operate and we intend to leverage our
powerful position to extend our leadership and aggressively grow all aspects of the business."
AUDIENCE GROWTH AND USAGE
StarMedia Network's user base is the largest online network in the Spanish- and Portuguese-speaking
markets, with 12.0 million unique users worldwide during the month of June.
StarMedia Network's audience continued to show strong growth during the second quarter, a result of
the StarMedia.com 6.0 launch and strength of the StarMedia brand. Page views in the quarter ended
June 30, 2000 were 2.7 billion, a 30% increase over page views of 2.1 billion in the quarter ended
March 31, 2000 and 300% over the quarter ended June 30, 1999.
Unique user and page view figures have been audited by ABC Interactive in compliance with Internet
Advertising Bureau (IAB) standards. ABC Interactive is the interactive auditing unit of the Audit Bureau
of Circulations (ABC), which provides online auditing services for leading Internet companies
worldwide. StarMedia Network is the only Internet company which publicly reports IAB-compliant
audited traffic for its Spanish and Portuguese language Web properties.
Active e-mail accounts grew to 4.4 million in the quarter ended June 30, 2000, a 35% increase over the
3.3 million active e-mail accounts in the quarter ended March 31, 2000, and a 267% increase over the
1.2 million active e-mail accounts in the second quarter 1999. Active email accounts refers to those
email accounts that have been used at least once within the last 90 days.
STARMEDIA NETWORK USER PROFILE -- - LAREDO STUDY
During the second quarter, StarMedia Network released the highlights of its second annual user study
indicating the Internet usage trends and behavior of StarMedia Network's worldwide Spanish- and
Portuguese-speaking audiences. Overall, the findings based on 22,500 participants indicate a diverse,
Internet savvy audience that has the desire to integrate the Internet into their everyday lives. They rely on
this medium to keep in touch with their family and friends via e-mail, chat and instant messaging.
Significant network-wide findings include:
-- Users spend an average of 10.4 hours online each week, up from 8.2 in
1998
-- Users spend 5.8 hours per week, or 56% of their total online time, at
the StarMedia Network properties, up from 2.9 hours, or 35% of online
time, in 1998
-- 42% have shopped online in the past 12 months, up from 29% in 1998
-- 50% have home Internet connection speeds of 56 kpbs or faster, up from
33% in 1998
-- 13% reported having Internet service via a mobile device and 10% via a
TV
DISTRIBUTION PLATFORMS
Consistent with the Company's strategy to make StarMedia Network's services accessible to users
anywhere at any time, the Company enters into agreements by which StarMedia Network content may
be distributed through a variety of distribution platforms: traditional narrowband service, broadband,
and wireless devices.
StarMedia Mobile
In the second quarter, StarMedia Mobile announced alliances with three different cellular providers
throughout the Latin American region. These agreements supply cellular operators with StarMedia
Mobile's cutting-edge wireless server technology enabling them to offer their subscribers StarMedia
Network content over cellular devices.
Agreements include:
-- Movilnet (http://www.movilnet.com.ve), one of Venezuela's leading
cellular carriers and a subsidiary of CANTV, to create Latin
America's first mobile portal, tun-tun.com. This joint
launch between StarMedia Network and Movilnet will run on cellular
technologies such as SMS (short message service), WAP (wireless access
protocol) and CDPD (cellular digital package data), and will allow
users to access customized StarMedia information from their cell phones
and handheld devices.
-- BellSouth Chile, a subsidiary of BellSouth, the leading mobile
telephone company in Latin America, to create
mibellsouth.cl, the first personalized mobile Internet
portal in Chile.
-- Comcel, a leading mobile telephone company in Colombia, to create
comcel.com, the first personalized mobile Internet portal in
Colombia.
These portals allow users to receive customized Web content on their cellular telephones. StarMedia
Mobile also has previously announced agreements with Brazilian wireless carriers Amazonia ATL,
Telemig Celular and Telet Cellular.
PRODUCT ENHANCEMENTS
During the quarter, StarMedia continued to add to its content offerings through a variety of product
enhancements and partnerships. Most notable was the introduction of StarMedia 6.0, the newest
version of the Network's flagship property starmedia.com. StarMedia 6.0 delivers enhanced
navigation features, a superior ad-serving platform, and links to the full offering of StarMedia Network's
online brands. The crisp interface and newly designed homepage allow users to access the site's content
more easily. The new format also allows for advertisements to be placed more prominently and served
faster. StarMedia 6.0 incorporates user feedback garnered from the Company's extensive user study,
in-country focus groups, and user e-mail.
