ARTISTdirect, Inc. Announces Strong Second Quarter Results.Business/Entertainment Editors & High-Tech Writers LOS ANGELES--(BUSINESS WIRE)--Aug. 2, 2000 ARTISTdirect, Inc. (Nasdaq:ARTD): Highlights: -- Net revenue of $5.6 million, up 182% from $2.0 million in Q2 1999 -- Online revenue of $4.6 million, up 174% from $1.7 million in Q2 1999 -- Advertising revenue of $2.0 million, up 288% from $0.5 million in Q2 1999 -- Gross profit (before amortization of stock-based compensation) of $1.2 million or 21% of revenue -- UBL (Universal Business Language) A format for exchanging data from one XML business language to another. Based on ebXML Core Components, UBL is designed to provide a common language that acts as an intermediate vocabulary so that one XML vocabulary can interoperate with directory now contains more than 100,000 musical artists -- Ticketmaster, eBay and RadioWave relationships bring new features to ARTISTdirect Network ARTISTdirect, Inc. (Nasdaq:ARTD) today announced financial results for the second quarter and six months ended June 30, 2000. Net revenue for the second quarter of 2000 increased 182% to $5.6 million, compared with $2.0 million in the second quarter of 1999. Net loss for the quarter was $14.0 million compared with a net loss of $5.5 million for the second quarter of 1999. Net loss was $0.39 per share for the second quarter of 2000 compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma loss per share of $0.29 for the second quarter of 1999. For the six months ended June 30, 2000, net revenue increased 174% to $10.1 million, compared with $3.7 million for the same period last year. Net loss for the six months ended June 30, 2000 was $25.2 million compared with a net loss of $8.2 million for the same period last year. Net loss was $1.53 per share for the six months ended June 30, 2000, on a pro forma basis including non-recurring, non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. recognized in the first quarter in connection with the automatic conversion of the Company's Series C Redeemable Redeemable Eligible for redemption under the terms of an indenture. 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. upon completion of its initial public offering ("IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ") and the interest accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. on the rescission The abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed. By Agreement offer. Pro forma loss per share was $0.46 for the six months ended June 30, 1999. The Company reported a negative gross profit of $527,000 for the second quarter of 2000. Excluding non-cash charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc amortization of stock-based compensation, second quarter gross profit was $1.2 million, or 21% of net revenue, compared with $382,000, or 19% of net revenue, in the prior year period. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become loss was $10.6 million. "We are very happy with our financial results for the second quarter," commented Marc Geiger, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and Chairman of ARTISTdirect, Inc. "For the first six months of the year, we generated almost as much revenue as for all of last year, demonstrating the strength of our business model. These results were achieved in spite of consumers being drawn to free music offered by other web sites in disregard of copyright law and artist rights. We believe strongly in copyright protection and, as we move forward, intend to continue working with our artist and label partners to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the promise of digital distribution. Our goal is to integrate digital music with the other experiences that fans value, such as exclusive music and merchandise, the chance to meet a favorite artist, behind the scenes video, and special access to concert tickets. As part of creating this comprehensive destination, we have entered into new partnerships that deliver unique features to our users." In June this year, ARTISTdirect and eBay launched a co-branded auction site where music fans can bid on concert tickets and memorabilia mem·o·ra·bil·i·a pl.n. 1. Objects valued for their connection with historical events, culture, or entertainment: posters, publicity photographs, and other movie memorabilia. 2. from their favorite artists. To date, fans have had the opportunity to buy premium seats to concerts by The Who, Diana Ross and The Supremes, Black Crowes BLACK CROW Lockheed Spurious Emission Detector with Jimmy Page, B-52s & GoGos, and Counting Crows Crow 1 n. pl. Crow or Crows In both senses also called Absaroke. 1. a. A Native American people formerly inhabiting an area of the northern Great Plains between the Platte and Yellowstone . Artists have found this to be a new vehicle for charity fundraising while giving their fans a chance to buy tickets that they otherwise might not be able to get. Also in June this year, we reached an agreement to have RadioWave.com provide branded, streaming music channels for the ARTISTdirect Network. These channels will be customized to specific music themes and enabled with links to ARTISTdirect e-commerce offerings. Subsequent to the close of the second quarter, ARTISTdirect entered into an agreement with Ticketmaster Online - CitySearch to integrate real-time ticketing into the ARTISTdirect Network. For the first time, visitors to ARTISTdirect will have access to the full offering of music events ticketed by Ticketmaster as well as opportunities to buy tickets before they generally go on sale for specific artists affiliated with ARTISTdirect. About ARTISTdirect, Inc. The ARTISTdirect Network (Nasdaq:ARTD) is an online music network that connects music artists and fans. The integrated network A network that supports both data and voice and/or different networking protocols. See converged network and new public network. of Web sites offers multi-media entertainment content, music news and information, community around shared music interests, and music-related commerce. The ARTISTdirect Network consists of ARTISTdirect.com (www.artistdirect.com), home of the official channels that the company operates on behalf of artists; UBL.com (www.ubl.com), a music search engine on the Web; iMusic (www.imusic.com), an online community site where fans exchange music interests and commentary; DOWNLOADSdirect, (www.downloadsdirect.com) -- a feature which enables users to download music from the ARTISTdirect Network and to upload their music and other information; Artist TV, the network hub See hub and hub vs. switch. for broadband programming; and the ARTISTdirect Superstore su·per·store n. A very large retail store that stocks highly diversified merchandise, such as groceries, toys, and camera equipment, or a wide variety of mechandise in a specific product line, such as computers or sporting goods. , a retail site offering a wide selection of recorded music recorded music n → música grabada and artist merchandise. Additionally, ARTISTdirect, Inc. operates the ARTISTdirect Talent Agency. The Company has offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Chicago, San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden and London. 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. Statement under 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: This release may contain projections or other 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. regarding future events or the future financial performance of ARTISTdirect that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. Potential risks and uncertainties which may affect future events and results include, among others, ARTISTdirect's ability to attract new artists and retain existing artists, increased competition in its industry, including from Web sites offering free music, ability to enter into new strategic relationships and leverage existing strategic relationships, ability to increase revenue from online product sales, advertising and other revenue streams, and to generate revenue from digital distribution, ability to increase visits to ARTISTdirect's site, ability to offer compelling content, ability to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. on-line music and merchandise orders in a timely manner, ability to build brand recognition, ability to protect and/or obtain intellectual property rights, and ability to manage growth. More information about potential factors that could affect the company's business and financial results is included in the documents filed by ARTISTdirect with the SEC, including its most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. , current report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and its Registration Statements on Form S-1 and all amendments thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. .
