Play Fantasy The Most Award Winning Fantasy game with real time scoring, top expert analysis, custom settings, and more. Play Now
 

SportsLine.com, Inc. Reports Third Quarter Operating Results

Revenue Grows 5%; Net Loss Reduced by 32%, EBITDA Improves by 24%

FORT LAUDERDALE, Fla., November 1, 2004 - SportsLine.com, Inc. (Nasdaq:SPLN), a leading Internet sports media company and publisher of CBS SportsLine.com (http://cbs.sportsline.com), today announced its operating results for the quarter ended September 30, 2004. SportsLine.com's revenue grew to $14.7 million for the quarter, a 5% increase compared to the $14.0 million of revenue in the same quarter of 2003. The Company's net loss was reduced 32% to $8.3 million, or $0.18 per basic and diluted share, compared to $12.1 million, or $0.28 per basic and diluted share, in the third quarter of 2003.

The Company's EBITDA loss from continuing operations (net loss from continuing operations excluding net interest and other income/expense, depreciation and amortization, equity consideration to Viacom and others and stock compensation expense) was $1.3 million, a 24% improvement compared to an EBITDA loss of $1.7 million in the third quarter of 2003, which excludes a write-down of e-commerce assets.

"The Company continues to move in a very positive direction, with improvements in all facets of our operations: increasing revenue, a decreasing net loss and the expectation of full year positive EBITDA for the first time in 2004," said Michael Levy, founder and CEO of SportsLine.com, Inc. "The growing adoption of our media sites and subscription products by both advertisers and users is solid evidence of the quality products we are producing."

                               SportsLine.com, Inc.
                               Financial Highlights
                      (in thousands, except per-share data)
                                   (unaudited)

                                  Three Months Ended      Nine Months Ended
                                     September 30,           September 30,
                                   2004        2003        2004        2003

    Revenue                      $14,731     $14,032     $37,666     $34,886

    Loss from operations         $(8,290)   $(12,078)   $(26,729)   $(34,472)

    Net loss                     $(8,304)   $(12,145)   $(26,708)   $(35,265)

    Basic and diluted loss per
     share before discontinued
     operations                   $(0.18)     $(0.28)     $(0.61)     $(0.84)

    Basic and diluted loss per
     share                        $(0.18)     $(0.28)     $(0.61)     $(0.86)

    Weighted average shares
     outstanding                  45,237      43,503      43,638      41,138

    EBITDA loss                  $(1,325)(1) $(1,744)    $(5,753)(1) $(8,571)

  • (1) Includes approximately $1.2 million of expenses relating to the Company's proposed merger with a subsidiary of Viacom.

    Additional Financial Highlights

    Revenue

    • Advertising and marketing services revenue from continuing operations increased slightly to $10.2 million in the third quarter of 2004, compared to $10.0 million in the same quarter of 2003.
    • Subscription and premium products revenue for the third quarter 2004 grew 14% to $4.6 million compared to $4.0 million in the third quarter of 2003.
    • Revenue generated through joint sales efforts with CBS represented approximately 9% of the Company's total advertising sales in the quarter ended September 30, 2004, compared to 15% in the same quarter a year ago.
    • The Company generated $14.7 million in fantasy football billings during 2004, which is being recognized as revenue between September 2004 and January 2005. This represents a 23% increase over the $12.0 million in fantasy football billings generated in 2003.

    Operating Expenses

    • Total operating expenses for the quarter ended September 30, 2004 were $17.3 million, a 16% improvement from total operating expenses of $20.5 million for the same quarter in 2003. Operating expenses for the third quarter 2004 include approximately $1.2 million of expenses relating to the Company's proposed merger with a subsidiary of Viacom. Operating expenses in 2003 included a $2.8 million write-down of e-commerce assets.
    • As of September 30, 2004, the Company's total headcount was 247 compared with 266 at the end of September 2003, excluding employees of discontinued operations.

    Balance Sheet

    • As of September 30, 2004, the Company's cash and cash equivalents and marketable securities totaled approximately $34 million, compared to approximately $29 million at the end of December 2003. Please refer to the condensed consolidated balance sheets and consolidated statements of cash flows contained in this press release.
    • Capital expenditures for the quarter ended September 30, 2004 were slightly less than $0.5 million, bringing the year to date total to approximately $1.7 million.

    Recent Business Highlights

    Fantasy Football Continues Strong Growth

  • Approximately 98,000 paid fantasy football leagues were sold this year, consisting of approximately 1.3 million teams. The number of leagues increased approximately 23% over total paid leagues in 2003.

    Viacom Update

  • On August 2, 2004 SportsLine.com and Viacom jointly announced the execution of a definitive agreement for SportsLine.com to merge with a subsidiary of Viacom. Public shareholders of SportsLine.com will be entitled to receive $1.75 per share in cash on closing of the transaction. Completion of the merger is subject to customary closing conditions, including approval by SportsLine.com shareholders. The merger is expected to be completed by the end of the year.

