24/7 Real Media Achieves Positive EBITDA in Third Quarter; Revenue Jumps 24% from Same Quarter a Year Ago, 78% Bottom Line Improvement on GAAP basis.Business Editors/High-Tech Writers NEW YORK--(BUSINESS WIRE)--Nov. 13, 2003 Third Quarter 2003 Highlights: -- Positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $145,000; -- Revenue rose 24% from the same quarter a year ago; -- Gross margin widened to 52%; -- Gross profit climbed 39%; and -- Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. declined 30% from year ago period. 24/7 Real Media, Inc. (Nasdaq: TFSM), the only gateway to the total spectrum of interactive marketing and technology solutions for online marketers and publishers, today announced that it achieved positive EBITDA for the third quarter, ended September September: see month. 30, 2003, and reported impressive revenue growth and significantly reduced operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. compared to the third quarter last year. 24/7 Real Media recorded $145,000 in EBITDA on revenue of $12.0 million. Revenue jumped 24% from the $9.7 million reported in the third quarter a year ago. Gross profit for the quarter climbed 39% to $6.3 million from $4.5 million in the same quarter of 2002, as gross margins widened to 52.4% from 46.7%. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the Company reported that the operating loss decreased 78% to $1.4 million during the third quarter from $6.5 million during the same quarter a year ago. The Company entered the fourth quarter with $23.8 million in cash. "Achieving positive EBITDA is one of the most significant developments in the Company's five-year history," said David J David J. Haskins (b. April 24, 1957, in Northampton, England) is a British alternative rock musician. He was the bassist for the seminal gothic rock band Bauhaus. Life and work . Moore Moore, city (1990 pop. 40,761), Cleveland co., central Okla., a suburb of Oklahoma City; inc. 1887. Its manufactures include lightning- and surge-protection equipment, packaging for foods, and auto parts. , chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , "Our relentless efforts to cut costs and refocus Verb 1. refocus - focus once again; The physicist refocused the light beam" focus - cause to converge on or toward a central point; "Focus the light on this image" 2. our business have resulted in vastly lower operating expenses and higher revenue, thereby accentuating the Company's significant operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. ." GAAP operating expenses declined 30% from the year-earlier period, despite the higher revenue. SG&A expenses fell 12% to $5.9 million, or 49% of revenue, from $6.7 million, or 69% of revenue in the third quarter of 2002. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss decreased 85% to $0.5 million, or $0.01 per share, in the third quarter, from $3.0 million, or $0.06 per share, in the third quarter of 2002, in line with management's previous guidance. As further described in the accompanying condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated income statement consolidated income statement An income statement that combines the income statements of two or more organizations. As with other consolidated statements, a consolidated income statement eliminates any funds owed to or due from firms within the same group. , and the note thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , pro forma net loss excludes amortization of intangibles, stock-based compensation, loss on sale of non-core assets, and other expenses from net loss determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. EBITDA excludes amortization of intangibles, stock-based compensation, loss on sale of non-core assets, depreciation, interest, taxes and other expenses from net loss determined in accordance with GAAP. The Company believes that financial measures that may be considered non-GAAP, including pro forma net loss and EBITDA, are helpful when presented in conjunction with the comparable GAAP measure of net loss. Nine Months Ended September 30, 2003 For the nine months ended September 30, 2003, revenue rose 16% to $36.0 million from $31.0 million in the first nine months of 2002. Gross profit climbed 25% to $17.5 million for the period from $14.0 million in the first nine months of 2002, as gross margin widened to 48.5% from 45.2% in the prior year period. The pro forma net loss fell to $2.9 million, or $0.04 per share, during this period from a loss of $9.8 million, or $0.19 per share, in the same period a year ago. GAAP net loss declined 57% from the prior year. The Company had an EBITDA loss for the first nine months of 2003 of $0.9 million, a 87% improvement from the EBITDA loss of $6.8 million in the first nine months of 2002. Segment Overview Integrated Media Solutions revenue, which includes revenue from the 24/7 Web Alliance, 24/7 Search (formerly 24/7 Website Results), and other services, rose 25% in the third quarter to $8.0 million from $6.4 million in the same period in 2002, and rose 31% excluding divested businesses. Gross margin in this segment widened to 40.1% in the third quarter from 32.1% in the same quarter of 2002. Within this segment, 24/7 Web Alliance revenue advanced 21% in the quarter to $5.3 million from $4.4 million in the third quarter of last year, and rose 30% excluding divested businesses. The number of paid impressions grew to 5.9 billion in the third quarter from 3.0 billion in the same period of 2002. The Company continues to establish new relationships with blue chip advertisers, particularly in the technology, pharmaceutical and automotive