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INT MEDIA GROUP REPORTS RESULTS FOR THE QUARTER ENDED JUNE 30, 2001
(New York, NY - August 7, 2001) -- INT Media Group, Incorporated (Nasdaq: INTM) today reported results for the quarter ended June 30, 2001. Revenues for the second quarter of 2001 were $10.8 million compared to revenues of $12.2 million for the same period last year. Net loss for the second quarter, excluding amortization of intangibles, workforce redundancy costs and losses on venture investments, was $2.7 million, or $0.11 per share, compared to net income of $764,000, or $0.03 per share, for the same period last year. Including amortization of intangibles, workforce redundancy costs and losses on venture investments, net loss for the second quarter ended June 30, 2001 was $14.7 million, or $0.58 per share.
"During the second quarter we finalized our name change from internet.com Corporation to INT Media Group, Incorporated. This name change more accurately reflects our current business as a media company as well as our strategy to continue to expand our services, online and offline, to Internet and IT professionals," stated INT Media Group's Chairman and CEO Alan M. Meckler. "The continuing advertising slump affecting most media companies certainly dampened our revenue growth in the second quarter. However, a combination of aggressive cost-cutting initiatives, a strong balance sheet ($27.8 million in cash and $25.7 million in working capital) and significant growth of new revenue lines gives us optimism for the company moving closer to breakeven operations by year's end. We believe that we have seen the worst of the ad slump and we have made the necessary cuts to our workforce bringing our operating costs in line with the realities of the current market conditions. These initiatives and our multi-faceted revenue lines, including expanding revenue opportunities from online paid services and offline conference and trade shows, should return us to a cash positive operating basis," added Meckler.
Workforce and Expense Reduction Initiatives
During the second quarter, INT Media Group eliminated approximately 25% of its total workforce. These staff reductions are part of an ongoing effort to increase the efficiency and effectiveness of INT Media Group's operations. The majority of the reductions involved positions made redundant by recent acquisitions of a number of Web sites and Internet media properties, both domestically and internationally. Other reductions were the result of the softening advertising market that has negatively impacted both traditional media print publications and trade shows, as well as new media properties.
New Content Areas and Services
During the second quarter, INT Media Group continued to expand and strengthen its world-class proprietary content offerings and services with the launch of the following internally developed sites and services:
- RIMRoad.com (information center for RIM shareware, freeware, hardware and more)
- 802.11-Planet.com (news and resources for wireless technology and business)
- OpticallyNetworked.com (news and resources for optical network builders)
- VoiceXML-Planet.com (news, resources and discussion forums covering this important new programming language)
- In May, INT Media Group announced the creation of a new division that will publish research reports analyzing the Internet and IT sectors worldwide. The CyberAtlas Research Division shares its name with the well-established CyberAtlas.com Web site and e-mail newsletter.
- In July, INT Media Group announced that it had successfully launched a paid subscription service for TheCounter.com (www.thecounter.com). TheCounter.com has over 1.5 million registered users.
- In July, INT Media Group launched NanotechPlanet.com (www.nanotechplanet.com) - the first Web site devoted to in-depth coverage of the nanotechnology industry.
Conferences and Trade Shows
INT Media Group produces paid conferences and trade shows on Internet and IT-specific topics worldwide that are aligned with the content on our Web sites. INT Media Group offered eight paid conferences and trade shows in the second quarter, each focusing on a different issue pertaining to the Internet industry and IT. Conferences and trade shows included: Building Dynamic Web Sites, Strategic IT Staffing - Chicago, Enterprise Web and Portal, Wireless One, Strategic IT Staffing - New York, E-Mail Newsletter Tactics, e-Business Integration and BOT 2001. We have plans to produce nearly 40 offline events for 2001.
