IGN Reports Second Quarter 2002 Results
Posted by Ben on Tuesday, July 23 2002

SAN FRANCISCO--(BUSINESS WIRE)--July 18, 2002--IGN Entertainment (Nasdaq:IGNX)

-- Q2 Revenue Up 11% Year-Over-Year & Up 10% Sequentially

-- Subscription Revenue Up 26% Over Prior Quarter

-- Ninth Straight Quarter of Improving Pro Forma Loss

-- Pro Forma Loss Drops Below $1.0 Million

IGN Entertainment (Nasdaq:IGNX) -- home to IGN.com, the web's largest information and entertainment destination for gamers --announced today its second quarter 2002 results. For the quarter ended June 30, 2002, IGN reported revenue of $2.6 million, compared to $2.3 million for the same period a year ago and $2.3 million for the previous quarter.

GAAP Based Net Loss

The GAAP based net loss for the second quarter of 2002 was $1.3 million, or $0.71 per share. This compares to $9.4 million, or $4.97 per share, for the year ago quarter, and $6.3 million, or $3.58 per share, for the prior quarter.

Sequential and Year-Over-Year Pro Forma Loss Improves

Pro forma net loss before significant non-cash items, restructuring charges and extraordinary items was $970,000, or $0.53 per share, for the second quarter of 2002, compared to $4.6 million, or $2.44 per share, for the year ago period and $1.4 million, or $0.82 per share, for the prior quarter. The difference between the $970,000 pro-forma net loss and the $1.3 million GAAP net loss this quarter consists of $343,000 of depreciation expense.

"Our ninth consecutive quarter of improving cash-based operating loss was the result of both higher revenue and lower expenses," said Mark Jung, IGN's CEO. "We are pleased that we are seeing increases in our top line across the board, with both advertising and subscription revenue showing gains."

Diverse Revenue Sources and Strong Customer Base

Impression-based advertising represented 56 percent of IGN's revenue in the second quarter. The company's second quarter advertising customers included such well-known consumer brands as Cingular Wireless, Intel, Kellogg's, Mastercard, Nokia, Pepsi, Pizza Hut, Procter & Gamble and Wrigley's, as well as top games companies Acclaim, Activision, Eidos, Microsoft, Nintendo, and Sony. Subscriptions accounted for $368,000, or 14 percent of revenue for the quarter. Other product lines -- including e-commerce partnerships, direct response marketing and content licensing -- generated the remaining 30 percent of revenue.

Subscription Revenue Continues to Grow

The company added 11,000 net new subscribers to its IGNinsider program during the second quarter, increasing its subscriber base to more than 56,000 as of June 30, 2002. As a result, subscription revenue grew by 26 percent over the prior quarter. As of July 18, 2002, the IGNinsider subscriber base has grown to 59,000.

Business Outlook

The following forward-looking statements reflect IGN's expectations as of July 18, 2002. As mentioned below, a wide variety of factors, most notably ongoing market uncertainties, may cause actual results to differ materially from forecast. The company intends to continue its practice of not updating forward-looking statements until its next quarterly results announcement.

The company expects its third quarter 2002 revenue to be approximately equal to its revenue in the second quarter of 2002 and forecasts that its third quarter 2002 expenses will be equal to or less than expenses in the second quarter of 2002. As a result, IGN expects its third quarter loss to be equal to or less than the prior quarter. For fiscal year 2002, the company anticipates that its revenue will increase over revenue reported for fiscal 2001.

This release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For example, the "Business Outlook" section and the quotations from IGN's CEO include forward-looking statements. These statements are based upon the beliefs and current expectations of IGN Entertainment, Inc. and its management. Such statements are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the results discussed therein. Risks and uncertainties that may cause such differences include, but are not limited to, our ability to maintain and expand our base of advertising and marketing customers, our ability to retain or grow our subscriber base, changes in market conditions in the U.S. economy and in the on-line advertising industry, changes in market conditions and competition in the video game software and platform industries, our limited operating history under a new and changing business model, our history of losses, the effectiveness of our cost-cutting efforts, our ability to diversify and grow revenue or to achieve long-term profitability, our ability to continue to develop content and service offerings that attract users and achieve market acceptance, the ability to finance our operating losses, our need to raise funds in addition to the funds we raised in our recent private placement and other risks detailed in the company's documents filed with the SEC, including the company's Form 10-K for the year ended December 31, 2001, and all subsequent filings, including quarterly reports on Form 10-Q. Specifically, please refer to the "Risk Factors" section of IGN's Form 10-K filed with the SEC.

IGN's earnings conference call can be heard live on the Internet at 1:30 p.m. PDT on Thursday, July 18. To listen to the call, visit the Investor Relations section of the IGN web site at http://ign.corp.com. The call will be archived and available until August 1, 2002.