24/7 Real Media, Inc. (Nasdaq: TFSM): First Quarter Highlights: --
Revenue of $42.9 million, an increase of 48% over the comparable
period in 2005. -- Pro forma operating income of $0.07 per share
compared with $0.03 per share in Q1 of 2005; GAAP net loss of $0.16
per share versus a GAAP net loss of $0.01 per share in Q1 of 2005,
primarily due to stock based compensation expenses. 24/7 Real
Media, Inc. (Nasdaq: TFSM), a leading global digital marketing
company, today announced financial results for the first quarter
ended March 31, 2006. Revenue for the first quarter of 2006 was
$42.9 million, an increase of 48% from the $29.1 million reported
for the first quarter of 2005, and a sequential increase of 3% from
the $41.7 million reported during the fourth quarter of 2005. 24/7
Real Media's results for the first quarter of 2006 reflect its
expansive global reach in the digital marketing sector, with
non-U.S. operations contributing 58% of the Company's revenue in
the first quarter. Operating strength in each of its geographic
regions and business segments contributed to the robust
year-over-year growth for the Company. Pro forma operating
income(1) for the first quarter of 2006 was $3.6 million, or $0.07
per share. This compares with pro forma operating income of $1.3
million, or $0.03 per share, for the first quarter of 2005. Under
generally accepted accounting principles (GAAP), net loss for the
first quarter of 2006 was $7.5 million, or $0.16 per share. Due to
the adoption of Statement of Financial Accounting Standards No.
123(R), Stock Based Compensation, the results for the first quarter
of 2006 include stock based compensation expenses totaling $9.0
million, or approximately $0.19 per share, a significant portion of
which was related to the vesting of restricted stock with a market
contingency. This compared with a net loss of $0.4 million, or
$0.01 per share, for the first quarter of 2005, which was
positively impacted by a recovery of an investment. "The Company
enjoyed an outstanding first quarter, substantially growing
revenues and improving operating performance during what is
traditionally a seasonally weak period," stated David J. Moore,
chairman and chief executive officer of 24/7 Real Media. "We
continue to provide marketers with the ability to approach digital
advertising as a precisely measurable science. Our recently
announced release of Open AdStream(R) 6 exemplifies the innovation
powering our leading solutions for publishers and advertisers. We
will continue to leverage our expertise in technology and
results-oriented services to drive significant growth in revenue
and profitability through 2006 and beyond." (1)Pro forma operating
income is a non-GAAP financial measure. 24/7 Real Media believes
pro forma reporting provides meaningful insight into the Company's
ongoing economic performance and therefore uses pro forma reporting
internally to assist in evaluating and managing the Company's
operations. A full reconciliation of GAAP net income to pro forma
operating income for the three months ended March 31, 2006 and 2005
appears in the financial statement portion of this release. Segment
Overview Revenue in the Media Solutions segment climbed 28% to
$18.2 million in the first quarter of 2006 from $14.2 million in
the first quarter of 2005. Segment gross margins for the quarter
were 31.0%. Search Solutions revenue advanced 85% to $17.8 million
from $9.6 million in the first quarter of 2005. Gross margins for
the segment were 26.6% in the first quarter of 2006. Technology
Solutions revenue climbed 32% to $6.9 million in the first quarter
of 2005 from $5.2 million in the first quarter of 2005. Technology
gross margins, excluding stock based compensation expenses, were
79.4% in the first quarter of 2006. Financial Guidance and Business
Outlook The Company expects second quarter revenue for 2006 to
range between $46 million and $47 million, the mid-point of which
represents an increase of 37% from second quarter 2005 revenue of
$33.9 million. The Company expects diluted pro forma operating
income per share in the second quarter of 2006 to be approximately
$0.08 per share. The Company is raising guidance for full year 2006
revenue to a range of $190 million to $200 million and anticipates
pro forma operating income per share for the full year in the range
of $0.35 to $0.36. The Company is not providing GAAP net income per
share guidance for the second quarter of 2006 or the full year 2006
at this time, as certain items that would be included in those
figures are dependent on future events and accounting
determinations.(2) Revenue guidance includes the projected
financial performance of K.K. 24-7 Search, the partnership with
Dentsu in which 24/7 Real Media holds a majority interest and
reports on a consolidated basis. Pro forma operating income
guidance is provided net of Dentsu's 49% minority interest in the
projected pro forma operating income or loss generated by K.K. 24-7
Search. For full year 2006 the Company expects revenue related to
K.K. 24-7 Search to be in the range of $5 million to $10 million.
