Business Editors
CORRECTION...By Business Wire
NEW YORK--(BUSINESS WIRE)--Feb. 26, 2004
In BW5760 issued Feb. 26, 2004: Last line in the Consolidated Statement of Operations table under 2003, across from Weighted average common shares outstanding should read 113,852,206 (sted 13,852,206).
The corrected release reads:
24/7 REAL MEDIA REPORTS 2003 RESULTS AND RAISES GUIDANCE FOR 2004; PROJECTS 2004 REVENUE OF $79 MILLION TO $84 MILLION, UP MORE THAN 60% YEAR-OVER-YEAR
24/7 Real Media, Inc. (Nasdaq: TFSM), a pioneer in interactive marketing and technology, today announced its financial results for the fourth quarter and calendar year, ended December 31, 2003, and updated its business outlook for 2004.
Fourth Quarter Results
Total revenue for the fourth quarter, ended December 31, 2003, rose 9.5% to $13.2 million from third quarter revenue of $12.0 million, and it climbed 14.5% from the $11.5 million reported in the same period in 2002. GAAP net loss for the fourth quarter of 2003 was $5.9 million, or $0.05 per share, compared to a net loss of $3.2 million, or $0.05 per share, for the same period a year ago. EBITDA was $0.2 million in the fourth quarter. A reconciliation of EBITDA, as defined by the Company, and GAAP results are included in the financial exhibits accompanying this release.
David J. Moore, chairman and chief executive officer of 24/7 Real Media, said: "2003 was a year of dramatic progress, operationally and financially. We have demonstrated to prestigious clients the value of the integrated 24/7 Real Media approach to Internet advertising. Since the end of 2003, the relationship we have forged with Lycos U.S. shows that 24/7 Real Media, by integrating media and technology, is providing a valuable platform to Web publishers in which costs, operations and data are all leveraged to produce higher revenue and profits. We are encouraged by results so far this year, and we believe we have set the stage for sustained, profitable growth. We are optimistic about the Company's prospects in 2004 and beyond."
Significant Recent Developments
-- Geographical Expansion - The Company announced the completion
of the acquisition of Real Media Korea on January 8. The
acquisition provides 24/7 Real Media with a leadership
position in the South Korean marketplace as the first step in
its expansion throughout Asia;
-- Technological Enhancements - The Company introduced Open
AdSystem(TM), which combines its patent-protected,
award-winning Open AdStream(R) or Open Advertiser(TM) ad
serving technologies with its Insight XE(TM) analytics in one
package for Web publishers and advertisers; and
-- Lycos U.S. - The Company announced the signing of multi-year
media sales and technology agreements with Lycos U.S. Lycos
U.S. has entered the Company's 24/7 Web Alliance, which is now
the 4th largest media entity on the Internet(1) with more than
66 million unique visitors monthly. In addition, starting in
March, Lycos U.S. will use two key products in the Company's
technology suite, Open AdStream and Insight XE. The Company
believes that the relationship with Lycos U.S. is a landmark
deal in the Internet advertising industry and has the
potential to contribute significantly to the Company's future
success.
2003 Full Year Results
Revenue for 2003 rose 15.6% to $49.2 million from $42.6 million for 2002. On a GAAP basis, net loss attributable to common stockholders for 2003 decreased to $14.4 million, or $0.17 per share, from a net loss of $24.3 million, or $0.46 per share, for 2002. Net loss attributable to common stockholders was negatively impacted by increased amortization from the acquisition of Insight First in January 2003, restructuring charges, the impairment of intangible assets related to the 24/7 Messenger product acquired with Now Marketing in September 2002 and preferred stock conversion discounts.
