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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
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MAY 5, 2000
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
THEGLOBE.COM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-25053 14-1782422
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
120 BROADWAY
NEW YORK, NEW YORK 10271
(Address of principal executive offices)
(212) 894-3600
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Attached hereto as Exhibit 99.1 and incorporated by reference herein
is financial information for theglobe.com, inc., for the quarter ended
March 31, 2000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press release dated April 27, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the
undersigned hereunto duly authorized.
Dated: May 5, 2000.
theglobe.com, inc.
By: /s/ Francis T. Joyce
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Name: Francis T. Joyce
Title: Vice President and Chief
Financial Officer
EXHIBIT 99.1
THEGLOBE.COM'S 1Q00 REVENUES MORE THAN DOUBLE YEAR-OVER-YEAR
- LOSSES NARROW VERSUS 4Q99 -
- BANNER IMPRESSIONS GENERATED INCREASE 211% YEAR-OVER-YEAR TO 632 MILLION -
- SUCCESSFUL DISTRIBUTION STRATEGY AND FOCUSED ECOMMERCE RESULT
IN REDUCED ANNUAL LOSS ESTIMATES GOING FORWARD-
NEW YORK, NY, APRIL 27, 2000 - theglobe.com, Inc. (Nasdaq: TGLO), one of
the world's leading online community networks and providers of community
services, today announced results for the first quarter ended March 31,
2000.
Revenues in the first quarter rose to $7.0 million, an increase of 119%
from $3.2 million a year earlier. Pro forma net loss, which excludes $7.6
million in amortization of goodwill and purchased intangibles, was $8.9
million, or $0.31 per share. This compares to a pro forma net loss of $4.9
million, or $0.23 per share, in the first quarter of 1999, and a pro forma
net loss of $11.1 million, or $0.41 per share, in the fourth quarter of
1999. Weighted average shares outstanding for the three months ended March
31, 2000, and March 31, 1999, were 28.8 million and 21.1 million,
respectively. For the three months ended December 31, 1999, weighted
average shares outstanding were 27.0 million. Cash, cash equivalents, and
short-term investments were $43.0 million as of March 31, 2000.
"We're very pleased at the significant strides theglobe.com has made this
quarter in distributing Customized Community Solutions to partners in key
verticals, expanding our advertiser base, and developing our world-leading
games information network," said Dean Daniels, President and Chief
Operating Officer, theglobe.com.
KEY METRICS
- -----------
o theglobe.com registered approximately 427,000 NEW MEMBERS during the
first quarter. This compares to approximately 363,000 and 221,000 new
members registered in the fourth and first quarters of 1999,
respectively. This represents 18% quarterly sequential growth and 93%
year-over-year growth. TOTAL MEMBERSHIP INCREASED TO OVER 3.9 MILLION
REGISTERED USERS as of March 31, 2000, a 96% year-over-year increase.
o Approximately 632 MILLION BANNER IMPRESSIONS were generated during the
quarter versus approximately 491 million and 203 million generated
during the fourth and first quarters of 1999, respectively. This
represents 29% quarterly sequential growth and 211% year-over-year
growth.
o According to Media Metrix data, theglobe.com is one of the fastest
growing properties, registering 136% AUDIENCE GROWTH FROM MARCH 1999
TO MARCH 2000, which outpaces the percentage growth of all other
leading community sites(1), as well as the overall Web, during this
period. This reflects organic growth, as well as growth via
acquisition and strategic distribution agreements.
o ADVERTISING SPONSORSHIPS. During the quarter, theglobe.com continued
to focus on advertising sponsorships, helping the Company to continue
selling targeted niches at higher CPMs. Sponsorship clients during the
quarter included Encyclopedia Britannica, Hewlett Packard, Toshiba,
and Time Warner Video, among others.
o Based on March 2000 Media Metrix data, games.theglobe.com,
theglobe.com's games network(2), represents the LARGEST GAMES
INFORMATION(3) NETWORK ON THE WEB based on combined home/work reach.
DISTRIBUTING 'CUSTOMIZED COMMUNITY SOLUTIONS' WITH GLOBECLUBS AND UPUBLISH!
Throughout the first quarter, organic growth of both globeclubs, a network
of web- and email-based clubs focused on user interest, and uPublish!, a
state-of-the-art website builder, continued to be strong, reflecting the
ongoing maturation of these best-of-breed community tools. Accordingly, our
flagship site, theglobe.com, continues to flourish as the `ground zero hub'
where we aggregate audience vis-a-vis our community services and
demonstrate how these tools are facilitating vibrant `micro' communities
for users. According to Media Metrix, in March 2000 the number of unique
visitors to theglobe.com Domain increased 78% versus February 2000.
