Exhibit 99.1
For Immediate Release
For Information Contact:
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Kenneth W. Sanders | | Larry Wahl |
Executive Vice President | | Director, Investor Relations & Corp. Comm. |
(954) 489-4000, ext. 7900 | | (954) 489-4000, ext. 7225 |
SportsLine.com, Inc. Reports Second Quarter Operating Results
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Revenue Grows 20%, Net Loss Reduced by 25%, EBITDA Improves by 46%
FORT LAUDERDALE, FL (August 3, 2004)–SportsLine.com, Inc. (NASDAQ:SPLN), a leading Internet sports media company and publisher of CBS SportsLine.com (http://cbs.sportsline.com), today announced its operating results for the quarter ended June 30, 2004. SportsLine.com’s revenue grew to $10.6 million for the quarter, a 20% increase compared to the $8.8 million of revenue in the same quarter of 2003. The Company’s net loss was reduced 25% to $10.0 million, or $0.23 per basic and diluted share, compared to $13.3 million, or $0.31 per basic and diluted share, in the second quarter of 2003.
The Company’s EBITDA loss from continuing operations (net loss from continuing operations excluding net interest and other income/expense, depreciation and amortization, equity consideration to Viacom and others and stock compensation expense) was $2.8 million, a 46% improvement compared to $5.1 million in the second quarter of 2003.
“We are pleased with the results this quarter, including solid double-digit growth in both our ad sales and subscription businesses,” said Michael Levy, founder and CEO of SportsLine.com, Inc.“It is very encouraging for the future of this company to experience that kind of growth, especially since the second quarter is traditionally weak due to a lack of major sporting events”
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SportsLine.com, Inc.
Financial Highlights
(in thousands, except per-share data)
(unaudited)
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| | | Three Months Ended
June 30,
| | | Six Months Ended June 30,
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| | | 2004
| | | 2003
| | | 2004
| | | 2003
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Revenue | | $ | 10,585 | | | $ | 8,844 | | | $ | 22,935 | | | $ | 20,854 | |
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Loss from operations | | $ | (9,775 | ) | | $ | (12,751 | ) | | $ | (18,438 | ) | | $ | (22,394 | ) |
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Net loss | | $ | (9,968 | ) | | $ | (13,294 | ) | | $ | (18,403 | ) | | $ | (23,120 | ) |
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Basic and diluted loss per share before discontinued operations | | $ | (0.23 | ) | | $ | (0.30 | ) | | $ | (0.43 | ) | | $ | (0.57 | ) |
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Basic and diluted loss per share | | $ | (0.23 | ) | | $ | (0.31 | ) | | $ | (0.43 | ) | | $ | (0.58 | ) |
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Weighted average shares outstanding | | | 43,264 | | | | 42,663 | | | | 42,827 | | | | 39,935 | |
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EBITDA loss | | $ | (2,756 | ) | | $ | (5,071 | ) | | $ | (4,427 | ) | | $ | (6,827 | ) |
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Additional Financial Highlights
Revenue
| | • | Advertising and marketing services revenue from continuing operations increased 16% to $8.7 million in the second quarter of 2004, compared to $7.5 million in the same quarter of 2003. |
| | • | Subscription and premium products revenue for the second quarter 2004 grew by 40% to $1.8 million compared to $1.3 million in the second quarter 2003. |
| | • | Revenue generated through joint sales efforts with CBS represented approximately 8% of the Company’s total advertising sales in the quarter ended June 30, 2004, compared to 3% in the same quarter a year ago. |
Operating Expenses
| | • | Total operating expenses for the quarter ended June 30, 2004 were $16.2 million, a slight improvement from operating expenses of $16.7 million for the same quarter in 2003. |
| | • | As of June 30, 2004, the Company’s total headcount was 248 compared with 267 at the end of June 2003, excluding employees of discontinued operations. |
Balance Sheet
