[December 16, 2004] Todito Announces 3Q04 Sales of US$4.5 Million Tweet MEXICO CITY, Dec. 16 /PRNewswire/ -- Todito, a leading Internet and Telecommunications company for North American Spanish-speakers, announced today its financial results for 3Q04. "Sales were not as strong as we would have liked to see this quarter, however we continue to take market share from our competitors and to grow our pre-paid business in new directions," commented Guillermo Salinas Pliego, Todito's Chairman. "Our pre-paid card sales in the U.S. show very promising results in both our dial-up and long distance units and we expect to grow distribution of Todito Card in the U.S. Hispanic market by at least 300 % by 2005." 3Q04 Financial Results 3Q04 % 3Q03 (thousands) Change (thousands) Pesos* US$** Pesos US$ Sales Cash Sales 45,916 4,024 + 3% 44,788 3,925 Total Sales*** 51,730 4,534 + 10% 47,184 4,135 Operating Costs + Expenses Cash Operating Costs + Expenses 35,601 3,120 + 17% 30,318 2,657 Total Operating Costs + Expenses 41,415 3,630 + 27% 32,715 2,867 EBITDA 10,315 904 (29%) 14,469 1,268 Todito's Annual Financial Results are audited by PricewaterhouseCoopers, S.C. * Constant Pesos as of September 30, 2004. ** Conversion based on the exchange rate in effect as of September 30, 2004 of 11.41 pesos per US$1. *** Total Sales is advertising sales, plus sales of Todito's pre-paid services card (Todito Card), as well as revenue from the sale of other content and services. Todito's Total Sales for 3Q04 increased 10% to Ps. 51.7 million (US$ 4.5 million) from Ps. 47.1 million (US$ 4.1 million) in 3Q03. Cash Sales increased 3% to Ps. 45.9 million (US$ 4.0 million), representing 89% of Total Sales in 3Q04. Total Operating Costs and Expenses were Ps. 41.4 million (US$ 3.6 million), of which 86% -- Ps. 35.6 million (US$ 3.1 million) -- were cash. Cash Operating Costs and Expenses increased 27% due to a rise in ISP and Long Distance sales costs and an increase in marketing expenses. As a result, Todito's EBITDA for 3Q04 decreased 29% to Ps. 10.3 million (US$ 0.9 million), compared to Ps.14.4 million (US$ 1.2 million) in 3Q03. "Marketing and promotion expenses were up 180% in the 3Q04, including US$250,000 for the production of a higher quality television advertising campaign for our dial-up and long-distance businesses," stated Alejandro Garcia, Todito's Chief Financial Officer. "To grow our user base, we also distributed more than 130,000 promotional cards with 300 minutes of free Internet connection during 3Q04. This had the effect of increasing both Todito Card's cost of sales and its operating expenses, but without a proportional increase in our sales. As a result, EBITDA decreased by 29% versus the same quarter in 2003. Nonetheless we believe that these promotional and marketing efforts will result in higher sales and cash flow in Todito Card´s ISP and Long Distance businesses in 2005." 300,000 Todito Card Activations in 3Q04 "We did not see as strong demand as we expected for ISP services in 3Q04, but we are confident that 2005 is going to be a great year for Todito Card in all its formats -- Dial-up, Long Distance and Online Payment for Content and Services," said Eugenio Laris, Todito's Director of Pre-paid Services Sales. "We have positioned Todito Card as the leading multi-services pre-paid card for North American Spanish speakers. We have a broad distribution, a strong brand and excellent marketing that together form a high barrier to entry for any competitors." ToditoCard's sales increased 6% to Ps. 19.0 million (US$ 1.7 million) in 3Q04, from Ps. 17.9 million (US$ 1.6 million) in the same period of 2003. Active users of Todito Card's dial-up internet connection service (users with balance, who have been active in the last 60 days), grew 61% to 450,000 in 3Q04 from 280,000 in 3Q03. ToditoCard´s points of sale in Mexico and the U.S. surpassed 30,000 in 3Q04, compared to 15,000 in 