The considerable success of these tools and, in turn, our own community has
resulted in our successful business-to-business initiative of distributing
'Customized Community Solutions' to partners in key verticals, thereby
lowering both our marketing and customer acquisition costs. By attracting
other leading Web properties seeking a core component to customer
retention, community tools and expertise, the power of globeclubs and
uPublish! at aggregating audience and spawning distribution agreements is
further validated.
o SPORTSLINE. During the first quarter theglobe.com entered into a
comprehensive strategic agreement with CBS SportsLine.com whereby
theglobe.com is customizing versions of globeclubs and uPublish! and
providing its community expertise to build and manage CBS SportsLine's
entire on-line community.
The first phase of this agreement was recently implemented when
theglobe.com launched CBS SportsLine's first baseball and football
communities, which reside on both CBS SportsLine's site and in
theglobe.com's Sports and Recreation area, and allow users to join or
start a club, participate in forums, and chat with other sports fans.
Additional phases of this agreement, including customized communities
for football, basketball, hockey, college and local sports, will
continue to be rolled out expeditiously.
o ROLLINGSTONE.COM. Most recently, theglobe.com and RollingStone.com
formed a strategic partnership whereby theglobe.com will provide users
of RollingStone.com with co-branded community tools to build personal
e-mail clubs and homepages. This partnership extends theglobe.com's
strategy of targeting niche audiences who are active, passionate and
pre-disposed to building their own micro-communities on the Web.
theglobe.com also maintains distribution agreements with Alloy, OneMain,
DirectHit, Road Runner, and Deja.com.
"As we continue to roll out our B2B initiative of distributing Customized
Community Solutions to other Web properties, we see growing demand in the
marketplace for community, a key component to customer retention on the Web
and a powerful tool for aggregating critical audience mass," said Mr.
Daniels. "Our partnerships with leading Web properties in key verticals
allow us to reduce our dependence on marketing and effectively lower
customer acquisition costs, while also leveraging our fixed costs over a
wider revenue base."
ADVERTISING/SPONSORSHIPS
- ------------------------
During the first quarter, theglobe.com continued to attract significant NEW
ADVERTISERS, including: Alta Vista, Backwire.com, Encyclopedia Britannica,
Excite, Fashionmall.com, H&R Block, iVillage.com, J.C. Watts, John McCain,
Polaroid, Sci-Fi Channel, and Sports Illustrated, among others.
Additionally, the Company continued to receive significant contracts from
ONGOING ADVERTISERS such as: Bell Atlantic, BellSouth, CD Universe, Dell
Computers, Disney, Earthweb, EA Sports, eFax, Entrepreneur Magazine, GT
Interactive, Hewlett Packard, HyperNix, InsWeb, Intel, Launch, Microsoft,
Office Max, Office Depot, Pogo.com, SegaSoft, Sony, Sprint, TCI, Visa, and
WebTrends, among others.
o theglobe.com had 193 INDIVIDUAL ADVERTISERS in the first quarter that
ran 246 individual advertising campaigns (both multi-month and renewal
contracts). This compares to 179 individual advertisers in the fourth
quarter that ran 245 individual advertising campaigns.
o Of these 193 individual advertisers, consumer brands represented
approximately 76%, versus 73% in the fourth quarter.
o ADVERTISING SPONSORSHIPS. theglobe.com continues to develop unique
programs for advertisers to accomplish their online advertising
initiatives by providing innovative sponsorships opportunities. As the
market moves toward increasingly "out of the box" advertising
solutions, theglobe.com is well poised to capture additional revenues
from these comprehensive and creative sponsorships.
Particularly noteworthy during the quarter were the following
sponsorships:
o ENCYCLOPEDIA BRITANNICA. Included unique ad units and ad placement
throughout theglobe.com, including the homepage and various theme
areas such as Arts & Books, Society & Culture, Entertainment, Science
& Technology, and Games.
