InPhonic Announces Record Revenues and Raises 2005 Revenue and EPS
Guidance Reports Full Year 2004 Revenue of $204.2 million and Q4
2004 Revenue of $60.0 million and for the first time Free Cash Flow
positive WASHINGTON, Feb. 8 /PRNewswire-FirstCall/ -- InPhonic,
Inc. (NASDAQ:INPC), a leading online seller of wireless services,
today reported record revenues and raises 2005 Revenue and EPS
Guidance above current analyst estimates. Fourth Quarter 2004
Results GAAP Results: Revenues were $60.0 million in the fourth
quarter 2004, compared with $54.7 million in the fourth quarter
2003, an increase of 10% year over year. Net loss was $(1.4)
million or $(0.37) per basic and diluted shares, in the fourth
quarter 2004, reflecting a decrease of $(9.7) million compared with
net income of $8.3 million, or $0.25 per diluted shares, in the
fourth quarter 2003. The fourth quarter 2003 results included the
effects of the one-time recognition of $17.3 million in revenues
that were previously deferred in accordance with Staff Accounting
Bulletin ("SAB") No. 101, Revenue Recognition in Financial
Statement. This one-time recognition impacted both revenues and net
income for the quarter. Non-GAAP Results: Revenues were $60.0
million in the fourth quarter 2004, compared with revenues of $37.4
million excluding the effects of the one-time recognition of $17.3
million in revenues in the fourth quarter 2003, an increase of 60%
year over year. For the fourth quarter 2004, Adjusted EBITDA of
$3.4 million, compared with $(5.0) million in the fourth quarter
2003, an improvement of $8.4 million year over year. Adjusted
Earnings before Taxes ("Adjusted EBT") of $1.9 million in the
fourth quarter 2004 or $0.05 per pro forma diluted share reflecting
an improvement of $12.1 million compared with adjusted EBT of
$(10.2) million or $(0.39) per pro forma diluted share. The
components of Adjusted EBITDA and Adjusted EBT are discussed below
under "Non- GAAP Financial Measures". This performance exceeded
average analysts' expectations of revenue of $54.1 million,
Adjusted EBITDA of $2.6 million and Adjusted EBT of $0.03 per pro
forma diluted share for the fourth quarter 2004. Full Year 2004
Results GAAP Results: Revenues were $204.2 million for 2004,
compared with $136.1 million for 2003, an increase of 50% year over
year. Net loss was $(10.2) million or $(2.30) per diluted share in
2004, reflecting an increase of $10.0 million, compared with net
loss of $(20.2) million, or $(2.46) per basic and diluted shares in
2003. The 2003 results included the effects of the one-time
recognition of $13.6 million in revenues that were previously
deferred in accordance with Staff Accounting Bulletin ("SAB") No.
101, Revenue Recognition in Financial Statements. This one-time
recognition impacted both revenues and net income for the year.
Non-GAAP Results: Revenues were $204.2 million for 2004, compared
with $122.5 million excluding the effects of the one-time
recognition of $13.6 million in revenues for 2003, an increase of
67% year over year. For 2004, Adjusted EBITDA of $4.4 million,
compared with $(21.3) million in 2003, an improvement of $25.7
million year over year. Adjusted Earnings before Taxes ("Adjusted
EBT") of $(1.1) million for 2004 or $(0.04) per pro forma diluted
share, reflecting an improvement of $26.3 million compared with
adjusted EBT of $(28.0) million or $(1.11) per pro forma diluted
share. This performance exceeded average analysts' expectations of
revenue of $198.3 million, Adjusted EBITDA of $3.4 million and
Adjusted EBT of $(0.11) per pro forma diluted share for 2004. "We
are very pleased with our strong 2004 and fourth quarter
performance as we posted record top line growth and bottom-line
improvement. We believe that our financial performance reflects the
growing strength of our business and the compelling value
proposition we provide to our customers." said David Steinberg,
Chief Executive Officer. Operating Highlights * Acquired
substantially all of the assets of A1 Wireless, one of the largest
online activators of wireless devices over the internet; * Added
distribution clients including Motorola, CNET, eCost, Sanyo, and
Radio Shack; * Expanded our Mobile Virtual Network Enabler or
"MVNE" services by adding AT&T as a premier client. We were
selected by AT&T to deliver a systems platform for procurement,
activation, billing and customer care; * Named the No. 1
fastest-growing private company in the United States on the 2004
Inc. 500 list, included in the 2004 "Best of the Web" by Forbes
magazine; and * Completed our Initial Public Offering on November
16, 2004. Other GAAP Fourth Quarter Financial Updates * Cash and
marketable securities were $101.0 million at December 31, 2004. *
Capital expenditures in the fourth quarter totaled $2.1 million,
compared to $1.8 million in the fourth quarter of 2003. See
"Non-GAAP Financial Measures" for additional information. 2005
Outlook Q1 2005 Guidance Forward-looking guidance for the first
quarter ending March 31, 2005, is as follows: Revenue is expected
to be between $52 million and $54 million; up from analysts'
original guidance of $44 million to $46 million which was raised to
$46 million to $48 million after giving effects for the results of
the A-1 acquisition. This projected result can be compared to
Revenues of $40.1 million achieved in Q1 2004. Adjusted EBITDA is
expected to be between $1.5 million and $1.6 million; up from
analysts' previous guidance of $0.5 million to $0.6 million, which
was raised $0.8 million to $0.9 million after giving effects for
the results of the A-1 acquisition. This projected result can be
compared to Adjusted EBITDA of $(2.8) million achieved in Q1 2004.