industries Automotive Industries, Ltd. (Hebrew: תעשיות רכב נצרת עלית, תע"ר . Revenue from 24/7 Search, the Company's paid inclusion service, was $2.2 million in the third quarter of 2003, an increase of 10% from the $2.0 million in the third quarter of 2002. Technology Solutions revenue advanced 22% to $4.1 million from $3.3 million in the same quarter last year, primarily driven by growth in revenue from the Company's Open AdStream(R) Central advertising delivery and management service and a trend towards larger contracts. Technology Solutions gross margins widened to 76.5% in the third quarter of 2003 from 74.6% in the same quarter of 2002. The Company's advance in Technology Solutions revenue reflects additional new client wins from competing ad serving solutions. During the third quarter, the Company added a number of new Open AdSystem(TM) customers, including Cygnus Interactive, Express-Expansion, W3 Data's WhitePages.com, Builders Homesite, HealthForum, Space.com Space.com is a space and astronomy news website. Its stories are often syndicated to other media outlets, including CNN, MSNBC, Yahoo!, and USA Today. Space.com was founded by CNN anchor Lou Dobbs and Rich Zahradnik, in July 1999. and Transcontinental. The Company's Insight XE(TM) Web analytics solution, formerly Open Insight, signed FOXNews, YellowPages.com Yellowpages.com is an Internet Web site operated by YELLOWPAGES.COM LLC, a wholly owned subsidiary of AT&T.[1]. History Yellowpages.com began on April 6,1996 when C. and UAL UAL United Airlines (ICAO code) UAL Unified Accelerator Library (Brookhaven National Laboratory) UAL User Account Lockdown UAL User Access Layer UAL Universal Auxiliary Language UAL User Agent Layer Loyalty Services as well as its first European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. clients. Business Outlook In the sector's traditionally seasonally robust fourth quarter, the Company anticipates revenue in the range of $13 million to $15 million, representing an increase of approximately 13% to 30% from the fourth quarter of 2002. The Company anticipates positive EBITDA and a pro forma loss per share of between one cent and zero, compared to a pro forma loss per share of $0.02 in the fourth quarter of 2002. For 2004, the Company forecasts a revenue increase of 20%-to-25% from full year 2003 and a full year operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. . "This quarter marks the fourth consecutive quarter of solid execution and performance," said David Moore David Moore is a common English name and may refer to:
Mr. Moore added, "In 2004 and beyond, we intend to further leverage our operations and financial resources to build a profitable business. We are taking a close look at investments and acquisition opportunities in the highest growth segments of our industry and in the fastest growing geographic regions, including Asia." In conjunction with this release, a conference call will be held to discuss these results at 5:00 pm EST EST electroshock therapy. EST abbr. electroshock therapy today. The call will be broadcasted live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.247realmedia A streaming media technology for the Internet from RealNetworks. Using the Real Time Streaming Protocol (RTSP), it is designed to handle any type of media, including audio, video, MIDI, text, animation and presentations. .com. Please allow extra time prior to the call to visit the site and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. the streaming media See streaming audio, streaming video and digital media hub. software required to listen to the Internet broadcast. The online archive of the broadcast will be available within two hours of the live call. Caution Regarding Pro Forma Information: Investors are cautioned that the pro forma loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the information contained in this news announcement is not a financial measure under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address. We present this pro forma financial information because we believe that it is helpful to some investors as one measure of our operations. We caution investors that pro forma financial information, by its very nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies. About 24/7 Real Media: 24/7 Real Media is the only gateway to the total spectrum of interactive marketing and technology. With expertise in all facets of interactive media, 24/7 Real Media is the starting point Noun 1. starting point - earliest limiting point terminus a quo commencement, get-go, offset, outset, showtime, starting time, beginning, start, kickoff, first - the time at which something is supposed to begin; "they got an early start"; "she knew from the for both publishers and marketers, enabling both to maximize customer relationships and revenue. Products and services include Internet ad serving, Web analytics, search engine optimization Designing a Web site so that search engines easily find the pages and index them. The goal is to have your page be in the top 10 results of a search. Optimization includes the choice of words used in the text paragraphs and the placement of those words on the page, both visible and hidden , online media representation and integrated marketing solutions designed to specifically address client goals and objectives. The company is headquartered in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , with offices in other major U.S. cities, Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Canada. For more information, please visit
www.247realmedia.com. Open AdStream(R) is a registered trademark of 24/7
Real Media, Inc.
