Andover.Net Reports Record Quarterly Revenues; Sequential Quarter Increase of 36%, Year-Over-Year Increase of Over 1,000%.Business/Technology Editors ACTON Acton, town (1990 pop. 17,872), Middlesex co., E Mass., NW of Boston; settled c.1680, inc. 1735. Among its manufactures are electrical machinery, chemicals, prefabricated houses, and precision equipment. , Mass.--(BUSINESS WIRE)--April 27, 2000 Fifth Consecutive Quarter Increase, Beat Analysts Revenue and Per Share Expectations Andover Andover (ăn`dōvər), town (1990 pop. 29,151), Essex co., NE Mass.; inc. 1646. Chiefly a textile producer in the 19th cent., Andover now makes toiletries, electronic and computer equipment, chemicals, medical instruments, rubber products, .Net, Inc. (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 :ANDN), the Internet's leading Linux/Open Source destination, today reported that its revenues for the quarter ended March 31, 2000 were $2.8 million, an increase of 36% from the previous quarter's revenues of $2.06 million and an increase of over 1,000% compared to $253,000 for the quarter ended March 31, 1999. The increase in revenue was fueled by continued growth in advertising and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. revenues and beat analysts earnings expectations by 27%. Reported loss per share, for the quarter ended March 31, 2000 was ($.22) as compared to analysts expectations of ($.28). The loss for the quarter, adjusted for non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , was ($.13) per share as compared to analysts expectations of ($.21) per share. As of March 31, 2000, Andover.Net has a cash balance of $73.0 million. Net cash used in operating activities during the quarter ended March 31, 2000 was $1.6 million.
Q 1 Business Highlights:
-- Merger Agreement with VA Linux Systems, Inc. (NASDAQ: LNUX)
-- Increased unique visitors to over 3 million/month and page
impressions to over 60 million/month
-- Completed acquisition of QuestionExchange, the leading online
technical support site for Linux/Open Source
-- Released Slashcode Open Source Project for Corporate ASP
Licensing
-- Doubled e-Commerce revenues
"One of our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. it," said Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Twickler, president 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 record-setting performance this quarter demonstrates how we efficiently monetize it first in advertising and e-commerce revenues and soon in Corporate Services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. . In fact, our acquisition of QuestionExchange will enable us to accelerate the Linux and Open Source Corporate Service and Support. And, our rapid development of the Slashcode enables us to accelerate our ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). (Application Service Provider) offerings to corporations." About Andover.Net Andover.Net (NASDAQ: ANDN) is the leading Linux destination on 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 . Serving over 60 million page impressions to over 3 million unique vistors every month, Andover.Net (www.andover.net) includes the largest news/community site, Slashdot (slashdot.org); the largest site for programmer (1) A hardware device used to customize a programmable logic chip such as a PAL, GAL, EPROM, etc. See PROM programmer. (2) A person who designs the logic for and writes the lines of codes of a computer program. resources, Freshmeat.net (www.freshmeat.net); the leading site for Linux and Open Source Online Support, QuestionExchange (www.questionexchange.com) and the popular developer e-commerce site, ThinkGeek (thinkgeek.com). With these sites and our other Linux sites such as FreeCode (freecode.com) and LinuxDaveCentral (www.linux.davecentral.com), Andover.Net accounts for over 50% of the visits to Linux destinations on the Internet. Andover.Net also includes cross-platform sites such as MediaBuilder (www.mediabuilder.com) that provide programmer and developer resources for users of many popular operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. in addition to Linux such as Windows, UNIX UNIX Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). and Macintosh. Except for the historical information contained herein, the matters discussed in this news release 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. involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, Andover.Net's limited operating history, expectation that Andover will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. substantial losses in the future; Andover's reliance on linux/open source community; Andover's heavy reliance on advertising revenues; intense competition and other risks listed in Andover.Net's registration statement on Form S-1. Andover.Net, Slashdot, Freshmeat, HTMLWorks, GIFWorks, AndoverNews Network, MediaBuilder, Internet Traffic Internet traffic is the flow of data around the Internet. It includes web traffic, which is the amount of that data that is related to the World Wide Web, along with the traffic from other major uses of the Internet, such as electronic mail and peer-to-peer networks. Report, DaveCentral, FreeCode, IT Managers Journal, Slaughterhouse slaughterhouse: see abattoir; meatpacking. , TechSightings and TechMailings are trademarks of Andover.Net.
ANDOVER.NET, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
(Thousands of dollars except per share amounts)
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2000 1999
Net revenues:
Advertising $1,678 $253
Barter advertising 529 0
E-commerce 605 0
Total revenues 2,812 253
Cost of revenues:
Editorial content and related 451 147
E-commerce 283 0
Total cost of revenues 734 147
Gross profit 2,078 106
Operating expenses:
Sales and marketing 1,405 369
General and administrative 1,603 236
Research and development 541 160
Barter advertising 529 0
Amortization of deferred
stock-based compensation 238 16
Amortization of intangible assets 1,209 0
Compensation expense related
to acquisitions 999 0
Total operating expenses 6,524 781
Loss from operations (4,446) (675)
Interest income, net 973 28
Net loss ($3,473) ($647)
Basic and diluted net loss per share
applicable to common shareholders ($0.22) ($0.08)
Basic and diluted weighted average
shares outstanding 15,862 7,804
ANDOVER.NET, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars)
(Unaudited)
March 31, March 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $ 73,030 $ 2,202
Accounts receivable, net 1,329 232
Other current assets 1,167 68
Total current assets 75,526 2,502
Property and equipment, net 1,926 72
Intangible assets 11,331 0
Other assets 148 0
11,479 0
Total assets $ 88,931 $ 2,574
Liabilities, Preferred Stock and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses $ 1,770 $ 342
Long-term debt - current portion 1,584 0
Total current liabilities 3,354 342
Long-term debt 816 0
Preferred stock 0 4,626
Stockholders' Equity
Common stock 160 80
Additional paid in capital 116,267 1,359
Deferred stock-based compensation (4,043) 0
Accumulated deficit (27,623) (3,833)
Total stockholders' equity 84,761 (2,394)
Total liabilities and
stockholders' equity $ 88,931 $ 2,574
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