EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contacts: Stephen M. Joseph Scott Solomon
Chief Financial Officer Vice President
Be Free, Inc. Sharon Merrill Associates, Inc.
(508) 357-8888, ext. 4017 (617) 542-5300
sjoseph@befree.com ssolomon@investorrelations.com
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BE FREE, INC. REPORTS 579 PERCENT INCREASE IN
FOURTH-QUARTER REVENUE
COMPANY ANNOUNCES 2-FOR-1 STOCK SPLIT
MARLBOROUGH, MASS., FEBRUARY 15, 2000 - Be Free, Inc. (NASDAQ: BFRE), the leader
of performance marketing on the Internet, today reported financial results for
the fourth quarter and year ended December 31, 1999.
Revenue for the fourth quarter increased 579 percent to $2.6 million compared
with $386,000 for the fourth quarter of 1998, and increased 100 percent from
$1.3 million in the third quarter of 1999.
The company recorded a net loss in the fourth quarter of 1999 of $5.4 million,
or $0.30 per share, compared with $1.8 million, or $0.30 per share, for the same
period in 1998. Excluding non-cash equity-related compensation charges, an
extraordinary item resulting from the early extinguishment of debt and the
accretion of preferred stock outstanding prior to the company's initial public
offering to its redemption value, the net loss for the fourth quarter of 1999
was $4.5 million, or $0.19 per share on a pro-forma basis.
Revenue increased to $5.3 million for the year ended December 31, 1999, more
than a 300 percent increase as compared to $1.3 million in 1998.
The company recorded a net loss of $17.8 million, or $2.04 per share, for 1999.
This compares with a net loss of $4.8 million, or $0.61 per share, for 1998. For
1999, the net loss, excluding non-cash equity-related compensation charges, an
extraordinary item and the accretion of preferred stock to its redemption value,
was $15.6 million, or $0.87 per share on a pro-forma basis.
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Gross margin was 84 percent in 1999 compared with 68 percent in 1998.
In addition, Be Free announced that its Board of Directors has approved a two-
for-one stock split of Be Free's common stock to be effected in the form of a
100 percent stock dividend.
The stock dividend will be payable on March 8, 2000, to shareholders of record
as of the close of business on March 1, 2000. Stockholders will receive one
additional share of Be Free common stock for each share held on the record date.
Based upon currently outstanding shares, the total number of shares outstanding
after the split will be approximately 56 million.
"We are very excited by both the rapid growth we achieved during the fourth
quarter and the addition of many major online merchants," said Gordon B.
Hoffstein, chairman and chief executive officer of Be Free. "Most of all, we
are pleased to have advanced our position as the leading provider of affiliate
marketing technology and infrastructure services. Forrester Research deems
affiliate marketing to be the most effective way to reach customers online, and
we look forward to accelerated growth in this segment. The company's stock
split reflects our confidence in our business and our continued growth."
Be Free signed a number of new online merchants during the quarter including:
Alta Vista, InfoSpace, Timex, 3M, Forrester Research and U.S. West. Be Free's
affiliate marketing solutions are now used by 14 of the Top 50 web sites as
tracked by Media Metrix.
Among the milestones Be Free achieved during the fourth quarter:
. The number of impressions, which represents the number of customer promotions
viewed on our customers' affiliate sites, increased to 1.7 billion in the
fourth quarter of 1999 from 338 million for the same period last year and
from 1.2 billion in the third quarter of 1999.
. The number of affiliate relationships for Be Free's customers grew to more
than 2.5 million in the fourth quarter from 67,000 in the fourth quarter of
1998 and from 1.5 million in the third quarter of 1999.
. The total number of customers increased to 258 at the end of the fourth
quarter from 27 over last year and 192 at the close of the third quarter of
1999.
"Performance-based online advertising is projected by Forrester Research to
increase to 50 percent of total online ad spending in 2003 from 15 percent in
1999. We believe that our "pay for performance" business model positions us to
capitalize on this projected growth," Hoffstein said. "Whether the focus is
business-to-business or business-to-consumer, we believe that our scalable,
high-performance technology is the most cost-effective and efficient way for
companies to extend brand reach, drive traffic to their sites, lower customer
acquisition costs and increase sales."
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"In 2000, we will focus on building on our leadership position in affiliate
marketing and extending our services to other areas of performance marketing.
We believe the key to achieving this goal is to continue to make our current
customers successful and add the world's leading online merchants to our
customer base. To attract these companies, we will provide the best performance
marketing technology available to enhance their online business-to-business and
business-to-consumer strategies," concluded Hoffstein.
ABOUT BE FREE, INC.
