Avenue A Fourth Quarter Revenue Up 35% From Fourth Quarter 1999; Company Reports Fourth Quarter 2000 and Twelve Months Results.Business Editors SEATTLE--(BUSINESS WIRE)--Jan. 30, 2001 Avenue A, Inc. (Nasdaq:AVEA AVEA American Veterinary Exhibitors Association ), a digital marketing and technology company, today announced financial results for the fourth quarter and the twelve months ended December December: see month. 31, 2000. For the fourth quarter ended December 31, 2000, Avenue A reported revenues of $48.2 million, a 35 percent increase over revenues of $35.6 million for the fourth quarter of 1999. 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, 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 amortization of deferred stock compensation, for the fourth quarter of 2000 was $6.4 million, or $0.11 per share, compared to a pro forma net loss of $2.3 million, or $0.12 per share for the comparable 1999 quarter. Net loss for the fourth quarter of 2000 was $11.9 million, or $0.21 per share, versus a net loss of $6.6 million, or $0.33 per share, for the fourth quarter of 1999. For the twelve months ended December 31, 2000, revenues were $194.5 million, up from $69.7 million for 1999. Pro forma net loss, before amortization of intangible assets and amortization of deferred stock compensation, for the full year 2000 was $15.3 million, or $0.31 per share, compared to a pro forma net loss of $6.6 million, or $0.34 per share, for the full year 1999. Net loss for the twelve months ended December 31, 2000 was $42.9 million, or $0.86 per share, compared with a net loss of $11.9 million, or $0.61 per share, for 1999. Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. McAndrews McAndrews may refer to:
Mr. McAndrews commented further, "As the effects of the dot-com (1) Refers to the period (dot) followed by the abbreviation of the commercial domain (.com) at the end of an Internet address. Since the .com domain is so widely used, the Internet became known as the "dot-com" world, and dot-com companies are those formed to offer services or shakeout Shakeout A situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry. Notes: During the dotcom boom and bust, numerous shakeouts occurred. diminish, and confidence in 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 as an advertising medium continues to grow, Avenue A will retain its position as a market leader and innovator. During 2001, we will continue to introduce innovative new technologies and services such as Site Finder Site Finder was a wildcard DNS record for all .com and .net domain names not yet registered by others, run by .com and .net top-level domain operator VeriSign between 15 September 2003 and 4 October 2003. and our new Customer LifeCycle initiative. In addition, we will continue to make focused investments in our Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. (TM) Digital Marketing Technology Suite, further demonstrating to our clients the effectiveness of online advertising, particularly when enhanced through strong customer service and our proprietary technology and analytics platform." Commenting on fourth quarter financial results, Michael Vernon Michael 'Mike' Vernon A.M. (2 April 1932 – 6 November 1993) was a prominent Australian consumer activist. Vernon was born in Portsmouth, United Kingdom in 1932 to John Ernest Vernon (a writer in the Royal Navy) and Caroline Vernon (nee Clark) (later a cryptologist in the , Chief Financial Officer, noted, "We are pleased that our gross margin continues to grow, to 22.4 percent in the fourth quarter, up from 20.8 percent in the prior quarter, reflecting greater revenue contributions from higher margin products. The shift in our revenue mix to larger, more stable clients also continued during the fourth quarter. Revenues from pure-play dot-coms declined to 45 percent of total revenues in the quarter, down from 48 percent in the prior quarter." Mr. Vernon Vernon, city, Canada Vernon, city (1991 pop. 23,514), S British Columbia, Canada, near the north end of Okanagan Lake. The center of a fruit-growing and dairying area, it has packing and dehydrating plants. also noted that Avenue A ended the year with $134 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. Avenue A Scores Major Client Wins During the fourth quarter, the Company continued to aggressively market to larger traditional advertisers and click-and-mortar companies. Recent client wins include: -- Starbucks -- Conseco -- AT&T Wireless The Company continues to serve as the digital marketing provider for companies such as MasterCard MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and International, Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. (MSN (1) (MicroSoft Network) A family of Internet-based services from Microsoft, which includes a search engine, e-mail (Hotmail), instant messaging (Windows Live Messaging) and a general-purpose portal with news, information and shopping (MSN Directory). division), Household Finance and Best Buy, among others. Avenue A Study Shows Banner Ads A graphic image used on Web sites to advertise a product or service. Banner ads come in numerous sizes, but are often rectangles 460 pixels wide by 60 pixels high. Also 460 x 55 and 392 x 72 sizes are commonly used. Increase Brand Awareness In a study whose results were announced in December, Avenue A confirmed that banner ads increase website visits, registrations and sales, even when people don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. click on them. The tightly controlled experiment "Controlled Experiment" is an episode of the original The Outer Limits television show. It first aired on 13 January, 1964, during the first season. Introduction A martian controller is assigned to investigate the phenomenon of murder