UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
May 2, 2000
EL SITIO, INC. (THE SITE, INC.)
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(Translation of registrant's name into English)
Avenida Ingeniero Huergo 1167, C1107AOL, Buenos Aires, Argentina
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(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F /X/ Form 40-F /_/
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934. Yes /_/ No /X/
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2 (b):
82-_________.
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, thereunto duly authorized.
EL SITIO, INC.
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(Registrant)
Date May 2, 2000 By /s/ Horacio Milberg
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Name: Horacio Milberg
Title: Chief Financial Officer
- ------------------------ Secretary
* Print the name and title under
the signature of the signing officer.
[LOGO]
FOR IMMEDIATE RELEASE
EL SITIO REPORTS FIRST QUARTER 2000 FINANCIAL RESULTS
Net Revenues Total $5.6 Million for the Quarter
Average Monthly Unique Users Reach 3.8 Million,
Up 39% From 1999 Fourth Quarter
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Buenos Aires and New York - May 2, 2000 - El Sitio, Inc. (Nasdaq: LCTO), a
leading Internet media company targeting Spanish- and Portuguese-
speakers, today reported net revenues of $5.6 million for the first
quarter ended March 31, 2000, reflecting growth in advertising revenues,
and unique users, registered users and page views on the Company's
network. The revenue figure compares to net revenues of $276,000 for the
first quarter of 1999 and $5.3 million for the fourth quarter of 1999.
Roberto Vivo-Chaneton, Chairman of El Sitio, commented, "First quarter
performance was outstanding, as each of the countries in our network
delivered revenues in excess of our expectations. This performance, along
with continued momentum in unique users and audience reach, is
particularly satisfying in light of expected seasonal softness in South
America in the first quarter."
Roby Cibrian-Campoy, Chief Executive Officer of El Sitio, stated, "Our
revenues and metrics grew steadily as the quarter progressed. We are
adding over 100,000 new registered users per month, and are now over one
million, demonstrating our network's increasing reach and appeal to both
users and advertisers. Key recent developments, such as the launch of new
country sites for Chile and Colombia, the acquisition of DeCompras.com,
which will close in the second quarter, and the growing number of well-
known vertical content sites seeking to access El Sitio's community, set
the stage for sustained growth."
Audience Highlights
El Sitio's substantial growth in audience reach and network traffic
continued through the first quarter of 2000. First quarter average
monthly unique users were 3.81 million, an increase of 39% over the 2.75
million average monthly unique users in the fourth quarter of 1999. Total
page views in the first quarter were 417.9 million, up 55% from the
fourth quarter. Registered users at March 31, 2000 were 936,000, up 48%
from 634,000 at December 31, 1999. Registered users totaled 251,000 at
<PAGE>
March 31, 1999. (Unique user and page view data are audited by Engage
I/Pro.).
Financial Highlights
Revenue growth for the first quarter of 2000 was driven by continued
momentum in El Sitio's advertising revenues, which totaled $2.9 million
in the first quarter, versus $276,000 a year ago and $2.7 million in the
1999 fourth quarter. Active advertising clients totaled 176 in the first
quarter, up from 160 in the fourth quarter and 20 in the 1999 first
quarter. Growth in revenues was achieved in all countries in the El Sitio
network, with Argentina, Brazil and Uruguay particularly strong,
notwithstanding the effects of seasonality in those countries.
Net connectivity revenues of $2.8 million compared to $2.7 million in the
fourth quarter of 1999. El Sitio had acquired the connectivity
subscribers of IMPSAT Fiber Networks in Brazil and Argentina in the
fourth quarter of 1999. The Company completed integration of the Brazil
and Argentina acquisitions in the first quarter of 2000, and expects to
actively promote the service beginning in the second quarter as part of
El Sitio's branding and advertising efforts. The Company's acquisition of
connectivity subscribers from IMPSAT Fiber Networks in Colombia closed in
mid-April 2000.
Negative EBITDA for the 2000 first quarter improved by 20% from the 1999
fourth quarter, totaling $14.1 million versus $17.7 million. El Sitio's
operating costs and expenses were below budget.
Net loss for the first quarter of 2000 was $20.4 million, or $0.51 per
share, compared to a net loss of $1.5 million, or $0.15 per share, for
the first quarter of 1999. The Company's net loss for the fourth quarter
of 1999 was $22.4 million, or $1.17 per share.
