Avenue A, Inc. Announces Better-Than-Expected Fourth Quarter Results; Year-End Ad Spending Boosts Revenue; Atlas DMT Client List Grows; Conference Call and Webcast at 11 a.m. EST Today.Business Editors/Technology Writers SEATTLE--(BUSINESS WIRE)--Feb. 4, 2002 Avenue A, Inc. (Nasdaq:AVEA AVEA American Veterinary Exhibitors Association ), a digital marketing and technology company, today announced financial results for the fourth quarter of 2001 and twelve months ended December 31, 2001. For the fourth quarter ended December 31, 2001, Avenue A, Inc. reported revenues of $24.4 million. 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 net loss for the fourth quarter of 2001, which excludes the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and deferred stock compensation and a non-recurring charge for the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , was $2.0 million, or $0.04 per share. This compares to a pro forma net loss of $6.4 million or $0.11 per share, for the comparable quarter of 2000. These results were significantly better than previously announced guidance of a pro forma net loss of $0.07-0.08 per share for the 2001 fourth quarter. Net loss in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) for the quarter was $4.5 million, or $0.08 per share, versus a net loss of $11.9 million, or $0.21 per share, for the fourth quarter of 2000. For the twelve months ended December 31, 2001, revenues were $89.6 million. Pro forma net loss, before amortization of intangible assets and deferred stock compensation and before non-recurring charges, for the full year 2001 was $19.9 million, or $0.35 per share, compared to a pro forma net loss of $15.3 million, or $0.31 per share for the full year 2000. GAAP net loss for the twelve months ended December 31, 2001 was $40.0 million, or $0.70 per share, compared with a net loss of $42.9 million, or $0.86 per share for the twelve months ended December 31, 2000. Brian McAndrews, President and Chief Executive Officer of Avenue A, Inc., stated, "We are really pleased with our fourth quarter results. Despite an uncertain economic climate, we saw strong increases in online ad spending during the holiday season. In addition, gross profit, an increasingly important measure of our business activity, grew to $7.9 million, an increase of 17 percent over the third quarter. This, combined with our strict cost controls, resulted in a fourth quarter that exceeded our expectations." Mr. McAndrews also noted, "Industry trends give us confidence that our growth opportunities are excellent. 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 usage continues its strong growth trajectory Trajectory The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight. , as users continue to migrate to the Internet from traditional media. As this shift continues, we believe that marketers will continue to move dollars online. With our strong financial position and the anticipated long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth in the marketplace, we feel that the outlook is very positive." The Company noted that it ended the year with $117.8 million in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, a slight increase over the prior quarter. Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. DMT See DSL. Off to a Strong Start During the fourth quarter, the Company continued the rollout of its new Atlas DMT(TM) Digital Marketing Suite, the industry's first complete ad serving and campaign management technology with integrated media planning and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. tools. Atlas DMT had signed 15 customers by the end of the fourth quarter, and it has announced the opening of 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 and San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden to better serve those customers. Fourth Quarter/Year End 2001 Conference Call/Webcast Today Avenue A, Inc. will host a conference call today to discuss these financial results at 11:00 a.m. Eastern/8:00 a.m. Pacific. The live webcast and replay will be available from the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.avenueainc.com, under "Calendar of Events." Interested parties should visit the website approximately 15 minutes prior to 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 install any necessary software. About Avenue A, Inc. Avenue A, Inc., a digital marketing services and technology company, was founded in 1997 to help marketers acquire, retain and grow customers across all digital media. Through its two operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon -- Avenue A, an interactive advertising agency, and Atlas DMT, an advertising technology provider -- Avenue A, Inc. is able to touch and bring value to any interaction in the digital marketplace. The corporation is based in Seattle and operates in New York. Avenue A, Inc. and Avenue A/NYC adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. the NAI See Network Associates. privacy principles that have been applauded by the FTC FTC See Federal Trade Commission (FTC). . These principles are designed to ensure Internet user Internet user n → internauta m/f Internet user Internet n → internaute m/f privacy. Please visit www.avenueainc.com to learn more. About Atlas DMT Atlas DMT is DMT I Diabetes Mellitus Type 1 an advertising technology provider and operating unit of Avenue A, Inc. Atlas DMT is the creator of Atlas Digital Marketing Suite 2.0, the industry's first complete digital marketing management system built by and for marketers. The Atlas Suite helps advertising agencies and other marketing professionals deliver efficient, profitable