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[TICKETMASTER.COM LOGO] [CITYSEARCH.COM LOGO]
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For Immediate Release
TICKETMASTER ONLINE-CITYSEARCH, INC. ANNOUNCES
THIRD QUARTER REVENUE GAINS OF 108 PERCENT
EBITDA LOSS DECREASES TO $7.6 MILLION
$(0.11) CASH EPS BEATS CONSENSUS OF $(0.13)
Pasadena, CA - October 19, 2000 - Ticketmaster Online-Citysearch, Inc. (NASDAQ:
TMCS) today announced record financial results for the third quarter and for the
nine months ended September 30, 2000. Revenues in the third quarter of 2000
increased 108 percent over the comparable year-ago period to $57.1 million,
reflecting a 105 percent increase in online ticketing revenues, a 98 percent
increase in city guide and related revenues and a 192 percent increase in
sponsorship and advertising over the year-ago period.
The EBITDA (earnings before interest, taxes, depreciation, amortization, merger
and other transaction costs, equity in loss of unconsolidated affiliates, other
income/expense and non-cash advertising expense) loss in the third quarter of
2000 was $7.6 million, compared to an EBITDA loss of $12.5 million in the year
ago quarter. Cash EPS (earnings per share excluding goodwill amortization,
losses in unconsolidated affiliates and non-cash advertising expense) was
$(0.11) per share compared with $(0.17) per share in the year ago quarter. First
Call consensus for Cash EPS for the third quarter of 2000 was $(0.13).
FINANCIAL RESULTS
Ticketmaster Online-Citysearch reported the following:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
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$ IN THOUSANDS 2000 1999 Change 2000 1999 Change
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<S> <C> <C> <C> <C> <C> <C>
Revenues
Ticketing Operations $ 34,065 $ 16,634 105% $ 102,745 $ 43,812 135%
City Guide & Related 17,743 8,977 98% 49,174 21,089 133%
Sponsorship & Advertising 5,254 1,800 192% 13,064 4,009 226%
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Total $ 57,062 $ 27,411 108% $ 164,983 $ 68,910 139%
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EBITDA* $ (7,556) $ (12,500) 40% $ (25,090) $ (24,953) (1)%
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</TABLE>
(*EBITDA - earnings before interest, taxes, depreciation, amortization, merger
and other transaction costs, equity in loss of unconsolidated affiliates, other
income/expense and non-cash advertising expense)
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"Our results reflect our unique competitive positioning which includes
ticketmaster.com's strong ticketing franchise, Citysearch's targeted local
advertising and business services, and Match.com's leading subscription base.
This has allowed us to grow revenue while achieving operating leverage as we
drive toward profitability," said John Pleasants, president and chief executive
officer of Ticketmaster Online-Citysearch. "We are very pleased with our strong
revenue performance, not only in our historically slowest ticketing quarter, but
in a quarter in which we revamped our city guide products sales force as part of
the CS21 initiative announced last quarter."
AUDIENCE AND TRAFFIC HIGHLIGHTS
Total network traffic grew significantly during the quarter to an estimated 773
million page views, an increase of 108 percent from the year ago quarter.
According to Media Metrix (Digital Media Universe), TMCS' combined reach among
home and work users increased to 10 percent in August and unique users grew to
8.0 million in the August period, an increase of 90 percent from the year ago
comparable period. In commerce, PC Data Online reported that ticketmaster.com
was the #2 e-tailer among US home users in September 2000, for the 6th
consecutive month.
TICKETING & TRANSACTIONS
Ticketing revenue was $34.1 million in the third quarter of 2000, an increase of
105 percent compared to the year ago quarter. Gross transaction value in the
third quarter on ticketmaster.com was approximately $213.1 million.
Ticketmaster.com sold more than 4.7 million tickets in the quarter, representing
25.2 percent of the total tickets sold by Ticketmaster Corporation within the
United States, United Kingdom and Canada. The average convenience and handling
charge on ticketmaster.com in the third quarter of 2000 was $6.72 per ticket.
Reflecting the typical third quarter seasonality in event ticketing, the leading
ten events generated approximately 1.1 million in Internet ticket sales,
compared to 1.6 million for the leading events in the second quarter. For these
events, however, the online percentage increased from 32.5 percent to 33.2
percent. "We are very optimistic about continued growth in the online percentage
over the balance of the year and into 2001," said Pleasants. The Company expects
to sell in excess of 30 percent of Ticketmaster Corporation's tickets for the
full year 2001.
