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INTERNET.COM REPORTS INCREASED CASH EARNINGS AND RECORD REVENUES FOR THE QUARTER ENDED JUNE 30, 2000; REVENUES INCREASE BY 323%
(New York, NY -July 31, 2000) -- internet.com Corporation (Nasdaq: INTM), the Internet Industry Portal, today reported results for the quarter ended June 30, 2000. Revenues for the second quarter of 2000 increased to $12.2 million, a 323% increase over revenues of $2.9 million for the same period last year. Net income for the second quarter, excluding amortization of intangibles and realized gain on investments, was $829,000, or $0.03 per share, compared to a net loss of $1.5 million, or $0.08 per share, for the same period last year. Including amortization of intangibles and realized gain on investments, net loss for the second quarter ended June 30, 2000 was $4.4 million, or $0.18 per share."It was another outstanding quarter for internet.com," stated internet.com chairman and CEO Alan M. Meckler. "We continued to expand our world-class proprietary content, both through acquisitions and internal Web site development, further solidifying our position as 'The Internet Industry Portal'. Our Internet-focused content attracts an audience of over 2.1 million business users that is important to our advertisers and also creates a number of other revenue opportunities for internet.com as is apparent from our rapid revenue growth. We continue to achieve this revenue growth in an efficient manner, as we generated cash earnings of $829,000 for the second quarter. In addition, our balance sheet continues to be rock-solid with over $85 million in cash as of June 30, 2000, leaving us poised to capitalize on new opportunities."
Acquisitions
internet.com continued to pursue strategic acquisitions to strengthen its content offerings and services. During the second quarter, internet.com acquired DomainBook.com and UnclaimedDomains.com, which when combined with DomainNotes.com, makes internet.com a leading online marketplace for information and commerce for the Internet domain sector. In addition, the acquisition of PDAStreet.com (its network of sites includes WinCecity.com, PalmBlvd.com, PsionPlace.com and VisorVillage.com) and Thinkmobile.com helped launch the new Wireless Internet Channel (http://www.wirelessinternetresources.com). These Web sites provide comprehensive coverage of the Wireless Internet marketplace serving the mobile community of PDA (Personal Digital Assistant) and mobile phone users. When combined with AllNetDevices.com and CEWire.com, they make internet.com a force in Wireless Internet information.
New Content Areas and Services
During the second quarter, internet.com continued to expand and strengthen its world class proprietary content offerings and services with the launch of the following internally developed sites: BSDToday.com (serves the BSD user community and is the daily source for BSD news and information), ApacheToday.com (developed to serve the community of Apache open source software users), InternetIPOLinx.com (provides the latest Internet-related IPO news), InternetLawLinx.com (provides the latest Internet-related legal news and developments), GIF.com (provides tools, tips, and techniques for creative professionals), SQLCourse2.com (provides users with advanced easy-to-follow SQL instruction) and The List of Web Hosts (http://www.WebHosts.TheList.com, helps users find business Web hosts, personal Web hosts and co-location facilities). In June 2000, internet.com announced the addition of two new Internet content channels, bringing the total number of channels to 14. The Wireless Internet Resources Channel, (http://www.wirelessinternetresources.com) was created to provide Internet professionals with information resources necessary for mobile computing. The ASP Resources Channel (http://www.ASPResourcesChannel.com) serves the Application Service Provider industry. In addition, internet.com launched three new bureaus to cover the thriving Internet market and community in the greater Seattle area, the greater Los Angeles area and Silicon Valley - San Francisco. The availability of internet.com's regional Internet news content in Los Angeles, Seattle and Silicon Valley is the latest in a series of regional expansion initiatives which includes recent launches in Boston, Washington D.C. and internet.com's pre-existing atNewYork.com site serving the Internet scene in New York's Silicon Alley. internet.com also announced plans to roll out several other bureaus in coming months.
