"Our first quarter results showed impressive momentum," said Candice Carpenter, Co-Chairperson and Chief Executive Officer of iVillage Inc. "We solidified our leadership position in the women's online sector. We grew our revenue, membership base and traffic, and our commerce revenue grew an impressive 59% over last quarter. Going forward, we will continue to invest in our brand leadership, grow our multiple revenue streams and pursue focused acquisitions in content and commerce," Ms. Carpenter continued. The Company reported negative earnings before interest, taxation, depreciation and amortization ("EBITDA") of approximately $15.0 million for the quarter ended March 31, 1999 and $7.5 million for the comparable year-ago quarter. Negative EBITDA for the quarter ended December 31, 1998 totaled $9.6 million.
Excluding charges related to iVillage's promotional agreement with NBC and stock-based compensation for non-employees, negative EBITDA for the first quarter 1999 was $10.4 million. iVillage reported a net loss of $17.6 million for the first quarter, or a pro forma net loss per share of $0.96. This compares to a net loss of $8.5 million for the same period one year ago and a net loss for the quarter ended December 31, 1998 of $11.2 million. The pro forma net loss per share excludes the one-time deemed dividend related to the NBC agreement and assumes the conversion of all outstanding convertible preferred stock as of the beginning of the year. Weighted average shares outstanding used for pro forma EPS were 18.3 million. As of March 31, 1999, total shares outstanding were 23.7 million. Shares outstanding at March 31, 1999 reflect the following: the conversion of all outstanding shares of convertible preferred stock into shares of common stock; the issuance of new shares, including the purchase of additional shares by the underwriters in exercise of their over-allotment option, as part of the Company's initial public offering; shares purchased by NBC; and shares issued in connection with the Astrology.net and iBaby minority interest acquisitions.
iVillage's initial public offering raised over $100 million in gross proceeds. "Our unique model and attractive demographics continue to attract premier sponsorships to iVillage.com due to the reciprocal relationship sponsorships create between consumers and advertisers," said Ms. Carpenter. "Sponsorships provide iVillage members access to utility and expert information within a community geared toward problem solving, and marketers are able to reach a very targeted and loyal demographic. We believe our long-term agreements with world class brand names are testament to the inherent benefits of this model." Major accomplishments in the first quarter included the launch of MoneyLife, a new Internet channel devoted exclusively to helping women manage their financial lives, and the launch of iVillage.com's Pets channel, an innovative content and e-commerce initiative with Ralston Purina. In February, Dan Schulman, Executive Vice President at AT&T Corp., was elected to iVillage's Board of Directors.
Mr. Schulman was formerly President of AT&T WorldNet Services, AT&T's consumer Internet unit. He also served as president of long distance and segment marketing at AT&T's consumer services unit, where he was the principal strategist. Mr. Schulman is a member of the Operations Group, AT&T's most senior executive body. In March, iVillage announced that Doug McCormick, recent CEO of Lifetime Television for Women and pioneer in women's media, was also elected to the Board of Directors of iVillage. Mr. McCormick is credited with creating the programming and marketing strategy that made Lifetime Television the nation's number one women's media brand in awareness and profitability. He is also credited with making Lifetime the ninth most profitable network in the country. About iVillage: iVillage is the leading online women's network and one of the most demographically targeted online communities on the World Wide Web. iVillage's network, "iVillage.com," is an easy-to-use, comprehensive online network of sites tailored to fit the interests and needs of women aged 25 through 49, and provides advertisers and merchants with targeted access to women using the Web. The network consists of 14 channels covering the leading topics of interest to women online, such as family, health, work, money, food, relationships, shopping, travel, pets and astrology. Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995: iVillage Inc. has included in this press release certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning iVillage's business, operations and financial condition. The words or phrases "can be", "expects", "may affect", "may depend", "believes", "estimate", "project" and similar words and phrases are intended to identify such forward-looking statements. Such forward-looking statements are subject to various known and unknown risks and uncertainties and iVillage cautions you that any forward-looking information provided by or on behalf of iVillage is not a guarantee of future performance. Actual results could differ materially from those anticipated in such forward-looking statements due to a number of factors, some of which are beyond iVillage's control, in addition to those discussed in iVillage's other press releases, public filings and statements by iVillage's management, including (i) the volatile and competitive nature of the Internet industry, (ii) changes in domestic and foreign economic and market conditions, (iii) the effect of federal, state and foreign regulation on iVillage's business, (iv) failure of iVillage, its vendors or other third parties to achieve Year 2000 compliance and (v) the effect of any future acquisitions. All such forward-looking statements are current only as of the date on which such statements were made. iVillage does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.
