News Announcement
[BRIGHT STATION LOGO APPEARS HERE]
BRIGHT STATION PLC ANNOUNCES 2000 Q3 RESULTS FOR THREE
MONTHS TO SEPTEMBER 30, 2000
- Revenues Increase 89% Over Last Year and Rise 23% Over Last Quarter -
London, England - November 7, 2000 - Bright Station plc (LSE: BSN, NASDAQ:BSTN)
(www.brightstation.com), the technology company and leading provider of Internet
and eCommerce solutions, today announced its third quarter results for the
three-month period ending September 30, 2000.
Q3 Financial Highlights:
- ------------------------
o 2000 Q3 revenues of $3.5 million, up 23% over Q2 2000 and 89% over Q3
1999;
o Pre-tax loss of $6.5 million reflects investment in building underlying
businesses;
o Closing quarter-end cash of $28.7 million;
o Part disposal of investment in Teltech Resources following their sale
to Sopheon plc, giving rise to a capital gain of $176,000 and Q4 cash
proceeds of $4.0 million. The Company still retains a 1.2% shareholding
in Sopheon plc;
o Strategic investments made in Netimperative, Schools for Schools and
Youareable.com.
Q3 Operational Highlights:
- -------------------------
o Smartlogik establishes US sales-team and drives revenue with new
contract wins;
o OfficeShopper moves Head Office operations to Chertsey (Southwest
London), opens regional distribution center at Heathrow and continues
to show strong revenue gains;
o Sparza, the subsidiary that acquired the Boo.com technology, has been
significantly enhanced to allow multiple customers to use its eCommerce
hosting capabilities;
o WebTop recognized as second largest Web search engine and media reviews
acknowledge it as a revolutionary product. WebTop generated its first
revenue stream from WebCheck product licenses.
Allen Thomas, Chairman Bright Station plc, commented:
"We have continued to make good progress in all areas of our businesses. Senior
marketing and sales appointments have been made across all the Divisions. The
new business pipeline for all the Bright Station businesses looks considerably
stronger than at the start of the year and these early signs of healthy revenue
growth mean that we can anticipate continuing progress in the last quarter of
2000."
(more)
Business Review:
- ----------------
Group revenues grew to $3.5 million for Q3 2000, an increase of 23% over Q2 2000
and 89% over Q3 1999. Bright Station is managed through three operating
divisions:
Web Solutions Division (WSD)
WSD is focused on leveraging its proprietary InfoSort (content indexing
technology), Muscat (natural language search technology), Smartlogik (the
knowledge management suite of solutions) and WebTop/WebCheck (the concept-based
web search tool).
Revenues for the third quarter increased by 6% over Q2 2000 to $2.2 million
despite business re-organization, new management appointments and the
traditional seasonal slowdown.
During the quarter, Smartlogik recruited a direct sales force based on both the
East and West Coast of the United States and it also signed several new
contracts in the US. These include Mybizworld - a business portal providing
aggregated news, research collaboration and commerce to small businesses, and a
contract with Thomson's Institute of Scientific Information. ISI has licensed
Smartlogik technology as an integral partner in developing management solutions
for their large global academic government and corporate customer base. This
partnership will provide Smartlogik with revenue sharing opportunities as ISI
and Thomson Scientific roll out their expanded product offerings.
The third quarter saw WebTop building its management team and awareness for its
product. With both a new Sales Director and a new Marketing Director in place an
encouraging pipeline of prospects has been developed. Since the quarter end
WebTop has announced the appointment of Andy Mitchell (ex CEO of AltaVista UK
and previously MD of doubleclick.com) as the CEO of its operations.
The recent addition of Zones for searching allows users to get segmented results
from the Web. Numerous articles about the revolutionary nature of the product
have appeared in publications such as "Industry Standard," "PC Week" and
"Marketing Communications." Over the last three months, WebTop searches have
increased by 40% per week and page impressions are up 30%.
eCommerce Division (ECD)
ECD contains B2B OfficeShopper (business supplies online) and Sparza (B2B
eCommerce licensing technologies).
Revenues for the third quarter increased by 71% over Q2 2000 to $1.3 million.
