AOL Latin America Reports Results for December Quarter 2000.Business Editors/High-Tech Writers FORT LAUDERDALE Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. , Fla.--(BUSINESS WIRE)--Feb. 14, 2001 Driving Continued Momentum are Significant Network Expansion, Launch of Regional Web Portal See portal. , New Wireless Agreements Company Announces $150 Million in Additional Capital from America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Online, the Cisneros Group The Cisneros Group of Companies is one of the largest, privately held media, entertainment, telecommunications and consumer products organizations in the world. The Group owns or holds interests in companies ranging from broadcast television, networks and pay television businesses of Companies, Banco Itau Membership Now Surpasses 550,000; Strong Start for Co-Branded Service with Banco Itau America Online See AOL. Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , Inc. (Nasdaq:AOLA AOLA America Online Latin America ) today announced results for the quarter ended December December: see month. 31, 2000, with strong subscriber growth, significant network expansion, the launch of its regional Web portal, and key marketing, distribution and content agreements underscoring the Company's ongoing momentum. AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. Latin America also announced that its principal shareholders, America Online, Inc., a subsidiary of AOL Time Warner Inc.; the Cisneros Group of Companies; and Banco Itau, have agreed to provide $150 million in added capital on terms to be established by the parties. The additional funding reaffirms the shareholders' commitment to the Company's continued growth. It is anticipated that AOL and the Cisneros Group of Companies will invest an aggregate of approximately $130 million in preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and that Banco Itau will invest the remainder in class A common stock. In addition, AOL Latin America announced today that membership in its services recently surpassed 550,000. AOL Latin America reported revenues of $7.9 million for the December quarter, up 74% from $4.6 million for the quarter ended September September: see month. 30, 2000. The Company reported a net loss before dividends on preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. of $101.8 million, or $0.35 per share, on a pro-forma fully-diluted basis, compared with a September quarter net loss of $98.1 million, or $0.36 per share, before dividends on a pro-forma fully-diluted basis. Because AOL Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. America's first service, America Online Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. , launched in November November: see month. 1999, there are no comparable prior year financials. Advertising and commerce revenues totaled $2.5 million in the quarter, a 29% increase from $1.9 million in the September quarter. AOL Latin America's roster of mainstream advertising and commerce partners has continued to grow. In addition to the growth of advertisers across AOL Latin America's services, America Online Brazil established significant advertising and commerce relationships with Coca-Cola Coca-Cola soft drink found throughout the world. [Trademarks:Crowley Trade, 115] See : Ubiquity , Polaroid Polaroid: see Land, Edwin H. , DirecTV DirecTV (trademarked as "DIRECTV") is a direct broadcast satellite (DBS) service based in El Segundo, California, USA, that transmits digital satellite television and audio to households in the United States, the Caribbean and Latin America except for Mexico. and Embratel EMBRATEL Empresa Brasileira de Telecomunicacoes as part of its sponsorship of the Rock in Rio Rock in Rio is a series of rock festivals held in Brazil and later in Portugal. Three incarnations of the festival were in Rio de Janeiro, in 1985, 1991 and 2001 and two in Lisbon, in 2004 and 2006. The shows were organized by entrepreneur Roberto Medina. festival. AOL Latin America's 550,000 membership total includes members of the Company's services in Brazil, Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. . AOL members in San Juan, Puerto Rico San Juan (IPA: [saŋ hwaŋ]) (from the Spanish San Juan Bautista, "Saint John the Baptist") is the capital and largest municipality on Puerto Rico. , are also included through a recent agreement between AOL Latin America and America Online, Inc. As with the Company's previous subscriber reports, this total includes members participating in the services' initial customer acquisition free trial promotional periods. At year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , AOL Latin America membership stood at 449,000, an increase of 135,000 from September 30, 2000. Usage remained strong in the December quarter, with members spending an average of nearly 30 minutes a day online. Building Momentum Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by Herington, President and Chief Executive Officer of AOL Latin America, said: "AOL Latin America has demonstrated strong momentum in recent months. With more than half a million members in our key markets of Brazil, Mexico, Argentina and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , we are more focused than ever on continuing to strengthen our product line-up line-up Noun 1. people or things assembled for a particular purpose: Christmas TV line-up 2. , extend our network, and provide the best possible online experience in the region. The $150 million funding commitment we are announcing today by our three partners -- America Online, the Cisneros Group and Banco Itau -- provides us with additional capital to continue extending the quality and reach of our services, as we move toward our goal of becoming the leading interactive services provider in Latin America." AOL Latin America has continued to drive growth with the launch and early performance of its co-branded Banco Itau service, the expansion of its network to 139 cities, its sponsorship of the Rock in Rio festival, the launch of its regional Web portal (www.aola.com), and agreements with new content, commerce and advertising partners. -- AOL Latin America and Banco Itau have had a strong initial response to their co-branded, customized America Online Brazil service, which recently launched and is being marketed to Itau's 7 million banking customers. The service provides one-click access to Banco Itau's online banking, a customized