Quokka Sports, Inc., a leading provider of sports entertainment for the digital world, today announced financial results for the fourth fiscal quarter and year ended December 31, 2000.
Revenues for the quarter ended December 31, 2000 were $9.1 million, up 36% from $6.7 million reported for the fourth quarter in 1999. The preliminary net loss for the quarter before interest, taxes, depreciation, amortization of goodwill, restructuring charges and other non-recurring operating expenses, was $19.3 million or $ (0.35) per share on a pro forma basis, compared to a net loss before interest, taxes, depreciation, amortization, restructuring charges and other non-recurring operating expenses, of $13.6 million or $ (0.31) per share on a pro forma basis for the fourth quarter 1999, reflecting increased investments in program production, sales and marketing and general infrastructure, in addition to expenses related to the closing of the acquisitions of 71% of Golf.com LLC on October 3, 2000 and Total Sports Inc. on November 13, 2000.
Also in the fourth quarter, the Company announced changes in its management team and operational structure to take advantage of technology and production efficiencies expected from its acquisition of Total Sports, as well as from its prior acquisitions of MountainZone.com and its interest in Golf.com. The restructuring resulted in a one-time charge of $2.6 million.
For the year ended December 31, 2000, Quokka Sports reported revenues of $47.2 million, representing a 260% increase over revenues of $13.1 million in the previous year. The preliminary net loss for fiscal 2000 before interest, taxes, depreciation, amortization of goodwill, restructuring charges and other non-recurring operating expenses was $75.9 million or $ (1.58) per share, compared to a net loss for fiscal 1999 before interest, taxes, depreciation, amortization of goodwill, restructuring charges and other non-recurring operating expenses of $54.4 million or $ (1.38) per share.
Because the Company’s revenue was less than $50 million for 2000, the Company is not in compliance with one of the covenants related to its $77.4 million of convertible subordinated promissory note financing. In addition, management expects operating losses and negative cash flows from operations to continue for the fiscal year 2001. As a result of these events and other factors, it is expected that the audit report of the Company’s independent accountants on the December 31, 2000 financial statements will include a paragraph regarding the Company’s ability to continue as a going concern.
The Company is in the process of evaluating the carrying value of goodwill and other intangibles on its balance sheet for impairment. Once the charge is determined, it will be made in the Company’s financial statements for fiscal year 2000, prior to filing of the Company’s Annual Report on Form 10-K with the Securities and Exchange Commission on or before March 31. Such a charge is expected to have no impact on the Company’s cash position or pro forma statement of operations.
‘This year has been strong for our company across all fronts. We achieved record revenues, wider audience reach, and considerable recognition for our core business strengths, including live event production and our technology platform. We head into 2001 continuing to manage our business aggressively by diversifying our revenue model and controlling expenses,’ commented Alvaro Saralegui, Quokka Sports President and Chief Executive Officer.
Major audience statistics for the Quokka Sports Network experienced strong growth over the prior year, according to Company estimates. Average unique visitors per month in the quarter ended December 31, 2000, were approximately 4.0 million, up 471% from 700,000 unique visitors per month in the fourth quarter 1999. The total connected time per unique visitor per month reached 24 minutes for the December quarter, continuing to place the Quokka Sports Network in the top tier of sticky sport sites on the Internet. Total connected time for the Quokka Sports Network in the fourth quarter of 2000 was 4.8 million hours, up 242% from 1.4 million in the fourth quarter 1999.
Saralegui continued, ‘Our 2001 live event coverage will kick off in March with the Southern Swing of the golf season and the NCAA Men’s and Women’s Championship basketball tournaments. Our real-time coverage of these exciting events will be second to none as we continue to fulfill the passions of sports fans with the breadth and depth of our event production.’
In conjunction with this earnings release, Management will host a conference call to discuss the fourth quarter 2000 and fiscal year-end results and the Company’s operations. The webcast will be broadcast today at 2:00 p.m. Pacific Standard Time on the investor relations page of the Company’s web site, located at www.quokka.com.
For more details contact:
Kate Rajeck of Quokka Sports, Inc.