MessageMedia Announces First Quarter Revenues Increased 8% Over Prior Quarter and 25% from Prior Year
Quarterly Highlights
·Revenues of $8.7 million, up 8 % over prior quarter: software sales
strong, messaging revenues softened
·U.S. gross margin increased to 61%: U.S. EBITDA loss narrowed to $1.6
million
·Cost reduction program successful: U.S. expense run rate down 39%
from prior quarter and additional domestic cost reductions taken in
April
·Continued market softness: Company lowers 2001 estimates
SUPERIOR, Colo. – April 26, 2001 - MessageMedia, Inc. (Nasdaq: MESG),
a leader in permission-based, e-mail marketing and messaging
solutions, announced today that revenues in its first quarter ending
March 31, 2001 were $8.7 million, an increase of 25 percent from the
$7.0 million reported in the first quarter of 2000 and eight percent
from the $8.0 million reported in the fourth quarter of 2000. Cost
reduction initiatives begun in December 2000 have been successful,
helping the Company to improve margins and narrow EBITDA* loss. U.S.
expense run rate declined $6.1 million in the 2001 first quarter, or
39 percent from the prior quarter to $9.5 million, and management
continued to move aggressively on further cost reductions.
Software Gains Momentum, But Service Revenues Decline
Software revenues in the 2001 first quarter were $2.6 million; a $1.4
million or 122 percent increase from the prior quarter. Messaging
revenues in the 2001 first quarter declined $0.7 million or 11 percent
from the prior quarter to $6.1 million due to overall industry
softness, seasonal trends, and the impact of retrenching dot-com
clients. In the 2001 first quarter, MessageMedia Europe increased
revenues 72 percent from the prior quarter to $841,000.
As a result of its cost reduction program, gross margin for
MessageMedia’s U.S. operations increased 20 percentage points to 61
percent in the first quarter of 2001. In the same period, U.S.
operating expense, excluding depreciation and amortization declined to
$6.5 million, compared to $11.1 million in the 2000 fourth quarter. As
part of its continuing focus on cost containment, on April 17th
MessageMedia reduced its domestic headcount by 21 percent. This is
expected to shrink the Company’s U.S. quarterly expense run rate by a
further million dollars beginning in the 2001 third quarter.
U.S. operations reported an EBITDA loss of $1.6 million, down sharply
from the $8.0 million reported in the 2000 fourth quarter and $4.8
million in the first quarter of 2000. On a consolidated basis
(including MessageMedia Europe), the Company reported an EBITDA loss
of $3.3 million in the 2001 first quarter, compared to $6.2 million in
the 2000 first quarter.
Excluding amortization of goodwill, the Company reported, on a
consolidated basis, a 2001 first quarter net loss of $3.7 million, or
$0.06 per share, compared to a net loss excluding amortization of
goodwill of $6.0 million, or $ 0.11 per share for the same period a
year-ago. Including amortization of goodwill, the 2001 first quarter
net loss, on a consolidated basis, was $13.5 million, or $0.22 per
share, compared to a net loss of $18.9 million, or $0.34 per share in
the 2000 first quarter.
The Company reported a consolidated cash position of $14.0 million at
the end of the 2001 first quarter. The U.S. cash position for the same
period was $12.3 million with $7.7 million being unrestricted.
New Clients Added: Client Mix Continues To Improve
The demand for MessageMedia’s UnityMail software recovered in the 2001
first quarter. Revenues of $2.6 million reflected new sales and
continued growth in UnityMail Express, MessageMedia’s hosted software
product. The UnityMail ASP program for agencies also made progress as
six new advertising/marketing agencies purchased licenses to re-sell
UnityMail software as part of their portfolio of e-marketing services.
Demand for the Company’s domestic messaging services softened in the
2001 first quarter as clients reduced online marketing expenditures.
Despite this softness, MessageMedia enjoyed success in offering its
new M3Platform, a powerful, customer-centric e-messaging platform that
fully integrates MessageMedia’s outsourced solutions into a common
advanced architecture, and Target DB, its outsourced database service
which allows marketers to develop highly targeted campaigns based on a
wide variety of customer data.
