Exhibit 99.1
News Announcement
(BRIGHT STATION LOGO APPEARS HERE)
BRIGHT STATION PLC ANNOUNCES 2000 Q2 RESULTS
AND INTERIM RESULTS FOR SIX MONTHS TO JUNE 30, 2000
Continued Progress Towards Business Transformation
London, England - August 10, 2000 - Bright Station plc (LSE:BSN, NASDAQ:BSTN)
(http://www.brightstation.com) the technology company and leading provider of
Internet and eCommerce solutions, today announced its second quarter results for
the three-month period ending June 2000, and its interim results for the six
months to June 30, 2000.
Q2 Financial Highlights:
o $2.9 million, up 78% over Q2 1999 (excluding the substantial license fee of
$6.1 million received from Fujitsu in Q2 1999);
o Pre-tax loss of $5.2 million reflects investment in building underlying
businesses;
o Closing cash of $30.5 million, plus $7.4 million received from Thomson
after June 2000 quarter's end, in final settlement of Information Services
Division disposal;
o Discontinued ISD operations generated $16.4 million in revenues, and an
operating loss of $2.1 million.
Q2 Operational Highlights:
o Completion of ISD disposal to Thomson and repayment of all Group debt;
o CEOs recruited for Smartlogik, OfficeShopper and Bright Station Ventures
Division;
o Leading edge Boo.com eCommerce software purchase completed at cost of
$379,000 plus associated acquisition costs;
o Smartlogik contract wins from BAA and Yellow Pages;
o WebCheck PDA launched and agreements signed with beenz.com and Netscape
Communications Corp. WebTop indexes half a billion pages from the World
Wide Web making it second only to Google in terms of indexed pages;
o Bright Station Ventures Division makes $152,000 (7%) investment in
Netimperative, a content and community site for Internet professionals;
o Bright Station staff levels increased from 160 to 235 by the quarter end.
Dan Wagner, CEO Bright Station plc, commented:
"The horizon is now clear for us to drive Bright Station forward as we progress
the dramatic transformation of our business. We now have the capital and the
talented people in place to develop our technologies as fast growing
commercially successful businesses. As this progresses, we will be reviewing all
the options for ensuring that the full value inherent within the business is
released to the benefit of shareholders."
(more)
Disposal of Information Services Division (ISD) and resultant balance sheet:
Following shareholder approval on April 27, 2000, the Company completed the
disposal of ISD to The Thomson Corporation (Thomson) on May 4, 2000 for a total
consideration of $289 million. In addition, the Company raised a further $42.3
million though equity subscriptions from Thomson ($24.1 million) and Jiyu
Holdings ($18.2 million). The net proceeds of the sale and equity subscriptions
were used to repay the Company's indebtedness in full and leave Bright Station
sufficient cash to invest in the remaining businesses. The Company received a
final payment from Thomson on August 1, 2000 in respect of working capital,
giving pro forma cash at June 30, 2000 of $37.9 million.
As a consequence of the disposal of ISD, Bright Station is expected to generate
substantial capital tax losses that will remain available for offset against
potential future capital gains. The Company is now free of debt, with no
capitalized development costs on the balance sheet (see below), and had positive
net assets at June 30, 2000 amounting to $54.4 million.
Change in Accounting Policy:
Historically it has been the Company's policy to capitalize costs associated
with the development of the host computer systems and the development of new
products. In recognition of the fact that the Company's business going forward,
comprising the eCommerce, Web Solutions and Ventures divisions is not mature and
in light of changing industry practice, the Company has decided to change its
accounting policy for these divisions such that development costs associated
with these divisions are expensed to the profit and loss account as incurred.
The revised policy is considered preferable to the previous policy, as it will
present a more prudent view of the areas of business in which the Company now
operates. The interim results for the six months ended June 30, 2000 are
presented on this revised basis and the comparative results for the six months
ended June 30, 1999 have been restated accordingly. The impact of the
restatement on the comparative profit and loss account is an increase of
$132,000 and the cumulative effect on the Group's reserves as of January 1, 2000
amounts to a decrease of $2.0 million. No such costs were capitalized during the
six months ended June 30, 2000 and it would therefore be inappropriate to
estimate the effect of the restatement on the profit and loss account for this
period.