The quarter saw the successful relocation of the OfficeShopper Head Office to
Chertsey (Southwest London) and the opening of a Regional Distribution Center
close to Heathrow Airport. It also saw the further development of their product,
and revenues in the quarter have shown continued growth.
OfficeShopper has first mover advantage for the provision of office supplies to
small and medium-sized companies via the Internet. Its new Head Office location
has enabled the hiring of high caliber staff and it is believed that the new
business structure will further deliver an efficient and scaleable operation.
The Sparza team have recently completed the transformation of the basic Sparza
platform into a sophisticated ASP (Application Service Provider) by
incorporating the Boo.com technology acquired in Q2. Sparza technology can now
provide a hosting solution for both Internet companies that want a low risk,
fast track entry into their respective markets, as well as large established
retailers who wish to expand their market reach through an outsourced eCommerce
platform.
(more)
Bright Station Ventures (BSV)
BSV was established to leverage off the technology assets and commercial
expertise that exists within the BSTN group through investment of cash and
technology in new e-business opportunities. This `tech equity' structure allows
BSV to accelerate investees' business and product development, as well as drive
future revenues to and create further technology synergies with the operating
subsidiaries of the Group.
BSV currently manages a portfolio of investments including:
o Zawya: The premier Arab world financial portal;
o Netimperative: A news site focusing on the Internet;
o Youreable.com: A vertical portal for the disabled community providing
both infomediary and transaction opportunities;
o Schoolsforschools.com: An e-procurement service allowing schools to
purchase supplies at a reduced cost;
o EHotel: California based hotel Internet access provider; and,
o eFinancial News: Institutional financial publishing business
BSV also provides an essential internal Corporate Finance role to assist in the
acquisition and fundraising activities of all the Bright Station operating
subsidiaries.
Outlook
- -------
The third quarter has seen some impressive progress towards achieving the
business objectives of Bright Station. Early contract wins and increased
awareness of the operating businesses indicates the potential going forward.
The Company's cash position is sound and each core business is now proactively
marketing their products and services. As a result, the new business pipeline
for all the Bright Station businesses looks considerably stronger than at the
start of the year.
Following these early signs of healthy revenue growth in Q3, the Board
anticipates continuing progress in the last quarter 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
David Collins/Robert Rinderman
Jaffoni & Collins 212 835 8500
BSTN@jcir.com
(financial tables follow)
Bright Station plc
Consolidated Profit And Loss Account (unaudited)
For the 3 months ended September 30, 2000
Restated
--------------------------------------------------------
Continuing Discontinued
Total operations operations Total
-------------- ----------------- --------------------- ----------------
2000 1999 1999 1999
-------------- ----------------- --------------------- ----------------
$'000 $'000 $'000 $'000
Turnover 3,500 1,852 72,406 74,258
Cost of sales (1,061) (403) (23,419) (23,822)
-------------- ----------------- --------------------- ----------------
2,439 1,449 48,987 50,436
Distribution costs (770) (451) (7,629) (8,080)
Administrative expenses (8,717) (1,429) (19,854) (21,283)
Amortization of development costs - - (3,623) (3,623)
-------------- ----------------- --------------------- ----------------
Operating (loss)/profit (7,048) (431) 17,881 17,450
Exceptional items
- gain on sale of fixed asset
investment 176 - - -
- loss on termination of
subsidiary - - (1,346) (1,346)
-------------- ----------------- --------------------- ----------------
(Loss)/profit on ordinary activities
before interest (6,872) (431) 16,535 16,104
================= =====================
Net interest receivable/(payable) 368 (6,561)
(Loss)/profit on ordinary activities before
taxation (6,504) 9,543
Taxation on (loss)/profit on ordinary activities - (678)
(Loss)/profit on ordinary activities after
taxation (6,504) 8,865
Minority equity interests - 6
----------------
Retained (loss)/profit (6,504) 8,871
================
(Loss)/earnings per ADS (cents) (15.1) 23.4
(Loss)/earnings per ADR excluding
exceptional loss (cents) (15.1) 27.0
Shares used in computing earnings per ADS
(thousands) 43,153 37,893
The financial results set forth above represent the Company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.478 being the rate of exchange on September 30, 2000, the last
trading day of the period.