| | • | As of June 30, 2004, the Company’s cash and cash equivalents and marketable securities totaled approximately $27 million, compared to approximately $29 million at the end of December 2003. Please refer to the condensed consolidated balance sheets and consolidated statements of cash flows contained in this press release. |
| | • | Capital expenditures for the quarter ended June 30, 2004 were approximately $1 million, bringing the year to date total to approximately $1.3 million. |
Recent Business Highlights
Viacom Update
| | • | On August 2, 2004 it was jointly announced that SportsLine.com and Viacom had signed a definitive agreement for SportsLine.com to merge with a subsidiary of Viacom. Public shareholders of SportsLine.com will be entitled to receive $1.75 per share in cash on closing of the transaction. Completion of the merger is subject to customary closing conditions, including approval by SportsLine.com shareholders. The merger is expected to be completed by the end of the year. Viacom currently holds approximately 38% of the total outstanding shares of SportsLine.com’s common stock. |
Class Action Securities Lawsuit Dismissed
| | • | On July 21, 2004 the Company announced that the United States District Court for the Southern District of Florida has dismissed with prejudice the consolidated shareholder securities class action lawsuit filed last year against the Company and certain of its officers. |
Business Outlook
The following business outlook section, as well as other forward looking statements in this press release, is based on current expectations as of today only. Due to economic and advertising market variables, and changes in consumer acceptance and other variables related to the Company’s subscription products, including the introduction of additional competing subscription products in the marketplace, among other factors, there can be no assurance that the Company will achieve the stated outlook. SportsLine.com makes these statements as of today and undertakes no obligation to update these statements. While it is currently expected that these business outlook statements will not be updated prior to the release of SportsLine.com’s 2004 third quarter earnings announcement, the Company reserves the right to update the outlook for any reason during the quarter, including the occurrence of material events.
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Consistent with previous guidance, the Company expects full year revenue growth for 2004 to be in the 12-18% range, although some quarters may exceed the range and others may be below the range due to seasonal fluctuations. The Company is expecting to reduce its net loss for the full year 2004 by 20-30%. Most of the projected revenue growth and the reduction in net loss are expected to occur in the second half of the year, consistent with prior years’ results.
The Company is also projecting positive EBITDA from continuing operations for the full year 2004, with EBITDA losses in the first half of the year and positive EBITDA during the second half of the year.
About SportsLine.com, Inc.
SportsLine.com (Nasdaq:SPLN) is at the leading edge of media companies providing Internet sports content, community and e-commerce. As the publisher ofCBS SportsLine.com and the official Web sites of theNFL,PGA TOUR andNCAA Sports, the Company serves as one of the most comprehensive sports information sources available, providing an unmatched breadth and depth of multimedia sports news, information, entertainment and merchandise.
Note: This press release contains forward-looking statements, which involve risks and uncertainties. SportsLine.com’s actual results could differ materially from those anticipated in these forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures, dependence on advertising revenues, which are difficult to forecast, the growth rate of the Internet, constantly changing technology and market acceptance of the company’s products and services. Investors are also directed to consider the other risks and uncertainties discussed in SportsLine.com’s Securities and Exchange Commission filings, including those discussed under the caption “Risk Factors That May Affect Future Results” in SportsLine.com’s latest Annual Report on Form 10-K. SportsLine.com undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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SportsLine.com, Inc.
