Printed Text.....LAST Q EARNINGS...1997
Excite Reports Fourth Quarter and Total Year 1997 Financial Results
REDWOOD CITY, Calif. -- Excite, Inc. (Nasdaq: XCIT) today reported revenue of $18.7 million for the fourth quarter ended December 31, 1997, up 30% from revenue of $14.4 million in the preceding quarter ended September 30, 1997 and up 187% from revenue of $6.5 million reported in the corresponding fourth quarter of 1996.
The pro forma net loss for the fourth quarter of 1997 was $3.7 million, or $0.22 per share. The pro forma net loss for the corresponding quarter of 1996 was $8.3 million, or $0.69 per share. (See Pro Forma Condensed Consolidated Statements of Operations Excluding Merger and Acquisition Related Charges.)
Including $2.2 million of non-cash expenses related to the amortization of intangible WebCrawler assets acquired from AOL in 1996, $1.5 million of substantially non cash charges related to the acquisition of Netbot, Inc. in December, 1997, and $0.3 million of other non-recurring expenses, the net loss for the fourth quarter of 1997 was $7.7 million, or $0.47 per share. The acquisition of Netbot, which was concluded in November, has been treated as a pooling of interests. Prior periods have not been restated due to immateriality. Netbot's operations for the month of December have been included in the consolidated results.
Total year 1997 revenues were $50.2 million, while pro forma losses totaled $17.0 million, or $1.20 per share. Including the amortization of WebCrawler assets and other acquisition and restructuring expenses, the Company incurred a total loss of $30.2 million, or $2.13 per share for the year. The corresponding results for 1996 include revenues of $14.8 million, a pro forma loss of $36.3 million, or $3.75 per share, and a total loss of $43.1 million, or $4.45 per share.
Page view traffic rose to approximately 27 million page views per day in December, which is an increase of 48% over the comparable figure in September. Additionally, AOL NetFind page views averaged approximately 7 million page views in the same period. Although NetFind page views are not included in Excite reach metrics, they represent an important source of brand exposure on all search and directory pages within AOL. Traffic from Netscape continued to trend downward, representing 15% of total traffic in December, down from 20% in September and 34% a year ago.
"The revenue and page view growth this quarter demonstrated continued significant momentum," said George Bell, Excite's President and CEO. "Both traditional banner revenue and sponsorship revenue, integrating advertising and transaction based revenue sources into our channels-oriented flagship brands, showed strong upward trends."
Banner revenue in the fourth quarter was up 38% from the third quarter. In addition, Excite booked approximately $30 million in sponsorship deals this quarter, bringing the total value of sponsorship agreements booked since June of this year to $114 million, now spread across 58 customers.
Operating Highlights:
* MatchLogic Merger Plan announced. As announced last week, Excite has signed a definitive agreement to acquire MatchLogic, Inc. for approximately 3.2 million shares of Excite stock. Closing is subject to certain accounting and regulatory approvals. The acquisition positions Excite at the forefront of the emerging direct marketing boom on the Web and diversifies the Company's advertising revenue streams with sophisticated ad campaign management services. In March, Excite expects to begin using MatchLogic to provide advertising services on its Excite.com and WebCrawler.com flagship brands, delivering to its advertisers state-of-the-art measurement and targeting solutions.
* Netbot Acquisition Completed. Excite's acquisition of Netbot has now been completed and the integration is well underway. Netbot makes intelligent shopping on the Internet a reality, combining the best on-line product shopping service available today with Excite's leadership in providing safe shopping services on the Web. Netbot is being integrated into the Excite shopping channel, arranged around 16 departments. Through a powerful, simple, one-stop connection, consumers can obtain the key information they need, and online retailers are delivered a large Internet audience of highly-qualified, online shoppers.
* Alliance with Prodigy. As announced yesterday, Prodigy's subscribers will be able to quickly customize their start page as a personal My Excite channel at the desktop. Excite's My Channel becomes an individual's personal web page delivering user-selected information such as sports scores, stock quotes, TV listings, daily horoscopes, and local weather.
