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EXHIBIT 99.1
[LOGO] [LOGO]
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FOR IMMEDIATE RELEASE
TICKETMASTER ONLINE-CITYSEARCH, INC. ANNOUNCES
RECORD SECOND QUARTER RESULTS;
ACCELERATES PATH TO PROFITABILITY
REVENUES UP 141% YEAR OVER YEAR
EBITDA LOSS DECREASES 39% FROM Q1 2000
LAUNCHES CS21 CITY GUIDE INITIATIVE TO LEVERAGE NATIONAL NETWORK
Pasadena, CA - July 25, 2000 - Ticketmaster Online-Citysearch, Inc. (NASDAQ:
TMCS) today announced record financial results for the second quarter of 2000.
The Company also announced its CS21 city guide initiative designed for TMCS to
achieve cash breakeven more quickly than previously expected.
Revenues in the second quarter of 2000 increased 141% over the comparable
year-ago period and 32% compared to Q1 2000 to $61.4 million, driven by a 125%
increase in online ticketing revenues, a 160% increase in city guide and related
revenues and a 265% increase in sponsorship and advertising over the year-ago
period. The EBITDA loss in the second quarter of 2000 was $6.7 million, compared
to an EBITDA loss of $9.2 million in the year ago quarter, and also reflected a
$4.2 million improvement over the EBITDA loss in the first quarter of 2000. Cash
EPS (earnings per share excluding goodwill and losses in unconsolidated
affiliates) was $(0.11) per share compared with $(0.13) in the year ago quarter.
FINANCIAL RESULTS
Ticketmaster Online-Citysearch reported the following:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
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$ IN THOUSANDS 2000 1999 Change 2000 1999 Change
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<S> <C> <C> <C> <C> <C> <C>
Revenues
Ticketing Operations $40,048 $17,792 125% $ 68,680 $ 27,178 153%
City Guide & Related 17,053 6,559 160% 31,431 12,112 160%
Sponsorship & Advertising 4,300 1,177 265% 7,810 2,209 254%
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Total $61,401 $25,528 141% $107,921 $ 41,499 160%
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EBITDA $(6,673) $(9,190) 27% $(17,536) $(15,223) (15)%
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</TABLE>
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"Every line of our business grew significantly during the quarter, which
demonstrates the overall strength and scalability of our business model," said
John Pleasants, Chief Executive Officer of Ticketmaster Online-Citysearch.
"These results indicate that we continue to execute on our vision of being the
leading online network to help people make the most of their cities."
The Company also launched CS21, a major new initiative to position TMCS' already
leading city guide operation for the 21st century. Beginning in the third
quarter, CS21 will relaunch the Citysearch city guides with expanded content,
new technologies and functionality, and new customer products and sales
approaches, all made possible by Citysearch's growth and presence as a national
network. In 1999, the Company increased its domestic city guides from 7 to 70
through internal expansion and the acquisition of the Microsoft Sidewalk city
guides. Reaping the benefits of national scale, the Company will re-align its
sales force and certain support operations to capitalize on these opportunities,
resulting in the reduction of approximately 150 Citysearch field personnel,
representing approximately 11% of the Company's total workforce of 1,375. The
Company estimates that the annual pro forma savings of such reductions will be
approximately $7 million, and that it will incur approximately $1 million in
severance and related costs to implement such changes in the third quarter of
2000.
"The CS21 initiative allows us to take the next step in executing our vision by
moving the user experience to the next level, refocusing our sales approaches to
reflect our scale, and capturing attendant operating efficiencies. As a result
of the strength of our business and the opportunities available through this
initiative, we now believe we will break even on a cash earnings basis sooner
than previously anticipated, " said Pleasants.
AUDIENCE AND TRAFFIC HIGHLIGHTS
Total network traffic grew significantly during the quarter to an estimated 800
million page views, an increase of 153% from the year ago quarter. According to
Media Metrix (Digital Media Universe), TMCS' combined reach among home and work
users increased to 9.1% in June, up from 6.6% in the year ago comparable period,
and unique users grew to 7.2 million in the June period, an increase of 76% 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 June 2000.
"These substantial increases in audience demonstrate both the increasing
importance of local information and transactions as the mass market Internet
user has emerged, as well as TMCS' strong leadership position in this segment,"
said Charles Conn, Chairman of Ticketmaster Online-Citysearch.
