AGENCY.COM Reports Record Revenues and Operating Margins in Third Quarter.Business Editors NEW YORK--(BUSINESS WIRE)--Oct. 25, 2000 Revenues Increase 90% From Year Ago Period Positive Cash EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.07, Up 40% Over Second Quarter 2000 3Q00 Highlights: -- Revenue of $57.3 million, up 14% over second quarter 2000 -- Gross Margins expand to 52.4%, up 150 basis points over second quarter 2000 -- 98% of revenue from non-dot-com clients AGENCY.COM Agency.com is an interactive marketing agency based in New York City with offices worldwide. The company is a part of Omnicom Group Inc.[1][2] and has approximately 500 employees in eleven offices on three continents. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ACOM (language) ACOM - An early system on the IBM 705. [Listed in CACM 2(5):16 (May 1959)]. ), a leading e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. builder in global markets, today reported record operating results for the third quarter ended September September: see month. 30, 2000. Third quarter 2000 revenues were $57.3 million, a 90% increase on a 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 basis over the same period a year ago. Revenues grew 14% on a sequential basis. Gross margin was 52.4%, compared to 50.9% in the previous quarter and 44.6% in the same quarter a year ago. Cash net income (before amortization of intangibles and non-cash compensation) for the third quarter increased 48% to $3.1 million, or $0.07 per share, versus $2.1 million or $0.05 per share in the second quarter of 2000, on a fully taxed basis. In the same period a year ago, AGENCY.COM had a pro forma cash net loss of $3.5 million, or $0.13 per share. Cash operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (before amortization of intangibles and non-cash compensation) for the third quarter was $4.7 million, representing a cash operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 8.2%. This compares to a pro forma cash operating loss 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. of $2.0 million for the year ago quarter. The company reported 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 (earnings before interest, taxes, depreciation, amortization of intangibles and non-cash compensation) of $6.6 million for the third quarter of 2000, an improvement of $7.4 million over the EBITDA loss of $0.8 million on a pro forma basis in the comparable quarter in 1999. The net loss for the third quarter on a reported basis was $39,000, or $0.00 per basic and fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a net loss of $7.0 million, or $0.25 per basic and fully diluted share on a pro forma basis for the third quarter of 1999. Chan Suh, 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. of AGENCY.COM said of the results, "We've we've Contraction of we have. we've have delivered another outstanding quarter, due to the solid growth platform that we have built here at AGENCY.COM. It begins with our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. relationships with blue chip clients. We have also put into place an experienced management team, with strong operational leaders in each of our 14 offices worldwide. We have invested in a 90 person global sales and customer service force to pursue continued growth in revenue and in quality of delivery across our network. We have developed and implemented a robust revenue and capacity planning Determining the required future configuration of hardware and software for a network, datacenter or Web site. There are numerous capacity planning tools on the market used to monitor and analyze the performance of the current hardware and software. framework to allow us to plan our work in the quarters ahead. And, we have accomplished all this while investing in a leadership position in wireless and interactive TV, to complement our web-based applications See Web application. , in addition to continuing our global expansion." "We are very pleased with the growth of our MDC (1) (Mobile Daughter Card) See riser card. (2) See Meta Data Coalition. (TM) (Multiple Digital Channels) operations in 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). ," continued Suh. "Our
wireless and iTV practices have worked with more than 125 clients,
including One2One, Viasat and Telenor Telenor (OSE: TEL, NASDAQ: TELN) is the incumbent telecommunications company in Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an international wireless carrier with operations in Scandinavia, Eastern Europe and Asia. , to conceive conceive /con·ceive/ (kon-sev´)1. to become pregnant. 2. take in, grasp, or form in the mind. con·ceive v. 1. To become pregnant. 2. and implement multiple digital channels strategies. In the third quarter, wireless and iTV contributed 18% of our total revenue, and we look for this number to grow." "This is our fourth quarter of improving operational results," said Charlie Dickson Dickson may refer to several placenames: Australia
