Excite@Home Reports First Quarter 2000 Financial & Operating Results

REDWOOD CITY, Calif., April 19 /PRNewswire/ -- Excite@Home today reported first quarter 2000 revenues of $138.0 million, an increase of 75% compared to pro forma revenues of $78.7 million in the first quarter of 1999. Pro forma results combine the historical results of Excite, Inc. and At Home Corporation, which merged on May 28, 1999.

Pro forma loss for the quarter was $4.6 million, or $0.01 per share, compared to a loss of $6.0 million, or $0.02 per share, in the first quarter of 1999. Pro forma loss for the quarter excludes net expenses of $671.9 million for the amortization of goodwill and other intangible assets, as well as the cost and amortization of distribution agreements and certain other non-operational gains and expenses.

In the first quarter Excite@Home's residential broadband subscriber base grew by approximately 350,000 net new subscribers to 1,500,000, an increase of 30% from 1,150,000 at year-end 1999. Total subscribers are up more than 220% from March 31, 1999.

Commenting on the quarter, Excite@Home president and CEO George Bell said, "This was our best quarter ever for broadband subscriber growth -- the most important measure in defining broadband leadership. In addition, with the launch of @Home 2000, our leadership now extends to the delivery of broadband content, fulfilling the vision of the merger between Excite and @Home.

"We are determined to grow these two key opportunities -- broadband access and media -- as quickly as possible by driving subscriber growth and by building compelling content and applications into our broadband media service," Bell added. "Securing long-term relationships with our largest cable partners, plus the addition of 15 million new homes to our footprint through our DSL deal with Rhythms, allows us to take a longer-term view of our growth opportunities."

Excite@Home chairman Tom Jermoluk added, "The new distribution agreements with our largest cable partners, AT&T;, Comcast and Cox, prove that we are in the broadband race for the long run, and that we are critical to our partners' success in rolling out broadband services. The agreements put us and our partners in position to drive robust growth through the delivery of broadband on a global scale."

Broadband Subscription Services

@Home Consumer Broadband Service

Excite@Home's addressable market for residential broadband services grew in the first quarter to approximately 26 million upgraded cable homes passed, up approximately 75% from 15 million homes a year ago. Excite@Home's 1,500,000 broadband subscribers represent a penetration rate of 5.7% of the upgraded footprint, up from 4.8% last quarter and 3.1% a year ago. Subscriber and addressable-market figures include areas served by Excite@Home affiliates that are currently being converted to the @Home service.

Excite@Home's global broadband footprint now totals 87 million homes under contract with 20 cable partners plus Rhythms NetConnections, a leading provider of high-speed access through digital subscriber line services. Excite@Home and Rhythms recently announced an agreement for Excite@Home to offer broadband access and content services via DSL to consumers in 15 million homes located outside of Excite@Home's cable footprint. The service, to be launched later this year, will utilize Excite@Home's existing broadband network, including its 15,000-mile fiber-optic backbone and its distributed array of regional high-speed transport and data-caching facilities. Subscribers will have access to the @Home 2000 service, including Excite broadband content, currently available to Excite@Home's cable modem subscribers.

@Work Business-to-Business Services

Excite@Home's commercial services division, @Work, continues to pursue its strategy of leveraging the Excite@Home network to provide connectivity and value-added services to businesses. @Work provides high-speed access to businesses, with total accounts activated exceeding 6,200 as of March 31, 2000, up from 5,100 last quarter and 2,300 a year ago. As an extension of its strategy, @Work offers Internet content providers access to the Excite@Home network. Earlier this month @Work and Equinix, Inc. announced an agreement under which Equinix data centers, which house content providers and e-commerce companies, will be connected directly to the Excite@Home network. The deal places the content and applications of Equinix's customers within easier reach of Excite@Home's 1.5 million broadband subscribers, enhancing the broadband subscriber experience and representing an incremental source of revenue to @Work.