Adjusted Earnings before Taxes ("Adjusted EBT") is expected to be
between $0.00 to $0.01 per share; up from analysts' previous
guidance of $(0.01) to $(0.02). This projected result can be
compared to Adjusted EBT per share of $(0.40) achieved in Q1 2004.
Full Year 2005 Guidance Forward-looking guidance for the full-year
ending December 31, 2005, is as follows: Revenue is expected to be
between $315 million to $325 million; up from analysts' previous
guidance of $250 million to $260 million which was raised to $280
million to $290 million after giving effects for the results of the
A- 1 acquisition. This projected result can be compared to Revenues
of $204 million achieved in 2004. Adjusted EBITDA is expected to be
between $35 million and $36 million; up from analysts' previous
guidance of $28 million to $30 million which was raised to $32
million to $33 million after giving effects for the results of the
A-1 acquisition. This projected result can be compared to Adjusted
EBITDA of $4.4 million achieved in 2004. Adjusted Earnings before
Taxes ("Adjusted EBT") is expected to be between of $0.74 to $0.76
per share, up from analysts' previous guidance of $0.67 to $0.69.
This projected result can be compared to Adjusted EBT per share of
$0.07 achieved in 2004. Forward-Looking Statements This press
release contains forward-looking statements, including, without
limitation, all statements related to future financial performance,
plans to grow our business and build our brand. Words such as
"expect," "anticipate" and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are based upon our current expectations. Forward-looking
statements involve risks and uncertainties. Our actual results and
the timing of events could differ materially from those anticipated
in such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to
our fluctuating operating results, seasonality in our business, our
ability to acquire products on reasonable terms, our online
business model, demand for our products, the strength of our brand,
competition, our ability to fulfill orders and other risks detailed
in our filings with the Securities and Exchange Commission,
including the Prospectus with respect to our initial public
offering filed pursuant to Rule 424(b)(4) on November 16, 2004. You
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
All forward-looking statements are qualified in their entirety by
this cautionary statement, and InPhonic undertakes no obligation to
revise or update any forward-looking statements to reflect events
or circumstances after the date hereof. Conference Call Company
management will be holding a conference call to discuss its fourth
quarter and full year 2004 financial results on Tuesday, February
8, 2005 after the close of the day's trading on the NASDAQ Stock
Market. The company will host a conference call, open to the
general public, at 5:00 PM Eastern Time to discuss the financial
results of the fourth quarter and full year 2004, and provide a
Company update. The conference call can be accessed by the
following: * 800-289-0572 (Domestic) or 913-981-5543
(International); passcode 3604127. * The replay will be available
through February 17, 2005 by dialing 888-203-1112 (Domestic) or
719-457-0820 (International); passcode 3604127. * The Company will
also audio web cast the call. * A link to the audio web cast will
be available on the Company's own site at http://www.inphonic.com/
in the Investor Relations section. * More call information and an
audio archive following the call will be available on the Company's
site at http://www.inphonic.com/ in the Investor Relations section.
