AdForce Announces 10th Consecutive Quarter of Record Revenues; Revenues Up 378% Over Same Quarter Last Year.CUPERTINO Cu·per·ti·no A city of western California west of San Jose. It has an electronics industry. Population: 50,000. , Calif.--(BUSINESS WIRE)--Oct. 13, 1999-- AdForce, Inc. (Nasdaq:ADFC ADFC Allgemeiner Deutscher Fahrrad Club ADFC Australian Defence Force Cadets ADFC Altimetry Data Fusion Center ADFC Alcohol and Drug Free Community ADFC Advanced Digital Fire Control ), a leading provider of centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. 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 ad management and delivery services, today announced financial results for the third quarter ended September September: see month. 30, 1999. AdForce announced record revenues of $5.1 million for the third quarter of 1999. This represents an increase of 378% over the same quarter last year, and a 22% increase over the second quarter of this year. The net loss from the third quarter was $0.34 per share, and compares to a net loss of $1.30 per share for the same quarter last year, and a net loss of $0.40 per share for the second quarter of 1999. "We're we're Contraction of we are. we're we are excited to be a driving force behind the explosive growth of the Internet," said AdForce 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. , Chuck Berger. "Our continued growth is a testament to the quality and reliability of our services." During the third quarter, AdForce continued to expand its presence in the market place by adding over 45 domestic and international customers, including Uproar, Medscape, 24/7 Media Asia, Carat Freeman/AOL outbound out·bound adj. Outward bound; headed away: outbound trains. Adj. 1. outbound - that is going out or leaving; "the departing train"; "an outward journey"; "outward-bound ships" , Virtual Billboard Network, emaildirect, Inc., Artist Direct, Football.com, iXL, Kids Net Connect, Brand Dialogue and Vickers Benson Direct and Interactive. During the quarter, AdForce introduced AdForce Desktop(TM) 3.0, a powerful advertising management system designed to help web site publishers maximize ad revenue and minimize overhead costs overhead costs see fixed costs. . AdForce Desktop 3.0 provides an end-to-end solution (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. for planning and scheduling advertising campaigns, targeting, managing inventory, delivering ads, measuring campaign effectiveness and reporting. In September, AdForce launched AdForce Asia in partnership with SINA.com and Compuserve Consultants Ltd. to support Asia's burgeoning 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. market. Headquartered in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , AdForce Asia will utilize AdForce's centralized ad serving technology infrastructure through ad serving centers in Hong Kong and Beijing to serve targeted, online ads to web users across Hong Kong, the Peoples' Republic of China, Taiwan and Singapore. Most recently, AdForce introduced TrackForce(TM), a comprehensive service that enables advertisers to monitor on-line activity well beyond initial click throughs, all the way to a final purchase of the advertisers' goods or services. With the ability to track up to 10 post-click activities over 90 days, TrackForce provides advertisers return-on-investment information needed to make better informed ad campaign decisions. On September 20, 1999, AdForce entered into a definitive agreement to be acquired by CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) , Inc. (Nasdaq:CMGI) of Andover, Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. .
"We believe that combining with CMGI will allow us to more
effectively develop our position within this rapidly growing
industry," said Berger. "The synergies and combined
capabilities of AdForce and other CMGI companies will be an immensely
positive proposition for our customers." The transaction with CMGI
is subject to customary terms and conditions, including regulatory
approvals and approval by AdForce's shareholders.Following the end of the quarter, America Online See AOL. Inc., having completed the acquisition of Netscape Communications in March 1999, informed AdForce that it will transition Netscape's domestic and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Netcenter ad serving to America Online's internal system following the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the current contract between AdForce and Netscape on November 22, 1999. Netscape accounted for approximately 20% of AdForce's revenues during the third quarter ended September 30, 1999. "Although we are disappointed at this decision, we will continue to work closely with America Online and Netscape to demonstrate AdForce's capabilities. Additionally, we expect to continue to provide Netscape services in Asia and to support both AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. and Netscape by delivering their outbound campaigns," said Berger. "Further, despite this pending transition, we continue to add new accounts, while many of our existing customers continue to experience