Adsouth Partners, Inc. Announces Third Quarter of 2005 Financial Results.BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla. -- Adsouth Partners, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ASPR ASPR Assistant Secretary for Preparedness and Response (US Department of Health and Human Services) ASPR Austrian Study Center for Peace and Conflict Resolution ASPR Armed Services Procurement Regulations (now DAR) ), announced today financial results for the third quarter and nine months ended September September: see month. 30, 2005. All share information and per share amounts are presented as if the Company's 1-for-15 reverse stock split, which became effective on March 25, 2005, was effective for all periods presented. The Company reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenue for the third quarter of 2005 of $6.5 million, compared to $2 million for the third quarter last year. Consolidated 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. for the third quarter of 2005 was $837,000, compared to $123,000 for same period in 2004. Net income was $816,000 for the third quarter of 2005, compared to $107,000 for the third quarter 2004. The net income attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common stockholders for the third quarter of 2005 was $816,000, or $0.11 basic earnings per common share and $0.04 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. earnings per common share, compared to net income available to common stockholders of $107,000, or $0.02 basic and diluted earnings per common share, for the same period in 2004. For the first nine months of 2005 consolidated revenue was $9.7 million, compared to $3.8 million for the first nine months of last year. Consolidated operating income for the first nine months of 2005 was $383,000, compared to an 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 $3.5 million for the same period in 2004. 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. during the first nine months of 2004 included $4.2 million of non-cash stock-based compensation expense which resulted from the issuance to the Company's officers and other key employees of common stock pursuant to stock grants, and stock options that were granted to consultants. Net loss for the first nine months of 2005 was $415,000, compared to a loss of $3.5 million for the first nine months of 2004. The net loss for the first nine months of 2005 includes $536,000 of loss on the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of the convertible notes that were issued in February February: see month. and May of 2005 and $209,000 of interest expense on the convertible notes that were extinguished ex·tin·guish tr.v. ex·tin·guished, ex·tin·guish·ing, ex·tin·guish·es 1. To put out (a fire, for example); quench. 2. To put an end to (hopes, for example); destroy. See Synonyms at abolish. 3. in June June: see month. 2005. The net loss attributable to common stockholders for the first nine months of 2005 was $1.8 million, or ($0.23) per share, basic and diluted, compared to $3.5 million, or ($0.65) per share, basic and diluted, for the first nine months of 2004. In connection with a private placement completed on June 17, 2005, the fair value of the securities issued (including the preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and warrants to purchase common stock) when compared to the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). resulted in a beneficial conversion feature that approximated $1.34 million. For purposes of calculating per share amounts attributable to common stockholders, such beneficial conversion feature is considered a deemed dividend and is deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from the net loss for purposes of calculating basic and diluted loss per share for the first nine months of 2005. John Cammarano, Adsouth's Chief Executive Officer, commented, "During the third quarter we continued to make progress in positioning Adsouth for the future and establishing the necessary financial discipline to mange mange (mānj), contagious skin disease of domestic and wild animals. The several types of mange, including follicular and sarcoptic mange, are caused by various minute parasitic mites that burrow into skin, hair follicles, or sweat glands. our business. We continue to be focused on growing the Company by adding new product lines and diversifying our advertising client base. Our recent relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. to a new facility now offers us new opportunities to create additional revenue streams." Mr. Cammarano added, "Our objective is to build scale and achieve a higher level of predictability in our business, which will improve our ability to execute the Company's growth strategy and reduce any risk or dependencies on any single product or client. We believe this strategy will help support Adsouth's transition to a profit oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. company and reduce the volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in our quarter to quarter financial performance." The following tables reconcile basic earnings per common share to dilutive earnings per common share.