During the third quarter, the Company announced that it and Ticketmaster
Corporation have entered into a multi-year licensing agreement with Corporacion
Interamericana de Entretenimiento (CIE) that furthers expansion into Central and
South America. It also entered into an arrangement to extend its current
ticketing arrangement with Yahoo! which provides for broad distribution on its
related properties.
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TicketWeb and 2b Technology, the Company's ticketing subsidiaries which serve
smaller and cultural venues, in the third quarter of 2000 added more than 150
new clients and sold 362,000 tickets, with an average convenience charge of more
than $3.00. During the quarter, these companies continued to broaden their
client base, adding universities such as the University of Southern California
and the University of Kentucky Athletics; museums such as the Dallas Museum of
Art and the National Gallery of Canada; and attractions such as the Phoenix Zoo
and the Cape Anne Whale Watch.
"We are pleased with our continued penetration into the small and medium size
venue market as it represents a large, under-served segment of the ticketing
market. There are a number of interesting new segments in this market which we
are actively pursuing for which TicketWeb and 2b Technology are particularly
well positioned," said Tom Stockham, president, ticketmaster.com.
CITY GUIDE & RELATED
City Guide and Related revenue increased 98 percent to $17.7 million in the
third quarter of 2000 from $9.0 million in the comparable year-ago period. City
guide traffic increased 141 percent since the third quarter last year, and in
the markets open for at least a year, traffic increased 47 percent over the
comparable year-ago period. According to a recent Nielsen //Net Ratings report,
the top 35 web-using Internet cites in the US now average more than 50 percent
penetration of the adult population; Citysearch's network of local city guides
covers 34 of these top 35 markets.
"CS21, our initiative to leverage our city guide's national footprint, is off to
a great start. The re-launch of city guides with expanded content, our new
technologies and functionality and the addition of new customer products and
sales efforts are proceeding extremely well and on target," said Steven Trepp,
president of Citysearch. "In September we launched our Los Angeles city guide
which gives us a presence in one of the largest Internet user communities in the
country. Our Los Angeles city guide also serves as the prototype for the upgrade
of all of our sites which is scheduled to be completed by January 2001."
The Company continued to build partnerships that increase distribution and brand
recognition for its Citysearch property, having recently announced agreements
with Yahoo! and Ask Jeeves and a content and distribution agreement with
weather.com.
With the CS21 initiative, the Company increased its focus on advertising sales
opportunities in its vertical properties such as employment and real estate. The
Company currently has approximately one-third of its local sales people focused
on these verticals and is poised to launch sales into the automotive vertical
over the next 90 days. Sales productivity rates in the existing vertical
categories continue to exceed the Company's overall sales rates by approximately
50 percent. "It is this experience that gives us confidence that we will be able
to grow revenue off of a lower cost base," said Trepp.
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During the quarter, the Company conducted its nationwide "Citysearch the Best of
Your City" promotion in 33 cities which allowed users to vote for their favorite
institutions in 50 categories ranging from hamburgers to museums. The popular
promotion generated two million votes and 10 million page views as users logged
on to share their opinion. Currently, the results are being rolled up into a
National "Citysearch the Best of Your City" which will be marketed nationally.
Given the popularity and success of this program, it will become an annual event
and marks the beginning of additional nationwide promotional efforts to be
launched by Citysearch.
In the third quarter of 2000, the Company's personals operations continued to
demonstrate strong growth. During the quarter, the Company re-launched
Match.com, offering enhanced functionality and a new technology platform as the
first step in the overall integration of its personals sites. Media Metrix
reported that TMCS' combined personals sites had an average of 1.5 million
unique users each month in the second quarter of 2000 (most current data
available), an increase of 63 percent from the same period of 1999. The combined
personals sites have had nearly nine million registrants and have more than
164,000 affiliate sites that drive traffic to them.
Match.com has expanded its distribution through new integration partnerships
with MSN's Love and Relationship channel, About.com, iVillage and IWon.com. In
addition, integration efforts between Citysearch and Match have resulted in
Citysearch becoming one of Match's top 25 affiliates.
