A record quarter. They lost less than AMZN. Wow!:
Lycos Reports 158% Growth in Revenues; 20% Increase in Revenues from Previous Quarter Deferred Revenues Grow 148% from Previous Quarter to over $56 Million
Business Wire - May 14, 1998 16:18
%LYCOS LCOS CMGI %MASSACHUSETTS %COMED %COMPUTERS %ELECTRONICS %INTERACTIVE %MULTIMEDIA %INTERNET %EARNINGS V%BW P%BW
WALTHAM, Mass.--(BUSINESS WIRE)--May 14, 1998--Lycos, Inc. (NASDAQ:LCOS) today announced financial results for its third quarter ended April 30, 1998. Revenues for the quarter were $15.1 million, representing an increase of 20% over the previous quarter ended January 31, 1998 and a 158% increase over the comparable period from the previous fiscal year. The Company reported a loss of $2.4 million or $0.15 per share for the quarter before amortization and one time merger-related expenses. This compares to net income of $301,000 or $0.02 per share for the previous quarter ended January 31, 1998. Net loss per share for the quarter after amortization and onetime charges was $5.90.
"This was clearly a landmark quarter for our Company," said Robert J. Davis, President and CEO of Lycos. "We believe we are establishing a new standard by which others will be judged. The additions of Tripod, one of the most popular community sites on the Web, and WiseWire, a leading directory-building technology, have made Lycos one of the world's premier Internet destinations. This position has been further solidified by the announcement of Lycos Online, part of our alliance with AT&T, that will rival any online service that is out in the market today," added Davis.
"This quarter was highlighted by several significant events which reaffirm our core business model," said Edward M. Philip, Lycos' Chief Financial Officer. "We experienced a 22% increase in advertising revenues driven by strong growth in traffic. Additionally, we announced several major electronic commerce agreements during the quarter, resulting in growth in deferred revenues to over $56 million. Equally impressive are the strategic alliances formed during this quarter, through both investment and acquisition. Our acquisitions of Tripod and WiseWire, as well as investments in PlanetAll and GlobeComm, position Lycos as the leading new generation online service for the future. Furthermore, on the international front, we expanded on the success of our European joint venture with Bertelsmann by announcing new alliances in Japan and Korea, two of the fastest growing Asian markets," added Philip.
Key accomplishments for the quarter:
Acquisitions
-- On April 30th, the Company acquired WiseWire Corporation and its
proprietary technology for directory-building on the Internet.
This acquisition establishes Lycos as the only online service to
offer an automated Web directory integrated with Internet search
results.
-- On February 11th, the Company acquired Tripod, establishing Lycos
as one of the most visited networks on the Internet. Tripod is
one of the Web's most popular community sites, providing users
with easy-to-use homepage building tools.
Strategic Alliances
-- Lycos acquired an equity interest in PlanetAll, a company which
offers unique contact management technology and services. The
investment is in conjunction with a strategic integration of
PlanetAll's services throughout the Lycos sites, allowing Lycos
users to keep in touch with friends and family by sharing a
common database of addresses, phone numbers, calendars and other
valuable information with the ability to update and change that
database from anywhere, anytime via the Web.
-- Lycos acquired a minority ownership position in GlobeComm, Inc.,
the Company which offers Lycos' free e-mail service through its
iName product. E-mail has proven to be a critical element in
building the large community of Lycos users who visit the site on
a regular basis.
-- The Company continued its international expansion by entering
into a joint venture with Sumitomo Corporation, one of Japan's
largest trading companies, and Internet Initiative Japan (IIJ),
the country's largest Internet Service Provider, to create Lycos
Japan, a localized version of the Lycos site. Along with the
previously announced Lycos Korea, which will launch this summer,
Lycos will now have coverage in two of the largest and fastest
growing Asian markets, in addition to its eleven European sites
through its Lycos Bertelsmann joint venture.
-- Lycos and AT&T announced a three year agreement through which the
companies will develop and offer a range of new Internetbased
consumer communications services. The teaming of the fastest
growing Web navigation and community center with the country's
largest direct Internet Service Provider will create an easily
accessible portal to the World Wide Web -- "Lycos Online Powered
by AT&T WorldNet Service" -- a new generation online service.
AT&T will offer users of Lycos a full array of telecommunications
services via a cobranded "Personal Communications Center" on the
Lycos site. In addition, Lycos and Tripod will offer various
services and content on AT&T Web sites.
-- In the quarter, Lycos continued its growth in the electronic
commerce marketplace, as evidenced by the closing of over $50
million in electronic commerce agreements. This includes
companies such as CDnow for music, Preview Travel for travel,
Test Drive for software as well as four Internet financial
services companies: E-loan, Homeshark, GetSmart and Realtor.com.
Product Enhancements
-- On April 13th, the Company launched its new Lycos "Personal
Guide", a free, comprehensive service that empowers users to
personalize Web content, organize their daily lives, leverage
online communities and manage their Tripod personal home pages.
Personal Guide provides Internet users with a single starting
point from which to explore the Web and take advantage of the
best content and tools the Internet has to offer.
-- Lycos' new integrated search results page features categories
found in the WiseWire-powered directory -- each containing links
to top sites as ranked by Web users -- followed by Web sites
found by the Lycos Web spider.
-- Lycos launched the Image Gallery providing users with access to a
collection of over 40,000 pictures and vintage illustrations. The
gallery contains images in the areas of pop culture,
personalities, art and history. The gallery is accessible from
its own access page, the search results page and from the Web
guides.