E-Commerce Agreements and Offerings
internet.com continued to expand its e-commerce relationships, adding new agreements with many of the Internet's well-known brands. Additional partners added during the second quarter included: Media1st.com, Pagoo.com, TopHosts.com and Web2PCS.com. internet.com also extended its relationship with CompuBank.com, the original Internet National Bank. In July, internet.com announced additional agreements with Acadio.com, eJigsaw.com, InsightExpress.com and Everyone.net. Also announced were licensing deals with Mercer Partners, Inc., Needbandwidth.com, AudioBasket.com and Espial.
International Expansion
We continued to expand our strong global presence with the development of English and non-English language Internet media properties. During the quarter we unveiled four new international Internet industry portals: Espanol.internet.com, serving Spain and Latin America, Belgium.internet.com, Netherlands.internet.com, NewZealand.internet.com and Taiwan.internet.com. Espanol.internet.com, Belgium.internet.com and Netherlands.internet.com are part of a joint venture between internet.com Corporation and VNU Business Publishing Europe, and are offered in the Spanish, Dutch and French, and Dutch languages, respectively. Taiwan.internet.com is a joint venture between internet.com Corporation and InteLink Taiwan Corporation and is offered in the Chinese language. NewZealand.internet.com is wholly-owned by internet.com. During the quarter, internet.com also announced a joint venture with Intervizyon, Inc. for a future launch of Turkey.internet.com.
Similar to other global internet.com properties, each international property delivers Internet industry content and coverage in the primary local language by "on the ground" local journalists in their respective regions, as well as relevant content from the North American edition. Each property follows internet.com's vertical channel approach, with content-specific channels covering the entire Internet industry. internet.com's global network of Web sites now consists of 17 international properties in Arabia, Asia, Australia, Belgium, Canada, China, Espa�ol, France, Germany, India, Israel, Japan, The Netherlands, New Zealand, South Africa, Taiwan and the United Kingdom.
Venture Fund Investments
internet.com Corporation announced the formation of internet.com Venture Partners III LLC, dedicated to early stage investments in content Web sites. internet.com Venture Partners III, a $75 million fund, which received substantial institutional backing, closed on June 5, 2000. During the second quarter, internet.com Venture Partners III announced the closing of investments in AnywhereYouGo.com, HowStuffWorks.com, Offices2Share.com, StockCharts.com and Workz.com. In July, internet.com Venture Partners III announced investments in BuildCentral.com, Validea.com and Recommend-It.com.
internet.com Corporation is also the portfolio manager of internet.com Venture Fund I LLC (April '99) and internet.com Venture Fund II LLC (November '99), which have made 34 investments to date. During the second quarter, internet.com Venture Fund II continued to expand its portfolio with the following investments: BuyerTouch.com, Caregiver.com, ImproveNow.com, NetRead.com, Purchasenet.com (formerly Cynaptec) and Xianzai.com. Venture Fund I portfolio company AuctionRover.com was acquired by GoTo.com (Nasdaq: GOTO) for 3,471,000 shares of GoTo.com common stock. During the second quarter several of the portfolio companies secured additional rounds of funding at increased valuations. MDLinx.com received $3.0 million in additional funding, HowStuffWorks.com received $4.5 million in additional funding and Tutor.com received $11.0 million in additional funding. In other portfolio company activity, DirectStuff.com announced the sale of two of its Web sites, MyCoupons.com and DirectCoupons.com, to Save.com for a two-year cash and marketing alliance valued at approximately $23 million.
internet.com also announced it will provide advertising across the internet.com network properties in exchange for equity interests in Offices2Share.com, StockCharts.com, Workz.com and Recommend-It.com.
internet.com Venture Funds I and II and internet.com Venture Partners III were formed to invest in early-stage online content providers serving targeted business-to-business markets that follow the strategy of, but are not competitive with, internet.com. internet.com is an investor in all three funds. internet.com continues to hold the added benefit of being a public company operating in the Internet space that also extends value to its stockholders by having an Internet venture capital arm.