Broadband Network Traffic Growth

Traffic on Excite@Home's broadband network is expanding rapidly as the base of residential and commercial broadband subscribers grows and as broadband subscribers continue to generate significantly more traffic than typical narrowband ISP users. Excite@Home's broadband subscriber base now generates an average of more than two gigabits of traffic per second through public and private Internet peering points, with peak traffic reaching up to five gigabits per second. This backbone traffic actually represents less than half of all traffic generated by Excite@Home's broadband subscribers, as the majority of broadband traffic is contained within Excite@Home's regional networks through the use of caching and distributed content feeds.

Media and Marketing Services

On April 4, 2000 Excite@Home launched @Home 2000 to all of its broadband subscribers in the U.S. @Home 2000 combines a software package designed for broadband-including a customized browser, the latest multimedia plug-ins and a suite of security features from McAfee.com -- with a completely new version of the Excite portal that is optimized for broadband. @Home broadband customers now have access to the breadth and depth of information and services available through Excite, including Excite's award-winning personalization capabilities, in addition to a wealth of multimedia content made possible by the speed of a broadband connection.

Traffic on the Excite Network, which includes Excite@Home's broadband and narrowband media properties, rose to 144 million average daily page views in March, an increase of 17% over December 1999 and 85% over March 1999. Cumulative registrations to Excite services totaled 64 million as of March 31, 2000, up from 51 million last quarter and 28 million a year ago. The Excite Network remains among the top five web media networks with over 30 million unique users, or 42.9% of all web users, in February according to Media Metrix. These measures exclude Excite@Home's broadband subscribers, which are not metered by Media Metrix.

Growth in traffic was driven by Excite.com as well as recently acquired properties Excite's Bluemountain and Excite's Webshots. Bluemountain.com remains the leading provider of online greeting-card services, with 16.6 million unique users in February according to Media Metrix. Bluemountain.com customers sent over 125 million electronic greeting cards during the first quarter, including 55 million in the month of February, which generated over 100 million page views on Valentine's Day alone.

Digital Marketing Services

Excite@Home's media properties serve the dual purposes of revenue generation through advertising sales and broadband subscriber acquisition through online marketing of the @Home service. MatchLogic, Excite@Home's advertising services subsidiary, uses its databases of anonymous user and permission-based e-mail profiles to deliver banner and e-mail ads. MatchLogic delivered 22 billion banner ad impressions and 57 million targeted e-mail marketing messages during the first quarter, increases of 40% and 12%, respectively, over the fourth quarter of 1999.

Online marketing channels generated a total of nearly 70,000 qualified subscriber leads in the first quarter. Approximately 50% of these leads were converted to @Home subscribers in the first quarter. Excite@Home's free ISP offer, FreeLane powered by Excite, has been a particularly effective source of subscriber leads. The service has generated over one million downloads and 500,000 active subscribers since its introduction in January, with about 2,000 subscribers per month converting to broadband as of March.

International Services

Excite@Home's international efforts continue to parallel its focus in North America on building integrated content and broadband access services. Excite@Home currently has a broadband footprint of 13 million homes passed outside of North America in five countries -- the Netherlands, Belgium, Australia, Japan and Germany -- as well as approximately six million homes passed in Canada. Excite content services are available in five of these six countries, as well as six other countries outside the U.S.

During the first quarter Excite@Home consolidated its operations in Australia, merging Excite Australia and @Home Australia with the intention of offering Excite-branded content to Australian broadband customers. The @Home broadband service was launched in Australia in January. Service is currently available to trial customers in Japan, with a commercial launch expected during the second quarter of 2000. During the first quarter Excite@Home increased its ownership in Excite Japan to approximately 67%.

Year 2000 Financial Outlook

In addition to its first quarter results, Excite@Home announced today its expectations for financial and operating performance for the remainder of 2000 and beyond. The Company stated that its goals are to have a total of at least three million residential broadband subscribers by the end of 2000, growing to six million subscribers by the end of 2001 and ten million subscribers by the end of 2002. The Company also stated that it is intensifying its investment efforts outside North America in an effort to capitalize on the growth of broadband access and media services abroad. As a result of these international investments and increased marketing and network investments intended to support an accelerated rate of broadband subscriber growth, the Company expects to incur operating losses in 2000 totaling between $0.25 and $0.30 per share for the full year. These losses exclude the amortization of goodwill and other intangible assets, as well as the cost and amortization of distribution agreements and certain other non-operational gains and expenses. The Company also stated that its goal is to achieve annual revenues in excess of $2 billion by 2002 and that it intends to achieve long-term profitability.

