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 directory now contains more than 100,000 musical artists
- Ticketmaster, eBay and RadioWave relationships bring new features to
ARTISTdirect Network
LOS ANGELES--(BUSINESS WIRE)--Aug. 2, 2000--ARTISTdirect, Inc.
(Nasdaq:ARTD): 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 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 recognized in the first
quarter in connection with the automatic conversion of the Company's
Series C Redeemable Preferred Stock upon completion of its initial public
offering ("IPO") and the interest accrual on the rescission 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 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 loss was $10.6 million.
"We are very happy with our financial results for the second quarter,"
commented Marc Geiger, CEO 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 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 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 with Jimmy Page, B-52s & GoGos, and Counting Crows. 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 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 for broadband programming; and the ARTISTdirect Superstore, a
retail site offering a wide selection of recorded music and artist
merchandise. Additionally, ARTISTdirect, Inc. operates the ARTISTdirect
Talent Agency. The Company has offices in New York, Los Angeles, Chicago,
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 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 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, current report on Form 8-K and its
Registration Statements on Form S-1 and all amendments thereto.
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. CONTACT: ARTISTdirect, Inc., Los
Angeles
James B. Carroll,
323/634-4022
jim.carroll@artistdirect.com
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