WILMINGTON, Mass.--(BUSINESS WIRE)--Dec. 5, 1995--CMG Information Services, Inc. (NASDAQ NMS Symbol: CMGI) today announced net income for the first quarter ended October 31, 1995 of $18,178,000 or $3.81 primary earnings per share and $3.70 fully diluted earnings per share compared to first quarter of fiscal 1995 net income of $516,000 or $0.11 earnings per share on both a primary and fully diluted basis.
Significant items included in income from continuing operations before income taxes of $28,878,000 for the quarter were a gain from the sale of available for sale securities of $30,049,000 and operating losses from the Company's Internet start-up operations.
Operations for CMG Information Services, Inc. in the first quarter included activities in three business segments: Internet investment and development, list and list services and fulfillment services.
The Company's operating loss from continuing operations for the quarter ended October 31, 1995 was ($1,206,000) compared to operating income of $818,000 for the first quarter of fiscal 1995. The operating loss was attributable to losses from the development stage Internet portfolio companies and the @Ventures group. In the Internet investment and development segment (established in the third quarter of fiscal year 1995) losses from continuing operations were ($1,647,000). Included in operating losses were research and development expenses relating to the portfolio companies totaling $456,000.
In the first quarter of fiscal 1996, Lycos, Inc. acquired Point Communications Corp. The acquisition accounting and valuation for the Point acquisition by Lycos, Inc. may result in a significant portion of the purchase price being identified as in-process research and development, which will be charged to operating results in the second quarter when the estimated amount is determined.
The Internet investment and development portfolio companies are meeting reasonable expectations as to their development. NetCarta recently demonstrated two new unique products for web users and web masters, called CyberPilot and Web Mapper, respectively, at the E-Mail and Internet Conference on November 29, 1995. Black Sun Interactive, Inc. will be demonstrating its new product offerings at the Fourth World Wide Web Conference on December 12, 1995. Lycos, Inc. is proceeding with its marketing and sales plans and is generating backlog. Backlog for the Internet businesses was $569,000 at October 31, 1995.
Revenue for the list and list services business segment was $3,135,000 compared to $3,023,000 for the quarters ended October 31, 1995 and 1994, respectively. Sales were level due to increases in paper and postage costs which have impacted the entire marketing industry.
Operating income from continuing operations of the list and list services segment was $441,000 down from $818,000 for the comparable prior quarter ended October 31, 1994. The decrease is primarily attributable to increases in selling and operating expenses related to the launching of the new Elementary/High School Database product line. Though lagging, the product line has performed better than anticipated in the first quarter. Prior to fiscal 1996 all costs related to the development of the Elementary/High School Database product were capitalized. With the initial development of this list now complete, related costs are expensed and previously capitalized costs are now being amortized.
During the quarter, the Company sold its remaining 1,020,000 shares of America Online (AMER) common stock, receiving net proceeds of $57,462,000. Included in other income is the gain on sale of the AMER stock of $30,049,000, interest income of $263,000 from short-term investments and the Company's share of the operating losses of FreeMark Communications, Inc. of ($270,000).
The Company's fulfillment services business, SalesLink Corporation, has been presented in the accompanying Report of First Quarter Earnings as discontinued operations as it is available for sale. First quarter operating results after taxes for SalesLink were down 55% or $111,000 from $200,000 in fiscal 1995 to $89,000 in fiscal 1996. The financial results were impacted by expansion expenses in the Chicago operation and the introduction of new services. SalesLink booked substantially more new business than anticipated in the first quarter. The new bookings related to the mutual fund business and product expansion into the product fulfillment of CD ROM packaging.
Commenting on the Company, David S. Wetherell, CEO, stated, "We are continuing our investment strategy of pursuing Internet related opportunities with @Ventures and managing the development and growth of our current portfolio of Internet businesses. The companies are proceeding with the development of technology as planned. NetCarta recently demonstrated its tools for web site management and browser acceleration at the E-Mail and Internet Conference. NetCarta's CyberPilot and Web Mapper products may be considered two of the most important Internet technologies since Mosaic. Black Sun Interactive, Inc. will be demonstrating its virtual reality modeling language (VRML) products at the Fourth World Wide Web conference on December 12, 1995. These products could have the opportunity to revolutionize user interaction and advertising on the Web. Lycos, Inc. is being accepted as one of the premier search engines of the Web, while adding a vast array of new capabilities for end users. The level of expenses incurred to date for our Internet investments has positioned us to bring to market Internet technology sooner than previously contemplated.
Further, "The list and list services segment is positioned to take advantage of the Elementary and High School list markets by the investment made in the El/Hi database. We may be able to increase our market share in this market because of the competitive advantage of having a very comprehensive database.
The financial position of the Company is strong with a cash balance of $64,239,000 and unutilized line of credit of $5,000,000 which will enable us to continue the pursuit of our business strategies."
CMG Information Services, Inc. is a leading provider of direct marketing services and is an innovator in the development of new Internet, interactive media and database management technologies.
CMG Information Services,Inc. Report of First Quarter Earnings (In thousands except share and per share amounts)
Three Months Ended Oct. 31, 1995 1994
Net Sales $ 3,362 $ 3,023
Operating income (loss) (1,206) 818
Other Income (expense): Gain on sale of available for sale securities 30,049 -- Equity in loss of affiliate (270) -- Other, net 305 60
Total 30,084 60
Income from continuing operations before income taxes 28,878 878 Income tax expense 10,789 351
Income from continuing operations 18,089 527
Income from discontinued operations of SalesLink Corp., net of income tax expense 89 200
Income from discontinued operations of BookLink Technologies,Inc., net of income tax benefits -- (211)
Net income $18,178 $ 516
Primary earnings per share: Income from continuing operations $ 3.79 $ 0.12 Income from discontinued operations of SalesLink 0.02 0.04 Loss from discontinued operations of BookLink -- (0.05)
Total $ 3.81 $ 0.11
Weighted average common and common equivalent shares outstanding - primary 4,777,028 4,663,470
Fully diluted earnings per share: Income from continuing operations $ 3.68 $ 0.11 Income from discontinued operations of SalesLink 0.02 0.04 Loss from discontinued operations of BookLink -- (0.04)
Total $ 3.70 $ 0.11
Weighted average common and common equivalent shares outstanding - fully diluted 4,911,211 4,788,270
CONTACT: Andrew J. Hajducky III
508/657-7000 ext. 3005
Комментариев нет:
Отправить комментарий