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Individual, Inc. Reports Third Quarter Results

Revenue and Users Reach Record Levels on Strength of WWW Services;
 Acquisition of Hoover Adds Additional Capabilities;

Highlights Newest NewsPage Offering with Customization Features

BURLINGTON, Mass., Oct. 25 /PRNewswire/ -- Individual, Inc. (Nasdaq: INDV) today reported that revenues for its third quarter ended September 30, 1996, rose 39 percent to a record $6.1 million compared with $4.4 million for the third quarter of 1995. The net loss for the quarter was $4.3 million, or 31 cents per share vs. a loss of $1.7 million, or 17 cents per share for the prior year period, as the company continued to invest in growing its customer base and to develop new Internet and Intranet products.

The number of users of the Company's enterprise and single-user services jumped to more than six-fold over a year ago to 425,000 at September 30, 1996. The increase reflects significant growth in users of "NewsPage" and "FreeLoader," Individual's World Wide Web services.

Michael Kolowich, president and chief executive officer, said, "This was another exciting growth quarter for Individual. The Company has continued to lead and redefine the manner in which business people receive their daily news briefing. Our continued, strong growth in both revenue and customer count is indicative of our leadership position in the personalized news marketplace."

Enterprise Service Growth

In the third quarter, revenue from "First!," the Company's enterprise service was up 43% percent from a year ago and represented 69% percent of total revenue for the quarter. New customers for First! Intranet accounted for most of the increase. The growth in Intranet delivery was partially offset by decreases in clients receiving the fax and e-mail service as the Company continued migrating its customer base to Internet and Intranet solutions. Kolowich noted Individual's continued success in refocusing its sales and product efforts into larger enterprise solutions for corporate Intranets and Lotus Notes.

Following the close of the quarter, on October 17, 1996 Individual enhanced its enterprise product line by acquiring the Hoover Business Intelligence Unit from Information Access Company, a unit of The Thompson Corporation. Hoover is an intelligent software agent that efficiently integrates and organizes information from internal and external news and information sources. The agent provides a neatly packaged, consolidated briefing report that is organized based on a specified "context," such as a company or industry. Reports are presented in Lotus Notes database format, and include real-time alerting from newswire feeds as well as extensive access to retrospective databases. Hoover's comprehensive information relationships include archival access for year-to-date information plus a two year backfile.

Kolowich noted, "We purchased Hoover for approximately $2 million in cash and deferred payments. As a standalone entity Hoover will have only a modest direct impact on Individual's revenue. When combined with our service offerings for Enterprise customers and sold through our direct sales channels, Hoover complements First! for Notes and First! Intranet with robust real-time and archival functionality, which has become an important feature requirement for our Enterprise customers. This will contribute to continued growth in the large-customer sector of our business."

He added that Hoover also adds a number of information sources currently not available through First!, including agreements with: IAC's news journals and databases such as PROMT and MARS; business publications such as Forbes; financial databases such as Disclosure and EDGAR; and industry-specific news sources such as ADIS and IMS World for the pharmaceutical industry."

Single User Service Expansion

Revenue from the Company's single user services represented 31% percent of total revenue for the quarter. Single user revenue grew 30% percent over the third quarter of 1995.

According to Kolowich, "Most notably, registered users for NewsPage, our internet based news service, exceeded 270,000, a quarter-to-quarter increase of 42 percent. The growth in users reflects our continued success in World Wide Web-based distribution. NewsPage has now established commercial link relationships with approximately 80 sites on the Web, including distribution partnerships, web site advertising and headline linkage with other web sites."

During the quarter, Individual commenced distribution partnerships with MSNBC, Intuit and Infoseek to provide specialized news topics to these services with links back to NewsPage. In September, Individual and Netscape launched Personalized News Service for Netscape 3.0 users using a new HTML- Enabled Version of NewsPage Direct, one of the first offerings in Netscape's Inbox Direct Service. These agreements are in addition to those already in place with Yahoo, Microsoft's MSN and NETCOM, among others.

Following the close of the quarter, on October 23, 1996, Individual announced its latest version of NewsPage, with a highly customizable version of NewsPage that each user can personally tailor from a list of over 2,500 topics. "The new NewsPage is the most powerful personalized business news service on the Web. We expect continued growth in NewsPage use because we have given our readers an easy and efficient way to view daily all of the relevant news they need to be more effective on their jobs," Kolowich commented.

FreeLoader, the Company's off-line personal news service, continues to increase its users base with over 90,000 now subscribing to the service. During the quarter, FreeLoader released version 2.0 of its service which offers additional functionality including branded channels with Pathfinder, Sony Music, Sportsline USA, ZDNet, Hotwired, Slate, Hachette Filipacchi Magazines, Intuit, and Travelocity. On September 12, 1996, MSNBC began distributing a co-branded version of FreeLoader. "The increase in users and the MSNBC distribution partnership are allowing FreeLoader to achieve its short-term goal to add its users as a base to provide the base for advertising revenue in future quarters," stated Kolowich.

Nine Month Results

For the nine months ended September 30, 1996, revenue rose 40% percent to $16.8 million from $12.0 million a year ago. The net loss, excluding a one time, non-cash write-off in the second quarter associated with the FreeLoader acquisition, was $9.6 million, or 79 cents per share vs. a loss of $4.7 million, or 49 cents, in the comparable prior period.