-- Lycos continued to add robust content from a variety of partners.
Some of the companies adding their services and products to the
Lycos Web destination include: Career Mosaic, ZDNet, Kidsites
3000, Yachtworld and Inso.
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 all forward-looking statements involve risks and uncertainties, including, without limitation to, the level of usage of the Internet and traffic to the Company's Internet site, dependence on strategic relationships to drive traffic to the Company's Internet site, continued acceptance of the Company's products, demand for Internet advertising and electronic commerce, seasonal trends in advertising sales, the advertising budgeting cycles of individual advertisers, capital expenditures and other costs relating to the expansion of operations, the introduction of new products or services by the Company or its competitors, the mix of the services sold and the channels through which those services are sold, pricing changes, general economic conditions and specific economic conditions in the Internet indust!
ry and other risks detailed in the Company's filings with the Securities and Exchange Commission.
About Lycos, Inc. (www.lycos.com)
Founded in 1995, Lycos, Inc. (NASDAQ:LCOS) is a new generation online service that combines all aspects of community, leading Web navigation resources and cuttingedge business and consumer e-commerce solutions. Located at lycos.com, Lycos -- "Your Personal Internet Guide" -- is dedicated to helping each individual user locate, retrieve and manage information tailored to his or her personal interests. Through the acquisition of Tripod, the fastest-growing community site on the Web, located at tripod.com, Lycos has become the most full-featured community-oriented home base on the Internet, providing free personal homepages to all users. Headquartered near Boston in Waltham, MA, Lycos maintains U.S. offices in New York City, Pittsburgh and San Francisco. International offices are located in Germany, Italy, France, the U.K., Spain, The Netherlands, and Japan.
(c) Lycos, Inc. "Lycos" is a registered trademark of Carnegie Mellon University. All other product or service marks mentioned herein belong to Lycos, Inc. or their respective owners. All rights reserved.
LYCOS, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING MERGER AND ACQUISITION RELATED CHARGES (1)
(UNAUDITED)
Three Months Three Months
Ended Ended
April 30, 1998 April 30, 1997
Revenues:
Advertising $ 11,686,820 $ 4,487,541
License, product and other 3,442,413 1,365,486
Total revenues 15,129,233 5,853,027
Cost of revenues 3,618,994 2,190,981
Gross profit 11,510,239 3,662,046
Operating expenses:
Research and development 2,708,562 1,167,161
Sales and marketing 10,178,861 3,565,490
General and administrative 1,521,019 682,322
Total operating expenses, excluding
merger and acquisition-related
charges 14,408,442 5,414,973
Pro forma operating loss, excluding
merger and acquisition-related
charges (2,898,203) (1,752,927)
Other income 524,349 480,145
Pro forma net loss, excluding merger
and acquisition-related charges $ (2,373,854) $ (1,272,782)
Pro forma basic and diluted net loss
per share, excluding merger and
acquisition-related charges $ (0.15) $ (0.09)
Shares used in computing basic and
diluted pro forma net income (loss)
per share excluding merger and
acquisition-related charges (2) 15,507,953 13,796,620
(1) These financial statements exclude merger and acquisitionrelated
charges, including the amortization of purchased intangible
assets and other nonrecurring costs. They do not purport to be
financial statements prepared in accordance with Generally
Accepted Accounting Principles.
(2) Shares used in computing basic and diluted net loss per share for
the three month period ended April 30, 1998 include Lycos common
stock from the assumed conversion of Tripod, Inc. and WiseWire
Corporation common and preferred stock on February 11, 1998 and
April 30, 1998, respectively.
LYCOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ended Ended
April 30, 1998 April 30, 1997
Revenues:
Advertising $ 11,686,820 $ 4,487,541
License, product and other 3,442,413 1,365,486
Total revenues 15,129,233 5,853,027
Cost of revenues 3,618,994 2,190,981
Gross profit 11,510,239 3,662,046
Operating expenses:
Research and development 2,708,562 1,167,161
Sales and marketing 10,178,861 3,565,490
General and administrative 1,521,019 682,322
Merger and acquisition costs,
including amortization of
goodwill and other purchased
intangibles 89,148,150 --
Total operating expenses 103,556,592 5,414,973
Operating loss (92,046,353) (1,752,927)
Other income 524,349 480,145
Net loss $ (91,522,004) $ (1,272,782)
Basic and diluted net loss per share $ (5.90) $ (0.09)
Shares used in computing basic and
diluted net loss per share 15,507,953 13,796,620
LYCOS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
April 30,
1998 July 31, 1997
Assets
Cash and cash equivalents $ 39,589,917 $ 41,350,721
Accounts receivable, net 9,976,921 6,751,374
License fees receivable 50,861,593 9,715,806
Property and equipment, net 4,379,424 2,092,727
Intangible assets 10,674,115 --
Other assets, net 9,136,915 19,961,147
Total assets $124,618,885 $ 79,871,775
Liabilities and stockholders' equity
Accounts payable and accrued
expenses $ 10,884,252 $ 12,059,100
Deferred revenues 56,062,498 28,667,949
Other liabilities 463,413 61,173
Total liabilities 67,410,163 40,788,222
Stockholders' equity 57,208,722 39,083,553
Total liabilities and
stockholders' equity $124,618,885 $ 79,871,775
CONTACT: Lycos, Inc.
Ted Philip
781/370-2700
tphilip@lycos.com
or
Lycos, Inc.
Madeline Mooney
781/370-2700
mmooney@lycos.com
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