Revenues Grew 94% Over Third Quarter 1999
Page Views Rose to 764 Million Over 434 Million in 1999
SAN FRANCISCO, Oct. 25 /PRNewswire/ --
MarketWatch.com, Inc. (Nasdaq: MKTW), a leading interactive financial media
company, today reported net revenues of $13.5 million for the quarter ended
September 30, 2000, a 94% improvement over the same period of 1999.
The Company's domestic pro forma net loss for the third quarter 2000,
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,
compared to $6.9 million, or $0.50 per share, for the same period of 1999. The
domestic pro forma net loss included $1.7 million and $2.7 million of CBS
in-kind advertising expense for the third quarters of 2000 and 1999,
respectively. Third quarter 2000 net loss was $20.3 million, or $1.23 per
share, compared to $20.0 million, or $1.45 per share, for the same period of
1999.
"This quarter we truly saw the advantage of having the Number One
franchise in our category and a terrific brand," said MarketWatch.com Chairman
and Chief Executive Officer Larry Kramer. "We were able to weather the
so-called 'dot-com ad slowdown' during the quarter because of our position as
the market leader and because of the continuing growth in our licensing
revenues."
Net revenues of $39.2 million for the nine months ended September 30, 2000
increased 163% over net revenues of $14.9 million in the comparable period of
1999. The Company's domestic pro forma net loss for the nine months ended
September 30, 2000, excluding amortization of goodwill and intangibles and its
share in the results of its European joint venture, was $25.1 million, or
$1.57 per share, compared to $21.2 million, or $1.67 per share, for the same
period of 1999. Included in the domestic pro forma net loss was $12.1 million
and $9.6 million of CBS in-kind advertising expense for the nine months ended
September 30, 2000 and 1999, respectively. Net loss for the first nine months
of 2000 was $67.0 million, or $4.19 per share, compared to $38.9 million, or
$3.07 per share, for the same period of 1999.
Revenue Lines Exhibited Solid Performance
Net revenues continued to climb to $13.5 million in the third quarter
2000. Advertising revenues of $8.4 million for Q3 2000 compared favorably to
$5.0 million for the same period last year. Licensing revenues rose to
$4.2 million for the third quarter 2000, compared to $1.8 million in Q3 1999.
The diversity of the Company's revenue stream was emphasized this quarter as
licensing revenues and other revenues (primarily broadcast and radio)
represented 31% and 7% of total revenues, respectively.
"There is no question that last quarter was a challenging one for
advertising-supported Web sites, both because of the slowdown in advertising
growth from dot.coms and seasonality," said Kramer. "But we saw the entrance
of traditional advertisers like Saturn, Compaq and Cadillac. September was the
biggest advertising month in the Company's history, and that momentum has
continued into Q4. We believe that we are on target for achieving our
financial goals for the next quarter and into next year."
During the third quarter 2000, approximately half of the Company's
advertising customers were non-financial related companies. In addition,
excluding financial-related dot.com companies, such as Schwab, Datek and
E-Trade, approximately a quarter of the Company's advertising revenues for Q3
2000 were derived from pure-play Internet companies, compared to approximately
a third of its advertising revenues last quarter.
Licensing revenues grew strongly as new and existing customers subscribed
to the Company's quality tools and news. MarketWatch.com's licensing business
more than doubled its customer base over the prior year. In addition, the
Company has further expanded the number of countries in which it has license
customers to over 15 countries worldwide.
"September was also the greatest revenue month in the history of our
licensing business," said Kramer. "We have assumed a leadership role in
providing tools and news to Internet financial services and information
companies and we see our licensing business continuing to grow both in the
U.S. and internationally. New clients during the quarter included, among
others, DLJdirect, The New York Daily News, PaineWebber and Instinet."
Traffic Continued Strong
According to Media Metrix's latest research, MarketWatch.com continues to
dominate the competition as the Number One financial news site. Page views for
the third quarter 2000 were 764 million, a 76% increase over 434 million page
views for the same period of 1999. Average monthly unique users were
8.6 million for third quarter 2000 compared to 4.6 million in Q3 1999, as
measured by DoubleClick.
"While the entire sector experienced lower levels in page views and unique
users following the financial market's harsh corrections in April and during
the summer, we have been pleased to see that we have maintained our position
as the market leader in reach, and that heavier traffic and user volume began
to return during the fall," said Kramer.
