<PAGE>
[iVILLAGE LOGO]
FOR IMMEDIATE RELEASE
iVillage Reports Second Quarter 2000 Financial Results
Revenue More Than Triples Over Second Quarter 1999
EBITDA Losses Substantially Decline
New York, NY - July 27, 2000 - iVillage Inc. (Nasdaq: IVIL), operator of
iVillage.com: The Women's Network (http://www.ivillage.com and AOL keyword:
ivillage), today announced financial results(1) for the second quarter ended
June 30, 2000.
iVillage's total revenues increased 202% to $19.4 million for the second quarter
of 2000, compared to revenues of $6.4 million for the second quarter of 1999.
iVillage reported Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) loss from continuing operations (excluding a one-time write-down) of
$9.9 million for the quarter ended June 30, 2000, a 21% decline from an EBITDA
loss from continuing operations of $12.5 million for the quarter ended March 31,
2000 and a 40% decline from year-end. The company expects continued EBITDA
improvement going forward.
Candice Carpenter, CEO of iVillage commented, "Over the last two quarters, we
have reduced EBITDA losses by 40%, accelerating our drive towards profitability.
The addition of more than 30 new blue-chip brands as sponsors this quarter and
our ranking as 6th in new user growth among the top 50 Web sites demonstrates
our leadership position in an important vertical category whose time has come."
Net loss from continuing operations for the second quarter 2000 was $19.9
million (excluding an $8.1 million one-time write-down related to iVillage's
investment positions and a $9.3 million charge related to discontinued commerce
operations). Net loss from continuing operations per share for the second
quarter was $0.94, compared to a net loss from continuing operations per share
of $0.75 for the first quarter 2000, or $22.3 million. Net loss from continuing
operations for the second quarter of 1999 was $15.0 million, or a net loss from
continuing operations per share of $0.63. At the end of the second quarter 2000,
iVillage had $77.8 million in cash, cash equivalents and restricted cash on its
balance sheet.
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iVillage continues to make strategic progress and recently announced a number of
significant milestones:
o iVillage expands globally while improving EBITDA: The company announced the
launch of iVillage UK, a joint venture with Britain's largest retailer,
Tesco PLC. One of the most powerful brands in the UK, according to Fortune
Magazine, Tesco is the world's largest online grocer, reaches half of the
UK population and has more than 14 million members in its affinity program.
The company also is a strong ISP player. The iVillage UK launch is part of
iVillage's previously announced strategy to build a global brand, increase
asset value, develop substantial future earning streams, and maintain brand
control, all without delaying the company's path to profitability.
o iVillage sharpens its focus on the company's media model: The company also
announced the sale of certain iBaby assets to BabyGear.com. This move
enables iVillage to focus on its core media business, while reducing
exposure to risks inherent in the e-commerce space. The company will still
offer women the opportunity to shop through a revenue-generating
sponsorship platform.
o iVillage continues to focus on the key verticals that have the most impact
in achieving profitability, as well as bring value to its members: The
company continues to build out its key network categories. For example,
iVillage's health area, allHealth.com, remains one of the top players in
the face of significant competitive spending and a number of new entrants
in the last year. The site received record traffic for the month of June
and signed as an exclusive content partner the Society for Women's Health,
solidifying allHealth.com's lead in this category. In addition, iVillage
expanded its relationship with Glaxo-Wellcome, Johnson & Johnson's Ortho
divisions, and the Gillette Women's Cancer Connection. Pfizer and American
Home Products are major new pharmaceutical advertisers in allHealth.com.
iVillage continues to create a strong permission-based marketing foundation
through member involvement.
o iVillage continues to target highly involved users across 75 categories: As
of the end of June, iVillage had 15.4 million newsletter subscriptions and
5.3 million members, representing a 114% increase in membership. iVillage
sent out 86 million member requested newsletters in June, more than
doubling the number of newsletters from June 1999.
iVillage expands its broadband capabilities with the addition of new initiatives
providing sponsors more outlets to reach targeted audiences:
o iVillage continues to build its multi-media platform: The company recently
launched the iVillage Music Network, an online radio network offering three
full-time original Web radio channels featuring a wide selection of music.
iVillage partnered with Westwind Media on this initiative, and the iVillage
Music Network is already providing a great vehicle to reach iVillage's
audience.