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TICKETING & TRANSACTIONS
Ticketing revenue increased 125% to $40.0 million in the second quarter of 2000
from $17.8 million in the second quarter of 1999. In the quarter, gross
transaction value on ticketmaster.com was approximately $247 million.
Ticketmaster.com sold more than 5.4 million tickets in the quarter, representing
25.8% 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 second quarter of 2000 was $7.08 per ticket.
During the quarter, the Company acquired TicketWeb, strengthening its presence
in the small and medium sized venue market. With 2b Technology, operator of the
Museum Ticketing Network which the Company acquired earlier in the year, and
through its ongoing relationship with Ticketmaster Corporation, the Company now
offers a complete range of ticketing solutions to clients of all sizes. In the
second quarter period, TicketWeb, which the company acquired on May 26, 2000,
and 2b Technology sold more than 500,000 tickets. During the quarter these
companies added clients such as the Chicago Shakespeare Theatre, the Mystic
Seaport, and the JFK Library & Museum, adding to a client base that includes the
Louvre Museum, the Guggenheim Museum and Beach Blanket Babylon of San Francisco.
"The U.S. Commerce Department estimated the overall ticketing and admissions
market at $23 billion in 1997. We see strong growth potential as we penetrate
new ticketing market segments, expand internationally, and introduce new
products and technologies such as the pilot of a dynamic pricing model we are
conducting in connection with the Seattle Mariners," said Tom Stockham,
President of ticketmaster.com. In the quarter ticketmaster.com also launched a
pilot print-at-home program in conjunction with the House of Blues.
CITY GUIDE & RELATED
City Guide and Related revenue increased 160% to $17.1 million in Q2 2000 from
$6.6 million in the comparable year-ago period. City guide traffic increased
153% since the second quarter last year, and in the Company's original seven
owned and operated markets traffic increased 75% over the comparable year-ago
period. On a combined network basis TMCS' reach exceeded 10% in more than 20
individual markets in the first quarter of 2000. "Traffic growth and financial
performance in our city guide operations continue to indicate that our unique
combination of deep local content and `get it done' transactions is being
embraced by both users and advertising customers. That momentum, our financial
results and the CS21 initiative all give us great confidence about our ability
to continue to be the leading city guide network," said Steven Trepp, President
of Citysearch.
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The second quarter of 2000 also benefited from growing traffic and subscription
fee revenue from the Company's personals operation. Media Metrix reported that
TMCS' combined personals sites had approximately 1.5 million unique users in
June, an increase of 46% from the same period of 1999. The combined sites have
more than 7.8 million user registrations, more than 1.2 million active users,
and over 150,000 affiliate sites that drive traffic to them.
SPONSORSHIPS AND ADVERTISING
In the second quarter, revenue in the Sponsorships and Advertising category
increased 265% to $4.3 million from $1.2 million in the comparable year-ago
period. Revenue benefited from the addition of new advertisers such as Taco
Bell, Mercedes and the Mandalay Bay Resort.
WIRELESS SERVICES
The Company continues to broaden the distribution of its content and transaction
capabilities across wireless and other handheld devices. TMCS recently announced
agreements with both Verizon Wireless and AT&T Wireless Services to offer their
respective customers access to TMCS' content and transaction capability. Verizon
Wireless is the country's largest wireless communications provider in the United
States with a customer base of 25 million. AT&T will offer TMCS content and
transactions to AT&T Digital PocketNet-SM- customers. Together they represent
approximately 40% of the mobile market.
CS21 CITY GUIDE INITIATIVE
The CS21 city guide initiative includes the introduction of the next generation
of the city guide service and leverages the company's national footprint to
increase revenue opportunities and capture efficiencies.
Key elements of the CS21 initiative include:
NEXT GENERATION PRODUCTS AND EXPANDED LOCAL CONTENT
LAUNCH OF NEXT GENERATION PRODUCT - Over the course of the third and fourth
quarters of this year, Citysearch will launch its next generation city guide
product with significantly enhanced features. The new product will offer deeper
content, faster and more effective searching, enhanced personalization
capability, a national technology platform, streamlined navigation and a new
easier-to-use design.
