Circle.com Reports Record Second Quarter Results.Business/Technology Editors BALTIMORE Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. , Md.--(BUSINESS WIRE)--Aug. 9, 2000 Circle.com (Nasdaq: CIRC), a leading international Internet professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. provider, today reported record financial results for its second quarter ended June 30, 2000, strengthening the Company's path to profitability. The Company reported record net revenues for the quarter of $17.7 million, an increase of 153% compared to $7.0 million for the same quarter of 1999. The Company also reported a gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. of 43.1% from 44.2% in the second quarter of 1999 and 40.1% in the first quarter of 2000. The Company reported an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become loss of $2.2 million versus a breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations second quarter of 1999 and a loss of $3.4 million in the first quarter of 2000. The net loss attributable to Circle.com shareholders for the quarter was $4.3 million or a loss of $0.19 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. "During the second quarter, we dramatically reduced our costs of doing business while achieving tremendous top-line growth in revenues," said Robert T. Wilke, Chief Executive Officer. "As a result, we have made great strides toward achieving breakeven EBITDA - as planned - in the first quarter of 2001. Our revenue growth has come because Web marketers are beginning to share our vision that success on the Web is now all about profitable market share - not just page views. Our costs of doing business are coming down because we are achieving scale as well as integrating our operations into a much tighter operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. . So we are managing a very impressive growth rate at the same time we are seeing significant improvements in our profit picture." Positive Leverage "We are managing our business toward profitability," said Victor Mandel, Executive Vice President of Finance and Development, Circle.com. "We have been able to return to our pre-recapitalization gross profit levels through strong sales increases and an expansion strategy focused on profitable growth. Our strong revenue growth is matched with a continued reduction in our EBITDA loss--evidence of a compelling equation for financial success." Strengthening the Brand for Expansion "We have put a great deal of effort into preparing our business for our impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. alignment with Havas Advertising," said Wilke. "In addition to strengthening our operating 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. substantially, we've developed a new positioning, logo, Website, annual report and marketing campaign to ready the Company for what we believe will be a tremendous global expansion opportunity." "Circle.com now has the brand platform to stand out from the crowd as a recognized leader," said Wilke. "We are taking all the necessary steps to make it clear to employees, investors and clients that Circle.com has the people, strategy and execution to break through the clutter in our industry." Additionally, Circle.com enhanced its marketing efforts by hiring Steve Lagana as Vice President of Marketing and Communications. Lagana, formerly of Litton, PRC brings over 15 years of strategic marketing experience to Circle.com. Global Opportunities On February 21, 2000 Snyder Communications Snyder Communications Inc. (SNC) was founded in 1988 by Daniel M. Snyder and his sister Michelle Snyder. Their activities were mainly outsourced marketing services, such as Direct marketing, database marketing, proprietary product sampling, sponsored information display in prime , Inc., announced a merger with Havas Advertising (Paris Stock Exchange: EURC EURC Edinburgh University Rifle Club (UK) EURC European Urban Renewal Council EURC End User Request Center (JPMorgan Chase) .PA) in which the Paris-based advertising firm will acquire Snyder's SNC SNC St Norbert College (De Pere, Wisconsin) SNC Sistema Nervioso Central SNC Société en Nom Collectif (French: Partnership) SNC Système Nerveux Central (French: central nervous system) class of common stock, creating the world's fourth largest advertising communications group based on 1999 revenues. Circle.com common stock, the tracking stock for Snyder Communications' Internet services business, will remain outstanding after the merger. The transaction has been approved by the Federal Trade Commission and the Department of Justice, pursuant to the Hart-Scott-Rodino Antitrust Improvements Act The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Public Law 94-435, known commonly as the HSR Act) is a set of amendments to the antitrust laws of the United States, principally the Clayton Antitrust Act. The HSR Act was signed into law by President Gerald R. of 1976. The Companies anticipate the merger will be completed in late September of this year. The completion of the merger transaction is subject to shareholder approval and customary closing conditions. "Our relationship with Havas Advertising affords us a tremendous opportunity to be a truly global partner to clients who need international solutions," said Wilke. "Moreover, it gives us the basis upon which to grow our own business into rapidly developing markets in Europe and beyond." About Circle.com http://www.circle.com Circle.com (NASDAQ: CIRC) is a leading international Internet professional services firm, providing complete end-to-end Web enabling services for leading companies. Circle.com, a division of Snyder Communications, Inc. (NYSE NYSE See: New York Stock Exchange : SNC), employs over 500 people in offices worldwide, and is headquartered in Baltimore, Maryland "Baltimore" redirects here. For the surrounding county, see Baltimore County, Maryland. For other uses, see Baltimore (disambiguation). Baltimore is an independent city located in the state of Maryland in the United States. . Matters discussed in this release may include 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. that involve risks and uncertainties, and actual results may be materially different. Factors that could cause actual results to differ are stated in Snyder Communications' reports and other documents filed from time to time with the Securities and Exchange Commission including the prospectus included in its Form S-4 Registration Statement dated October 5, 1999, its 1999 10-K, and its 2000 10-Qs. These results should be read in conjunction with the financial results of Snyder Communications, Inc. being released today.
Circle.com
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Net revenues $ 17,720 $ 6,998 $ 34,397 $ 12,347
Professional
services 10,082 3,906 20,071 7,128
Gross
Profit 7,638 3,092 14,326 5,219
Operating
expenses:
Office
and
general 9,880 3,115 19,984 5,887
Amortization
of intangibles 2,389 312 4,797 711
Depreciation 866 278 1,442 419
Total operating
expenses 13,135 3,705 26,223 7,017
Loss from
operations (5,497) (613) (11,897) (1,798)
Interest
expense, net (1,069) -- (1,811) --
Loss before
income taxes (6,566) (613) (13,708) (1,798)
Income tax
provision
(benefit) (1,379) 907 (2,879) 593
Net loss (5,187) (1,520) (10,829) (2,391)
Less: Loss
related to
SNC's
retained
interest (859) (304) (1,794) (478)
Loss
attributable
to Circle.com
stockholders $ (4,328) $ (1,216) $ (9,035) $ (1,913)
Diluted loss
per share (a) $ (0.19) $ (0.06) $ (0.40) $ (0.10)
Circle.com
shares (b) 22,571 18,992 22,520 18,485
(a) Circle.com per share amounts exclude the portion of Circle.com's income (loss) which is attributed to SNC's retained interest Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. . (b) 1999 shares have been computed using the shares of Circle.com stock that would have been outstanding if the recapitialization of Snyder Communications had occurred at the beginning of 1999. |
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