"We continue to build our base of users through ongoing site development and
integration, extensive marketing and word of mouth. We have also capitalized on
offline marketing opportunities such as the `mixers' for singles we held
throughout the country, resulting in sold out events and participation by more
than 4,000 people helping to reinforce the Match.com brand," said Cynthia
Hennessy, president, Match.com.
SPONSORSHIPS AND ADVERTISING
In the third quarter, revenue in the Sponsorships and Advertising category
increased 192 percent to $5.3 million from $1.8 million in the third quarter a
year ago. Revenues from advertising sold to Internet companies equaled
approximately six percent of TMCS consolidated revenue in the third quarter, of
which only two percent was to stand-alone Internet companies.
"We are particularly pleased that some of the nation's leading brands are
recognizing the value of our national platform of local city guides. Sequential
Sponsorship and Advertising revenues were up 22 percent as we set up new
advertising accounts with premier mainstream companies such as Procter and
Gamble, Crate & Barrel, Best Buy, America West Airlines, AT&T Wireless and
Western Union," said Pleasants.
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WIRELESS SERVICES
With the recent addition of Sprint, Nextel, VoiceStream and MSN Mobile, the
Company provides content and ticketing services to carriers that represent
approximately 62 percent of the mobile market. Although penetration of these new
devices is still nascent, TMCS's services have already been averaging more than
700,000 page views per month. In addition, the Company continues to expand its
wireless content offering. For instance, its original content on more than
25,000 restaurants and bars across the country will soon be available on
wireless devices.
TMCS ADVERTISING ON USA NETWORKS
Reflecting the commitment of TMCS and USA Networks, Inc. (Nasdaq: USAI) to work
together on promotions and advertising, during the third quarter of 2000, the
USA Network ran Citysearch television commercials on its programs such as the US
Open, La Femme Nikita and the USA and Sci-Fi Weekend Movies as well as Star Trek
Voyager. USAi contributed the advertising, but the Company did record a non
cash-charge of approximately $1.5 million based on value received. The Company
intends to continue to leverage its relationship with USA Networks to help build
the brands of its properties.
OUTLOOK
THE COMPANY'S OUTLOOK STATEMENTS BELOW AND OTHER STATEMENTS MADE REGARDING THE
COMPANY'S EXPECTATIONS CONTAIN FORWARD-LOOKING STATEMENTS. THE FORWARD-LOOKING
STATEMENTS ARE BASED ON THE COMPANY'S EXPECTATIONS AS OF THE DATE OF THIS
RELEASE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE STATEMENTS.
THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THESE STATEMENTS. THESE STATEMENTS
DO NOT INCLUDE THE POTENTIAL IMPACT OF ANY MERGERS, ACQUISITIONS OR OTHER
BUSINESS COMBINATIONS THAT MAY BE COMPLETED AFTER SEPTEMBER 30, 2000.
The Company is comfortable with the consensus analyst estimates of the Company's
total revenues, EBITDA (earnings before interest, taxes, depreciation,
amortization, merger and other transaction costs and non-cash advertising
expense), and Cash EPS (earnings per share excluding goodwill, losses in
unconsolidated affiliates and non-cash advertising expense) for the fourth
quarter of 2000 and for the full year 2001. The consensus estimates are averages
derived from the published reports by analysts covered by First Call . The
estimates contained in analysts reports are based on information and a variety
of assumptions and estimates that have been developed by the individual analysts
or their firms. The Company does not endorse or concur with the information,
analysis or conclusion of any individual analyst, whether included in the
consensus numbers or otherwise.
The consensus revenue estimate for the fourth quarter and full year 2001 are
$59.5 million and $287.0 million, respectively. The Company believes that
approximately two-thirds of such revenues will be
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generated from ticketing operations and approximately one third from other
operations. The consensus EBITDA estimate for the fourth quarter of 2000 and
full year 2001 are $(8.6) million and $(9.3) million, respectively. The Company
believes that such EBITDA results will reflect roughly consistent gross margins
for ticketing operations with improving margins for other operations. The
consensus cash EPS estimate for the fourth quarter of 2000 and full year 2001
are $(0.12) and $(0.21), respectively. The Company believes that total revenue
growth in the 2002 year will be consistent with revenue growth in 2001 and that
the Company will be profitable on an EBITDA basis (as defined above) for the
full year 2002.
