MECKLERMEDIA, "THE INTERNET MEDIA COMPANY," REPORTS OPERATING RESULTS FOR THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 1998
(WESTPORT, CT, August 4, 1998) -- Mecklermedia Corporation, "The Internet Media Company" (Nasdaq: MECK), today reported results for the third quarter ended June 30, 1998. Revenues for the third quarter of fiscal 1998 decreased to $5.8 million compared to $6.3 million for the same period last year as a result of lower print publishing revenues, offset by higher trade show and Web site revenues. (In December 1997, the Company announced a strategic magazine initiative whereby Internet World became the new name of Web Week, effective with the February 2, 1998 issue. The paid circulation magazine previously known as Internet World ceased publishing effective with the February 1998 issue and Internet Shopper magazine ceased publishing effective with the January 1998 issue. These changes were effected to enable the Company to concentrate its print publishing efforts into a single business-to-business publication, leveraging the Internet World brand name and further aligning the publishing focus with its Internet World trade shows and Internet.com network of Web sites. Revenues from print publishing for the three months ended June 30, 1998 decreased from the same period in the prior fiscal year due to these changes.) Net loss for the third quarter improved to $1.7 million, or $0.20 per share, compared to $1.9 million, or $0.23 per share, in the same period of the prior year.For the nine months ended June 30, 1998, revenues increased 13% to $49.8 million from $44.3 million for the comparable period in fiscal 1997. Operating income for the nine months ended June 30, 1998 increased 280% to $7.9 million from $2.1 million for the same period in the prior fiscal year. Net income for the nine months ended June 30, 1998 was $6.4 million, or $0.75 per share, compared to net income of $3.7 million, or $0.43 per share, in the same period of the prior year. Net income for the nine months ended June 30, 1998 includes a $2.0 million gain related to the sale of the active subscriber list of the paid monthly print publication formerly known as Internet World. Net income for the nine month period of fiscal 1998 reflects a provision for income taxes of $4.1 million, while net income for the same period of fiscal 1997 reflects an income tax benefit of $773,000 due to the utilization of available net operating loss carryforwards.
For the third quarter, trade show revenues increased from $865,000 to $2.4 million, reflecting the growth of Internet World U.K. 1998 and Internet World Mexico 1998. Due to the Company's increase in its ownership of the U.K. and Mexico events during fiscal 1998 to 100% and 51%, respectively, these events are now consolidated for financial reporting purposes. In the fiscal 1997 period these events were recorded as equity investments. Web site revenues also contributed to the increase rising to $971,000 for the three months ended June 30, 1998 from $349,000 for the comparable period in fiscal 1997, due to increased advertising revenue for Internet.com, the Company's network of Web sites for Internet news and information. Revenues from print publishing for the three months ended June 30, 1998 decreased to $2.2 million from $4.5 million for the same period in the prior fiscal year primarily as a result of the Company concentrating its print publishing efforts into a single business-to-business publication as described above. This decrease in print publishing revenues was offset partially by advertising revenue contributed by Boardwatch Magazine, which was acquired during the third quarter.
Advertising, promotion and selling expenses decreased from $2.8 million for the third quarter of fiscal 1997 to $1.6 million for the third quarter of fiscal 1998 as a result of the Company concentrating its print publishing efforts into a single business-to-business publication, partially offset by additional expenses from Boardwatch Magazine. General and administrative expenses increased due to personnel and other expenses related to the acquisition of the ISPCON trade shows and Boardwatch Magazine, as well one-time professional fees related to trademark litigation. Amortization of intangibles increased from $213,000 for the third quarter of fiscal 1997 to $704,000 for the third quarter of fiscal 1998 due to the acquisition of the ISPCON trade shows and Boardwatch Magazine, as well as a number of Web sites.
"We are pleased with our performance nine months year to date with the achievement of record revenues, gross profit, operating income, and net income," said Alan M. Meckler, Chairman and CEO of Mecklermedia. "Our third fiscal quarter was highlighted by the acquisition of the ISPCON trade shows, Boardwatch Magazine, and their related Web sites. During this period we continued our international trade show growth, with announcements of the launch of future Internet World shows in Egypt, Turkey, Spain, Hong Kong, and Singapore where we have a 51% majority interest, as well as ISPCON events in Australia and the U.K. which we wholly own. We also acquired a 51% interest in an existing Internet show in Ireland and we acquired the remaining interest in our Internet World France event, whereby that event is now wholly-owned. Our Internet.com network of Web sites now receives approximately 17 million page views on a monthly basis and has approximately 1 million unique users-making Internet.com one of the leading business-to-business content sites on the Web. Continued growth and integration of our trade shows, print publishing and Web sites will enable us to maintain our leadership position in the Internet media business," stated Meckler.