Software licensing revenues in the eCommerce division for the two quarters ended
June 30, 1999 have been restated to match the phasing of the major components of
the associated contracts. The effect of the restatement is to reduce revenues in
the second quarter of 1999 by $132,000.
Business Review:
Group revenues for Q2 2000 increased by 78% over Q2 1999 (excluding the
substantial license fee of $6.1 million received from Fujitsu in Q2 1999), and
by 29% over Q1 2000. Bright Station is managed through three operating
divisions:
Web Solutions Division (WSD)
WSD is focused on the proprietary InfoSort content indexing technology, Muscat
natural language search technology, WebTop/WebCheck concept-based search tool
and Smartlogik, the knowledge management suite of solutions.
Revenues for the second quarter increased by 28% over Q1 2000, to $2.1 million.
In this quarter, Smartlogik's newly appointed CEO, Stephen Hill, has been able
to recruit key staff and develop his business plan. Smartlogik also negotiated
several landmark new business contracts during the quarter. Licensing agreements
have been announced with Yellow Pages, whereby Smartlogik's search and
structuring technology is used to power the soon to be released Yell.com site,
and with BAA, who selected the Company's knowledge management software suite for
deployment to over 5,500 employees/desktops throughout its global Intranet.
During the period, WebTop also launched the WebCheck personal desktop assistant
(PDA) - a revolutionary search tool that allows users to simply highlight text
inside a desktop document and with one mouse click, find concept-related
information from the Web. The Company expects to
(more)
Bright Station Q2'00 Results, 8/10/00 Page 3 of 9
generate revenues from licensing rebranded WebCheck PDAs to companies who want
to provide their own customers with a seamless desktop search facility that
aggregates targeted Web content alongside results from the Web at large. Bright
Station also expects to generate revenue through advertising as the use of
WebTop continues to grow.
Powerful new Sun Enterprise servers and other equipment, acquired from various
leasing companies to Boo.com for $2.0 million, now drive WebTop, which has
indexed over half a billion documents on the Web, making it the second most
comprehensive search engine after Google. On June 26, 2000, Google announced
that it had signed up with Yahoo! as its default Internet search engine.
As a consequence of these actions WebTop has developed an encouraging pipeline
of potential alliance partners and has signed agreements with beenz.com, and
with Netscape Communications Corp. of the US, to operate in the Netherlands.
eCommerce Division (ECD)
ECD contains the B2B OfficeShopper Internet procurement business and the Sparza
B2B eCommerce licensing technologies.
Revenues for the second quarter increased by 32% over Q1 2000, to $778,000.
At the end of this quarter the appointment of a new management team was
announced for OfficeShopper headed by Jeff Meers who, as CEO, has instituted a
strategic review of the business. This will lead to the emergence of an extended
business model with a refocused product offer and improved functionality
leveraging off the existing technology. A planned re-launch date has been set
for later in the year.
The acquisition of Boo.com's leading edge eCommerce software for $379,000 and
its integration into Sparza has given the Company the opportunity to change the
emphasis of Sparza. As a result, the Sparza eCommerce technology has been
upgraded to now offer a fully functional and integrated eCommerce hosting
capability. This should be of real value to new entrants into the European
market; especially those from the US. Sparza is now multi-currency,
multi-lingual and linked to fulfillment and logistics companies throughout
Europe. This will allow retailers to enter new markets by leveraging the Sparza
technology platform, coupled with their own marketing support, without having to
replicate their existing bricks and mortar business models. In addition Sparza
technology will provide a hosting solution for Internet companies that want a
low risk, fast track entry into their respective markets. Discussions are
currently taking place with several potential partners and licensees.
Bright Station Ventures (BSV)
BSV was established to leverage off the technology and expertise that exists
within the business. It seeks opportunities where Bright Station can apply its
financial, intellectual and technology assets to start up companies in exchange
for equity. BSV has moved fast since its creation in May, with the appointment
of Robert Lomnitz as CEO and investments in four businesses:
During the six months ended June 30, 2000:
Zawya: Various technical and service investments in return for a 4% equity
stake. Zawya is the premier Arab world financial vertical portal providing
extensive coverage on money markets, industry sectors, and other information
relevant to its targeted user group.
