aQuantive Announces Record Fourth Quarter and Annual Financial Results; Revenue, Net Income and EBITDA exceed Guidance.SEATTLE Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. -- Conference Call and Webcast at 1:30pm PST/4:30pm EST EST electroshock therapy. EST abbr. electroshock therapy Today aQuantive This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Inc. (Nasdaq:AQNT), a digital marketing company, today reported financial results for the fourth quarter and year ended December December: see month. 31, 2005. 2005 fourth quarter results were: --Revenue of $87.5 million, an increase of 44 percent over the fourth quarter of 2004. --Net income of $11.6 million, or $0.15 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, an increase of 63 percent over the fourth quarter of 2004. --EBITDA(1) of $25.9 million, or $0.33 per diluted share, an increase of 94 percent over the fourth quarter of 2004. 2005 annual results, which include contributions from all acquisitions made during 2004 and 2005, were: --Revenue of $308.4 million, an increase of 95 percent over 2004 --Operating income of $61.0 million, an increase of 130 percent over 2004 --EBITDA of $79.1 million, or $1.03 per diluted share, an increase of 122 percent over 2004 "2005 was another tremendous year for aQuantive. We experienced rapid growth and excellent financial results across all of our 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 ," said 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:
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this great opportunity." aQuantive operates three business segments. Segment information is as follows: Digital Marketing Services Avenue A | Razorfish Razorfish is a common name used for two unrelated groups of fishes:
(2) (Defense Messaging System) An X.500-compliant messaging system developed by the U.S. Dept. of Defense. ) segment, recorded revenue of $53.9 million in the fourth quarter of 2005, compared to revenue of $36.7 million in the fourth quarter of 2004. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $11.4 million in the fourth quarter of 2005, compared to $3.8 million in the fourth quarter of 2004. Annual DMS revenue was $189.8 million in 2005, compared to revenue of $87.7 million in 2004. Operating income was $31.9 million in 2005, compared to $13.0 million in 2004. In December 2005, Avenue A | Razorfish acquired DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. , a U.K.-based interactive agency, marking its first significant entry into international digital marketing. Digital Marketing Technologies Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. , aQuantive's digital marketing technologies (DMT See DSL. ) segment, recorded revenue of $25.7 million in the fourth quarter of 2005, compared to revenue of $18.9 million in the fourth quarter of 2004. Operating income was $11.9 million in the fourth quarter of 2005, compared to $9.2 million in the fourth quarter of 2004. Annual DMT revenue was $92.3 million in 2005, compared to $60.9 million in 2004. Operating income was $42.9 million in 2005, compared to $26.1 million in 2004. Digital Performance Media DRIVEpm and MediaBrokers, aQuantive's digital performance media (DPM (Documents Per Minute) The number of paper documents that can be processed in one minute. ) segment, recorded revenue of $7.9 million in the fourth quarter of 2005, compared to revenue of $5.1 million in the fourth quarter of 2004. Operating income was $1.9 million for the fourth quarter of 2005, compared to $645,000 in the fourth quarter of 2004. Annual DPM revenue was $26.4 million in 2005, compared to $9.4 million in 2004. Operating income was $4.9 million in 2005, compared to a net loss of $70,000 in 2004. 2006 Financial Guidance In 2006, the Company will provide guidance for revenue, net income, Adjusted 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 (2) and net income before share-based compensation(3), for comparability with historical results, due to the adoption of Statement of Financial Accounting Standards No. 123R "Share Based Payment" in January January: see month. 2006. Share-based compensation expense is expected to have a significant impact on our net income and earnings per diluted share, as noted below. Actual share-based compensation expense may differ from these estimates based on the timing and amount of options granted, the assumptions used in valuing these options and other factors. Accordingly, the Company forecasts full year 2006 results as follows: --Revenue of $375 -- $395 million --Net income before share-based compensation of $0.57 -- $0.61 per diluted share --Adjusted EBITDA of $1.19 -- $1.25 per diluted share --Net income of $0.40 -- $0.44 per diluted share The Company anticipates first quarter results as follows: --Revenue of $82 -- $85 million --Net income before share-based compensation of $0.08 -- $0.10 per diluted share --Adjusted EBITDA of $0.19 -- $0.23 per diluted share --Net income of $0.04 -- $0.06 per diluted share
(1) EBITDA (i.e. earnings before interest expense, net interest and
other income, income tax, depreciation and amortization) is a
non-GAAP financial measure. See the supplemental schedule of
EBITDA reconciliation to GAAP net income for the three and twelve
months ended December 31, 2005 and 2004.
(2) Adjusted EBITDA (i.e. earnings before interest expense, net
interest and other income, income tax, depreciation amortization
and share-based compensation) is a non-GAAP financial measure. See
the supplemental schedule attached to this press release for more
information.
