Exhibit 99
CONTACTS:
Becky Yeamans, Juno Investor Relations
(212) 597-9274 or ir@support.juno.com
Gary Baker, Juno Public Relations
(212) 597-9005 or pr@support.juno.com
JUNO REPORTS RECORD ANNUAL AND FOURTH-QUARTER RESULTS
*119% YEAR-OVER-YEAR INCREASE IN ANNUAL REVENUES
*SUBSCRIBER BASE GROWS TO 14.2 MILLION REGISTERED, 4.0 MILLION ACTIVE
*QUARTERLY NET LOSS NARROWS TO LESS THAN HALF OF Q3 FIGURE
NEW YORK, NY (January 25, 2001) -- Juno Online Services, Inc. (Nasdaq: JWEB),
one of the nation's largest Internet access providers, today reported record
annual revenues of $114.0 million for the year ended December 31, 2000, more
than double the $52.0 million in annual revenues reported for 1999.
Fourth-quarter revenues totaled $30.3 million in 2000, an increase of 67.8% over
revenues reported for the fourth quarter of 1999. Juno derives revenue from
subscription fees it charges for its premium Web access services, from the sale
of advertising, and from various forms of electronic commerce.
Despite substantial reductions in expenditures for subscriber acquisition in the
second half of 2000, Juno's subscriber base continued to show significant
growth. Juno's base of active subscribers increased to 4.0 million in the month
of December 2000, up from 3.7 million in September 2000 and 2.4 million in
December 1999. Juno's total registered subscriber base grew to 14.2 million at
December 31, 2000, up from 12.8 million at September 30, 2000 and 8.1 million at
December 31, 1999.
Juno's BILLABLE subscriber base also continued to grow, reaching 842,000 as of
December 31, 2000, up from 750,000 as of September 30, 2000 and 550,000 as of
December 31, 1999. The net increase of 92,000 during the fourth quarter
represents more than four times the billable subscriber growth the company
reported for the third quarter. Migrations from Juno's free basic service to its
billable premium services, which accounted for most of the growth in the fourth
quarter, increased following the company's adoption of measures designed in part
to encourage heavier users of the free service to modify their usage patterns or
upgrade to a billable service. While these measures are expected to result in a
certain amount of subscriber attrition from the free service, management
believes they are also responsible for a significant portion of the recent
increase in migration to Juno's billable services.
Juno reduced its quarterly net loss by 61% in the fourth quarter, to $11.6
million ($0.29 per share), down from $29.3 million ($0.75 per share) in the
third quarter of 2000. Cash losses, as reflected by the company's EBITDA
(earnings before interest, taxes, depreciation, and amortization), were even
lower, totaling $9.5 million ($0.24 per share) for the fourth quarter. The
improvement in Juno's bottom line came as the
company continued to execute on its plan to reduce firmwide expenses. In
particular, Juno reduced its expenditures for subscriber acquisition to $8.7
million in the fourth quarter of 2000, down from $24.9 million in the third
quarter. The company also continued to benefit from reductions in its effective
telecommunications rates, and began to benefit from the cost savings associated
with the measures it undertook to reduce the disproportionate consumption of
resources by the heavier users of its free service. (As previously reported,
internal statistics collected in late 2000 showed that 5% of the users of Juno's
free service accounted for more than 50% of the hours the service was used to
access the Web.)
At December 31, 2000, the company had approximately $56 million in cash and cash
equivalents, an amount management currently projects should be more than
adequate to fund Juno's operations until the business becomes cash-flow
positive.
"We are very proud of our fourth-quarter results, which we believe provide
evidence of certain economic advantages our business model offers within the
current market environment," said Charles Ardai, Juno's president and chief
executive officer. "We believe it is particularly noteworthy that we were able
to significantly expand both our active and billable subscriber bases while
cutting our subscriber acquisition expenses by nearly a factor of three. Our
well-established, multi-tiered service offerings and our ability to
cost-effectively upsell billable services to our free subscribers allowed us,
among other things, to take advantage of the withdrawal of various competitors
from the Internet access market in order to achieve low-cost growth in both our
subscriber base and our billable service revenues."
In 2000, approximately 65% of Juno's revenue came from billable services, while
the remaining 35% came from various forms of advertising sales and electronic
commerce. This balance shifted increasingly toward billable services over the
second half of the year, and the company currently expects this shift to
continue in 2001. While overall revenue is expected to decline in the first
quarter of 2001 as compared to the fourth quarter of 2000 due to a reduction in
revenue from advertising sales, the company's net loss is expected to come down
as well, improving modestly in the first quarter and more significantly in later
quarters. The company's ANNUAL net loss for 2001 is expected to improve
dramatically as compared to 2000, to a total of between $10 million and $25
million for the full year, on total revenues for 2001 of between $100 million
and $120 million.