INCREASED DEPTH OF LOCAL CONTENT - The Company is expanding its already leading
local content, currently produced by approximately 145 local personnel, through
added central resources as well as broadened third party relationships. A key
element of this initiative is the integration of the recently acquired
TicketWeb's event listings into Citysearch, as well as other efforts to make the
Company's city guides the leading source of all event information on the
Internet. Additional classified categories such as automotive and real estate
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verticals will join the site's already popular jobs vertical. Restaurant reviews
from Zagat continue to be integrated pursuant to the Company's previously
announced partnership with Zagat. The Company is also expanding its distribution
of content, including functionality on wireless devices.
"CITYSEARCH THE BEST" - The Company recently launched "Citysearch the Best."
This content and marketing initiative invites users to vote on leading local
attractions such as the best restaurants, best bars and best music venues in
their city. Voting is currently underway, resulting in approximately 1.6 million
page views to date. The results from the local "Citysearch the Best" guides will
be published in the Fall and then rolled up into a national launch of
"Citysearch the Best."
LAUNCH OF CITYSEARCH LOS ANGELES - The Company plans to launch an owned and
operated city guide in Los Angeles, the Company's hometown and currently the
country's second largest Internet market as measured by number of adult users,
in September of this year. The Company previously served this market through a
partnership arrangement.
CONTENT SYNDICATION - Capitalizing on its leading local content, the Company
continues to make progress in syndicating its content through revenue generating
arrangements. Although currently a small overall contributor to revenue, the
Company sees interest in purchasing its content increasing and recently entered
into arrangements with American Express and Carlson Travel Network to syndicate
its content on their sites.
INCREASED ADVERTISING REVENUE OPPORTUNITIES
NATIONAL/REGIONAL SALES - In 1999, the company grew its domestic city guides
from 7 to 70, creating a national footprint that, when combined with its other
businesses, reaches approximately 90% of the U.S. Internet population. In the
past six months, the company has significantly increased its national and
regional advertising sales effort, and it anticipates continuing to add to its
resources in this area. With its national reach, the Company will aggressively
sell advertising and sponsorships to large multi-location companies, allowing
them an efficient way to target their local customers. While this effort is only
approximately six months old, the Company has already established national
advertising relationships with Kozmo and ARTISTdirect, Inc.
NEW CUSTOMER PRODUCTS - With its national presence, the Company is now able to
offer more effective advertising products organized around vertical categories
such as employment, automotive and real estate. Strong traffic growth and an
increasingly sophisticated local customer base also enable the Company to offer
new "media-only" advertising products whereby local advertisers pay for
placement in Citysearch's city guide offering. Media-only advertising products
such as premium placement and pay-for-placement, in addition to the Company's
existing "bundled" website products, will allow the Company to offer local
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advertisers a full range of advertising options and is expected to lead to
increased revenue opportunities. The Company is also making available more
technologically enabled products for clients who want the ability to purchase
advertising products and manage their accounts directly online.
IMPROVED SALES MODEL AND OPERATING EFFICIENCIES
INCREASED FOCUS ON NATIONAL AND VERTICAL SALES - To support CS21, the Company
has increased its national sales organization and organized it around a regional
and vertical selling model. This will allow capture of efficiencies created by
the evolving sophistication of its clients and increased technology support
tools. This combination of activities will result in the reduction of certain
local sales personnel and associated support personnel, although the Company
will continue to employ more than 150 people dedicated to local sales.
NEW TOOLS AND TECHNOLOGY - Citysearch has developed new technology tools that
will allow the Company to service advertising clients more efficiently. For
instance, a new tool allows Citysearch to capture and process website content
electronically, minimizing the use of paper forms, and significantly reducing
the time needed to process and build websites for Citysearch clients. The
Company is also working to provide a "do-it-yourself" solution that will let
businesses design their own web sites. The result will be a more efficient use
of the Company's sales and support organization and greater value for its
clients.
GREATER NATIONAL MARKETING LEVERAGE
INCREASED USE OF NATIONAL MEDIA - With its national footprint complete, the
Company is increasingly able to leverage national media and promotional activity
to promote its properties while maintaining a true local voice. For instance,
the Company recently launched a national radio, online, and print campaign,
"Make the most of your city." In support of its "Citysearch the Best" campaign,
the Company has embarked on national marketing effort which includes
geographically targeted online banners, key word buys, a local mix of radio,
print and television media as well as a weekly sweepstakes promotion. The
Company has also revamped its national newsletter program, with user
clickthroughs averaging 25%.