(3) Net income before share-based compensation (i.e. net income before
the after tax impact of share-based compensation expense) is a
non-GAAP financial measure. See the supplemental schedule attached
to this press release for more information.
Fourth Quarter 2005 Conference Call/Webcast Today at 1:30pm PST/4:30pm EST aQuantive, Inc. will host a conference call and webcast to discuss fourth quarter 2005 financial results today at 1:30pm PST/4:30pm EST. The conference call will be webcast from the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.aquantive.com/investor. Interested parties should log on to the webcast approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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. any necessary software. The webcast is not interactive. About aQuantive, Inc. aQuantive, Inc. (Nasdaq:AQNT), a digital marketing company, was founded in 1997 to help marketers acquire, retain and grow customers across all digital media. Through its operating units, Avenue A | Razorfish (www.avenuea-razorfish.com), a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. interactive agency, Atlas (www.atlassolutions.com), a provider of digital marketing technologies and expertise, and DRIVEpm (www.drivepm.com) and MediaBrokers, digital performance media companies, aQuantive is positioned to bring value to any interaction in the digital marketplace. aQuantive (www.aquantive.com) is headquartered in Seattle, Washington  This page is protected from moves until disputes have been resolved on the .The reason for its protection is listed on the protection policy page. . 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. Words such as "expects," "anticipates," "forecasts," and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Forward-looking statements also include any other passages that relate to expected future events or trends that can only be evaluated by events or trends that will occur in the future. The forward-looking statements in this release include, without limitation, statements regarding expected financial performance for the first quarter of 2006 and for the full year 2006, including expected share-based compensation expense for those periods. The forward-looking statements are based on the opinions and estimates of management at the time the statements were 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. These risks and uncertainties include, among others, the risk of unforeseen changes in client online marketing and advertising budgets, unanticipated loss of clients or delays in anticipated campaigns and projects, the potential failure to attract new clients due to the company's inability to competitively market its services, the risk of 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. demand for the company's services, the potential failure to maintain desired client relationships or to achieve effective advertising campaigns for clients, potential deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. or slower-than-expected development of the Internet advertising Delivering ads to Internet users via Web sites, e-mail, ad-supported software and Internet-enabled cellphones. Also called an "ad network," Internet advertising organizations act as a middleman between the advertiser and the Web sites and software publishers that display the ads. market, quarterly fluctuations in operating results, timing variations on the part of advertisers to implement advertising campaigns, costs and risks related to acquisitions of technologies, businesses or brands, the short term nature of the company's contracts with clients, which generally are cancelable on 90 days' or less notice, and the uncertainties, potential costs, and possible business impacts of new legislation or 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. involving the company. More information about factors that could cause actual results to differ materially from those predicted in aQuantive's forward-looking statements is set out in its quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2005, filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements, which speak only as to the date of this release. Except as required by law, aQuantive, 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. In the company name Avenue A | Razorfish noted in this news release, a pipe symbol appears between Avenue A and Razorfish. This symbol may not appear properly in some systems.
aQuantive, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, 2005 December 31, 2004
----------------- ------------------
Assets
Current assets:
Cash, cash equivalents, and
short-term investments $ 112,889 $ 59,247
Accounts receivable, net of
allowances 160,370 106,683
Other receivables 968 1,486
Prepaid expenses and other
current assets 2,108 1,631
Deferred tax asset 5,416 7,204
---------------- -----------------
Total current assets 281,751 176,251
Property and equipment, net 27,370 17,569
Goodwill and other intangible
assets, net 173,153 174,071
Other assets 2,631 2,690
Deferred tax asset, net 23,755 15,642
---------------- -----------------
Total assets $ 508,660 $ 386,223
================ =================
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable and accrued
expenses $ 133,303 $ 89,608
Pre-billed media 18,254 15,655
Deferred revenue 14,310 10,394
Other current liabilities 670 603
---------------- -----------------
Total current liabilities 166,537 116,260
Notes payable 80,000 80,000
Other long-term liabilities 5,183 3,466
---------------- -----------------
Total liabilities 251,720 199,726
---------------- -----------------
Shareholders' equity:
Common stock 665 623
Paid-in capital 269,382 233,898
Accumulated deficit and other
comprehensive income (13,107) (48,024)
---------------- -----------------
Total shareholders' equity 256,940 186,497
---------------- -----------------
Total liabilities and
shareholders' equity $ 508,660 $ 386,223
================ =================
aQuantive, Inc.
Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenue $ 87,457 $ 60,706 $308,405 $157,937
Costs and expenses:
Cost of revenue 11,069 7,943 39,149 22,551
Client support 37,790 29,545 139,637 66,934
Product development 2,713 1,702 9,328 6,188
Sales and marketing 4,578 2,675 15,028 9,197
General and
administrative 6,983 6,521 32,732 21,213
Amortization of
intangible assets 1,801 1,832 7,210 4,048
Client reimbursed
expenses 1,600 703 4,340 1,260
-------- -------- -------- --------
Total costs and
expenses 66,534 50,921 247,424 131,391
-------- -------- -------- --------
Income from operations 20,923 9,785 60,981 26,546
Interest and other income, net 510 600 1,532 1,925
Interest expense 581 610 2,334 875
-------- -------- -------- --------
Income before provision for
income taxes 20,852 9,775 60,179 27,596
Provision (benefit) for income
taxes 9,278 2,682 24,998 (15,287)
-------- -------- -------- --------
Net income $ 11,574 $ 7,093 $ 35,181 $ 42,883
======== ======== ======== ========
Basic net income per share $ 0.18 $ 0.11 $ 0.55 $ 0.70
======== ======== ======== ========
Diluted net income per share $ 0.15 $ 0.10 $ 0.48 $ 0.62
======== ======== ======== ========
Shares used in computing basic
net income per share 65,878 61,996 64,099 61,225
======== ======== ======== ========
Shares used in computing
diluted net income per share 78,404 73,268 76,516 69,412
======== ======== ======== ========
Supplemental Schedule of EBITDA and Non-GAAP Estimates
The term "EBITDA" refers to a financial measure that is defined as
earnings before net interest and other income, interest expense,
income taxes, depreciation and amortization. EBITDA is commonly used
to analyze companies on the basis of leverage and liquidity. However,
EBITDA is not a measure determined under GAAP in the United States of
America and may not be comparable to similarly titled measures
reported by other companies. EBITDA should not be construed as a
substitute for net income or as a better measure of liquidity than
cash flow from operating activities, which are determined in
accordance with GAAP. Management believes that EBITDA is a useful
measure for analyzing operating results, and uses this non-GAAP
financial measure to review past results and forecast future results.
The following schedule reconciles EBITDA to net income on the
company's consolidated statement of operations, which the company
believes is the most directly comparable GAAP measure.
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ ---------------------
(in thousands, except per
share data) 2005 2004 2005 2004
--------- -------- ---------- ----------
(unaudited) (unaudited)
Net income $ 11,574 $ 7,093 $ 35,181 $ 42,883
Depreciation and amortization
of property and equipment 2,987 1,557 10,038 4,332
Amortization of intangible
assets 2,006 2,043 8,051 4,702
(Deduct) interest and other
income, net (510) (600) (1,532) (1,925)
Interest expense 581 610 2,334 875
Provision (benefit) for
income taxes 9,278 2,682 24,998 (15,287)
-------- ------- --------- ---------
EBITDA $ 25,916 $13,385 $ 79,070 $ 35,580
======== ======= ========= =========
EBITDA per basic share $ 0.39 $ 0.22 $ 1.23 $ 0.58
======== ======= ========= =========
EBITDA per diluted share $ 0.33 $ 0.18 $ 1.03 $ 0.51
======== ======= ========= =========
The term "Adjusted EBITDA" refers to a financial measure that is
defined by us as earnings before net interest and other income,
interest expense, income taxes, depreciation and amortization, and
before share-based expense. Adjusted EBITDA is a non-GAAP financial
measure, and may not be comparable to similarly titled measures
reported by other companies. In our estimate of Adjusted EBITDA for
the first quarter of 2006, we have excluded estimates for interest
expense of approximately $580,000, net interest and other income of
approximately $700,000, depreciation of approximately $3.1 million,
amortization of intangible assets of approximately $2.0 million,
share-based compensation of approximately $5.5 million and income
taxes at an effective tax rate of 40%. In our estimate of Adjusted
EBITDA for the full year 2006, we have excluded estimates for interest
expense of approximately $2.3 million, net interest and other income
of approximately $3.0 million, depreciation of approximately $14.5
million, amortization of intangible assets of approximately $8.0
million, share-based compensation of approximately $22.0 million and
income taxes at an effective tax rate of 40%.
We have presented information regarding our current expectations for
Net Income before share-based compensation for the first quarter of
2006 and for the full year 2006. We provide this information because
management believes that analyzing our operating results excluding the
impact of share-based compensation provides a more valuable measure of
our operating performance. We exclude share-based compensation from
our internal measurements of financial performance, although we
consider the dilutive impact to our shareholders when awarding
share-based compensation. Share-based compensation programs are an
important component of our compensation structure. We expect to
continue awarding share-based compensation to employees, and including
the impact of these awards in our operating results. For the first
quarter of 2006, our calculation of Net Income before share-based
compensation excludes the after tax impact of such compensation of
approximately $3.3 million. For the full year 2006, our calculation
excludes the after tax impact of such compensation of approximately
$13.2 million.