During the second quarter, StarMedia teamed up with Ricardo Rocha, one of Mexico's leading
journalists, to create an exclusive news and information center that is part of the StarMedia.com Mexico
destination. Through the Ricardo Rocha channel, StarMedia.com Mexico offered users in the region
extensive coverage of the entire Mexican presidential elections, including the unprecedented opportunity
to participate in live online chats with all five of Mexico's leading presidential candidates.
StarMedia.com was the only Mexican site to provide users with direct access to all the candidates and
the unique chance to discuss political, economic and social topics.
In addition, in the hours leading up to the vote, StarMedia.com Mexico was the only Website to feature
a live feed from Mexico's Federal Electoral Institute. Voters were provided with real-time access to
vote tallies via the Internet for the first time ever in Latin America, an example of the Internet's
democratizing effect in the region.
StarMedia Presents Carlos Santana
In May, StarMedia Network announced its exclusive title sponsorship of eight-time Grammy Award
winner, Carlos Santana's Supernatural Summer Tour in the United States. Using state-of-the-art
webcast technology, StarMedia Broadband provides users unique interactive access to Santana's music
and concerts. StarMedia recently unveiled its official Santana website,
starmedia.com which features webcasts of selected concerts, behind the scenes
activity, unique touring information, interviews and historical footage of the artist and the band.
NOTABLE CLIENT CAMPAIGNS
Absolut
During the second quarter, StarMedia Network together with Absolut, announced the creation of an
advertising partnership by which the Absolut brand will be promoted on the Brazil, Colombia, Mexico,
Venezuela, United States and Puerto Rico properties of StarMedia.com. This innovative advertising
campaign -- Absolut's first on the Internet -- consists of approximately ten unique animations, and is an
example of how StarMedia helps advertisers to execute the most effective campaigns on the Internet.
Pepsi
StarMedia Network together with Pepsi-Cola International, also launched a new advertising campaign
at pidemasonline.com, the first pan-regional online community created for teens by teens.
Pidemasonline.com provides Spanish- and Portuguese-speaking teens with the opportunity to create
and define their own virtual community where they can enjoy the freedom of expression to discuss their
views on topics ranging from music to relationships to pop culture to ecology. Multi-media marketing
efforts will support pidemasonline.com and will include the URL
pidemasonline.com on point-of-purchase material and on over 20 million Pepsi packages in
the Puerto Rico market. The new site has been launched in Puerto Rico and Venezuela and will be
followed by rollouts in Argentina and Brazil later this year.
ABOUT STARMEDIA NETWORK, INC.
StarMedia Network, Inc. is the leading Internet media company for Spanish and Portuguese speakers
worldwide. The Network consists of a portfolio of pan-regional and local brands, distributed across an
array of platforms including the Web, wireless and broadband. All of the StarMedia Network
properties share an integrated sales network, marketing support, and a technical and operational
infrastructure. StarMedia Network consists of 12 leading brands including StarMedia.com, Cade?,
LatinRed, AdNet, Zeek!, Guia SP, Guia RJ, OpenChile, Panoramas.cl, Paisas.com, Batepapo.com.br,
Yo Invito; and operates StarMedia Mobile, the wireless division, and StarMedia Broadband, the
broadband services arm. Founded in 1996, the Company has over 850 employees and operations in
Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico, Spain, Uruguay, Venezuela, and throughout
the U.S.
StarMedia and StarMedia's logos, product and service names are registered trademarks of StarMedia
Network, Inc.
This press release contains statements of a forward-looking nature within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or
future financial results of StarMedia Network, Inc. Investors are cautioned that such statements are only
predictions and are based on management's current expectations or beliefs and are subject to a number
of factors that could cause actual events or results to differ materially. In considering such statements,
investors should specifically consider various factors which could cause actual events or results to differ
materially from those indicated from such forward-looking statements, including the matters set forth in
StarMedia Network, Inc.'s reports and documents filed from time to time with the Securities and
Exchange Commission.
StarMedia Network, Inc.