The Company's pro forma operating income guidance for full year
2006 includes $0.01 per share contributed by the partnership. In
conjunction with this release, a conference call will be held at
8:30 a.m. EDT on Thursday, May 4 to discuss these results. The call
will be broadcast live over the Internet and can be accessed at
www.247realmedia.com/about/investor. Please allow extra time to
visit our Web site prior to the call and download the streaming
media software required to listen to the Internet broadcast. The
online replay of the broadcast should be available within two hours
following the live call and will be available for three weeks.
(2)Our diluted pro forma operating income per share guidance for
the second quarter of 2006 and full year 2006 excludes depreciation
expense of $0.9 million and $4.0 million, respectively;
amortization expense of $0.9 million and $3.4 million,
respectively; and stock based compensation expense related to
equity instruments already granted of $3.0 million and $18.0
million, respectively. Also excluded are interest income/expense,
which we do not expect to be material; income taxes, as we are
still determining the amount of our net operating loss carry
forwards and our overall effective tax rate; warrant liabilities
contingent on the price of our common stock; and amounts related to
stock-based compensation that will be granted in future periods and
are as yet undetermined. About 24/7 Real Media, Inc. 24/7 Real
Media, Inc. is a leading global digital marketing company,
empowering advertisers and publishers to engage their target
audiences with greater precision, transparency and ROI. Using its
award winning ad serving, targeting, tracking and analytics
platform, powerful search marketing capabilities and global network
of specialized Web sites, the company has turned the art of
reaching audiences across virtually any digital medium into a
measurable science. The company is headquartered in New York, with
20 offices in 12 countries throughout North America, Europe and
Asia. For more information, please visit www.247realmedia.com. 24/7
Real Media: The Science of Digital Marketing. 24/7 Real Media is a
member of the NAI and adheres to the NAI privacy principles that
have been applauded by the FTC. These principles are designed to
help ensure Internet user privacy. For more information about
online data collection associated with ad serving, including online
preference marketing and an opportunity to opt-out of 24/7 Real
Media cookies, go to: www.networkadvertising.org. Caution
concerning forward-looking statements: Certain statements in this
news release are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. For instance,
words such as "expects," "anticipates," "predicts," "guidance" and
similar expressions identify forward-looking statements.
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. Some
of the forward-looking statements in this news release include,
without limitation, statements regarding the expected financial
performance for the second quarter of 2006 and for the full year
2006. Investors are cautioned not to place undue reliance upon
these forward-looking statements, which speak only as of the date
of this release. Except as required by law, 24/7 Real Media
undertakes no obligation to update any forward-looking or other
statements in this news release, whether as a result of new
information, future events or otherwise. Management may reiterate
these forward looking statements subsequent to the date hereof, but
such reiterations should not be considered an update or
reaffirmation of these statements unless expressly so stated. The
forward-looking statements are based on the subjective opinions and
estimates of management at the time the statements were made and
are subject to substantial risks and uncertainties that could cause
actual results to differ materially from those anticipated in the
forward-looking statements. These substantial risks and
uncertainties include, among others, geopolitical, tax, exchange
rate and other risks associated with international operations,
which currently comprise a significant portion of the Company's
revenue; the potential for enhanced competition, including with
competitors that have substantially greater resources than those of
the Company; potential issues that may arise in the Company's
Search segment, which is a less seasoned business than the
Company's other segments and which is in an ultra competitive and
rapidly evolving industry, in which the Company's business is
somewhat dependent on its ability to maintain good relations with a
few search engines; due to these factors, the Company's Search
business may not be able to expand as rapidly as projected, nor
maintain its existing customer base or profitability structure; the
potential loss of key employees and inability to attract qualified
new employees, especially in our Search business, due to a very
competitive and tightening job market; risks that the Company's
technology will be insufficient to meet increased business levels;
risk that the Company's technology services will be disrupted by
terrorist attack, disasters or malicious intrusion, and that the
Company's back-up facilities and disaster recovery plans will not
be adequate; customer concentration or customer loss risks;
potential deterioration or slower-than-expected growth in the
Internet advertising market; the uncertainties, costs and business
impacts of potential new legislation; accounting risks and the risk
of litigation or regulatory investigation involving the Company.