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o The company expands offerings to sponsors: Additionally, iVillage signed an
enhanced agreement with Akamai that will offer the advertising community
the option of streaming advertisements as part of an iVillage sponsorship.
This strategic positioning ensures state-of the art video streaming for the
company's content and advertisers.
iVillage experiences significant increase in the percentage of revenue from blue
chip companies and outperforms other categories in monetizing page views:
o iVillage's proven track record continues to attract top-tier companies: New
sponsors for the quarter include Bristol-Myers Squibb, Kraft and Procter &
Gamble. In addition, the company continued to expand or maintain
relationships with Crayola, General Mills, Gerber, Mead-Johnson, Quaker,
Talbots, Universal Studios, and Warner Lambert, among others.
o The company builds out new and existing relationships: iVillage also signed
more than 30 new brands. New brands include Bell Atlantic, the Beef
Industry Council Bounty, Clairol, Excedrin, Flonase, HBO, Lipitor,
McDonald's, Oil of Olay, Secret, and Viactiv, among others.
o iVillage continues with leading CPMs: Revenue per thousand page views in
the second quarter was at $39. With its ability to monetize pages, the
company continues to outperform all other vertical content sites including
the computer, sports and women categories, as well as all major portals.
Doug McCormick, President of iVillage, commented, "We recruited some great
additions to our sales force this quarter, adding to our existing base of
talented professionals. This move strengthens our focus, talent and
professionalism in our dealings with the traditional advertising community. We
also continue to execute on our business model and signed six greater than a
million-dollar sponsors this quarter. The majority of new sponsors this quarter
were well-known traditional consumer product advertisers."
iVillage continues to set records across all key metrics:
o For the month of June 2000, iVillage had a reach of 10.2%, based on a
custom report run by Media Metrix(2) (summary report is attached). Traffic
to iVillage.com grew 68% to 166 million average monthly page views during
the second quarter of 2000, compared to the second quarter of 1999, and 11%
over the first quarter of 2000. The company has the highest concentration
of women among the top 50 sites. Additionally, iVillage.com was ranked 6th
in percent of new user growth from June 1999 to June 2000, and 14th in
overall visitor growth.(3)
o For the second quarter of 2000, iVillage continued to be in the top 25
ranking for monthly page views per visit and length of stay among the top
50 Web sites. In June, iVillage ranked 20th out of the top 50 sites in
minutes spent per month, and 17th in pages per visitor per month.
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About iVillage.com: The Women's Network
iVillage.com: The Women's Network (http://www.ivillage.com and AOL keyword:
ivillage) is the leading women's network online providing practical solutions
and everyday support for women between the ages of 25 and 54. iVillage.com is
organized into branded communities across 16 content channels that focus on
issues of most importance to women and provide interactive services, peer
support and online access to experts and tailored shopping opportunities.
Content channels include allHealth, Astrology, Beauty, Click!: Where Computers
Make Sense, Diet & Fitness, Food, Garden, MoneyLife, ParentsPlace, Parent Soup,
Pets, Readers & Writers, Relationships, Travel, Work from Home and Working Diva.
