SportsLine.com, Inc. Reports Third Quarter Financial ResultsRecord revenue, site traffic and reach generated; Quarter ends with $142 million in cash | ||
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FORT LAUDERDALE, Fla., October 19th-- SportsLine.com, Inc. (NASDAQ:SPLN), the leading global Internet sports media company and publisher of CBS SportsLine.com (http://cbs.sportsline.com), today announced its financial results for the third quarter ended September 30, 2000. Consolidated revenue increased 132% to $26.7 million in the third quarter of 2000, compared to pro forma consolidated revenue of $11.5 million in the same quarter of 1999. The Company ended the quarter with cash and short-term marketable securities in the amount of $142 million. The Company's pro forma domestic EBITDA (operating loss excluding depreciation and amortization expense) loss for the quarter was $1.5 million, an 81% improvement from the pro forma domestic EBITDA loss of $8.2 million in the third quarter of 1999. Consolidated pro forma EBITDA loss for the quarter was $9.0 million. The Company's pro forma domestic net loss for the quarter was $8.7 million, a 40% improvement from the $14.5 million pro forma domestic net loss in the same period last year. Pro forma consolidated net loss for the third quarter ended September 30, 2000 was $16.3 million, or $0.62 per share, compared to a pro forma consolidated net loss of $16.0 million, or $0.69 per share, in the same period last year. Pro forma consolidated revenues, EBITDA and net loss exclude the results of the e-commerce business sold to MVP.com as of January 2000, as if the sale had occurred on January 1, 1999, and the write down during the third quarter of the Company's Internet investments. Several of SportsLine.com's Internet investments, including MVP.com, have been adversely affected by the recent market downturn, which has significantly deflated their equity valuations and made raising equity capital extremely difficult. As a result, the Company has recorded a non-cash charge of $114.3 million to write down the value of these investments to their estimated fair market value, as of September 30, 2000. Including this non-recurring charge, the Company's consolidated net loss for the quarter ended September 30, 2000 was $130.5 million, or $4.94 per share. Traffic to the Company's Web sites increased to a record 2.4 billion page views for the quarter ended September 30, 2000, including 1.1 billion page views in the month of September. The daily average of approximately 25.7 million page views represents a 176% increase over the same period in 1999 and a 69% increase over the 15.2 million daily average page views in the second quarter 2000. The daily average of approximately 36.3 million page views in September represents an increase of 187% over the daily average of 12.7 million page views in September 1999. Page views for the four Sundays in September 2000 averaged approximately 70 million per day. For the month of September, Nielsen//NetRatings reported that SportsLine.com reached a record 7.7 million unique visitors at home and work combined in September 2000, an increase of 11% over the 6.9 million unique visitors in August 2000. SportsLine.com also reached 5.3 million unique visitors at home in September, an increase of 41% over the 3.8 million unique visitors reached at home in September 1999. (Nielsen//NetRatings did not begin publishing a combined home/work number until July 2000). ``Once again, SportsLine.com experienced a strong quarter with solid
operating results,'' said Michael Levy, founder and CEO of SportsLine.com, Inc.
``We believe that the same strategic focus that has catapulted us to the
forefront of our industry will enable us over the long term to achieve
significant operating leverage from our business model with high gross margins
resulting in a highly profitable business.
Despite the significant non-cash
charge we are taking to reflect the effect of market conditions on our
Internet investments, we are in a strong financial position, with more than
enough cash to carry us through to achieve our objectives.''