Netimperative: $152,000 in finance for a 7% equity stake with a technology
investment to follow. Netimperative is a news site focusing on the Internet and
containing exclusive, proprietary content generated by Netimperative's full time
reporting staff;
In July 2000:
Yourable.com: Finance and technology invested in return for an 8.325% equity
holding. Yourable is a vertical portal for the disabled community providing both
infomediary and transaction opportunities;
Schoolsforschools.com: Finance and technology invested in return for an 8.325%
equity holding. Schoolsforschools is an e-procurement service allowing schools
to purchase their ongoing
(more)
Bright Station Q2'00 Results, 8/10/00 Page 4 of 9
requirements at a reduced cost through the elimination of costly administrative
procedures and the power of aggregated purchasing. BSV is currently assisting
the company in its merger negotiations with BiblioTech, which owns
Schoolmaster.net, a 5-year old school community Web site with a significant
existing user base of in excess of 3,000 schools;
BSV is already receiving upwards of 30 - 50 business plans per week of other
Internet start-up businesses that offer opportunities for the injection of
Bright Station technology, know-how and cash in exchange for equity. It is also
investigating opportunities to license Bright Station technologies through
well-established overseas partners.
Outlook
The second quarter has seen progress towards achieving the business
transformation started in Q1. New senior management are in place and are
recruiting their own key teams and the Company's cash position is sound.
Business plans for each core business are being reviewed or implemented. As a
result, the new business pipeline for all the Bright Station businesses looks
considerably stronger than at the start of the year.
Following healthy revenue growth in Q2, the Board anticipates continuing
progress in the second half of 2000.
For further information please contact:
David Mattey, Chief Financial Officer
Nick Chaloner, Head of Corporate Communications
Bright Station plc 020 7930 6900
nickchaloner@brightstation.com
John Olsen/Nick Lockwood
Hogarth Partnership 020 7357 9477
nlockwood@hogarthpr.co.uk
Robert Rinderman/David Collins
Jaffoni & Collins 212 835 8500
BSTN@jcir.com
(financial tables follow)
Bright Station Q2'00 Results, 8/10/00 Page 5 of 9
Bright Station plc
Consolidated Profit And Loss Account (unaudited)
For the 3 months ended June 30, 2000
Restated
----------------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
------------ -------------- ------------ ------------ -------------- -----------
2000 2000 2000 1999 1999 1999
------------ -------------- ------------ ------------ -------------- -----------
$'000 $'000 $'000 $'000 $'000 $'000
Turnover 2,920 16,343 19,263 7,702 59,848 67,550
Cost of sales (629) (7,520) (8,149) (884) (25,485) (26,369)
------------ -------------- ------------ ------------ -------------- -----------
Gross profit 2,291 8,823 11,114 6,818 34,363 41,181
Distribution costs (635) (2,876) (3,511) (735) (8,301) (9,036)
Administrative expenses (6,825) (6,438) (13,263) (4,173) (15,635) (19,808)
Amortization of development costs - (1,683) (1,683) - (3,311) (3,311)
------------ -------------- ------------ ------------ -------------- -----------
Operating (loss)/profit (5,169) (2,174) (7,343) 1,910 7,116 9,026
Exceptional item - adjustment to loss
on disposal of ISD - 8,510 8,510 - - -
------------ -------------- ------------ ------------ -------------- -----------
(Loss)/profit on ordinary activities
before interest (5,169) 6,336 1,167 1,910 7,116 9,026
============ ============== ============ ==============
Net interest payable (2,547) (6,958)
------------ -----------
(Loss)/profit on ordinary activities
before taxation (1,380) 2,068
Taxation on (loss)/profit on ordinary 17 (975)
activities
------------ -----------
(Loss)/profit on ordinary activities
after taxation (1,363) 1,093
Minority equity interests (24) (197)
------------ -----------
Retained (loss)/profit (1,387) 896
============ ===========
------------ -----------
(Loss)/earnings per ADS (cents) (3.3) 2.4
------------ -----------
------------ -----------
(Loss)/earnings per ADR excluding
exceptional loss (cents) (23.9) 2.4
------------ -----------
Shares used in computing earnings per
ADS (thousands) 41,468 37,893
The financial results set forth above represent the company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.5159 being the rate of exchange on June 30, 2000, the last trading
day of the period.