Established in 1995 and headquartered in New York City, iVillage Inc. (Nasdaq:
IVIL) is a new media company, recognized as an industry leader in developing
innovative sponsorship and commerce relationships that match the desire of
marketers to reach women with the needs of iVillage.com members for relevant
information and services.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
iVillage Inc. has included in this press release certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 concerning iVillage's business, operations and financial condition. The
words or phrases "can be", "expects", "may affect", "may depend", "believes",
"estimate", "project" and similar words and phrases are intended to identify
such forward-looking statements. Such forward-looking statements are subject to
various known and unknown risks and uncertainties and iVillage cautions you that
any forward-looking information provided by or on behalf of iVillage is not a
guarantee of future performance. Actual results could differ materially from
those anticipated in such forward-looking statements due to a number of factors,
some of which are beyond iVillage's control, in addition to those discussed in
iVillage's other press releases, public filings and statements by iVillage's
management, including (i) the volatile and competitive nature of the Internet
industry, (ii) changes in domestic and foreign economic and market conditions,
(iii) the effect of federal, state and foreign regulation on iVillage's
business, and (iv) the impact of recent and future acquisitions on iVillage's
business and financial condition. All such forward-looking statements are
current only as of the date on which such statements were made. iVillage does
not undertake any obligation to publicly update any forward-looking statement to
reflect events or circumstances after the date on which any such statement is
made or to reflect the occurrence of unanticipated events.
# # #
Contacts:
Media:
------
iVillage The Abernathy MacGregor Group
Jason Stell Carl Fischer
212-206-3141 212-371-5999
[email protected] [email protected]
Analysts and Investors:
-----------------------
iVillage The Abernathy MacGregor Group
Barbara Coffey Carina Thate
917-326-4193 212-371-5999
[email protected] [email protected]
--------
(1) Note: Data included in this release reflects the sale of iVillage's iBaby
commerce assets, announced July 6, 2000, which are now accounted for as
discontinued operations.
(2) Given that there are several Web measurement services, iVillage believes in
showing the fullest representation of Web measurement indices (see the attached
chart).
(3) Of the Media Metrix top 50 sites in June 1999 and June 2000.
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iVillage Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
-------------- ---------------
(Unaudited)
ASSETS:
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 68,506 $ 106,010
Restricted cash - 1,495
Accounts receivable, net 5,890 6,620
Inventory - 2,332
Other current assets 5,330 3,193
Net current assets of discontinued operations 1,464 -
-------------- ---------------
Total current assets 81,190 119,650
Restricted cash 9,250 -
Fixed assets, net 11,386 10,017
Goodwill and intangible assets, net 146,886 175,143
Other assets 972 7,938
Non-current assets of discontinued operations 7,503 -
----------------- -----------------
Total assets $ 257,187 $ 312,748
================= =================
LIABILITIES and STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and accrued expenses $ 12,715 $ 16,216
Liabilities for disposal of iBaby 4,270 -
Deferred revenue 11,437 12,682
----------------- -----------------
Total liabilities 28,422 28,898
----------------- -----------------
Commitments and contingencies
Stockholders' equity 228,765 283,850
----------------- -----------------
Total liabilities and stockholders' equity $ 257,187 $ 312,748
================= =================
</TABLE>
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iVillage Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
--------------------------------------------------------
2000 1999 2000 1999
--------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 19,392 $ 6,416 $ 37,496 $ 11,208
Cost of revenues 6,992 2,885 13,611 6,606
-------- -------- -------- --------
Gross margin 12,400 3,531 23,885 4,602
-------- -------- -------- --------
Operating expenses:
Product development and technology 2,059 1,195 3,558 2,603
Sales and marketing 10,991 7,347 23,611 14,794
Sales and marketing - NBC expenses 2,815 4,466 6,107 7,572
General and administrative 6,456 3,012 13,064 6,257
Depreciation and amortization 11,291 3,651 22,759 6,040
-------- -------- -------- --------
Total operating expenses 33,612 19,671 69,099 37,266