First Quarter Milestones
The Company achieved a number of milestones during the first quarter of
2000, including:
Network expansion
El Sitio's network now consists of seven country-specific sites and a
global site, following the launches of El Sitio Chile in February and El
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<PAGE>
Sitio Colombia in late April. The Company also continues to implement its
strategy to further localize its content in major Latin American and U.S.
Hispanic population centers. The Company recently added localized content
for five of Argentina's largest metropolitan areas.
Product and content
Since the beginning of 2000, the Company has entered into several content
and strategic partnerships to further enhance its network and grow
advertising revenues. These agreements include the advertising and
content alliances with Grupo Sarandi in Uruguay, and Red de Television
Chilevision S.A. and Iberoamerican Media Holdings Chile S.A., and
commerce and content alliances with Compaq Latin America and
Hollywood.com.
El Sitio recently entered into partnerships with leading Internet
vertical portals, which pay El Sitio fees and, in certain cases, a
percentage of revenues in order to access El Sitio's loyal and growing
community of users. The Company has just recently concluded an exclusive
agreement with the Hicks Muse-backed sports portal PSNSports.com. Under
the agreement, PSNSports.com, the official site of the leading sports
cable network PSN Sports, will provide El Sitio with access to content,
video and services. Other new content partners include travel network
Viajo.com, financial sites Patagon.com and LatinStocks.com, auction site
Lokau.com, and real estate portal HogarDigital.com. The incorporation of
these selected topical sites on El Sitio's network broadens the Company's
quality offering and further monetizes its community and market reach.
Convergence and Broadband
In February, the Company launched El Sitio 3D, Latin America's first
three-dimensional virtual community in which audio, video and text
converge to provide users with a compelling online experience. El Sitio
3D is experiencing approximately 10,000 daily logins; the Company is
actively creating new original content and features for this site and is
expanding its library of video and audio clips. El Sitio 3D plays a key
role in the Company's efforts to lead the broadband revolution in Latin
America.
E-commerce
In March, El Sitio announced the acquisition of DeCompras.com, a leading
e-commerce company targeting Mexico as well as Mexican-Americans located
in the United States, who comprise approximately 65% of all U.S.
Hispanics. This acquisition, which is expected to close in late May,
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<PAGE>
accelerates the implementation of El Sitio's e-commerce strategy as
DeCompras' market represents approximately one-half of El Sitio's target
audience in the Americas.
About El Sitio
El Sitio, Inc. (Nasdaq: LCTO) is a leading Internet media company
providing original country-specific and global interactive content and
community-building features, e-commerce and connectivity to Spanish- and
Portuguese-speakers. El Sitio is designed as an Internet destination
network (www.elsitio.com) that consists of country web sites for
Argentina, Brazil, Chile, Colombia, Mexico, the United States and
Uruguay, as well as a Global site. Founded in 1997, El Sitio has a team
of 425 professionals in seven offices throughout the Americas. El Sitio's
common shares began trading on the Nasdaq National Market in December
1999.
This announcement contains forward-looking statements that involve risks
and uncertainties, including those relating to El Sitio's ability to
expand its user and advertiser bases, to increase its revenues, and to
generate future profits and positive cash flow from operations. Actual
results may differ materially from the results predicted, and reported
results should not be considered as an indication of future performance.
The potential risks and uncertainties include, among others, the
increasingly competitive and changing environment for advertising sales,
uncertainties associated with the Internet as an advertising and e-
commerce medium, the company's dependence on advertising revenues and on
third parties for technology, content, and distribution, and the
company's ability to integrate acquired businesses. Other factors that
could affect the company's business, results of operations, financial
condition and prospects are identified in the company's prospectus dated
December 9, 1999 included in its registration statement on Form F-1,
including under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors", which
registration statement is on file with the U.S. Securities and Exchange
Commission (http://www.sec.gov). Nothing can or should be inferred about
El Sitio's future financial performance from the information contained in
this press release. The accompanying condensed consolidated statements of
operations and balance sheets are an integral part of this announcement.
[Financial Tables Attached]
All other trademarks and/or registered trademarks are the property of
their respective owners.
