Switchboard Reports First Quarter Results

Apr 27, 2001, 01:00 ET from Switchboard Incorporated

    WESTBORO, Mass., April 27 /PRNewswire/ --
 Switchboard Incorporated (Nasdaq:   SWBD), a leading provider of directory
 technology and Nearbuy (SM) locally targeted e-marketing solutions, today
 announced financial results for its fiscal first quarter ended March 31, 2001.
 For the first quarter, revenue was approximately $4.3 million, an increase of
 12% over the comparable quarter last year.  The $4.3 million was comprised of
 approximately 58% from Advertising revenue, 30% from Merchant Services
 revenue, and 12% from Syndication and Licensing revenue.
     Switchboard reported a net loss for the quarter of approximately
 $7.2 million or $0.28 per share pro forma, which includes $2.5 million of
 non-cash CBS advertising and promotion.  This compares to a net loss of
 $6.9 million or $0.34 per share pro forma in the comparable quarter last year,
 which included $6.0 million of non-cash CBS advertising and promotion
 expenses.  Net loss on an adjusted pro-forma basis excluding the CBS
 advertising and promotion expenses was $0.18 per share pro forma, and
 $0.04 per share pro forma for the comparable quarter in 2000.
     As of March 31, 2001, Switchboard had approximately $67.0 million in cash
 and marketable securities.
     Commenting on the first quarter results, Douglas J. Greenlaw, CEO of
 Switchboard said, "We are pleased with the results and our performance for the
 first quarter, especially in light of the current market conditions.  We are
 on track with our annual projections and remain focused on executing against
 our key strategic initiatives laid out in the fourth quarter of 2000,
 including our Nearbuy merchant applications and the evolution of our directory
 technology platform, which we believe position us for growth in the second
 half of 2001."
 
     Major Strategic Highlights
     During the first quarter of 2001, Switchboard achieved its first major
 engineering milestone in its multi-year, multi-million dollar technology,
 marketing and services alliance with America Online.  The relationship centers
 around the development of a new online directory and local advertising
 platform for key America Online properties, including Netscape and CompuServe.
 The 1st revision of the platform was delivered and accepted according to the
 terms of the agreement established between the two companies in December 2000.
     This quarter Switchboard introduced Nearbuy-a suite of Switchboard
 products and services that leverage the Company's directory technology to
 promote local business across a full range of Internet and wireless platforms.
 These products and services are dedicated to helping businesses of all sizes
 connect with consumers through locally targeted solutions.  Key milestones
 were achieved in Q1 in the development of Nearbuy including the launch of the
 Company's next generation product directory powered by retailers who subscribe
 to Switchboard's Nearbuy Merchandising Services.  Additionally, the Company
 launched Deals Nearbuy (SM), a new initiative which promotes merchant offers
 to consumers via direct email in their local community.  Deals Nearbuy is
 currently undergoing test marketing trials in several cities across the U.S.
 in preparation for a national roll-out in the 2nd half of 2001.
     Switchboard continued the expansion of its merchant aggregation channel
 throughout the period through a number of new alliances.  A key strategic win
 in the media channel was recently revealed when the Company announced plans to
 integrate Switchboard yellow pages, white pages, email directories and maps in
 several New York Times Digital online properties including newyorktoday.com,
 Boston.com, and Telegram.com (the Web site of the Worcester Telegram and
 Gazette). These Switchboard offerings will appear in co-branded pages on each
 site.  Both the New York Times Digital properties and Switchboard will be able
 to sell online yellow pages advertising into the co-branded directories.
     "We continue to remain true to our business model despite this challenging
 economy," continued Greenlaw.  "Switchboard has clearly emerged as one of the
 premier online directory service leaders.  The success of our products and the
 quality of our strategic partners are a true testament that Switchboard stands
 alone in this space."
 
                            Switchboard Incorporated
                       Condensed Statements of Operations
                    (in thousands, except per share amounts)
                                  (unaudited)
 
                                                   Three Months Ended March 31,
                                                        2001          2000
 
     Total revenue                                     $4,271         $3,818
 
     Cost of revenue                                      981            916
 
     Gross profit                                       3,290          2,902
     Gross profit %                                       77%            76%
 
     Operating expenses:
     Sales and marketing                                8,790          8,737
     Product development                                1,313            613
     General and administrative                         1,027            733
     Amortization of goodwill and intangibles             314              0
        Total operating expenses                       11,444         10,083
 
     Operating loss                                    (8,154)        (7,181)
 
     Other income (expense), net                          909            294
     Income tax provision                                   0              0
     Net loss                                         ($7,245)       ($6,887)
 