In the 2001 first quarter, MessageMedia added 58 new software and five
messaging clients including such names as Chicago Board of Options
Exchange and Fossil, an international watchmaker. In addition, the
Company renewed or upgraded licenses for 19 existing software
accounts. This brought MessageMedia’s total client portfolio to
approximately 311 messaging clients and 304 software accounts.
The mix of messaging clients also improved. At quarter-end, Fortune
1000 clients increased to 21 percent of total messaging revenues; the
B2B sector increased to 33 percent; and consumer-oriented dot.coms
decreased to 32 percent. Despite the softening in messaging revenues,
average CPM rate (customers’ cost per thousand messages) in the 2001
first quarter remained flat, reflecting the positive reception to
MessageMedia’s high-touch outsourced services.
New Financial Guidance
The Company anticipates that current market trends will continue and
that its revenues in its U.S. operations will be down between five and
10 percent in the 2001 second quarter with modest growth in the latter
part of the year. The Company further believes that its ongoing cost
reduction program will bring its operating expense in line with its
projected revenues and that its U.S operations will be EBITDA positive
by the end of 2001.
Conference Call Invitation
MessageMedia will hold a Conference Call today at 10:30 a.m. EST to
discuss its financial results. The dial-in numbers to participate are
800-240-5318 (domestic) or 303-205-0033 (international). Please refer
to the MessageMedia Call. A replay of the call will be made available
from 12:30 p.m. EST on Thursday, April 26th to 7 p.m. on Thursday, May
10th. To access the replay, please call 800-405-2236 (domestic: pass
code is 326092#) 303-590-3000 (international: pass code is 326092#).
About MessageMedia, Inc.
MessageMedia (Nasdaq:MESG), a leader in permission-based e-mail
marketing and messaging solutions, offers M3Platform, a powerful
customer-centric e-messaging platform, and UnityMail, 4.0 an
award-winning licensed software. MessageMedia provides specialized
solutions for the publishing, ISP/portal, retail/e-tail, financial
services, high-tech, and travel and entertainment industries.
*EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, restructuring, net of other income and expense, and the
cumulative effect of a change in accounting principles.
Safe Harbor Statement Under the Private Securities Litigation Reform
Act
With the exception of the historical information contained in this
release, the matters described herein contain forward-looking
statements that involve risk and uncertainties. In particular,
MessageMedia’s statements under the caption, “New Financial Guidance”
contain a variety of financial and operating projections. The Company
has based these projections primarily on historical operating results
of the Company and recent trends it has observed in the markets for
its products. The Company’s ability to meet any or all of these
projections is inherently speculative, uncertain, and subject to a
high degree of risk. Specific risks include, but are not limited to:
MessageMedia`s limited operating history, the anticipated fluctuations
in operating results, demand for the Company’s products and services,
price competition, disruptions in MessageMedia’s business as a result
of its recent reduction in the number of employees, inaccuracy of
certain of the assumptions used to make these forecasts,
MessageMedia’s ability to obtain additional financing, uncertain
acceptance of new services being offered, undeveloped and rapidly
changing market conditions, and other factors detailed in
MessageMedia`s filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the year ended December
31, 2000 and its most recent Quarterly Report on Form 10-Q. The
occurrence of one or more of the risks referenced above may materially
affect the Company’s financial performance, which in turn, may cause
the value of its common stock to fall. All companies and product
names are trademarks of their respective owners. Readers are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. MessageMedia undertakes no
obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Contact Information:
A. Richard Hurwitz
VP, Marketing and Communications
MessageMedia, Inc.
Tel: (303) 381-7500
E-mail: investor@messagemedia.com
MessageMedia, Inc.
1100 McCaslin Boulevard, Suite 100, Superior, Colo. 80027
Phone: (303) 440-7550; Fax: (303) 381-3924 www.messagemedia.com
Investor Relations inquiries should be sent to
investor@messagemedia.com
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