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<PAGE>
Contacts:
Investors: Media:
Horacio Milberg Mariano Varela
Chief Financial Officer Vice President, Marketing
El Sitio, Inc. El Sitio, Inc.
011-5411-4339-3700 011-5411-4339-3700
Or Or
Jeff Majtyka/Leonardo Santiago Eric Sokolsky
Brainerd Communicators TSI Communications
212-986-6667 212-320-2203
# # #
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<PAGE>
EL SITIO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------------------------
March 31, 2000 March 31, 1999 December 31, 1999
------------------ ----------------- -----------------
(unaudited) (unaudited) (unaudited)
(In thousands, except share and per share data)
<S> <C> <C> <C>
Revenues
Net advertising and related services revenues . . . . . . . . . . $ 2,877 $ 276 $ 2,681
Net connectivity services revenues . . . . . . . . . . . . . . . 2,769 2,656
---------- ---------- ----------
Total net revenues . . . . . . . . . . . . . . . . . . . . . . . 5,646 276 5,337
---------- ---------- ----------
Costs and expenses
Product, content and technology . . . . . . . . . . . . . . . . . 5,131 616 4,893
Marketing and sales . . . . . . . . . . . . . . . . . . . . . . . 9,845 355 13,397
Corporate, general and administrative . . . . . . . . . . . . . . 4,814 740 4,703
Depreciation and amortization . . . . . . . . . . . . . . . . . . 2,315 66 1,764
Share-based compensation . . . . . . . . . . . . . . . . . . . . 2,040 1,543
---------- ---------- ----------
Total costs and expenses . . . . . . . . . . . . . . . . . . . . 24,145 1,777 26,300
---------- ---------- ----------
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . (18,499) (1,501) (20,963)
Total other income (expense) . . . . . . . . . . . . . . . . . . 2,058 (14) 499
Dividends on convertible preferred shares(1) . . . . . . . . . . (3,929) (1,960)
---------- ---------- ----------
Net loss attributable to common shareholders . . . . . . . . . . $ (20,370) $ (1,515) $ (22,424)
========== ========== ==========
Basic and diluted net loss per common share . . . . . . . . . . . $ (0.51) $ (0.15) $ (1.17)
Shares used in computing basic and diluted loss per common share 40,182,063 10,408,889 19,164,323
</TABLE>
[FN]
<F1> The difference between the initial public offering price per common
share and the $9.00 price per Class B convertible preferred share
is amortized as a deemed dividend during the six-month period
ending June 15, 2000.
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<PAGE>
EL SITIO, INC.
BALANCE SHEET DATA
<TABLE>
<CAPTION>
March 31, 2000 March 31, 1999 December 31, 1999
(unaudited) (unaudited) (audited)
------------------ ------------------ ------------------
(in thousands)
<S> <C> <C> <C>
ASSETS
Current assets
Cash, cash equivalents and investments . . . . . . . . . . . . $136,783 $ 471 $160,029
Trade accounts receivable, net . . . . . . . . . . . . . . . . 3,910 105 3,123
Other current assets . . . . . . . . . . . . . . . . . . . . . 14,502 -- 10,486
-------- -------- --------
Total current assets . . . . . . . . . . . . . . . . . . . . . 155,195 576 173,638
-------- -------- --------
Property, plant and equipment, net . . . . . . . . . . . . . . . 7,561 630 5,405
Intangible assets - Customer base . . . . . . . . . . . . . . . . 16,857 139 18,209
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 6,093 355 4,668
-------- -------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $185,706 $ 1,700 $201,920
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable - trade . . . . . . . . . . . . . . . . . . . $ 8,846 $ 282 $ 13,499
Accrued and other liabilities . . . . . . . . . . . . . . . . . 5,611 660 4,796
Other current liabilities . . . . . . . . . . . . . . . . . . . 1,203 700 986
-------- -------- --------
Total current liabilities . . . . . . . . . . . . . . . . . . 15,660 1,642 19,281
-------- -------- --------
Class B convertible preferred shares . . . . . . . . . . . . . . 8,967 -- 8,967
-------- -------- --------
Shareholders' equity (deficit) . . . . . . . . . . . . . . . . . 161,079 58 173,672
-------- -------- --------
Total liabilities and shareholders' equity . . . . . . . . . . . $185,706 $ 1,700 $201,920
======== ======== ========
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</TABLE>