Juno's billable service revenues totaled $73.9 million in 2000, up from $34.5
million in 1999. Fourth-quarter billable service revenues were $19.8 million, up
52.0% compared with the fourth quarter of 1999 and up 4.3% sequentially as
compared with the third quarter of 2000. Management is currently projecting a
modest increase in billable service revenues during the first quarter of 2001,
attributable in large part to initial upward migration (which is unlikely to
continue at recent levels on an ongoing basis) associated with the measures
implemented by the company in December to address resource consumption by
heavier users. Additionally, the company is currently evaluating the
desirability of reducing the extent of discounted promotional pricing for its
billable services. To the extent such reductions were ultimately to be
implemented, they might be expected to strengthen billable service margin and
benefit the firm's bottom line while resulting in a lower billable subscriber
count than would be observed in the absence of such changes.
Revenue from advertising and transaction fees and from direct product sales
totaled $40.1 million on a combined basis in 2000, up from $17.5 million in
1999. In the fourth quarter of 2000, such revenues totaled
$10.5 million, more than double the $5.0 million posted in the year-ago quarter
but approximately 6.0% lower than in the third quarter of 2000, reflecting
industry-wide softness in the demand for Internet advertising. In light of
current trends in the Internet advertising market and its own experience over
the past quarter, the company expects advertising revenues to decline
substantially further in the first quarter of 2001, and believes such revenues
are unlikely to increase on a quarterly basis for the remainder of the year.
Drawing on the flexibility associated with its multiple revenue streams and
tiered service levels, the company currently plans to respond to current
softness in the online advertising market by reducing its reliance on
advertising revenue and increasing its focus on other revenue sources over the
coming year.
Cost of revenues improved sequentially as a percentage of total revenues, to
47.0% in the quarter ended December 31, 2000, as compared with 47.7% in the
quarter ended September 30, 2000. Cost of revenues for billable services
improved in relation to corresponding revenues as the company's average
telecommunications rates continued to decline and as further cost efficiencies
were achieved in customer relationship management operations, offset by a slight
decrease in the average monthly subscription fees realized per billable
subscriber. The improvement in the costs of advertising and transaction fees as
a percentage of related revenues was also largely due to declines in
telecommunications rates.
Operations, free service expenses declined to $10.9 million in the fourth
quarter, down from $11.8 million in the third quarter. This improvement occurred
despite the continued expansion of Juno's active free subscriber base, due in
part to a decline of approximately 14% in the company's telecommunications rates
compared with the third quarter. Additionally, average monthly connection time
per free subscriber declined by 2.4% in the fourth quarter as compared with the
third quarter, a result attributable at least in part to the measures
implemented in December to address resource consumption by heavier users.
Operations, free service expenses and the portion of cost of revenues that is
associated with the free service averaged approximately $1.38 per active free
subscriber per month on a combined basis in the fourth quarter, down from
approximately $1.65 per month in the third quarter. This per-subscriber cost is
substantially lower than Juno's management has seen reported by most other
Internet access providers. Juno believes its cost advantage to be due in part to
the use of its patented offline technology to minimize connection time per
subscriber while preserving the revenue opportunity associated with offline
usage hours.
Revenues associated with free service subscribers averaged approximately $0.95
per active free subscriber per month in the fourth quarter, down from
approximately $1.10 per subscriber per month in the third quarter, principally
due to the widely reported softness in the Internet advertising market. This
ongoing softness is reflected in an increase in uncollectible receivables, the
reduction or cancellation of certain advertising contracts, and a decline of the
company's backlog of such contracts to about $12 million at the end of the
fourth quarter from about $28 million at the end of the third quarter. The
effect on Juno's advertising revenues of the decline in the Internet advertising
market is heightened by the fact that most of Juno's advertisers are themselves
Internet-related companies. Juno believes it is likely that revenues associated
with the free service will continue to decline over the coming quarters, and is
thus taking steps to reduce expenses associated with providing the free service,
with a particular focus on telecommunications costs. The full impact of these
steps will probably not be realized for several quarters, and management
currently expects revenues associated with the free service to continue to be
exceeded for some time by the sum of the expenses reported on the Operations,
free service line and the portion of the cost of revenues line associated with
the free service.
