<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): January 25, 2000
USWEB CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 000-23151 87-0551650
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Identification Incorporation Number)
or organization)
410 TOWNSEND STREET
SAN FRANCISCO, CA 94107
(Address of principal executive offices including Zip Code)
(415) 369-6700
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On January 25, 2000, the Registrant issued the press release (attached
hereto as Exhibit 99.1) announcing fourth quarter 1999 revenues. The information
contained in the press release is incorporated herein by reference.
Exhibit Number Description
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99.1 USWeb Corporation Press Release, dated January 25, 2000.
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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.
Date: January 25, 2000 USWEB CORPORATION
By: /S/ CAROLYN V. AVER
----------------------
Carolyn V. Aver
Executive Vice President,
Chief Financial Officer and Secretary
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EXHIBIT INDEX
Exhibit Number Description
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99.1 USWeb Corporation Press Release, dated January 25, 2000.
- -------------------
<PAGE>
EXHIBIT 99.1
For Immediate Release
- ---------------------
USWeb/CKS Reports Record Fourth Quarter 1999 Revenues
124% increase over previous year; performance demonstrates strong integration
and market leadership
SAN FRANCISCO --January 25, 2000-- USWeb/CKS (Nasdaq: USWB), the leader in
Internet professional services, today reported that its financial results for
the fourth quarter of 1999 included record-high quarterly revenues and strong
organic growth.
Revenues for the fourth quarter of 1999 were $187 million. Compared to the
prior year, fourth quarter revenues increased 157%, from $73 million. Net income
before non-cash charges and after applying an assumed 38% effective tax rate was
$17 million or $0.16 per diluted share. Also excluded from these results is a
$25 million gain the company realized on the sale of marketable equity
securities during the quarter. In the fourth quarter of 1998, net income before
non-cash charges and after applying an assumed 38% effective tax rate was $5
million or $0.07 per diluted share. Including non-cash charges and the gain on
the sale of securities, the company reported a net loss in the fourth quarter of
1999 of $57 million or $0.62 per share, compared to a net loss in the fourth
quarter of 1998 of $84 million or $1.26 per share.
Revenues for 1999 were $511 million, an increase of 124% over revenues of
$229 million for the previous year. Net income for the year, excluding non-cash
charges and the gain on the sale of securities, and after applying an assumed
38% effective tax rate was $47 million or $0.52 per diluted share, compared to
$13 million or $0.18 per diluted share in 1998, representing a 259% increase.
Including non-cash charges and the gain on the sale of securities, the company
reported a net loss for the year of $175 million or $2.18 per share, compared
with a net loss of $188 million or $3.07 per share in 1998.
Non-cash charges include a provision for contract loss (which represents
the value of warrants granted in a strategic relationship), stock compensation,
acquired in-process technology, impairment of goodwill, amortization of
intangible assets, and depreciation and amortization.
"Our strong performance this quarter continues to demonstrate successful
integration and the growing market demand for our multi-disciplinary approach,"
said Robert Shaw, CEO of USWeb/CKS. "Important clients, top-rate talent, and
market-leading business partners are helping USWeb/CKS drive the new economy."
"The momentum we create in the market stems from our ability to deliver
breakthrough results that quickly provide value to a business. It's the
standard we set called Time-to-Value,"
<PAGE>
USWeb/CKS Reports Record Q4 Revenues 2-2-2-2
continued Shaw. "Our unique insight, experience and scale allows us to execute
rapidly and effect change in the industry."
During the fourth quarter of 1999, USWeb/CKS announced its agreement to
merge with Whittman-Hart, Inc., a leading provider of enterprise-wide e-Business
solutions for fast-growing and middle-market companies. The merger is expected
to close during the first quarter of 2000, subject to regulatory clearance.
Commenting on the pending merger, Shaw added, "USWeb pioneered the Internet
professional services market in 1996, and we redefined the market when USWeb
merged with CKS in 1998. We set a new standard by adding the world-class
strategy expertise of the Mitchell Madison Group in 1999, and we are now
redefining the market again as a result of the pending merger with Whittman-
Hart. We are assembling the talent and expertise to help invent the future for
.coms and reinvent the future for Brick-and-Mortar companies and big brands--
transforming their business from the supplier to the consumer."