-------- -------- -------- --------
Loss from operations (21,212) (16,140) (45,214) (32,664)
Interest income, net 1,322 1,182 2,880 1,513
Loss on sale of Web site
-------- -------- -------- --------
Other income (expense), net (8,117) (7,956) --
-------- -------- -------- --------
Net loss from continuing operations (28,007) (14,958) (50,290) (31,151)
-------- -------- -------- --------
Preferred stock deemed dividend -- -- -- (23,612)
-------- -------- -------- --------
Net loss from continuing operations attributable to
common stockholders (28,007) (14,958) (50,290) (54,762)
-------- -------- -------- --------
Discontinued operations:
Loss from operation of iBaby (1,978) (2,145) (4,863) (3,512)
Loss on disposal of iBaby, including provision for losses
during phase-out period, $ 3,075, and estimated
loss on sale of assets, $ 4,198 (7,273) -- (7,273) --
-------- -------- -------- --------
Net loss attributable to common stockholders (37,258) (17,103) (62,426) (58,274)
======== ======== ======== ========
Basic and diluted net loss per share from
continuing operations (0.94) (0.63) (1.69) (2.13)
======== ======== ======== ========
Weighted average shares of common stock outstanding
used in computing basic and diluted net loss per share 29,691 23,728 29,691 14,656
======== ======== ======== ========
Other supplemental information:
EBITDA loss (9,921) (12,489) (22,455) (26,624)
======== ======== ======== ========
EBITDA loss without NBC expenses (7,106) (8,023) (16,348) (19,052)
======== ======== ======== ========
</TABLE>
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Summary Statistics For iVillage - for June 2000
<TABLE>
<CAPTION>
---------------------------------------------------------------------
Media Metrix Media Metrix Nielsen/ PC Data Doubleclick*
Digital Media Digital Media NetRatings Online DART
Syndicated Custom Syndicated Syndicated Proprietary
Report Report Report Report Report
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unique Visitors (000) 6,615 8,030 5,374 9,206 10,157
-----------------------------------------------------------------------------------------------------
% Reach 8.4% 10.2% 6.4% 11.3
-----------------------------------------------------------------------------------------------------
Property Rank 33 33 36
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
Number of Pages per Visitor per Month 15.1 19 35.6
-----------------------------------------------------------------------------------------------------
Rank within top 50 sites 18 24 19
-----------------------------------------------------------------------------------------------------
Minutes Spent per Usage Month 18.1 19.7 14.9 33.0
-----------------------------------------------------------------------------------------------------
Rank within top 50 sites 20 15 18
-----------------------------------------------------------------------------------------------------
</TABLE>
*Doubleclick data is unaudited
What the third-party audience measurement services measure
----------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------
Media Metrix Media Metrix Nielsen/ PC Data Doubleclick
Digital Media Digital Media NetRatings Online DART
Syndicated Custom Syndicated Syndicated Proprietary
Report Report Report Report Report
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
WWW U.S. home use X X X X X
---------------------------------------------------------------------------------------------------
WWW U.S. work use X X X
---------------------------------------------------------------------------------------------------
WWW Int'l home use X
---------------------------------------------------------------------------------------------------
WWW Int'l work use X
---------------------------------------------------------------------------------------------------
AOL Proprietary U.S. home use X X X
---------------------------------------------------------------------------------------------------
AOL Proprietary U.S. work use X X
---------------------------------------------------------------------------------------------------
AOL Proprietary U.S. home use (adds
iVillage message boards and chats) X
---------------------------------------------------------------------------------------------------
AOL Proprietary U.S. work use (adds
iVillage message boards and chats) X
---------------------------------------------------------------------------------------------------
Other Commercial Online Services
(CompuServe, Prodigy) and Off-line
Ad-Supported Digital Applications
(Juno, ICQ, Pointcast, etc.) X X
-------------------------------------------------------------------------------------------------
</TABLE>
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iVillage Inc.
