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INT MEDIA GROUP REPORTS RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2001
(New York, NY - October 31, 2001) -- INT Media Group, Incorporated (Nasdaq: INTM) today reported results for the quarter ended September 30, 2001. Revenues for the third quarter of 2001 were $10.3 million compared to revenues of $14.7 million for the same period last year. Net loss for the third quarter, excluding amortization and impairment of intangibles, workforce redundancy costs and loss on venture investments, was $1.4 million, or $0.06 per share, compared to net income of $1.5 million, or $0.06 per share, for the same period last year. EBITDA loss for the quarter was $1.0 million compared to EBITDA of $1.0 million for the same period last year. During the quarter the Company recorded a non-cash charge of $54.0 million related to the impairment of intangibles.
"The continuing weakness in the advertising market combined with the events of September 11, 2001 accounted for the slight decline in our revenues for the third quarter compared to the second quarter of 2001. As a result of the September 11 events, we were forced to cancel two conferences and trade shows and postpone a third that were all originally scheduled for the third quarter. We are pleased that even after the effects of these events, we have substantially reduced our loss on a sequential quarterly basis as a result of our aggressive cost-cutting initiatives," stated INT Media Group's Chairman and CEO Alan M. Meckler. "Our strong balance sheet, with $25.7 million in cash, $23.4 million in working capital and no debt, combined with our lower operating cost structure and the growth that we are experiencing in new revenue lines, gives us great optimism for the future."
New Content Areas and Services
During the third 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:
- 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 free registered users and over 20,000 paid 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.
- In October, INT Media Group launched an enhanced VC Buzz (www.vcbuzz.com) focused on venture capital investments. Published daily and free, VC Buzz alerts users to all the venture capital deals by industry, investor, size and region. VC Buzz delivers breaking news on venture funds and venture backed firms, while providing a comprehensive database and search capability.
- CyberAtlas Research released two research reports during the quarter: "Successful Search Engine Optimization Strategies: A Marketer's Perspective", authored by renowned search engine experts Danny Sullivan and Chris Sherman; and "Internet Advertising: Where Are We Now?" authored by Michael Pastore, Editor of CyberAtlas.com.
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 four paid conferences and trade shows in the third quarter, each focusing on a different issue pertaining to the Internet industry and IT. Conferences and trade shows included: Flash Kit Australia 2001, Search Engine Strategies 2001 - San Francisco, Enterprise Web & Corporate Portal and Enterprise Watch Australia 2001. We have nine more conferences and trade shows scheduled for the fourth quarter.
During the third quarter, INT Media Group also announced the launch of the following conferences and trade shows:
- Flash Kit Fall 2001 (October 15-17, 2001, Los Angeles Convention Center, Los Angeles, CA)
- Search Engine Strategies 2001 Dallas (November 14-15, 2001, Dallas Market Center, Dallas, TX)
- 802.11 PLANET Fall 2001 (Nov. 27-28, 2001, Santa Clara Convention Center, Santa Clara, CA)
- Enterprise Storage Strategies 2001 (November 28-29, 2001 Boston Park Plaza, Boston, MA)
- Nanotech Planet 2001 (November 29-30, 2001, Marriott Copley Plaza, Boston, MA)
- E-Mail Newsletter Strategies 2001 (Dec. 3-4, 2001, Hyatt Regency Hotel, San Francisco, CA)
- International IT Service Management Summit (Dec. 6-7, 2001, Disney's Contemporary Resort & Convention Center, Orlando, FL)
- Search Engine Strategies 2001 (December 12, 2001, Radisson Scandinavia Hotel, Copenhagen)
- Wireless One 2002 (February 19-21, 2002, Santa Clara, CA)
- Commercial High-Performance Computing (March 19-20, 2002, The Hyatt Orlando, Orlando, FL)
- eSecurity 2001 (May 29-30, 2002, Sheraton Premiere at Tysons Corner, Vienna, VA)
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 third 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 over 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.
Stock Repurchase Program
In October, INT Media Group announced that its Board of Directors had unanimously authorized the expenditure of up to $1.0 million to repurchase the Company's outstanding common stock. Any purchases under INT Media Group's stock repurchase program may be made, from time-to-time, in the open market, through block trades or otherwise, at the discretion of Company management. Depending on market conditions and other factors, these purchases may be commenced or suspended at any time or from time-to-time without prior notice. To date, no repurchases have been made under this program.