"USWeb/CKS has been a valuable ally in translating our unique brand
proposition into a highly successful e-commerce presence," said Bill Miller, EVP
of marketing at FAO Schwarz, commenting on the pending merger. "But business-
to-consumer is only half the battle. Our goal is to create a seamless value
chain that links us to business partners as well as customers. That's what it
takes to succeed on the digital playing field, and that's the kind of solution
we'll be asking for. We're very pleased that USWeb/CKS and Whittman-Hart are
bringing the two halves of the digital equation together."
Momentum Milestones
The company continues to reach significant milestones while maintaining a
high level of momentum.
. Client commitment: The size and scope of our client work continues to
grow. Top client annualized average revenue for the quarter was:
. Top 10 clients was $15.0 million
. Top 30 clients was $9.1 million
. Major wins: The Company continues to win industry-leading engagements
that utilize its multidisciplinary expertise. Significant wins this
quarter include JCPenney, Inc., who selected USWeb/CKS to help build
their online presence; FedEx selected USWeb/CKS to help develop their
customer relationship management solution; ServiceMaster, the parent
company of Terminix, TruGreen-Chemlawn and Merry Maids chose USWeb/CKS
to build their Internet Service Portal at www.WeServeHomes.com; and
Sharper Image brought in USWeb/CKS to help make-over its online
offering. Also in the fourth quarter, Trodat GmbH of Austria selected
USWeb/CKS to build a complex business-to-business supply chain
management infrastructure to help Trodat more accurately collaborate
with its suppliers and distributors. In addition, USWeb/CKS developed
new brand and
<PAGE>
USWeb/CKS Reports Record Q4 Revenues 3-3-3-3
creative work for companies ranging from FAO Schwarz's fao.com to the
new look of AltaVista.
. Delivering Time-to-Value: Continued client successes demonstrate high
demand for the company's Time-to-Value concept. USWeb/CKS delivered
timely results for a wide variety of clients, including Britanica.com,
where USWeb/CKS delivered a rapid, significant increase in scalability,
and the launches of Harley-Davidson's Roadstore, Walgreen's Online
Pharmacy and Williams-Sonoma's e-commerce site in time for the holiday
season.
. Strategic alliances: USWeb/CKS established a new market-defining
strategic alliance with 3Com. The two companies formed a strategic
global alliance to develop, market and deliver wireless applications for
the mobile workplace and converged voice, video and data solutions.
Under the alliance, 3Com will expend up to $100 million in a combination
of funded development and the purchase of $40 million of USWeb/CKS stock
from a third party. The first e-business solution to be developed under
the alliance is expected to be delivered in the second half of 2000.
. Industry rankings and recognition: USWeb/CKS earned major industry
awards and top rankings from numerous sources during the fourth quarter
for both its creative work and leadership in the Internet professional
services market. Among the most prestigious honors, USWeb/CKS was named
to Fortune's e-50 Index, a new guide for tracking the Internet economy.
The index comprises 50 leading e-companies and was created by Fortune
magazine to serve as a "modern day antidote to the Dow Jones industrial
average." USWeb/CKS was also one of four companies from the e-50 named
to Fortune's "Power List" and was profiled by senior writer Eric Nee as
a company maintaining its position as the No. 1 Web consultant by using
its diversified services to help companies move onto the Internet. Other
industry recognition includes:
. Smart Reseller's Smart 50: USWeb/CKS was ranked No. 3 on Smart
Reseller's Smart 50 list. The list profiles 50 of the most
successful and dynamic businesses in the IT services industry.
. Advertising Age i.20: Robert Shaw was one of 20 interactive
executives named to Advertising Age's i.20. Formerly called
"Digital Media Masters," the i.20 recognizes leading individuals
who "are at the center of the e-revolution."
. Deloitte & Touche's Fast 500: The "Fast 500" is a ranking of the
500 fastest growing U.S. technology companies.
. London International Advertising Awards (LIAA): USWeb/CKS won the
LIAA Computer Software category award in product design for
software packaging for Apple Computer, Inc.
