CMG Reports Significant Increase in Sales for Fiscal Year 1997/ Part 1 of 2.ANDOVER, Mass.--(BUSINESS WIRE)--Sept. 18, 1997--CMG Information Services See Information Systems. Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) ) today reported financial results for its fourth quarter and fiscal year ended July 31, 1997. Sales for the quarter were $22.1 million, representing an increase of 16 percent over the previous quarter ended April 30, 1997, and a 143 percent increase over the fourth quarter ended July 31, 1996. The growth over last year's fourth quarter largely reflects sales from the company's Pacific Link subsidiary and increased sales from the company's consolidated Internet investment companies. The company reported a net loss of $5.0 million, or ($0.52) per share for the fourth quarter compared to a net loss of $10.3 million or ($1.07) per share for the previous quarter ended April 30, 1997. Fourth quarter results included an $8.4 million pre-tax gain on the July 31, 1997 dividend distribution to CMG CMG Coastal & Marine Geology (USGS) CMG Chipotle Mexican Grill, Inc. (stock symbol) CMG Companion (of the Order Of) St Michael and St George CMG Computer Measurement Group shareholders of 603,000 shares of common stock of the company's subsidiary, Lycos Inc. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased to $36.2 million in the fourth quarter of fiscal 1997, from $30.8 million in the third quarter of fiscal year 1997. For the fiscal year ended July 31, 1997, sales were $70.6 million as compared to $28.5 million for the previous fiscal year, representing a 148 percent increase. Net loss for the year ended July 31, 1997 was $22.0 million representing ($2.34) per share, compared to net income of $14.3 million, or $1.48 per share for the prior year ended July 31, 1996. Commenting on the company's operating performance, 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. David Wetherell said, "We are very proud of the significant progress made across our portfolio of businesses during the fourth quarter and full year. While the company's development efforts in all businesses continue to march ahead, CMG added four new investments to its CMG@Ventures portfolio during the fourth quarter. The company in total has investments in 17 businesses at July 31, 1997. CMG's shareholders were rewarded during the fourth quarter with a dividend distribution of a portion of the company's Lycos shares. Based on current share prices, CMG shareholders who still hold their Lycos dividend shares have benefited in an increase in value in those shares of approximately 90 percent in less than two months. Under our new venture dividend program we hope we will be able to offer many more opportunities to our shareholders to directly share the benefits from our CMG@Ventures investments." Operating Segments The company reports three operating segments: Investment and Development, Fulfillment Services, and Lists and Database Services. The Investment and Development segment results reflect the consolidated performance of majority-owned Internet companies, which currently include Lycos, Blaxxun, Planet Direct, ADSmart, InfoMation and Vicinity. The Investment and Development segment reported sales of $8,463,000 in the current quarter, compared with $6,015,000 in the third quarter of this year. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. was $10,423,000 in the quarter just ended versus a loss of $9,481,000 for the quarter ended April 30, 1997. Compared with the third quarter of fiscal 1997, current quarter results reflect the combination of increased sales and marketing expenses associated with product launches, higher sales and reduced operating losses for Lycos, and the impact of share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. at Vicinity which resulted in the consolidation of Vicinity's operating losses beginning in the fourth quarter of fiscal year 1997. During the fourth quarter, CMG@Ventures acquired minority ownership interests in PlanetAll, Softway Systems and Koz Inc., all of which are carried at cost in CMG's financial statements, and Reel.com which is accounted for under the equity method. CMG's portion of the net operating performance of Ikonic, Parable parable, the term translates the Hebrew word "mashal"—a term denoting a metaphor, or an enigmatic saying or an analogy. In the Greco-Roman rhetorical tradition, however, "parables" were illustrative narrative examples. Jewish teachers of the 1st cent. A.D. , Silknet, GeoCities and Reel.com are reflected in Equity in losses of affiliates. In the Fulfillment Services segment, sales increased 8 percent to $11,393,000 in the fourth quarter of fiscal 1997 from $10,587,000 in the third quarter of fiscal year 1997, primarily reflecting the addition of new turnkey business Turnkey Business A situation where the high level management of a firm is in charge of the planning and execution of all business strategy. The client, who buys a franchise or part of the business, only has to "turn the key" for the operation to start. from one major customer. Segment operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. decreased 8 percent compared with operating profit in the third quarter ended April 30, 1997, reflecting increased expenses associated with the addition of operating infrastructure in preparation of new business attained. The Lists and Database Services segment results reflect the combined results of CMG's list sales and services business with those of Engaged Technologies, which is developing highly powerful data mining, querying, analysis and targeting products and services. The Lists and Database Services segment reported sales of $2,204,000 in the quarter just ended compared to $2,408,000 in the third quarter of fiscal year 1997. Sales were lower due to continued consolidation in the educational publishing industry and competitive pricing pressure. The segment posted an operating loss for the quarter of $4,745,000 versus a loss of $3,435,000 for the third quarter ended April 30, 1997. Included in the segment's operating expenses were research and development expenses of $2,289,000 for the quarter just ended, compared to $2,022,000 for the third