Because they depend on third party activities and can vary widely, the Company
is not projecting the Company's future amounts of non-cash advertising expenses
or losses in unconsolidated subsidiaries. The Company intends to continue to
expense these costs as they occur. The Company currently believes that goodwill
and amortization expenses in future periods will be consistent with such
expenses in the third quarter of 2000.
ABOUT TICKETMASTER ONLINE-CITYSEARCH
Ticketmaster Online-Citysearch (NASDAQ: TMCS) is the leading local network
enabling people to get the most out of their city. Operating in cities
worldwide, TMCS helps people find and plan what they want to do, and then take
action, with local transactions functionality such as buying event tickets,
making reservations, or meeting the right people to do things with - anytime,
anywhere, on multiple devices. This integrated family of sites includes
TICKETMASTER.COM, the world's number one online ticketing company;
CITYSEARCH.COM, the leading local network; and MATCH.COM, the premier online
matchmaking service. Located in Pasadena, California, TMCS is majority owned by
USA Networks, Inc. (NASDAQ: USAI) .
CONFERENCE CALL
The Company will host a conference call to discuss its third quarter results
which is open to all parties. The call will be held on Thursday, October 19,
2000, at 4:30 p.m. Eastern Time. Those parties in the United States and Canada
interested in participating in the telephone conference should call toll free
1-800-857-4151 and use pass code CITYSEARCH or listen on the Web at
WWW.ABOUTTMCS.COM. Other international parties should call 1-415-228-4834 and
use pass code CITYSEARCH. The call is scheduled to begin promptly at its
appointed time, and all interested parties should be on the line by then. In
order to ensure participation, please dial in 15 minutes prior to the scheduled
time.
Replays of the conference call will begin approximately one hour after its
completion and will run until 5:00 p.m. Eastern Time on October 26, 2000. To
hear the replay, parties in the United States and Canada should call toll free
1-888-568-0042. International parties should call 1-402-530-7751. An online
replay of the conference call will be available at WWW.ABOUTTMCS.COM.
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains forward-looking statements about Ticketmaster
Online-Citysearch, Inc. (the "Company"), including statements concerning its
future product plans. These forward-looking statements involve risks and
uncertainties. The Company's actual results could differ materially from these
statements. These forward looking statements are based on the Company's
expectations as of the date of this release and the Company undertakes no
obligation to update these statements. Among the risks and uncertainties that
could adversely affect the Company's actual results are: the Company's lack of
profitability and anticipation of continued losses; the Company's dependence on
its relationship with Ticketmaster Corporation; control of the Company by USA
Networks, Inc.; the potential for conflicts of interest between the Company and
USA Networks, Inc.; possible future sales of the Company's securities by USA
Networks, Inc.; the Company's future capital needs and the uncertainty of
additional financing; the unpredictability and potential fluctuations in future
revenues and operating results; the fact that the Company competes in new and
emerging markets; the Company's turnover rate; the Company's dependence on the
continued growth of online commerce; possible shortages of trained sales and
other key personnel; our need tocontinue to promote our brands; risks associated
with our fixed price contracts; risks associated with competition, introducing
new services or rapid growth and our need to continue to produce compelling
content; international operational risks; our reliance on third party
technology; network security risks; intellectual property infringement risks;
risks associated with changing legal requirements on our operations, including
privacy concerns; litigation risks, including our involvement in antitrust
proceedings affecting Ticketmaster Corporation; the dilutive effect of future
acquisitions; and the Company's dependence on establishing and maintaining
strategic relationships with local media companies. Investors are encouraged to
read the risks and uncertainties detailed in the Company's filings with the
Securities and Exchange Commission.
Ticketmaster Online-Citysearch is the owner or licensee of its name and logo
trademarks and service marks. All other trademarks and trade names are the
property of their respective owners.
# # #
FOR MORE INFORMATION:
MEDIA:
Eric Jaffe, Ticketmaster Online-Citysearch, +1-626-660-3572;
[email protected]
INVESTORS:
Mary McAboy, Ticketmaster Online-Citysearch, +1-626-660-2858;
[email protected]
Ticketmaster Online-Citysearch's corporate headquarters is located at 790
East Colorado Boulevard - Suite 200, Pasadena, California, 91101;
+1-626-405-0050; fax +1-626-405-9929; [email protected].
