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
For the month of February , 2000
EL SITIO, INC (THE SITE, INC.)
______________________________________________________________________________
(Translation of registrant's name into English)
Avenida Ingeniero Huergo 1167, C1107, AOL, Buenos Aires, Argentina
______________________________________________________________________________
(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
_____________________________________
(Registrant)
Date February 29, 2000 By /s/ Horacio Milberg
__________________________________
Name: Horacio Milberg
___________________ Title: Chief Financial Officer and
* Print the name and title under the Secretary
signature of the signing officer.
FOR IMMEDIATE RELEASE
EL SITIO REPORTS FOURTH QUARTER AND
1999 FISCAL YEAR FINANCIAL RESULTS
Net revenues for the fourth quarter totaled $5.3 million,
driven by advertising and connectivity
Audience in the fourth quarter reached 2.75 million average monthly unique
users,an increase of 164% over the third quarter
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Buenos Aires and New York -Feb. 29, 2000 -El Sitio Inc. (Nasdaq: LCTO), a
leading Internet network which targets Spanish- and Portuguese-speaking
audiences in Latin America and the United States, today reported net revenues
of $5.3 million for the fourth quarter ended December 31, 1999 compared to
net revenues of $171,000 for the fourth quarter of 1998, and $760,000 for the
third quarter of 1999. Net loss for the fourth quarter of 1999 was $22.4
million compared to a net loss of $1.7 million for the fourth quarter of
1998.
Net revenues for fiscal 1999 were $6.9 million compared to $780,000 in fiscal
1998. Net loss for fiscal 1999 was $36.3 million compared to a net loss of
$3.5 million in fiscal 1998.
Revenue growth for both periods in 1999 was driven by higher advertising and
related revenues, which totaled $2.7 million and $4.2 million for the fourth
quarter and full year, respectively. Active advertising clients totaled 113
in the 1999 fourth quarter, up from 86 in the third quarter and 23 in the
1998 fourth quarter. Results for both 1999 periods also include almost three
months of retail dial-up operations in Brazil and almost two months of retail
dial-up operations in Argentina.
Roberto Vivo-Chaneton, Chairman of El Sitio, commented, "Our fourth quarter
performance was strong, suggesting both an early validation of our business
model and our growing stature as a leading destination network in our target
markets. Looking ahead, we are focusing on three strategic areas. First, we
are actively expanding our network, as illustrated by site launches in
Brazil, Mexico and the United States and our recently announced agreement in
Chile, where we have entered into an alliance with a major radio and TV
network. Second, we are accelerating the implementation of our e-commerce
strategy through, among other steps, today's announced signing of a letter of
intent to acquire Mexico's DeCompras.com. Finally, we continue to seek to
leverage our partnerships and forge new alliances that further build on our
competitive strengths in content and position us for the broadband and
<PAGE>
wireless environments. We have considerable momentum that is continuing in
the early part of 2000."
Roberto Cibrian-Campoy, El Sitio's Chief Executive Officer, added, "A key
development in our broadband strategy is El Sitio 3-D, our multimedia browser
introduced earlier this month. This product illustrates our commitment to
providing El Sitio's users with a unique online experience which implements
innovative technology developed for broadband access. Telecommunication
deregulation in Latin America is allowing for the rapid development and
deployment of high-speed access that in turn allows for a richer and more
interactive Internet experience. With developments like El Sitio 3-D, the
company is already positioned as a leader in the development of the Internet
in Latin America through the creation of exciting new interactive content for
broadband Internet access."
Audience Highlights
El Sitio previously reported substantial growth in network traffic in the
1999 fourth quarter. Fourth quarter highlights included 2.75 million average
monthly unique users, an increase of 164% over the 1.04 million average
monthly users in the third quarter. Total page views in the fourth quarter
were 270.1 million, up 127% from the third quarter. Registered users at
December 31, 1999 were 633,600 compared to 440,838 at September 30, 1999 and
107,118 at December 31, 1998. (Unique user and page view data are audited by
Nielsen I/Pro.)
1999 Milestones
The Company achieved a number of milestones in 1999, including:
Capital raising
In 1999, El Sitio raised over $200 million in new capital through two private
placements and its initial public offering of common stock.
Network expansion
A central element of El Sitio's strategy is the expansion of its network
targeted to Spanish- and Portuguese-speaking Internet users. Major site
launches in 1999 included Brazil, Mexico and the United States, and new sites
are expected to be launched in Chile and Colombia in the next 60 days. The
company also continues to implement its strategy to further localize its
content in major Latin American and U.S. Hispanic population centers.
Product and content
El Sitio regards its focus on original and proprietary country-specific
quality content as a key competitive advantage. The company unveiled a
variety of interactive services, tools and other resources in 1999,
highlighted by its popular cupido.net relationship network. The company also
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launched a re-designed homepage in November 1999 that enhanced the
presentation of its content based on user feedback and preferences.
Convergence
El Sitio is positioning itself as a leader in the convergence of the Internet
and traditional media in Latin America. After a year of development, the
company launched in February 2000 its El Sitio 3-D web-browser, the first
three-dimensional Latin American virtual community in which audio, video and
text converge to provide users a compelling online experience. In December
1999, El Sitio produced and hosted the Fashion Show of the Millennium, Latin
America's first event of its kind produced and distributed by an Internet
company using video streaming technology.