About internet.com
internet.com Corporation (Nasdaq: INTM; http://www.internet.com), based in Darien, CT, is a leading provider of global real-time news and information resources for Internet industry and Internet technology professionals, Web developers and experienced Internet users. internet.com operates a network of 126 Web sites, 177 e-mail newsletters, 136 online discussion forums and 79 moderated e-mail discussion lists with over 2.1 million unique visitors that generate 140 million page views monthly. Total "views", which include Web site page views, e-mail newsletter views and e-mail discussion list views, are nearly 200 million per month. internet.com's global presence includes editions in Arabia, Asia, Australia, Belgium, Canada, China, Espa�ol, France, Germany, India, Israel, Japan, The Netherlands, New Zealand, South Africa, Taiwan and the United Kingdom. In addition, internet.com with its related internet.com Venture Funds I, II, and Venture Partners III is an investor in a growing number of business-to-business content sites and related Internet media properties.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding internet.com Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see internet.com's reports filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934. The forward-looking statements included herein are made as of the date of this press release, and internet.com assumes no obligation to update the forward-looking statements after the date hereof.
internet.com Corporation
Consolidated Balance Sheets
December 31, 1999 and June 30, 2000
(in thousands, except share and per share amounts)
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December 31, 1999 (1) |
June 30, 2000 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$17,943 |
$ 85,878 |
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Accounts receivable, net of allowances of $712 and $1,473, respectively |
5,568 |
10,529 |
||
Prepaid expenses and other |
347 |
1,107 |
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Total current assets |
23,858 |
97,514 |
||
Property and equipment, net of accumulated depreciation of $688 and $1,557, respectively |
3,221 |
4,752 |
||
Intangible assets, net of accumulated amortization of $10,428 and $20,098, respectively |
39,086 |
52,394 |
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Investments in internet.com venture funds and other |
1,855 |
4,794 |
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Other assets |
370 |
457 |
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Total assets |
$68,390 |
$159,911 |
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LIABILITIES AND STOCKHOLDERS� EQUITY |
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Current liabilities: |
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Accounts payable |
$ 1,635 |
$ 2,634 |
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Accrued payroll and related expenses |
1,441 |
1,926 |
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Accrued expenses and other |
2,096 |
4,071 |
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Accrued Web site acquisition payments |
6,462 |
4,539 |
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Deferred revenues |
403 |
747 |
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Total current liabilities |
12,037 |
13,917 |
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Accrued Web site acquisition payments |
338 |
240 |
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Total liabilities |
12,375 |
14,157 |
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Commitments and contingencies |
- |
- |
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Stockholders� equity: |
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Preferred stock, $.01 par value, 4,000,000 shares authorized, no shares issued and outstanding |
- |
- |
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Common stock, $.01 par value, 75,000,000 shares authorized, 23,334,520 and 25,090,770 shares issued and outstanding at December 31, 1999 and June 30, 2000, respectively |
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233 |
251 |
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Additional paid-in capital |
70,917 |
169,315 |
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Accumulated deficit |
(15,135) |
(23,819) |
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Accumulated other comprehensive income |
- |
7 |
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Total stockholders� equity |
56,015 |
145,754 |
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Total liabilities and stockholders� equity |
$68,390 |
$159,911 |
(1)
Represents the combined financial data of predecessor business and internet.com.internet.com Corporation
Consolidated Statements of Operations
For the Six Months Ended June 30, 1999 and 2000
(unaudited)
(in thousands, except per share amounts)
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Three Months Ended June 30, |
Six Months Ended June 30, |
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1999 (1) |
2000 |
1999 (1) |
2000 |
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Revenues |
$ 2,872 |
$12,161 |
$ 4,484 |
$21,806 |
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Cost of revenues |
1,786 |
5,499 |
2,903 |
9,724 |
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Gross profit |
1,086 |
6,662 |
1,581 |
12,082 |
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O perating expenses: |
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Advertising, promotion and selling |
1,614 |
4,549 |
2,542 |
8,580 |
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General and administrative |