A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , based upon the high quality of our revenue stream and our continued focus on timely invoicing in·voice n. 1. A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill. 2. The goods or services itemized in an invoice. tr.v. and collection." For the nine months ending September 30, 2000, the Company recorded revenue of $146.1 million, compared to pro forma revenue of $77.1 million for the first nine months of 1999. Cash operating income (before amortization of intangibles and non-cash compensation) for the first nine months of the year was $7.8 million, compared to a pro forma cash operating loss of $4.6 million for the same period last year. Cash net income for the first nine months of the year was $5.9 million or $0.12 per share, compared to a pro forma cash net loss of $7.7 million, or $0.28 per share for the same period last year. Significant Highlights: Improving Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. Highlight Quality of Revenue: -- Continued to retain world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. , blue-chip blue chip also blue-chip·per n. 1. A stock that sells at a high price because of public confidence in its long record of steady earnings. 2. An extremely valuable asset or property. 3. clients such as 3M, British Airways British Airways in full British Airways PLC International passenger airline based in London. In 1936 British Airways Ltd. was founded through the merger of three smaller airlines. , CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) , The Coca-Cola Coca-Cola soft drink found throughout the world. [Trademarks:Crowley Trade, 115] See : Ubiquity Company, Compaq, DirecTV, Intel and Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. -- Added new clients including Adidas, Cushman & Wakefield, Discovery Networks, GMAC GMAC General Motors Acceptance Corporation GMAC Graduate Management Admission Council GMAC Give Me A Call GMAC Genetic Manipulation Advisory Committee GMAC Genetic Modification Advisory Committee (Singapore) GMAC Give Me A Chance , GM OnStar, Incyte Genomics, Liberty Mutual, One2One, Visa International and several leading global clients in the healthcare and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. sectors -- Top ten clients generated average annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenue of $11.4 million per client -- Top twenty clients generated average annualized revenue of $7.7 million per client -- Average billable rate per hour increased 17%, to $175 from $149, in second quarter of 2000 Expanding Global Reach: -- 25% of revenue derived from non-U.S. clients -- 32% of consultants in Europe -- Partnered with local entrepreneurs to establish new ventures to access Korean and Latin American markets Pioneering MDC(TM) Strategy: -- Continued to develop MDC(TM) (Multiple Digital Channels) strategy, delivering work within the three digital demand curves, including: Web, Wireless and iTV -- Wireless and iTV practice areas are working with clients including: One2One, Viasat and Telenor to conceive and implement clients' multiple digital channels strategies -- Partnered with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) to expand web integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. initiative into European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Markets Developing our People: -- Recruiting efforts resulted in net hiring of 171 billable consultants, increasing total billable consultants worldwide to 1,250 -- Made several senior level management appointments including: Anthony Laudico as COO (Cell Of Origin) See mobile positioning. of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Anders Lassen Anders Frederik Emil Victor Schau Lassen VC, MC & Two Bars (22 September, 1920 - 9 April, 1945) was a Danish recipient of the Victoria Cross, the highest and most prestigious award for gallantry in the face of the enemy that can be awarded to British and Commonwealth forces. as Regional President in Copenhagen, John Joseph as North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. EVP EVP Executive Vice President EVP EGR (Exhaust Gas Recirculation) Valve Position Sensor EVP Electronic Voice Phenomenon EVP Europäische Volkspartei (Germany) EVP Employee Value Proposition for Client Service, and Peter Lichtgarn as Global EVP of Corporate Communications -- Ninety professionals dedicated to a global sales and customer service effort to ensure quality across our network and create a robust sales pipeline -- Every employee will be trained in wireless technology within the next six months About AGENCY.COM AGENCY.COM is a leading e-business builder in global markets. The company provides strategy, branding and technology services that help its clients build and grow their interactive business across multiple digital channels - the Web, wireless and interactive television. Founded in January 1995, AGENCY.COM 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 and has offices in Amsterdam, Atlanta, Boston, Chicago, Copenhagen, Dallas, London, Paris, Portland (OR), San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , Vail Vail (vāl), town (1990 pop. 3,569), Eagle co., W central Colo., on Gore Creek, in the Gore Range of the Rocky Mts.; founded as a ski resort 1962, inc. as a town 1966. (CO), Woodbridge (NJ) and affiliate offices in Miami (FL), Seoul, Korea and Singapore. AGENCY.COM serves a broad and diversified diversified (di·verˑ·s global client base in a variety of industries, including 3M, Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. , British Airways, Colgate-Palmolive, Compaq, Heineken and Reuters. For investor information, please visit our Web site at http://www.agency.com/investors or call AGENCY.COM's Investor Relations Investor relations The process by which the corporation communicates with its investors. line at 212/358-2702. To receive press releases going forward, please send contact information to investors@agency.com or call toll free 877-721-3006 for a fax copy. Matters discussed in this release include 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. that involve risks and uncertainties, and actual results may be materially different. Many factors could cause actual events or results to differ from anticipated events or results, including without limitation the risk factors and other items that are contained in AGENCY.COM's reports and documents filed from time to time with the Securities and Exchange Commission.