    Class Action Securities Lawsuit Dismissed

  • On July 21, 2004 the Company announced that the United States District Court for the Southern District of Florida has dismissed with prejudice the consolidated shareholder securities class action lawsuit filed last year against the Company and certain of its officers.

    About SportsLine.com, Inc.

    SportsLine.com (Nasdaq: SPLN) is at the leading edge of media companies providing Internet sports content, community and e-commerce. As the publisher of CBS SportsLine.com and the official Web sites of the NFL, PGA TOUR and NCAA Sports, the Company serves as one of the most comprehensive sports information sources available, containing an unmatched breadth and depth of multimedia sports news, information, entertainment and merchandise.

    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, dependence on advertising revenues, which are difficult to forecast, 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 has filed a proxy statement, and SportsLine.com and Viacom have filed other documents with the Securities and Exchange Commission concerning the proposed merger transaction. Holders of SportsLine.com common stock are urged to read the proxy statement and such other documents because they will contain important information. In addition, SportsLine.com and its directors and executive officers and other members of its management and its employees may be deemed to be participants in the solicitation of proxies from the shareholders of SportsLine.com with respect to the transactions contemplated by the merger agreement. Information about the directors and officers of SportsLine.com in the merger will be available in the proxy statement and other documents that SportsLine.com will file with the Commission. Investors can obtain a free copy of the documents filed with the Commission by Viacom and SportsLine at the Commission's website http://www.sec.gov. Investors can also obtain a free copy of the relevant documents filed by SportsLine.com by contacting Investor Relations at: 2200 W. Cypress Creek Road, Ft. Lauderdale, FL 33309, 954-489-4000 x5026 or online at http://www.sportsline.com/info/ir/. Investors can also obtain a free copy of the relevant documents filed by Viacom by contacting Investor Relations at: 800-516-4399, 1515 Broadway, New York, NY 10036.

                                   SportsLine.com, Inc.
                           Consolidated Statements of Operations
                          (in thousands, except per-share data)
                                       (unaudited)
    
                                       Three Months Ended      Nine Months Ended
                                          September 30,           September 30,
                                        2004        2003        2004        2003
        Revenue:
          Advertising and marketing
           services                   $10,162     $10,011     $30,575     $28,806
          Subscription and premium
           products                     4,569       4,021       7,091       6,080
            Total revenue              14,731      14,032      37,666      34,886
    
        Cost of revenue                 5,692       5,587      14,039      14,289
    
        Gross profit                    9,039       8,445      23,627      20,597
    
        Operating expenses:
          Sales and marketing:
            Consideration to Viacom
             for promotion              5,571       5,571      16,714      16,714
            Other                       4,638       5,960      13,666      16,345
          General and administrative    6,286(1)    5,152      17,614(1)   15,603
          Depreciation and
           amortization                   834       1,040       2,362       3,607
          Write-down of e-commerce
           assets                          --       2,800          --       2,800
    
            Total operating expenses   17,329      20,523      50,356      55,069
    
        Loss from operations           (8,290)    (12,078)    (26,729)    (34,472)
    
        Net interest and other income
         (expense)                        (14)        (42)         21        (273)
    
        Loss from continuing
         operations                    (8,304)    (12,120)    (26,708)    (34,745)
    
        Loss from discontinued
         operations                        --         (25)         --        (235)
        Loss from sale of
         discontinued operations           --          --          --        (285)
    
        Net loss                      $(8,304)   $(12,145)   $(26,708)   $(35,265)
    
        Basic and diluted loss per
         share before discontinued
         operations                    $(0.18)     $(0.28)     $(0.61)     $(0.84)
        Loss per share from
         discontinued operations           --          --          --       (0.01)
        Loss per share from sale of
         discontinued operations           --          --          --       (0.01)
        Basic and diluted loss per
         share                         $(0.18)     $(0.28)     $(0.61)     $(0.86)
    
        Basic and diluted weighted
         average shares outstanding    45,237      43,503      43,638      41,138
    
        EBITDA loss                   $(1,325)(1) $(1,744)    $(5,753)(1) $(8,571)
    
    
    
  • (1) Includes approximately $1.2 million of expenses relating to the Company's proposed merger with a subsidiary of Viacom.

    Supplemental Financial Data (unaudited)

    In order to fully assess the Company's financial operating results, management believes that EBITDA from continuing operations is an appropriate non-GAAP financial measure of evaluating the operating and liquidity performance of the Company, because it reflects the resources available for operating funds and strategic opportunities, including, among others, to invest in the business, make strategic acquisitions, strengthen the balance sheet and repurchase stock. However, EBITDA from continuing operations should be considered in addition to, not as a substitute for, or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with generally accepted accounting principles.