As planned, Juno reduced its operating expenses substantially in the fourth
quarter, and the company expects to reduce such expenses significantly further
in 2001, driven primarily by ongoing reductions in telecommunications costs and
subscriber acquisition expenditures, and to a lesser extent, by such factors as
increased utilization of the company's India office and selected personnel and
overhead reductions associated with the company's evolving business focus.
"Juno's multiple revenue sources, adaptive approach to subscriber acquisition,
and ability to cost-effectively upsell free subscribers to billable services
have allowed us to shift the balance of our revenue streams and significantly
drive down operating expenses in response to changing market conditions," said
Ardai. "We expect that the positive effects of such adaptive changes on our
bottom-line performance will continue over the coming months, thus adding to the
preliminary evidence we have presented this quarter regarding the competitive
advantages associated with Juno's business model and the strength of the
company's prospects for future profitability."
ABOUT JUNO
Juno Online Services, Inc. is one of the nation's leading Internet access
providers, with 14.2 million total registered subscribers as of December 31,
2000 and 4.0 million active subscribers during that month.
Founded in 1995, Juno provides multiple levels of service, including free basic
Internet access, billable premium dial-up service, and (in certain markets)
high-speed broadband access. The company's revenues are derived primarily from
the subscription fees charged for its billable premium services, from the sale
of advertising, and from various forms of electronic commerce.
For more information about Juno, visit www.juno.com/corp. To get a copy of the
Juno software, go to www.juno.com or call 1-800-TRY-JUNO.
STATEMENTS IN THIS PRESS RELEASE REGARDING JUNO ONLINE SERVICES, INC. THAT ARE
NOT HISTORICAL FACTS ARE FORWARD-LOOKING STATEMENTS AND ARE SUBJECT TO RISKS AND
UNCERTAINTIES THAT COULD CAUSE SUCH STATEMENTS TO DIFFER MATERIALLY FROM ACTUAL
FUTURE EVENTS OR RESULTS. ANY SUCH FORWARD-LOOKING STATEMENTS ARE MADE PURSUANT
TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. THE FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE JUNO'S ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE DESCRIBED IN A FORWARD-LOOKING STATEMENT: LIMITED
HISTORY OF OFFERING JUNO'S BILLABLE PREMIUM SERVICES AND FREE BASIC SERVICE IN
ITS CURRENT FORM; HISTORY OF LOSSES; FAILURE TO RETAIN OR GROW JUNO'S SUBSCRIBER
BASE; INCREASING COMPETITION FROM EXISTING OR NEW COMPETITORS; INABILITY TO
SUSTAIN CURRENT LEVELS OF SUBSCRIBER ACQUISITION OR RETENTION; INABILITY TO
SUCCESSFULLY MIGRATE FREE SUBSCRIBERS TO, OR TO RETAIN SUBSCRIBERS IN, JUNO'S
BILLABLE PREMIUM SERVICES; RAPID TECHNOLOGICAL CHANGE; POSSIBLE UNAVAILABILITY
OF FINANCING AS AND IF NEEDED; DECREASES IN THE POPULARITY OF THE INTERNET AMONG
CONSUMERS OR AS AN ADVERTISING MEDIUM; DEPENDENCE ON A LIMITED NUMBER OF
PARTNERS AND VENDORS FOR THE PROVISION AND ROLL-OUT OF THE JUNO EXPRESS
BROADBAND SERVICE; POSSIBLE INDUSTRY CONSOLIDATION; AND POTENTIAL FLUCTUATIONS
IN QUARTERLY AND ANNUAL RESULTS. THIS LIST
IS INTENDED TO IDENTIFY ONLY CERTAIN OF THE PRINCIPAL FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER. READERS ARE REFERRED TO THE REPORTS AND DOCUMENTS
FILED BY JUNO WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
QUARTERLY REPORT ON FORM 10-Q FILED NOVEMBER 14, 2000 AND THE REGISTRATION
STATEMENTS ON FORM S-3 FILED ON NOVEMBER 28, 2000, AS SUBSEQUENTLY AMENDED, FOR
A DISCUSSION OF THESE AND OTHER IMPORTANT RISK FACTORS.
"EBITDA" IS NOT A MEASUREMENT OF FINANCIAL PERFORMANCE UNDER GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AND SHOULD NOT BE CONSIDERED AN ALTERNATIVE TO NET LOSS.
EBITDA EXCLUDES INTEREST, TAXES, AND NON-CASH EXPENSES SUCH AS DEPRECIATION,
AMORTIZATION, AND CHARGES FOR STOCK-BASED SUBSCRIBER ACQUISITION.