(more)
Bright Station Q2'00 Results, 8/10/00 Page 6 of 9
Bright Station plc
Consolidated Profit And Loss Account (unaudited)
For the 6 months ended June 30, 2000
Restated
-------------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
----------- ------------- ---------- ------------ ------------ -----------
2000 2000 2000 1999 1999 1999
----------- ------------- ---------- ------------ ------------ -----------
$'000 $'000 $'000 $'000 $'000 $'000
Turnover 5,178 74,497 79,675 9,591 122,661 132,252
Cost of sales (1,213) (33,501) (34,714) (1,225) (52,684) (53,909)
----------- ------------- ---------- ------------ ------------ -----------
Gross profit 3,965 40,996 44,961 8,366 69,977 78,343
Distribution costs (1,132) (11,541) (12,673) (772) (15,712) (16,484)
Administrative expenses (10,837) (23,935) (34,772) (7,936) (31,262) (39,198)
Amortization of development costs - (5,542) (5,542) - (6,321) (6,321)
----------- ------------- ---------- ------------ ------------ -----------
Operating (loss)/profit (8,004) (22) (8,026) (342) 16,682 16,340
Exceptional item - loss on disposal - (152,243) (152,243) - - -
of ISD
----------- ------------- ---------- ------------ ------------ -----------
(Loss)/profit on ordinary activities
before interest (8,004) (152,265) (160,269) (342) 16,682 16,340
=========== ============= ============ ============
Net interest payable (9,543) (13,764)
---------- -----------
(Loss)/profit on ordinary activities
before taxation (169,812) 2,576
Taxation on (loss)/profit on
ordinary activities (411) (1,047)
---------- -----------
(Loss)/profit on ordinary activities
after taxation (170,223) 1,529
Minority equity interests (56) 8
---------- -----------
Retained (loss)/profit (170,279) 1,537
========== ===========
---------- -----------
(Loss)/earnings per ADS (cents) (424.5) 4.1
---------- -----------
---------- -----------
(Loss)/earnings per ADR excluding exceptional
loss (cents) (45.0) 4.1
---------- -----------
Shares used in computing earnings per
ADS (thousands) 40,117 37,885
The financial results set forth above represent the company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.5159 being the rate of exchange on June 30, 2000, the last trading
day of the period.
(more)
Bright Station Q2'00 Results, 8/10/00 Page 7 of 9
Bright Station plc
Consolidated Balance Sheet (unaudited)
as at June 30, 2000
Restated Restated
----------------- -----------------
30 June 30 June 31 December
2000 1999 1999
$'000 $'000 $'000
FIXED ASSETS
Intangible assets 455 39,392 39,040
Goodwill 9,850 11,456 14,863
Tangible assets 3,449 25,479 21,735
Investments 5,190 20,518 14,606
------------------ ----------------- -----------------
18,944 96,845 90,244
------------------ ----------------- -----------------
CURRENT ASSETS
Stocks - 238 91
Debtors 12,861 75,756 55,618
Cash at bank and in hand 30,512 13,672 15,949
------------------ ----------------- -----------------
43,373 89,666 71,658
CREDITORS (amounts falling
due within one year)
(6,658) (108,720) (108,499)
------------------ ----------------- -----------------
NET CURRENT LIABILITIES 36,715 (19,054) (36,841)
------------------ ----------------- -----------------
TOTAL ASSETS LESS CURRENT LIABILITIES 55,659 77,791 53,403
CREDITORS (amounts falling due
after more than one year)
- (225,251) (208,239)
Provisions for liabilities and charges
(1,290) (4,690) (2,168)
------------------ ----------------- -----------------
54,369 (152,150) (157,004)
================== ================= =================
CAPITAL AND RESERVES
Called up share capital 2,616 2,300 2,348
Share premium account 279,027 230,944 234,887
Shares to be issued 203 1,466 1,466
Profit and loss account (227,477) (388,605) (396,528)
------------------ ----------------- -----------------
Ordinary shareholders' funds 54,369 (153,895) (157,827)
Minority interest - 1,745 823
------------------ ----------------- -----------------
Total shareholders' funds 54,369 (152,150) (157,004)
================== ================= =================
The financial results set forth above represent the company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.5159 being the rate of exchange on June 30, 2000, the last trading
day of the period
(more)
Bright Station Q2'00 Results, 8/10/00 Page 8 of 9
Bright Station plc
Consolidated Cash Flow Statement
for the 6 Months Ended June 30, 2000 (unaudited)
Restated
---------------
2000 1999
