Company Posts Significant Bottom Line Improvement
SAN FRANCISCO, April 25 /PRNewswire/ --
MarketWatch.com, Inc. (Nasdaq: MKTW), the Internet's leading source of
financial news and information, today reported net revenues of $11.8 million
for the quarter ended March 31, 2001, a 5% decline over the same period of
2000.
The Company's domestic pro forma net loss for the first quarter of 2001,
excluding amortization of goodwill and intangibles and its share in the
results of its European joint venture, was $5.8 million, or $0.35 per share,
comparing favorably to $9.4 million, or $0.67 per share, for the same period
of 2000. First quarter 2001 net loss was $19.9 million, or $1.20 per share,
compared to $22.7 million, or $1.62 per share, for the same period of 2000.
"This quarter has truly emphasized the significance of our content
licensing business line and the importance of a diversified revenue stream, as
demand for online advertising softened from the overall economic slowdown,"
said Larry Kramer, MarketWatch.com Chairman and Chief Executive Officer. "Our
licensing business exceeded our expectations and grew more than 100% over last
year. With site traffic continuing to grow, and numerous other positive
developments, we believe MarketWatch.com is well positioned as a category
leader."
"Over the past several months we continued our tight cost controls in
light of the advertising downturn," added Kramer. "This enabled us to exceed
our bottom line targets and continue our path to generating positive cash flow
from operations."
Advertising and licensing services
Advertising revenues were $5.2 million for Q1 2001 compared to
$8.7 million for the same period last year. Licensing revenues rose 103% to
$5.9 million for the first quarter 2001, compared to $2.9 million in Q1 2000.
The diversity of the Company's revenue stream continued to be emphasized this
quarter as licensing revenues and other revenues (primarily broadcast and
radio) represented 56% of total net revenues.
"As the premier online source of financial news and information, we
continued to broaden our advertising client base this quarter by signing up
more traditional advertisers such as Anheuser-Busch, Kmart/BlueLight.com, and
Infiniti. They joined a stable of ongoing campaigns with existing clients who
are traditional advertisers, including United Airlines and Lexus," said
Kramer. "We provide advertisers a unique opportunity for reaching our highly
desirable demographic during the work day."
Licensing revenues more than doubled this quarter over a year ago as
several new customers joined existing clients as subscribers to the Company's
world-class content and tools. MarketWatch.com's licensing business
maintained its top-tier customer base, adding CIBC, Prudential Securities,
Bank of New York, Dow Jones Newswire and several others during Q1 2001. The
Company serves licensing clients in more than 17 countries worldwide.
Traffic
The Company continued to improve its traffic metrics across its licensing
business and all of its online properties -- cbs.marketwatch.com,
ftmarketwatch.com and bigcharts.com. Some highlights included:
-- According to March 2001 data from Media Metrix and Nielsen//NetRatings,
MarketWatch.com led the competition as the Number One financial news and
information source on the Internet.
-- During Q1 2001, MarketWatch.com served a total of 1.3 billion pages and
licensing content impressions on its destination sites and syndicated
licensing clients' sites. Page views from the Company's web sites for the
first quarter of 2001 were 676 million, excluding pages from "spiders"
(external third parties accessing MarketWatch.com pages in order to capture
headlines and other content). First quarter page views from the Company's web
sites, with spiders, were 890 million, compared to 831 million page views for
fourth quarter of 2000 and 771 million page views in Q1 2000.
-- The 14-week CBS MarketWatch Survivor Investment contest, which launched
February 5, 2001, contributed 9.2 million page views through March 31, 2001.
The contest includes two components -- an offline contest among 14 investment
clubs (promoted in connection with CBS' The Early Show, reaching 2.5 million
households on average), and an online individual contest with more than
55,000 players registered as of March 31, 2001.
-- Average monthly unique users were 8.51 million for first quarter 2001,
compared to 8.37 million for the fourth quarter 2000, as measured by
DoubleClick.
"We're increasing our lead against our next closest competitors," said
Kramer. "We have maintained our position as the market leader in original
financial content, and attribute part of our success this quarter to the
launch of a new version of our consumer destination site, CBS
MarketWatch.com."
Operating Results
Operating expenses, excluding the amortization of goodwill and
intangibles, decreased 23% to $13.7 million for the first quarter 2001,
compared to $17.8 million in the first quarter of 2000. Operating expenses,
excluding the amortization of goodwill and intangibles, as a percentage of net
revenues, decreased to 116%, compared to 143% in the first quarter of 2000.
The Company continued to focus on cost containment and management, with
headcount totaling 255 at March 31, 2001, compared to 266 at
December 31, 2000.
Cash at the end of Q1 2001 totaled $40.1 million, with cash used in
operations during the quarter averaging $800,000 per month. Accounts
receivable at March 31, 2001 decreased to $9.6 million compared to
$11.8 million last quarter.
"We continue to conservatively manage our cash and our operating
expenses," added Kramer. "We believe our current cash reserves will be more
than sufficient until we are generating positive cash flow, which we
anticipate by the end of this year."
Other Business Highlights
FT MarketWatch.com, the web site joint venture between MarketWatch.com,
Inc. and Financial Times Group Limited, served 457,000 unique users and
7.5 million page views in March 2001, as compared to 300,000 unique users and
5.1 million page views in December 2000.
Content from the Company's properties is distributed in major newspapers,
including The Financial Times, The Daily News Express, the daily evening
commuter edition of the New York Daily News, and the San Francisco Examiner.
