Geoff Kerr, USWeb/CKS Corporation, (408) 987-3260,
[email protected]
Kate Wagner, USWeb/CKS Corporation, (408) 987-3268,
[email protected]
USWeb/CKS Reports Fourth Quarter and 1998 Year-end Financial Results
Profit before non-cash and merger related charges was $0.07 per share for the quarter; Sequential quarterly revenue increases 16%, year-to-year revenue increases 100%
SANTA CLARA, California - January 25, 1999 - USWeb/CKS (Nasdaq: USWB) a leader in strategic Internet and marketing communications services today reported its financial results for its fourth quarter and year ended December 31, 1998.
Revenues for the fourth quarter were $72.6 million, a 16% increase over revenues of $62.6 million reported in the quarter ended September 30, 1998. The company reported a net loss for the quarter of $84.1 million or $1.26 per share, which included non-cash and merger-related charges, compared with a net loss of $27.8 million, or $0.44 per share in the previous quarter. Net income before non-cash and merger related charges was $5.9 million or $0.07 per diluted share, compared with net income before non-cash charges of $5.3 million or $0.07 per diluted share in the previous quarter. Non-cash charges are primarily related to acquisitions and include stock compensation, acquired in-process technology, amortization of intangible assets, depreciation and amortization, and an impairment charge associated with goodwill.
During the fourth quarter of 1998, USWeb/CKS completed the merger between USWeb Corporation and CKS|Group, a transaction valued at approximately $540 million in USWeb stock. The merger was accounted for as a pooling of interests. The Company recorded a charge of $28.8 million for merger and integration related costs that include investment banking fees, legal and accounting fees, severance, lease termination costs and other costs directly associated with the merger. Primarily as a result of the merger, the Company's outstanding shares at December 31, 1998 increased to 70.1 million shares.
Revenues for 1998 were $228.6 million, an increase of 100% over revenues of $114.3 million for the previous year. For 1998, the company reported a net loss including non-cash and merger related charges of $188.3 million or $3.07 per share compared with a net loss of $50.7 million or $1.73 per share for 1997. Net income excluding non-cash and merger related charges for the year ended December 31, 1998 was $13.4 million, or $0.18 per diluted share.
"1998 was an excellent year for USWeb/CKS. We grew the business 100%, worked with 46 Fortune 100 clients, and increased annualized average revenue per client from our top 30 clients this quarter to $4.5 million from $3.6 million in the last quarter," said Robert Shaw, CEO of USWeb/CKS. "Looking forward, we think 1999 will go down as the year when large organizations recognized the fundamental shift that the Internet has rippled through the economy. We believe organizations around the world will make significant investments in Internet technology to fundamentally improve the way they do business. Our opportunity is based on these companies turning to professional service firms like USWeb/CKS to position them on the critical path of online commerce."
Financial Tables Attached
This press release contains "forward-looking statements" (as defined under securities law) regarding potential opportunities for USWeb/CKS to provide its professional services and to implement its objectives for E-Services, e-Commerce and other Internet-related business applications, services and infrastructure. USWeb/CKS's actual results, including those in achieving, implementing or realizing the planned benefits of any of its objectives, may differ materially and adversely from those discussed in this press release. Factors that may cause such a difference include, without limitation, the large rate of adoption of Internet Technology by large organizations and the level of investment such as organizations make in Internet-related professional services, the company's ability to differentiate itself from competitors and to win new clients, as well as the risks associated with implementation of the company's products and service offerings, risks regarding market acceptance, technical challenges, costs associated with formation of Internet data centers, risks relating to the merger with CKS or other entities, including difficulties in integration or loss of customers or employees, and diversion of management and employee time and attention from other aspects of the Company's business. Current revenue growth patterns are not necessarily indicative of future performance. For additional information about factors that could affect the Company's business, see the documents filed with the United States Securities and Exchange Commission.