on Earth. showed that the advertising campaign for a leading online and offline marketer was directly accountable for driving a 10 percent increase in conversions. Eighty percent of those additional conversions were from customers who did not click on the banner ads, but rather converted later on the client's site, otherwise known as "Awareness Conversions." This test clearly demonstrates that the "conventional wisdom" that banners are ineffective because click-through rates The number of times a link on a Web page is clicked compared to the number of times it is displayed. Advertising royalties paid to Web sites are often based on click-through rate (CTR), and the amount paid per click-through is considerably higher than the cost of an ad that is displayed are declining, is false. The results confirm that online advertising can increase both brand awareness and a prospect's propensity to convert. Avenue A Launches Site Finder On October 31, Avenue A announced the launch of Site Finder, the first online planning tool built on customer-level behavior data. Site Finder is the latest in a broad set of tools Avenue A is developing that seek to turn the web from a broadcast medium into a true one-to-one marketing vehicle. For customers new to web advertising, Site Finder offers a powerful way to determine campaign effectiveness before spending a single dollar online. For seasoned web advertisers, Site Finder reveals counter-intuitive high performing sites that traditional media planning tools may overlook. Avenue A Unveils Customer LifeCycle Marketing On November 8, Avenue A announced its new strategic initiative, Customer LifeCycle Marketing, to transform the Internet from a broadcast medium into a one-to-one marketing vehicle. Customer LifeCycle Marketing is designed to move a client's prospects and customers through the stages of buying, from awareness to trial and from purchase to loyalty. With knowledge of an individual's position in the customer lifecycle, a business can tailor A tailor is a person whose occupation is to sew menswear style jackets and the skirts or trousers that go with them. Although the term dates to the thirteenth century, tailor its messages and media to individual prospects or customers. Avenue A will continue this initiative by releasing new message-targeting capabilities and additional enhancements to its Atlas Digital Marketing Technology Suite. Fourth Quarter 2000 Conference Call/Webcast Today Avenue A will host a conference call to discuss these financial results this afternoon at 2:30 p.m. Pacific / 5:30 p.m. Eastern. The live call 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.avenuea.com, under "Calendar of Events." Interested parties should log on to the conference call approximately fifteen 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. any necessary software. ABOUT AVENUE A Avenue A, a digital marketing and technology company, enables marketers to acquire, retain, and grow customers across digital media. Using the Atlas(TM) Digital Marketing Technology Suite and a unique process of continuous testing, analysis, 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. , Avenue A focuses on achieving the best possible results and the highest possible return on investment for their clients' digital marketing efforts. Clients include Microsoft, Best Buy, Household Finance and TicketmasterOnline-CitySearch. Avenue A was founded in 1997, and is headquartered in Seattle with offices in London, Chicago and 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 . Avenue A also offers digital marketing services through iballs, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. based in New York. Avenue A and iballs 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 endorsed 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. 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 include all passages containing verbs such as 'aims, anticipates, believes, estimates, expects, intends, plans, predicts, projects or targets' or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be evaluated by events that will occur in the future. The forward-looking statements in this release include, among others, expectations regarding Avenue A's drive to profitability. 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. Factors that could affect Avenue A's actual results include, among others, the potential failure to attract new clients, to maintain current, desired client relationships or to achieve effective advertising campaigns for existing clients, to achieve projected revenues and gross margins, delays in reaching profitability, insufficient funds to reach profitability, quarterly and seasonal fluctuations in operating results, fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. or declining demand for our advertising services, timing variations on the part of advertisers to implement advertising campaigns, costs related to any possible future acquisitions of technologies or businesses, the short term nature of Avenue A's contracts with clients which are cancelable on 90 days' or less notice, the fact that many of our clients have limited operating histories, are unprofitable and may not be able to pay for our services, and the uncertainties, potential costs, and possible business impacts of unfavorable rulings in the previously-announced class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax . More information about factors that potentially could affect Avenue A's financial results is included in Avenue A's Form 10-Q Form 10-Q See 10-Q. , as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , for the fiscal quarter ended September 30, 2000 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 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.