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Ticketmaster Online-Citysearch, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
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<CAPTION>
Actual Actual Actual Actual
------------- ------------- ------------- -------------
3 Mos. Ended 3 Mos. Ended 9 Mos. Ended 9 Mos. Ended
9/30/00 9/30/99 9/30/00 9/30/99
(unaudited) (unaudited) (unaudited) (unaudited)
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<S> <C> <C> <C> <C>
Revenues
Ticketing operations $ 34,065 $ 16,634 $ 102,745 $ 43,812
City guide and related 17,743 8,977 49,174 21,089
Sponsorship and advertising 5,254 1,800 13,064 4,009
------------- -------------- -------------- --------------
Total revenues 57,062 27,411 164,983 68,910
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Operating costs and expenses
Ticketing operations 26,030 12,305 77,568 32,612
City guide and related 12,886 8,582 39,015 19,052
Sales and marketing 21,056 13,990 57,007 29,569
Research and development 1,374 2,051 4,641 5,589
General and administrative 7,048 4,087 19,808 9,994
Amortization of goodwill and other intangibles 36,994 18,606 107,265 44,294
Merger and other transaction costs - 514 - 3,285
------------- -------------- -------------- --------------
Total costs and expenses 105,388 60,135 305,304 144,395
------------- -------------- -------------- --------------
Loss from operations (48,326) (32,724) (140,321) (75,485)
Interest income, net 556 986 2,346 3,223
Equity in loss of unconsolidated affiliates (1,194) - (3,774) -
Other income / expense (11) - (289) -
------------- -------------- -------------- --------------
Loss before income taxes (48,975) (31,738) (142,038) (72,262)
Income tax provision 168 49 1,033 182
------------- -------------- -------------- --------------
Net loss $ (49,143) $ (31,787) $ (143,071) $ (72,444)
============= ============== ============== ==============
Basic and diluted net loss
per share $ (0.55) $ (0.41) $ (1.65) $ (0.99)
============= ============== ============== ==============
Shares used to compute basic and
diluted net loss per share 88,548 76,908 86,909 73,537
============= ============== ============== ==============
Supplemental Financial Information (a)
EBITDA (b) $ (7,556) $ (13,014) $ (25,090) $ (28,238)
============= ============== ============== ==============
EBITDA before merger and other transaction costs (c) $ (7,556) $ (12,500) $ (25,090) $ (24,953)
============= ============== ============== ==============
Basic and diluted net loss per share,
excluding amortization of goodwill, equity in loss
of unconsolidated affiliates and non-cash
advertising expense $ (0.11) $ (0.17) $ (0.35) $ (0.38)
============= ============== ============== =============
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Notes:
a) The accompanying supplemental financial information is presented for
informational purposes only and should not be considered as a substitute for
the historical and pro forma financial information presented in accordance
with GAAP.
b) EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, advertising contributed by USA Networks, Inc. for which no
consideration was paid by TMCS, equity in loss of unconsolidated affiliates
and other income/expense.
c) EBITDA before merger and other transaction costs excludes non-recurring
charges associated with certain transactions which were not completed.
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Ticketmaster Online-Citysearch, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
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September 30, December 31,
2000 1999
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(unaudited)
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ASSETS
Current assets
Cash and cash equivalents $ 30,297 $ 61,455
Marketable securities available for sale 17,583 26,299
Accounts receivable, net 10,396 6,546
Other current assets 5,225 3,826
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Total current assets 63,501 98,126
Property and equipment, net 23,788 16,831
Investments 20,028 23,085
Goodwill and other intangible assets, net 613,607 662,921
Other long term assets 3,833 3,706
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Total assets $ 724,757 $ 804,669
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 2,822 $ 4,537
Accrued expenses 14,279 9,100
Other current liabilities 10,157 6,936
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Total current liabilities 27,258 20,573
Other liabilities 1,146 1,503
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Total liabilities 28,404 22,076
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Stockholders' equity
Common stock & additional paid in capital 976,958 920,198
Accumulated deficit (280,481) (137,413)
Accumulated other comprehensive loss (124) (192)
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Total stockholders' equity 696,353 782,593
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Total liabilities and stockholders' equity $ 724,757 $ 804,669
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