Supplemental Schedule of Segment Information
(in Digital Digital Digital Unallocated Total
thousands) Market- Market- Perfor- Corporate
ing ing mance Expenses
Services Techno- Media
(1) logies (2) (3)
---------- ---------- ---------- --------------------
(unaudited)
Three Months ended December 31, 2005
-----------------------------------------------------------
Revenue $ 53,921 $ 25,650 $ 7,886 $ - $ 87,457
Costs
and
expenses:
Cost
of
revenue 243 6,332 4,302 192 11,069
Client
support 36,883 - 907 - 37,790
Product
develop-
ment - 2,713 - - 2,713
Sales
and
marketing 1,336 2,735 507 - 4,578
General
and admin-
istrative 2,442 1,934 254 2,353 6,983
Amorti-
zation
of
intangible
assets - - - 1,801 1,801
Client
reimbursed
expenses 1,600 - - - 1,600
--------- --------- --------- ---------- --------
Total
costs
and
expenses 42,504 13,714 5,970 4,346 66,534
---------- --------- --------- ---------- --------
Income
from
operations $ 11,417 $ 11,936 $ 1,916 $ (4,346)$ 20,923
========= ========= ========= ========== ========
Three Months ended December 31, 2004
-----------------------------------------------------------
Total
Revenue $ 36,707 $ 18,865 $ 5,134 $ - $ 60,706
Costs
and
expenses:
Cost
of
revenue - 4,166 3,585 192 7,943
Client
support 29,035 - 510 - 29,545
Product
develop-
ment - 1,702 - - 1,702
Sales
and
marketing 676 1,818 181 - 2,675
General
and
admin-
istrative 2,522 1,933 213 1,853 6,521
Amorti-
zation
of
intangible
assets - - - 1,832 1,832
Client
reimbursed
expenses 703 - - - 703
--------- --------- --------- ---------- --------
Total
costs
and
expenses 32,936 9,619 4,489 3,877 50,921
--------- --------- --------- ---------- --------
Income
from
operations $ 3,771 $ 9,246 $ 645 $ (3,877)$ 9,785
========= ========= ========= ========== ========
(in Digital Digital Digital Unallocated Total
thousands) Market- Market- Perfor- Corporate
ing ing mance Expenses
Services Techno- Media
(1) logies (2) (3)
---------- ---------- ---------- --------------------
(unaudited)
Year ended December 31, 2005
-----------------------------------------------------------
Revenue $ 189,755 $ 92,287 $ 26,363 $ - $308,405
Costs
and
expenses:
Cost
of
revenue 243 22,678 15,440 788 39,149
Client
support 135,790 - 3,847 - 139,637
Product
develop-
ment - 9,328 - - 9,328
Sales
and
marketing 4,595 9,509 924 - 15,028
General
and admin-
istrative 12,916 7,912 1,223 10,681 32,732
Amorti-
zation
of
intangible
assets - - - 7,210 7,210
Client
reimbursed
expenses 4,340 - - - 4,340
--------- --------- --------- ---------- --------
Total
costs
and
expenses 157,884 49,427 21,434 18,679 247,424
---------- --------- ---------- ---------- --------
Income
from
operations $ 31,871 $ 42,860 $ 4,929 $ (18,679)$ 60,981
========= ========= ========= ========== ========
Year ended December 31, 2004
-----------------------------------------------------------
Revenue $ 87,653 $ 60,871 $ 9,413 $ - $157,937
Costs
and
expenses:
Cost
of
revenue - 14,652 7,323 576 22,551
Client
support 65,505 - 1,429 - 66,934
Product
develop-
ment - 6,188 - - 6,188
Sales
and
marketing 1,628 7,268 301 - 9,197
General
and
admin-
istrative 6,253 6,660 430 7,870 21,213
Amorti-
zation
of
intangible
assets - - - 4,048 4,048
Client
reimbursed
expenses 1,260 - - - 1,260
--------- --------- --------- ---------- --------
Total
costs
and
expenses 74,646 34,768 9,483 12,494 131,391
---------- --------- --------- ---------- --------
Income
from
operations $ 13,007 $ 26,103 $ (70) $ (12,494)$ 26,546
========= ========= ========= ========== ========
(1) Digital Marketing Services includes Avenue A | Razorfish
(2) Digital Marketing Technologies includes Atlas
(3) Digital Media includes DRIVEpm and MediaBrokers
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