Operating Results Improved
As net revenues increased, operating expenses, excluding the amortization
of intangibles, decreased to $14.8 million for the third quarter 2000, as
compared to $17.8 million and $18.5 million in the first and second quarters
2000, respectively. In addition, the trend in operating expenses, excluding
the amortization of intangibles, as a percentage of net revenues, continued
decreasing to 110% as compared to 143% and 139% in the first and second
quarters 2000, respectively.
For the first nine months of 2000, the Company has been investing in its
infrastructure and expanding its business. Total employees had increased to
256 at September 30, 2000 from 202 at December 31, 1999, including over
80 full-time reporters and editors and over 60 staff in our advertising and
licensing sales organizations. MarketWatch.com has established 14 offices
around the world and has been migrating its data centers and internal
information systems from Data Broadcasting Corporation.
Cash at the end of Q3 2000 totaled $48.4 million, with cash used in
operations during the quarter averaging $1.1 million per month. Accounts
receivable at September 30, 2000 increased to $13.0 million as compared to
$10.6 million last quarter, as the Company recorded record monthly revenues in
September 2000.
"We continue to manage our cash and our costs, even during a high growth
period," 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 next year."
FT MarketWatch.com Strengthened Hold on Europe
Following its successful launch in June 2000, FT MarketWatch.com, the Web
site joint venture between MarketWatch.com, Inc. and Financial Times Group
Limited, served 200,000 unique users and 3 million page views in September
2000. Recently, FT MarketWatch.com won the "Best Investment News Site" Award
from Investors' Week.
MarketWatch Content in Print Debuted
The Daily News Express, the new daily evening commuter edition of the New
York Daily News, was launched in September with MarketWatch.com news content
as its primary business news provider. The Daily News Express carries a varied
and colorful array of the Company's news, features and commentary.
Wireless Distribution Expanded
In addition to agreements with AT&T Corp. Wireless Services Group, Palm,
Inc. and Omnisky Corporation, the Company expanded its content on Sprint PCS
and 3Com Corporation's new internet appliance and began licensing its wireless
content to B2B customers. During the third quarter 2000, MarketWatch.com
recorded 3.3 million views across wireless devices.
Broadcast and Radio Grew Steadily
The CBS MarketWatch Weekend show celebrated its 52nd episode in September
with carriage in 128 markets, reaching over 80% of the U.S. The
MarketWatch.com radio network continues strongly in the top 10 markets in the
U.S.
About MarketWatch.com, Inc.
MarketWatch.com, Inc., a leading interactive financial media company,
provides fast, relevant information via the Internet, television, radio and
print to help people make and save money. The Company operates leading
financial Internet Web sites at http://cbs.marketwatch.com and
http://www.bigcharts.com , and, in a joint venture with the Financial Times
Group Limited, launched its first international site at
http://www.ftmarketwatch.com . MarketWatch.com's financial news and tools are
licensed in custom-designed formats by major brokerages and Internet sites.
The Company produces CBS MarketWatch Weekend, scheduled on 128 CBS television
stations this fall. The MarketWatch.com editorial staff also provides daily
business and economic reports on CBS Television and Radio Network news
programming. MarketWatch.com's financial news radio network is heard on
128 stations. In addition, MarketWatch.com made its print debut with the Daily
News Express, a daily commuter newspaper edition of the New York Daily News.
Founded in 1997 and headquartered in San Francisco, MarketWatch.com has
facilities and bureaus in New York City, Minneapolis, Washington D.C., Los
Angeles, Chicago, Boston, Detroit, Atlanta, Dallas, Austin, Tokyo, Hong Kong
and London.
MarketWatch.com will hold a conference call today at 8:00 a.m. PDT.
Investors will have the opportunity to listen to the real-time Web cast of
this call at http://ir.marketwatch.com/ . Recordings will be available shortly
after the call at the above Web address. Investors also have the option of
calling 800-475-6701 (access code 541685) for the teleconference replay. This
will be available for approximately two weeks, beginning at 11:30 a.m. PDT on
October 25, 2000.