Insider Stock Purchases
In October, INT Media Group announced that Alan M. Meckler, Chairman and CEO, purchased a total of 60,300 shares of INT Media Group common stock during the month of September 2001. Prices for these shares ranged from $1.09 to $2.89. Meckler also announced that he will continue to make purchases in the open market for his own account and the accounts of various trusts and foundations that he controls. The purchases are in keeping with Meckler's previous purchases since the Company's IPO in June of 1999. Meckler has purchased a total of 214,600 shares in the open market since June 1999.
Metrics
- September 2001 page views were over 225 million
- September 2001 total views were over 300 million (includes Web site page views, e-mail newsletter views and e-mail discussion list views)
- Over 5.5 million e-mail newsletter subscribers as of September 30, 2001
- Nearly 8.0 million total opt-in e-mail rental list subscribers as of September 30, 2001
- Over 850,000 unique opt-in e-mail rental list subscribers as of September 30, 2001
- September 2001 unique users were over 20 million (based on internal log files)
- Over 100 new advertisers during the third quarter
- 235 employees as of September 30, 2001
Business Outlook
The following forward looking-statements reflect INT Media Group's expectations as of October 31, 2001. Given the emerging nature of online advertising, potential changes in general economic conditions, and the various other risk factors discussed below and in INT Media Group's reports filed with the Securities and Exchange Commission from time to time, actual results may differ materially. INT Media Group intends to continue its practice of not updating forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
Future Expectations
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Actual Q1 2001 |
Actual Q2 2001 |
Actual Q3 2001 |
Q4 2001 |
Total 2001 |
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Revenues ($M) |
$12.0 |
$10.8 |
$10.3 |
$10.0-10.7 |
$43.1-43.8 |
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Cash operating expenses ($M) |
$15.9 |
$13.1 |
$11.2 |
$10.2-11.0 |
$50.4-51.2 |
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Depreciation ($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 excluding amortization and impairment of intangibles, workforce redundancy costs and loss on venture investments |
$(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 225 e-mail newsletters that generate 225 million page views monthly. INT Media Group events include nearly 40 offline internet.com and Intermedia Group seminars 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 3 '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 third quarter results on November 1, 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 Third Quarter." Please call five minutes in advance to ensure that you are connected prior to the presentation. Instant replay will be available until November 14, 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
Mary Ann Boland
(212) 547 - 7939
[email protected]
INT Media Group, Incorporated Consolidated Balance Sheets December 31, 2000 and September 30, 2001 (in thousands, except share and per share amounts)
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December 31, 2000 |
September 30, 2001 |
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(unaudited) |
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ASSETS |
||||
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Current assets: |
||||
Cash and cash equivalents |
$59,979 |
$25,725 |
||
Accounts receivable, net of allowances of $2,359 and $3,474, respectively |
12,004 |
7,004 |
||
Prepaid expenses and other |
1,964 |
1,358 |
||
|
Total current assets |
73,947 |
34,087 |
||
Property and equipment, net of accumulated depreciation of $2,787 and $4,881, respectively |
4,837 |
4,539 |
||
Intangible assets, net of accumulated amortization of $35,282 and $55,106, respectively |
76,587 |
9,922 |
||
Investments and other assets |
6,801 |
3,984 |
||
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Total assets |
$162,172 |
$52,532 |
||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
|
Current liabilities: |
||||
Accounts payable |
$2,163 |
$1,295 |
||
Accrued expenses |
6,295 |
5,322 |
||
Accrued Web site acquisition payments |
10,988 |
1,104 |
||
Deferred revenues |
2,187 |
2,990 |
||
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Total current liabilities |
21,633 |
10,711 |
||
|
Accrued Web site acquisition payments |
1,236 |
360 |
||
|
Deferred revenues |
1,820 |
1,138 |
||
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Total liabilities |
24,689 |
12,209 |
||
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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 |
- |
- |
||
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 September 30, 2001, respectively |
||||
|
253 |
253 |
|||
Additional paid-in capital |
175,363 |
175,418 |
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Accumulated deficit |
(38,112) |
(135,322) |
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Accumulated other comprehensive income |
(21) |
(26) |
||
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Total stockholders' equity |
137,483 |
40,323 |
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Total liabilities and stockholders' equity |
$162,172 |
$52,532 |
INT Media Group, Incorporated