digital marketing programs. The end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. system manages online media planning, buying, ad delivery and analysis. Atlas DMT serves its clients from offices in Seattle and New York. To learn more, please visit www.atlasdmt.com. About Avenue A Avenue A is an interactive advertising agency and operating unit of Avenue A, Inc. It offers a one-stop solution that seeks to drive breakthrough results for its clients' web and e-mail marketing Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. initiatives by using innovative technology and rigorous analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. methods that turn campaign data into actionable Giving sufficient legal grounds for a lawsuit; giving rise to a Cause of Action. An act, event, or occurrence is said to be actionable when there are legal grounds for basing a lawsuit on it. insights. Avenue A's integrated suite of services includes web advertising, affiliate programs, search engine optimization Designing a Web site so that search engines easily find the pages and index them. The goal is to have your page be in the top 10 results of a search. Optimization includes the choice of words used in the text paragraphs and the placement of those words on the page, both visible and hidden , strategic portal relationships, e-mail prospecting, e-mail list management, customer targeting, profiling and advanced analytical services. Avenue A focuses on achieving the best possible results and the highest possible return on investment for its clients' digital marketing efforts. Clients include Microsoft, AT&T Wireless and Best Buy. Certain statements 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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements are based on the opinions and estimates of the management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Forward-looking statements in this release include, without limitation, statements and inferences regarding industry trends, Avenue A, Inc.'s growth opportunities, Internet usage trends, future use by marketers of the Internet, anticipated long-term growth in the marketplace, and the outlook for Avenue A, Inc. Factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, among others, the risk that unforeseen events or future 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 could negatively affect industry trends and the Company's growth opportunities, the risk that Internet usage could slow as the Internet and related industries mature, the risk that the Internet market may deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. , or develop more slowly than expected, and the risk of further downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the online advertising industry, as well as the economy in general. Additional factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, among others, the risk of failure by Avenue A, Inc. to attract new clients and to achieve effective advertising campaigns for existing clients, Avenue A, Inc's limited operating history, Avenue A Inc.'s history of losses, quarterly and seasonal fluctuations in the company's operating results, the short term nature of Avenue A, Inc.'s contracts with clients which are cancelable on 90 days' or less notice, and the uncertainties and potential cost of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and the risks of adverse rulings by the courts presiding pre·side intr.v. pre·sid·ed, pre·sid·ing, pre·sides 1. To hold the position of authority; act as chairperson or president. 2. To possess or exercise authority or control. 3. over previously announced pending lawsuits which might materially and adversely affect Avenue A, Inc.'s business. More information about factors that potentially could affect Avenue A, Inc.'s financial results is included in Avenue A, Inc.'s Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended September 30, 2001 filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, Avenue A, Inc. undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise. Avenue A, Inc. has applied for registration of the "Avenue A" and "Atlas" service marks in 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. and other countries. All other trademarks, trade names or company names referenced herein are used for identification only and are the property of their respective owners.
Avenue A, Inc.
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2001 2000
----------- ------------
Assets
Current assets:
Cash, cash equivalents, and short-term
investments $ 117,754 $ 134,145
Accounts receivable, net of allowance 16,127 39,343
Other receivables 1,369 1,824
Prepaid expenses and other current
assets 242 716
----------- ------------
Total current assets 135,492 176,028
Property and equipment, net 6,664 13,087
Other assets 1,325 3,519
Intangible assets, net 1,330 5,671
----------- ------------
Total assets $ 144,811 $ 198,305
=========== ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 25,448 $ 48,664
Deferred revenue 488 2,000
Notes payable, current portion 2,000 1,084
----------- ------------
Total current liabilities 27,936 51,748
----------- ------------
Long-term notes payable 1,555 3,556
----------- ------------
Total liabilities 29,491 55,304
----------- ------------
Shareholders' equity:
Common stock 584 581
Paid-in capital 216,884 222,901
Deferred stock compensation (4,063) (21,566)
Subscription receivable (548) (941)
Accumulated deficit (97,537) (57,974)
----------- ------------
Total shareholders' equity 115,320 143,001
----------- ------------
Total liabilities and shareholders' equity $ 144,811 $ 198,305
=========== ============
Avenue A, Inc.