iVillage Inc. and Subsidiaries
Consolidated Statements of Operations
Three months ended March 31,
1998 1999
Revenues:
Advertising, sponsorship
and other $2,200 $ 4,690
Commerce -- 1,774
Total revenues 2,200 6,464
Operating expenses:
Production, product
and technology 2,657 6,587
Sales and marketing 4,870 7,782
Sales and marketing
- NBC expenses -- 3,106
General and administrative 2,145 4,025
Depreciation and
amortization 1,120 2,854
Total operating expenses 10,792 24,354
Loss from operations (8,592) (17,890)
Interest income, net 76 330
Net loss (8,516) (17,560)
Preferred stock
deemed dividend -- (23,612)
Net loss attributable
to common stockholders $ (8,516) $ (41,172)
Basic and diluted net
loss per share
attributable to
common shareholders $(4.40) $ (7.51)
Weighted average shares
of common stock outstanding
used in computing basic
and diluted net loss
per share 1,934 5,483
Pro forma basic and diluted
net loss per share $(2.25)
Shares of common stock used
in computing pro forma
basic and diluted net
loss per share 18,295
Other supplemental
information:
Negative EBITDA $ (7,472) $(15,036)
Negative EBITDA without
NBC expenses $ (7,472) $(11,930)
Net loss per share
excluding deemed dividend $(3.20)
Pro forma earnings per
share excluding deemed
dividend $(0.96)
iVillage Inc. and Subsidiaries Consolidated Balance Sheets
December 31 March 31,
1998 1999
ASSETS:
Current assets:
Cash and cash
equivalents $30,824,869 $ 100,524,089
Accounts receivable,
net 3,147,561 1,706,639
Other current assets 715,161 1,840,784
Total current assets 34,687,591 104,071,512
Fixed assets, net 7,380,366 7,247,509
Goodwill and intangible
assets, net 4,535,148 34,732,222
Other assets 187,860 188,971
Total assets $46,790,965 $ 146,240,214
LIABILITIES and STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and
accrued expenses $11,559,711 $ 12,152,204
Capital leases payable 136,573 73,364
Deferred revenue 2,909,740 2,638,465
Other current
liabilities 162,859 198,945
Total liabilities 14,768,883 15,062,978
Commitments and contingencies
Stockholders' equity:
Series A, convertible
preferred stock - par value
$.0005, 1,000,000 shares
authorized, issued and
outstanding 500 --
Series B and B-1,
convertible preferred
stock - par value $.0005,
5,929,846 shares
authorized, 4,777,746
issued and outstanding 2,389 --
Series C, convertible
preferred stock - par
value $.0005, 13,528,765
authorized, 13,193,445
issued and outstanding 6,597 --
Series D, convertible
preferred stock - par
value $.0005, 13,000,000
authorized, issued and
outstanding 6,500 --
Series E, convertible
preferred stock - par
value $.0005, 12,280,702
shares authorized, 11,730,948
issued and outstanding 5,865
Common stock, par value
$.01, 35,000,000 and
65,000,000 shares authorized,
2,113,385 and 23,695,388
issued and outstanding at
December 31, 1998 and
March 31, 1999,
respectively 21,133 236,953
Additional paid-in
capital 112,848,505 273,703,775
Accumulated deficit (76,274,895) (117,447,334)
Stockholders notes
receivable (565,000) (16,062,555)
Unearned compensation (4,029,512) (9,253,603)
Total stockholders'
equity 32,022,082 131,177,236
Total liabilities
and stockholders'
equity $46,790,965 $ 146,240,214
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