Pro Forma Financial Highlights
(in thousands, except per-share data)
(unaudited)
T h r e e M o n t h s E n d e d
September 30, 2000(a) September 30, 1999(a)
U.S. Sports.com Total U.S. Sports.com(b) Total
Revenue $23,701 $3,008 $26,709 $10,925 $576 $11,501
Net loss $(8,660) $(7,601) $(16,261) $(14,503) $(1,537) $(16,040)
Basic and
diluted
net loss
per share $(0.62) $(0.69)
Weighted average
shares outstanding 26,436 23,263
EBITDA $(1,527) $(7,500) $(9,027) $(8,153) $(1,369) $(9,522)
Average page
views per
day 23,178 2,502 25,680 9,168 123 9,291
N i n e M o n t h s E n d e d
September 30, 2000(a) September 30, 1999(a)
U.S. Sports.com Total U.S. Sports.com(b) Total
Revenue $67,113 $6,591 $73,704 $29,123 $576 $29,699
Net loss $(27,523) $(20,740) $(48,263) $(36,621) $(1,537) $(38,158)
Basic and
diluted net loss
per share $(1.84) $(1.69)
Weighted average
shares
outstanding 26,179 22,585
EBITDA $(5,321) $(21,399) $(26,720) $(19,816) $(1,369) $(21,185)
(a) Pro forma results exclude the effects of the following non-recurring
transactions:
-- Writedown of equity securities of $114.3 million in the third
quarter of 2000
-- Gain on sale of e-commerce subsidiaries of $7.8 million in the
first quarter of 2000
-- Operating results of the e-commerce subsidiaries for the three and
nine months ended September 30, 1999 due to their sale in the first
quarter of 2000
-- Extraordinary gain on extinguishment of debt of $21.8 million in
the third quarter of 1999
(b) Sports.com commenced operations during the quarter ended
September 30, 1999
Revenue Continues to Rise SportsLine.com's consolidated revenue of $26.7 million for the third quarter established a new quarterly high and increased 132% compared to pro forma consolidated revenue of $11.5 million posted in the third quarter of 1999. Advertising accounted for a record $20.9 million or 78% of the Company's consolidated revenue for the quarter, a 168% increase over the $7.8 million of advertising revenue for the third quarter of 1999. Traffic Surges During Quarter For the first time, SportsLine.com recorded more than 2 billion page views in a quarter and more than 1 billion in a single month. The 2.4 billion page views for the third quarter, an average of 26.0 million per day, represents a 174% increase over the same period in 1999 and a 71% increase over the 15.0 million daily page views in the second quarter 2000. The 1.1 billion page views in September, an average of 36.3 million per day, represents an increase of 187% over the daily average of 12.7 million page views in September 1999. Page views for the four Sundays in September averaged approximately 70 million per day. SportsLine.com Extends Reach According to Nielsen//NetRatings, SportsLine.com reached a record 7.7 million unique visitors at home and work combined in September 2000, an increase of 11% over the 6.9 million unique visitors in August 2000. SportsLine.com also reached 5.3 million unique visitors at home in September, an increase of 41% over the 3.8 million unique visitors at home in September 1999. (Nielsen//NetRatings did not begin publishing a combined home/work number until July 2000). Database Grows Rapidly SportsLine.com now has approximately 3.2 million unique registered users, a 54% increase over the 2.1 million from the second quarter of 2000 and a 144% increase from the 1.3 million unique registered users at the end of the third quarter of 1999. Free Fantasy Products Spur Traffic/Reach/Database Increases Earlier this year, SportsLine.com began offering all of its fantasy football products free of charge. This strategy was designed to generate a significant increase in fantasy players and page views, further building the Company's database and enhancing its ability to generate incremental revenue. This decision proven to be successful as there are currently approximately 1.3 million unique fantasy football users, nearly 10 times as many as a year ago. SportsLine.com's free fantasy strategy contributed significantly to the Company's record traffic and reach this quarter, while generating a major sponsorship with Miller Lite and a 54% increase in the SportsLine.com database over the previous quarter. Also, former Denver Broncos great John Elway joined the SportsLine.com team as spokesman for the fantasy football promotional campaign. MVP.com Update As noted above, SportsLine.com recorded during the third quarter a non-cash, one-time charge to write down the value of its investments in MVP.com. MVP.com is overdue with its scheduled payment for the fourth quarter of 2000 and is negotiating with SportsLine.com and its other financial and strategic partners for additional funding. SportsLine.com also is discussing with MVP.com a potential restructuring of payment terms for the remainder of our 10-year agreement, conditioned on MVP.com securing additional financing. The Company cannot currently predict the outcome of these discussions, but is confident that it will be able to continue to capitalize on the e-commerce potential of its growing user base, whether under a restructured MVP.com agreement or a future alternate arrangement. SportsLine.com Produces Official PGA Championship Site PGA.com, the official Web site of The PGA of America selected SportsLine.com to produce exclusive real-time online coverage of the PGA Championship, the last of golf's four major championships this season. Traffic to SportsLine.com's Web sites during the four days of the Championship generated more than 140 million page views, including