More information about factors that could cause actual results to
differ materially from those predicted in the Company's
forward-looking statements, as well as additional information
regarding the Company's business and financial results and
condition, is set out in its annual report on Form 10-K for the
year ended December 31, 2005, and will be set out in its Quarterly
Report on Form 10-Q for the three months ended March 31, 2006,
which the Company expects to file with the Securities and Exchange
Commission on or before May 10, 2006. Investors are strongly
encouraged to read the Company's Form 10-K, Forms 10-Q and other
filings with the Securities and Exchange Commission in their
entirety. -0- *T 24/7 REAL MEDIA, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except share and per share data) Three
months ended ------------------------- March 31, 2006 2005
----------- ----------- (unaudited) Revenues: Media $18,230 $14,229
Search 17,833 9,622 Technology 6,878 5,219 ----------- -----------
Total revenues 42,941 29,070 ----------- ----------- Cost of
revenues: Media 12,576 9,627 Search 13,092 6,632 Technology
(inclusive of $179 and $8 in stock-based compensation,
respectively) 1,599 1,000 ----------- ----------- Total cost of
revenues 27,267 17,259 ----------- ----------- Gross profit 15,674
11,811 ----------- ----------- Operating expenses: Sales and
marketing (inclusive of $1,545 and $120 of stock-based
compensation, respectively) 7,985 5,410 General and administrative
(inclusive of $6,338 and $335 of stock-based compensation,
respectively) 11,298 4,919 Product development (inclusive of $977
and $50 of stock-based compensation, respectively) 2,758 1,292
Other expenses: Amortization of intangible assets and deferred
financing costs 890 1,140 Restructuring costs - 973 -----------
----------- Total operating expenses 22,931 13,734 -----------
----------- Operating loss (7,257) (1,923) Interest income
(expense), net 65 (88) Change in fair value of warrant liability
(252) 150 Recovery of investment - 2,100 Impairment of marketable
securities - (588) Other income (expense), net 110 (46) -----------
----------- Loss before income taxes and minority interest in
operations of consolidated subsidiaries (7,334) (395) Provision for
income taxes (230) (11) Minority interest in operations of
consolidated subsidiary 48 - ----------- ----------- Net loss
(7,516) (406) Dividends on preferred stock - (12) -----------
----------- Net loss attributable to common stockholders $(7,516)
$(418) =========== =========== Basic net loss attributable to
common stockholders per share $(0.16) $(0.01) ===========
=========== Weighted average shares used in basic calculation
46,848,231 44,831,154 =========== =========== Pro forma: Operating
income (a) 3,552 1,301 Diluted operating income per share $0.07
$0.03 =========== =========== Weighted average shares used in pro
forma calculation 53,505,930 49,960,553 =========== =========== (a)
Pro forma operating income excludes certain other expenses computed
as follows: Operating loss $(7,257) $(1,923) Excluding:
Amortization of intangible assets and deferred financing costs 890
1,140 Stock-based compensation 9,039 513 Restructuring costs - 973
Minority interest in pro forma operating loss of consolidated
subsidiary 48 - Depreciation 832 598 ----------- ----------- Pro
forma operating income $3,552 $1,301 =========== =========== 24/7
REAL MEDIA, INC. CONDENSED CONSOLIDATED BALANCE SHEET (in
thousands) March 31, December 31, 2006 2005 ---------------
-------------- (unaudited) Cash $41,562 $40,009 Accounts receivable
41,549 38,316 Total current assets 86,246 80,694 Total assets
147,173 142,804 Accounts payable and accrued liabilities 39,158
43,383 Deferred revenue 3,495 3,218 Short-term debt 14,694 14,542
Total current liabilities 57,347 61,143 Total liabilities 58,590
62,529 Minority interests 1,514 1,556 Total stockholders' equity
87,069 78,719 *T
24/7 Real Media (NASDAQ:TFSM)
Historical Stock Chart
From Sep 2024 to Oct 2024
24/7 Real Media (NASDAQ:TFSM)
Historical Stock Chart
From Oct 2023 to Oct 2024