welcome screen and finance channel, and the full suite of features and unique services available on America Online Brazil. Banco Itau currently has 1.4 million customers banking online, and is actively promoting the co-branded service as its preferred service for online banking. -- The Company more than doubled the number of cities where it offers local dial-up access from 60 at the end of the September quarter to 139 cities today. America Online Brazil has expanded to 64 additional cities and now has a presence in 123 cities in Brazil. America Online Mexico is now available in 9 cities and America Online Argentina is now available in 7 cities. All three services intend to continue expanding their reach. -- America Online Brazil was the primary sponsor of Rock in Rio: For a Better World, the 7-day music festival in January bringing together top local and international artists, including N'SYNC, Sting and R.E.M., with 1.2 million concert goers. Live celebrity chats and performances via streaming video were carried on America Online Brazil. Additionally, America Online Brazil installation kits and service trials were available at the concert. This initiative reinforced AOL Latin America's commitment to Brazil and provided the Company with extraordinary brand building that targeted a large and important consumer constituency. -- During the quarter, AOL Latin America formed several new advertising, e-commerce and marketing relationships. For Rock in Rio, America Online Brazil formed significant advertising and e-commerce partnerships with leading brands like Coca-Cola, Polaroid, DirecTV and Embratel. America Online Mexico entered into a co-marketing agreement with Visa and a CD distribution agreement with Domino's Pizza. In addition, America Online Argentina became a sponsor of Expedicion Robinson, the Argentine television equivalent of "Survivor," and signed an agreement with Garbarino, a leading Argentine retailer of home appliances and electronics, to pre-install AOL software in certain computers and distribute America Online Argentina CDs. -- AOL Latin America launched its regional Web portal, which provides 20 Latin American countries with access to AOL features and content including news, weather and "Voces Latinas," a joint project of AOL Latin America and TIME Latin America. The regional Web portal introduces users to localized AOL services in Brazil, Mexico and Argentina and offers AOL software downloads to prospective members. Content is available in Spanish and Portuguese in a format designed to introduce visitors to the AOL experience and create a rich Web-based community specifically tailored to the interests of Latin American consumers. -- AOL Latin America entered into wireless distribution agreements with Telesp Celular, the largest cellular operator in Brazil, and Algar Telecom Leste, a cellular carrier based in Rio de Janeiro. Through these agreements, AOL Brazil is offering "AOL Mobile" content and features on Telesp and ATL's wireless Internet services in Brazil. Both agreements advance AOL Latin America's "AOL Anywhere"(sm) strategy by providing consumers in Brazil with another way, beyond the PC, to access and enjoy AOL's unique offerings. -- The Company added a number of new content partners during the quarter including: Revista Submarino, a Brazilian magazine focusing on culture and entertainment; Chabelo.com, the official Web site of one of Mexico's most famous animators; and Tres Puntos, an online Argentine news magazine with investigative stories from some of the country's leading journalists. AOL Latin America now has more than 400 local and regional partners across its services. America Online Brazil now has 100 local content partners, America Online Mexico has more than 115 local partners and America Online Argentina has more than 165 local partners. AOL Latin America, as previously announced, has changed its financial reporting period to a calendar year from the prior July-June fiscal year. This will also conform with the fiscal year of AOL Time Warner Inc., which reports on a calendar year basis. Results for the six-month period ended December 31, 2000 will be reported to the SEC in a transition report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . About AOL Latin America America Online Latin America, Inc. (Nasdaq:AOLA) is the exclusive provider of AOL branded services in Latin America and has quickly become one of the leading Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and interactive services providers in the region. AOL Latin America launched its first service, America Online Brazil, in November 1999, and began as a joint venture of America Online, Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of AOL Time Warner Inc. (NYSE NYSE See: New York Stock Exchange : AOL), and the Cisneros Group of Companies. The Company combines the technology, brand name, infrastructure and relationships of AOL, the world's leader in branded interactive services, with the relationships, regional experience and extensive media assets of the Cisneros Group of Companies, one of the leading media groups in the Americas. The Company currently operates services in Brazil, Mexico and Argentina. Banco Itau, a leading Brazilian bank, is also a minority shareholder of AOL Latin America. This release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements regarding (i) our plans to continue extending the quality and reach of our services and grow our business, and (ii) the intention of our three major stockholders to invest an additional $150 million in the company. These forward-looking statements are subject to a number of risks and uncertainties, which are described in our Annual Report on Form 10-K for the year ended June 30, 2000, and from time to time in other reports we file with the SEC, as well as the following risks and uncertainties: the impact our continued losses will have on our ability to finance our operations, our limited operating history, uncertainty relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our ability to convert our subscribers into paying subscribers, the actions of our competitors, our ability to penetrate our markets, and the possibility that we may not be able to enter into an agreement with our principal stockholders to sell them equity securities on terms acceptable to us, if at all. Actual results could differ materially from those described in the forward-looking statements.