During the second quarter and in July, INT Media Group also announced the launch of the following conferences and trade shows:
- Flash Kit Australia (held July 26-27, 2001 at the Centrepoint Convention Centre, in Sydney, Australia)
- E-Mail Newsletter Strategies (September 12-13, 2001, The Hyatt Regency Hotel, San Francisco, CA)
- 802.11 Planet Fall 2001 (October 2-3, 2001, Santa Clara Convention Center, Santa Clara, CA)
- Flash Kit Fall 2001 (October 15-17, 2001, Los Angeles Convention Center, Los Angeles, CA)
- Nanotech Planet 2001 (November 29-30, 2001, Marriott Copley Plaza, Boston, MA)
E-Commerce Agreements, Licensing and Alliances
INT Media Group 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: BuyDomains.com, CameraWorld.com, eCheck 2000, MightyWords.com, Synapse Group, YellowOnline.com and youknowbest.com. INT Media Group works with each of its commerce partners to increase their traffic, generate additional revenue and support their brands by promoting their brands, products and services to our audience of nearly 20.0 million unique users worldwide.
Venture Fund Investments
INT Media Group is the portfolio manager of internet.com Venture Fund I LLC (April '99), internet.com Venture Fund II LLC (November '99) and internet.com Venture Partners III LLC (June '00), which have invested in over 40 Internet properties to date. Recent venture fund activity included the acquisition of Backwire.com (www.backwire.com) (a Venture Partners III portfolio company) by Leap Wireless International, Inc. (Nasdaq: LWIN), an innovator of wireless communications services, for Leap Wireless common stock.
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, INT Media Group. INT Media Group is an investor in all three funds.
Metrics
- June 2001 page views were over 250 million
- June 2001 total views were over 325 million (includes Web site page views, e-mail newsletter views and e-mail discussion list views)
- Over 5.5 million e-mail newsletter subscribers as of June 30, 2001
- Over 7.5 million total opt-in e-mail rental list subscribers as of June 30, 2001
- Over 850,000 unique opt-in e-mail rental list subscribers as of June 30, 2001
- June 2001 unique users were nearly 20.0 million (based on internal log files)
- Over 200 new advertisers during the second quarter
- 270 employees as of June 30, 2001
Business Outlook
The following forward looking-statements reflect INT Media Group's expectations as of August 7, 2001. Given the emerging nature of online advertising, potential changes in general economic conditions, and the various other risk factors discussed below and in INT Media Group's reports filed with the Securities and Exchange Commission from time to time, actual results may differ materially. INT Media Group intends to continue its practice of not updating forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
Future Expectations
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Actual Q1 2001 |
Actual Q2 2001 |
Q3 2001 |
Q4 2001 |
Total 2001 |
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Revenues ($M) |
$12.0 |
$10.8 |
$10.5-11.5 |
$11.0-12.0 |
$44.3-46.3 |
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Cash operating expenses ($M) |
$15.9 |
$13.1 |
$11.0-12.8 |
$10.8-12.6 |
$50.8-54.4 |
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Depreciation ($M) |
$0.7 |
$0.6 |
$0.7 |
$0.7 |
$2.7 |
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Interest Income ($M) |
$0.7 |
$0.3 |
$0.2 |
$0.2 |
$1.4 |
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Share Count(M) |
25.3 |
25.3 |
25.3 |
25.3 |
25.3 |
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EPS before amortization expense |
$(0.15) |
$(0.11) |
$0.06 |
$0.03 |
$(0.35) |
About INT Media Group
INT Media Group (Nasdaq: INTM), headquartered in Darien, CT, is a leading provider of global real-time news, information and media resources for Internet industry and information technology professionals, Web developers and experienced Internet users. INT Media Group includes the internet.com and EarthWeb Network of 160 Web sites and nearly 250 e-mail newsletters that generate over 250 million page views monthly. INT Media Group events include nearly 40 offline internet.com and Intermedia Group conferences and trade shows on Internet and IT-specific topics that are aligned with our Network of Web sites and e-mail newsletters. In addition, INT Media Group recently launched its CyberAtlas Research Division that publishes research reports analyzing the Internet and information technologies sectors worldwide.