                                       Three Months Ended      Nine Months Ended
               (in thousands)             September 30,           September 30,
                                        2004        2003        2004        2003
        EBITDA loss reconciliation:
          Net loss                    $(8,304)   $(12,145)   $(26,708)   $(35,265)
          Amortization of equity
           issued to third parties      5,807       5,950      17,421      17,849
          Depreciation and
           amortization                   834       1,040       2,362       3,607
          Write-down of e-commerce
           assets                          --       2,800          --       2,800
          Stock compensation expense      324         544       1,193       1,645
          Loss from sale of
           discontinued operations         --          --          --         285
          (Income) loss from
           discontinued operations         --          25          --         235
          Interest and other expense,
           net                             14          42         (21)        273
        EBITDA loss                   $(1,325)    $(1,744)    $(5,753)    $(8,571)
    
    
    
    

    Supplemental financial data related to gaming information operations, which the Company sold in 2003, is reflected as discontinued operations in the Company's consolidated statements of operations for the three and nine months ended September 30, 2003:

                                          Three Months Ended    Nine Months Ended
              (in thousands)              September 30, 2003    September 30, 2003
    
        Advertising and marketing services
         revenue                                    $--                  $188
        Subscription and premium products
         revenue                                    277                 1,205
        Cost of revenue                            (236)               (1,318)
        Sales and marketing expense                  (8)                 (135)
        General and administrative expense          (58)                 (169)
        Depreciation and amortization                --                    (7)
        Interest income, net                         --                     1
           Loss from discontinued operations       $(25)                $(235)
    
    
    
    
    
                                  SportsLine.com, Inc.
                          Consolidated Statements of Cash Flows
                                     (in thousands)
                                       (unaudited)
    
                                                          Nine Months Ended
                                                             September 30,
                                                         2004             2003
    
        Cash flows from operating activities:
          Net loss                                    $(26,708)         $(35,265)
    
          Adjustments to reconcile net loss
           to net cash provided by operating
           activities:
             Depreciation and amortization               2,362             3,613
             Equity consideration to third
              parties                                   17,421            17,849
             Stock compensation expense                  1,193             1,669
             Other                                        (168)             (577)
             Loss on sale of discontinued
              operations                                    --               285
             Write-down of e-commerce assets                --             2,800
             Changes in assets and
              liabilities:
                Accounts receivable                      1,522            (1,516)
                Prepaid expenses and other
                 assets                                    496              (705)
                Accounts payable                          (449)              269
                Accrued expenses                        (2,011)              390
                Deferred revenue                        13,583            11,634
                    Net cash provided by
                     operating activities                7,241               446
    
        Cash flows from investing activities:
          Purchases of available-for-sale
           securities                                   (9,745)          (13,810)
          Sales of available-for-sale
           securities                                   16,734            10,113
          Purchases of held-to-maturity
           securities                                       --            (3,292)
          Maturities of held-to-maturity
           securities                                    1,000             7,094
          Purchase of property and equipment            (1,747)           (1,159)
          Purchase of license                               --              (250)
          Proceeds from sale of discontinued
           operations                                       --             1,460
          Net change in restricted cash                    238               197
                    Net cash provided by
                     investing activities                6,480               353
    
        Cash flows from financing activities:
          Proceeds from issuance of stock and
           exercise of
            employee options                               183               151
          Repurchase of common shares                       --              (521)
          Repurchase of restricted shares                 (110)             (137)
                    Net cash provided by
                     (used in) financing
                     activities                             73              (507)
    
        Net increase in cash and cash
         equivalents                                    13,794               292
        Cash and cash equivalents, beginning
         of period                                       2,485            17,383
        Cash and cash equivalents, end of
         period                                        $16,279           $17,675
    
    
    
                                  SportsLine.com, Inc.
                          Condensed Consolidated Balance Sheets
                                     (in thousands)
    
                                             September 30, 2004  December 31, 2003
                                                (unaudited)         (audited)
    
        Assets:
          Cash and cash equivalents                $16,279            $2,485
          Short-term marketable securities          14,819            16,943
          Receivables, prepaids and other
           current assets                           14,190            15,989
               Total current assets                 45,288            35,417
    
          Non-current marketable securities          3,250             9,134
          Property and equipment, net                5,426             5,563
          Deferred advertising and content-
           CBS                                       5,143             6,857
          Other assets                               1,268             2,435
          Goodwill                                  16,194            16,194
                                                   $76,569           $75,600
    
    
        Liabilities and Shareholders' Equity:
          Current liabilities                      $31,937           $19,508
          Long-term convertible notes               16,661            16,661
          Other long-term liabilities               27,246            15,833
          Shareholders' equity                         725            23,598
                                                   $76,569           $75,600
    
    
    
                 Supplemental schedule of cash and marketable securities
    
                                             September 30, 2004  December 31, 2003
                                                (unaudited)         (audited)
    
          Cash and cash equivalents                $16,279            $2,485
          Short-term marketable securities          14,819            16,943
          Non-current marketable securities          3,250             9,134
                                                   $34,348           $28,562
    

    #  #  #

    For further information, contact:
    SportsLine.com Inc. — Corporate Communications — (954) 489-4000