     Accrued dividends for preferred stockholders           0            271
 
     Net loss attributable to common stockholders     ($7,245)       ($7,158)
 
     Basic and diluted net loss per share              ($0.28)        ($0.41)
 
     Shares used in computing basic and
      diluted net loss per share                       25,654         17,494
 
     Pro forma net loss per share                      ($0.28)        ($0.34)
 
     Shares used in computing pro forma
      basic and diluted net loss per share             25,654         20,071
 
     CBS non-cash advertising and promotion             2,540          6,031
 
     Adjusted net loss                                ($4,705)         ($856)
 
     Adjusted pro forma net loss per share             ($0.18)        ($0.04)
 
     Note: Pro forma E.P.S. assumes a conversion of all convertible preferred
           stock and excludes the accretion of dividends, which were eliminated
           upon the closing of the Company's initial public offering on
           March 7, 2000.
 
 
                            Switchboard Incorporated
                            Condensed Balance Sheets
                                 (in thousands)
                                  (unaudited)
                                                              As of
                                                      March 31,    December 31,
                                                        2001           2000
     ASSETS
     Cash and marketable securities                   $67,017        $70,770
     Accounts receivable, net                           6,818          7,149
     Other current assets                               9,034          7,199
     Property, equipment and other assets              12,537         13,439
        Total assets                                  $95,406        $98,557
 
     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
     Current liabilities                               $4,199         $4,315
     Deferred revenue                                   2,296          1,512
     Other liabilities                                  2,535          2,000
     Stockholders' equity (deficit)                    86,376         90,730
        Total liabilities and
         stockholders' equity (deficit)               $95,406        $98,557
 
 
     About Switchboard Incorporated
     Headquartered in Westboro, Mass., Switchboard Incorporated is a leading
 provider of directory technology and Nearbuy(SM) solutions -- a tightly
 integrated suite of products and services promoting local business across a
 full range of Internet and wireless platforms.  Its flagship Web site, CBS
 Switchboard.com (http://www.switchboard.com) offers a broad range of
 functions, content and services including yellow and white pages, product
 searching, and interactive maps and driving directions.  Viewed more than
 80 million times each month, CBS Switchboard.com showcases Switchboard's
 superior technology and breadth of directory product offerings.  ePresence
 (Nasdaq:   EPRE) and Viacom Inc. (NYSE:   VIAb) own approximately 38% and 29% of
 the outstanding shares of Switchboard, respectively. "Switchboard" is a
 registered trademark, and "Nearbuy", "Deals Nearbuy" and "What's Nearbuy" are
 service marks of Switchboard Incorporated.  "CBS" and the CBS "eye" device are
 registered trademarks of CBS Broadcasting Inc.
 
     This release contains forward-looking statements based on current
 expectations or beliefs, as well as a number of assumptions about future
 events, and these statements are subject to important factors and
 uncertainties that could cause actual results to differ materially from those
 described in the forward-looking statements.  The forward-looking statements
 in this release address a variety of subjects including, for example, the
 expected benefits to be derived from Switchboard's strategic alliances and
 acquisitions, Switchboard's ability to continue its growth and attain future
 profitability, Switchboard's ability to maintain multiple revenue streams, and
 the economic value and utility of the products and services offered by
 Switchboard to Switchboard's customers.  The following factors, among others,
 could cause actual results to differ materially from those described in these
 forward-looking statements: Switchboard's alliances with participants in the
 media, wireless communications, newspaper, merchant aggregation and
 advertising industries (including AOL Time Warner) may fail to achieve their
 anticipated benefits; Switchboard's quarterly operating results are volatile;
 Switchboard's efforts to shift its revenue focus to the delivery of directory
 platform technology and merchant services to new partners may take longer than
 expected or may be unsuccessful; if Switchboard cannot demonstrate the value
 of its local merchant services, local merchant customers may stop using its
 services;  the attractiveness of Switchboard's services would diminish if it
 is not able to license accurate database information from third-party
 providers; and if Switchboard is unable to remain an attractive medium for
 advertising, its revenue will substantially decline.  For a detailed
 discussion of these and other cautionary statements, please refer to
 Switchboard's filings with the Securities and Exchange Commission, including
 Switchboard's Registration Statement on Form S-1 (File No. 333-90013) and
 Switchboard's Annual Report on Form 10-K filed on April 2, 2001.
 
