Business Editors
SAN FRANCISCO--(BUSINESS WIRE)--April 23, 2003
MarketWatch.com, Inc. (Nasdaq:MKTW), a leading multimedia source of financial news and information, today announced financial results for the first quarter ended March 31, 2003. The Company's total revenues increased 13% to $11.1 million for the first quarter 2003, compared to $9.8 million for the same period a year ago. First quarter 2003 net income was $35,000, or $0.00 per share, comparing favorably to a net loss of ($5.7 million), or ($0.34) per share, for the first quarter 2002. The Company also reported EBITDA of $1.0 million for the first quarter 2003.
Cash and cash equivalents at March 31, 2003 were $43.8 million, an increase of $432,000 from December 31, 2002.
"The diligent efforts of our advertising sales force combined with an uplift in the advertising market as a whole contributed to our improved financial results," said Larry Kramer, Chairman and CEO of MarketWatch.com. "While we're pleased with the volume of activity coming from advertisers in the current quarter, we remain cautiously optimistic about our business given the general economic climate and the uncertainty surrounding the war."
Revenues
Advertising revenues, which include online and broadcast sales, totaled $5.2 million in the first quarter 2003, an increase of 47% from the first quarter 2002. The increase from first quarter 2002 was driven primarily by the near doubling of advertising revenues from advertisers outside of the financial services sector such as Jaguar, Sprint PCS and IBM. In addition, as a result of improved rates and sell-through, broadcasting advertising revenues from television and radio experienced a growth of 54 percent over the same period last year.
Licensing revenues totaled $5.6 million in the first quarter 2003, compared to $6.2 million in the same period a year ago. The decrease was largely due to softness and consolidation in the financial services sector, which has traditionally been the licensing group's primary focus.
"The war somewhat affected our sales during the first quarter, causing longer sales cycles and a limited number of customers to delay advertising campaigns," said Kramer. "Notwithstanding the impact of the war on our business, our operating model enables us to continue to invest in new products and solutions for our advertising, licensing and subscription customers, which we believe will support the growth of our business as the economy strengthens."
Subscription revenues, which mainly consist of fees collected for the Company's newsletters, were $323,000, up substantially over the $44,000 reported the same period a year ago, primarily due to the Company's acquisition of the Hulbert Financial Digest in April 2002.
Other Financial Highlights
Operating expenses for the first quarter 2003 were $7.2 million, compared to $11.8 million for the same period a year ago. MarketWatch.com full-time employees totaled 210 at March 31, 2003, compared to 196 a year ago.
Sale of the Company's common stock under its employee stock plans generated $574,000 during the first quarter 2003, contributing to the growth in the Company's $43.8 million cash balance at March 31, 2003. Accounts receivable decreased to $6.0 million as of March 31, 2003, compared to $7.3 million reported in the first quarter 2002, primarily due to strong collection efforts.
"Our cash reserves give us the flexibility to invest in our business through internal growth of our products and offerings and pursuit of acquisition and partnering opportunities," said Joan Platt, Chief Financial Officer of MarketWatch.com. "We are continuing to operate conservatively and maintain our expectations to generate positive cash flow and be profitable on an annual basis in 2003."
Audience Growth
During the first quarter 2003, MarketWatch.com's Web properties generated 12.6 million average monthly unique users, an 18% increase from the average monthly unique users of 10.7 million in the fourth quarter 2002 and up 34% from 9.4 million average monthly unique users in Q1 2002, according to digiMine, the Company's third-party traffic researcher.
The Company's Web site page views for the first quarter 2003 grew to 821 million, up 6% from 773 million for the same period a year ago. MarketWatch.com also served an additional 822 million licensing content impressions through the Web sites of licensing clients such as USA Today, New York Times and Morgan Stanley, bringing the total Q1 2003 page view volume to 1.64 billion, compared to 1.56 billion page views and content licensing impressions in the first quarter 2002.
"Our audience size and demographics make MarketWatch.com properties one of the most effective partners for advertisers seeking to reach a daytime audience," said Mr. Kramer. "This quarter's traffic growth underscores the Company's reputation as a reliable source of financial news and information and served as a driver for our advertising and subscription businesses."
Business Highlights
-- In January, MarketWatch.com expanded its flagship CBS
MarketWatch Web site with a new editorial section covering the
investment newsletter industry, called Newsletters & Research.
The Company is a leading online provider of information for
this important niche within the financial services sector.
-- During the first quarter, the Company began a revenue-sharing
relationship with Google, providing sponsored links to
information related to keyword searches that MarketWatch.com
users enter. The Company also began a new per-click
relationship with Sprinks, a division of About, Inc., a
PRIMEDIA company. Under the agreement, Sprinks provides
sponsored links to information related to content that
MarketWatch.com users read.
-- In February, Media Magazine named CBS MarketWatch the Best
Online Business and Finance Publisher for the second straight
year.
-- In March, MarketWatch.com launched a new service on Yahoo!
Platinum, making the Company's financial news and content
available to Yahoo! subscribers as part of the Company's
ongoing strategy of expanding its paid subscription product
offerings.
-- In March, the Company signed an agreement with Knight
Ridder/Tribune Information Services (KRT) to provide a
selection of columns and breaking news stories to be offered
for publication in more than 300 newspapers that are served by
the KRT news service. CBS MarketWatch's most popular writers,
including Marshall Loeb (personal finance), Steve Kerch (real
estate) and Frank Barnako (Internet), are among the columns
being offered.
-- The Calandra Report, a newsletter aimed at active investors,
debuted in March. Thom Calandra, the Company's Chief
Commentator, has provided the Company's CBS MarketWatch Web
site with its most popular commentary for more than five years
and now offers profit-seeking strategies and commentary to
paid subscribers in addition to his free column on the site.
-- The MarketWatch.com Radio Network increased its coverage of
the U.S. to 134 markets, including all of the top 50 in the
nation. The CBS MarketWatch Weekend television show finished
March reaching nearly 86% of Designated Market Areas (DMAs).
The quarter marked a period of increased cooperation with CBS
News on the war in Iraq news gathering and coverage.
About MarketWatch.com, Inc.
MarketWatch.com, Inc. (Nasdaq:MKTW) is a leading multimedia source of financial news and information. Founded in 1997, the Company operates two award-winning Web sites, CBS MarketWatch and BigCharts. The Company produces the syndicated CBS MarketWatch Weekend TV program, airs financial reports over The CBS Television Network, and provides updates every 30 minutes on the MarketWatch.com Radio Network. MarketWatch.com licenses market news, investment analysis tools and sophisticated charting applications to financial services firms and media companies. The Company also offers subscription products for individual investors, including the Hulbert Financial Digest.
Notice Regarding Forward-Looking Statements
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