Bright Station plc
Consolidated Profit And Loss Account (unaudited)
For the 9 months ended September 30, 2000
Restated
------------------------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
--------------- -------------- --------------- ---------------- ------------------- -----------
2000 2000 2000 1999 1999 1999
---------- --------- ---------- ---------- ----------- ---------
$'000 $'000 $'000 $'000 $'000 $'000
Turnover 8,549 72,635 81,184 11,203 192,000 203,203
Cost of sales (2,244) (32,664) (34,908) (1,598) (74,785) (76,383)
---------- --------- ---------- ---------- ----------- ---------
Gross profit 6,305 39,971 46,276 9,605 117,215 126,820
Distribution costs (1,874) (11,252) (13,126) (1,203) (22,949) (24,152)
Administrative expenses (19,283) (23,336) (42,619) (9,167) (50,335) (59,502)
Amortisation of development
costs - (5,404) (5,404) - (9,786) (9,786)
---------- --------- ---------- ---------- ----------- ---------
Operating (loss)/profit (14,852) (21) (14,873) (765) 34,145 33,380
Exceptional items
- gain on sale of fixed
asset investment 176 - 176 - -
-
- loss on disposal of
ISD - (148,437) (148,437) - - -
- loss on termination
of subsidiary - - - - (1,346) (1,346)
---------- --------- ---------- ---------- ----------- ---------
(Loss)/profit on ordinary
activities before interest (14,676) (148,458) (163,134) (765) 32,799 32,034
========== ========= ========== ===========
Net interest payable (8,936) (19,981)
---------- ---------
(Loss)/profit on ordinary activities before taxation (172,070) 12,053
Taxation on (loss)/profit on ordinary activities (401) (1,700)
---------- ---------
(Loss)/profit on ordinary activities after taxation (172,471) 10,353
Minority equity interests (55) 13
--------- --------
Retained (loss)/profit (172,526) 10,366
========== =========
(Loss)/earnings per ADS (cents) (419.4) 27.3
---------- ---------
(Loss)/earnings per ADS excluding exceptional loss (cents) (59.0) 30.9
---------- ---------
Shares used in computing earnings per ADS (thousands) 41,136 37,903
The financial results set forth above represent the Company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.478 being the rate of exchange on September 30, 2000, the last
trading day of the period.
Bright Station plc
Consolidated Balance Sheet (unaudited)
as at September 30, 2000
Restated Restated
------------------------------------
September September December
30 30 31
2000 1999 1999
$'000 $'000 $'000
FIXED ASSETS
Intangible assets 480 38,752 38,064
Goodwill 9,758 10,831 14,492
Tangible assets 3,249 23,117 21,192
Investments 1,746 19,121 14,241
----------------- ----------------- -----------------
15,233 91,821 87,989
----------------- ----------------- -----------------
CURRENT ASSETS
Stocks - 136 89
Debtors 10,618 68,232 54,228
Cash at bank and in hand 28,725 10,572 15,550
----------------- ----------------- -----------------
39,343 78,940 69,867
CREDITORS (amounts falling
due within one year) (8,507) (89,027) (105,786)
----------------- ----------------- -----------------
NET CURRENT LIABILITIES 30,836 (10,087) (35,919)
----------------- ----------------- -----------------
TOTAL ASSETS LESS CURRENT LIABILITIES 46,069 81,734 52,070
CREDITORS (amounts falling due
after more than one year) - (210,832) (203,033)
Provisions for liabilities and charges (1,258) (3,837) (2,114)
----------------- ----------------- -----------------
44,811 (132,935) (153,077)
----------------- ----------------- -----------------
CAPITAL AND RESERVES
Called up share capital 2,551 2,244 2,289
Share premium account 272,036 225,238 229,015
Shares to be issued 198 1,429 1,429
Profit and loss account (229,974) (362,711) (386,613)
----------------- ----------------- -----------------
Ordinary shareholders' funds 44,811 (133,800) (153,880)
Minority interest - 865 803
----------------- ----------------- -----------------
Total shareholders' funds 44,811 (132,935) (153,077)
----------------- ----------------- -----------------
The financial results set forth above represent the Company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.478 being the rate of exchange on September 30, 2000, the last
trading day of the period.
