CMGI Announces Record Fourth Quarter Revenues of $377.2 Million; Revenues
Grow 568% over Prior Year Fourth Quarter, 62% over Preceding Quarter
ANDOVER, Mass., Sep 21, 2000 (BUSINESS WIRE) --
Company Expects Profitability in 5 of 6 Business Segments by
Close of Fiscal Year 2001
CMGI, Inc. (NASDAQ:CMGI), a leading global Internet operating and development
company, today reported net revenues of $377.2 million for the fourth quarter
ended July 31, 2000, a 62% sequential increase in quarterly revenues and a 568%
increase compared with last year's fourth quarter. Net revenues for the
Company's search and portals segment increased 6,208% compared with the fourth
quarter of fiscal 1999, and increased 14% compared with the third quarter of
fiscal 2000. Net revenues for the Company's infrastructure and enabling
technologies segment increased 938% compared with the fourth quarter of fiscal
1999, and increased 33% compared with the third quarter of fiscal 2000. Net
revenues for the Company's Internet professional services segment increased
24,096% compared with the fourth quarter of fiscal 1999, and increased 218%
compared with the third quarter of fiscal 2000. Net revenues for the Company's
e-business and fulfillment segment increased 275% compared with the fourth
quarter of fiscal 1999, and increased 206% compared with the third quarter of
fiscal 2000. Net revenues for the Company's interactive marketing segment
increased 457% compared with the fourth quarter of fiscal 1999, and increased
14% compared with the third quarter of fiscal 2000. For the fiscal year ended
July 31, 2000, CMGI's net revenues increased $711.7 million, or 382% to $898.1
million from $186.4 million in fiscal 1999.
Excluding the effects of in-process research and development charges and
amortization of intangible assets and stock-based compensation charges in both
periods, CMGI's net loss was $142.8 million or ($0.49) basic loss per share for
the fourth quarter of fiscal 2000, compared to net income of $36.6 million or
$0.13 basic income per share for the previous quarter ended April 30, 2000.
Including the effects of in-process research and development charges and
amortization of intangible assets and stock-based compensation charges in both
periods, CMGI's net loss was $633.7 million or ($2.17) basic loss per share for
the quarter, compared to a net loss of $428 million or ($1.53) basic loss per
share for the previous quarter ended April 30, 2000.
Fourth quarter fiscal 2000 results included the impact of pre-tax gains,
classified as "other gains, net," of $82.1 million on the sale of Yahoo! common
stock, $53.6 million on the acquisition of Half.com by eBay, and $9.2 million
primarily resulting from issuance of stock by Engage to Compaq Computer
Corporation (NYSE: CPQ). During the fourth quarter of fiscal 2000 the Company
also recorded in-process research and development charges totaling $19.7 million
primarily related to the acquisition of yesmail.com, and a $35 million write
down accounted for as a realized loss on one marketable securities investment.
Third quarter fiscal 2000 results included pre-tax gains of $209.3 million on
the sale of Yahoo! common stock and $4.2 million on the sale of Amazon.com
common stock classified as "other gains, net," and a pre-tax gain of $20.9
million primarily resulting from issuance of stock by Vicinity in its initial
public offering. During the third quarter the Company also recorded in-process
research and development charges totaling $41.2 million related to the
acquisitions of AdForce, Equilibrium and Flycast. Excluding the effects of
in-process research and development and amortization of intangible assets and
stock-based compensation charges, CMGI's fourth quarter fiscal 2000 operating
expenses for continuing operations were $606.2 million, reflecting a 42%
increase from the third quarter of fiscal 2000 and a 517% increase from last
year's fourth quarter.
"The dramatic growth exhibited across the CMGI network in the past quarter and
throughout the past year is a powerful testament to the strength and increasing
reach of our companies," said David Wetherell, Chairman and CEO, CMGI. "Through
the evolution and expansion of our unique business model, we will continue to
aggressively capitalize on the synergies and efficiencies inherent in our new
operating structure, while leveraging the emerging opportunities represented
within our CMGI @Ventures portfolio. Looking forward to fiscal 2001, we will
remain focused on strong growth, the clear achievement of leadership within our
operating segments, and an accelerated path to profitability. In fact, we expect
four out of five operating segments to begin to realize positive earnings before
interest, taxes, depreciation, amortization, and in-process research and
development charges, on a monthly run-rate basis by the end of the current
fiscal year."
