Full year GAAP and pro forma earnings improved significantly versus 2001 Generates $43.9 million of cash from operations in 2002
New York, NY, 1/21/2003 - DoubleClick Inc. (Nasdaq: DCLK), the leading provider of data and technology tools for advertisers, direct marketers and web publishers, today announced financial results for the fourth quarter and full year ending December 31, 2002 and provided a business outlook for 2003.
DoubleClick reported revenues for the fourth quarter of $66.3 million and a GAAP net loss of ($54.0) million with GAAP EPS of ($0.40). Pro forma net income for the fourth quarter was $7.4 million with pro forma EPS of $0.05, which exceeded pro forma EPS guidance. The difference between GAAP net loss and pro forma net income was the result of a $65.8 million restructuring charge primarily relating to real-estate, gains of $7.9 million from the sale of a portion of the company`s holdings in DoubleClick Japan and minority interest positions, and other non-cash and non-recurring items.
Full year 2002 revenues were $300.2 million, down 26% versus 2001, which included the results of the divested media, email list and research businesses. GAAP net loss was ($117.9) million for 2002, improving $147.9 million over full year 2001, and GAAP EPS was ($0.87). Exclusive of certain non-cash and non-recurring items, DoubleClick reported its first full year of pro forma profitability with pro forma net income of $17.9 million for the full year 2002 and pro forma EPS of $0.13 for 2002 versus ($0.24) in full year 2001.
Total company headcount was 1,111 at the end of 2002, down 23.4% from 1,450 at the end of 2001. Total company pro forma operating expenses of $187.7 million declined 34.5% year over year. The Company ended the quarter with $750.0 million in cash and marketable securities and a net cash position of $588.2 million, or $4.32 per share.(A) Sale of the company`s holdings in DoubleClick Japan and minority interest positions during the quarter generated $38.0 million dollars in cash.
"Our 2002 results show the culmination of our strategy to diversify our revenues into new markets, reduce our exposure to less profitable businesses, and improve profitability. We have been able to carry out these goals while successfully operating in a difficult market environment," said Kevin Ryan, CEO of DoubleClick.
The global TechSolutions division reported fourth quarter revenues of $43.6 million, and annual revenues of $187.2 million, a decline of 9.6% versus full year 2001. Impressions delivered across DoubleClick`s global DART and DARTmail platforms were 144.4 billion in the fourth quarter of 2002. Total TechSolutions gross margins increased 180 basis points to 64.1% versus the third quarter of 2002.
In the ad management business, rich media use has increased 43% since the first quarter of 2002 when DoubleClick launched the Rich Media Certification program that enhances rich media usability. Rich media is an Internet advertising term for a Web page ad that uses advanced technology such as streaming video, downloaded programs that interact instantly with the user, and ads that change when the user`s mouse passes over it. According to recent data, 25% of all ads delivered by DoubleClick for its customers are rich media ads, while the industry standard remains at 7.5%.2 To further take advantage of this growing trend, DoubleClick has formed a strategic alliance with Macromedia to develop an enhanced rich media workflow management solution.
DARTmail revenues reported within TechSolutions were $10.2 million for the quarter, and annual revenues were $39.4 million, an increase of 90.6% from the prior year. In December of 2002, Forrester Research named DoubleClick the leading email technology provider in terms of strategic vision.3 The report noted that DoubleClick`s DARTmail product is beginning to automate the arduous data and content exchange required to support individualized communications.
Forrester`s assessment was based, in part, on DoubleClick`s successful acquisition of Protagona, a campaign management enterprise software company, in November 2002. Marketers increasingly expect email service vendors to provide advice and tools that enable multi-channel marketing. The Protagona Ensemble product is a complete desktop solution to plan, execute and analyze campaigns across various marketing channels. In 2003, DoubleClick plans to integrate the Ensemble campaign management tool with DoubleClick`s DARTmail and UnityMail products to create an integrated suite of solutions to better meet customer needs.
David Rosenblatt, President of DoubleClick said, "In 2001 we proved we could execute financially with disciplined expense reduction. In 2002 we proved we could execute strategically with the divestitures of businesses, while filling out our suite of marketing and data solutions. In 2003 we plan to execute operationally to fulfill our vision of being the premier provider of technology and data tools for marketers."
The Data division reported quarterly revenue of $20.4 million and annual revenues of $83.3 million up 2.5% year-over-year. Core catalog alliance revenues grew 9% year-over-year. Other increases in annual revenues were derived from Abacus` United Kingdom operations offset by the divestiture of the Company`s research business. Gross margins remained consistent year-over-year at 72.1%.
During 2002, Abacus` business-to-consumer division added 130 catalog clients to its alliance cooperative, its client base now makes up 74% of the top 50 US consumer catalogs. Abacus` business-to-business division saw a significant year-over-year increase in revenues driven by new client acquisition and increased volume by current clients.
International expansion of the Abacus alliance model was also a strategic focus in 2002. On June 27, 2002, DoubleClick purchased the other half of the Abacus UK business after it reached profitability in its fourth year. Since 1998, its database has grown to 300 million transactions of 26 million individuals, and has also seen a 29% increase in the last year to 279 catalog members. Other international markets for the Abacus alliance model are in the initial stages of development.