SportsLine USA, Inc. Reports Second Quarter Financial Results
Business Wire - July 21, 1998 16:21
%SPORTSLINE-USA SPLN %FLORIDA %COMED %COMPUTERS %ELECTRONICS %INTERACTIVE %MULTIMEDIA %INTERNET %SPORTS %EARNINGS V%BW P%BW
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 21, 1998-- SportsLine USA, Inc. (Nasdaq: SPLN) today reported total revenue of $7.0 million for the second quarter ended June 30, 1998, a 245% increase over total revenue of $2.0 million reported for the same quarter in 1997. Net loss for the second quarter of 1998 was $7.5 million, or $0.41 per share, compared to net loss of $8.2 million, or $0.75 per share in the same period in 1997. EBITDA (earnings before interest, taxes, depreciation and amortization) was a loss of $4.8 million for the second quarter of 1998 compared to a loss of $5.4 million for the same quarter last year. The Company's 1997 financial results have been restated to include the results of GolfWeb, which SportsLine USA acquired on January 29, 1998 in a pooling-of-interests transaction.
As announced last week, average daily page views during the second quarter increased 310% to approximately 5.3 million, compared to average daily page views of approximately 1.3 million during the same quarter of 1997. In addition, average daily page views for the second quarter of 1998 grew 23% over average daily page views generated during the first quarter of 1998, which included the XVIII Olympic Winter Games. Traffic during the month of June 1998 grew to a record high of 6.3 million average page views per day -- surpassing the previous high of 5.6 million average daily page views in March 1998 -- due primarily to SportsLine USA's extensive coverage of World Cup '98. Daily visits averaged 500,000 in the second quarter of 1998, an increase of 170% over the 185,000 average daily visits recorded during the second quarter of 1997.
According to Media Metrix, SportsLine USA's reach among users at work grew to 5.5% in June compared to 3.9% in May 1998. Among home users, the Company registered a reach of 3.1% in June compared to 3.0% the previous month.
For the six months ended June 30, 1998, revenue increased 294% to $13.8 million from $3.5 million in the same period last year. Net loss for the six months ended June 30, 1998 was $16.5 million or $0.96 per share, compared to a net loss of $14.5 million, or $1.43 per share in the same period last year. EBITDA loss was $10.4 million, equal to the EBITDA loss of $10.4 million reported in the same period last year.
"SportsLine USA continues to be a dominant force in sports information and entertainment on the Internet, as underscored by our substantial growth in both revenue and site traffic," said Michael Levy, president and CEO of SportsLine USA, Inc. "Our unparalleled sports content was strengthened even further this quarter with the addition of Soccer Live and 3-D Soccer World in support of World Cup '98, as well as our enhanced Baseball Live and new 3-D Baseball World. Additionally, we unveiled our redesigned, streamlined site which provides faster access and a more user-friendly format to further heighten our fans' online sports experience. We closed out the quarter on a high note with the purchase of International Golf Outlet, Inc., an online retailer of high-quality golf equipment and accessories. This transaction complements our acquisition of GolfWeb earlier in the year and demonstrates SportsLine USA's commitment to growing our e-commerce business."
Financial Highlights
(In thousands except per-share and member data)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997(1) 1998 1997(1)
------ -------- ------ -------
Revenue $ 7,013 $ 2,033 $ 13,802 $ 3,507
EBITDA $ (4,837) $ (5,394) $ (10,428) $(10,370)
Net loss $ (7,505) $ (8,239) $ (16,511) $(14,465)
Net loss per share $ (0.41) $ (0.75) $ (0.96) $ (1.43)
======= ======= ======== =======
Weighted average shares
outstanding 18,250 10,936 17,170 10,129
======== ======== ======== ========
Average page views per day 5,291 1,290 -- --
Average visits per day 500 185 -- --
Members at end of period 56,400 36,000 -- --
======== ========
(1) Amounts have been restated to include the results of GolfWeb,
which the Company acquired on January 29, 1998 in a
pooling-of-interests transaction.
Revenue Growth
In the second quarter of 1998, SportsLine USA posted strong gains
in all revenue streams over the same quarter in the previous year. In
particular, advertising revenue increased 249% over last year's second
quarter, reaching approximately $4.1 million. During the second
quarter, SportsLine USA welcomed a number of new advertisers including
Cadillac, Chrysler, Office Depot, Castrol USA, First Plus Financial,
EDS, Cheez Whiz, Eddie Bauer, Crestar, Universal Studios and Sybase,
Inc.