Condensed Consolidated Balance Sheets
June 30, 2000 December 31, 1999
ASSETS (unaudited) (audited)
Current assets:
Cash and cash equivalents $ 169,878,000 $ 274,089,000
Account receivables, net 12,315,000 7,575,000
Other current assets 15,656,000 5,506,000
Total current assets 197,849,000 287,170,000
Fixed assets, net 51,423,000 23,160,000
Intangible assets, net 4,974,000 4,642,000
Goodwill, net 41,777,000 18,513,000
Other assets 35,475,000 22,586,000
$ 331,498,000 $ 356,071,000
LIABILITIES and STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 14,961,000 $ 7,535,000
Accrued expenses 38,744,000 17,108,000
Other current liabilities 2,988,000 2,292,000
Total current liabilities 56,693,000 26,935,000
Long term liabilities 4,061,000 2,775,000
Stockholders' equity (deficit):
Common stock 66,000 64,000
Additional paid-in capital 504,958,000 484,465,000
Deferred compensation (5,136,000) (8,461,000)
Other comprehensive loss (758,000) (421,000)
Accumulated deficit (228,386,000) (149,286,000)
Total stockholders' equity (deficit) 270,744,000 326,361,000
Total liabilities and
stockholders' equity (deficit) $ 331,498,000 $ 356,071,000
StarMedia Network, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended Six Months Ended
Jun. 30, Jun. 30, Jun. 30, Jun. 30,
2000 1999 2000 1999
unaudited unaudited unaudited audited
Revenues $ 13,764,000 $ 3,880,000 $ 23,820,000 $ 5,474,000
Operating expenses:
Product & technology
development 19,458,000 6,434,000 35,358,000 10,019,000
Sales & marketing 22,274,000 13,266,000 40,861,000 22,926,000
General &
administration 7,702,000 3,188,000 15,777,000 5,642,000
Non-recurring Charges -- 1,023,000 -- 1,023,000
Depreciation &
amortization 7,289,000 1,170,000 11,833,000 1,644,000
Stock-based
compensation
expense 1,108,000 1,595,000 2,320,000 3,012,000
Total operating
expenses 57,831,000 26,676,000 106,149,000 44,266,000
Loss from
operations (44,067,000) (22,796,000) (82,329,000) (38,792,000)
Interest income 3,330,000 945,000 6,793,000 1,404,000
Interest expense (364,000) (231,000) (684,000) (269,000)
Loss in unconsolidated
subsidiary (2,500,000) -- (2,500,000) --
Other Expenses (373,000) -- (373,000) --
Net loss before
provision for
income taxes (43,974,000) (22,082,000) (79,093,000) (37,657,000)
Provision for
income taxes (7,000) -- (7,000) --
Net loss (43,981,000) (22,082,000) (79,100,000) (37,657,000)
Preferred stock
dividends and
accretion -- (1,725,000) -- (4,266,000)
Net loss available
to common
shareholders $(43,981,000) $(23,807,000) $(79,100,000) $(41,923,000)
Historical basic
and diluted net
loss per common
share $ (0.67) $ (0.76) $ (1.21) $ (1.91)
Historical number
of shares used in
computing basic and
diluted net loss
per share 65,706,679 31,187,100 65,173,234 21,927,102
Pro Forma
Net loss $(43,981,000) $(22,082,000) $(79,100,000) $(37,657,000)
Net Loss per
share on a
proforma
basis $ (0.67) $ (0.43) $ (1.21) $ (0.79)
Number of shares
used in calculating
net loss per share
on a pro forma
basis 65,706,679 50,877,357 65,173,234 47,618,438
Pro Forma calculations assume that all outstanding Redeemable Convertible
Preferred Shares have been converted to Common Shares on a 1:1 basis on
day issued.
SOURCE StarMedia Network, Inc.
/CONTACT: Investors, Gina M. Sorice, Vice President, Investor Relations,
212-905-8317, or gina.sorice@starmedia.net, or Amy Carpi, Sr. Investor
Relations Associate, 212-905-8318, or amy.carpi@starmedia.net, or Media, Romi
Schutzer, Vice President, Corporate Communications, 212-905-8269, or
romi.schutzer@starmedia.net, all of StarMedia Network, Inc./
/Web site: starmedia.net
(STRM) |