3Q03. Online Advertising Sales Up 10% vs. 3Q03 Todito Portal advertising sales increased 11% to Ps. 32.3 million (US$ 2.8 million) in 3Q04, from Ps. 29.0 million (US$ 2.5 million) in 3Q03. "We continue to grow our online audience and to monetize it effectively," commented Adrian Gonzalez, Todito's Chief Operating Officer. "In 2005 we expect to see explosive growth in Todito Portal premium content and services unit, including a revamped online dating and job searching service, and Todito TV." Nine Months Accumulated Results Todito's Total Sales for the first nine months of the year increased 24% to Ps. 167.7 million (US$ 14.7 million) from Ps. 135 million (US$ 11.8 million) for the same period one year ago. Total Operating Costs and Expenses were Ps. 123.4 million (US$ 10.8 million), a 40% increase compared to Ps. 88.2 million (US$ 7.7 million) for the same period of 2003, primarily due to an increase in ISP and Long Distance sales costs, as well as a 48% increase in marketing expenses. As a result, for the first nine months of the year, EBITDA was Ps. 44.2 million (US$ 3.8 million), 5% less than the EBITDA generated in the first nine months of 2004. Nine Month Ended September 30 2004 (thousands) % 2003(thousands) Pesos* US$** Change Pesos US$ Sales Cash Sales 154,094 13,505 + 18% 130,081 11,401 Total Sales*** 167,727 14,700 + 24% 135,016 11,833 Operating Costs + Expenses Cash Operating Costs + Expenses 109,849 9,627 + 32% 83,271 7,298 Total Operating Costs + Expenses 123,482 10,822 + 40% 88,207 7,731 EBITDA 44,245 3,878 (5%) 46,810 4,103 Todito's Annual Financial Results are audited by PricewaterhouseCoopers, S.C. * Constant Pesos as of September 30, 2004. ** Conversion based on the exchange rate in effect as of September 30, 2004 of 11.41 pesos per US$1. *** Total Sales is advertising sales, plus sales of Todito's pre-paid services card (Todito Card), as well as revenue from the sale of other content and services. "The internet boom is on the horizon in Mexico and in the U.S. Hispanic market and when it arrives, Todito Card will be the way that most of the 135 million North American Spanish speakers get on line," commented Tim Parsa, Todito's CEO. "Todito has diversified its revenue sources from principally Todito Portal's online advertising sales in 2000 to Todito´s present mix of high-volume, high-margin internet and telecommunication businesses today. Todito´s challenge now is to continue its U.S. expansion and consolidate its position of leadership in Mexico." Company Profile Grupo Todito, S.A. de C.V. is a leading Internet and Telecommunications company for North American Spanish-speakers. It has two principal operating units, Todito Portal -an Internet portal which offers online advertising and premium content and services- and Todito ISP -multiservices prepaid card for dial-up ISP, long distance telephone service and other content and services. Grupo Todito is jointly owned by Universidad CNCI, S.A. de C.V. (BMV: CNCIB) and TV Azteca, S.A. de C.V. . With exception of historical information, the concepts discussed in this official notice are concepts on the future that involve risks and uncertainties that can cause results to differ substantially from the projected ones. The statements are based on the present expectations of the administration and are subject to uncertainties and variations in the circumstances. Visit Us: http://www.todito.com/ http://www.toditocard.com/ http://www.toditocardusa.com/ http://www.toditomax.com/ http://www.toditoshop.com/ http://www.toditotv.com/ Grupo Todito, S.A. de C.V. CONTACT: INVESTORS - Alejandro Garcia, Finance Director of Grupo Todito,S.A. de C.V., +5281-8221-2031, fax, +5281-8221-2091, [email protected];Media - Tristan Canales, Corporate Communications Director of TV Azteca, S.A.de C.V., +5255-3099-1441, fax, +5255-3099-1464, [email protected] Web site: http://www.todito.com/ [ Back To TMCnet.com's Homepage ]