Income Statement ($ in Million except for EPS)
<TABLE>
<CAPTION>
Mar-99 Jun-99 Sep-99 Dec-99 | FY 99 | Mar-00 Jun-00
| |
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue 4.793 6.416 8.655 16.712 | 36.576 | 18.104 19.392
Growth q-q 34% 35% 93% | | 8% 7%
Growth Y/y | | 278% 202%
| |
Cost of Revenues 3.722 2.885 3.884 4.935 | 15.425 | 6.619 6.992
---------------------------------------------------------------------------------
Gross Profit 1.072 3.531 4.771 11.777 | 21.151 | 11.485 12.400
Gross Margin 22% 55% 55% 70%| 58%| 63% 64%
| |
Product Development & Technology 1.408 1.195 1.292 1.331 | 5.226 | 1.499 2.059
% of Revenues 29% 19% 15% 8% | 14%| 8% 11%
Sales and Marketing 10.553 11.813 18.237 22.923 | 63.526 | 15.912 13.806
% of Revenues 220% 184% 211% 137% | 174%| 88% 71%
General and Administrative 3.245 3.012 3.031 3.878 | 13.166 | 6.608 6.456
% of Revenues 68% 47% 35% 23% | 36%| 37% 33%
Depreciation and Amortization 2.389 3.652 8.213 11.467 | 25.721 | 11.468 11.291
% of Revenues 50% 57% 95% 69% | 70%| 63% 58%
---------------------------------------------------------------------------------
Total Operating Expenses 17.595 19.672 30.772 39.598 | 107.638 | 35.487 33.612
% of Revenues 367% 307% 356% 237% | 294%| 196% 173%
| |
Loss from Operations (16.524) (16.141) (26.001) (27.821) | (86.487)| (24.002) (21.212)
| |
Interest Income (Expense) & Other 0.330 1.182 0.937 1.636 | 4.085 | 1.558 1.322
Other 0.129 0.142 | 0.271 | 0.162 (8.117)
| |
---------------------------------------------------------------------------------
Net loss from continueing operations (16.194) (14.959) (24.935) (26.043) | (82.131)| (22.282) (28.007)
| |
Loss from operations of iBaby (1.337) (2.145) (3.471) (3.888) | (10.841)| (2.885) (1.978)
Loss on disposal of iBaby | | (7.273)
Preferred Div (23.612) | (23.612)|
---------------------------------------------------------------------------------
Net Loss Attributed to Common (41.143) (17.104) (28.406) (29.931) |(116.584)| (25.167) (37.258)
| |
EPS on continuing operations $ (0.89) $ (0.63) $ (0.98) $ (0.91) |$ (3.94)| $ (0.75) $ (0.94)
Shares out 18.295 23.728 25.430 28.660 | 20.851 | 29.630 29.691
| |
Additional Financial Information | |
Revenue from Barter 0.841 0.855 0.800 0.829 | 3.325 | 0.808 0.903
% of Revenues 18% 13% 9% 5% | 9%| 4% 5%
Revenue from Astrology 0.103 0.422 0.446 0.427 | 1.398 | 0.543 0.566
Sales and Marketing related to NBC 3.106 4.466 4.605 5.289 | 17.466 | 3.292 2.815
EBITDA (14.135) (12.489) (17.788) (16.355) | (60.766)| (12.534) (9.921)
EBITDA - excluding NBC (11.029) (8.023) (13.183) (11.066) | (43.301)| (9.242) (7.106)
| |
Balance Sheet and Other Highlights | |
| |
Cash & Resticted Cash (in millions) 100.52 85.28 56.01 107.50 | | 93.22 77.76
Average monthly pageview (in 000)* 87 99 113 133 | | 149 166
Revenues/average quarterly PV * $ 18.30 $ 21.60 $ 25.54 $ 41.76 | | $ 40.47 $ 38.94
Member & Member equivalents (mill)* 1.555 1.998 2.688 4.198 | | 4.942 5.287
Subscriptions (millions)* 7.7 8.5 11.4 10.9 | | 11.9 15.4
Number of Community Hosts (000)* 1.34 1.61 1.69 2.15 | | 2.08 2.24
Number of deals greater than $1 million* 1 1 6 13 | | 4 5
</TABLE>
* Unaudited data