During the company's fourth fiscal quarter of 2000, Compaq and CMGI announced
the creation of a new joint venture company that will provide Internet-based
products, services and information for a range of vertical employee groups.
Named Freeup LLC, the company expects to launch a business-to-employee (B2E) web
destination called Freeup.com(TM) later this year. Freeup.com will aggregate
information and tools into task-specific subject areas designed to help
employees simplify work processes and increase productivity. Initial funding
from the parent companies is expected to total approximately $20 million.
Compaq, through a wholly-owned subsidiary, owns a controlling interest in
Freeup, while CMGI holds the remaining stake.
Subsequent to the quarter end, recognizing the value of Tribal Voice's instant
messaging (IM) technology, and in keeping with CMGI's efforts to accelerate its
path to profitability and effect strategic and operational efficiencies within
its majority-owned companies, CMGion announced its intention to acquire Tribal
Voice. On September 15, 2000, CMGion acquired Tribal Voice. Both CMGion and
Tribal Voice are majority-owned CMGI subsidiaries. Designed to enable more
efficient delivery of applications and content, CMGion will integrate Tribal
Voice's instant messaging and presence detection technologies as a component of
its network platform offerings.
OPERATING RESULTS AND HIGHLIGHTS
On September 7, 2000, the company announced that it has formally organized its
17 majority-owned operating companies and venture capital affiliate into six
lines of business. These six lines of business include five operating segments -
search and portals; infrastructure and enabling technologies; Internet
professional services; e-business and fulfillment; and interactive marketing -
as well as CMGI's affiliated venture capital arm, CMGI @Ventures. In keeping
with the new company alignment, CMGI will hereafter report its financial results
and key segment operating metrics in accordance with the new operational
structure. CMGI intends to expand upon and revise these operating metrics in
keeping with the larger evolution and organization of its business moving
forward. In accordance with generally accepted accounting principles, all
significant intercompany transactions have been eliminated in consolidation.
Accordingly, segment results reported by CMGI exclude the effect of transactions
between CMGI's subsidiaries.
Search and Portals (AltaVista, iCAST and MyWay.com)
The Search and Portals segment reported revenues of $97,961,000 in the fourth
quarter of fiscal 2000, compared with $86,129,000 in the previous quarter ended
April 30, 2000, an increase of 14%. Fourth quarter revenue increases primarily
reflect increased revenues for AltaVista and iCAST, including increases in
AltaVista's advertising and software sales volumes, and growth in its European
operations, along with increased sales by iCAST's Signatures Network subsidiary.
Excluding the effects of in-process research and development and amortization of
intangible assets and stock-based compensation charges, the operating loss for
the search and portals segment was $85,564,000 in the quarter just ended versus
a loss of $76,989,000 for the quarter ended April 30, 2000. Including the
effects of in-process research and development and amortization of intangible
assets and stock-based compensation charges, the operating loss for the search
and portals segment was $307,723,000 in the quarter just ended versus a loss of
$327,842,000 for the quarter ended April 30, 2000. Segment operating metrics
included a record of more than 62 million unique users and average daily page
views of more than 84.8 million for the month of July.
AltaVista Company is the second most popular referring search engine, passing
Excite in the most recent survey by WebSideStory's StatMarket
(http://www.statmarket.com), issued in July. The amount of Web traffic worldwide
AltaVista refers or directs to other sites nearly doubled to 17 percent over the
previous 15-month period. Only Yahoo! ranked higher in the survey. AltaVista
attributes its rise in search market share to its successful international
expansion and continued worldwide commitment to search excellence. In the same
month, AltaVista launched AltaVista India, its eighth country-specific web
index, at in.altavista.com. The new site offers Internet users the
largest index of Indian Web sites available, covering over 1.25 million unique
Web pages.
In addition, AltaVista restructured its agreement with DoubleClick, Inc.
AltaVista has extended its use of DoubleClick's DART for Publishers ad serving
solution through 2004. In addition, AltaVista will accelerate taking lead
advertising sales responsibility for its worldwide network of Web sites in the
United Kingdom, France, Germany, Italy, Sweden, and the Netherlands by January
1, 2001. The majority of advertising served on AltaVista will use DART through
2002. In 2003, at least half of AltaVista's advertisements will be served by
DART. AltaVista will assume majority responsibility for ad serving thereafter.
iCAST's fourth quarter was highlighted by significant growth in membership and a
number of strategic partnerships and one acquisition. In June, iCAST was
selected as the entertainment channel for all Compaq Presario PCs. Through this
relationship, Compaq will link the Presario's "Entertainment" Internet keyboard
button to iCAST.com, providing users "one touch" access to iCAST's wide array of
entertainment multimedia content, tools and services. iCAST also formed a
strategic alliance with AltaVista to provide content to its entertainment
channel.