$'000 $'000
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (4,692) 7,649
-------------- ---------------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received
597 133
Interest paid on bank loans and overdrafts
(12,056) (13,576)
Interest paid on finance leases
(38) (8)
-------------- ---------------
(11,497) (13,451)
-------------- ---------------
TAXATION PAID
(376) (596)
-------------- ---------------
CAPITAL EXPENDITURE
Payments to develop intangible assets
(4,407) (9,150)
Payments to acquire tangible fixed assets
(3,023) (3,606)
Purchase of investment
(151) -
Receipts from sales of tangible fixed assets
- 99
-------------- ---------------
(7,581) (12,657)
-------------- ---------------
ACQUISITIONS AND DISPOSALS
Purchase of share in joint venture
- (1,316)
Proceeds from sale of investments
- 1,178
Expenses in connection with purchase of subsidiary undertaking
- (749)
Cash transferred with sale of ISD
(7,296) -
Payment of deferred consideration
(1,912) -
Expenses in connection with disposal of ISD
(6,723) -
Proceeds from sale of investments
274,046 -
-------------- ---------------
258,115 (887)
-------------- ---------------
CASH INFLOW/(OUTFLOW) BEFORE THE USE OF
LIQUID RESOURCES AND FINANCING
233,969 (19,942)
-------------- ---------------
FINANCING
Net proceeds on issue of Ordinary share capital
42,798 -
Debt due within one year
- Increase in borrowings
- 39,905
- Repayment of loans
(261,526) (13,176)
Repayment of capital element of finance leases
(973) (299)
-------------- ---------------
(219,701) 26,430
-------------- ---------------
INCREASE IN CASH
14,266 6,488
============== ===============
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET FUNDS/(DEBT)
Increase in cash in the period
14,268 6,488
Cash used to decrease lease financing
973 299
Cash acquired from issue of debt (net of expenses)
- (26,324)
Cash used to repay loans
261,526 8,692
-------------- ---------------
Change in net funds/(debt) from cash flows
276,767 (10,845)
Other non-cash changes
(9,285) (555)
New finance leases
- (2,082)
Finance lease obligations transferred to ISD
8,677 -
Effect of foreign exchange rate changes
(7,683) (8,446)
-------------- ---------------
Movement in net funds/(debt) in period
268,476 (21,928)
Net debt at beginning of period
(237,964) (144,197)
-------------- ---------------
Net funds/(debt) at end of period
30,512 (166,125)
============== ===============
The financial results set forth above represent the company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.5159 being the rate of exchange on June 30, 2000, the last trading
day of the period.
(more)
Bright Station Q2'00 Results, 8/10/00 Page 9 of 9
Bright Station plc
Analysis of Revenues
for the 6 Months Ended June 30, 2000 (unaudited)
Restated
---------------------------------- ---------------------------------------
2000 1999
---------------------------------- ---------------------------------------
Qtr 1 Qtr 2 Total Qtr 1 Qtr 2 Total
$'000 $'000 $'000 $'000 $'000 $'000
ISD - discontinued operations 58,154 16,343 74,497 62,813 59,848 122,661
WSD - continuing operations 1,670 2,142 3,812 1,427 7,214(1) 8,641
ECD - continuing operations 588 778 1,366 462 488 950
---------------------------------- ---------------------------------------
Total revenues 60,412 19,263 79,675 64,702 67,550 132,252
================================== =======================================
(1) Includes $6.1 million in respect of license fee from Fujitsu
The financial results set forth above represent the company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.5159 being the rate of exchange on June 30, 2000, the last trading
day of the period.
These results are unaudited and do not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The financial statements for
the year ended December 31, 1999 have been audited by the Company's auditors,
PricewaterhouseCoopers, and delivered to the Registrar of Companies. The audit
report was not qualified and neither did it contain any statements under Section
237 (2) or (3) of the Companies Act 1985. With the exception of the change in
accounting policy for capitalised development costs and the restatement of
software licencing revenues (see interim statement), the unaudited results for
the six months ended June 30, 2000 have been prepared in accordance with the
accounting policies stated in the 1999 Annual Report and Accounts.
# # #