. WebAwards: USWeb/CKS won six Web Marketing Association WebAwards,
including Outstanding Web Site awards for the Ultimate Band
Listing (UBL) and Rankit.com; and Standard of Excellence awards
for Workforce Magazine and Saturday Night Live, The Probe.
. Belgian Business ICT Award: USWeb/CKS received the Belgian
Business ICT Award in the Internet/Intranet development category
for its Web-based business-to-business solution called
"Catalogix," which reinvents order processing
<PAGE>
USWeb/CKS Reports Record Q4 Revenues 4-4-4-4
procedures for Haseldonckx, Belgium's representative of Arjo
Wiggins, the leading paper retailer in Europe.
. Communications Arts/Design Annual Award: USWeb/CKS won the
Communications Arts/Design Annual Award for Audio Visual/Packaging
for Apple Computer, Inc. The company was honored for its creative
packaging work for such products as the MacOSX Server, Apple
Network Assistant, AppleShare and AppleWorks. A two-page spread
highlights USWeb/CKS' work in the recently published Communication
Arts/Design Annual 40. Communications Arts is considered a premier
international publication on design and marketing communications.
About USWeb/CKS
USWeb/CKS (Nasdaq: USWB) seeks to transform businesses in the digital
economy and create sustainable market leadership for its clients. As the
leading Internet professional services firm, USWeb/CKS has created a new
standard for success in the digital economy - Time-to-Value. Time-to-Value means
USWeb/CKS applies its extensive insight, experience and scale to deliver
breakthrough results quickly. The Company is headquartered in San Francisco,
California, with more than 4,000 professionals in 13 countries around the world.
USWeb/CKS recently announced its intention to merge with Whittman-Hart, Inc.
Additional information about USWeb/CKS is available by calling 415/284-7070 or
go to www.uswebcks.com.
This press release contains ''forward-looking statements'' (as defined
under U.S. securities law) regarding potential opportunities for USWeb/CKS to
continue and build leadership in its markets and to attract and retain talented
employees. USWeb/CKS' actual future results, including those in achieving its
leadership, hiring, retention, timing, market share and financial goals, may
differ materially and adversely from those discussed in this press release.
Factors that may cause such differences include the rate of adoption of Internet
technology by large organizations and the level of investment these
organizations make in Internet-related professional services, the Company's
ability to differentiate itself from competitors and win new clients, the risks
associated with implementation of the Company's products and service offerings,
technical challenges, the Company's ability to attract, retain and motivate
talented employees, timing in delivering completed projects, costs associated
with formation of Internet data centers, risks relating to the integration of
acquired entities and the pending merger with Whittman-Hart, Inc., including
difficulties in integration or loss of customers or employees, and diversion of
management and employee time and attention from other aspects of the Company's
business. Current revenue growth patterns are not necessarily indicative of
future performance.
Regarding the planned merger of USWeb/CKS and Whittman-Hart: The merger is
subject to stockholder approval and other customary closing conditions. There
can be no assurance that the merger will be completed on the intended schedule,
or at all, or that the combined entities will be able to realize the intended
benefits. For additional information about factors that could affect the
businesses of
<PAGE>
USWeb/CKS Reports Record Q4 Revenues 5-5-5-5
USWeb/CKS and Whittman-Hart, see the documents filed by the
companies with the United States Securities and Exchange Commission.
