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Exhibit 99.1
Company Press Release
ARTISTDIRECT INC. FILES SEC FORM 10-Q RELATING TO FIRST-QUARTER RESULTS
LOS ANGELES--(BUSINESS WIRE)--May 15, 2000--ARTISTdirect Inc. (Nasdaq:ARTD -
news) today filed a Form 10-Q with the Securities and Exchange Commission for
the quarter ended March 31, 2000.
As part of that filing, the company revised its previously announced financial
results to reflect a one-time, non-cash effective dividend in connection with
the adjustable conversion of the company's Series C Redeemable Preferred Stock
upon completion of its initial public offering ("IPO") on March 31, 2000.
Net loss from operations was not affected by the non-recurring, non-cash
effective dividend. Net loss attributable to common shareholders and loss per
share includes the impact of the effective dividend, in accordance with
generally accepted accounting principles.
As a result, pro forma net loss per share of $0.39, as previously announced, was
revised to a pro forma net loss per share of $1.25. Results of future periods
will not be affected as all of the company's redeemable preferred stock was
converted to common stock in connection with the IPO.
About ARTISTdirect Inc.
The ARTISTdirect Network is an online music network that connects music artists
and fans. The integrated network of Web sites offers multimedia entertainment
content, music news and information, community around shared music interests and
music-related commerce.
The ARTISTdirect Network consists of ARTISTdirect.com (www.artistdirect.com),
home of the official channels that the company operates on behalf of artists;
UBL.com (www.ubl.com), a music search engine on the Web; iMusic
(www.imusic.com), an online community site where fans exchange music interests
and commentary; DOWNLOADSdirect (www.downloadsdirect.com), a feature that
enables users to download music from the ARTISTdirect Network and to upload
their music and other information, Artist TV the Network's hub for broadband
programming, and the ARTISTdirect Superstore, a retail site offering a wide
selection of recorded music and artist merchandise.
Additionally, ARTISTdirect operates the ARTISTdirect Talent Agency and manages
Kneeling Elephant Records. The company has offices in New York, Los Angeles, San
Francisco and London. Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995: This release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of ARTISTdirect that involve risks and uncertainties. Readers are
cautioned that these statements are only predictions and may differ materially
from actual future events or results. Potential risks and uncertainties that may
affect future events and results include, among others, ARTISTdirect's unproven
business model, increased competition in its industry, ARTISTdirect's ability to
increase revenue from online product sales, advertising and other revenue
streams, ability to increase visits to ARTISTdirect's site, ability to attract
and retain artists, ability to offer compelling content, ability to fulfill
online music and merchandise orders in a timely manner, ability to build brand
recognition, ability to integrate acquisitions of technology and other
businesses, ability to protect and/or obtain intellectual property rights, and
ability to manage growth. More information about potential factors that could
affect the company's business and financial results is included in the documents
filed by ARTISTdirect with the SEC, including its Registration Statement on Form
S-1 and all amendments thereto.
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ARTISTdirect INC.
Consolidated Statements of Operation
(amounts in thousands, except for share data)
(Unaudited)
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<CAPTION>
Three months ended March 31,
2000 1999
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Net revenue:
Online product sales $ 2,029 $ 1,016
Advertising and other 1,797 381
Agency commissions 545 130
Record label 126 171
Total net revenue 4,497 1,698
Cost of revenue:
Direct cost of product sales 1,921 901
Other cost of revenue 1,633 395
Stock-based compensation 2,793 --
Total cost of revenue 6,347 1,296
Gross profit (loss) (1,850) 402
Operating expenses:
Product development 807 191
Sales and marketing 5,117 777
General and administrative 3,660 1,308
Amortization of stock-based
compensation (366) 802
Depreciation and amortization 1,174 88
Loss from operations (12,242) (2,764)
Income from equity investment -- 33
Interest income, net 1,055 12
Net loss $ (11,187) $ (2,719)
Dividends on redeemable
preferred securities 963 121
Beneficial conversion feature
on redeemable preferred stock 24,375 --
Net loss attributable to
common shareholders $ (36,525) $ (2,840)
Basic and diluted loss per share $ (2.45) N/A
Weighted average common shares
outstanding 14,901,505 N/A
Pro forma loss per share $ (1.25) $ (0.16)
Pro forma weighted average
common shares outstanding 28,489,648 16,649,626
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Contact:
ARTISTdirect Inc., Los Angeles
James B. Carroll, 323/634-4022
[email protected]
