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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 19, 2000
Ticketmaster Online-CitySearch, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-25041 95-4546874
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
790 E. Colorado Boulevard, Suite 200, Pasadena, California 91101
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (626) 405-0050
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Page 1 of 4
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ITEM 5. OTHER EVENTS.
On April 19, 2000, the Registrant issued a press release announcing its
results for the quarter ended March 31, 2000. The full text of the press release
is set forth in Exhibit 99.1 hereto and is incorporated in this Report as if
fully set forth herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
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99.1 Press Release dated April 19, 2000.
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Page 2 of 4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TICKETMASTER ONLINE-CITYSEARCH, INC.
Date: April 19, 2000 By: /S/ BRADLEY K. SERWIN
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Bradley K. Serwin
Vice President, General Counsel
and Secretary
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Page 3 of 4
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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99.1 Press Release dated April 19, 2000.
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Page 4 of 4
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[LOGO]
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For Immediate Release
TICKETMASTER ONLINE-CITYSEARCH, INC. ANNOUNCES
RECORD FIRST QUARTER RESULTS;
REVENUE INCREASES 191% YEAR OVER YEAR
TRAFFIC GROWS STRONGLY FOR NUMBER ONE LOCAL NETWORK AND EBITDA LOSS
DECREASES FROM Q4 1999 BY 25%
Pasadena, CA - April 19, 2000 - Ticketmaster Online-CitySearch, Inc. (NASDAQ:
TMCS) today announced record financial results for the first quarter of 2000,
strengthening its leadership position as the number one local network and number
one online ticketing company. Revenues in the first quarter increased 191% over
the comparable year-ago period and 28% compared to Q4 1999 to $46.5 million,
driven by a 205% increase in online ticketing revenues and a 159% increase in
city guide and related revenues over the year-ago period.
FINANCIAL RESULTS
Ticketmaster Online-CitySearch reported the following:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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$ IN THOUSANDS 2000 1999 Change
----------------------------------------------------------
<S> <C> <C> <C>
Revenues
Ticketing $28,632 $9,386 205%
City Guide & Related 14,378 5,553 159%
Sponsorship & Advertising 3,510 1,032 240%
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Total $46,520 $15,971 191%
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EBITDA ($10,863) ($6,032) (80)%
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</TABLE>
"We are very pleased with our progress on all fronts in the first quarter," said
Charles Conn, Chief Executive Officer of Ticketmaster Online-CitySearch. "Last
year, we expanded our network nationwide and reached real critical mass. With
our build-out complete, we are now focusing on leveraging our business model and
narrowing losses while deepening our product offerings. We are concentrating on
selling advertising to national, regional and local advertisers who want access
to our unparalleled reach with local audiences, and we continue to grow our
transaction and subscription revenues, giving us more broadly based revenue
streams than most online companies."
"Our focus for 2000 is to continue to drive penetration of existing city markets
while improving the quality
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of our user experience on all of our sites, and growing even more quickly
through both international expansion and presence on wireless devices," said
John Pleasants, President of Ticketmaster Online-CitySearch. "Our recent
announcements, including our pact with Phone.com and our international
agreements in Japan and Korea are indicative of this growth strategy."
Traffic grew significantly during the quarter to a record high of an estimated
765 million page views, an increase of 21.5% compared to the previous quarter.
These numbers clearly define TMCS as a market leader in these fast growing
market areas. In January of 1999, only 25% of small businesses used the Web
according to the Kelsey Group. By January this year, that number reached 64% and
is projected to reach 75% by next year according to the Kelsey Group. The
Company believes this will contribute to significant growth of the local online
advertising market. According to Jupiter Communications, 24% of the $11.5
billion spent on online advertising in 2003 will be spent locally, an increase
of nearly 300% over today's figures.
The Company's EBITDA loss for the quarter narrowed to $10.9 million, or $3.7
million less than the immediately preceding quarter, a decrease of approximately
25%. The loss was $4.8 million wider than in the year-ago comparable period,
before the expansion of the Company's network of owned and operated city guides.
"Industry statistics show that Internet use is now a broad demographic trend. As
the mass-market user has emerged, information about the 10 or 15 miles around
their own homes, in which they spend most of their time and money has become
much more important. We believe our family of Web sites address this large
segment uniquely well," said Conn.
