Youbet.com, the online pari-mutuel wagering service, reported a 52% reduction in losses for its fourth quarter and a 41% reduction in losses for 2000. For the year ended December 31, 2000, the company's loss before an extraordinary net gain was $16.7 million, or $0.86 per common share, a reduction of 32% from the loss of $24.5 million, or $1.45 per common share recorded for the full year 1999. Including the extraordinary item, Youbet.com's net loss for 2000 was $1.7 million, or $0.09 per common share.
Robert Fell, chairman and chief executive officer, attributed the improvements to reduced operating expenses, better efforts to retain cash, and the introduction of new products. This week Youbet.com introduced a Web-based service called Youbet Express, which provides subscribers with immediate access to the company's services. Fell expects Youbet Express to substantially increase subscriptions.
"With no debt on our books and $10 million in cash we have a stronger operating foundation," Fell said during a Wednesday conference call. "We are moving in the right direction. We have our goals set in one area and that is building a profitable business."
As of Dec. 31, Youbet.com had 15,600 subscribers, or 1,000 more than it had a year ago. The subscribers, however, include 2,267 in California and 1,467 in New Jersey who are prohibited from placing wagers through the service.
Fell said at least 30,000 subscribers are needed before the company will become profitable. He would not say how much subscriptions have grown since Youbet Express was launched, but promised an update during the company's first quarter report.
Trading on Youbet.com (Nasdaq:UBET) was heavy Wednesday with 340,900 shares changing hands compared to its average daily volume of 59,954 shares. The activity did not budge the price from its opening price of 47 cents per share. Youbet.com needs its stock to trade at a minimum of $1 per share for 10 consecutive days before the end of May or it will be bounced off the Nasdaq exchange.
Fell said he believes Youbet Express will help the stock rise above $1 per share.
Other financial highlights from Youbet.com's quarterly report included a 40% decrease in operating expenses to $7.2 million for the final quarter of 2000, and a 77% decrease in sales and marketing to $1.5 million, down from $7.2 million for the fourth quarter of 1999. Youbet.com cut its marketing costs by using more focused and targeted programs.
Revenue for the quarter remained a steady $1.4 million compared to the same period a year ago. The company said revenue was flat because New Jersey residents were blocked from wagering and due to the company reducing its marketing efforts.
For the year, Youbet.com retired all of its $45.5 million in debt for $26.4 million. The repurchase of its notes resulted in a net gain of $15 million. When the extraordinary net gain is considered, Youbet.com's net loss for the year drops to 9 cents per share. The service handle for the year increased 58% to $97 million compared with a 1999 handle of $61.3 million.