* Individual investors can listen to the call at
http://www.fulldisclosure.com/, Thomson/CCBN's individual investor
portal. * Institutional investors can access the call via the
password-protected event management site,
http://www.streetevents.com/. Non-GAAP Financial Measure To
supplement the Company's consolidated financial statements, which
are presented in accordance with GAAP, InPhonic uses Non-GAAP
measures of certain components of financial performance, including
Non-GAAP revenues in the fourth quarter 2003, Non-GAAP earnings
before interest, taxes, depreciation and amortization and
stock-based compensation ("EBITDA"), Non-GAAP net income per
diluted share excluding stock-based compensation and depreciation
and amortization related to acquisitions, Non-GAAP gross profit and
Non-GAAP free cash flow generated by operations. Non-GAAP revenues
in the fourth quarter 2003. InPhonic uses the calculation of
Non-GAAP revenues in the fourth quarter of 2003 to ensure accurate
comparison of revenues to future period revenues. In the fourth
quarter of 2003, InPhonic recognized $17.3 million of revenues
previously deferred under SAB 101 and this amount is excluded from
Non-GAAP fourth quarter 2003 revenues for comparative purposes.
Similarly, InPhonic uses the calculation of Non-GAAP revenues for
the full year 2003 to ensure accurate comparison to future period
revenues. InPhonic excludes $13.6 million in 2003 revenues
previously deferred under SAB 101 in calculating non-GAAP revenue
for the full year 2003. Adjusted EBITDA - Earnings before Interest,
Taxes, Depreciation and Amortization adjusted for Stock-based
Compensation Adjusted EBT - Net Income (loss) excluding stock-based
compensation and depreciation and amortization related to
acquisitions These measures should be considered in addition to
results prepared in accordance with generally accepted accounting
principles, but should not be considered a substitute for, or
superior to, GAAP results. The Company has reconciled Non-GAAP
financial measures included in this press release to the nearest
GAAP measure. Investors are encouraged to review the related GAAP
financial measures and the reconciliation of these Non-GAAP
financial measures to their most directly comparable GAAP financial
measure. Reconciliation of non-GAAP results of operations measures
to the nearest comparable GAAP measures (Unaudited) The following
table presents certain non-GAAP results before material non-
recurring items (in millions): Three months ended Three months
ended December 31, 2003 December 31, 2004 Non-GAAP Non-GAAP Actual
Adjustments Results Actual Adjustments Results Net sales $54.7
$(17.3)(a) $37.4 $60.0 $60.0 Operating income (loss) $8.4
$(17.3)(a) $(8.9) $(1.2) $(1.2) $(17.3)(a) $2.8(c) $0.1 (c) $0.1(d)
Net income (loss) $8.3 $(17.2) $(8.9) $(1.4) $2.9 $1.5 Year ended
Year ended December 31, 2003 December 31, 2004 Non-GAAP Non-GAAP
Actual Adjustments Results Actual Adjustments Results Net sales
$136.1 $(13.6)(b) $122.5 $204.2 $204.2 Operating income (loss)
$(19.1) $(13.6)(b) $(32.7) $(9.6) $(9.6) $(13.6)(b) $7.4(c) $3.6
(c) $0.1(d) Net income (loss) $(20.2) $(10.0) $(30.2) $(10.2) $7.5
$(2.7) Three months ended March 31, 2004 Actual Adjustments
Non-GAAP Results Net sales $40.1 $40.1 Operating income (loss)
$(4.7) $(4.7) $0.2 (c) Net income (loss) $(4.8) $0.2 $(4.6) (a)
One-time recognition of $17.3 million in revenues that were
deferred prior to Q4 2004 in accordance with Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements. (b)
One-time recognition of $13.6 million in revenues that were
deferred prior to 2004 in accordance with Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial Statements. (c) Non-GAAP
net income excludes stock-based compensation (d) Non-GAAP net
income excludes depreciation and amortization related to a
non-recurring Q4 2004 asset acquisition. Reconciliation of non-GAAP
measures to the nearest comparable GAAP measures (Unaudited) in
millions Adjusted EBITDA: Three Months Ended December 31, 2003
December 31, 2004 Net income (loss) $8.3 $(1.4) Non-recurring