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 ability to achieve future financial goals,
growth in the Company's license revenues and the Company's expectations as to
its cash needs and future positive cash flow. Factors that might contribute to
such differences include, among others, the Company's ability to attract
advertisers from industries other than the Internet related industries and the
financial industries; the effect of seasonal or other trends in the Internet
industry and advertising sales; levels of renewals from licensing customers
and the Company's ability to attract new licensing customers; the Company's
dependence on its direct sales force with respect to its advertising and
licensing revenues; the Company's ability to attract and retain key personnel,
including editorial, technical and sales personnel, and the productivity
levels of these personnel; the continued acceptance of the Internet as an
advertising medium; competition, which could lead to pricing pressure; the
Company's short operating history, which makes it difficult to evaluate future
prospects; unforeseen changes in expense levels; whether the Company's other
services will be accepted by sufficient numbers of consumers in order for it
to be attractive to advertisers and non-Internet media outlets; the Company's
ability to manage its growth; 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 indicated in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999, 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 Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2000 1999
Assets
Current assets:
Cash, cash equivalents and short term
investments $48,395 $14,479
Accounts receivable, net 13,007 8,073
Prepaid expenses 3,732 3,699
Total current assets 65,134 26,251
Property and equipment, net 10,358 5,035
Investment in subsidiary 1,346 --
Intangible assets, net 1,505 2,683
Goodwill, net 84,717 122,840
Other assets 100 46
Total assets $163,160 $156,855
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $10,839 $7,363
Deferred revenue 58 344
Total current liabilities 10,897 7,707
Stockholders' equity:
Preferred stock -- --
Common stock 166 139
Additional paid-in capital 319,357 231,746
Deferred compensation (42) (413)
Contribution receivable (26,890) (8,952)
Accumulated deficit (140,328) (73,372)
Total stockholders' equity 152,263 149,148
Total liabilities and stockholders'
equity $163,160 $156,855
MarketWatch.com, Inc.
Unaudited Condensed Consolidated Statements of Operations
(In thousands)
Three Months Nine Months
Ended Sept 30, Ended Sept 30,
2000 1999 2000 1999
Net revenues:
Advertising $8,356 $5,043 $26,277 $11,151
License 4,226 1,767 10,602 3,310
Other 935 155 2,358 470
Total net revenues 13,517 6,965 39,237 14,931
Cost of net revenues 5,606 2,734 15,400 6,133
Gross profit 7,911 4,231 23,837 8,798
Operating expenses:
Product development 2,144 1,645 6,514 3,115
General and administrative 3,853 2,447 10,540 6,222
Sales and marketing 7,137 4,796 21,939 12,384
CBS in-kind advertising 1,704 2,711 12,061 9,570
Purchased in-process
research and development -- -- -- 200
Goodwill 12,849 12,850 38,549 17,134
Total operating expenses 27,687 24,449 89,603 48,625
Loss from operations (19,776) (20,218) (65,766) (39,827)
Interest income 883 222 1,346 949
Loss in joint venture (1,416) -- (2,536) --
Net loss $(20,309) $(19,996) $(66,956) $(38,878)
Basic and diluted net loss
per share $(1.23) $(1.45) $(4.19) $(3.07)
Weighted average shares used
to compute basic and diluted
net loss per share 16,473 13,800 15,992 12,670
MarketWatch.com, Inc.
Unaudited Domestic Pro Forma Condensed Consolidated Statements of Operations
(In thousands)
Three Months Nine Months
Ended Sept 30, Ended Sept 30,
2000 1999 2000 1999
Net revenues:
Advertising $8,356 $5,043 $26,277 $11,151
License 4,226 1,767 10,602 3,310
Other 935 155 2,358 470
Total net revenues 13,517 6,965 39,237 14,931
Cost of net revenues 5,356 2,484 14,650 5,800
Gross profit 8,161 4,481 24,587 9,131
Operating expenses:
Product development 2,144 1,645 6,514 3,115
General and administrative 3,853 2,447 10,540 6,222
Sales and marketing 7,137 4,796 21,939 12,384
CBS in-kind advertising 1,704 2,711 12,061 9,570
Total operating expenses 14,838 11,599 51,054 31,291
Loss from operations (6,677) (7,118) (26,467) (22,160)
Interest income 883 222 1,346 949
Domestic pro forma net loss $(5,794) $(6,896) $(25,121) $(21,211)
Basic and diluted net loss
per share $(0.35) $(0.50) $(1.57) $(1.67)
Weighted average shares used
to compute basic and diluted
net loss per share 16,473 13,800 15,992 12,670
Note: The above unaudited domestic pro forma condensed consolidated
statements of operations exclude the effects of the following:
-- Amortization of purchased technology, goodwill and intangibles
-- Loss in joint venture
SOURCE MarketWatch.com, Inc.
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Related links:
http://www.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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