Consolidated Statements of Operations
(in thousands, except per-share data)
(unaudited)
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| | | Three Months Ended
June 30,
| | | Six Months Ended June 30,
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| | | 2004
| | | 2003
| | | 2004
| | | 2003
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Revenue: | | | | | | | | | | | | | | | | |
Advertising and marketing services | | $ | 8,746 | | | $ | 7,527 | | | $ | 20,413 | | | $ | 18,795 | |
Subscription and premium products | | | 1,839 | | | | 1,317 | | | | 2,522 | | | | 2,059 | |
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Total revenue | | | 10,585 | | | | 8,844 | | | | 22,935 | | | | 20,854 | |
Cost of revenue | | | 4,125 | | | | 4,889 | | | | 8,347 | | | | 8,702 | |
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Gross profit | | | 6,460 | | | | 3,955 | | | | 14,588 | | | | 12,152 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Sales and marketing: | | | | | | | | | | | | | | | | |
Amortization of equity issued to Viacom for promotion | | | 5,572 | | | | 5,572 | | | | 11,143 | | | | 11,143 | |
Other | | | 4,193 | | | | 4,858 | | | | 9,028 | | | | 10,385 | |
General and administrative | | | 5,672 | | | | 5,090 | | | | 11,327 | | | | 10,451 | |
Depreciation and amortization | | | 798 | | | | 1,186 | | | | 1,528 | | | | 2,567 | |
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Total operating expenses | | | 16,235 | | | | 16,706 | | | | 33,026 | | | | 34,546 | |
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Loss from operations | | | (9,775 | ) | | | (12,751 | ) | | | (18,438 | ) | | | (22,394 | ) |
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Net interest and other income (expense) | | | (193 | ) | | | (102 | ) | | | 35 | | | | (231 | ) |
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Loss from continuing operations | | | (9,968 | ) | | | (12,853 | ) | | | (18,403 | ) | | | (22,625 | ) |
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Loss from discontinued operations | | | — | | | | (156 | ) | | | — | | | | (210 | ) |
Loss from sale of discontinued operations | | | — | | | | (285 | ) | | | — | | | | (285 | ) |
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Net loss | | $ | (9,968 | ) | | $ | (13,294 | ) | | $ | (18,403 | ) | | $ | (23,120 | ) |
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Basic and diluted loss per share before discontinued operations | | $ | (0.23 | ) | | $ | (0.30 | ) | | $ | (0.43 | ) | | $ | (0.57 | ) |
Loss per share from sale of discontinued operations | | | — | | | | (0.01 | ) | | | — | | | | (0.01 | ) |
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Basic and diluted loss per share | | $ | (0.23 | ) | | $ | (0.31 | ) | | $ | (0.43 | ) | | $ | (0.58 | ) |
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Basic and diluted weighted average shares outstanding | | | 43,264 | | | | 42,663 | | | | 42,827 | | | | 39,935 | |
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EBITDA loss | | $ | (2,756 | ) | | $ | (5,071 | ) | | $ | (4,427 | ) | | $ | (6,827 | ) |
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Supplemental Financial Data (unaudited)
In order to fully assess the Company’s financial operating results, management believes that EBITDA from continuing operations is an appropriate non-GAAP financial measure of evaluating the operating and liquidity performance of the Company, because it reflects the resources available for operating funds and strategic opportunities, including, among others, to invest in the business, make strategic acquisitions, strengthen the balance sheet and repurchase stock. However, EBITDA from continuing operations should be considered in addition to, not as a substitute for, or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with generally accepted accounting principles.
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| | | Three Months Ended
June 30,
| | | Six Months Ended June 30,
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| (in thousands) | | 2004
| | | 2003
| | | 2004
| | | 2003
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EBITDA loss reconciliation: | | | | | | | | | | | | | | | | |
Net loss | | $ | (9,968 | ) | | $ | (13,294 | ) | | $ | (18,403 | ) | | $ | (23,120 | ) |
Amortization of equity issued to third parties | | | 5,807 | | | | 5,951 | | | | 11,614 | | | | 11,900 | |
Depreciation and amortization | | | 798 | | | | 1,186 | | | | 1,528 | | | | 2,567 | |
Stock compensation expense | | | 414 | | | | 543 | | | | 869 | | | | 1,100 | |
Loss from sale of discontinued operations | | | — | | | | 285 | | | | — | | | | 285 | |
(Income) loss from discontinued operations | | | — | | | | 156 | | | | — | | | | 210 | |
Interest and other expense, net | | | 193 | | | | 102 | | | | (35 | ) | | | 231 | |
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EBITDA loss | | $ | (2,756 | ) | | $ | (5,071 | ) | | $ | (4,427 | ) | | $ | (6,827 | ) |
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Supplemental financial data related to gaming information operations, which the Company sold in 2003, is reflected as discontinued operations in the Company’s consolidated statements of operations for the three and six months ended June 30, 2003:
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| (in thousands) | | Three Months Ended