AOL Latin America, Inc.
Summary of Consolidated Financial Results
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Quarter Ended Quarter Ended
December 31, 2000 September 30, 2000
Revenues
Subscriptions $ 5,429 $ 2,621
Advertising and commerce 2,492 1,931
Total Revenues 7,921 4,552
Cost and expenses
Cost of revenues 21,797 16,473
Sales and marketing 74,655 76,296
Product development 2,022 2,098
General and administrative 11,257 7,990
Total costs and
expenses 109,731 102,857
Loss from operations (101,810) (98,305)
Other income, net (2) 206
Loss before provision
for income taxes (101,812) (98,099)
Provision for income taxes - -
Net Loss before dividends on
Series B and C preferred shares (101,812) (98,099)
Dividends on Series B and C
preferred shares 3,674 2,037
Net loss applicable to common
stockholders $ (105,486) $ (100,136)
Basic and diluted loss per share $ (1.68) $ (2.93)
Number of shares outstanding (1) 62,848 34,145
(1) Weighted average number of shares reflects the IPO issuance
effected in August 2000. Prior to that date, there were zero Class A
common shares outstanding.
AOL Latin America, Inc.
Supplemental Pro Forma EPS Calculations
(Unaudited)
(In Thousands, except per share data)
Quarter Ended Quarter Ended
December 31, 2000 September 30, 2000
Pro forma fully diluted calculation:
Reported net loss before
dividends on Series B and C
Preferred Shares $ (101,812) $ (98,099)
Pro forma fully diluted
loss per share $ (0.35) $ (0.36)
Pro forma fully diluted
shares outstanding (1) 288,610 275,386
(1) Includes common stock and assumes conversion of preferred
shares into common, the AOL Warrant, the ESOP, and the overallotment.
America Online Latin America, Inc.
Condensed Consolidated Balance Sheets
As of December 31, 2000 and June 30, 2000
December 31, 2000 June 30, 2000
ASSETS
Current assets:
Cash and cash equivalents $ 63,509 $ 33,321
Short-term investments 69,357 -
Trade accounts receivable 3,724 1,286
Other receivables 12,269 2,140
Prepaid offering costs - 3,476
Prepaid expenses and other
current assets 15,200 2,285
Total current assets 164,059 42,508
Property and equipment at
cost, net 11,307 8,367
Investments including available
for sale securities 754 1,756
Product development costs and
other intangible assets, net 1,877 1,981
Other assets 1,034 1,028
---------------
Total assets $ 179,031 $ 55,640
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 25,024 $ 13,868
Payables to affiliates 10,976 8,637
Other accrued expenses
and liabilities 9,236 2,694
Deferred revenue 3,187 1,927
Accrued personnel costs 3,450 1,919
Other taxes payable 943 202
-
Total current
liabilities 52,816 29,247
Long-term liabilities:
Deferred revenue 1,957 2,804
Other liabilities 437 270
Total liabilities 55,210 32,321
STOCKHOLDERS' EQUITY 123,821 23,319
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 179,031 $ 55,640
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