In July, iCAST bolstered its movies channel with the acquisition of Shortbuzz,
one of the leading Web sites for independent filmmakers seeking online and
offline distribution. The deal includes an archive of more than 400 short films
and a syndication deal with The FX Network, whereby it will feature iCAST
Movies' top short films on its program, "The 'X' Show."
In July, MyWay launched a wireless version of its portal services to enable
users of mobile computing devices to personalize their wireless web experience.
MyWay's portal has also begun to carry broadband entertainment content in its
Entertainment Channel for Bell South, supporting the rapid growth of DSL service
in the Bell South service area.
Infrastructure and Enabling Technologies (Activate, CMGion, Equilibrium,
ExchangePath, NaviPath, NaviSite, Tribal Voice and 1stUp.com)
The Infrastructure and Enabling Technologies segment reported revenues of
$26,234,000 in the fourth quarter of fiscal 2000, compared with $19,760,000 in
the previous quarter ended April 30, 2000, an increase of 33%. Fourth quarter
revenue increases primarily reflect increased revenues for NaviSite, including
the results of continued build-out of data center facilities and growth in
NaviSite's customer base. Excluding the effects of in-process research and
development and amortization of intangible assets and stock-based compensation
charges, the operating loss for the infrastructure and enabling technologies
segment was $70,188,000 in the quarter just ended versus a loss of $52,570,000
for the quarter ended April 30, 2000. Including the effects of in-process
research and development and amortization of intangible assets and stock-based
compensation charges, the operating loss for the infrastructure and enabling
technologies segment was $108,692,000 in the quarter just ended versus a loss of
$73,875,000 for the quarter ended April 30, 2000.
Q4 operating metrics for the Infrastructure and Enabling Technologies segment
included:
-- Average annualized revenue per managed hosting customer
(including CMGI subsidiaries and affiliates) of $227,000;
-- Total data center "raised floor" space of 88,000 square feet;
-- More than 15 million total streams;
-- 44 terrabytes of data transferred;
-- More than 6.7 million ISP subscribers; and
-- More than 29.9 million recorded ISP usage hours in July.
Activate gained notice during the fourth quarter for its continued strong
growth: as it was identified as one of the top four streaming infrastructure
providers by Decise, and Activate's Canadian subsidiary was labeled the market
leader by Convergence Consulting Group. Activate's specialized digital media
infrastructure was further enhanced by deployment of additional distribution
capacity using Activate's proprietary "cell-based" network architecture.
Activate also bolstered its senior management team through the appointment of
Dennis Shepard as Chief Operating Officer, and opened an additional regional
office in San Francisco.
NaviPath expanded its network coverage to more than 92% of the US major market
online population and added coverage of more than 58% of the Canadian major
market online population during the fourth quarter. Added to their supplemental
third-party network coverage, NaviPath can now provide local Internet access to
more than 96% of the total online population in the US and Canada.
During the fourth quarter, NaviPath reorganized its company into strategic
business units focused on distinct product and market segments, including access
network services, managed backbone services, private-label customer relationship
management, and billing/registration services. The company also added two major
customers to its growing list of more than 50-plus ISPs, Juno Online and Global
Crossing, launched Version 4.0 of GeoDial, the company's flagship Internet
access service, and acquired the technology assets of Proxymate from Lucent
Technologies, providing a key privacy management function to the NaviOne VISP
platform.
In an important operational milestone, the company also relocated its
headquarters to a new 52,000 square foot facility and opened a state-of-the-art
Network Management Center through which it will continue to provide 24x7 service
to its customers.
Since the quarter end, NaviPath surpassed the 2 million active user mark, with
continued 20% to 30% growth month-over-month. The company also launched Version
1.1 of NaviOne, its flagship VISP service and rolled-out its first "turnkey"
NaviOne customer. Additionally, NaviPath commenced its initial overseas
expansion by launching IP Wide Area Network (WAN) services linking its domestic
backbone to four CMGI facilities across Europe.