Certain of the Company's operations are cyclical in nature. The number and size of trade shows in a particular quarter has and will continue to significantly impact the Company's quarterly results. Accordingly, presentation of quarterly results of operations is not necessarily indicative of annual results or trends.
Mecklermedia Corporation, The Internet Media Company, based in Westport, Connecticut, is a leading provider of Internet information through its Internet World trade shows and conferences, its Internet World weekly print publication, and its Internet.com network of Web sites at http://www.internet.com, which provides daily news and information resources for the Internet community. Mecklermedia also publishes the ISDEX, the only 100% Internet stock index featuring 50 leading companies at http://www.isdex.com. Mecklermedia's global presence includes Internet World trade shows and licensed publications throughout Canada, Mexico, South America, Europe, the Middle East, Africa, Asia, and Australia.
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| . | Three Months Ended June 30 | Nine Months Ended June 30 | ||
| . | 1998 | 1997 | 1998 | 1997 |
| REVENUES: | ||||
| Trade shows | $2,366 | $865 | $36,431 | $26,987 |
| Print publishing | 2,232 | 4,524 | 9,738 | 14,817 |
| Web sites | 971 | 349 | 2,570 | 1,017 |
| Other | 274 | 532 | 1,096 | 1,451 |
| . | 5,843 | 6,270 | 49,835 | 44,272 |
| COST OF SALES AND DIRECT COSTS: | ||||
| Trade shows | 1,917 | 128 | 16,314 | 13,598 |
| Print publishing | 1,815 | 3,961 | 8,226 | 10,421 |
| Web sites | 558 | 282 | 1,418 | 843 |
| Other | 73 | 122 | 296 | 411 |
| . | 4,363 | 4,493 | 26,254 | 25,273 |
| Gross profit after cost of sales and direct costs | 1,480 | 1,777 | 23,581 | 18,999 |
| OPERATING EXPENSES: | ||||
| Advertising, promotion and selling | 1,604 | 2,834 | 7,907 | 10,089 |
| General and administrative | 2,128 | 1,983 | 6,484 | 6,256 |
| Operating income(loss) | (2,956) | (3,253) | 7,850 | 2,066 |
| Interest income | 150 | 279 | 664 | 825 |
| Gain on sale of assets | - | - | 2,036 | - |
| Income(loss) before income taxes | (2,806) | (2,974) | 10,550 | 2,891 |
| Provision (benefit)for income taxes | (1,066) | (1,046) | 4,143 | (773) |
| Net income (loss) | ($1,740) | $(1,928) | $6,407 | $3,664 |
| Basic earnings (loss) per share | ($0.20) | $(0.23) | $0.75 | $0.43 |
| Diluted earnings (loss)per share | ($0.20) | $(0.23) | $0.73 | $0.42 |
| Weighted average shares | 8,724 | 8,516 | 8,526 | 8,502 |
CONSOLIDATED BALANCE SHEETS ( In thousands)
| . | JUNE 30, 1998 | SEPTEMBER 30, 1997 |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $6,456 | $23,971 |
| Accounts receivable, net | 6,214 | 3,960 |
| Advanced billings for trade shows | 10,900 | 9,497 |
| Inventory | 412 | 1,074 |
| Prepaid trade show expenses | 4,310 | 3,198 |
| Deferred income taxes | 603 | 1,715 |
| Prepaid expenses and other | 613 | 1,824 |
| Total current assets | 29,508 | 45,239 |
| PROPERTY AND EQUIPMENT, NET | 2,976 | 2,528 |
| INTANGIBLE ASSETS, NET | 37,825 | 3,760 |
| OTHER ASSETS | 634 | 254 |
| Total assets | $70,943 | $51,781 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Accounts payable | $3,074 | $4,219 |
| Accrued expenses | 5,517 | 3,708 |
| Accrued income taxes | 893 | 72 |
| Deferred trade show revenue | 23,622 | 21,406 |
| Deferred magazine revenue | 536 | 2,640 |
| Total current liabilities | 33,642 | 32,045 |
| DEFERRED MAGAZINE REVENUE - LONG-TERM | 132 | 320 |
| Total liabilities | 33,774 | 32,365 |
| STOCKHOLDERS' EQUITY: | ||
| Common stock | 91 | 85 |
| Additional paid-in capital | 41,365 | 24,857 |
| Treasury stock, at cost | (5,272) | (172) |
| Retained earnings (deficit) | 1,101 | (5,306) |
| Foreign currency translation adjustment | (116) | (48) |
| Total stockholders' equity | 37,169 | 19,416 |
| Total liabilities and stockholders' equity | $70,943 | $51,781 |
| *This press release contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties, including but not limited to, risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. | ||
Contact:
Dara Tyson
Mecklermedia Corporation
(203) 341-2972
[email protected]
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