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2000 1999
--------- ---------
Assets
Current assets:
Cash, cash equivalents,
and short-term investments $ 134,145 $ 22,765
Accounts receivable,
net of allowance 39,343 28,295
Other receivables 1,824 183
Prepaid expenses and
other current assets 716 153
--------- ---------
Total current assets 176,028 51,396
Property and equipment, net 13,087 4,625
Other assets 5,671 849
Intangible assets, net 3,519 5,221
--------- ---------
Total assets $ 198,305 $ 62,091
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and
accrued expenses $ 48,664 $ 39,141
Deferred revenue 1,084 20
Notes payable,
current portion 2,000 303
--------- ---------
Total current liabilities 51,748 39,464
--------- ---------
Long-term notes payable 3,556 683
--------- ---------
Total liabilities 55,304 40,147
--------- ---------
Shareholders' equity:
Convertible preferred stock -- 164
Common stock 581 251
Paid-in capital 222,901 60,424
Deferred stock compensation (21,566) (22,670)
Subscription receivable (941) (965)
Accumulated deficit (57,974) (15,260)
--------- ---------
Total shareholders' equity 143,001 21,944
--------- ---------
Total liabilities
and shareholders' equity $ 198,305 $ 62,091
========= =========
Avenue A, Inc.
Consolidated Statement of Operations
(in thousands, except per share data)
Quarter Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(unaudited)(unaudited)
Revenue $ 48,160 $ 35,597 $ 194,532 $ 69,695
Cost of revenue 37,391 28,972 155,318 56,979
--------- --------- --------- ---------
Gross profit 10,769 6,625 39,214 12,716
--------- --------- --------- ---------
Expenses:
Client services 4,504 2,275 15,660 4,860
Technology and analytics 4,840 1,496 16,078 3,292
Selling, general,
and administrative 8,726 5,202 26,913 10,826
Depreciation and
amortization of
property and equipment 1,346 205 4,201 853
Amortization of
intangible assets 514 488 2,024 651
Amortization of deferred
stock compensation 4,982 3,821 25,624 4,681
--------- --------- --------- ---------
Total expenses 24,912 13,487 90,500 25,163
--------- --------- --------- ---------
Loss from operations (14,143) (6,862) (51,286) (12,447)
Interest income, net 2,225 219 8,357 554
--------- --------- --------- ---------
Net loss $ (11,918) $ (6,643) $ (42,929) $ (11,893)
========= ========= ========= =========
Basic and diluted net
loss per share $ (0.21) $ (0.33) $ (0.86) $ (0.61)
========= ========= ========= =========
Shares used in computing
basic and diluted
net loss per share 56,224 20,117 49,707 19,428
========= ========= ========= =========
Reconciliation of Loss From Operations
to Pro Forma Loss From Operations
(in thousands)
Loss from operations $ (14,143) $ (6,862) $ (51,286) $ (12,447)
Amortization of
intangible assets 514 488 2,024 651
Amortization of
deferred stock
compensation 4,982 3,821 25,624 4,681
--------- --------- --------- ---------
Pro forma loss
from operations (A) (8,647) (2,553) (23,638) (7,115)
Interest income, net 2,225 219 8,357 554
--------- --------- --------- ---------
Pro forma net loss (A) $ (6,422) $ (2,334) $ (15,281) $ (6,561)
========= ========= ========= =========
Pro forma basic and
diluted net loss
per share $ (0.11) $ (0.12) $ (0.31) $ (0.34)
========= ========= ========= =========
Shares used in computing
pro forma basic and
diluted net loss
per share 56,224 20,117 49,707 19,428
========= ========= ========= =========
(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). The above table
reconciles the loss from operations in accordance with GAAP to
pro forma loss from operations for the periods presented.
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