Be Free, Inc. (NASDAQ: BFRE) is the leader of performance marketing - the next
generation of online marketing. Be Free helps its customers build and manage
uniquely branded online sales channels, e-nablingsm these sites to capture
revenue by driving site traffic, generating qualified leads and selling products
in context on locations throughout the Web. Be Free's customers include some of
the Internet's leading merchants, online services and portals such as America
Online, Inc. (NYSE: AOL), barnesandnoble.com (NASDAQ: BNBN), GoTo.com (NASDAQ:
GOTO), Mercata, Travelocity, Reel.com (NASDAQ: HLYW), CNet (NASDAQ: CNET), PC
Connection (NASDAQ: PCCC), Priceline (NASDAQ: PCLN), About.com (NASDAQ: BOUT)
and Yahoo! GeoCities (NASDAQ: YHOO).
Collectively, Be Free's customers have more than 3 million affiliates in their
sales channels. Affiliates can enroll in performance marketing programs using
Be Free's technology with a streamlined application form called FastApp, located
at http://www.reporting.net/networks/affiliates/bf_fast_app
Founded in 1996, Be Free has offices in Marlborough, MA, Pittsburgh, PA,
Atlanta, GA, Chicago, IL, Los Angeles, CA, Campbell, CA, and New York, NY. For
more information, visit http://www.befree.com.
The Company's consolidated statements of operations and balance sheets are
attached.
Statements in this news release including but not limited to those relating to
the future growth of Be Free and its leadership position may be considered
forward-looking statements under the Private Securities Litigation Reform Act of
1995. These statements are based on Be Free's current expectations, hopes,
beliefs and estimates. These statements involve risks and uncertainties that
could cause actual results to differ materially from those anticipated or
projected. Further information about the risk factors that could affect the
Company's performance are contained in the Company's filings with the Securities
and Exchange Commission, including but not limited to its S-1 dated November 3,
1999.
-more-
BE FREE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except share and per share amounts)
3 months ended 12 months ended
December 31, December 31,
---------------------------------- ----------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
Revenue:
Performance marketing services $ 2,620 $ 386 $ 5,329 $ 1,319
Other -- -- -- 8
------------ ------------ ------------ ------------
Total revenue 2,620 386 5,329 1,327
Cost of revenue 408 198 845 424
------------ ------------ ------------ ------------
Gross margin 2,212 188 4,484 903
------------ ------------ ------------ ------------
Operating expenses:
Sales and marketing 4,470 915 12,803 1,454
Development and engineering 1,632 330 4,767 729
General and administrative 1,172 442 2,823 875
Equity related compensation 501 178 1,941 2,385
------------ ------------ ------------ ------------
Total operating expenses 7,775 1,865 22,334 5,443
------------ ------------ ------------ ------------
Operating loss (5,563) (1,677) (17,850) (4,540)
Interest income (expense), net 542 (138) 347 (223)
------------ ------------ ------------ ------------
Net loss before extraordinary item (5,021) (1,815) (17,503) (4,763)
Extraordinary item (330) -- (330) --
------------ ------------ ------------ ------------
Net loss (5,351) (1,815) (17,833) (4,763)
Accretion of preferred stock to
redemption value (220) (97) (1,517) (130)
------------ ------------ ------------ ------------
Net loss attributable to common
stockholders $ (5,571) $ (1,912) $ (19,350) $ (4,893)
============ ============ ============ ============
Basic and diluted net loss per share $ (0.30) $ (0.30) $ (2.04) $ (0.61)
Weighted average shares used in
computing basic and diluted net
loss per share 18,808,430 6,412,382 9,475,670 8,009,129
Net loss before equity related
compensation, extraordinary item &
accretion of preferred stock
to redemption value $ (4,520) $ (1,637) $ (15,562) $ (2,378)
============ ============ ============ ============
Proforma net loss per share before
equity related compensation,
extraordinary item & accretion of
preferred stock to redemption value * $ (0.19) $ (0.14) $ (0.87) $ (0.24)
Proforma weighted average shares * 23,205,614 11,712,382 17,856,280 9,819,814
* Proforma weighted average shares assumes the conversion of preferred stock
upon issuance.
BE FREE, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
December 31,
1999 1998
ASSETS
Current Assets:
Cash, cash equivalents and marketable securities $ 71,738 $ 4,327
Accounts receivable, net of allowance for doubtful accounts 1,549 119
Prepaid expenses and other current assets 1,062 168
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Total current assets 74,349 4,614
Marketable securities 7,954 --
Property and equipment, net 7,967 962
Other assets 567 395
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Total assets $ 90,837 $ 5,971
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses 3,883 883
Deferred revenue 755 122
Current portion of long term debt 943 187
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Total current liabilities 5,581 1,192
Long-term deferred revenue 188 --
Long-term debt, net of current portion 2,507 4,949
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Total liabilities 8,276 6,141
Stockholders' equity (deficit) 82,561 (170)
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Total liabilities and stockholders' equity (deficit) $ 90,837 $ 5,971
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