Cautionary Note Regarding Forward-looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including those relating to the Company's financial outlook for future periods and its goals for the growth of its broadband subscriber base; the timing for introducing new services; and the degree of acceptance for the Company's DSL-based offering. Actual results may differ materially due to a number of factors, including the rate of increased spending to stimulate growth in broadband subscribers and expand international operations; the effectiveness those efforts, which cannot be assured; of the increasingly competitive environment for Internet advertising sales and e-commerce services, which can be expected to limit the growth of media revenues; the Company's dependence on the actions of its cable partners to upgrade the cable plant and market and install the @Home service; the Company's ability to successfully integrate its acquired companies; the Company's ability to successfully expand its online marketing programs; and the Company's ability to expand its international operations and relationships. In addition, certain transactions described in this press release, such as the restructuring of the Company's relationships with its principal cable partners, are contingent upon the parties' success in executing definitive agreements and/or obtaining corporate approvals, and there can be no assurance that such transactions will be completed. Reported results should not be considered as an indication of future performance. In particular, Excite@Home anticipates that its increased investments designed to stimulate growth of its broadband subscriber base and to expand its international activities will result in operating losses for the current year. The matters discussed in this press release also involve risks and uncertainties described in Excite@Home's filings with the Securities and Exchange Commission. Excite@Home assumes no obligation to update the forward-looking information contained in this press release.

About Excite@Home

Excite@Home, the leader in broadband, offers media services through the Excite Network (http://www.excite.com, http://www.bluemountain.com and other properties), and broadband subscription services through @Home (http://www.home.com) and @Work (www.work.home.net). The company has a worldwide footprint of 87 million broadband homes under long-term contract. Excite@Home's MatchLogic division (http://www.matchlogic.com) offers marketers industry-leading digital advertising capabilities including rich media production, ad and email services, and database analysis all integrated into a complete solutions package.

Excite@Home, @Home, @Work, Excite, Blue Mountain, the stylized "@" logo and MatchLogic are trademarks of or licensed to At Home Corporation and may be registered in certain jurisdictions. All other brand names are trademarks of their respective owners.

NOTE:The results for all periods presented have been restated to reflectthe pro forma combined operations of At Home and Excite. At Home'sacquisition of Excite was completed during the quarter ending June 30, 1999and was accounted for as a purchase.

                             AT HOME CORPORATION
                             UNAUDITED PRO FORMA
                 CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
                    (In thousands, except per share data)



                                        Three Months       Three Months
                                       Ended March 31,  Ended December 31,
                                     2000             1999          1999

    Revenues (1)                   $138,063         $78,748      $128,753

    Costs and expenses:
     Operating costs                 57,239          29,357        50,112
     Product development
      and engineering                20,975          14,000        20,223
     Sales and marketing             56,926          34,668        49,596
     General and administrative      10,724           9,140        10,722

    Total costs and expenses (2)    145,864          87,165       130,653

    Loss from operations            (7,801)         (8,417)       (1,900)

    Interest income, net              3,193           2,421         2,414

    Pro forma net
     income (loss)                 $(4,608)        $(5,996)          $514

    Pro forma net income
     (loss) per share - basic       $(0.01)         $(0.02)         $0.00

    Shares used in pro forma
     per share calculation
     - basic                        387,644         356,405       374,758

    (1) Revenue from
     related parties                $12,094         $12,039        $7,500

    (2) Depreciation and
     amortization included in
     costs and expenses             $19,589         $12,767       $17,904

Note: The above unaudited pro forma condensed consolidated statements of operations exclude the effects of the following:

                             AT HOME CORPORATION
                 CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
                    (In thousands, except per share data)


