The Cobalt Group Announces Record First Quarter 2000 Financial Results
25 April 2000
The Cobalt Group Announces Record First Quarter 2000 Financial Results
SEATTLE--April 24, 2000--The Cobalt Group, Inc. (Nasdaq:CBLT)-- Sequential Quarterly Revenues Grow 11% to $9.3 million
-- Quarter-over-Quarter Revenues Grow 278%
-- NADA and The Cobalt Group Partner to Promote Web Site Adoption
-- The Cobalt Group Launches MotorPlace.com, a
Business-to-Business Vertical Portal
The Cobalt Group, Inc. (Nasdaq:CBLT), a leading provider of Internet-based business-to-business services to the automotive industry, today announced financial results for its first quarter ended March 31, 2000.
Revenue for the first quarter of 2000 increased 11% to $9.3 million from revenue of $8.4 million in the fourth quarter of 1999, and increased 278% from revenue of $2.5 million in the first quarter of 1999. The Cobalt Group's growth in revenue was driven by continued strong growth in Web site revenues, including sales of its National Automobile Dealers Association (NADA) endorsed Web site packages.
During the first quarter, revenue derived from Web site hosting and application services was $6.3 million, or 67% of total revenue. This compares to Web site services revenue of $5.7 million or 68% of revenue for the fourth quarter of 1999. For the first quarter, revenue derived from vehicle parts locating and data collection services was $3.0 million, or 33% of total revenue. This reflects revenues of $2.9 million associated with the Company's PartsVoice subsidiary and $100,000 associated with IntegraLink Corporation, which was acquired in January 2000. PartsVoice revenue was $2.7 million or 32% of total revenue in the fourth quarter of 1999.
The Company reported first quarter 2000 net income of $3.0 million, or $0.18 per share, compared to a net loss of $4.8 million, or $0.29 per share for the fourth quarter of 1999 and a net loss of $2.3 million, or $0.22 per share for the first quarter of 1999. During the first quarter of 2000, a gain of $6.4 million was recognized on the sale of the Company's YachtWorld division. Additional gains totaling $7.0 million will be recognized equally in the third and fourth quarters when note payments are received. Excluding the gain from the sale of YachtWorld, the Company's net loss for the first quarter was $3.4 million or $0.20 per share. Losses for the quarter were lower than management's expectations primarily due to slower than anticipated hiring. Per share amounts for the first quarter of 1999 are computed on a pro forma basis, which assumes conversion of convertible preferred stock that was outstanding in 1999 from the original date of issuance.
"We are very pleased to report record results for the first quarter," stated John Holt, president and CEO of The Cobalt Group. "As we continue to add customers, products, and strategic partners, we are cementing our position as one of the leading business-to-business solutions providers for the automotive industry."
Holt added, "Our relationship with NADA has enabled us to help hundreds of dealers develop robust Internet presences and take direct control of their relationships with Internet prospects and customers. New relationships with Excite@Home, InfoSpace, BuySellBid, CarTrackers.com, and Usedcars.com, provide a stream of value-added services to our dealer partners, further cementing our customer relationships and deepening the value of our network. In the months ahead we'll continue to expand the foundations of MotorPlace.com to provide further products and services to our dealer partners and thereby leverage and monetize our customer network."
The Cobalt Group ended the first quarter with approximately 5,600 dealer Web site clients, over 10,000 dealer franchises using its PartsVoice parts locating system and relationships with 16 automotive manufacturers and more than 50 of the 100 largest dealer groups in the United States.
First Quarter Highlights
-- On March 15, 2000, The Cobalt Group announced that it added
CarTrackers.com and Usedcars.com to its growing network of
vehicle distribution partner Web sites. Cobalt will provide
more than 200,000 used car listings to these premier
automotive Web sites. Cobalt also partners with other leading
new and used car shopping destinations such as DealerNet,
Yahoo!, InfoSpace, Excite@Home, BuySellBid.com and AutoVantage
to distribute car listings.
