Audible, Inc. Reports 17% Consumer Content Revenue Increase over Third Quarter 2002.Business Editors WAYNE, N.J.--(BUSINESS WIRE)--Feb. 10, 2003 Cash Burn Decreased 73% Over Third Quarter 2002 Audible A protected MP3 file format from the Audible.com audio download service. See Audible.com. , 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 : ADBLC), the leading provider of downloadable spoken word audio that informs and entertains anywhere and at any time with audio editions of books, newspapers, magazines, radio programs and original shows, announced results for the quarter and year ended December 31, 2002. Senior management will host an investor teleconference at 5:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT Monday, February 10th to discuss these results and the company outlook. Details for the teleconference and webcast are provided below. During the fourth quarter of 2002, Audible's(R) consumer content revenue increased 17% over the third quarter to $3,497,801. For the full year 2002, consumer content revenue of $10.9 million was 113% higher than 2001. Net cash used during the quarter was $848,000. Audible's cash and cash equivalents totaled $2.8 million on December 31, 2002. During the quarterly conference call at 5 PM EDT today, management also intends to discuss its decision to move Audible's share trading to the OTC bulletin board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. in mid-February 2003. "The fourth quarter represents Audible's 18th straight quarter of quarter-over-quarter revenue growth of 17% or greater and we added over 23,000 new customers," reported Audible's 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. , Donald Katz Katz , Bernard 1911-2003. German-born British physiologist. He shared a 1970 Nobel Prize for the study of nerve impulse transmission. . "We achieved this while bringing our cash usage far below stated expectations. This performance means that our need of cash some time in this quarter, as was reported in our 10-Q for the third quarter, 2002 is not the case. Our need for additional cash has been delayed from the first quarter of 2003 to the last half of 2003. Meanwhile, our efforts to increase consumer awareness and distribution of our award winning premium audio service advanced during the quarter. We expect continued news and progress pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to our efforts to partner with major retailers, computer sellers, digital audio player See digital music player, digital media hub and digital media server. manufacturers, broadband service providers An ISP, telephone company, cable company or other carrier that offers high-speed communications to homes and businesses, typically for Internet access. Cable modems, DSL and T1 lines are the common technologies. See broadband, cable modem, DSL and T1. , telecom providers, and Web destinations." Mr. Katz also commented on Audible's determination to move its public share trading activity to the OTC bulletin board: "While I would encourage our many shareholders to listen to our conference call for a more complete discussion of this decision, the short explanation is that in November 2002, NASDAQ adopted a listing requirement test based on shareholder equity accounting. This test affords no positive financial value to non-physical digital content or technology assets or homegrown home·grown adj. 1. Raised or grown at home. 2. Originating in or characteristic of a locality: "Rock is homegrown music in the United States, evolved from blues and country and Tin Pan Alley" invention. For instance, while this new test would have accorded positive shareholder equity if Audible had purchased its patent portfolio, it affords us no credit for our patents or the digital distribution inventions they describe. Our Microsoft 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. - which carries a potential cash risk only in 2006 -- was also relegated to a negative bookkeeping bookkeeping, maintenance of systematic and convenient records of money transactions in order to show the condition of a business enterprise. The essential purpose of bookkeeping is to reveal the amounts and sources of the losses and profits for any given period. item." "We attempted to point out to NASDAQ the illogic il·log·ic n. A lack of logic. Noun 1. illogic - invalid or incorrect reasoning illogicality, illogicalness, inconsequence of a listing test that penalizes innovation and economic efficiency born of new technology distribution platforms," Mr. Katz continued, "but we were ultimately asked to meet financial structure requirements by the NASDAQ listing committee that would have been gratuitously gra·tu·i·tous adj. 1. Given or granted without return or recompense; unearned. 