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Ask Jeeves Reports Third Quarter 2002 Results

Company Beats Top and Bottom Line Expectations; Company Expects to Be Pro Forma Profitable and Cash Flow Positive In Fourth Quarter; Company Projects Revenues of $90 million, EPS of $0.10 And Positive Cash Flow for 2003


EMERYVILLE, Calif., Oct. 16 /PRNewswire-FirstCall/ -- Ask Jeeves, Inc. (Nasdaq: ASKJ - News; "the Company") today reported results for the third quarter ended September 30, 2002.

Revenues for the third quarter ended September 30, 2002 were $17.8 million, exceeding the Company's third quarter expectations of $16.5 million. The latest results represent 15 percent growth over revenues of $15.4 million for the comparable year-ago quarter and modest sequential growth over $17.6 million reported for the second quarter of 2002.

Pro forma net loss for the quarter was $3.4 million, or $0.08 per share, compared with the Company's third quarter expectations for a pro forma net loss of $5.0 million, or $0.12 per share. Pro forma net loss was $7.0 million, or $0.19 per share, for the comparable year-ago quarter and was $6.5 million, or $0.16 per share, for the second quarter of 2002. The Company's pro forma results for the quarter exclude restructuring and acquisition costs, amortization of goodwill and other assets, stock-based compensation, and impairment of long-lived assets. Under generally accepted accounting principles ("GAAP"), the net loss for the second quarter of 2002 was $4.4 million, or $0.11 per share. This compares to net loss on a GAAP basis of $27.5 million, or $0.74 per share, for the comparable year-ago quarter and a net loss of $8.5 million, or $0.21 per share, for the second quarter of 2002.

Commenting on the quarter, CEO Skip Battle said, "I am pleased with this quarter's better than expected top and bottom line results, particularly in light of the seasonably weak summer months. This quarter represents the second straight quarter of year-over-year growth and the third straight quarter of sequential growth. Our results clearly reflect our focus and effort over the last seven quarters to make our products and organization both more competitive in, and more responsive to, the marketplace. Our strategy has positioned the company to achieve sustainable, profitable growth, which we expect to achieve going forward."

For the third quarter of 2002, Web Properties revenues grew to $14.7 million versus the $14.2 million reported for the second quarter of 2002. The increase in Web Properties revenue is primarily due to increased sales of the Company's premium advertising products, strong performance of paid listings, and solid sales from Ask Jeeves UK.

Jeeves Solutions(SM) revenues were $3.1 million for the third quarter of 2002, compared to $3.4 million in the second quarter of 2002.

Unrestricted cash, cash equivalents and marketable securities totaled $29.4 million on September 30, 2002. The Company currently anticipates that it will be cash flow positive in the fourth quarter.

Fourth Quarter 2002 Business Outlook:

The following business outlook contains forward-looking statements intended to provide visibility into management's current expectations. These forward-looking statements are subject to risks and uncertainties. As a result, actual results may differ materially from what is expected. The guidance provided in this press release is based on limited information available to the company at this time, which is subject to change. In addition, the guidance is on a pro forma basis. Although the guidance provided may change after October 16, 2002, the company undertakes no obligation to revise or update these statements.

Commenting on the business outlook, CFO Steve Sordello said, "We expect to be profitable on a pro forma basis and cash flow positive in the fourth quarter. This will be the first time that the company will achieve this milestone. Additionally, we expect the fourth quarter of 2002 to mark our fourth straight quarter of sequential revenue growth."

Ask Jeeves expects fourth quarter 2002 revenue to be approximately $21 million. The revenue mix for its business units will be approximately 83 percent for Web Properties and 17 percent for Jeeves Solutions.

Ask Jeeves expects to report a pro forma profit for the fourth quarter of 2002 of approximately $1 million, or approximately $0.02 per share. The Company expects weighted shares outstanding for the fourth quarter to be approximately 44.0 million.

2003 Preliminary Business Outlook

For 2003, Ask Jeeves anticipates revenue growth of approximately 25 percent from 2002 levels to about $90 million, and pro forma earnings per share of approximately $0.10.

Cash

The Company expects to exit 2002 with approximately $30 million in unrestricted cash, cash equivalents and marketable securities, and to be cash flow positive on an overall basis for 2003.

Conference Call Scheduled for October 16

Ask Jeeves will hold a conference call to discuss its third quarter results and its business outlook for the fourth quarter and 2003 at 5:00 p.m. EDT on October 16, 2002. Investors can listen to the conference call on the Internet at www.ask.com/investor. To listen to the live call, go to the Web site at least fifteen minutes prior to the start time to download and install necessary audio software. For those unable to listen to the live broadcast, 48-hour replay will be available one hour after the conclusion of the call at www.ask.com/investor.

Cautionary Note Regarding Forward-looking Statements

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: risks associated with the e-commerce and e-support markets; dependence on the Internet; risk associated with rapid technological change; lack of market acceptance of products; introduction of new products by competitors; integration of acquired businesses; slower spending environment for advertising sales; dependence on third parties for content, distribution or advertising delivery; targets for JeevesOne product pricing and product reception in the market; declines in the average selling price of the Company's products; and adverse economic conditions in any of the major countries or markets in which the Company does business. Further information on potential risk factors that could affect the financial results of Ask Jeeves are included in its 2001 Annual Report on Form 10- K, its quarterly reports on Form 10-Q and other filings for 2001 and 2002 filed with the Securities and Exchange Commission.

About Ask Jeeves, Inc.

Ask Jeeves is a leading provider of natural language question answering and advanced search technologies. The company offers these technologies through two business units: Web Properties and Jeeves Solutions. Web Properties operates a leading media property that delivers one-to-one marketing by connecting interested users with relevant advertisers. In addition to its Web sites, which include Ask Jeeves at Ask.com® and Teoma(SM) at Teoma.com, Ask Jeeves also syndicates its monetized search technology to a network of affiliate partners. Jeeves Solutions, Ask Jeeves' enterprise software business, helps companies improve customer interaction online. Its automated, natural language software enables self-service through sophisticated connectivity to companies' Web content and back-end systems. JeevesOne(TM), its flagship product, also provides deep analytics that help companies learn about their customers. Ask Jeeves is based in Emeryville, California, with offices in New York, Boston, New Jersey, Los Angeles and London.

For more information, visit http://www.Ask.com or call 510-985-7400.

NOTE: Ask Jeeves and Ask.com are registered trademarks of Ask Jeeves, Inc. JeevesOne, Jeeves Solutions and Teoma are trademarks and service marks of Ask Jeeves, Inc.

 
Editorial Contact:
Michele Mehl
Jeeves Solutions
425-398-8222
mmehl@jeevessolutions.com
 
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