revenue adjustment (17.3)(a) Add Back: Net interest and other
expense (income) 0.1 0.2 Taxes - - Stock-based compensation 0.2 2.8
Impairment of goodwill and intangibles 2.0 Depreciation and
amortization 1.7 1.8 Adjusted EBITDA: $(5.0) $3.4 Year Ended
December 31, 2003 December 31, 2004 Net income (loss) $(20.2)
$(10.2) Non-recurring revenue adjustment (13.6)(b) Add Back: Net
Interest expense (income) 1.1 0.6 Taxes - - Stock-based
compensation 3.6 7.4 Impairment of goodwill and intangibles 2.4 0.2
Depreciation and amortization 5.4 6.4 Adjusted EBITDA: $(21.3) $4.4
Three Months Ended March 31, 2004 Net income (loss) $(4.8)
Non-recurring revenue adjustment - Add Back: Net interest and other
expense (income) 0.1 Taxes - Stock-based compensation 0.2
Impairment of goodwill and intangibles - Depreciation and
amortization 1.6 Non-GAAP EBITDA $(2.8) (a) One-time recognition of
$17.3 million in revenues that were previously deferred in
accordance with Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements. (b) One-time recognition of
$13.6 million in revenues that were deferred prior to 2004 in
accordance with Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements. Reconciliation of non-GAAP
measures to the nearest comparable GAAP measures (Unaudited) in
millions except share and per share amounts Non-GAAP EBT: Three
Months Ended December 31, 2003 December 31, 2004 Net income (loss)
$8.3 $(1.4) Non-recurring revenue adjustment (17.3)(a) Add Back:
Net interest and other expense (income) 0.1 0.2 Taxes - -
Stock-based compensation 0.2 2.8 Depreciation and amortization of
acquisitions (1.5) 0.3 Non-GAAP EBT $(10.2) $1.9 EBT per share
$(0.39) $0.05 Basic Weighted Average Shares 11,547,511 21,385,595
Add: Diluted shares 14,546,485 15,664,882 Weighted Average Diluted
Shares 26,093,996 37,050,477 Treasury shares used in per share
calculation 26,093,996 37,050,477 Year Ended December 31, 2003
December 31, 2004 Net income (loss) $(20.2) $(10.2) Non-recurring
revenue adjustment (13.6)(b) - Add Back: Net interest and other
expense (income) 1.1 0.6 Taxes - - Stock-based compensation 3.6 7.4
Depreciation and amortization of acquisitions 1.1 1.1 Non-GAAP EBT
$(28.0) $(1.1) EBT Per Share $(1.11) $(0.04) Basic Weighted Average
Shares 11,204,791 14,016,753 Add: Diluted shares 13,989,167
18,847,307 Weighted Average Diluted Shares 25,193,958 32,864,060
Shares used in per share calculation - Treasury Method Shares
25,193,958 32,864,060 (a) One-time recognition of $17.3 million in
revenues that were previously deferred in accordance with Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements. (b) One-time recognition of $13.6 million in revenues
that were deferred prior to 2004 in accordance with Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements. Reconciliation of non-GAAP measures to the nearest
comparable GAAP measures (Unaudited) in millions Three Months Ended
December 31, 2003 December 31, 2004 Net income (loss) $8.3 $(1.4)
Non-recurring revenue adjustment $(17.3) (a) Non-GAAP net income
(loss) $(9.0) $(1.4) Depreciation and amortization $1.7 (c) $1.8
(c) Stock based compensation $0.2 (d) $2.8 (d) Free cash flow
$(7.1) $3.2 Year Ended December 31, 2003 December 31, 2004 Net
income $(20.2) $(10.2) Non-recurring revenue adjustment $(13.6) (b)
Non-GAAP net income $(33.8) $(10.2) Depreciation and amortization
$5.4 (c) $6.4 (c) Stock based compensation $3.6 (d) $7.4 (d) Free
cash flow $(24.8) $3.6 (a) One-time recognition of $17.3 million in
revenues that were previously deferred in accordance with Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements. (b) One-time recognition of $13.6 million in revenues
that were previously deferred in accordance with Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements. (c)
Free cash flow excludes depreciation and amortization (d) Free cash
flow excludes stock-based compensation DATASOURCE: InPhonic, Inc.
CONTACT: Tripp Donnelly, Vice President, Corporate Communications
of InPhonic, Inc., +1-202-333-0001, Web site
http://www.inphonic.com/
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