Weighted Net
Average Income
Shares Per
Net Income Outstanding Share
---------- ----------- --------
Three Months Ended September 30, 2005
-------------------------------------
Basic earnings per common share $ 816,000 7,659,881 $ 0.11
Assumed conversion of Series B
Preferred Stock -- 11,039,016 $ (0.07)
Assumed conversion of options and
warrants -- 198,896 $ 0.00
--------- ---------- --------
Diluted earnings per share $ 816,000 18,897,793 $ 0.04
========= ========== ========
Three Months Ended September 30, 2004
-------------------------------------
Basic earnings per common share $ 107,000 5,869,881 $ 0.02
Assumed conversion of options and
warrants -- 220,688 $ 0.00
--------- ---------- --------
Diluted earnings per share $ 107,000 6,090,569 $ 0.02
========= ========== ========
Products Sector Adsouth sells a range of products, both through direct marketing operations and sales to retail stores. Some of the products are not related to the others and have different distribution channels. There is typically a period of several months from the time that Adsouth acquires the right to distribute a product until it generates revenue from that product. During this period, Adsouth is engaged in marketing activities and thus is incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. costs before it can generate any revenue from a product. Before Adsouth sells products to retail accounts, it may use its direct marketing capability to introduce the product to market. For the third quarter and first nine months of 2004, all product revenues were from sales of the DermaFresh line of products. During the third quarter of 2005 the product mix as a percentage of product revenue was 51% from the e70 product line, 26% from the Lip Solution product, 10% from the Hercules Hercules, in astronomy Hercules (hûr`kyəlēz'), in astronomy, northern constellation located between Lyra and Corona Borealis. It is traditionally depicted as the hero Hercules in a kneeling position. Hook product, 3% from the DermaFresh product line and 10% from other products. In the first nine months of 2005 the product mix as a percentage of product revenue was 48% from the Lip Solution product, 26% from the DermaFresh line, 19% from the e70 product line, 4% from the Hercules Hook product, and 3% from other products. The products sector reported revenue of $1.5 million for the third quarter of 2005, compared to $922,000 for the third quarter of last year. Operating income was $186,000 for the third quarter of 2005, compared to $72,000 for same period in 2004. Net income was $165,000 for the third quarter of 2005, compared to $56,000 for the third quarter of last year. For the first nine months of 2005 the product sector reported revenue of $3.9 million, compared to $928,000 for the first nine months of 2004. Operating income for the first nine months of 2005 was $236,000, compared to an operating loss of $755,000 for the same period last year. Net loss for the first nine months of 2005 was $317,000, compared to $739,000 for the first nine months of 2004. The product sectors net loss for the first nine months of 2005 includes $357,000 of loss from the early extinguishment of convertible notes that were issued in February and May 2005 and $143,000 of interest expense on the convertible notes that were extinguished in June 2005. Advertising Sector The advertising sector includes the placement of advertising in different media, the production of direct marketing commercials, and the planning and implementation of direct marketing programs for our clients. Both revenue and gross margins reflect services in addition to those of a typical advertising agency since the gross margin on advertising revenue is typically a percentage of the amount paid for the advertisement ADVERTISEMENT. A 'notice' published either in handbills or in a newspaper. 2. The law in many instances requires parties to advertise in order to give notice of acts which are to be done; in these cases, the advertisement is in general equivalent to notice. . The advertising sector reported revenue of $5.1 million for the third quarter of 2005, compared to $1 million for the third quarter of last year. Operating income was $651,000 for the third quarter of 2005, compared to $51,000 for the same period last year. Net income for the advertising sector was $651,000 for the third quarter of 2005, compared to $51,000 for the third quarter of last year. The advertising sectors revenue for the first nine months of 2005 was $5.8 million, compared to $2.9 million for the first nine months of last year. Operating income for the first nine months of 2005 was $147,000, compared to an operating loss of $2.8 million for the first nine months of last year, which included $3.5 million in expenses related to stock option grants. Net loss for the first nine months of 2005 was $98,000, compared to a net loss of $2.8 million for the same period in 2004. The net loss for the first nine months of 2005 includes $179,000 of loss from the early extinguishment of convertible notes that were issued in February and May 2005 and $66,000 of interest expense on the convertible notes that were extinguished in June 2005. Balance Sheet At September 30, 2005, available working capital was $2 million compared to a working capital deficiency A shortage or insufficiency. The amount by which federal Income Tax due exceeds the amount reported by the taxpayer on his or her return; also, the amount owed by a taxpayer who has not filed a return. of $916,000 at December December: see month. 31, 2004. Working capital at September 30, 2005 includes $845,000 of cash. Stockholders equity at September 30, 2005 was $2.6 million compared to a capital deficiency of $557,000 at December 31, 2004. During the first nine months of 2005, $900,000 of working capital was provided by operations and $2.6 million was provided by the net proceeds of private placements (net of offering costs and convertible note repayments) Guidance and Outlook On August 16, 2005 we issued a press release disclosing that we believed our 2005 revenues will be at least $12 million and that we were suspending any guidance with respect to earnings. Such guidance has not changed as of the date of this press release. Conference Call Reminder The conference call will take place at 11:00 a.m. Eastern, on Wednesday Wednesday: see week. , November November: see month. 16, 2005. Anyone interested in participating should call 800-683-1575 if calling within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or 973-935-2106 if calling internationally approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 5 to 10 minutes prior to 11:00 a.m. There will be a playback Playback could mean:
The call is being webcast by ViaVid Broadcasting and may be accessed at Adsouth's website at www.adsouthpartners.com. The webcast may also be accessed at ViaVid's website at www.viavid.net. The webcast may be accessed through February 28, 2006 on either site. To access the webcast, you will need to have the Windows Media Player Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. on your desktop. For the free 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. of the Media Player, please visit: www.microsoft.com/windows/windowsmedia/en/download/default.asp . About Adsouth Partners, Inc. Adsouth Partners is a vertically integrated direct response marketing company that generates revenues from the placement of advertising, the production of advertisements, creative advertising and public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . Since mid 2004, it has expanded its activities as it obtained the rights to products that it markets and sells to retail outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → . Adsouth Partners, through its product division DermaFresh, has previously announced shipments to several of the largest retailers in the country. A complete list is available on our website at http://www.adsouthinc.com and a preview To see ahead of time. Page layout and word processing programs often have a preview function that lets you see how all the pages will appear before they are printed. In the days of character-based interfaces, a preview was absolutely necessary to see how different fonts would look or how of the products offered is available at http://www.dermafresh.com. Information on our websites and any other websites do not constitute a part of this press release. Certain statements in this news release may contain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and 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 rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are 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. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Events that may arise could prevent the implementation of any strategically significant plan(s) outlined above. The Company cautions that these forward-looking statements are further qualified by other factors including, but not limited to, those set forth in the Company's Form 10-KSB filing, its registration statements and other filings with the United States Securities and Exchange Commission (available at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ). The Company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.