approximately 50 million page views on Friday, August 18. Both the four-day weekend and single day marks established Company records, which subsequently were broken during the football season. SportsLine.com Aligns with Air2Web for Wireless Applications In September, the Company formed a strategic alliance with Air2Web to develop an array of wireless applications adapting SportsLine.com's content for users of digital cell phones and hand-held devices. As a result of the alliance, SportsLine.com launched two new wireless applications during the quarter, one for wireless Palm(TM) handheld devices and one for digital cell phones, including headlines, scores and live game coverage of the NFL and Major League Baseball. SportsLine.com Columnist Receives National Award Dennis Dodd, SportsLine.com's college football senior writer, earned his second consecutive first-place award in the annual Football Writers Association of America (FWAA) Best Writing Contest. Dodd is the only writer for an Internet publication to have won in the FWAA Best Writing Contest. His award-winning story was in the Immediate Deadline Reporting category for a report filed on the NCAA national championship football game between Florida State and Virginia Tech. Korea.sports.com Launches In July, SportsLine.com, its European subsidiary Sports.com, and Asiacontent.com jointly launched korea.sports.com, an all-encompassing Korean language sports site targeted to Korea's sports enthusiasts. Korea.sports.com is the second Asian sports Web site launched by the joint venture with Asiacontent.com. MarketPlace on SportsLine.com Debuts In July, SportsLine.com created and launched a new shopping channel designed to enable retailers to access SportsLine.com's highly attractive, targeted audience, while providing users with convenient access to a variety of appealing products and services. Retailers pay a placement fee for space and retain all responsibility for inventory, transactions, fulfillment and customer service. The new channel is designed to enable the Company to monetize its audience base and traffic at a very high gross margin, while offering quality products and services to its users without reentering the e-commerce business directly. SportsLine.com Celebrates Fifth Anniversary On August 16, SportsLine.com celebrated the fifth anniversary of the launch of its flagship Web site in 1995. About SportsLine.com, Inc. SportsLine.com, Inc. is at the leading edge of media companies providing Internet sports content, community and e-commerce on a global basis. SportsLine.com, Inc.'s content includes more than one million pages of multimedia sports information, entertainment and merchandise. The Company's flagship Internet sports service (http://cbs.sportsline.com) was renamed CBS SportsLine.com as part of an exclusive promotional and content agreement with CBS in March 1997. SportsLine.com, Inc. produces the official league Web sites for Major League Baseball, the PGA TOUR and NFL Europe League, and serves as the primary sports content provider for America Online, Netscape and Excite. In 1999, the Company commenced operations in Europe through its subsidiary, Sports.com Limited. Note: This press release contains forward-looking statements, which involve risks and uncertainties. SportsLine.com'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.com's Securities and Exchange Commission filings, including those discussed under the caption ``Risk Factors That May Affect Future Results'' in SportsLine.com's latest Annual Report on Form 10-K. SportsLine.com 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.com, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(in thousands, except per-share data)
(unaudited)
T h r e e M o n t h s E n d e d
September 30, 2000(a) September 30, 1999(a)
U.S. Sports.com Total U.S. Sports.com(b) Total
Revenue
Advertising $19,801 $1,106 $20,907 $7,602 $195 $7,797
E-commerce -- 29 29 -- 6 6
Licensing
and other 2,120 1,873 3,993 2,008 352 2,360
Subscription
services 1,780 -- 1,780 1,315 23 1,338
Total
revenue 23,701 3,008 26,709 10,925 576 11,501
Cost of revenue 8,020 4,199 12,219 5,239 445 5,684
Gross profit
(loss) 15,681 (1,191) 14,490 5,686 131 5,817
Operating expenses:
Product
development 435 -- 435 358 -- 358
Sales and
marketing 10,183 3,928 14,111 9,020 321 9,341
General and
admini-
strative 6,590 2,381 8,971 4,461 1,179 5,640
Depreciation and
amortization 9,818 478 10,296 7,228 319 7,547
Total operating
expenses 27,026 6,787 33,813 21,067 1,819 22,886
Loss from
operations (11,345) (7,978) (19,323) (15,381) (1,688) (17,069)
Net interest
and other
income 2,685 377 3,062 878 151 1,029
Net loss $(8,660) $(7,601) $(16,261) $(14,503) $(1,537) $(16,040)
Basic and
diluted net
loss per share $(0.62) $(0.69)
Average shares
outstanding 26,436 23,263
EBITDA $(1,527) $(7,500) $(9,027) $(8,153) $(1,369) $(9,522)
Gross margin 66% (40)% 54% 52% 23% 51%
(a) Pro forma results exclude the effects of the following non-recurring
transactions:
-- Writedown of equity securities of $114.3 million in the third
quarter of 2000
-- Gain on sale of e-commerce subsidiaries of $7.8 million in the
first quarter of 2000
-- Operating results of the e-commerce subsidiaries for the three and
nine months ended September 30, 1999 due to their sale in the first
quarter of 2000
-- Extraordinary gain on extinguishment of debt of $21.8 million in
the third quarter of 1999
(b) Sports.com commenced operations during the quarter ended
September 30, 1999
SportsLine.com, Inc.