                                         Three Months           Three Months
                                        Ended March 31,    Ended December 31,
                                     2000             1999          1999
                                         (unaudited)              (unaudited)

    Revenues (1)                   $138,063        $ 25,098      $128,753

    Costs and expenses:
     Operating costs                 57,239          18,600        50,112
     Product development
      and engineering                20,975           6,467        20,223
     Sales and marketing             56,926           7,676        49,596
     General and administrative      10,724           4,103        10,722

     Total costs and expenses
      before investment gain,
      equity losses, and costs
      and amortization of
      distribution agreements
      and acquisition-related
      amounts (2)                   145,864          36,846       130,653

    Loss from operations before
     investment gain, equity
     losses, and costs and
     amortization of distribution
     agreements and
     acquisition-related amounts    (7,801)        (11,748)       (1,900)

    Interest income, net              3,193           2,811         2,414

    Net income (loss) before
     investment gain, equity
     losses, and costs and
     amortization of
     distribution agreements
     and acquisition-related
     amounts                        (4,608)         (8,937)           514

    Realized gain on
     investment held                     --          12,566            --

    Equity share of losses
     of affiliated companies        (4,815)              --       (5,956)

    Cost and amortization
     of distribution
     agreements                    (93,965)        (15,020)     (214,312)

    Costs and amortization
     of goodwill, intangible
     assets, deferred
     compensation and other
     acquisition-related
     amounts                      (573,133)         (6,733)     (503,256)

    Net loss                     $(676,521)       $(18,124)    $(723,010)

    Net income (loss) per
     share before investment
     gain, equity losses,
     and costs and amortization
     of distribution agreements
     and acquisition-related
     amounts - basic                $(0.01)         $(0.04)         $0.00

    Net loss per share -
    basic and diluted               $(1.75)         $(0.08)       $(1.93)

    Shares used in per share
     calculations                   387,644         240,966       374,758


    (1) Revenue from
     related parties               $ 12,094          $5,439        $7,500

    (2) Depreciation and
     amortization included
     in costs and expenses         $ 19,589          $7,455      $ 17,904


                             AT HOME CORPORATION
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)


                                                 March 31,      December 31,
                                                    2000              1999
                                                 (unaudited)

    ASSETS
    Current Assets:
     Cash and cash equivalents                      $201,513       $224,548
     Short-term investments                          300,769        300,675
    Total cash, cash equivalents
     and short-term investments                      502,282        525,223

     Accounts receivable, net                         50,260         52,200
     Accounts receivable - related parties            26,925         18,332
     Other current assets                             40,169         35,151
    Total Current Assets:                            619,636        630,906

    Property, equipment and improvements, net        244,596        176,077
    Investments in affiliated companies               24,815         19,015
    Strategic investments                            281,901        273,005
    Distribution agreements, net                     287,878        313,557
    Goodwill and other intangible assets, net      7,182,871      7,615,062
    Other assets                                      82,988         76,657
    Total Assets:                                 $8,724,685     $9,104,279

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
     Accounts payable                                $55,843        $44,491
     Accounts payable - related parties               14,177         23,206
     Accrued compensation and related expenses        15,691         15,632
     Deferred revenue                                 59,519         56,844
     Other accrued liabilities                        71,761         62,540
     Current portion of capital lease
     and other obligations                            37,039         38,666
    Total Current Liabilities:                       254,030        241,379

    Convertible notes and debentures                 738,083        736,294
    Capital lease and other obligations,
     less current portion                             86,337         52,552
    Other liabilities                                  8,045          7,037

    Stockholders' Equity:
     Preferred stock                                 408,658        397,019
     Common stock                                  9,556,140      9,312,700
     Deferred compensation                          (50,169)       (50,493)
     Accumulated other comprehensive income           84,886         92,594
     Accumulated deficit                         (2,361,325)    (1,684,803)

    Total Stockholders' Equity:                    7,638,190      8,067,017
    Total Liabilities and
     Stockholders' Equity:                        $8,724,685     $9,104,279

SOURCE Excite@Home