Bright Station plc
Consolidated Cash Flow Statement
for the 9 Months Ended September 30, 2000 (unaudited)
3 months 9 months Restated 9 months
------------- ------------- ------------------
2000 2000 1999
$'000 $'000 $'000
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (6,955) (11,530) 32,702
------------ ------------- ---------------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 174 757 235
Interest paid on bank loans and overdrafts (9) (11,763) (15,990)
Interest paid on finance leases - (38) (7)
------------ ------------- ---------------
165 (11,044) (15,762)
------------ ------------- ---------------
TAXATION PAID - (367) (789)
------------ ------------- ---------------
CAPITAL EXPENDITURE
Payments to acquire intangible assets (98) (4,394) (14,309)
Payments to acquire tangible fixed assets (44) (2,991) (5,099)
Purchase of investments (879) (1,027) -
Receipts from sales of tangible fixed assets - - 129
------------ ------------- ---------------
(1,021) (8,412) (19,279)
------------ ------------- ---------------
ACQUISITIONS AND DISPOSALS
Purchase of share in joint venture - - (1,825)
Proceeds from sale of investments - - 1,144
Payment to acquire minority interest in subsidiary undertaking - - (634)
Expenses in connection with purchase of subsidiary undertaking - - (729)
Cash transferred with sale of ISD - (7,114) -
Payment of deferred consideration - (1,864) -
Expenses in connection with sale of ISD (350) (6,905) -
Proceeds from sale of ISD 6,938 74,131 -
------------ ------------- ---------------
6,588 258,248 (2,044)
------------ ------------- ---------------
CASH (OUTFLOW)/ INFLOW BEFORE THE USE OF
LIQUID RESOURCES AND FINANCING (1,223) 226,895 (5,172)
------------ ------------- ---------------
FINANCING
Net proceeds on issue of Ordinary share capital 98 41,826 -
Debt due within one year
- Increase in borrowings - - 38,756
- Repayment of loans (254,988) (29,341)
Repayment of capital element of finance leases - (949) (479)
------------ ------------- ---------------
98 (214,111) 8,936
------------ ------------- ---------------
INCREASE IN CASH (1,125) 12,784 3,764
------------ ------------- -----------------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET FUNDS/(DEBT)
Increase in cash in the period (1,125) 12,784 3,764
Cash used to decrease lease financing - 949 479
Cash acquired from issue of debt (net of expenses) - - (38,756)
Cash used to repay loans - 254,988 29,341
------------ ------------- ---------------
Change in net funds/(debt) from cash flows (1,125) 268,721 (5,172)
Other non-cash changes - (9,053) (1,330)
New finance leases - - (3,070)
Finance lease obligations transferred to ISD - 8,460 -
Effect of foreign exchange rate changes 102 (7,389) (12,854)
------------ ------------- ---------------
Movement in net funds/(debt) in period (1,023) 260,739 (22,426)
Net debt at beginning of period 29,748 (232,014) (213,123)
------------ ------------- ---------------
Net funds/(debt) at end of period 28,725 28,725 (235,549)
------------ ------------- ---------------
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) 1.478 being the rate of exchange on September 30, 2000, the last
trading day of the period.
Bright Station plc
Analysis of Revenues
for the 9 Months Ended September 30, 2000 (unaudited)
Restated
----------------------------------------- -----------------------------------------
2000 1999
----------------------------------------- -----------------------------------------
Qtr 1 Qtr 2 Qtr 3 Total Qtr 1 Qtr 2 Qtr 3 Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
ISD - discontinued operations 56,701 15,934 - 72,635 61,242 58,352 72,406 192,000
WSD - continuing operations 1,630 2,088 2,207 5,925 1,391 7,033 (1) 1,534 9,958
ECD - continuing operations 573 758 1,293 2,624 451 476 318 1,245
Total revenues 58,904 18,780 3,500 81,184 63,084 65,861 74,258 203,203
====================================================================================
(1) Includes $5.9 million in respect of license fee
from Fujitsu
The financial results set forth above represent the Company's financial results
under UK GAAP translated for convenience into US Dollars at the rate of
US$:(pound) 1.478 being the rate of exchange on September 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 31 December 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 nine months ended 30 September 2000 have been prepared in accordance with
the accounting policies stated in the 1999 Annual Report and Accounts.
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