Pro Forma Condensed Consolidated Statement of Operations
(in thousands, except per-share data)
(unaudited)
N i n e M o n t h s E n d e d
September 30, 2000(a) September 30, 1999(a)
U.S. Sports.com Total U.S. Sports.com(b) Total
Revenue
Advertising $55,974 $3,630 $59,604 $19,887 $195 $20,082
E-commerce -- 93 93 -- 6 6
Licensing
and other 6,279 2,815 9,094 5,263 352 5,615
Subscription
services 4,860 53 4,913 3,973 23 3,996
Total
revenue 67,113 6,591 73,704 29,123 576 29,699
Cost of revenue 22,045 9,341 31,386 13,098 445 13,543
Gross profit
(loss) 45,068 (2,750) 42,318 16,025 131 16,156
Operating expenses:
Product
development 1,268 -- 1,268 1,120 -- 1,120
Sales and
marketing 28,490 11,153 39,643 22,588 321 22,909
General and
admini-
strative 20,630 7,496 28,126 12,133 1,179 13,312
Depreciation
and amorti-
zation 28,956 1,694 30,650 19,643 319 19,962
Total operating
expenses 79,344 20,343 99,687 55,484 1,819 57,303
Loss from
operations (34,276) (23,093) (57,369) (39,459) (1,688) (41,147)
Net interest
and other
income 6,753 2,353 9,106 2,838 151 2,989
Net loss $(27,523) $(20,740) $(48,263) $(36,621) $(1,537) $(38,158)
Basic and
diluted net
loss per share $(1.84) $(1.69)
Average
shares
outstanding 26,179 22,585
EBITDA $(5,320) $(21,399) $(26,719) $(19,816) $(1,369) $(21,185)
Gross margin 67% (42)% 57% 55% 23% 54%
(a) Pro forma results exclude the effects of the following non-recurring
transactions:
-- Writedown of equity securities of $114.3 million in the third
quarter of 2000
-- Gain on sale of e-commerce subsidiaries of $7.8 million in the
first quarter of 2000
-- Operating results of the e-commerce subsidiaries for the three and
nine months ended September 30, 1999 due to their sale in the first
quarter of 2000
-- Extraordinary gain on extinguishment of debt of $21.8 million in
the third quarter of 1999
(b) Sports.com commenced operations during the quarter ended
September 30, 1999
SportsLine.com, Inc.