Caution concerning forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This news release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on management's current expectations and are naturally subject to uncertainty and changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Actual results may vary materially from the expectations contained herein due to changes in economic, business, competitive and/or regulatory factors. More detailed information about those factors is set forth in our filings with the Securities and Exchange Commission. In addition, the following factors, among others, could cause actual results to differ materially from those described herein: enhanced competition, the potential for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of relationships with employees or major customers, loss of faith in Internet advertising Delivering ads to Internet users via Web sites, e-mail, ad-supported software and Internet-enabled cellphones. Also called an "ad network," Internet advertising organizations act as a middleman between the advertiser and the Web sites and software publishers that display the ads. , international risks, and other economic, business, competitive and/or regulatory factors affecting the businesses of 24/7 Real Media. The guidance provided in this press release is based on limited information available to the Company at this time, and is subject to change. In addition, certain guidance regarding future results is on a modified EBITDA basis consistent with the modified EBITDA results included in this release. All information in this release is as of November 13, 2003. The Company is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
24/7 REAL MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three months ended Nine months ended
------------------ ------------------
September 30, September 30,
2003 2002 2003 2002
-------- --------- -------- ---------
(unaudited) (unaudited)
Revenues:
Integrated media solutions $7,953 $6,379 $24,657 $21,224
Technology solutions 4,081 3,340 11,351 9,825
-------- --------- -------- ---------
Total revenues 12,034 9,719 36,008 31,049
-------- --------- -------- ---------
Cost of revenues:
Integrated media solutions 4,762 4,334 15,357 14,435
Technology solutions 957 847 3,183 2,586
-------- --------- -------- ---------
Total cost of revenues 5,719 5,181 18,540 17,021
-------- --------- -------- ---------
Gross profit 6,315 4,538 17,468 14,028
-------- --------- -------- ---------
Operating expenses:
Sales and marketing 3,116 3,178 9,487 9,456
General and administrative 2,787 3,509 8,485 10,954
Product development 870 807 2,213 3,251
Other expenses:
Amortization of intangible
assets 661 466 1,970 1,475
Stock-based compensation 295 2,190 489 2,609
Loss on sale of non-core
assets, net - 856 - 550
-------- --------- -------- ---------
Total operating expenses 7,729 11,006 22,644 28,295
-------- --------- -------- ---------
Operating loss (1,414) (6,468) (5,176) (14,267)
Interest income (expense), net 6 (85) (141) (193)
Other expense, net (17) - (849) -
-------- --------- -------- ---------
Loss before income taxes (1,425) (6,553) (6,166) (14,460)
Provision for income taxes 12 - 52 -
-------- --------- -------- ---------
Net loss (1,437) (6,553) (6,218) (14,460)
Dividends on preferred stock (200) (50) (488) (50)
Preferred stock conversion
discount - (6,628) (1,780) (6,628)
-------- --------- -------- ---------
Net loss attributable to common
stockholders $(1,637) $(13,231) $(8,486) $(21,138)
======== ========= ======== =========
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three months ended Nine months ended
----------------------- -----------------------
September 30, September 30,
2003 2002 2003 2002
----------- ----------- ----------- -----------
(unaudited) (unaudited)
Loss per common share -
basic and diluted
Net loss $(0.02) $(0.12) $(0.08) $(0.28)
Preferred stock
dividends and
conversion discount (0.00) (0.13) (0.03) (0.13)
----------- ----------- ----------- -----------
Net loss attributable
to common stockholders $(0.02) $(0.25) $(0.11) $(0.41)
=========== =========== =========== ===========
Pro forma:
Net loss (a) (464) (3,041) (2,910) (9,826)
Net loss per share (a) $(0.01) $(0.06) $(0.04) $(0.19)
Weighted average common
shares outstanding 85,086,656 52,540,206 74,055,588 51,051,525
=========== =========== =========== ===========
(a) Pro forma net loss excludes certain other expenses computed
as follows:
Net loss $(1,437) $(6,553) $(6,218) $(14,460)
Excluding:
Amortization of
intangibles 661 466 1,970 1,475
Stock-based
compensation 295 2,190 489 2,609
Loss on sale of
non-core
assets, net - 856 - 550
Other expense 17 - 849 -
----------- ----------- ----------- -----------
Pro forma net loss $(464) $(3,041) $(2,910) $(9,826)
=========== =========== =========== ===========
24/7 REAL MEDIA, INC.
RECONCILIATION OF NET LOSS TO EBITDA
(in thousands)
Net loss $(1,437) $(6,553) $(6,218) $(14,460)
Excluding:
Amortization of
intangibles 661 466 1,970 1,475
Stock-based
compensation 295 2,190 489 2,609
Loss on sale of
non-core assets,
net - 856 - 550
Depreciation 603 837 1,840 2,881
Interest, taxes
and other expenses 23 85 1,042 193
----------- ----------- ----------- -----------
EBITDA $145 $(2,119) $(877) $(6,752)
=========== =========== =========== ===========
24/7 REAL MEDIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in thousands)
September 30, December 31,
2003 2002
--------------- ----------------
Cash $11,779 $7,674
Restricted cash 12,000 -
Accounts receivable 10,150 9,799
Total current assets 35,142 19,758
Total assets 49,555 33,967
Accounts payable and accrued
liabilities 14,134 16,054
Deferred revenue 2,750 2,748
Total current liabilities 16,939 18,849
Loan payable 13,167 7,876
Total liabilities 30,461 27,083
Total stockholders' equity 19,094 6,884
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