ARTISTdirect, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2000 1999
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 62,150 $ 69,119
Cash held for clients 643 770
Short term investments 44,091 --
Accounts receivable, net 2,551 1,001
Prepaid expenses and other current assets 7,592 6,795
Total current assets 117,027 77,685
Property and equipment, net 8,400 3,343
Goodwill and intangibles, net 11,958 13,415
Other assets, net 4,269 4,157
$ 141,654 $ 98,600
Liabilities, Redeemable Preferred
Stock and Stockholders' Equity (Deficit)
Current liabilities:
Cash held for clients $ 643 $ 770
Accounts payable 1,267 3,709
Accrued expenses 5,577 4,698
Notes payable -- 741
Deferred revenue -- 37
Total current liabilities 7,487 9,955
Long term liabilities 891 683
Total liabilities 8,378 10,638
Redeemable securities 11,506 111,707
Stockholders' equity (deficit):
Common stock 369 141
Additional paid-in-capital 201,395 36,688
Unearned compensation (31,206) (36,976)
Accumulated deficit (48,788) (23,598)
Total stockholders' equity (deficit) 121,770 (23,745)
$ 141,654 $ 98,600
ARTISTdirect, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except for share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Net revenue:
Online product
sales $2,580 $1,154 $4,609 $2,170
Advertising
and other 1,973 508 3,770 889
Agency
commissions 927 161 1,472 291
Record label 118 161 244 332
Total net
revenue 5,598 1,984 10,095 3,682
Cost of revenue:
Direct cost of
product sales 2,317 1,048 4,238 1,949
Other cost
of revenue 2,129 554 3,762 949
Stock-based
compensation 1,679 51 4,472 51
Total cost
of revenue 6,125 1,653 12,472 2,949
Gross Profit (527) 331 (2,377) 733
Operating expenses:
Product development 679 440 1,486 631
Sales and marketing 6,596 1,760 11,793 2,537
General and
administrative 4,478 1,929 8,058 3,237
Amortization of
stock-based
compensation 1,757 1,115 1,391 1,917
Depreciation
and amortization 1,457 625 2,631 713
Loss from
operations (15,494) (5,538) (27,736) (8,302)
Income from
equity investment 15 -- 15 33
Interest
income, net 1,476 65 2,531 77
Net loss $(14,003) $(5,473) $(25,190) $(8,192)
Dividend on
redeemable stock 271 297 1,456 418
Beneficial conversion
feature on redeemable
preferred stock -- -- 24,375 --
Net loss attributable
to common
shareholders $(14,274) $(5,770) $(51,021) $(8,610)
Basic and diluted
loss per share $(0.39) N/A $(1.97) N/A(a)
Weighted
average
common shares
outstanding 36,852,548 N/A 25,902,230 N/A(a)
Pro forma loss
per share $(0.39) $(0.29) $(1.53) $(0.46)(b)
Pro forma
weighted
average common
shares
outstanding 36,852,548 18,594,676 32,696,302 17,735,212
EBITDA loss $(10,601) $(3,747) $(19,242) $(5,621)(c)
(a) During the three and six months ended June 30, 1999 the Company was organized as a limited liability company. Accordingly, no common shares were outstanding and no loss per share is applicable. (b) Pro forma net loss per share and pro forma weighted average shares outstanding are calculated assuming that the Company's members' interests, which were converted to common shares in 1999 and its Redeemable Preferred Securities, which were converted to common shares at the IPO, were outstanding as common shares during the periods presented. The calculation of the pro forma net loss per share includes the effect of the beneficial conversion feature assuming the Series C preferred stock converted at the initial public offering date pursuant to the original terms of the Series C preferred stock. (c) EBITDA excludes income from equity investment, net interest income, depreciation and amortization and stock-based compensation. |
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