significant growth. Accordingly, we expect to show continued revenue growth in the fourth quarter." David Andonian, President of Corporate Development for CMGI stated, "CMGI remains confident in the fundamental strength of AdForce's business and technology and looks forward to closing the pending acquisition of AdForce." About AdForce (www.adforce.com) AdForce is "The Force in .com Marketing"(TM) and a leading provider of centralized advertising services, enabling online publishers, rep firms and advertisers to leverage the unique advantages of the Internet as the first fully interactive medium. Deploying advanced scalable technology and backed by robust data centers, the AdForce service delivers billions of impressions monthly for some of the Internet's most prominent advertisers. AdForce provides a comprehensive suite of products, which allow advertisers, and publishers to target, deliver, measure and analyze Internet advertising programs for the best results. The company has offices in Cupertino, CA, Costa Mesa Costa Mesa (kŏs`tə mā`sə), city (1990 pop. 96,357), Orange co., S Calif., on the Pacific south of Santa Ana; inc. 1953. It is a transportation, residential, and light industrial center. , CA, and 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 , NY. This press release contains certain 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. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Act of 1934, as amended. These statements are subject to the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " created by those sections. AdForce's actual results for future periods could differ materially from those predicted in these forward-looking statements. Factors that could cause actual events or results to differ include, but are not limited to AdForce's ability to maintain the performance and reliability of its systems, its need to continue scaling its systems successfully and to add new features and functionality to meet market demands, competitive pressures affecting AdForce and/or its customers, continued consolidation in the industry affecting AdForce's customers or competitors, the reaction of existing and potential customers to the announced merger agreement between AdForce and CMGI, and other risks described in AdForce's Registration Statement on Form S-1, as amended, and Form 10-Q Form 10-Q See 10-Q. for the period ended June 30, 1999 filed with the Securities and Exchange Commission. AdForce undertakes no obligation to update forward-looking statements to reflect events or 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 occurring after the date of such statements. -0-
AdForce, Inc.
Condensed Statements of Operations
(dollars in thousands, except per share amount)
Three Months ended Nine months ended
September 30, September 30,
------------------ ------------------
1999 1998 1999 1998
-------- -------- -------- --------
(unaudited) (unaudited)
Net Revenue $ 5,085 $ 1,064 $ 12,487 $ 2,262
Cost of revenue:
Data center operations 3,197 1,044 7,972 2,988
Amortization of intangible
assets and deferred
stock compensation 434 301 1,103 787
-------- -------- -------- --------
Total cost of revenue 3,631 1,345 9,075 3,775
-------- -------- -------- --------
Gross profit (loss) 1,454 (281) 3,412 (1,513)
Operating expenses:
Research and development 2,405 1,241 6,888 3,031
Marketing and selling 3,231 1,389 6,977 3,223
General and administrative 1,311 509 2,604 1,352
Restructuring expense 263 -- 263 --
Amortization of intangible
assets and deferred
stock compensation 1,428 584 4,354 1,378
-------- -------- -------- --------
Total operating expenses 8,638 3,723 21,086 8,984
-------- -------- -------- --------
Loss from operations (7,184) (4,004) (17,674) (10,497)
Interest income (expense) 724 37 983 (143)
-------- -------- -------- --------
Net loss $ (6,460) $ (3,967) $(16,691) $(10,640)
======== ======== ======== ========
Basic and diluted net loss per
share $ (0.34) $ (1.30) $ (1.38) $ (4.18)
======== ======== ======== ========
Weighted average shares of
common stock outstanding
used in computing basic and
diluted net loss per share 19,238 3,046 12,080 2,544
======== ======== ======== ========
AdForce, Inc.
Condensed Balance Sheets
(dollars in thousands)
Sept. 30, Dec. 31,
1999 1998
--------- ---------
unaudited
Current assets:
Cash, cash equivalents, and short-term
investments $70,581 $10,045
Accounts receivable, net 1,770 1,160
Prepaid expenses and other current assets 1,429 575
------- -------
Total current assets 73,780 11,780
Property and equipment, net 8,843 4,208
Intangibles, net and other non-current assets 4,183 4,947
------- -------
Total assets $86,806 $20,935
======= =======
Current liabilities:
Accounts payable $ 2,684 $ 1,078
Other accrued liabilities 2,787 1,257
Deferred revenue 782 10
Current portion of captial lease obligations 2,800 1,460
------- -------
Total current liabilities 9,053 3,805
Long-term portion of capital lease obligations 5,238 3,089
Stockholders' equity:
Total stockholders' equity 72,515 14,041
------- -------
Total liabilities and stockholders' equity $86,806 $20,935
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