Condensed Consolidated Statement of Operations
(in thousands, except per-share data)
(unaudited)
T h r e e M o n t h s E n d e d
September 30, 2000 September 30, 1999
U.S. Sports.com Total U.S. Sports.com(a) Total
Revenue
Advertising $19,801 $1,106 $20,907 $7,602 $195 $7,797
E-commerce -- 29 29 3,654 6 3,660
Licensing
and other 2,120 1,873 3,993 2,008 352 2,360
Subscription
services 1,780 -- 1,780 1,315 23 1,338
Total
revenue 23,701 3,008 26,709 14,579 576 15,155
Cost of revenue 8,020 4,199 12,219 7,884 445 8,329
Gross profit
(loss) 15,681 (1,191) 14,490 6,695 131 6,826
Operating expenses:
Product
development 435 -- 435 358 -- 358
Sales and
marketing 10,183 3,928 14,111 10,338 321 10,659
General and
admini-
strative 6,590 2,381 8,971 4,751 1,179 5,930
Depreciation and
amortization 9,818 478 10,296 7,312 319 7,631
Total operating
expenses 27,026 6,787 33,813 22,759 1,819 24,578
Loss from
operations (11,345) (7,978) (19,323) (16,064) (1,688) (17,752)
Loss on equity
investments (114,285) -- (114,285) -- -- --
Net interest and
other income 2,685 377 3,062 881 151 1,032
Net loss before
extraordinary
gain (122,945) (7,601) (130,546) (15,183) (1,537) (16,720)
Extraordinary
gain on extin-
guishment
of debt -- -- -- 21,808 -- 21,808
Net income
(loss) $(122,945) $(7,601) $(130,546) $6,625 $(1,537) $5,088
Basic and diluted
net loss per
share before
extraordinary gain $(4.94) $(0.72)
Basic and diluted
net income (loss)
per share $(4.94) $0.22
Average shares
outstanding 26,436 23,263
EBITDA $(1,527) $(7,500) $(9,027) $(8,752) $(1,369) $(10,121)
Gross margin 66% (40)% 54% 46% 23% 45%
(a) Sports.com commenced operations during the quarter ended
September 30, 1999
SportsLine.com, Inc
Condensed Consolidated Statement of Operations
(in thousands, except per-share data)
(unaudited)
N i n e M o n t h s E n d e d
September 30, 2000 September 30, 1999
U.S. Sports.com Total U.S Sports.com(a) Total
Revenue
Advertising $55,974 $3,630 $59,604 $19,887 $195 $20,082
E-commerce -- 93 93 9,536 6 9,542
Licensing
and other 6,279 2,815 9,094 5,263 352 5,615
Subscription
services 4,860 53 4,913 3,973 23 3,996
Total
revenue 67,113 6,591 73,704 38,659 576 39,235
Cost of revenue 22,045 9,341 31,386 20,051 445 20,496
Gross profit
(loss) 45,068 (2,750) 42,318 18,608 131 18,739
Operating expenses:
Product
development 1,268 -- 1,268 1,120 -- 1,120
Sales and
marketing 28,490 11,153 39,643 25,375 321 25,696
General and
admini-
strative 20,630 7,496 28,126 12,769 1,179 13,948
Depreciation
and amorti-
zation 28,956 1,694 30,650 19,871 319 20,190
Total operating
expenses 79,344 20,343 99,687 59,135 1,819 60,954
Loss from
operations (34,276) (23,093) (57,369) (40,527) (1,688) (42,215)
Loss on equity
investments (114,285) -- (114,285) -- -- --
Gain on sale
of e-commerce
subsidiaries 7,814 -- 7,814 -- -- --
Net interest
and other
income 6,753 2,353 9,106 2,835 151 2,986
Net loss before
extraordinary
gain (133,994) (20,740) (154,734) (37,692) (1,537) (39,229)
Extraordinary
gain on
extinguishment
of debt -- -- -- 21,808 -- 21,808
Net loss $(133,994) $(20,740) $(154,734) $(15,884) $(1,537) $(17,421)
Basic and diluted
net loss per
share before
extraordinary
gain $ (5.91) $ (1.74)
Basic and diluted
net loss per share $ (5.91) $ (0.77)
Average shares
outstanding 26,179 22,585
EBITDA $(5,320) $(21,399) $(26,719) $(20,656) $(1,369) $(22,025)
Gross
margin 67% (42)% 57% 48% 23% 48%
(a) Sports.com commenced operations during the quarter ended
September 30, 1999.
SportsLine.com, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, 2000 December 31, 1999
Assets:
Cash and short-term
marketable securities $141,854 $70,922
Current deferred advertising
and content-CBS 17,288 17,288
Receivables, prepaids and
other current assets 29,737 28,772
Non-current marketable securities 297 50,541
Property and equipment, net 17,916 10,351
Long-term deferred advertising
and content-CBS 15,750 28,716
Licensing rights and other assets 23,101 22,047
Goodwill 37,522 42,824
$283,465 $271,461
Liabilities and Shareholders' Equity:
Current liabilities $44,128 $19,754
Deferred advertising MVP.com 73,612 --
Long-term convertible notes 19,608 19,608
Other long-term liabilities 60,778 7,443
Shareholders' equity 85,339 224,656
$283,465 $271,461
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