During the fiscal fourth quarter, NaviSite added 79 new customers and 35 new
systems integrator/Web developer partners; staff size also increased to 473 from
425 at the end of the previous quarter to support this continued growth.
NaviSite continued its international expansion, building on a strategic
relationship with Level 3 Communications for data center facilities with several
new initiatives, including a relationship with the Arrowpoint division of Cisco
Systems to develop and deploy technology to enhance the management and
scalability of applications across globally distributed data centers, and most
recently with the announcement of plans for a strategic partnership with NTT
DATA to deliver managed services to the Japanese market. In addition, the
company expanded its streaming business with support for Microsoft's Windows
Media Technologies 7 and Digital Broadcast Manager.
NaviSite continued to expand its business-to-business (B2B) offerings with an
announced agreement with Idapta(TM), a leading provider of enterprise-level
operating systems and trading applications for business-to-business (B2B)
e-commerce, for the integration of Idapta's emarket operating system, Commerce
O/S(TM), and trading application, MarketExchange(TM), with NaviSite's managed
hosting solutions. NaviSite also announced the appointment of Tricia Gilligan as
Chief Operating Officer.
During the fourth quarter, 1stUp.com continued to establish itself as a leading
provider of private label Internet access solutions and innovative advertising
technology. In aggregate, 1stUp-powered ISP services now rank as the largest ISP
in Canada and among the Top 5 largest ISPs in the United States, according to
Internetnews.com
During the fourth quarter, 1stUp.com successfully launched free Internet access
offerings with Belo Media Corporation, Ameritrade, Fox's "The X-Files,"
Encyclopedia Britannica and a number of additional brands, bringing its
distribution partner total to more than 130. Just one year since launching its
first access offering with AltaVista, the company has now reached 5 million
registered subscribers, with 800,000 subscribers in Canada.
1stUp.com also launched its Premium Service, which enables distribution partners
to offer consumers a less expensive alternative to traditional fee-based dial-up
services, without requiring consumers to view rotating banner ads. Lastly, the
company successfully launched its broadband trial program, with 1stUp.com
broadband services expected to launch nationally this fall through distribution
partners still to be announced.
Internet Professional Services (CMGI Solutions)
The Internet Professional Services segment reported revenues of $30,487,000 in
the fourth quarter of fiscal 2000, compared with $9,575,000 in the previous
quarter ended April 30, 2000, an increase of 218%. Fourth quarter revenue
increases primarily reflect increased revenues as a result of having a full
quarter of revenues for Tallan, which was acquired on March 31, 2000. Excluding
the effects of in-process research and development and amortization of
intangible assets and stock-based compensation charges, the operating loss for
the Internet professional services segment was $1,463,000 in the quarter just
ended versus a loss of $6,359,000 for the quarter ended April 30, 2000.
Including the effects of in-process research and development and amortization of
intangible assets and stock-based compensation charges, the operating loss for
the Internet professional services segment was $52,842,000 in the quarter just
ended versus a loss of $23,731,000 for the quarter ended April 30, 2000. Fourth
quarter operating metrics for the Internet professional services segment
included 391 billable consultants, and annualized revenue per billable
consultant of $311,000.
CMGI Solutions continued its pattern of solid growth during the fourth quarter
of fiscal year 2000 adding several leading companies, including eBay, Wave
Systems, and Kinko's to its current client base. In addition, the company
continued its strategic hiring program, adding more than 125 consultants to meet
its continued, planned gement and Prospectus.
Plaintiff seeks to recover damages on behalf of class members and is represented
by the law firm of Schiffrin & Barroway, LLP, who has significant experience and
expertise prosecuting class actions on behalf of investors and shareholders. For
more information on Schiffrin & Barroway, please visit our website at
www.sbclasslaw.com.
If you are a member of the class described above, you may, not later than
November 7, 2000, move the Court to serve as lead plaintiff of the class, if you
so choose. In order to serve as lead plaintiff, however, you must meet certain
legal requirements.
CONTACT: Schiffrin & Barroway, LLP, Bala Cynwyd
Marc A. Topaz, Esq.
Robert B. Weiser, Esq.
888/299-7706 (toll free) or 610/667-7706
e-mail: info@sbclasslaw.com
TICKERS: NASDAQ:CRFH
URL: businesswire.com
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
Copyright (C) 2000 Business Wire. All rights reserved. |