June 30, 2003
| | | Six Months Ended
June 30, 2003
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Advertising and marketing services revenue | | $ | 38 | | | $ | 188 | |
Subscription and premium products revenue | | | 382 | | | | 928 | |
Cost of revenue | | | (471 | ) | | | (1,059 | ) |
Sales and marketing expense | | | (52 | ) | | | (127 | ) |
General and administrative expense | | | (53 | ) | | | (134 | ) |
Depreciation and amortization | | | — | | | | (7 | ) |
Interest income, net | | | — | | | | 1 | |
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Loss from discontinued operations | | $ | (156 | ) | | $ | (210 | ) |
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SportsLine.com, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
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| | | Six Months Ended June 30,
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| | | 2004
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Cash flows from operating activities: | | | | | | | | |
Net loss | | $ | (18,403 | ) | | $ | (23,120 | ) |
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Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
Depreciation and amortization | | | 1,528 | | | | 2,573 | |
Equity consideration to third parties | | | 11,614 | | | | 11,900 | |
Stock compensation expense | | | 869 | | | | 1,115 | |
Other | | | 15 | | | | (555 | ) |
Changes in assets and liabilities: | | | | | | | | |
Accounts receivable | | | 389 | | | | (1,011 | ) |
Prepaid expenses and other assets | | | (365 | ) | | | (1,287 | ) |
Accounts payable | | | (194 | ) | | | 2,111 | |
Accrued expenses | | | (4,644 | ) | | | (94 | ) |
Deferred revenue | | | 8,422 | | | | 2,232 | |
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Net cash used in operating activities | | | (769 | ) | | | (6,136 | ) |
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Cash flows from investing activities: | | | | | | | | |
Purchases of available-for-sale securities | | | (5,430 | ) | | | (5,237 | ) |
Sales of available-for-sale securities | | | 12,274 | | | | 10,080 | |
Purchases of held-to-maturity securities | | | — | | | | (3,243 | ) |
Maturities of held-to-maturity securities | | | 1,000 | | | | 7,094 | |
Purchase of property and equipment | | | (1,322 | ) | | | (873 | ) |
Purchase of license | | | — | | | | (250 | ) |
Proceeds from sale of discontinued operations | | | — | | | | 1,460 | |
Net change in restricted cash | | | 238 | | | | 97 | |
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Net cash provided by investing activities | | | 6,760 | | | | 9,128 | |
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Cash flows from financing activities: | | | | | | | | |
Proceeds from issuance of stock and exercise of employee options | | | 53 | | | | 78 | |
Repurchase of common stock | | | — | | | | (521 | ) |
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Net cash provided by (used in) financing activities | | | 53 | | | | (443 | ) |
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Net increase in cash and cash equivalents | | | 6,044 | | | | 2,549 | |
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Cash and cash equivalents, beginning of period | | | 2,485 | | | | 17,383 | |
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Cash and cash equivalents, end of period | | $ | 8,529 | | | $ | 19,932 | |
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SportsLine.com, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
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| | | June 30, 2004
| | December 31, 2003
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| | | (unaudited) | | (audited) |
Assets: | | | | | | |
Cash and cash equivalents | | $ | 8,529 | | $ | 2,485 |
Short-term marketable securities | | | 10,713 | | | 16,943 |
Receivables, prepaids and other current assets | | | 16,093 | | | 15,989 |
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Total current assets | | | 35,335 | | | 35,417 |
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Non-current marketable securities | | | 7,365 | | | 9,134 |
Property and equipment, net | | | 5,511 | | | 5,563 |
Deferred advertising and content-CBS | | | 5,714 | | | 6,857 |
Other assets | | | 1,618 | | | 2,435 |
Goodwill | | | 16,194 | | | 16,194 |
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| | | $ | 71,737 | | $ | 75,600 |
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Liabilities and Shareholders’ Equity: | | | | | | |
Current liabilities | | $ | 23,983 | | $ | 19,508 |
Long-term convertible notes | | | 16,661 | | | 16,661 |
Other long-term liabilities | | | 22,424 | | | 15,833 |
Shareholders’ equity | | | 8,669 | | | 23,598 |
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| | | $ | 71,737 | | $ | 75,600 |
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Supplemental schedule of cash and marketable securities
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| | | June 30, 2004
| | December 31, 2003
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Cash and cash equivalents | | $ | 8,529 | | $ | 2,485 |
Short-term marketable securities | | | 10,713 | | | 16,943 |
Non-current marketable securities | | | 7,365 | | | 9,134 |
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| | | $ | 26,607 | | $ | 28,562 |
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