WOW! Cobalt Beats Consensus Estimates - Loses Just $14 Mill in Q3!(?)
24 October 2000
The Cobalt Group Announces Third Quarter 2000 Financial Results
SEATTLE - Get the marching band ready. In some kind of perverse reporting logic, The Cobalt Group, a provider of e-business products and services to the automotive industry, announced Monday financial results for its third quarter ended Sept. 30, 2000, with jubilant enthusiasm of beating consensus estimates. - (Yes, this is a sarcastic editorial opinion)Gross revenue for the third quarter of 2000 increased to $11.3 million, up from $11.0 million in the second quarter of 2000 and up from $7.0 million in the third quarter of 1999, an increase of 3% and 60% respectively. However, net loss for the third quarter was $14.0 million or $0.79 per share. This compares to a net loss of $4.7 million or $0.27 per share in the second quarter of 2000 and a net loss of $5.5 million or $0.52 per share in the third quarter of 1999. So, in other words, while Q3 2000 revenues showed an increase of $4 million from Q3 1999, loses from Q3 to Q3 went up $8.5 million. Uhh, do they use a different kind of accounting system in Seattle?
Gross revenue for the nine months ended September 30, 2000 was $31.6 million, up from $14.9 million for the comparable nine-month period in 1999. Net loss for the nine months ended Sept. 30, 2000 was $15.6 million or $0.90 per share as compared to a loss of $11.7 million or $2.67 per share for the comparable nine-month period in 1999.
The Cobalt Group, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)
Three months ended Nine months ended
September 30, September 30,
-----------------------------------------------
2000 1999 2000 1999
-----------------------------------------------
Gross revenues
Web site design and
hosting services $ 7,727 $ 3,553 $ 20,890 $ 8,598
Data extraction and
aggregation services 3,213 2,810 9,384 4,610
Other services 366 686 1,304 1,703
----------- ----------- ----------- ----------
Total gross revenues 11,306 7,049 31,578 14,911
Less: Amortization of
non-cash equity
discounts 202 - 216 -
----------- ----------- ----------- ----------
Net revenues 11,104 7,049 31,362 14,911
Cost of revenues,
exclusive of stock-
based compensation of
$16, $50, $43 and $96,
respectively 2,117 1,506 6,084 3,143
-----------------------------------------------
Gross profit 8,987 5,543 25,278 11,768
Operating expenses
Sales and marketing,
exclusive of stock-
based compensation
of $44, $324, $96
and $598,
respectively 6,093 3,675 15,541 7,776
Product development,
exclusive of stock-
based compensation
of $51, $146, $139
and $391
respectively 2,248 834 5,184 1,835
General and
administrative,
exclusive of stock-
based compensation
of $101, $531, $474
and $1,297
respectively 5,494 3,893 14,297 8,385
Amortization of
intangible assets 1,584 1,378 4,676 2,364
Stock-based
compensation 212 1,051 752 2,382
-----------------------------------------------
Total operating
expenses 15,631 10,831 40,450 22,742
-----------------------------------------------
Loss from operations (6,644) (5,288) (15,172) (10,974)
Interest expense (78) (374) (297) (926)
Interest income 277 - 975 -
Intangible asset
impairment charge (9,742) - (9,742) -
Gain on sale of
YachtWorld 2,212 - 8,658 -
Other income, net (15) 135 (71) 228
-----------------------------------------------
Net loss $ (13,990) $ (5,527) $ (15,649) $ (11,672)
===============================================
Net loss available to
common shareholders $ (13,990) $ (5,830) $ (15,649) $ (13,213)
===============================================
Basic and diluted net
loss per share $ (0.79) $ (0.52) $ (0.90) $ (2.67)
===============================================
Weighted-average
shares outstanding 17,777,662 11,286,321 17,429,143 4,955,322
===============================================
The Cobalt Group, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
Sept. 30, Dec. 31,
2000 1999
--------- ---------
Assets (unaudited)
Current assets
Cash and cash equivalents $ 11,083 $ 14,224
Accounts receivable, net of allowance for
doubtful accounts of $920 and $497,
respectively 7,714 4,581
Other current assets 1,638 2,225
--------- ---------
20,435 21,030
Capital assets, net 11,159 4,636
Intangible assets, net 16,645 27,330
Other assets 1,312 1,036
--------- ---------
Total assets $ 49,551 $ 54,032
========= =========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 5,224 $ 2,020
Accrued liabilities 1,971 1,520
Deferred revenue 3,622 2,456
Notes payable 263 -
Software financing contract, current portion 669 362
Capital lease obligations, current portion 1,320 844
--------- ---------
13,069 7,202
Non-current liabilities
Software financing contract, non-current portion 176 28
Capital lease obligations, non-current portion 996 1,217
--------- ---------
1,172 1,245
Shareholders' 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; 17,937,527 and 16,855,431 issued
and outstanding, respectively 179 169
Additional paid-in capital 109,162 89,957
Deferred equity expenses (16,877) (3,036)
Notes receivable from shareholders (144) (144)
Accumulated deficit (57,010) (41,361)
--------- ---------
35,310 45,585
--------- ---------
Total liabilities and shareholders' equity $ 49,551 $ 54,032
========= =========
MJR