     Investor contact:                         Media contact:
     John Jewett, Chief Financial Officer      Melissa Hamlet
     Switchboard Inc.                          (609) 396-0946 x 263
     (508) 898-8176                            mhamlet@garfieldgroup.com
 
 

SOURCE Switchboard Incorporated
    WESTBORO, Mass., April 27 /PRNewswire/ --
 Switchboard Incorporated (Nasdaq:   SWBD), a leading provider of directory
 technology and Nearbuy (SM) locally targeted e-marketing solutions, today
 announced financial results for its fiscal first quarter ended March 31, 2001.
 For the first quarter, revenue was approximately $4.3 million, an increase of
 12% over the comparable quarter last year.  The $4.3 million was comprised of
 approximately 58% from Advertising revenue, 30% from Merchant Services
 revenue, and 12% from Syndication and Licensing revenue.
     Switchboard reported a net loss for the quarter of approximately
 $7.2 million or $0.28 per share pro forma, which includes $2.5 million of
 non-cash CBS advertising and promotion.  This compares to a net loss of
 $6.9 million or $0.34 per share pro forma in the comparable quarter last year,
 which included $6.0 million of non-cash CBS advertising and promotion
 expenses.  Net loss on an adjusted pro-forma basis excluding the CBS
 advertising and promotion expenses was $0.18 per share pro forma, and
 $0.04 per share pro forma for the comparable quarter in 2000.
     As of March 31, 2001, Switchboard had approximately $67.0 million in cash
 and marketable securities.
     Commenting on the first quarter results, Douglas J. Greenlaw, CEO of
 Switchboard said, "We are pleased with the results and our performance for the
 first quarter, especially in light of the current market conditions.  We are
 on track with our annual projections and remain focused on executing against
 our key strategic initiatives laid out in the fourth quarter of 2000,
 including our Nearbuy merchant applications and the evolution of our directory
 technology platform, which we believe position us for growth in the second
 half of 2001."
 
     Major Strategic Highlights
     During the first quarter of 2001, Switchboard achieved its first major
 engineering milestone in its multi-year, multi-million dollar technology,
 marketing and services alliance with America Online.  The relationship centers
 around the development of a new online directory and local advertising
 platform for key America Online properties, including Netscape and CompuServe.
 The 1st revision of the platform was delivered and accepted according to the
 terms of the agreement established between the two companies in December 2000.
     This quarter Switchboard introduced Nearbuy-a suite of Switchboard
 products and services that leverage the Company's directory technology to
 promote local business across a full range of Internet and wireless platforms.
 These products and services are dedicated to helping businesses of all sizes
 connect with consumers through locally targeted solutions.  Key milestones
 were achieved in Q1 in the development of Nearbuy including the launch of the
 Company's next generation product directory powered by retailers who subscribe
 to Switchboard's Nearbuy Merchandising Services.  Additionally, the Company
 launched Deals Nearbuy (SM), a new initiative which promotes merchant offers
 to consumers via direct email in their local community.  Deals Nearbuy is
 currently undergoing test marketing trials in several cities across the U.S.
 in preparation for a national roll-out in the 2nd half of 2001.
     Switchboard continued the expansion of its merchant aggregation channel
 throughout the period through a number of new alliances.  A key strategic win
 in the media channel was recently revealed when the Company announced plans to
 integrate Switchboard yellow pages, white pages, email directories and maps in
 several New York Times Digital online properties including newyorktoday.com,
 Boston.com, and Telegram.com (the Web site of the Worcester Telegram and
 Gazette). These Switchboard offerings will appear in co-branded pages on each
 site.  Both the New York Times Digital properties and Switchboard will be able
 to sell online yellow pages advertising into the co-branded directories.
     "We continue to remain true to our business model despite this challenging
 economy," continued Greenlaw.  "Switchboard has clearly emerged as one of the
 premier online directory service leaders.  The success of our products and the
 quality of our strategic partners are a true testament that Switchboard stands
 alone in this space."
 
                            Switchboard Incorporated
                       Condensed Statements of Operations
                    (in thousands, except per share amounts)
                                  (unaudited)
 
                                                   Three Months Ended March 31,
                                                        2001          2000
 
     Total revenue                                     $4,271         $3,818
 
     Cost of revenue                                      981            916
 
     Gross profit                                       3,290          2,902
     Gross profit %                                       77%            76%
 
     Operating expenses:
     Sales and marketing                                8,790          8,737
     Product development                                1,313            613
     General and administrative                         1,027            733
     Amortization of goodwill and intangibles             314              0
        Total operating expenses                       11,444         10,083
 
     Operating loss                                    (8,154)        (7,181)
 
     Other income (expense), net                          909            294
     Income tax provision                                   0              0
     Net loss                                         ($7,245)       ($6,887)
 