E-commerce
In December 1999, El Sitio launched a shopping guide dedicated to assisting
El Sitio's users as they navigate the online buying process. This guide
provides users with a search engine and directory, online tutorials, El
Sitio's recommendations on top shopping sites, and other relevant tools to
facilitate the online shopping experience for users. The channel is a first
step in El Sitio's e-commerce strategy, which is targeted at capitalizing on
what is expected to be a significant market opportunity in Latin America.
Today, El Sitio announced separately the signing of a letter of intent to
acquire Mexico's DeCompras.com. DeCompras.com is a Mexico-based e-commerce
company whose acquisition will accelerate El Sitio's e-commerce strategy in
the region.
Connectivity
El Sitio completed acquisitions of the retail dial-up access subscribers of
IMPSAT Fiber Networks in Argentina and Brazil. El Sitio also expects to
complete the acquisition of IMPSAT's subscribers in Colombia in March 2000.
These three acquisitions give El Sitio access to a base of nearly 80,000
dial-up subscribers as of December 31, 1999. The company believes that it
can continue to expand its fee-paying subscriber base in these countries with
high-quality and high-speed services.
Wireless access
In November 1999, the company entered into a strategic relationship with
Motorola, Inc. to deliver original, country-specific content to pager users
via Motorola's iKno!K and OptoK personalized information services systems.
This partnership illustrates El Sitio's goal to maximize distribution and
access to its network.
About El Sitio, Inc.
El Sitio, Inc. (http://www.elsitio.com and http://www.osite.com.br) is a
leading Internet network providing original and proprietary country-specific
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<PAGE>
content for Spanish- and Portuguese-speaking audiences in Latin America and
the United States. El Sitio consists of country web sites for Argentina,
Brazil, Mexico, Uruguay and the United States as well as a global site. El
Sitio offers users country-specific content and interactive community
features such as free e-mail, a search engine, chat rooms, bulletin boards,
auctions, contests, and Cupido net, an interactive meeting place. Founded in
1997 by Roberto Vivo-Chaneton and Roberto Cibrian-Campoy, El Sitio has a team
of approximately 330 professionals in its offices in Buenos Aires, Mexico
City, Miami, Montevideo, Santiago and Sao Paulo.
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 advertising and other 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 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.
[Tables Attached]
All other trademarks and/or registered trademarks are the property of their
respective owners.
Contacts:
Horacio Milberg Mariano Varela
Chief Financial Officer Vice President, Marketing
El Sitio, Inc. El Sitio, Inc.
011-5411-4339-3700 011-5411-4339-3700
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<PAGE>
Victoria Weld Jeff Majtyka/ Leonardo Santiago
Kekst & Co. Brainerd Communicators
212-521-4849 212-986-6667
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<PAGE>
CONDENSED STATEMENT OF OPERATIONS AND BALANCE SHEETS
(Unaudited and Subject to Final Audit)
<TABLE>
<CAPTION>
Actual Actual
Fourth Fourth
Quarter Quarter Actual Actual
1998 1999 1998 1999
(U.S. dollars in thousands, except share and
per share data)
<S> <C> <C> <C> <C>
Net advertising and related
services revenues . . . . . . $171 $2,681 $780 $4,205
Net connectivity services
revenues . . . . . . . . . . -- 2,656 -- 2,656
Total net revenues . . . . . 171 5,337 780 6,861
Costs and expenses:
Product content & technology 708 4,893 1,556 8,074
Marketing and sales . . . . . 354 13,397 674 20,554
Corporate, general and
administrative . . . . . . . 796 4,703 1,940 8,439
Depreciation and amortization 48 1,764 107 2,100
Share-based compensation . . -- 1,543 -- 2,042
Total costs and expenses . . 1,906 26,300 4,277 41,209
Operating loss . . . . . . . (1,735) (20,963) (3,497) (34,348)
Loss attributable to minority
interest . . . . . . . . . . -- 1 -- 1
Total other Income (expense) 10 498 (20) 764
Dividends on Class A and
Class B convertible preferred
shares . . . . . . . . . . . -- (1,960) -- (2,744)
Net loss attributable to
common shareholders . . . . . (1,725) (22,424) (3,517) (36,327)
Basic and diluted net loss
per common share . . . . . . (0.29) (1.17) (1.15) (2.66)
Shares used in computing
basic and diluted loss per
common share . . . . . . . . 6,000,000 19,164,323 3,050,000 13,681,306
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<PAGE>
<CAPTION>
Pro Forma Pro Forma
Fourth Fourth
Quarter Quarter Pro forma Pro Forma
1998 1999 1998 1999
<S> <C> <C> <C> <C>
Pro Forma<F1>
Net revenues . . . . . . . . $4,218 $5,693 $15,156 $15,863
Operating loss . . . . . . . $(2,585) $(21,061) $(7,689) $(38,108)
Net loss . . . . . . . . . . $(2,575) $(22,522) $(7,709) $(40,087)
<FN>
<F1>To reflect acquisitions of retail dial-up subscribers in Argentina and
Brazil (as if acquisitions had occurred at beginning of periods) and includes
the effect of amortization of acquired subscribers based on a three-year
period.
</TABLE>
<TABLE>
<CAPTION>
Actual Actual
1998 1999
(U.S. dollars in thousands)
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents . . . . . . . . . . . $246 $160,029
Working capital (deficit) . . . . . . . . . . . (42) 154,358
Total assets . . . . . . . . . . . . . . . . . 1,481 201,920
Total liabilities . . . . . . . . . . . . . . . 712 19,281
Class A convertible preferred shares . . . . . -- --
Class B convertible preferred shares . . . . . -- 8,967
</TABLE>
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