Fiscal 2002 net revenue is expected to decline approximately 10% versus fiscal 2001 net revenue, primarily as a result of restructuring and divestitures that commenced during fiscal 2001.

Excluding the effects of charges related to depreciation, amortization of intangible assets and stock-based compensation (amortization charges), long-lived asset impairment and restructuring, CMGI’s fourth quarter fiscal 2001 operating expenses were $360.0 million, reflecting a decrease of $60.8 million, or 14%, from the previous quarter. Excluding the effects of these charges, CMGI reported an operating loss (recurring operating loss) of $104.5 million or ($0.30) per share for the quarter ended July 31, 2001 versus a recurring operating loss of $131.7 million or ($0.38) per share in the previous quarter ended April 30, 2001. The Company expects that its recurring operating loss for all of fiscal 2002 will be less than the $104.5 million recurring operating loss in the fourth quarter of fiscal 2001. The Company expects to achieve break-even on a recurring operating basis during the fourth quarter of fiscal 2002.

CMGI reported a total operating loss of $1.050 billion for the quarter ended July 31, 2001, compared to a total operating loss of $996.0 million for the quarter ended April 30, 2001. Included in the fourth quarter total operating loss were charges related to impairment of long-lived assets of $692.3 million, depreciation and amortization charges of $163.6 million and restructuring charges of $89.8 million. Third quarter fiscal 2001 total operating loss included long-lived asset impairment charges of $609.5 million, depreciation and amortization charges of $236.2 million and restructuring charges of $18.5 million.

CMGI continually evaluates the carrying value of its long-lived assets. If it is determined that the carrying value may require adjustment and the estimated fair value of the asset is less than its recorded amount, an impairment charge is recorded. During the fourth quarter, the Company determined that the carrying values of certain of its long-lived assets required adjustment. The long-lived asset impairment charges recorded in the fourth quarter were primarily related to goodwill associated with the Company’s fiscal 2000 acquisitions of AltaVista, Flycast and Tallán, the fiscal 2001 acquisition of MediaBridge and certain assets of NaviSite.

CMGI’s net loss was $1.276 billion or ($3.69) loss per share for the fourth quarter, compared to a net loss of $963.3 million or ($2.80) loss per share for the previous quarter ended April 30, 2001. Fourth quarter fiscal 2001 results included the impact of pre-tax losses, classified as Other gains (losses), net, of $187.5 million related to a write-down of the Company’s investment in Pacific Century CyberWorks Limited, $119.3 million related to write-downs of certain @Ventures investments and $106.1 million related to write-downs of certain marketable securities investments. Third quarter fiscal 2001 results included pre-tax losses of $26.1 million related to write-downs of certain @Ventures investments and $18.5 million on the sale of CMGI’s majority interest in Signatures Network, Inc.

As of July 31, 2001, CMGI had a consolidated cash and cash equivalents balance of $710.7 million. Total cash and cash equivalents usage was $135.1 million during the fourth quarter versus $119.0 million in the previous quarter. These amounts included net proceeds from maturities or sales of marketable securities of $2.5 million and $73.8 million in the fourth and third quarters, respectively. CMGI expects to exit fiscal 2002 with a cash and cash equivalents balance in excess of $325 million and total cash and cash equivalents usage is expected to decline to approximately $10 -$15 million in the fourth quarter of fiscal 2002.

We continue to make measurable improvements in our performance, and our most recent quarter saw a number of significant actions, said David Wetherell, CMGI’s Chairman and Chief Executive Officer. We continue to aggressively restructure the operations of our core holdings and have taken several key steps to improve the prospects of these businesses. Our increased focus on realizing efficiencies through consolidation and improvement of operating processes should continue to bear fruit in the future.

SOURCE: COMPANY PRESS RELEASE