AUDIENCE AND TRAFFIC HIGHLIGHTS
Ticketmaster Online-CitySearch's combined reach among home and work users
increased to 9.3%, up from 4.7% in the year ago comparable period. The Company's
unique users grew to 6.9 million in February 2000, an increase of 146% from
February 1999, according to Media Metrix (Digital Media Universe). In commerce,
PC Data Online reported that ticketmaster.com was the number three e-tailer
among US home users in March 2000.
2
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TICKETING & TRANSACTIONS
Ticketing revenue increased 205% to $28.6 million in the first quarter of 2000
from $9.4 million in the first quarter of 1999. In the quarter, gross
transaction value was over $183 million. First quarter records included over $2
million of gross transaction value sold in an hour and a record single week of
over 500,000 tickets sold. Overall, ticketmaster.com sold over 4.2 million
tickets in the quarter at an average convenience and handling charge of $6.49
per ticket. For the quarter, this represented a record 20.5% of the total
tickets sold by Ticketmaster Corporation within the United States, United
Kingdom, and Canada.
During the quarter, TMCS had a number of very successful concert merchandise
promotions including Ozzfest, during which TMCS sold over 13,000 tee shirts in
seven days. Concerts represented only approximately one-half of ticket sales in
the quarter, with sports, family entertainment and arts sales each surpassing
10% of total tickets sold.
Importantly, the Company is also expanding the overall market for advance ticket
sales with several new initiatives focused on museums, cultural institutions and
small venues. In February, TMCS acquired 2b Technology, Inc., the number one
visitor management and ticketing firm serving higher volume museums, cultural
institutions and historic sites. 2b's ticketing solutions handled more than 90
million tickets through its systems in 1999. Additionally, the Company remains
on track to begin its second-quarter roll out of its Web-based self-service
product for smaller venues, such as nightclubs, community theatres and comedy
clubs, as well as its print-at-home ticketing capability.
CITY GUIDE & RELATED
City Guide and Related revenue increased 159% to $14.4 million in Q1 2000 from
$5.6 million in the comparable year-ago period. City guide traffic increased
251% since the first quarter last year, and in markets where city guides have
been in operation for more than one year, traffic increased 102% over the
comparable year-ago period. Reach in these more mature markets continues to be
strong with an estimated TMCS network reach in these local markets ranging from
9 to 21% according to Media Metrix. The first quarter of 2000 also benefited
from Personals subscription fee revenue, which the Company began to acquire late
in the second quarter of 1999.
Now a comprehensive national network, CitySearch continues to focus on building
strong local media relationships in its cities, recently adding new promotional
and content arrangements with radio, television and newspaper companies
including the Chicago Reader, The Denver Post, and WNCX in Cleveland, bringing
the total number of local media partnerships to over 100.
The Company's Personals operation continued to exhibit strong momentum and in
February, Media Metrix reported that TMCS' combined personals sites had
approximately 1.8 million unique users, up from 1.3
3
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million in the same period of 1999. The combined sites have more than 7 million
user registrations, more than 1 million active users, and over 150,000 affiliate
sites that drive traffic to them. TMCS also recently announced the appointment
of Cynthia Hennessy as President, Match.com. Hennessy brings 19 years of
marketing experience to Match.com from companies including TLP, Inc., a leading
marketing and advertising agency, and The Walt Disney Company.
SPONSORSHIPS AND ADVERTISING
In the first quarter, revenue in the Sponsorships and Advertising category
increased 240% to $3.5 million from $1.0 million in the comparable year-ago
period. The strong increase was attributable to the Company's growing success in
leveraging its expanded footprint of local cities to appeal to national
advertisers, including significant advertising relationships with Microsoft,
American Express, Fox Sports, Polaroid and VH1. "We continue to believe that as
the market for online advertising continues to grow, our strong local reach, as
well as the targeted demographics of citysearch.com, ticketmaster.com and
Match.com, give us significant opportunities to grow our advertising revenue,"
said Pleasants.
RECENT HIGHLIGHTS
- On April 11, 2000 TMCS announced a strategic alliance with zagat.com,
which will integrate Zagat Survey restaurant ratings into
citysearch.com, as well as making TMCS' event listings, profiles and
links to ticketmaster.com to buy tickets available at zagat.com.
- TMCS appointed David Kehr, formerly film critic at the Chicago Tribune
and New York Daily News, as Senior Movie Critic.
WIRELESS SERVICES
- In February, TMCS announced the formation of a dedicated wireless
group and a new strategic partner affiliate program, designed to
capitalize on the growing demand for wireless content and services.