INT Media Group Q 2 '01 Conference Call Alert
Alan M. Meckler, Chairman and CEO, Christopher S. Cardell, President and COO, and Christopher J. Baudouin, Chief Financial Officer of INT Media Group (Nasdaq: INTM) invite you to participate in a conference call reviewing 2001 second quarter results today August 7, 2001 at 11:00 am EST.
The conference call number is (877) 807-9258 for domestic participants and (706) 634-2391 for international participants; pass code "INT Media Second Quarter." Please call five minutes in advance to ensure that you are connected prior to the presentation. Instant replay will be available until August 25, 2001. Replay call numbers are (800) 642-1687 for domestic participants and (706) 645-9291 for international participants: password: 1270201.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release which are not historical facts are "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The potential risks and uncertainties address a variety of subjects including, for example, the competitive environment in which INT Media Group competes; the unpredictability of INT Media Group's future revenues (including those resulting from online advertising on INT Media Group's Network of Web sites and related Internet media properties), expenses, cash flows and stock price; INT Media Group's investments in international and venture fund investments; any material change in INT Media Group's intellectual property rights; and the continued growth and acceptance of the Internet and information technology. For a more detailed discussion of such risks and uncertainties, refer to INT Media Group'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 INT Media Group assumes no obligation to update the forward-looking statements after the date hereof.
Contact
INT Media Group, Incorporated
Eileen Smith
(203) 662 - 0598
[email protected]
INT Media Group, Incorporated Consolidated Balance Sheets December 31, 2000 and June 30, 2001 (in thousands, except share and per share amounts)
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December 31, 2000 (1) |
June 30, 2001 |
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(unaudited) |
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ASSETS |
||||
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Current assets: |
||||
Cash and cash equivalents |
$59,979 |
$27,737 |
||
Accounts receivable, net of allowances of $2,359 and $3,194, respectively |
12,004 |
8,832 |
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Prepaid expenses and other |
1,964 |
1,811 |
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Total current assets |
73,947 |
38,380 |
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Property and equipment, net of accumulated depreciation of $2,787 and $4,097, respectively |
4,837 |
5,318 |
||
Intangible assets, net of accumulated amortization of $35,282 and $55,106, respectively |
76,587 |
73,807 |
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Investments and other assets |
6,801 |
5,888 |
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Total assets |
$162,172 |
$123,393 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$2,163 |
$3,064 |
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Accrued expenses |
6,295 |
5,724 |
||
Accrued Web site acquisition payments |
10,988 |
1,635 |
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Deferred revenues |
2,187 |
2,696 |
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Total current liabilities |
21,633 |
13,119 |
||
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Accrued Web site acquisition payments |
1,236 |
428 |
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Deferred revenues |
1,820 |
1,366 |
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Total liabilities |
24,689 |
14,913 |
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Commitments and contingencies |
- |
- |
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Stockholders' equity: |
||||
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, 25,323,357 and 25,333,077 shares issued and outstanding at December 31, 2000 and June 30, 2001, respectively |
||||
|
253 |
253 |
|||
Additional paid-in capital |
175,363 |
175,418 |
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Accumulated deficit |
(38,112) |
(67,172) |
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Accumulated other comprehensive income |
(21) |
(19) |
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Total stockholders' equity |
137,483 |
108,480 |
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Total liabilities and stockholders' equity |
$162,172 |
$123,393 |
(1)
Represents the combined financial data of predecessor business and internet.com.INT Media Group, Incorporated
Consolidated Statements of Operations
For the Three Months Ended June 30, 2000 and 2001
(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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2000 |
2001 |
2000 |
2001 |
|||||
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Revenues |
$12,161 |
$10,783 |
$21,806 |
$22,796 |
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Cost of revenues |
5,499 |
5,169 |
9,724 |
12,791 |
||||
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Gross profit |
6,662 |
5,614 |
12,082 |
10,005 |
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O perating expenses: |
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Advertising, promotion and selling |
4,549 |
4,686 |
8,580 |
10,363 |
||||
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General and administrative |