World Cup Soccer, one of the leading international sporting
events of the year, generated approximately $1.1 million in
advertising revenue, of which $800,000 was recognized in the second
quarter of 1998. Among the more than ten major sponsors were
presenting sponsor Hewlett-Packard, EA SPORTS, EDS, Expedia, HP's Palm
Top brand, Sprint and StarMedia.
SportsLine USA's "e-commerce" revenue grew rapidly during the
second quarter of 1998, increasing 128% over the same period last year
to $574,000. During the first half of 1998, World Cup '98, the XVIII
Olympic Winter Games, and other event-driven promotions helped propel
the Company's "e-commerce" revenues past the $1 million mark. In
addition, SportsLine USA continued to expand its extensive online
selection of sports-focused books, videos, and games; licensed and
logo apparel; sports memorabilia; trading cards; and specialty
sporting goods.
Comprehensive Coverage of World Cup '98
CBS SportsLine provided extensive coverage of World Cup '98, held
from June 10 to July 12. A unique and popular feature of this coverage
was Soccer Live, which depicted all of the World Cup action - such as
goals, shots, fouls, corner and penalty kicks, ejections and
substitutions -- with Shockwave(tm)-based animation. Soccer Live's
main screen also contained links to information on every player, team,
coach and country participating in the event, as well as breaking
news, exclusive stories, live scoreboards, games and contests, audio
interviews, chats and polls, World Cup history and thousands of
photographs. A further highlight was 3-D Soccer World, which offered
fans a unique opportunity to interact within a three-dimensional
soccer stadium and chat with other fans from around the world. In
addition, CBS SportsLine, in association with Mitsubishi Corporation
and leading publishers around the world, delivered World Cup content
in Japanese, Portuguese, Spanish, Dutch and German.
International Golf Outlet Acquisition
On June 29, SportsLine USA completed the acquisition of
International Golf Outlet, Inc. (IGO), a privately-held Internet
retailer of fine golf equipment and accessories through its online
service (www.igogolf.com). In the transaction, the Company acquired
all of the outstanding capital stock of IGO for $2 million, consisting
of $350,000 in cash and $1.65 million of SportsLine USA common stock.
SportsLine USA also agreed to issue additional common stock, currently
valued at $1.5 million, to the IGO shareholders if IGO meets certain
revenue and earnings targets over the next three years.
IGO, based in Austin, Texas, is an electronic mail order golf
store that offers -- through its Web site and third-party Web sites --
more than 1,000 products including golf clubs, golf balls, bags,
footwear, apparel, accessories, training aids, artwork, software,
books and videos. IGO began its online e-commerce operations in
1995 and currently sells golf equipment to consumers in more than 100
countries. IGO will be operated as a wholly-owned subsidiary of
SportsLine USA, under David Schofman, co-founder of IGO, who now
serves as SportsLine USA's director of golf merchandise.
New Streamlined Design
In late June, CBS SportsLine unveiled a new, streamlined site
design which reduces download time and provides faster access for
millions of fans worldwide. The redesign improves navigation of CBS
SportsLine by utilizing a more consistent, user-friendly format which
includes major sports and special event-site links located above the
masthead, feature areas linked directly below, and JAVA scorebox,
daily poll, and links to other prominent sites found along the left
column. The new design allows for quick access without sacrificing
either the distinctive CBS SportsLine feel or its unparalleled
content.
CBS SportsLine Teams with Commissioner.com
CBS SportsLine and Daedalus World Wide, developers of
Commissioner.com (http://commissioner.com) -- the premier service for
fantasy games and products -- signed an eight-year revenue-sharing
agreement that integrates the strengths of both organizations to
produce comprehensive fantasy products that will be easy to use,
powerful, personal and fun. The resulting Web site can be accessed at
sportsline.commissioner.com. Seven fantasy sports games will be
available through this site, commencing with professional football in
the fall. The introductory package will also include professional auto
racing, baseball, basketball, golf, hockey and soccer.
Special Event Sites
In addition to sites devoted to World Cup '98 and the U.S. Open,
during the second quarter of 1998 SportsLine USA produced
comprehensive sites devoted to coverage of special events including
The Masters golf tournament, NBA and NHL Playoffs, the Kentucky
Derby, Preakness, and Belmont Stakes, the Indianapolis 500, the French
Open, Wimbledon, the College World Series and the NBA Draft.
In early July, SportsLine USA and Major League Baseball launched
the official 1998 All-Star Game Web site
(http://www.mlballstargame.com). The Web site provided fans a unique
opportunity to become part of the all-star experience by offering
unparalleled, in-depth multimedia content including audio and video
highlights and special behind-the-scenes features, complete player
profiles, live coverage of the Home Run Derby and FanFest '98, fan
polls, a comprehensive historical area devoted to previous All-Star
Games, merchandise and souvenirs.
