USWEB/CKS REPORTS RECORD REVENUES FOR FIRST QUARTER 1999
Record Quarterly Revenue of $84.1 Million, Sequential Quarterly Revenue
Increases 16%; Company Reaches Significant Integration Milestones
SANTA CLARA, Calif., April 19 /PRNewswire/ -- USWeb/CKS, (Nasdaq: USWB) a leader in strategic Internet and marketing communications services today reported its financial results for the first quarter of 1999.
Revenues for the first quarter of 1999 were $84.1 million, a 16% increase over revenues of $72.6 million reported in the quarter ended December 31, 1998. Revenues increased $44.8 million or 114% over revenues of $39.3 million in the first quarter of 1998. The Company reported a net loss for the quarter of $51.7 million or $0.73 per share, which included non-cash and merger-related charges, compared with a net loss of $84.1 million, or $1.26 per share in the previous quarter, and a net loss of $15.3 million or $0.29 per share in the first quarter of 1998. Net income before non-cash and merger-related charges was $10.9 million or $0.13 per diluted share, compared with net income before non-cash and merger-related charges of $5.9 million or $0.07 per diluted share in the previous quarter and a loss before non-cash charges and merger-related charges of $0.5 million or $0.01 per share in the first quarter of 1998. Non-cash charges include provision for contract loss, which represents the value of certain warrants granted in a strategic relationship and stock compensation, acquired in-process technology, amortization of intangible assets, depreciation and amortization, and an impairment charge associated with goodwill that was recognized in the fourth quarter of 1998.
During the fourth quarter of 1998, the merger between USWeb Corporation and CKS Group was completed. The merger was accounted for as a pooling of interests. During the first quarter of 1999, the Company recognized costs directly associated with the merger of $5.3 million, which, combined with merger costs incurred in the fourth quarter of 1998, brings the total of merger and integration costs to $34.2 million. "The first quarter of 1999 demonstrates the momentum USWeb/CKS has created in the market. We grew the business 16% sequentially while at the same time accomplishing major integration milestones that are the foundation for building an Internet professional services powerhouse," said Robert Shaw, CEO of USWeb/CKS. "And, the work we do for clients represents the magnitude of how companies are using the Internet to transform or create businesses in the digital economy."
Q1 Client Highlights
USWeb/CKS continues to work with a broad, prominent client base in a variety of industries, including companies with established brands, pure-play Internet businesses and emerging leaders. Notable client activity in the first quarter of 1999 included e-commerce services for Dick's Sporting Goods, Honeywell, Jenny Craig, National Airlines, Sony Music and Tower Records. In the financial services industry, notable clients include, E*OFFERING, Net.B@nk and PIMCO. International-based clients include BBC, Bayer AG and IKK Bundesverband, the largest health insurance company in Germany.
Q1 Integration Highlights
Significant progress has been made to integrate USWeb and CKS Group into one firm. In less than 120 days the Company has achieved a number of significant integration milestones. * Developed a comprehensive business strategy that leverages our first-to-market leadership position. * Consolidated into six regions allowing the Company to focus on integration, drive a more common approach and improve business efficiencies. The company also consolidated offices in four major metropolitan areas: Chicago, Los Angeles, New York and the San Francisco Bay Area and eliminated low-performing and non-strategic units in the Northeast. * Identified eight practices to focus company expertise and disciplines that can be leveraged to benefit clients. These practices are: Business Systems, e-Commerce, Customer Relationships, Internet Communications, Knowledge Management, Marketing Communications, Network Solutions and Strategy Consulting. * Invested in e-Services to leverage the USWeb/CKS business model and increase delivery speed of complex applications to clients. USWeb/CKS e-Services also help drive a common approach and becomes a second channel to customers. * Continued acquisition strategy to fill gaps in service offerings and practices in geographic regions such as Central, Northeast and Europe. * Creating next generation methodologies and knowledge management systems to enhance predictability, create a common approach, increase innovation through shared expertise and cross-fertilization, as well as deploy knowledge faster into client engagements. * Improving back-office infrastructure to implement centralized systems and a single project and financial reporting system. These new systems help eliminate duplication, improve scale and efficiency and provide better management information.
USWeb/CKS is a professional services firm that works with its clients to define strategies and implement innovative ways to build their businesses through a combination of expertise in strategy, Internet technology and marketing communications. USWeb/CKS helps clients differentiate their products and services, strengthen customer relationships, leverage human capital, and improve business efficiency in the new electronic economy. The Company provides a broad selection of services from brand development and advertising to business process automation and e-commerce solutions. The Company headquarters are in Santa Clara, California. Additional information about USWeb/CKS is available at uswebcks.com.
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