The move preceded announcements made by the Company with wireless
industry leaders such as AvantGo, Nokia and Palm, Inc.
- TMCS and Phone.com, Inc. (NASDAQ: PHCM), announced an agreement to
work together to accelerate the deployment of in-depth local content
and transaction capabilities via the mobile phone.
INTERNATIONAL EXPANSION
- TMCS formed, along with some of Japan's leading companies led by
Kadokawa Shoten Publishing Co, Ltd. and Sumitomo Corporation, a joint
venture company, Walkerplus.com, Inc., to provide premier online city
guide destination sites and services to Japan's rapidly growing
Internet base.
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- KICC and CitySearch announced the first of a series of city guides in
South Korea, utilizing its license of CitySearch's proprietary
technology.
- Extending its Canadian presence, Bell Actimedia introduced two
additional Canadian city guides in Montreal and Quebec City utilizing
its license of CitySearch's proprietary technology. These sites
represent two new markets in a series of Canadian city guide sites to
be launched in 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) and has equity investments in ACTIVE.COM,
FAIRMARKET.COM, and FOODLINE.COM.
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 those concerning its future
product plans. These forward-looking statements involve risks and uncertainties.
The Company's actual results could differ materially from 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.; risks associated
with the integration of component companies; 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; 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:
Nancy Scott Lyon, Ticketmaster Online-CitySearch, +1-626-660-2530;
[email protected]
Sara Strickland, Ticketmaster Online-CitySearch, +1-626-660-2758;
[email protected]
Eric Jaffe, Ticketmaster Online-CitySearch, +1-626-660-3572;
[email protected]
Ticketmaster Online-CitySearch 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].
5
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Ticketmaster Online-CitySearch, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------------------- --------------------------
(unaudited)
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents $ 58,359 $ 61,455
Marketable securities available for sale 18,042 26,299
Accounts receivable, net 7,888 6,546
Other current assets 4,399 3,826
-------------------------- --------------------------
Total current assets 88,688 98,126
Property and equipment, net 19,674 16,831
Investments 18,818 23,085
Goodwill and other intangible assets, net 645,532 662,921
Other long term assets 3,364 3,706
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Total assets $ 776,076 $ 804,669
========================== ==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 2,823 $ 4,537
Accrued expenses 10,673 9,100
Other current liabilities 7,584 6,936
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Total current liabilities 21,080 20,573
Other liabilities 1,226 1,503
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Total liabilities 22,306 22,076
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Stockholders' equity
Common stock & additional paid in capital 939,867 920,198
Accumulated deficit (186,035) (137,413)
Accumulated other comprehensive loss (62) (192)
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Total stockholders' equity 753,770 782,593
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Total liabilities and stockholders' equity $ 776,076 $ 804,669
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</TABLE>
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Ticketmaster Online-CitySearch, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Actual Actual
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3 Mos. Ended 3 Mos. Ended
03/31/00 03/31/99
(unaudited) (unaudited)
----------------- -----------------
<S> <C> <C>
Revenues
Ticketing operations $28,632 $ 9,386
City guide and related 14,378 5,553
Sponsorship and advertising 3,510 1,032
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Total revenues 46,520 15,971
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Operating costs and expenses
Ticketing operations 21,426 6,851
City guide and related 12,731 4,607
Sales and marketing 17,666 6,200
Research and development 1,688 1,933
General and administrative 5,856 2,608
Amortization of goodwill and other intangibles 34,575 11,976
Merger and other transaction costs 0 679
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Total costs and expenses 93,942 34,854
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Loss from operations (47,422) (18,883)
Interest income, net 1,100 1,200
Equity in loss of unconsolidated affiliates (2,126) 0
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Loss before income taxes (48,448) (17,683)
Income tax provision 174 57
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Net loss ($48,622) ($17,740)
================= =================
Basic and diluted net loss
per share ($0.57) ($0.25)
================= =================
Shares used to compute basic and
diluted net loss per share 85,409 71,555
================= =================
Supplemental Financial Information (a)
EBITDA (b) ($10,863) ($6,032)
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EBITDA before merger and other
transactions costs (c) ($10,863) ($5,353)
================= =================
Basic and diluted net loss
per share, excluding amortization of goodwill
and equity in loss of unconsolidated affiliates ($0.14) ($0.08)
================= =================
</TABLE>
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 and
amortization.
c) EBITDA before merger and other transaction costs excludes non-recurring
charges associated with the Ticketmaster Online and CitySearch merger and other
transactions.