INCREASED INTEGRATION ACROSS THE TMCS NETWORK
The Company intends to continue to integrate its network of websites and better
leverage sales and promotions opportunities across all of its brands to help
drive traffic. For instance, the Company has already begun including TicketWeb
and 2b Technology offerings in its local city guides, and select city guides are
now carrying ticketmaster.com's "Deal of the Week." In addition, cross traffic
between the Company's various properties continues to grow.
ABOUT TICKETMASTER ONLINE-CITYSEARCH
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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:
MEDIA:
Nancy Scott Lyon, Ticketmaster Online-Citysearch, +1-626-660-2530;
[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 Balance Sheet
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 39,751 $ 61,455
Marketable securities available for sale 20,827 26,299
Accounts receivable, net 7,180 6,546
Other current assets 4,563 3,826
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Total current assets 72,321 98,126
Property and equipment, net 21,625 16,831
Investments 21,145 23,085
Goodwill and other intangible assets, net 650,437 662,921
Other long term assets 3,358 3,706
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Total assets $ 768,886 $ 804,669
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 2,930 $ 4,537
Accrued expenses 10,966 9,100
Other current liabilities 10,939 6,936
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Total current liabilities 24,835 20,573
Other liabilities 1,650 1,503
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Total liabilities 26,485 22,076
----------- -----------
Stockholders' equity
Common stock & additional paid in capital 973,808 920,198
Accumulated deficit (231,342) (137,413)
Accumulated other comprehensive loss (65) (192)
----------- -----------
Total stockholders' equity 742,401 782,593
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Total liabilities and stockholders' equity $ 768,886 $ 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)
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<CAPTION>
Actual Actual Actual Actual
------------ ------------ ------------ ------------
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
06/30/00 06/30/99 06/30/00 06/30/99
(unaudited) (unaudited) (unaudited) (unaudited)
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<S> <C> <C> <C> <C>
Revenues
Ticketing operations $ 40,048 $ 17,792 $ 68,680 $ 27,178
City guide and related 17,053 6,559 31,431 12,112
Sponsorship and advertising 4,300 1,177 7,810 2,209
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Total revenues 61,401 25,528 107,921 41,499
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Operating costs and expenses
Ticketing operations 30,112 13,455 51,538 20,307
City guide and related 13,398 5,861 26,129 10,469
Sales and marketing 18,285 9,379 35,951 15,578
Research and development 1,580 1,605 3,268 3,538
General and administrative 6,904 3,291 12,760 5,907
Amortization of goodwill and other
intangibles 35,696 13,713 70,271 25,689
Merger and other transaction costs 0 2,100 0 2,771
------------ ------------ ------------ ------------
Total costs and expenses 105,975 49,404 199,917 84,259
------------ ------------ ------------ ------------
Loss from operations (44,574) (23,876) (91,996) (42,760)
Interest income, net 692 1,037 1,792 2,237
Equity in loss of unconsolidated
affiliates (454) 0 (2,580) 0
Other income / expense (278) 0 (278) 0
------------ ------------ ------------ ------------
Loss before income taxes (44,614) (22,839) (93,062) (40,523)
Income tax provision 691 77 865 134
------------ ------------ ------------ ------------
Net loss ($ 45,305) ($ 22,916) ($ 93,927) ($ 40,657)
============ ============ ============ ============
Basic and diluted net loss
per share ($ 0.52) ($ 0.31) ($ 1.09) ($ 0.56)
============ ============ ============ ============
Shares used to compute basic and
diluted net loss per share 86,753 72,926 86,081 72,249
============ ============ ============ ============
Supplemental Financial Information (a)
EBITDA (b) ($ 6,673) ($ 9,190) ($ 17,536) ($ 15,223)
============ ============ ============ ============
EBITDA before merger and other
transactions costs (c) ($ 6,673) ($ 7,090) ($ 17,536) ($ 12,452)
============ ============ ============ ============
Basic and diluted net loss per share,
excluding amortization of goodwill
and equity in loss of unconsolidated
affiliates ($ 0.11) ($ 0.13) ($ 0.24) ($ 0.21)
============ ============ ============ ============
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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 and
amortization and excludes 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.