-- On February 14, 2000, The Cobalt Group introduced
DesignGallery, an Internet-based showroom of Web site layouts
and graphics developed to streamline the process of designing
dealer Web sites.
-- On February 10, 2000, The Cobalt Group announced a series of
strategic Customer Relationship Management (CRM) initiatives
designed to help auto dealers capture, manage and retain
digital customers. The CRM suite of hosted applications
includes the products - Lead Manager, Ultimate Golf Challenge,
Service Solution 2-1-1 and Personal Pages.
-- On January 20, 2000, The Cobalt Group launched MotorPlace.com,
a business-to-business vertical portal for the automotive
industry. The site aggregates vehicle and parts data from
Cobalt's auto dealer clients to create a dealer-to-dealer
e-commerce marketplace with over 46 million parts and 600,000
new and used vehicles. The site also provides auto dealers
access to Web site management tools, as well as information
services such as daily automotive and national news, sports
scores, stock quotes and weather. While the site capitalizes
on the significant traffic Cobalt enjoys every day from its
existing dealer customers, MotorPlace.com is designed to
provide value to non-Cobalt customers as well. The Company has
announced that it intends to add additional services to
MotorPlace.com such as used vehicle and equipment auctions,
goods and service procurement, and enhanced e-commerce parts
products.
-- On January 14, 2000, The Cobalt Group announced the
acquisition of IntegraLink Corporation, a provider of advanced
data collection and reporting services for the automotive
industry. IntegraLink specializes in collecting, normalizing
and enhancing service records, vehicle sales and inventory
data, parts sales and inventory data, and dealership
accounting information from automotive dealership management
systems.
-- On January 12, 2000, The Cobalt Group announced that it would
expand consumer choice in online car shopping by providing its
400,000 new vehicle listings to Excite@Home, the leading
broadband media company. In turn, Cobalt's auto dealer
customers will gain exposure to millions of motivated car
buyers nationwide.
-- On January 10, 2000, the National Automobile Dealer's
Association (NADA) and The Cobalt Group announced aggressive
programs to accelerate Web site adoption by NADA's 19,500
member dealers and create a comprehensive consumer automotive
portal with easy access to NADA dealers' Web sites and new and
used vehicle inventory. As part of the NADA-Cobalt initiative,
Cobalt is offering NADA dealers two different NADA-endorsed
Web packages, allowing them to select a solution that best
matches their requirements. Cobalt activated 129 orders for
NADA endorsed Web packages during the first quarter.
-- On January 7, 2000, The Cobalt Group announced a partnership
with InfoSpace.com, one of the Web's leading infrastructure
companies, to expand distribution of its dealers' 200,000 used
vehicle listings on the Web. In turn, Cobalt's auto dealer
customers will gain exposure to millions of motivated online
car buyers nationwide.
-- On January 4, 2000, The Cobalt Group announced that it would
provide its more than 600,000 new and used vehicle listings to
BuySellBid.com, a leading developer of online multimedia
classifieds. In turn, BuySellBid.com will distribute the
listings across its partner sites.
About the Cobalt Group
The Cobalt Group(TM) (Nasdaq:CBLT), based in Seattle, is a leading provider of Internet-based products and services for the automotive industry. Cobalt helps dealers, dealer groups and automobile manufacturers harness the power of the Internet to realize new efficiencies, win new prospects and better serve their customers. Cobalt operates MotorPlace.com(TM) (www.MotorPlace.com), a business-to-business vertical portal for the automotive industry; DealerNet(R) (www.dealernet.com), one of the best-known automotive destination sites on the Web; and PartsVoice(R) (www.partsvoice.com), a leading OEM auto parts locating and data management service. The Cobalt Group also owns IntegraLink Corporation, the auto industry's premier provider of advanced data collection and reporting services.
Cobalt offers Web site services that are endorsed by the National Automobile Dealers Association.