quarter of fiscal year 1997. The increase reflects the continued development of Engaged Technologies' data mining, access and query products and services. The remainder of the increased segment operating expenses relate to the continued development of marketing and administrative infrastructure for Engaged Technologies. Subsequent to July 31, 1997, Engage sold certain rights to its Engage.Fusion(TM) and Engage.Discover(TM) products for cash and stock valued at $11.5 million. Under the agreement, Engage retains the exclusive right to sell these products as part of the Engage Product Suite. Internet Company Highlights Lycos reported a 32 percent increase in revenues and 55 percent reduction in net loss in the quarter just ended versus the third quarter ended April 30, 1997, a 324 percent increase in full year revenue, and positive cash flow of nearly $4 million for the fourth quarter. Lycos also reported an increase in the number of advertisers during the fourth quarter to more than 400 advertisers. Lycos' 50 percent joint venture with Bertelsmann, which was announced on May 12, 1997, has rapidly produced dominant navigation services throughout Europe, with services in nine countries including: Germany, United Kingdom, France, Italy, Austria, Switzerland, Netherlands, Luxembourg and Spain. The joint venture, which will create 37 navigation centers throughout Eastern and Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). , was capitalized with $10 million in start-up capital from Bertelsmann and technology and Internet expertise from Lycos. In August, Lycos announced that it has entered into an unrivaled electronic commerce partnership with BarnesandNoble.com, the online subsidiary of the world's largest bookseller. The agreement makes Lycos a flagship online partner, integrating content and technology extensively throughout the companies' respective Websites to promote the worldwide distribution of books online. In September, Lycos announced that it has been selected as the exclusive provider for the Microsoft Active Channel Guide in Microsoft Internet Explorer See Internet Explorer. 4.0. Lycos will produce and host the Active Channel Guide designed to guide Internet Explorer Microsoft's Web browser, which comes with Windows starting with Windows 98. Commonly called "IE," versions for Mac and Unix are also available. Internet Explorer is the most widely used Web browser on the market. It has also been the browser engine in AOL's Internet access software. 4.0 users to channels that meet their topics of interest. The Active Channel Guide will prominently display the Lycos logo and Lycos will be the exclusive provider of search services to the greater World Wide Web from within the Active Channel Guide by providing users direct access to www.lycos.com . GeoCities announced an agreement with Softbank Corp. to establish GeoCities Japan Corp. GeoCities will have a 40 percent stake in the joint venture, and Softbank the remainder. GeoCities has now welcomed 945,000 users, or "homesteaders," since launching in June 1995. GeoCities now receives more than 400 million page views and 90 million individual visits each month and has added a stellar roster of advertisers in the past 12 months. In April, GeoCities launched a new consumer advertising campaign, featuring a variety of print executions designed to build consumer awareness of GeoCities 40 themed communities, with spending projected to be close to $2 million. GeoCities was recently named the fourth most visited site on the Web by the industry measurement organization PC Meter. Planet Direct launched a new version of its personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. Web-based on-line service in June, featuring a new approach for presenting useful and relevant content for each member's personal start page. Planet Direct has increased the number of Internet Service Provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. ) affiliates carrying its next generation service by 86 percent since the end of June. A network of 130 ISPs are currently presenting the co-branded Planet Direct service to their 1.4 million subscribers nation-wide. Planet Direct has increased the number of fully registered users of its service to 130,000 and its service has reached over 1 million daily hits. In August, Planet Direct announced that it will partner with Paramount Stations Group Paramount Stations Group (sometimes abbreviated as PSG) was a television broadcasting company that was renamed from the TVX Broadcast Group in 1991 after Paramount Pictures gained full ownership of the group. (PSG PSG, n polysomnograph; polygraph performed during sleep. Physiological variables such as pulse, blood pressure, and respiration are monitored and charted. ), a unit of Viacom Inc. and the sixth-largest station group in the country with 15 television stations, to provide viewers of 10 of the Group's owned and operated UPN UPN User Principal Name (Microsoft Windows 2000) UPN United Paramount Network UPN Unión del Pueblo Navarro (Navarrese People Union) UPN Umgekehrte Polnische Notation affiliated stations with a host of community-based information services. The PSG-Planet Direct venture will offer an extensive entertainment and news-driven online service that provides regional and national information to local viewers. Other recently announced partnerships include CitySearch, ZDNet, The Mining Company and Barnes and Noble. Silknet launched its eService(TM) system during the quarter. eService(TM) is an innovative, Web-based software solution for providing superior customer service and reducing customer service expenses and overhead. eService(TM) allows customers to resolve most issues on their own by accessing a support Web site and searching the eService(TM) knowledge base for solutions. If an answer can not be found in the knowledge base, the customer can request service from a live representative. The eService(TM) system provides for a variety of multimedia response methods by the representative. During the quarter, Pacific Bell Internet Services became the first company to replace its existing client service system with Silknet's eService(TM) customer support site. Additional