SportsLine USA Completes Secondary Public Offering
In April, SportsLine USA completed a secondary public offering of
four million shares of Common Stock at $37.625 per share. Of the four
million shares offered, 2,288,430 shares were offered by SportsLine
USA and 1,711,570 shares by selling shareholders. The Company plans to
use the net proceeds from the offering for working capital and other
general corporate purposes, including expansion of the Company's
marketing and advertising sales efforts, content development and
licensing, international expansion, capital expenditures, and
potential acquisitions or investments in complementary businesses,
products and technologies.
About SportsLine USA
SportsLine USA, Inc. is a leading Internet-based sports media
company that provides branded, interactive information and programming
as well as merchandise to sports enthusiasts worldwide. SportsLine USA
publishes CBS SportsLine, which features more than 300,000 pages of
multimedia sports information, entertainment and merchandise covering
all major professional, collegiate and international sports and
includes exclusive content from sports teams, organizations and
superstars such as Michael Jordan, Tiger Woods and Shaquille O'Neal.
SportsLine USA was founded in 1994, and its Internet sports service
was renamed CBS SportsLine in March of 1997 as part of an exclusive
five-year promotional and content agreement with CBS Sports.
Note: This press release contains forward-looking statements,
which involve risks and uncertainties. SportsLine USA's actual results
could differ materially from those anticipated in these
forward-looking statements. Factors that might cause or contribute to
such differences include, among others, competitive pressures, the
growth rate of the Internet, constantly changing technology and market
acceptance of the company's products and services. Investors are also
directed to consider the other risks and uncertainties discussed in
SportsLine USA's Securities and Exchange Commission filings, including
those discussed under the caption "Risk Factors That May Affect Future
Results" in SportsLine USA's Annual Report on Form 10-K for the year
ended December 31, 1997. SportsLine USA undertakes no obligation to
publicly release the result of any revisions to these forward-looking
statements, which may be made to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
SportsLine USA, Inc.
Condensed Consolidated Statements of Operations
(in thousands except per-share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1998 1997(1) 1998 1997(1)
------ --------- ------ -------
Revenue:
Advertising $ 4,134 $ 1,185 $ 8,553 $ 1,966
E-commerce 574 252 1,041 409
Membership and premium
services 1,104 538 2,112 1,059
Licensing & other 1,201 58 2,096 73
-------- -------- -------- --------
Total revenue 7,013 2,033 13,802 3,507
Cost of revenue 3,970 2,266 8,384 4,152
-------- -------- -------- --------
Gross margin (deficit) 3,043 (233) 5,418 (645)
-------- -------- -------- --------
Operating expenses:
Product development 324 685 713 1,357
Sales and marketing 4,632 2,738 8,994 4,970
General and
administrative 2,924 1,738 6,139 3,398
Depreciation and
amortization 3,845 3,060 7,674 4,454
-------- -------- -------- --------
Total operating
expenses 11,725 8,221 23,520 14,179
-------- -------- -------- --------
Loss from operations (8,682) (8,454) (18,102) (14,824)
Net interest income 1,177 215 1,591 359
-------- -------- -------- --------
Net loss $ (7,505) $ (8,239) $(16,511) $(14,465)
======== ======== ======== ========
Net loss per share $ (0.41) $ (0.75) $ (0.96) $ (1.43)
======== ======== ======== ========
Average shares outstanding 18,250 10,936 17,170 10,129
======== ======== ======== ========
EBITDA $ (4,837) $ (5,394) $(10,428) $(10,370)
======== ======== ======== ========
(1) Amounts have been restated to include the results of GolfWeb,
which the Company acquired on January 29, 1998 in a
pooling-of-interests transaction.
SportsLine USA, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, 1998 December 31, 1997(1)
------------- ---------------------
Assets:
Cash and investments $ 106,646 $ 33,988
Other current assets 14,086 5,579
Property and equipment, net 4,180 4,170
Other assets 3,756 1,989
-------- -----
$ 128,668 $ 45,726
======== ======
Liabilities and Shareholders' Equity:
Current liabilities $ 7,347 $ 8,283
Long-term obligations 346 458
Shareholders' equity 120,975 36,985
-------- ------
$ 128,668 $ 45,726
======== ======
(1) Amounts have been restated to include the results of GolfWeb,
which the Company acquired on January 29, 1998 in a
pooling-of-interests transaction.
CONTACT: Kenneth Sanders
Chief Financial Officer
(954) 351-2120, ext. 829
or
Sara L. Wilkins
Director, Investor Relations
(954) 351-2120 ext. 511
saraw@sportsline.com
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