artnet AG — Earnings Release 1999

Nov 30, 1999

News Details

Ad-hoc | 30 November 1999 11:44

Ad hoc-Service: artnet.com AG english

Ad hoc-announcement edited and sent by DGAP. The sender is responsible for the content of this announcement. —————————————————————————— artnet.com AG Announces Nine Month Results – Revenue Rose 188% while Investment in Marketing Generated Dramatic Increases in Traffic Hamburg, November 30, 1999 – After its first full quarter as a public company, artnet.com AG, the leading online destination for art commerce and art content, today announced financial results for the first nine months of 1999. Total revenue was up nearly threefold from US$610,000 in the year-ago period, to US$1,785,000. The focus of the quarter was on the marketing and branding campaign, both online and offline. Marketing builds traffic, and Web site traffic is a key driver of e-commerce revenue. From June through October, artnet.com experienced increases in page requests, visits and users of 124%, 175%, and 69% respectively. In September, a key marketing alliance with America Online (AOL) commenced, securing prominent positioning in AOL’s shopping area and banner advertisement placement throughout all AOL Web properties (AOL, AOL.com, CompuServe, and Netscape) on their US and German sites. Its impact became evident already in fourth quarter traffic. artnet.com’s marketing and branding programs will accelerate through the remainder of this year and next as it continues to position itself as the world’s premier online art destination. Auctions grew during the quarter, with proceeds totaling US$501,000, placing the year-to-date total at US$999,000, and bidders and consignors registered at an increasing rate. This was accomplished in what has traditionally been the slowest period of the year for the auction industry and the art business generally. Lots sold in the quarter numbered 307, an increase of 184% over the previous quarter, and included purchases by first-time buyers. The top lot sold in the quarter, for US$27,300, Roni Horn’s When Dickinson Shut Her Eyes, illustrated growing geographic reach – it was consigned by a Brazilian gallery and purchased by a California collector. Auction revenue was US$49,000, reflecting a continued strategy of charging low premiums to build market share. Subscription revenue, primarily the Auction Database, increased 98% to US$397,000 for the nine months, compared to US$200,000 in the year ago period. Subscriber growth for the Database is now at its highest level, a result of increased traffic to the Web site. Gallery/artist Web page advertising sales continue their advancing pace, with revenue rising 216% to US$1,296,000 over the same period last year. Looking to the fourth quarter, the sales team had a strong presence at the Paris, Berlin, San Francisco and Cologne art fairs and will round out a record year for advertising sales. artnet.com reported an operating loss before minority interest of US$7.8 million, as compared to US$2.1 million in the first nine months of 1998. Operating expenses were US$9,825,000 in the nine months, up from US$2,618,000 in the year-ago period. Cash operating expenses were $6,337,000 in the nine months, up from $2,273,000 in the year-ago period. These costs reflect the establishment of the auction and bookstore divisions, the launch of new marketing initiatives, technology upgrades and the higher levels of customer and client service required to support the large influx of customers, artnet.com finished the period with cash reserves of US$21.1 million. The full text of the nine month report can be viewed on www.neuer-markt.de or ordered by fax from artnet.com. Summary Statement of Operations: For The Nine Months Ended September 30, USD 1999 USD 1999 DM 1999 DM 1998 Auction Proceeds 999.000 – 1.818.000 – Auction Revenue 49.000 – 89.000 – Advertising Sales 1.296.000 410.000 2.359.000 734.000 Subscription Sales 397.000 200.000 722.000 359.000 Book Store Sales 43.000 – 78.000 – Total Revenue 1.785.000 610.000 3.248.000 1.093.000 Operating expenditure 9.825.000 2.618.000 17.879.000 4.688.000 Operating loss (8.040.000) (2.008.000) (14.631.000) (3.595.000) Loss before minority interest (7.839.000) (2.096.000) (14.265.000) (3.751.000) Loss after minority interest (7.498.000) (2.096.000) (13.645.000) (3.751.000) Wenden Sie sich bitte bezüglich weiterer Informationen an: Investorrelations@artnet.com, or Hans Neuendorf, Vorstand, Frankfurt PH: +49 69 913012 0, FAX +49 69 913012 79 / Grace Schalkwyk, Investor Relations,NewYork PH:+1 212 497 9700, FAX +1 212 4979707 End of Message