AGENCY.COM Ltd And Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
ACTUAL
Nine months ended September 30th
2000 1999
Revenues $ 146,054 $ 56,499
Direct salaries & costs 71,776 28,784
Gross margin 74,278 27,715
Operating expenses
General & administrative 51,824 21,636
Sales & marketing 9,477 2,591
Depreciation & amortization 5,211 3,149
Amortization of goodwill 12,834 4,687
Non cash compensation 1,956 72
Total operational expenses 81,302 32,135
Loss from operations (7,024) (4,420)
Interest (income)/expense (2,582) 2,125
Loss before provision for
income taxes (4,442) (6,545)
Provision for income taxes 1,115 238
Net loss $ (5,557) $ (6,783)
Per share information:
Net loss per common share
Basic $ (0.16) $ (0.29)
Diluted $ (0.16) $ (0.29)
Weighted average common shares
used in computing per share amounts
Basic 35,322 23,187
Diluted 35,322 23,187
Supplemental Cash income/(loss)
information : (a)
Loss before provision for
income taxes $ (4,442) $ (6,545)
Amortization of Goodwill 12,834 4,687
Non-Cash compensation 1,956 72
Cash income/(loss) before
provision for income taxes 10,348 (1,786)
Provision for income taxes 4,450 238
Cash income/(loss) $ 5,898 $ (2,024)
Cash earnings (loss)
per share $ 0.12 $ (0.09)
Fully diluted shares 47,699 23,187
EBITDA (b) $ 12,977 $ 3,488
(a) Cash income/(loss) is defined as net loss before non-cash
compensation and amortization of intangibles assuming a tax rate
of 43% on cash income before provision for income taxes. For 1999,
reported tax was used since it was a cash loss before provision
for income taxes.
(b) EBITDA is defined as earnings before interest, taxes,
depreciation, amortization of intangibles and non-cash
compensation.
AGENCY.COM Ltd And Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
PRO FORMA
Nine months ended September 30th
2000 1999 (a)
Revenues $ 146,054 $ 77,116
Direct salaries & costs 71,776 43,131
Gross margin 74,278 33,985
Operating expenses
General & administrative 51,824 31,112
Sales & marketing 9,477 4,128
Depreciation & amortization 5,211 3,371
Amortization of goodwill 12,834 12,198
Non cash compensation 1,956 72
Total operational expenses 81,302 50,881
Loss from operations (7,024) (16,896)
Interest (income)/expense (2,582) 3,355
Minority Interest (income)
expense -
(51)
Other - 10
Loss before provision (benefit)
from income taxes (4,442) (20,210)
Provision for (benefit from) income taxes 1,115 (201)
Net loss $ (5,557) $ (20,009)
Per share information:
Net loss per common share
Basic $ (0.16) $ (0.73)
Diluted $ (0.16) $ (0.73)
Weighted average common shares used
in computing per share amounts
Basic 35,322 27,488
Diluted 35,322 27,488
Supplemental Cash income/(loss)
information : (b)
Loss before provision for
income taxes $ (4,442) $ (20,210)
Amortization of Goodwill 12,834 12,198
Non-Cash compensation 1,956 72
Cash income/(loss) before
provision for income taxes 10,348 (7,940)
Provision for (benefit from)
income taxes 4,450 (201)
Cash income/(loss) $ 5,898 $ (7,739)
Cash earnings/(loss) per share $ 0.12 $ (0.28)
Fully diluted shares 47,699 27,488
EBITDA (c) $ 12,977 $ (1,214)
(a) Proforma results of operations gives effect to the acquisitions
made in 1999 and 2000 as if these transactions occurred on January
1, 1999.
(b) Cash income/(loss) is defined as net loss before non-cash
compensation and amortization of intangibles assuming a tax rate
of 43% on cash income before provision for income taxes. For 1999,
reported tax was used since it was a cash loss before provision
for income taxes.
(c) EBITDA is defined as earnings before interest, taxes,
depreciation, amortization of intangibles and non-cash
compensation.