Consolidated Statement of Operations
(in thousands, except per share data)
Quarter Ended Twelve Months Ended
December 31, December 31,
------------------- --------------------
2001 2000 2001 2000
---------- -------- --------- ----------
(unaudited) (unaudited)
Revenue $ 24,434 $ 48,195 $ 89,611 $194,665
Cost of revenue 16,490 37,426 63,419 155,451
---------- -------- --------- ----------
Gross profit 7,944 10,769 26,192 39,214
---------- -------- --------- ----------
Expenses:
Client support 3,093 4,698 11,170 15,966
Product development 2,207 4,330 12,129 12,542
Selling, general, and
administrative 4,830 9,042 23,535 30,143
Depreciation and
amortization of property
and equipment 1,208 1,346 5,600 4,201
Amortization of intangible
assets 499 514 2,002 2,024
Amortization of deferred
stock compensation 1,445 4,982 10,899 25,624
Impairment of fixed assets 490 - 1,040 -
Corporate restructuring
charges - - 3,666 -
---------- -------- --------- ----------
Total expenses 13,772 24,912 70,041 90,500
---------- -------- --------- ----------
Loss from operations (5,828) (14,143) (43,849) (51,286)
Interest income, net 1,364 2,225 6,365 8,357
Impairment of cost-basis
investment - - 2,500 -
---------- -------- --------- ----------
Net loss $ (4,464) $(11,918) $(39,984) $(42,929)
========== ======== ========= ==========
Basic and diluted net loss
per share $ (0.08) $ (0.21) $ (0.70) $ (0.86)
========== ======== ========= ==========
Shares used in computing
basic and diluted net loss
per share 57,794 56,224 57,230 49,707
========== ======== ========= ==========
Avenue A, Inc.
Reconciliation of Loss From Operations to
Pro Forma Loss From Operations, Pro Forma Net Loss,
and Pro Forma Net Loss Excluding Non-recurring items
(in thousands)
Quarter Ended Twelve Months Ended
December 31, December 31,
------------------- --------------------
2001 2000 2001 2000
---------- -------- --------- ----------
(unaudited) (unaudited)
Loss from operations $ (5,828) $(14,143) $(43,849) $(51,286)
Amortization of intangible
assets 499 514 2,002 2,024
Amortization of deferred
stock compensation 1,445 4,982 10,899 25,624
---------- -------- --------- ----------
Pro forma loss from
operations (A) (3,884) (8,647) (30,948) (23,638)
Interest income, net 1,364 2,225 6,365 8,357
Impairment of cost-basis
investment - - 2,500 -
---------- -------- --------- ----------
Pro forma net loss (A) $ (2,520) $ (6,422) $(27,083) $(15,281)
========== ======== ========= ==========
Pro forma basic and diluted
net loss per share $ (0.04) $ (0.11) $ (0.47) $ (0.31)
========== ======== ========= ==========
Shares used in computing pro
forma basic and diluted
net loss per share 57,794 56,224 57,230 49,707
========== ======== ========= ==========
Pro forma net loss (A) $ (2,520) $ (6,422) $(27,083) $(15,281)
Corporate restructuring
charges - - 3,666 -
Impairment of fixed assets 490 - 1,040 -
Impairment of cost-basis
investment - - 2,500 -
---------- -------- --------- ----------
Pro forma net loss excluding
non-recurring items (B) $ (2,030) $ (6,422) $(19,877) $(15,281)
========== ======== ========= ==========
Pro forma basic and diluted
net loss per share excluding
non-recurring items $ (0.04) $ (0.11) $ (0.35) $ (0.31)
========== ======== ========= ==========
Shares used in computing pro
forma basic and diluted
net loss per share 57,794 56,224 57,230 49,707
========== ======== ========= ==========
(A) The pro forma loss from operations and net loss exclude
amortization of intangible assets and stock-based compensation
charges, which are summarized in the above table. These
disclosures do not purport to be prepared in accordance with
Generally Accepted Accounting Principles (GAAP).
(B) The pro forma net loss excluding non-recurring items excludes
corporate restructuring charges, impairment of fixed assets, and
impairment of cost-basis investment which are summarized in the
above table. These disclosures do not purport to be prepared in
accordance with Generally Accepted Accounting Principles (GAAP).
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