Financial content is also widely distributed across major wireless networks,
including AT&T Wireless, Palm Inc., OmniSky, AvantGo, Nextel, Verizon and
Sprint PCS. During March 2001, MarketWatch.com recorded 11.7 million views
across wireless devices as one of the leading financial information providers
for this growing sector.
The CBS MarketWatch Weekend show continued to gain ratings, and at
March 31, 2001, was broadcast on 156 stations, reaching approximately 87% of
the U.S. The MarketWatch.com radio network has grown to 162 stations covering
83% of the U.S. The radio network is carried in all of the top 10 markets,
24 of the top 25 and 44 of the top 50, reaching 14.4 million unduplicated
listeners per week.
About MarketWatch.com, Inc.
MarketWatch.com, Inc., a leading financial media company, is the number
one financial news and information source on the Internet. Founded in 1997,
MarketWatch.com operates three web sites: cbs.marketwatch.com, bigcharts.com,
and U.K.-based ftmarketwatch.com. In addition to offering top-notch financial
reporting and investment tools on its web sites, MarketWatch.com licenses a
wide array of content and tools in custom-designed formats for brokerages and
other online businesses. The Company also produces the syndicated CBS
MarketWatch Weekend program, airs financial reports over CBS Network
Television, and provides updates every 30 minutes on the MarketWatch.com Radio
Network. Editorial content from cbs.marketwatch.com is distributed in major
newspapers and wireless networks.
Notice Regarding Forward-Looking Statements
This media release contains forward-looking statements that involve risks
and uncertainties. MarketWatch.com's actual results may differ materially from
those anticipated in these forward-looking statements, which include
statements as to the Company's future positive cash flow, level of web site
traffic and sufficiency of cash reserves. Factors that might contribute to
such differences include, among others, the Company's ability to attract and
retain advertisers from industries other than the Internet related industries
and the financial industries; levels of renewals from licensing customers and
the Company's ability to attract new licensing customers; the level of
internet advertising; competition, which could lead to pricing pressure; the
Company's ability to generate significant revenues from sources other than
Internet advertising; general economic conditions; unforeseen changes in
expense levels; and the Company's ability to develop on a timely basis, as
well as consumer acceptance of, the Company's new services or tools. More
information about these and other potential factors, which could affect the
Company's business and financial results, is contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, as well as the other
reports it files with the Securities Exchange Commission. These
forward-looking statements are based on information available to the Company
on the date hereof. MarketWatch.com, Inc. assumes no obligation to publicize
the results of any potential revision of these forward-looking statements.
MarketWatch.com, Inc.
Unaudited Condensed Statements of Operations
(in thousands)
Three Months Ended
March 31,
2001 2000
Net revenues:
Advertising $5,179 $8,727
Licensing 5,865 2,895
Other 769 779
Total net revenues 11,813 12,401
Cost of net revenues 4,810 4,439
Gross profit 7,003 7,962
Operating expenses:
Product development 2,485 2,300
General and administrative 3,645 3,116
Sales and marketing 6,221 7,921
CBS in-kind advertising 1,317 4,426
Amortization of goodwill 12,801 12,850
Total operating expenses 26,469 30,613
Loss from operations (19,466) (22,651)
Interest income 602 168
Loss in joint venture (1,055) (223)
Net loss $(19,919) $(22,706)
Basic and diluted net loss per share $(1.20) $(1.62)
Weighted average shares used to compute
basic and diluted net loss per share 16,573 14,024
MarketWatch.com, Inc.
Unaudited Domestic Proforma Condensed Statements of Operations
(in thousands)
Three Months Ended
March 31,
2001 2000
Net revenues:
Advertising $5,179 $8,727
Licensing 5,865 2,895
Other 769 779
Total net revenues 11,813 12,401
Cost of net revenues 4,560 4,189
Gross profit 7,253 8,212
Operating expenses:
Product development 2,485 2,300
General and administrative 3,645 3,116
Sales and marketing 6,221 7,921
CBS in-kind advertising 1,317 4,426
Total operating expenses 13,668 17,763
Loss from operations (6,415) (9,551)
Interest income 602 168
Net loss $(5,813) $(9,383)
Basic and diluted net loss per share $(0.35) $(0.67)
Weighted average shares used to compute
basic and diluted net loss per share 16,573 14,024
Note: The above unaudited domestic pro forma condensed statements of
operations exclude the effects of the following:
-- Amortization of purchased technology, goodwill and intangibles
-- Loss in joint venture
MarketWatch.com, Inc.
Condensed Balance Sheets
(in thousands)
March 31, December 31,
2001 2000
(unaudited)
Assets
Current assets:
Cash and cash equivalents $40,070 $45,356
Accounts receivable, net 9,604 11,838
Prepaid expenses 2,496 2,497
Total current assets 52,170 59,691
Property and equipment, net 11,493 10,846
Intangible assets, net 786 1,129
Goodwill, net 59,302 72,010
Investment in joint venture 421 --
Other assets 569 564
Total assets $124,741 $144,240
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $9,266 $10,635
Deferred revenue 381 188
Total current liabilities 9,647 10,823
Stockholders' equity:
Preferred stock -- --
Common stock 167 166
Additional paid-in capital 319,703 319,425
Contribution receivable (20,222) (21,539)
Accumulated deficit (184,554) (164,635)
Total stockholders' equity 115,094 133,417
Total liabilities and stockholders' equity $124,741 $144,240
SOURCE MarketWatch.com, Inc.
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Related links:
http://cbs.marketwatch.com
CONTACT:
Joan P. Platt, Chief Financial Officer of
MarketWatch.com, Inc., 415-733-0500, or
investor_relations@marketwatch.com
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