     Accrued dividends for preferred stockholders           0            271
 
     Net loss attributable to common stockholders     ($7,245)       ($7,158)
 
     Basic and diluted net loss per share              ($0.28)        ($0.41)
 
     Shares used in computing basic and
      diluted net loss per share                       25,654         17,494
 
     Pro forma net loss per share                      ($0.28)        ($0.34)
 
     Shares used in computing pro forma
      basic and diluted net loss per share             25,654         20,071
 
     CBS non-cash advertising and promotion             2,540          6,031
 
     Adjusted net loss                                ($4,705)         ($856)
 
     Adjusted pro forma net loss per share             ($0.18)        ($0.04)
 
     Note: Pro forma E.P.S. assumes a conversion of all convertible preferred
           stock and excludes the accretion of dividends, which were eliminated
           upon the closing of the Company's initial public offering on
           March 7, 2000.
 
 
                            Switchboard Incorporated
                            Condensed Balance Sheets
                                 (in thousands)
                                  (unaudited)
                                                              As of
                                                      March 31,    December 31,
                                                        2001           2000
     ASSETS
     Cash and marketable securities                   $67,017        $70,770
     Accounts receivable, net                           6,818          7,149
     Other current assets                               9,034          7,199
     Property, equipment and other assets              12,537         13,439
        Total assets                                  $95,406        $98,557
 
     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
     Current liabilities                               $4,199         $4,315
     Deferred revenue                                   2,296          1,512
     Other liabilities                                  2,535          2,000
     Stockholders' equity (deficit)                    86,376         90,730
        Total liabilities and
         stockholders' equity (deficit)               $95,406        $98,557
 
 
     About Switchboard Incorporated
     Headquartered in Westboro, Mass., Switchboard Incorporated is a leading
 provider of directory technology and Nearbuy(SM) solutions -- a tightly
 integrated suite of products and services promoting local business across a
 full range of Internet and wireless platforms.  Its flagship Web site, CBS
 Switchboard.com (http://www.switchboard.com) offers a broad range of
 functions, content and services including yellow and white pages, product
 searching, and interactive maps and driving directions.  Viewed more than
 80 million times each month, CBS Switchboard.com showcases Switchboard's
 superior technology and breadth of directory product offerings.  ePresence
 (Nasdaq:   EPRE) and Viacom Inc. (NYSE:   VIAb) own approximately 38% and 29% of
 the outstanding shares of Switchboard, respectively. "Switchboard" is a
 registered trademark, and "Nearbuy", "Deals Nearbuy" and "What's Nearbuy" are
 service marks of Switchboard Incorporated.  "CBS" and the CBS "eye" device are
 registered trademarks of CBS Broadcasting Inc.
 
     This release contains forward-looking statements based on current
 expectations or beliefs, as well as a number of assumptions about future
 events, and these statements are subject to important factors and
 uncertainties that could cause actual results to differ materially from those
 described in the forward-looking statements.  The forward-looking statements
 in this release address a variety of subjects including, for example, the
 expected benefits to be derived from Switchboard's strategic alliances and
 acquisitions, Switchboard's ability to continue its growth and attain future
 profitability, Switchboard's ability to maintain multiple revenue streams, and
 the economic value and utility of the products and services offered by
 Switchboard to Switchboard's customers.  The following factors, among others,
 could cause actual results to differ materially from those described in these
 forward-looking statements: Switchboard's alliances with participants in the
 media, wireless communications, newspaper, merchant aggregation and
 advertising industries (including AOL Time Warner) may fail to achieve their
 anticipated benefits; Switchboard's quarterly operating results are volatile;
 Switchboard's efforts to shift its revenue focus to the delivery of directory
 platform technology and merchant services to new partners may take longer than
 expected or may be unsuccessful; if Switchboard cannot demonstrate the value
 of its local merchant services, local merchant customers may stop using its
 services;  the attractiveness of Switchboard's services would diminish if it
 is not able to license accurate database information from third-party
 providers; and if Switchboard is unable to remain an attractive medium for
 advertising, its revenue will substantially decline.  For a detailed
 discussion of these and other cautionary statements, please refer to
 Switchboard's filings with the Securities and Exchange Commission, including
 Switchboard's Registration Statement on Form S-1 (File No. 333-90013) and
 Switchboard's Annual Report on Form 10-K filed on April 2, 2001.
 
     Investor contact:                         Media contact:
     John Jewett, Chief Financial Officer      Melissa Hamlet
     Switchboard Inc.                          (609) 396-0946 x 263
     (508) 898-8176                            mhamlet@garfieldgroup.com
 
 SOURCE  Switchboard Incorporated