Avalon Reports Pre-Merger Results for Quarter Ended September 30; Company Also Reports $4.4 Million in Pro Forma Revenue, Reduction in Operating Costs Going Forward.Business Editors HUNTINGTON BEACH Huntington Beach, city (1990 pop. 181,519), Orange co., S Calif., on the Pacific coast, across from Santa Catalina Island, in an oil-producing area; inc. 1909. It manufactures aerospace vehicles, aircraft parts, optical instruments, and heat transfer equipment. , Calif.--(BUSINESS WIRE)--Nov. 15, 2002 Avalon Avalon (ăv`əlŏn), in Celtic mythology, the blissful otherworld of the dead. In medieval romance it was the island to which the mortally wounded King Arthur was taken, and from which it was expected he would someday return. Digital Marketing Systems, Inc. (Nasdaq: AVLN AVLN Automatic Vehicle Location and Navigation ), a leading provider of digital marketing software and services, announced it had filed the SEC quarterly report on Form 10-Q Form 10-Q See 10-Q. containing financial results for pre-merger operations for the three months ended September 30, 2002. "The report reflects the merger of Category 5 Technologies, Inc. and MindArrow Systems, Inc., which closed on September 30," explained Michael Friedl, CFO See Chief Financial Officer. for Avalon. "Pursuant to SEC and accounting guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , the balance sheet contains data for both companies as of that date, while the income statement is that of Category 5, which was the larger pre-merger entity, for the quarter ended September 30," Friedl continued. "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, the combined entity reported $4.4 million in revenues, with a net loss of $4.2 million. We caution that neither the pro forma results from the two companies nor Category 5's operating results for the three month period take into account the expected operating synergies going forward, and therefore may not be indicative of the combined entities' future performance post-merger." "The Avalon management team remains confident that our previously announced targets for calendar 2003 are attainable at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. ," stated Robert Webber, Avalon's 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. . "Based on our deal pipeline and other initiatives, we have announced a target of $35 million in revenues and earnings of $3.5 million, or $0.50 per share, for the calendar year ending December 31, 2003. The merger integration is proceeding well, we had record revenues from our large enterprise group in October, and we are focused on building a business with sustainable profitability." "Going forward, we will distinguish our small business sales (primarily former Category 5 operations) from our large enterprise sales (primarily former MindArrow and CaptureQuest operations)," stated Friedl. "We are already seeing improved operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the former, and year-over-year growth of more than 50% for the latter. The combined entity, Avalon, has adopted the June 30 fiscal year end of Category 5." "Although the summer months are traditionally Category 5's slowest time, we were able to decrease our cost base and improve operational efficiencies and customer service 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. significantly in anticipation of the merger," stated Paul Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic , former Chairman and CEO of Category 5, and now President of Avalon's small business unit. "We look forward to more profitable growth in 2003 as we implement several new initiatives for the Avalon Business Direct unit, and take advantage of additional technology and corporate resources that the merger brings."
STATEMENT OF OPERATIONS DATA: CATEGORY 5 ONLY
For the For the
Quarter Ended Quarter Ended
September 30, September 30,
2001 2002
(unaudited) (unaudited)
Revenues $4,356,205 $ 3,304,808
Operating income (loss) (38,897) (2,454,157)
Write-down of short-term investment -- (1,021,135)
Interest and other income (expense) (4,050) 144,058
Benefit for income taxes. -- 1,144,000
Net income (loss) $34,847 $ (2,187,234)
Net loss per common share outstanding $ 0.01 $ (0.57)
Shares used in computation of basic
loss per share 2,738,769 3,828,756
BALANCE SHEET DATA: MINDARROW AND CATEGORY 5 COMBINED
September 30,
2002
(unaudited)
Cash and cash equivalents $821,750
Working capital (6,016,776)
Total assets 35,672,133
Total liabilities 10,686,927
Stockholders' equity $24,985,206
About Avalon Digital Marketing Systems Avalon Digital Marketing Inc., (NASDQ: AVLN) with headquarters in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, and offices 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 , Salt Lake City, and 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. , provides digital marketing software and services that enable clients to communicate and sell more effectively and efficiently over the web and via email. The company's expertise is centered on three key areas of eBusiness -- content, commerce, and communications. Avalon provides complete digital marketing solutions to large enterprise customers, as well as small business software and products through Avalon Business Direct. In addition to a growing customer base of more than 10,000 small businesses, Avalon's large enterprise clients include more than 100 leading companies including Ceridian, Johnson & Johnson, Cendant, Avaya, and the NBA NBA abbr. 1. National Basketball Association 2. National Boxing Association NBA (US) n abbr (= National Basketball Association) → Basketball-Dachverband (= (National Basketball Association National Basketball Association (NBA) U.S. professional basketball league. It was formed in 1949 by the merger of two rival organizations, the National Basketball League (founded 1937) and the Basketball Association of America (1946). ). The company's solutions are designed to establish a more effective line of communication between a company and its customers -- using the right media to deliver the right message at the right time. Certain statements contained in this press 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. under the federal securities laws, and Avalon Digital Marketing Systems intends that such statements be subject to the safe-harbor created thereby. These forward-looking statements are not guarantees of future growth and involve risks, uncertainties and assumptions that are difficult to predict. Avalon's performance and actual outcomes and results may differ materially from what is expressed in, or implied by, such forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning (i) future operating results of Avalon, (ii) anticipated benefits of the merger between MindArrow and Category 5, (iii) opportunities for growth in the business of Avalon following the merger, and (iv) future growth in the digital marketing industry. Among the important factors that could cause actual results to differ from such forward-looking statements include, without limitation, (i) general uncertainties in providing estimates of future operating results, which may be limited by Avalon's business pipeline, future acceptance of its products and general market conditions, among other things, (ii) Avalon's limited operating history, (iii) Avalon's possible inability to sustain and manage its growth, (iv) the risk that Avalon will not be able to obtain additional financing, if needed, to support its operations, and (v) the possible failure of MindArrow and Category 5 to successfully integrate their product offerings and operations. Additional factors that could affect Avalon and its financial results are included its periodic filings, and those of its predecessor companies, MindArrow and Category 5, made with the Securities and Exchange Commission, and the joint proxy statement/prospectus of MindArrow and Category 5 dated September 16, 2002 filed with the SEC. Avalon undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. |
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