Segment Overview - Fourth Quarter and Calendar-Year 2003
Integrated Media Solutions revenue, which includes revenue from the 24/7 Web Alliance, 24/7 Search and other media services, climbed 17.7% to $33.9 million in 2003 from $28.8 million in 2002. 2002 Integrated Media Solutions revenue included revenue from business units that were divested in early 2003. 24/7 Web Alliance operations grew 26.1% to $6.0 million in the fourth quarter of 2003 from $4.8 million in the same quarter of 2002. For the full year, 24/7 Web Alliance revenue rose 29.4% to $21.5 million from $16.6 million in 2002. The Company continues to establish new relationships with blue chip advertisers, particularly in the healthcare, technology, pharmaceutical and automotive industries.
24/7 Search, our growing search marketing business, saw revenue rise nearly 19% to $2.7 million in the fourth quarter of 2003 from $2.3 million in the same quarter of 2002 and increase nearly 25% to $10.3 million in 2003 from $8.3 million in 2002. The increase was due to the greater number of valid visitors delivered to client advertisers as a result of expanding strategic relationships with search engine distribution partners.
Other media services revenue, which primarily consists of e-mail list rental, declined to $2.1 million in 2003 from $3.9 million in 2002. The difference resulted from the divestiture of the U.S. e-mail management product.
Gross profit margin for Integrated Media Solutions expanded to 36.2% in 2003 from 32.9% in 2002, as the mix in sales shifted to higher margin products.
Technology Solutions revenue rose 11.0% to $15.3 million in 2003 from $13.8 million in 2002 and held steady at $3.9 million in the fourth quarter of 2003 from the same quarter of 2002. Starting in January 2003, the Company adopted a subscription-based accounting treatment of license revenues, negatively impacting year-over-year comparisons.
Technology revenue in 2003 was generated from our award-winning Open AdStream(R) (OAS) advertisement serving and management platform, which includes OAS Local software, OAS Central service and Open Advertiser(TM) (OAD) service; and from Insight XE(TM). Revenue from our hosted products, which are services distributed by 24/7 Real Media from centrally hosted servers, continued to grow throughout 2003. These services delivered 14.9 billion paid impressions in the fourth quarter, representing nearly double the 7.5 billion paid impressions delivered in the fourth quarter of 2002. During the fourth quarter, the Company added a number of new Open AdSystem(TM) customers, including FOXNews.com, eMedicine.com, Weather.com, CourtTV.com and World Wrestling Entertainment(TM) in the U.S. and Doctissimo.fr, Vaybee.com, I-Network Publicidad, Vocento and TV2.no in Europe. The Company's Insight XE(TM) Web analytics solution, formerly Open Insight, signed FOXNews and NTL Home.
Guidance
The Company expects Q1 2004 revenue of between $15.5 million and $16.5 million, which at the midpoint represents an increase of approximately 35% from first quarter 2003 revenue of $11.8 million. The Company expects full-year 2004 revenue in the range of $79 million-to-$84 million. The Company also expects to generate a full-year pro forma operating profit during 2004. Pro forma operating profit, as defined by the Company, equals Gross Profit less ongoing Sales and Marketing, General and Administrative and Product Development expenses, excluding depreciation.
24/7 Real Media will recognize only a portion of the media revenues generated on the Lycos U.S. properties from the date of the agreement through the end of February, with full recognition commencing in March. The Company projects that during the integration phase of the Lycos U.S. relationship, which is expected to last through September, the agreement will be slightly accretive to the Company's results of operations.
The Company believes that it will benefit from improved operating leverage in the intermediate-term future. Over the next two to three years, the Company expects organic revenue growth in the 20%-to-25% range with gross margin ranging from 40%-to-45%. Gross margin will be subject to fluctuations in the mix between media and technology revenue. The Company anticipates pro forma operating profit margin during this period to be in the 8%-to-12% range. Of every incremental $1.00 of media revenue generated, the Company believes that approximately $0.15 will be added to pro forma operating profit. Of every incremental $1.00 of technology revenue generated, the Company believes that approximately $0.40 will be added to pro forma operating profit.
1 2 3 4 Continued »