2. Given or received without cost or obligation; free. 3. dilutive to our shareholders." "We have therefore made a decision to do what is best for our business," Katz concluded. "We will hopefully become one of the many stars leaving NASDAQ and coming to the OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). . We will take our growth model, our powerful strategic partners and investors, and our more than thousand shareholders to the OTC. If companies like Audible - which one NASDAQ official recently acknowledged is "in the sweet spot of the companies that have built NASDAQ"-- needs to move to the OTC to responsibly execute its business plan, then the OTC may well become as to the NASDAQ in the first decade of the 21th century, what the NASDAQ represented in contrast to the older exchanges in the last part of the 20th century. We make this move to the OTC in the expectation that with continued growth and the achievement of profitability, the value of Audible will be reflected in whatever valuation environment we reside." Fourth quarter 2003 highlights include: -- Growth to over 205,000 customers, an increase of 67% year over year. -- Consumer content increased 103% over fourth quarter 2001. -- The free Audible.com Otis(TM) digital audio player made available to Apple computer users with membership. -- Best Buy Retail Stores to offer Audible.com subscriptions to Pocket PC 2002 users -- Audible.com and leading retailer Zones enter into integrated marketing agreement. -- Audible received extensive media coverage from The International Herald Tribune, Associated Press, Macworld, AudioFile Magazine, Seattle Times, Kansas City Star, ZDNet.com, CNet.com, and more. A live webcast of the financial results conference call is available on Monday, February 10, 2003 at 5:00 p.m. EDT (2:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ). Please click on www.audible.com/ir for online access to the call. About Audible.com: Audible.com, named the best entertainment software 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 by CNet.com (June 2002), and one of the "Best of Today's Web" by PC World (August 2002) features daily audio editions of The Wall Street Journal and The 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 Times - available on a subscription basis in time for the morning drive to work each day-as well as Forbes, Harvard Business Review Harvard Business Review is a general management magazine published since 1922 by Harvard Business School Publishing, owned by the Harvard Business School. A monthly research-based magazine written for business practitioners, it claims a high ranking business readership and , Scientific American Scientific American U.S. monthly magazine interpreting scientific developments to lay readers. It was founded in 1845 as a newspaper describing new inventions. By 1853 its circulation had reached 30,000 and it was reporting on various sciences, such as astronomy and and Fast Company. The site offers a powerful collection of audiobook best sellers and classics by authors such as Tom Clancy For the member of the Irish folk band The Clancy Brothers, see Tom Clancy (singer) and for the American Celticist, see Thomas Owen Clancy. Thomas Leo Clancy Jr. (born April 12 1947), better known as Tom Clancy , Stephen King <noinclude></noinclude>
Stephen Edwin King (born September 21, 1947) is an American author of over 200 stories including over 50 bestselling horror and , John Grisham “Grisham” redirects here. For other uses, see Grisham (disambiguation). John Ray Grisham (born February 8, 1955) is a former politician, retired attorney, American novelist and author best known for his works of modern legal drama. , Mary Higgins Clark Mary Theresa Eleanor Higgins Clark Conheeney, best known as Mary Higgins Clark, (b December 24, 1927 in the Bronx, New York) is an American author of suspense novels. , James Patterson
Hawking, Stephen William Hawking , William Shakespeare, Emily Dickinson and Jane Austen. There are also speeches, lectures, and on-demand radio programs including Marketplace, All Things Considered All Things Considered (ATC) is a news radio program in the United States, broadcast on the National Public Radio network. It was the first news program on the network, and is broadcast live worldwide through several outlets. , Car Talk, Fresh Air and This American Life This American Life (TAL) is a weekly hour-long radio program produced by Chicago Public Radio. It is distributed by Public Radio International and is also available as a free weekly podcast. , and original shows such as RobinWilliams@audible.com. All of the programs at audible.com are available for computer-based playback Playback could mean:
About Audible, Inc.: Audible(R) (www.audible.com(R)) is the Internet's largest, most diverse provider of premium spoken audio services for content 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. and playback on personal computers, CD or AudibleReady(R) computer-based mobile devices. Audible has more than 34,000 hours of audio programs and 125 content partners that include leading audiobook publishers, broadcasters, entertainers, magazine and newspaper publishers and business information providers. Audible.com is Amazon.com's (www.amazon.com) exclusive provider of spoken word products for downloading downloading - download or streaming via the Web. Additionally, the Company is strategically aligned with Random House, Inc., to pioneer the first-ever imprint im·print tr.v. im·print·ed, im·print·ing, im·prints 1. To produce (a mark or pattern) on a surface by pressure. 2. To produce a mark on (a surface) by pressure. 3. to produce spoken word content specifically suited for digital distribution, Random House Audible. Among the Company's key business partners are Apple Corp., Card Access Inc., Casio Inc., Compaq Computer Corporation (company) Compaq Computer Corporation - The largest US manufacturer and vendor of IBM PC compatible personal computers and servers. Compaq was started in 1982 by three ex-Texas Instruments employees. Quarterly sales $2499M, profits $210M (Aug 1994). http://compaq.com/. , Handspring hand·spring n. A gymnastic feat in which the body is flipped completely forward or backward from an upright position, landing first on the hands and then on the feet. , Hewlett-Packard Company, Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, , Royal Philips Electronics, RealNetworks, Inc., SONICblue Incorporated's Rio Audio Group, Sony Electronics Sony Electronics Inc., headquartered in San Diego, Calif., is the largest component of Sony Corporation of America, the U.S. holding company for Sony's U.S.-based electronics and entertainment businesses. , Texas Instruments See TI. (company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. and VoiceAge Corp. Audible, www.audible.com, AudibleManager and AudibleReady are registered trademarks of Audible, Inc.; Otis, AudibleListener are trademarks of Audible, Inc. and all are part of the family of Audible, Inc. trademarks. Other product or service names mentioned herein are the trademarks of their respective owners. This press release contains information about Audible, Inc. that is not historical fact and may be deemed to contain 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. about the company. Actual results may differ materially from those anticipated in any forward-looking statements as a result of certain risks and uncertainties, including, without limitation, Audible's limited operating history, history of losses, uncertain market for its services, and its inability to license or produce compelling audio content and other risks and uncertainties detailed in the company's Securities and Exchange Commission filings.
AUDIBLE INC.
COMPARATIVE STATEMENT OF OPERATIONS
Three months ended
-------------------------
Dec. 31, Sept. 30,
-------------------------
2002 2002
------------ ------------
(unaudited) (unaudited)
Revenue, net:
Consumer content $3,497,801 $3,002,039
Services 47,874 64,316
Hardware 196,908 152,243
Other 49,106 68,709
------------ ------------
Total revenue, net 3,791,689 3,287,307
------------ ------------
Operating expenses:
Cost of content and services revenue 1,374,005 1,475,558
Cost of hardware revenue 664,346 604,644
Production expenses 935,706 1,029,185
Development 492,563 702,463
Sales and marketing 3,202,800 3,016,255
General and administrative 796,994 1,005,892
------------ ------------
Total operating expenses 7,466,414 7,833,997
------------ ------------
Loss from operations (3,674,725) (4,546,690)
Other income, net 8,759 17,134
------------ ------------
Loss before state income tax benefit (3,665,966) (4,529,556)
State income tax benefit 313,580 0
------------ ------------
Net loss (3,352,386) (4,529,556)
Accrued dividends on redeemable
convertible preferred stock (350,778) (354,195)
------------ ------------
Net loss applicable to common shareholders ($3,703,164) ($4,883,751)
============ ============
Basic and diluted net loss per common share $(0.12) $(0.16)
============ ============
Weighted average common shares outstanding 30,969,079 30,947,340
============ ============
AUDIBLE INC.