Operating Results

The net loss for the quarter rose $2.6 million from the prior year period as the increase in revenue was more than offset by higher expenditures, including: a rise in operating expenses to develop, sell and market NewsPage, which was introduced in the second quarter of 1995; increased development expenditures for new releases of First! products, primarily First! Intranet, and the inclusion of real-time alerting; expenditures for the development and marketing of the FreeLoader service, which was acquired at the end of second quarter 1996; increased expenditures in administration, primarily for deferred compensation, executive search fees and legal costs; and Individual's pro-rata share of losses from the joint venture with Toshiba and Mitsui.

Kolowich noted, "During this period of rapid growth, we are investing in the Company's future. Our operating results are on track with our expectations."

The Company ended the third quarter with total assets of $43 million, including $34 million of cash equivalents and investments. Shareholders' equity was $26 million with long-term obligations of $1 million.

Individual, Inc. is a pioneer and leading provider of electronic personalized information services. Through its exclusive information retrieval, filtering, and delivery technologies, Individual brings highly relevant, precisely targeted news, information, and advertising to more than 425,000 readers worldwide. Individual's services include: First! and Hoover for corporate enterprises; NewsPage, a comprehensive custom news site on the World Wide Web (; and FreeLoader, the first off-line Web delivery service ( Individual's partners include Lotus, Knight-Ridder, Microsoft Corp., NETCOM, Netscape, and Toshiba. The Company is headquartered in Burlington, Mass., with offices around the world. Visit Individual on the Web at

Certain of the above statements, including, without limitation, statements regarding the Company's expectations for future growth in revenues and users, are forward looking statements that involve risks and uncertainties. Actual results could differ materially as a result of a variety of factors, including, changes in the rapidly evolving market for customized business information services, risks of technological change and new product introductions, risks associated with acquisitions, competitive developments, and other risk factors described from time to time in the Company's SEC reports.

NewsPage, First!, FreeLoader and BookWire are trademarks of Individual, Inc. All other trademarks contained herein are the property of their respective owners.
 Individual, Inc.
 Consolidated Statements of Operations
 For the three months ended For the nine months ended
 September 30, September 30,
 1996 1995 1996 1995
 Revenue $6,134,818 $4,424,354 $16,811,836 $12,025,226
 Cost of revenue 2,977,252 2,087,588 7,872,092 5,470,783
 Gross margin 3,157,566 2,336,766 8,939,744 6,554,443

Operating expenses:

Sales and
 marketing 1,628,830 761,673 4,035,595 1,747,896

New subscriber
 acquisition 2,173,862 1,852,619 6,353,490 5,856,579
 Product development 1,825,873 716,084 3,718,084 1,764,801

General and
 administrative 1,588,716 639,499 3,874,530 1,853,850

Purchased incomplete
 technology -- -- 35,563,750 --

Total operating
 expenses 7,217,281 3,969,875 53,545,449 11,223,126
 Loss from operations (4,059,715) (1,633,109) (44,605,705) (4,668,683)

Interest income and
 other, net (200,579) 12,922 272,260 75,320
 Interest expense (42,168) (62,270) (817,382) (129,294)
 Net loss ($4,302,462) ($1,682,457) ($45,150,827) ($4,722,657)

Net loss per
 common share ($0.31) ($0.17) ($3.73) ($0.49)

Weighted average

common shares
 outstanding 14,088,645 9,645,865 12,119,213 9,641,133
 Individual, Inc.
 Consolidated Balance Sheets
 September 30, December 31,
 1996 1995


Current assets:
 Cash and cash equivalents $27,205,515 $17,517,743

Investments in marketable
 securities 7,048,657 --
 Accounts receivable, net 4,048,069 5,741,694
 Prepaid expenses 380,881 115,094
 Total current assets 38,683,122 23,374,531
 Property and equipment, net 4,079,880 2,926,234
 Other assets, net 316,275 501,740
 Total assets $ 43,079,277 $ 26,802,505


Current liabilities:
 Accounts payable $2,624,245 $2,088,783
 Accrued expenses 4,677,161 1,716,108
 Deferred revenue 7,868,013 8,924,309

Bank loans for
 equipment financing 804,734 638,067

Current obligations
 under capital leases 105,289 138,017
 Total current liabilities 16,079,442 13,505,284
 Senior subordinated notes -- 10,000,000
 Other long term liabilities 1,076,623 985,738
 Redeemable preferred stock -- 23,999,013
 Equity (deficit) 89,618,747 (3,142,822)
 Accumulated deficit (63,695,535) (18,544,708)

Total stockholders'
 equity (deficit) 25,923,212 (21,687,530)

Total liabilities and
 stockholders' equity (deficit) ($46,811,359) ($4,401,357)

SOURCE Individual, Inc.
 -0- 10/25/96

/CONTACT: Bob Lentz of Individual, Inc., 617-273-6000, ext. 259, or ; or Heather Wietzel of The Financial Relations Board, Inc., 513-861-8213, or /


CO: Individual, Inc.` ST: Massachusetts IN: CPR SU: ERN

BS -- NYF030 -- 5671 10/25/96 09:09 EDT
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Publication:PR Newswire
Date:Oct 25, 1996
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