###
Contact: Geoff Kerr, USWeb/CKS, 415/369-6723 or [email protected]
<PAGE>
USWEB/CKS
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
December 31, December 31,
1999 1998
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ASSETS
Current assets:
Cash and cash equivalents $ 171,067 $ 64,956
Short-term investments 44,591 36,230
Accounts receivable, net 224,542 89,038
Other current assets 21,736 9,946
Deferred tax assets 993 637
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Total current assets 462,929 200,807
Property and equipment, net 52,544 18,880
Marketable equity securities 48,958 -
Intangible assets, net 340,621 168,335
Deferred income taxes and other assets 21,339 15,152
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$ 926,391 $ 403,174
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 46,673 $ 38,251
Accrued expenses 75,194 52,908
Deferred revenue 61,395 4,210
Income taxes payable 5,975 3,111
Borrowings and lease obligations,
current 16,953 3,445
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Total current liabilities 206,190 101,925
Lease obligations, long-term portion 2,873 1,377
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209,063 103,302
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Stockholders' equity:
Common Stock 89 66
Additional paid-in-capital 1,092,810 546,976
Accumulated deficit (422,193) (247,170)
Other comprehensive income 46,622 -
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Total stockholders' equity 717,328 299,872
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$ 926,391 $ 403,174
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USWEB/CKS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Historical Data:
Revenues $ 186,936 $ 72,648 $ 510,948 $ 228,600
-------------- -------------- --------------- --------------
Cost of revenues:
Services 111,250 44,387 305,846 141,119
Depreciation and amortization 2,580 1,511 7,541 5,132
Provision for loss on contract 2,943 7,900 7,014 9,994
Stock compensation 26,437 3,622 40,371 13,037
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Total cost of revenues 143,210 57,420 360,772 169,282
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Gross profit 43,726 15,228 150,176 59,318
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Operating expenses:
Marketing, sales and support 17,801 8,060 47,185 27,384
General and administrative 31,925 13,044 85,652 43,254
Depreciation and amortization 1,999 528 4,778 1,817
Acquired in-process technology - - 2,212 25,508
Stock compensation 23,996 7,798 51,979 31,760
Amortization of intangible assets 47,921 28,762 151,714 74,538
Merger and integration costs - 28,822 5,316 28,822
Impairment of Goodwill - 11,079 - 11,079
-------------- -------------- --------------- --------------
Total operating expenses 123,642 98,093 348,836 244,162
-------------- -------------- --------------- --------------
Loss from operations (79,916) (82,865) (198,660) (184,844)
Other income, net 25,616 1,245 28,348 4,302
Loss before income taxes (54,300) (81,620) (170,312) (180,542)
Provision for income taxes 2,466 2,529 4,711 7,739
-------------- -------------- --------------- --------------
Net loss $ (56,766) $ (84,149) $ (175,023) $ (188,281)
============== ============== =============== ==============
Net loss per share:
Basic and diluted $ (0.62) $ (1.26) $ (2.18) $ (3.07)
============== ============== =============== ==============
Weighted average shares outstanding 91,472 66,792 80,286 61,329
============== ============== =============== ==============
Supplemental Data:
Gross profit as reported $ 43,726 $ 15,228 $ 150,176 $ 59,318
Non-cash and merger related charges (1) 31,960 13,033 54,926 28,163
-------------- -------------- --------------- --------------
Supplemental gross profit $ 75,686 $ 28,261 $ 205,102 $ 87,481
============== ============== =============== ==============
Net loss before income taxes as reported $ (54,300) $ (81,620) $ (170,312) $ (180,542)
Non-cash and merger related charges (1) 105,876 90,022 270,925 201,687
Gain on sale of marketable equity securities (2) (24,705) - (24,705) -
Provision for income taxes (3) (10,211) (3,193) (28,845) (8,035)
-------------- -------------- --------------- --------------
Supplemental net income $ 16,660 $ 5,209 $ 47,063 $ 13,110
============== ============== =============== ==============
Supplemental net income per share:
Basic supplemental net income per share $ 0.18 $ 0.08 $ 0.59 $ 0.21
============== ============== =============== ==============
Basic supplemental weighted average
shares outstanding 91,472 66,792 80,286 61,329
============== ============== =============== ==============
Diluted supplemental net income per share $ 0.16 $ 0.07 $ 0.52 $ 0.18
============== ============== =============== ==============
Diluted supplemental weighted average
shares outstanding (4) 104,584 77,675 91,274 72,483
============== ============== =============== ==============
</TABLE>
(1) Non-cash and merger related charges include provision for loss on
contract, which represents the value of certain warrants granted in a
strategic relationship, merger and integration costs, stock compensation,
acquired in-process technology, impairment of Goodwill, amortization of
intangible assets and depreciation and amortization.
(2) During the fourth quarter of 1999, the Company realized a gain on the sale
of marketable equity securities. This gain is included in the "Other
income, net" line item of historical data.
(3) Supplemental net income and supplemental net income per share data
includes a tax provision at an assumed effective rate of 38% for all
periods presented.
(4) The computation of diluted supplemental net income per share includes the
dilutive effect of potential common stock, primarily employee stock
options and warrants.