846 |
2,218 |
1,619 |
4,139 |
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Depreciation |
107 |
487 |
189 |
869 |
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Amortization |
2,090 |
5,332 |
4,028 |
9,670 |
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Non-cash compensation charge |
7,975 |
- |
7,975 |
- |
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Total operating expenses |
12,632 |
12,586 |
16,353 |
23,258 |
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Operating loss |
(11,546) |
(5,924) |
(14,772) |
(11,176) |
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Minority interest |
- |
96 |
- |
142 |
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Equity loss |
- |
(8) |
- |
(99) |
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Realized gain on investments |
- |
72 |
- |
72 |
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Interest income (expense), net |
(52) |
1,387 |
(84) |
2,476 |
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Loss before income taxes |
(11,598) |
(4,377) |
(14,856) |
(8,585) |
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Provision for income taxes |
- |
54 |
- |
99 |
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Net loss |
$(11,598) |
$ (4,431) |
$(14,856) |
$ (8,684) |
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Net income (loss), excluding amortization, non-cash compensation charge and realized gain on investments |
$ (1,533) |
$ 829 |
$ (2,853) |
$ 914 |
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Basic and diluted earnings (loss) per share, excluding amortization, non-cash compensation charge and realized gain on investments |
$ (0.08) |
$ 0.03 |
$ (0.16) |
$ 0.04 |
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Basic and diluted net loss per share |
$ (0.63) |
$ (0.18) |
$ (0.86) |
$ (0.35) |
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Weighted average number of common shares used in diluted earnings per share, excluding amortization, non-cash compensation charge and realized gain on investments |
18,270 |
25,656 |
17,293 |
25,485 |
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Weighted average number of common shares |
18,270 |
25,089 |
17,293 |
24,789 |
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(1)
Represents the combined financial data of predecessor business and internet.com.internet.com Corporation
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1999 and 2000
(unaudited)
(in thousands)
|
Six Months Ended June 30, |
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1999 (1) |
2000 |
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Cash flows from operating activities: |
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Net loss |
$(14,856) |
$(8,684) |
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Adjustments to reconcile net cash used in operating activities- |
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Depreciation and amortization |
4,217 |
10,539 |
|
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Provision for losses on accounts receivable |
165 |
761 |
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Minority interest |
- |
(142) |
|
|
Equity loss |
- |
99 |
|
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Non-cash compensation charge |
7,975 |
- |
|
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Changes in assets and liabilities - |
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Accounts receivable |
(783) |
(5,595) |
|
|
Prepaid expenses and other |
(80) |
(847) |
|
|
Accounts payable and accrued expenses |
2,268 |
3,584 |
|
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Deferred revenues |
402 |
292 |
|
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Net (cash used in) provided by operating activities |
(692) |
7 |
|
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Cash flows from investing activities: |
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Additions to property and equipment |
(836) |
(2,385) |
|
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Acquisitions of Web sites, related Internet media properties and other |
(3,233) |
(25,071) |
|
Investments in internet.com venture funds and other |
(90) |
(3,038) |
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Net cash used in investing activities |
(4,159) |
(30,494) |
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Cash flows from financing activities: |
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Proceeds from issuance of common stock, net |
45,932 |
98,330 |
|
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Proceeds from exercise of stock options |
- |
86 |
|
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Proceeds from exercise of warrant |
3,000 |
- |
|
|
Borrowings under line of credit |
4,670 |
|
- |
|
Payments for line of credit |
(6,566) |
- |
|
|
Net cash provided by financing activities |
47,046 |
98,416 |
|
|
Effect of exchange rates on cash |
- |
6 |
|
|
Net increase in cash and cash equivalents |
42,195 |
67,935 |
|
|
Cash and cash equivalents, beginning of period |
129 |
17,943 |
|
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Cash and cash equivalents, end of period |
$ 42,324 |
$ 85,878 |
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Supplemental disclosures of cash flow: |
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Cash paid for interest |
$ 92 |
$ - |
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Cash paid for income taxes |
$ - |
$ 25 |
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Contact:
internet.com Corporation
Eileen Smith, (203) 662-2961 or
[email protected]