For more information, please visit The Cobalt Group at www.cobaltgroup.com.
"Safe harbor" statement under the private securities litigation reform act of 1995: this release may contain forward-looking statements relating to the development of Cobalt's products and services and future operating results, including statements regarding future market share and new products and services. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Actual results may vary significantly from the results expressed or implied in such statements. For a discussion of the risks that could affect Cobalt's future performance, please see "Risk Factors" in Cobalt's most recent annual report on form 10-K, as filed with the Securities and Exchange Commission. Cobalt undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
Cobalt, The Cobalt Group, DealerNet, PartsVoice, IntegraLink, AdWizard, and MotorPlace.com are trademarks of The Cobalt Group, Inc. All other trademarks are the property of their respective owners.
The Cobalt Group, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)
Three months ended
March 31,
----------- -----------
2000 1999
----------- -----------
(unaudited)
Revenues $ 9,284 $ 2,453
Cost of revenues 1,775 540
----------- -----------
7,509 1,913
Operating expenses
Sales and marketing 4,276 1,650
Product development 1,254 401
General and administrative 3,783 1,809
Amortization of intangible assets 1,508 61
Stock-based compensation 290 335
----------- -----------
Total operating expenses 11,111 4,256
----------- -----------
Loss from operations (3,602) (2,343)
Interest expense (68) (49)
Interest income 317 61
Gain on sale of YachtWorld 6,446 -
Other income, net (66) (4)
----------- -----------
Net income (loss) $ 3,027 $ (2,335)
=========== ===========
Net income (loss) available
to common shareholders $ 3,027 $ (2,926)
=========== ===========
Basic net income (loss) per share $ 0.18 $ (1.97)
=========== ===========
Weighted-average shares outstanding 17,082,768 1,488,681
=========== ===========
Diluted net income (loss) per share $ 0.16 $ (1.97)
=========== ===========
Weighted-average diluted
shares outstanding 18,587,055 1,488,681
=========== ===========
Pro forma net loss available to
common shareholders $ (2,335)
===========
Pro forma basic and diluted net
loss per share $ (0.22)
===========
Pro forma weighted-average shares
outstanding 10,642,583
===========
The Cobalt Group, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
March 31, December 31,
2000 1999
---------- ---------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 16,817 $ 14,224
Accounts receivable, net of allowance
for doubtful accounts of $497 and
$533, respectively 6,031 4,581
Note receivable from Boats.com, Inc. 7,006 -
Other current assets 1,160 2,225
---------- ---------
31,014 21,030
Capital assets, net of accumulated
depreciation of $1,707 and $2,046,
respectively 5,558 4,636
Intangible assets, net of accumulated
amortization of $4,016 and $5,524,
respectively 29,557 27,330
Other assets 962 1,036
---------- ---------
Total assets $ 67,091 $ 54,032
========== =========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 1,858 $ 2,020
Accrued liabilities 1,493 1,520
Deferred revenue 2,747 2,456
Deferred gain on sale of YachtWorld 7,000 -
Notes payable 253 -
Software financing contract,
current portion 300 362
Capital lease obligations,
current portion 706 844
---------- ---------
14,357 7,202
Non-current liabilities
Software financing contract,
non-current portion - 28
Capital lease obligations,
non-current portion 1,129 1,217
---------- ---------
1,129 1,245
Shareholders' (deficit) equity
Preferred stock; $0.01 par value
per share; 100,000,000 shares
authorized; 0 shares issued
and outstanding - -
Common stock; $0.01 par value
per share; 200,000,000 shares
authorized; 16,855,431 and 17,210,941
issued and outstanding, respectively 172 169
Additional paid-in capital 91,955 89,957
Deferred compensation (2,044) (3,036)
Notes receivable from shareholders (144) (144)
Accumulated deficit (38,334) (41,361)
---------- ---------
51,605 45,585
---------- ---------
Total liabilities and shareholders'
equity $ 67,091 $ 54,032
========== =========