Consolidated Statements of Operations
For the Three Months and Nine Months Ended September 30, 2000 and 2001
(unaudited)
(in thousands, except per share amounts)
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
|
2000 |
2001 |
2000 |
2001 |
|||||
|
Revenues |
$14,717 |
$10,282 |
$36,523 |
$33,078 |
||||
|
Cost of revenues |
6,334 |
4,285 |
16,058 |
17,076 |
||||
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Gross profit |
8,383 |
5,997 |
20,465 |
16,002 |
||||
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O perating expenses: |
||||||||
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Advertising, promotion and selling |
4,835 |
3,835 |
13,416 |
14,198 |
||||
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General and administrative |
2,563 |
3,129 |
6,702 |
9,037 |
||||
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Depreciation |
578 |
704 |
1,446 |
2,046 |
||||
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Amortization |
6,712 |
10,683 |
16,377 |
30,509 |
||||
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Impairment of intangibles |
- |
53,897 |
- |
53,897 |
||||
|
Workforce redundancy costs |
- |
256 |
- |
1,352 |
||||
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Total operating expenses |
14,688 |
72,504 |
37,941 |
111,039 |
||||
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Operating loss |
(6,305) |
(66,507) |
(17,476) |
(95,037) |
||||
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Minority interest and equity losses from international investments |
(89) |
11 |
(20) |
61 |
||||
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Loss on venture investments, net |
(546) |
(1,892) |
(500) |
(3,445) |
||||
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Interest income, net |
1,199 |
238 |
3,675 |
1,213 |
||||
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Loss before income taxes |
(5,741) |
(68,150) |
(14,321) |
(97,208) |
||||
|
Provision for income taxes |
49 |
- |
148 |
2 |
||||
|
Net loss |
$(5,790) |
$(68,150) |
$(14,469) |
$(97,210) |
||||
|
Net income (loss), excluding amortization and impairment of intangibles, workforce redundancy costs and loss on venture investments |
$1,468 |
($1,422) |
2,408 |
(8,007) |
||||
|
Basic and diluted earnings (loss) per share, excluding amortization and impairment of intangibles, workforce redundancy costs and loss on venture investments |
$0.06 |
$(0.06) |
$0.09 |
$(0.32) |
||||
|
Basic and diluted net loss per share |
$(0.23) |
$(2.69) |
$(0.58) |
$(3.84) |
||||
|
Weighted average number of common shares used in diluted earnings (loss) per share, excluding amortization and impairment of intangibles, workforce redundancy costs and loss on venture investments |
|
26,119 |
25,333 |
25,718 |
25,333 |
|||
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Weighted average number of common shares |
25,143 |
25,333 |
24,904 |
25,333 |
||||
INT Media Group, Incorporated
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2000 and 2001
(unaudited)
(in thousands)
|
Nine Months Ended September 30, |
|||
|
2000 (1) |
2001 |
||
|
Cash flows from operating activities: |
|||
|
Net loss |
$(14,469) |
$(97,210) |
|
Adjustments to reconcile net cash used in operating activities- |
|||
|
Depreciation and amortization |
17,823 |
32,555 |
|
|
Impairment of Intangibles |
- |
53,897 |
|
|
Provision for losses on accounts receivable |
1,262 |
2,874 |
|
|
Minority interest and equity losses from international investments |
20 |
(61) |
|
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Loss on venture investments, net |
500 |
3,445 |
|
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Changes in assets and liabilities- |
|||
Accounts receivable, net |
(7,610) |
2,389 |
|
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Prepaid expenses and other |
(1,355) |
(391) |
|
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Accounts payable and accrued expenses |
3,453 |
(2,238) |
|
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Deferred revenues |
814 |
(1,212) |
|
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Net cash used in operating activities |
438 |
(5,170) |
|
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Cash flows from investing activities: |
|||
|
Additions to property and equipment |
(2,808) |
(1,787) |
|
|
Acquisitions of Web sites, related Internet media properties and other |
(40,918) |
(26,526) |
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Investments in internet.com venture funds and other |
(5,382) |
(827) |
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Net cash used in investing activities |
(49,108) |
(29,140) |
|
|
Cash flows from financing activities: |
|||
|
Proceeds from issuance of common stock, net |
98,330 |
- |
|
|
Proceeds from exercise of stock options |
304 |
55 |
|
|
Net cash provided by financing activities |
98,634 |
55 |
|
|
Effect of exchange rates on cash |
5 |
1 |
|
|
Net increase (decrease) in cash and cash equivalents |
49,969 |
(34,254) |
|
|
Cash and cash equivalents, beginning of period |
17,943 |
59,979 |
|
|
Cash and cash equivalents, end of period |
$67,912 |
$25,725 |
|
|
Supplemental disclosures of cash flow: |
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|
Cash paid for interest |
$- |
$- |
|
|
Cash paid for income taxes |
$25 |
$38 |
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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)