Geoff Kerr, USWeb/CKS, 408/987-3260,
[email protected]
Investor Contact: Kate Wagner, USWeb/CKS, 408/987-3268,
[email protected]
USWeb/CKS Reports Record Revenues For Second Quarter 1999
Breaks 100 million dollar quarterly revenue mark; Attains sequential quarterly revenue increase of 20%; Realizes record margins while achieving significant milestones and scale
SANTA CLARA, Calif. - July 20, 1999 - USWeb/CKS (Nasdaq: USWB), the leader in strategic Internet and marketing communications services, today reported that its financial results for the second quarter of 1999 included record-high quarterly revenues.
Revenues for the second quarter of 1999 were $101.0 million and net income before non-cash charges and after the application of an assumed 38% effective tax rate was $10.0 million or $0.12 per diluted share. Including non-cash charges, the company reported a net loss for the quarter of $22.6 million or $0.29 per share. Compared to the prior year, second quarter revenues increased 87%, from $54.0 million. In the second quarter of 1998, net income before non-cash charges and after the application of an assumed 38% effective tax rate was $3.0 million or $0.05 per diluted share, and net loss including non-cash charges was $61.1 million or $1.08 per share.
Non-cash charges include a provision for contract loss or recovery (which represents the value of certain warrants granted in a strategic relationship), stock compensation, acquired in-process technology, amortization of intangible assets, and depreciation and amortization.
�Reaching the $100 million quarterly revenue mark demonstrates that the hard work performed over the past two quarters is paying off,� said Robert Shaw, CEO of USWeb/CKS. �We grew the business 20% sequentially while at the same time improving operating margins to 15%, before non-cash charges, which highlights the leverage in our business model.�
Leadership Milestones
Shaw continued, �We are recognized as an industry powerhouse and intend to capitalize on our strong position. USWeb/CKS is fast becoming one of the most important companies in the digital economy�reaching a scale and critical mass very few Internet professional services firms can match.�
- First pure-play Internet professional services firm to reach $100 million quarterly revenue milestone
- Unequaled insight: Market-leading vision and expertise across strategy, marketing and technology disciplines
- Unparalleled scale: Over 2,900 employees provide the talent and market-leading expertise in 40 offices in 10 countries that allows USWeb/CKS the ability and scale to execute at Internet speed
- Industry-leading experience: Over 4,000 client projects and engagements which represents more experience than any other Internet professional services firm
- Size and scope of client work expanded. Top client revenue for the quarter, annualized:
-- Top 10 clients was $8.5 million, 18% growth from last quarter
-- Top 30 clients was $5.0 million, 17% growth from last quarter
- Major client wins and successes demonstrate high demand for USWeb/CKS�s time-to-value proposition�delivering breakthrough results fast. Standout examples include: branding and e-commerce solution for Mars Music; online pharmacy for Walgreens; e-commerce platform for Williams-Sonoma brands; Internet-based data warehousing applications for 20th Century Fox; site redesign and branding for AOL; and hot start ups such as Ask Jeeves, MyPoints and RePlay Networks
- Recruiting magnet: The Company recruited over 500 people in 90 days while maintaining a healthy 80% annualized retention rate
- Completed on-time deployment of phase one integrated back-office systems
- USWeb/CKS�s intranet, a cornerstone competitive factor for the Company, won significant industry recognition as a next generation knowledge management system
Shaw continued to highlight that, �our people are USWeb/CKS�s most important asset and our second quarter results are a clear reflection of the caliber of people we recruit and retain. We�ve begun to put into place creative programs and initiatives that continue to make USWeb/CKS a fun and exciting place to work, attracting talented professionals from leading firms and universities internationally.�
About USWeb/CKS
USWeb/CKS (Nasdaq: USWB) is the leading professional services firm that works with clients to define strategies and implement innovative ways to build their businesses through a combination of expertise in strategy, Internet technology and marketing communications. USWeb/CKS helps clients differentiate their products and services, strengthen customer relationships, leverage human capital, and improve business efficiency in the new electronic economy. The Company provides a broad selection of services from brand development and advertising to business process automation and e-commerce solutions. The Company headquarters are in Santa Clara, California. Additional information about USWeb/CKS is available by calling 408/987-3200.
Financial Tables Attached
This press release contains "forward-looking statements" (as defined under securities law) regarding potential opportunities for USWeb/CKS to continue and build leadership in its markets and to attract and retain talented employees. USWeb/CKS�s actual future results, including those in achieving its leadership, hiring, retention, timing, market share and financial goals, may differ materially and adversely from those discussed in this press release. Factors that may cause such a differences include the rate of adoption of Internet technology by large organizations and the level of investment these organizations make in Internet-related professional services, the Company�s ability to differentiate itself from competitors and win new clients, the risks associated with implementation of the Company�s products and service offerings, technical challenges, the Company�s ability to attract, retain and motivate talented employees, timing in delivering completed projects, costs associated with formation of Internet data centers, risks relating to the integration of acquired 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 company�s documents filed with the United States Securities and Exchange Commission.