Selected financial information of our operating segments is presented
in the following tables.
Advertising Products Total
---------------------------------------------------------------------
Three Months Ended
September 30, 2005:
Revenues $ 5,063,000 $ 1,452,000 $ 6,515,000
Costs and expenses (excluding
non cash stock based
compensation expense) (4,363,000) (1,247,000) (5,610,000)
---------------------------------------------------------------------
700,000 205,000 905,000
Non cash stock based
compensation (49,000) (19,000) (68,000)
---------------------------------------------------------------------
Operating income 651,000 186,000 837,000
Interest expense and factor
discounts (1,000) (23,000) (24,000)
Interest income 1,000 2,000 3,000
---------------------------------------------------------------------
Net income $ 651,000 $ 165,000 $ 816,000
=====================================================================
Three Months Ended
September 30, 2004:
Revenues $ 1,028,000 $ 922,000 $ 1,950,000
Costs and expenses (excluding
non cash stock based
compensation) (802,000) (763,000) (1,565,000)
---------------------------------------------------------------------
226,000 159,000 385,000
Non cash stock based
compensation (175,000) (87,000) (262,000)
---------------------------------------------------------------------
Operating income 51,000 72,000 123,000
Interest expense -- (16,000) (16,000)
---------------------------------------------------------------------
Net income $ 51,000 $ 56,000 $ 107,000
=====================================================================
Advertising Products Total
---------------------------------------------------------------------
Nine Months Ended
September 30, 2005:
Revenues $ 5,755,000 $ 3,921,000 $ 9,676,000
Costs and expenses (excluding
non cash stock based
compensation expense and non-
recurring payments) (5,416,000) (3,556,000) (8,972,000)
---------------------------------------------------------------------
339,000 365,000 704,000
Payments to settle arbitration
and litigation matters (100,000) (25,000) (125,000)
Non cash stock based
compensation (92,000) (104,000) (196,000)
---------------------------------------------------------------------
Operating income (loss) 147,000 236,000 383,000
Interest expense and factor
discounts (67,000) (198,000) (265,000)
Interest income 1,000 2,000 3,000
Loss on early debt
extinguishment (179,000) (357,000) (536,000)
---------------------------------------------------------------------
Net loss $ (98,000) $ (317,000) $ (415,000)
=====================================================================
Nine Months Ended
September 30, 2004:
Revenues $ 2,884,000 $ 928,000 $ 3,812,000
Costs and expenses (excluding
non cash stock based
compensation expense) (2,143,000) (1,004,000) (3,147,000)
---------------------------------------------------------------------
741,000 (76,000) 665,000
Non cash stock based
compensation (3,503,000) (663,000) (4,166,000)
---------------------------------------------------------------------
Operating loss (2,762,000) (739,000) (3,501,000)
Interest expense and factor
discounts -- (16,000) (16,000)
Loss on sale of marketable
securities (10,000) -- (10,000)
---------------------------------------------------------------------
Net loss $(2,772,000) $ (755,000) $(3,527,000)
=====================================================================
September 30, December 31,
2005 2004 Change
---------------------------- ------------
Cash $ 845,000 $ 38,000 $ 807,000
Certificate of deposit
(restricted) 102,000 100,000 2,000
Accounts receivable - net 686,000 36,000 650,000
Due from factor 234,000 -- 234,000
Inventory 986,000 186,000 800,000
Marketable securities 33,000 -- 33,000
Prepaid media 468,000 -- 468,000
Other current assets 422,000 34,000 388,000
Accounts payable (731,000) (475,000) (256,000)
Accrued salaries and payroll
taxes (29,000) (261,000) 232,000
Deferred media revenue (655,000) -- (655,000)
Current debt (120,000) (354,000) 234,000
Other current liabilities (191,000) (220,000) 29,000
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Working capital (deficiency) $ 2,050,000 $ (916,000) $2,966,000
=====================================================================
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