AGENCY.COM Ltd And Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
ACTUAL
Three months ended September 30th
2000 1999
Revenues $ 57,322 $ 26,110
Direct salaries & costs 27,287 13,712
Gross margin 30,035 12,398
Operating expenses
General & administrative 19,444 10,982
Sales & marketing 3,952 1,336
Depreciation & amortization 1,939 1,165
Amortization of goodwill 4,374 2,352
Non cash compensation 411 72
Total operational expenses 30,120 15,907
Loss from operations (85) (3,509)
Interest (income)/expenses (810) 1,070
Income/(loss) before
provision for income taxes 725 (4,579)
Provision for income taxes 764 185
Net Loss $ (39) $ (4,764)
Per share information:
Net loss per common share
Basic $ 0.00 $ (0.18)
Diluted $ 0.00 $ (0.18)
Weighted average common
shares used in computing
per share amounts
Basic 35,659 26,310
Diluted 35,659 26,310
Supplemental Cash income/(loss)
information : (a)
Income/(loss) before provision
for income taxes $ 725 $ (4,579)
Amortization of Goodwill 4,374 2,352
Non-Cash compensation 411 72
Cash income/(loss) before
provision for income taxes 5,510 (2,155)
Provision for income taxes 2,369 185
Cash income/(loss) $ 3,141 $ (2,340)
Cash earnings/(loss) per share $ 0.07 (0.09)
Fully diluted shares
47,224 26,310
EBITDA (b) $ 6,639 $ 80
(a) Cash income/(loss) is defined as net loss before non-cash
compensation and amortization of intangibles assuming a tax rate
of 43% on cash income before provision for income taxes. For 1999,
reported tax was used since it was a cash loss before provision
for income taxes.
(b) EBITDA is defined as earnings before interest, taxes,
depreciation, amortization of intangibles and non-cash
compensation.
AGENCY.COM Ltd And Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
PRO FORMA
Three months ended September 30th
2000 1999 (a)
Revenues $ 57,322 $ 30,210
Direct salaries & costs 27,287 16,726
Gross margin 30,035 13,484
Operating expenses
General & administrative 19,444 12,752
Sales & marketing 3,952 1,556
Depreciation & amortization 1,939 1,174
Amortization of goodwill 4,374 3,432
Non cash compensation 411 72
Total operational expenses 30,120 18,986
Loss from operations (85) (5,502)
Interest (income)/expenses (810) 1,273
Income/(loss) before
provision for income taxes 725 (6,775)
Provision for income taxes 764 234
Net loss $ (39) $ (7,009)
Per share information:
Net income/(loss) per
common share
Basic $ 0.00 $ (0.25)
Diluted $ 0.00 $ (0.25)
Weighted average common
shares used in computing
per share amounts
Basic 35,659 27,713
Diluted 35,659 27,713
Supplemental Cash income/(loss)
information : (b)
Income/(loss) before provision
for income taxes $ 725 $ (6,775)
Amortization of Goodwill 4,374 3,432
Non-Cash compensation 411 72
Cash income/(loss) before
provision for income taxes 5,510 (3,271)
Provision for income taxes 2,369 234
Cash income/(loss) $ 3,141 $ (3,505)
Cash earnings/(loss) per share $ 0.07 $ (0.13)
Fully diluted shares 47,224 27,713
EBITDA (c) $ 6,639 $ (824)
(a) Proforma results of operations gives effect to the acquisitions
made in 1999 and 2000 as if these transactions occurred on January
1, 1999.
(b) Cash income/(loss) is defined as net income loss before non-cash
compensation and amortization of intangibles assuming a tax rate
of 43% on cash income before provision for income taxes. For 1999,
reported tax was used since it was a cash loss before provision
for income taxes.
(c) EBITDA is defined as earnings before interest, taxes,
depreciation, amortization of intangibles and non-cash
compensation.
AGENCY.COM LTD. AND SUBSIDIARIES
Consolidated Balance Sheet
($ Thousands)
09/30/2000 12/31/1999
Assets
Current Assets:
Cash and cash equivalents $70,301 $85,035
Accounts receivable,
net of allowance for
doubtful accounts 42,387 23,768
Unbilled charges 14,689 9,224
Prepaid expenses and
other current assets 2,884 1,953
Total current assets 130,261 119,980
Property and Equipment, net
of accumulated depreciation
and amortization 25,478 18,554
Intangibles, net of
accumulated amortization 90,907 85,244
Investments and other
assets 2,834 3,113
Total assets $249,480 $226,891
Liabilities And
Stockholders' Equity
Current Liabilities:
Accounts payable and
accrued expenses $20,176 $18,075
Deferred revenue & Advance
Billing 16,737 10,283
Other current liabilities 9,145 3,976
Total current
liabilities 46,058 32,334
Long term liabilities 6,230 3,864
Total liabilities 52,288 36,198
Total Stockholders' equity 197,192 190,693
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $249,480 $226,891
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