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
THREE MONTHS YEAR ENDED
ENDED DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
Revenues:
Billable services .......................... $ 19,784 $ 13,016 $ 73,911 $ 34,545
Advertising and transaction fee............. 10,509 4,327 38,708 12,662
Direct product sales ....................... -- 712 1,419 4,794
--------- --------- --------- ---------
Total revenues ............................ 30,293 18,055 114,038 52,001
--------- --------- --------- ---------
Cost of revenues:
Billable services .......................... 12,297 8,831 49,024 24,950
Advertising and transaction fees ........... 1,929 1,313 8,115 4,675
Direct product sales ....................... -- 599 1,344 4,176
--------- --------- --------- ---------
Total cost of revenues .................... 14,226 10,743 58,483 33,801
--------- --------- --------- ---------
Operating expenses:
Operations, free service ................... 10,888 1,617 38,311 6,698
Subscriber acquisition .................... 8,717 16,003 116,461 47,651
Sales and marketing ........................ 3,870 3,348 18,105 11,556
Product development ........................ 2,249 1,809 10,282 7,232
General and administrative ................. 2,902 1,645 9,303 4,615
--------- --------- --------- ---------
Total operating expenses .................. 28,626 24,422 192,462 77,752
--------- --------- --------- ---------
Loss from operations ...................... (12,559) (17,110) (136,907) (59,552)
Interest income, net ......................... 974 1,382 5,509 3,718
--------- --------- --------- ---------
Net loss .................................. $ (11,585) $ (15,728) $(131,398) $ (55,834)
========= ========= ========= =========
Basic and diluted net loss per share ......... $ (0.29) $ (3.39)
========= =========
Pro forma basic and diluted
net loss per share ......................... $ (0.45) $ (1.84)
========= =========
Weighted average shares outstanding used
in net loss per share calculations ........ 40,278 38,747
========= =========
Weighted average shares outstanding used
in pro forma net loss per share
calculations .............................. 34,702 30,339
========= =========
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, DECEMBER 31,
2000 1999
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents ............................... $ 55,729 $ 91,497
Accounts receivable, net of allowance for
doubtful accounts of $2,688 and $2,064 at December 31,
2000 and 1999, respectively ........................... 9,420 4,850
Prepaid expenses and other current assets ............... 3,141 15,437
---------- ----------
Total current assets ................................... 68,290 111,784
Fixed assets, net ......................................... 9,164 5,684
Other assets .............................................. 917 100
---------- ----------
Total assets ........................................... $ 78,371 $ 117,568
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ................... $ 29,287 $ 28,280
Current portion of capital lease obligations ............ 1,209 1,423
Deferred revenue ........................................ 14,578 14,510
---------- ----------
Total current liabilities .............................. 45,074 44,213
Capital lease obligations ................................. 402 1,455
Deferred rent ............................................. 150 252
Liabilities expected to be settled with common stock ...... 4,000 --
Stockholders' equity:
Preferred stock--$.01 par value; 5,000,000 shares
authorized, none issued and outstanding ............... -- --
Common stock--$.01 par value; 133,333,334 shares
authorized, 41,134,350 and 34,833,568 shares issued and
outstanding at December 31, 2000 and 1999 respectively 411 348
Additional paid-in capital .............................. 211,550 123,530
Unearned compensation ................................... (333) (745)
Cumulative translation adjustment ....................... (1) (1)
Accumulated deficit ..................................... (182,882) (51,484)
---------- ----------
Total stockholders' equity ............................. 28,745 71,648
---------- ----------
Total liabilities and stockholders' equity ............. $ 78,371 $ 117,568
========== ==========
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
YEAR ENDED
DECEMBER 31,
----------------------
2000 1999
--------- ---------
Cash flows from operating activities:
Net loss .............................................. $(131,398) $ (55,834)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization ........................ 3,900 2,396
Stock-based subscriber acquisition ................... 9,092 --
Amortization of deferred rent ........................ (84) (66)
Amortization of unearned compensation ................ 212 416
Changes in operating assets and liabilities:
Accounts receivable, net ............................ (4,570) (3,007)
Prepaid expenses and other current assets ........... 12,296 (15,269)
Accounts payable and accrued expenses ............... 989 17,368
Deferred revenue .................................... 68 8,908
--------- ---------