companies with eService(TM) system implementations planned include Planet Direct and PC Connection. Also, during the quarter, Silknet closed its second round of financing with a $5 million investment from a consortium of companies including CMG @ Ventures II, BancBoston Ventures, Vertex Management and Zero Stage Capital. Parable announced in early May that it had been awarded "Best of Show" distinction at the Internet Showcase conference in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. for its flagship product A primary product of a company, which is typically why the company was founded and/or what made it well known. For example, MS-DOS, Windows and the Microsoft Office suite have been flagship products of Microsoft. CorelDRAW is a flagship product of Corel Corporation. , ThingMaker. The Internet Showcase conference provided for a select group of 80 companies to showcase their products and technologies before an audience of Internet industry leaders, prominent industry and business press, analysts, venture capitalists Venture Capitalist An investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding. Notes: Venture capitalists usually expect higher returns for the additional risks taken. and investment bankers Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. . Engage announced the sale of the rights to its Engage.Fusion(TM) and Engage.Discover(TM) products for cash and stock valued at $11.5 million on Sept. 2, 1997. Under the agreement, Engage retains the exclusive right to sell these products as part of the Engage Product Suite. NaviSite announced the launch of its services and the opening of its first specialized datacenter in Andover, MA on Aug. 19, 1997. Unlike Internet Service Providers and telecommunications carriers who offer standardized Web hosting services A web hosting service is a type of Internet hosting service that allows individuals and organizations to provide their own websites accessible via the World Wide Web. Web hosts are companies that provide space on a server they own for use by their clients as well as providing , NaviSite is uniquely focused on active and customized Internet server management for business critical systems. NaviSite provides a dedicated server-hosting environment and comprehensive services to manage the complicated and rapidly changing needs of business-critical Internet systems. Vicinity announced in August the renewal of their multi-year agreement with Yahoo! to provide innovative services on the Web. Vicinity will continue to supply Yahoo! with customized Business Directory, Maps and Driving Directions. These services will remain integrated throughout the main Yahoo! site and the eleven Yahoo! metro sites. Currently, users of Yahoo! services gain transparent access to Vicinity's product whenever they want yellow pages, maps, driving directions or related information. Vicinity plans to add new features and enhancements to the Yahoo! services during the term of this agreement. ADSmart now has in excess of 80 sites which have chosen to join its on-line advertising network. The company has made significant progress in assembling its sales staff which is actively pursuing the advertising sales market. Sales offices have been opened 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 and 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 , with plans for Chicago in the near future. InfoMation continued to build momentum for its new Web-based knowledge management solution with its August, 1997 announcement of three strategic partnerships with leading content publishers. Financial Times Information, Phillips Publishing International Inc., and Information Inc. are the latest companies to provide access to a wealth of prestigious business and financial news sources and publications through InfoMation's innovative Echo(TM) personalized knowledge management center. The partnerships expand the depth of focused news and information delivered to corporate users. Echo is Echo I may refer to:
Ikonic continued to strengthen its position as a leading provider of strategy, design and implementation services for large Websites of market-leading companies. Ikonic was responsible for the design of an interactive Website launched by the Pacific Exchange during May that features a specialized graphics format that allows pages to be loaded quickly, powerful navigation tools that make finding information easy, as well as price quotes and company information for the 2,600 stocks and 600 equity options traded on the Pacific Exchange. Commenting on the company's progress in its Investment and Development segment, Wetherell stated that, "With the dramatic success of GeoCities, Lycos and Vicinity, CMG@Ventures is now the largest shareholder in three of the top twenty most visited sites on the Web. We believe these companies, along with the others in our portfolio, are very well positioned to convert this growing traffic to significant revenue opportunities via advertising, sponsorships, licensing and publishing contracts A publishing contract is a legal contract between a publisher and a writer or author (or more than one), to publish written material by the writer(s) or author(s). This may involve a single written work, or a series of works. . We are very excited about the prospects for these companies in fiscal 1998 and foresee many opportunities to continue on a strong pace of investing in new Internet See Web 2.0 and Internet2. ventures." CMG Information Services Inc. is a leading provider of direct marketing services, investing in and integrating advanced Internet, interactive media and database technologies. 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. in this release are made pursuant to 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act. Investors are cautioned that actual results could differ materially from those anticipated by such statements and are advised to consults CMG's current SEC filings for additional information concerning risk factors that affect the company's business. (PART 1 OF 2, TABULAR INFORMATION TO FOLLOW) CONTACT: CMG Information Services Inc. Andrew J. Hajducky III, 508/684-3660 |
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