2,218 |
3,260 |
4,139 |
5,908 |
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Depreciation |
487 |
646 |
869 |
1,342 |
||||
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Amortization |
5,332 |
10,628 |
9,670 |
19,826 |
||||
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Workforce redundancy costs |
- |
386 |
- |
1,096 |
||||
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Total operating expenses |
12,586 |
19,606 |
23,258 |
38,535 |
||||
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Operating loss |
(5,924) |
(13,992) |
11,176 |
28,530 |
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Minority interest and equity losses from international investments |
23 |
36 |
69 |
50 |
||||
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Gain (loss) on venture investments, net |
137 |
(1,030) |
46 |
(1,553) |
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Interest income, net |
1,387 |
259 |
2,476 |
975 |
||||
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Loss before income taxes |
(4,377) |
(14,727) |
(8,585) |
(29,058) |
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Provision for income taxes |
54 |
- |
99 |
2 |
||||
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Net loss |
$(4,431) |
$(14,727) |
(8,684) |
(29,060) |
||||
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Net income (loss), excluding amortization, workforce redundancy costs and gains (losses) on venture investments |
$764 |
($2,683) |
940 |
(6,585) |
||||
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Basic and diluted earnings (loss) per share, excluding amortization, workforce redundancy costs and gains (losses) on venture investments |
$0.03 |
$(0.11) |
$0.04 |
$(0.26) |
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Basic and diluted net loss per share |
$(0.18) |
$(0.58) |
$(0.3) |
$(1.1) |
||||
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Weighted average number of common shares used in diluted earnings (loss) per share, excluding amortization, workforce redundancy costs and gains (losses) on venture investments |
|
25,656 |
25,333 |
25,485 |
25,333 |
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Weighted average number of common shares |
25,089 |
25,333 |
24,789 |
25,333 |
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(1)
Represents the combined financial data of predecessor business and internet.com.INT Media Group, Incorporated
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2000 and 2001
(unaudited)
(in thousands)
|
Six Months Ended June 30, |
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|
2000 (1) |
2001 |
||
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Cash flows from operating activities: |
|||
|
Net loss |
$(8,684) |
$(29,060) |
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Adjustments to reconcile net cash used in operating activities- |
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Depreciation and amortization |
10,539 |
21,168 |
|
|
Provision for losses on accounts receivable |
761 |
1,551 |
|
|
Minority interest and equity losses from international investments |
(69) |
(50) |
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(Gain) loss on venture investments, net |
(46) |
1,553 |
|
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Changes in assets and liabilities- |
|||
Accounts receivable, net |
(5,595) |
1,961 |
|
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Prepaid expenses and other |
(847) |
(195) |
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Accounts payable and accrued expenses |
3,584 |
(228) |
|
|
Deferred revenues |
292 |
(1,192) |
|
|
Net cash used in operating activities |
(65) |
(4,492) |
|
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Cash flows from investing activities: |
|||
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Additions to property and equipment |
(2,385) |
(1,717) |
|
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Acquisitions of Web sites, related Internet media properties and other |
(25,071) |
(25,382) |
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Investments in internet.com venture funds and other |
(2,966) |
(707) |
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Net cash used in investing activities |
(30,422) |
(27,806) |
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Cash flows from financing activities: |
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Proceeds from issuance of common stock, net |
98,330 |
- |
|
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Proceeds from exercise of stock options |
86 |
55 |
|
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Net cash provided by financing activities |
98,416 |
55 |
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Effect of exchange rates on cash |
6 |
1 |
|
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Net increase in cash and cash equivalents |
67,935 |
(32,242) |
|
|
Cash and cash equivalents, beginning of period |
17,943 |
59,979 |
|
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Cash and cash equivalents, end of period |
$85,878 |
$27,737 |
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Supplemental disclosures of cash flow: |
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Cash paid for interest |
$- |
$- |
|
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Cash paid for income taxes |
$25 |
$- |
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All current INT Media Group, Inc. press releases can be found on the World Wide Web at (http://www.internet.com/corporate/press.html)