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LOS ANGELES--(BUSINESS WIRE)--May 15, 2000--ARTISTdirect Inc.
(Nasdaq:ARTD) today filed a Form 10-Q with the Securities and Exchange
Commission for the quarter ended March 31, 2000.
As part of that filing, the company revised its previously announced
financial results to reflect a one-time, non-cash effective dividend in
connection with the adjustable conversion of the company's Series C
Redeemable Preferred Stock upon completion of its initial public offering
("IPO") on March 31, 2000.
Net loss from operations was not affected by the non-recurring,
non-cash effective dividend. Net loss attributable to common shareholders
and loss per share includes the impact of the effective dividend, in
accordance with generally accepted accounting principles.
As a result, pro forma net loss per share of $0.39, as previously
announced, was revised to a pro forma net loss per share of $1.25. Results
of future periods will not be affected as all of the company's redeemable
preferred stock was converted to common stock in connection with the IPO.
About ARTISTdirect Inc.
The ARTISTdirect Network is an online music network that connects music
artists and fans. The integrated network of Web sites offers multimedia
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 that enables users to download music
from the ARTISTdirect Network and to upload their music and other
information, Artist TV the Network's hub for broadband programming, and
the ARTISTdirect Superstore, a retail site offering a wide selection of
recorded music and artist merchandise.
Additionally, ARTISTdirect operates the ARTISTdirect Talent Agency and
manages Kneeling Elephant Records. The company has offices in New York,
Los Angeles, San Francisco and London.
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995: This release may contain projections or other forward-looking
statements 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 that
may affect future events and results include, among others, ARTISTdirect's
unproven business model, increased competition in its industry,
ARTISTdirect's ability to increase revenue from online product sales,
advertising and other revenue streams, ability to increase visits to
ARTISTdirect's site, ability to attract and retain artists, ability to
offer compelling content, ability to fulfill online music and merchandise
orders in a timely manner, ability to build brand recognition, ability to
integrate acquisitions of technology and other businesses, 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 Registration Statement
on Form S-1 and all amendments thereto. -0-
*T ARTISTdirect INC.
Consolidated Statements of Operation
(amounts in thousands, except for share data)
(Unaudited)
Three months ended March 31,
2000 1999
Net revenue:
Online product sales $ 2,029 $ 1,016
Advertising and other 1,797 381
Agency commissions 545 130
Record label 126 171
Total net revenue 4,497 1,698
Cost of revenue:
Direct cost of product sales 1,921 901
Other cost of revenue 1,633 395
Stock-based compensation 2,793 --
Total cost of revenue 6,347 1,296
Gross profit (loss) (1,850) 402
Operating expenses:
Product development 807 191
Sales and marketing 5,117 777
General and administrative 3,660 1,308
Amortization of stock-based
compensation (366) 802
Depreciation and amortization 1,174 88
Loss from operations (12,242) (2,764)
Income from equity investment -- 33
Interest income, net 1,055 12
Net loss $(11,187) $(2,719)
Dividends on redeemable
preferred securities 963 121
Beneficial conversion feature
on redeemable preferred stock 24,375 --
Net loss attributable to
common shareholders $(36,525) $(2,840)
Basic and diluted loss per share $(2.45) N/A
Weighted average common shares
outstanding 14,901,505 N/A
Pro forma loss per share $(1.25) $ (0.16)
Pro forma weighted average
common shares outstanding 28,489,648 16,649,626
*T
CONTACT: ARTISTdirect Inc., Los Angeles
James B. Carroll, 323/634-4022
jim.carroll@artistdirect.com
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