O HEWLETT PACKARD. In conjunction with the launch of the new Hewlett
Packard color printer, theglobe.com was one of a select few sites
awarded this campaign and designed a unique creative that was
delivered within targeted areas of the site. This represented the
eighth sponsorship agreement between theglobe.com and Hewlett Packard.
o TOSHIBA. Exclusive sponsor of theglobe.com's Superbowl 2000 promotion,
which included a "linkable" logo throughout the site and an area
devoted on each page for a message from Toshiba regarding their unique
line of products and/or services.
o TIME WARNER VIDEO. Selected KidsDomain, a part of theglobe.com games
network and the leading entertainment and educational site for kids,
to help generate awareness and promote its newly released Pokemon
video through a unique homepage opportunity developed by theglobe.com.
o VALENTINE'S DAY. In February, theglobe.com Network hosted its annual
Valentine's Day Promotion, which presented users with a captivating
theme area in which to play interactive games, enter contests, send
postcards and interact with one another using theglobe.com's community
tools and services. Promotion sponsors included BuyJewel.com,
ProFlowers, BlueFly, and NetJewel.
OTHER SPONSORSHIP CLIENTS DURING THE QUARTER INCLUDED Carsmart, CD
Universe, Pogo.com, Polaroid, and Sega, among others.
GAMES.THEGLOBE.COM: OUR GAMES NETWORK
- -------------------------------------
games.theglobe.com, our world leading games information network, was
rounded out during the first quarter as a result of the late February
acquisition of Chips & Bits, Inc., a leading online game retailer, and
Strategy Plus, Inc., a publisher of magazines targeted at game enthusiasts.
During the quarter, games.theglobe.com extended its international reach via
gamesdomain.com, its leading European online games publication, which began
distributing its comprehensive games content to Excite UK. Additionally, as
part of our business-to-business initiative, theglobe.com continues to
distribute its comprehensive games information content to AOL UK. Other
partners for games.theglobe.com content include Time Warner's Road Runner,
collegebroadcast.com, Netscape Online (UK), Bun.com, and Electronics
Boutique UK.
KidsDomain.com's audience percentage growth recently outpaced top kids
sites Nick.com and CTW.com, and it further extended its international reach
via the February launch of the U.K. version of the site, Kids Domain U.K.
Additionally, Kids Domain attracted advertisers including Disney--Tarzan,
Disney--Goofy, Discovery Channel, BellSouth--Spring Families, Family
Education Company, GT Interactive, Kellogg, Southpeak Interactive, Zany
Brainy, and Zeeks.com, during the quarter, and most recently entered into a
unique sponsorship with Golden Books.
In May, theglobe.com will officially launch its games information network
at E3 2000, the largest interactive entertainment trade show of the year,
to be held in Los Angeles.
ECOMMERCE
- ---------
Following notably strong sales of video games in both the fourth quarter of
1999 and the first quarter of 2000 and our overall strong position in this
vertical, theglobe.com has decided to realign its ecommerce effort to focus
on the direct sale of these products. Additionally, the Company will focus
on forming partnerships with ecommerce companies that want access to
theglobe.com's audience. As part of this realignment, Chips & Bits, Inc.,
the leading online game retailer that for nearly 10 years has successfully
been selling high-margin video games, will become the backbone behind our
direct ecommerce initiative.
As a result, in late April the Board of Directors approved a plan to close
our Seattle ecommerce operations. theglobe.com expects to record a
restructuring charge of approximately $16.5 million, or $0.54 per share, in
the second quarter, of which approximately $15.2 million will be related to
non-cash items such as goodwill and intangible assets.
"With the realignment of our ecommerce effort to focus on higher-margin
ecommerce initiatives and our successful distribution strategy, we are able
to reduce our annual loss estimates going forward, effectively accelerating
the Company's timeline to achieving profitability," commented Frank Joyce,
Chief Financial Officer, theglobe.com.
(1) Leading community sites refers to Tripod, Angelfire, Fortunecity, and Xoom.
(2) games.theglobe.com, theglobe.com's games information network, is
comprised of leading online game sites HappyPuppy.com, GamesDomain.com,
ConsoleDomain.com, Computer Games Online, KidsDomain.com, Computer
Games Magazine, and Chips & Bits.
(3) Games information includes news, game previews and reviews, game demo
downloads, and hints and cheats.
ABOUT THEGLOBE.COM NETWORK
theglobe.com is a network of communities that specializes in bringing
people together around shared topics of interest. The Company delivers
"community" through four different streams: its flagship website
(www.theglobe.com) featuring the Company's best of breed community tools
and services (e-mail clubs and web site building tools); customized
community solutions to other web properties; small business communities;
and a vibrant games information network rated number one in the world by
Media Metrix. theglobe.com currently distributes community services and
games content to CBS Sportsline.com, Time Warner's Road Runner,
RollingStone.com, Deja.com, Alloy.com, AOL UK, Excite UK, DirectHit.com,
OneMain.com and Chaitime.com.