Net cash used in operating activities .............. (109,495) (45,088)
--------- ---------
Cash flows from investing activities:
Purchases of fixed assets ............................. (6,895) (1,359)
Other assets .......................................... (817) 82
--------- ---------
Net cash used in investing activities .............. (7,712) (1,277)
--------- ---------
Cash flows from financing activities:
Payments on capital lease obligations ................. (1,752) (816)
Payments on senior note ............................... -- (9,129)
Net proceeds from issuance of redeemable
convertible preferred stock ......................... -- 61,859
Net proceeds from issuance of common stock ............ 81,080 77,285
Proceeds from issuance of common stock
in connection with employee stock purchase plan ..... 1,166 --
Proceeds from issuance of common stock
upon exercise of stock options ...................... 945 511
--------- ---------
Net cash provided by financing activities .......... 81,439 129,710
--------- ---------
Net (decrease) increase in cash and cash equivalents (35,768) 83,345
Cash and cash equivalents, beginning of period .......... 91,497 8,152
--------- ---------
Cash and cash equivalents, end of period ................ $ 55,729 $ 91,497
========= =========
Supplemental disclosure of cash flow information:
Cash paid for interest ................................ $ 171 $ 370
Supplemental schedule of non cash
financing activities:
Capital lease obligations incurred for
network equipment ................................... $ 485 $ 2,635
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
SEQUENTIAL QUARTERLY COMPARISON
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
-------------------------------
DECEMBER 31, SEPTEMBER 30,
2000 2000
------------ -------------
Revenues:
Billable services .................... $ 19,784 $ 18,962
Advertising and transaction fees ..... 10,509 11,105
Direct product sales ................. -- 78
---------- -----------
Total revenues ...................... 30,293 30,145
---------- -----------
Cost of revenues:
Billable services .................... 12,297 12,130
Advertising and transaction fees ..... 1,929 2,174
Direct product sales ................. -- 74
---------- -----------
Total cost of revenues .............. 14,226 14,378
---------- -----------
Operating expenses:
Operations, free service ............. 10,888 11,773
Subscriber acquisition ............... 8,717 24,874
Sales and marketing .................. 3,870 5,010
Product development .................. 2,249 2,470
General and administrative ........... 2,902 2,139
---------- -----------
Total operating expenses ............ 28,626 46,266
---------- -----------
Loss from operations ................ (12,559) (30,499)
Interest income, net ................... 974 1,163
---------- -----------
Net loss ............................ $ (11,585) $ (29,336)
========== ===========
Basic and diluted net loss per share ... $ (0.29) $ (0.75)
========== ===========
Weighted average shares outstanding used
in basic and diluted per share
calculations ...................... 40,278 38,866
========== ===========
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
(IN THOUSANDS, EXCEPT FOR SELECTED SUBSCRIBER DATA)
(UNAUDITED)
EBITDA: THREE MONTHS ENDED
--------------------------------
DECEMBER 31, SEPTEMBER 30,
2000 2000
------------ -------------
Net loss .......................... $ (11,585) $ (29,336)
Depreciation and amortization 1,190 1,041
Noncash subscriber acquisition 1,866 12,535
Interest income, net ......... (974) (1,163)
------------ -------------
EBITDA .................. $ (9,503) $ (16,923)
=========== ============
SELECTED SUBSCRIBER DATA: DEC. 31, SEPT. 30, JUN. 30, MAR. 31, DEC. 31,
- ------------------------- -------- --------- -------- -------- --------
2000 2000 2000 2000 1999
---- ---- ---- ---- ----
Total registered subscriber accounts
as of (1) ........................ 14,153,000 12,771,000 11,048,000 9,430,000 8,137,000
Active subscriber accounts
in month ended (2) .............. 4,001,000 3,700,000 3,379,000 3,053,000 2,394,000
Active Web-enabled
subscribers in month ended (3) .. 3,587,000 3,251,000 2,876,000 2,358,000 771,000
Billable subscription service
accounts as of (4) .............. 842,000 750,000 730,000 661,000 550,000
- ---------------------------
(1) Includes all subscriber accounts created since Juno's inception, computed
after deduction of any accounts that have since been cancelled, but
regardless of current activity, if any.
(2) Encompasses all registered subscriber accounts that connected at least
once during the month, together with all subscribers to a billable
service, in each case regardless of the type of activity or activities
engaged in by such subscribers.
(3) Refers to the subset of active subscriber accounts that have been
centrally provisioned for, and provided with the client-side software
necessary to access, not only e-mail, but also the World Wide Web,
regardless of the extent, if any, to which such subscribers have actually
used the Web.
(4) Represents the subset of active subscriber accounts that carry a charge
for premium functionality.