* ZDNet Becomes Premier Content Provider for Excite's Computers & Internet Channel. Focusing on what consumers want to know about computer and Internet technology, new content from ZDNet, a division of Ziff-Davis, Inc., is now available on the Excite.com and WebCrawler.com Computers & Internet Channels as a result of an agreement signed in December. As these Computers & Internet channels are built out, consumers will be able to shop for computer equipment and software, access freeware and shareware services, get help for their computer-related problems, talk with computer users with similar interests, read the latest industry news, browse a comprehensive directory of web sites encompassing topics from programming to software, and much more. As part of this two-year alliance, Excite and ZDNet will also develop and execute joint online promotions, and Excite will receive off web promotion which it expects to be worth over $1.0 million. Each company will sell and retain the advertising revenue generated on its respective site. Excite anticipates that its Computers & Internet Channel will be one of the most heavily used sites and attract significant advertising revenue.
* Excite Chosen to Provide Free Email Addresses to School Children in UK. Ten million UK school children are expected to get lifelong email accounts with ExcitePost, a new email service being established as part of the UK Government's Net Year initiative to provide Internet connectivity to every pupil in the UK by the end of 1998. Excite will create and maintain a filtered and controlled environment for students to use their Web email to send messages back and forth, maintain pen pals around the world, do primary research and stay in touch with their schoolmates and teachers.
* Excite and cybermeals Sign $15.5 million Electronic Commerce Agreement. Under the terms of this four-year sponsorship/ commerce agreement, cybermeals will be the exclusive worldwide provider of aggregated online consumer takeout and delivery meals to the millions of consumers who visit Excite every day. cybermeals' nationwide network of more than 11,000 restaurants will be promoted in various Excite channels, including food and drink reviews in the Lifestyle Channel, maps and local links in the Travel Channel and as part of the Gourmet & Groceries department in the Shopping Channel. Cybermeals and Excite will team up to create seasonal, sport and event-based campaigns, including Superbowl and NCAA playoffs. In addition, cybermeals will be an anchor tenant for Excite's Shopping Channel and will appear prominently when consumers search for food-related sites. In exchange, cybermeals has guaranteed Excite payments totaling $15.5 million and additional transaction revenues based on meeting specified performance thresholds.
About Excite, Inc.
Founded in 1994, Excite, Inc. is a global media company offering consumers and advertisers comprehensive Internet navigation services with extensive personalization capabilities. The Excite network consists of two of the largest brands on the Web, Excite ( www.excite.com ) and WebCrawler ( www.webcrawler.com ) and its subsidiaries; Netbot, Inc., Excite Japan Co., Ltd. and Excite UK, Ltd. Localized versions of Excite are available in United Kingdom, Germany, France, Sweden, Netherlands, Australia, and Japan. Based in Redwood City, CA, Excite, Inc. (Nasdaq: XCIT) has strategic relationships with America Online, Inc., Intuit, Inc., Tribune Company, Itochu Corporation, CUC Investments Inc., Apple Computer, Inc. and Netscape Communications Corp.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including and without limitation: the continued increases in the number of companies advertising on the Excite Network as well as on the Web generally; the Company's ability to increase sales of targeted advertisements and to achieve higher costs per thousand impressions for its advertisements; the increasingly competitive environment for Web advertising sales; increases in the amount of traffic on the Excite Network and increases in the amount of use of the Excite Network by Web users; the Company's increased operating expenses and negative cash flows resulting from its recent acquisition of Netbot, proposed acquisition of MatchLogic and its proposed brand building campaign; the Company's dependence on third parties to attract traffic to the Excite Network; the ability of the Company to successfully integrate the services and technology of Netbot, Inc. with the other services offered on the Excite Network; the ability of the Company to develop and achieve consumer and advertiser acceptance for the Excite Network in the international market; general economic conditions; the risks relating to the proposed acquisition of MatchLogic described below; and other risks detailed in the Company's annual report on Form 10-K, as amended by Form
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