Safe Harbor -- this press release contains financial information and
includes forward-looking statements related to theglobe.com, Inc. that
involve risks and uncertainties, including, but not limited to, product
delivery, the management of growth, market acceptance of certain products
and other risks. These forward-looking statements are made in reliance on
the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. For further information about these factors that could affect
theglobe.com's future results, please see the Company's filings with the
Securities and Exchange Commission. Prospective investors are cautioned
that forward-looking statements are not guarantees of performance. Actual
results may differ materially from management expectations. Copies of these
filings are available upon request from theglobe.com's investor relations
department. theglobe.com, theglobe.com (logo), globeclubs, Happy Puppy,
Kids Domain, Games Domain, WebJump, Chips & Bits, shop.theglobe.com, and
uPublish! are service marks of theglobe.com, inc. or its subsidiaries.
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<TABLE>
<CAPTION>
THEGLOBE.COM
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three months ended March 31,
----------------------------------------------------------
2000 1999
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<S> <C> <C>
Net revenues $6,979 $3,192
Cost of revenues 4,408 1,196
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Gross profit 2,571 1,996
Operating expenses:
Sales and marketing 5,597 2,187
Product development 2,968 2,114
General & administrative 3,211 2,754
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Total operating expenses 11,776 7,055
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Loss from operations (9,205) (5,059)
Interest and other income, net 420 196
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Loss before provision for income taxes (8,785) (4,863)
Provision for income taxes 70 46
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Pro forma net loss ($8,855) ($4,909)
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Basic and diluted pro forma net loss per share ($0.31) ($0.23)
=========================== ===========================
Weighted average basic and diluted
shares outstanding 28,805 21,090
=========================== ===========================
</TABLE>
NOTE: THE ABOVE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS FOR THE THREE months ended March 31, 2000 and 1999
exclude $7.6 million and $1.4 million, respectively, of
amortization of goodwill and other purchased intangibles.
<PAGE>
<TABLE>
<CAPTION>
THEGLOBE.COM
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three months ended March 31,
---------------------------------------------------
2000 1999
------------------------ ------------------------
<S> <C> <C>
Net revenues $6,979 $3,192
Cost of revenues 4,408 1,196
------------------------ ------------------------
Gross profit 2,571 1,996
Operating expenses:
Sales and marketing 5,597 2,187
Product development 2,968 2,114
General & administrative 3,211 2,754
Amortization of goodwill
and intangible assets 7,624 1,361
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Total operating expenses 19,400 8,416
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Loss from operations (16,829) (6,420)
Interest and other income, net 420 196
------------------------ ------------------------
Loss before provision for income taxes (16,409) (6,224)
Provision for income taxes 70 46
------------------------ ------------------------
Net loss ($16,479) ($6,270)
======================== ========================
Basic and diluted net loss per share ($0.57) ($0.30)
======================== ========================
Weighted average basic and diluted
shares outstanding 28,805 21,090
======================== ========================
</TABLE>
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<TABLE>
<CAPTION>
THEGLOBE.COM
CONSOLIDATED CONDENSED BALANCE SHEET
MARCH 31, 2000
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
ASSETS MARCH 31, 2000 DECEMBER 31, 1999
------------------------- -------------------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $19,164 $36,586
Short-term investments 23,845 19,289
Accounts receivable, net 5,196 4,220
Prepaid and other current assets 2,998 1,446
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Total current assets 51,203 61,541
Property and equipment, net 10,513 9,464
Other assets 6,145 719
Restricted investments 5,157 3,657
Goodwill and intangible assets, net 71,865 63,462
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Total assets $144,883 $138,843
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,153 $2,722
Accrued expenses 3,506 2,439
Accrued compensation 1,308 1,610
Deferred revenue 1,216 566
Current installments of obligations under
capital leases 2,030 1,957
Current portion of long-term debt 6 -
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Total current liabilities 11,219 9,294
Long-term debt 130 -
Obligations under capital leases excluding
current installments 1,693 2,201
Deferred rent 467 438
Stockholders' equity:
Common stock 31 28
Additional paid-in capital 218,112 197,307
Deferred compensation (239) (269)
Accumulated other comprehensive loss (4) (109)
Accumulated deficit (86,526) (70,047)
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Total stockholders' equity 131,374 126,910
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Total liabilities and stockholders' equity $144,883 $138,843
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</TABLE>