CONDENSED STATEMENT OF OPERATIONS
Three months ended Year ended
Dec. 31, Dec. 31,
------------------------------------------------------
2002 2001 2002 2001
------------------------------------------------------
(unaudited) (unaudited)
Revenue, net:
Consumer
content $3,497,801 $1,719,227 $10,939,871 $5,143,002
Services 47,874 248,546 347,816 883,921
Bulk content - 500,000 - 1,435,048
Hardware 196,908 200,146 931,785 1,293,533
Other 49,106 17,194 150,067 315,909
------------ ------------ ------------- -------------
Total revenue,
net 3,791,689 2,685,113 12,369,539 9,071,413
------------ ------------ ------------- -------------
Operating Expenses:
Cost of content
and services
revenue 1,374,005 1,142,536 4,970,017 4,901,866
Cost of
hardware revenue 664,346 665,033 2,717,542 2,858,495
Production
expenses 935,706 1,058,269 3,882,320 5,635,977
Development 492,563 470,361 2,270,912 3,322,133
Sales and
marketing 3,202,800 4,036,516 12,467,569 15,187,584
General and
administrative 796,994 840,953 3,647,415 4,726,694
------------ ------------ ------------- -------------
Total operating
expenses 7,466,414 8,213,668 29,955,775 36,632,749
------------ ------------ ------------- -------------
Loss from
operations (3,674,725) (5,528,555) (17,586,236) (27,561,336)
Other income,
net 8,759 46,299 85,158 565,565
------------ ------------ ------------- -------------
Loss before
state income
tax benefit (3,665,966) (5,482,256) (17,501,078) (26,995,771)
State income
tax benefit 313,580 326,898 313,580 326,898
------------ ------------ ------------- -------------
Net loss (3,352,386) (5,155,358) (17,187,498) (26,668,873)
Accrued dividends
on redeemable
convertible
preferred stock (350,778) (276,854) (1,365,720) (1,049,516)
------------ ------------ ------------- -------------
Net loss
applicable to
common
shareholders ($3,703,164) ($5,432,212) ($18,553,218) ($27,718,389)
============ ============ ============= =============
Basic and
diluted net
loss per common
share $(0.12) $(0.20) $(0.61) $(1.03)
============ ============ ============= =============
Weighted average
common shares
outstanding 30,969,079 26,870,264 30,508,217 26,917,543
============ ============ ============= =============
AUDIBLE INC.
CONDENSED BALANCE SHEETS
Dec. 31, Dec. 31,
Assets 2002 2001
------------- ------------
(unaudited)
Current Assets
Cash and cash equivalents $2,822,080 $7,627,802
Accounts receivable, net of allowance 189,263 153,122
Royalty advances 58,425 56,682
Prepaid expenses and other current assets 736,823 661,192
Inventory 77,262 449,220
Note receivable due from stockholder,
current - 10,000
------------- ------------
Total current assets 3,883,853 8,958,018
Property and equipment, net 633,400 1,990,670
Note receivable due from stockholder, non
current - 35,000
Other assets 90,805 15,805
------------- ------------
Total Assets $4,608,058 $10,999,493
============= ============
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable $1,077,509 $1,519,586
Accrued expenses and compensation 3,231,893 2,345,288
Royalty obligations, current 598,500 896,950
Advances, current 476,053 517,813
Accrued dividends on redeemable
convertible preferred stock 125,257 730,612
------------- ------------
Total current liabilities 5,509,212 6,010,249
Deferred cash compensation 90,550 93,550
Royalty obligations, non current 25,000 48,500
Advances, non current 19,448 77,780
Redeemable convertible preferred stock:
Series A 12,289,976 10,318,902
Stockholders' Deficit
Common stock 316,779 275,470
Additional paid-in capital 98,033,060 93,728,564
Deferred compensation and services (591,155) (5,884,267)
Notes due from stockholders for common
stock (289,545) (294,456)
Convertible preferred stock: Series B 1,137,500 -
Treasury stock at cost (184,740) (179,990)
Accumulated deficit (111,748,027) (93,194,809)
------------- ------------
Total Stockholders' Deficit (13,326,128) (5,549,488)
------------- ------------
Total Liabilities and Stockholders'
Deficit $4,608,058 $10,999,493
============= ============
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