Revenue up 36% Year-over-Year, Adjusted EBITDA of $2.1 Million for Quarter
NEWARK, N.J.--(BUSINESS WIRE)--Aug. 2, 2007--Audible, Inc.
(NASDAQ: ADBL; www.audible.com), the leader in spoken audio
entertainment, information, and educational programming on the
Internet, today announced unaudited financial results for the second
quarter ended June 30, 2007.
Audible reported consolidated second quarter net revenues of $25.9
million, up 36% over the $19.1 million reported in the second quarter
of 2006 and 3% over $25.3 million in the first quarter of 2007.
Adjusted EBITDA ("EBITDA") increased to $2.1 million, up from $113,000
EBITDA reported in the second quarter of 2006 and $1.0 million in the
first quarter of 2007. Net loss for the second quarter of 2007 was
($125,000), or $(0.01) per share, a decrease from the net loss of
($2.2) million, or $(0.09) per share reported in the second quarter of
2006, and ($1.2) million or $(0.05) per share in the first quarter of
2007.
During the quarter, approximately 56,000 new AudibleListener(R)
members were acquired. There were nearly 431,000 AudibleListener
members at the end of the quarter, an increase compared to 309,000 at
the end of second quarter of 2006 and 415,000 at the end of first
quarter of 2007.
"During the second quarter of 2007 our continued focus on
acquiring higher value AudibleListener members produced stellar
results. We served them with superior listening, while offering
targeted customer communications and consistent customer support,"
noted Donald Katz, CEO and Chairman, Audible, Inc. "We are pleased to
have achieved a quarter that demonstrates our commitment to profitable
growth."
Second Quarter 2007 Key Financial and Operating Metrics
Consolidated Net Revenue: Consolidated net revenue totaled $25.9
million in the second quarter of 2007, a 36% increase over the $19.1
million in consolidated net revenue in the second quarter of 2006 and
a 3% increase over $25.3 million in the first quarter 2007.
Adjusted EBITDA: EBITDA increased to $2.1 million, up from
$113,000 EBITDA reported in the second quarter of 2006. EBITDA for the
second quarter of 2007 is based upon a net loss of ($125,000) which
then excludes stock-based compensation of $1.5 million, depreciation
and amortization of $1.3 million, interest income (net) of $854,000,
and asset impairment of $160,000.
Deferred revenue: Deferred revenue was $16.3 million at June 30,
2007, a $1.9 million or 14% increase over the $14.4 million balance
reported at December 31, 2006.
Total New Audible Listener Members: Nearly 56,000 new
AudibleListener members were acquired during the second quarter of
2007, a decrease from the 65,000 Audible Listener members reported in
second quarter of 2006. However, 96% percent of new members acquired
in Q2 2007 were higher revenue AudibleListener Gold and Platinum
members, versus 47% of new members acquired in the second quarter of
2006.
Conference Call
Senior management will host an investor teleconference at 5:00
p.m. EDT today to discuss second quarter results as well as related
financial and operational developments. A live webcast of the
conference call will be available at www.audible.com/ir for audio
streaming access to the call. To participate in the call, the dial-in
number is 800-238-9007 or +1-719-457-2622. Passcode 5495299.
Use of Non-GAAP Measures
In addition to the results presented in accordance with generally
accepted accounting principles, or GAAP, Audible presents financial
measures that are non-GAAP measures, specifically adjusted EBITDA.
Adjusted EBITDA is net (loss) income excluding interest, taxes,
depreciation, amortization, asset impairment, loss on equity
investment and stock based compensation. Audible believes that this
non-GAAP measure, viewed in addition to and not in lieu of Audible's
reported GAAP results, provides useful information to investors
regarding its performance and overall results of operations. These
metrics are an integral part of Audible's internal reporting to
measure the performance of the company and the overall effectiveness
of senior management. Reconciliations to comparable GAAP measures are
available in the accompanying schedules to this press release and on
Audible's Web site. The GAAP financial measures presented are
consistent with Audible's historical financial reporting practices.
The non-GAAP measures presented herein may not be comparable to
similarly titled measures presented by other companies, and are not
identical to corresponding measures used in our various agreements or
other public filings. Management also presents total cash sales. The
measurement of total cash sales is defined as the change in deferred
revenue plus consolidated net sales. Management believes that total
cash sales is a useful measurement when analyzing period results.
About Audible, Inc.:
Audible (www.audible.com) is the leader in spoken audio
information and entertainment on the Internet. Content from Audible is
downloaded and played back on personal computers, CDs, or AudibleReady
computer-based and wireless mobile devices. Audible has 140,000 hours
of audio programs from more than 470 content partners that include
leading audiobook publishers, broadcasters, entertainers, magazine and
newspaper publishers, and business information providers. Audible is
the preeminent provider of spoken-word audio products for Apple's
iTunes Store. Among Audible's key business relationships are Apple,
Inc., Amazon.com, Palm, Inc., Creative Labs Inc., SanDisk, and XM
Satellite Radio. Audible has approximately 170 employees with
headquarters in Newark, NJ and an office in London, England. Audible,
audible.com, AudibleListener, and AudibleReady are registered
trademarks of Audible, Inc. and all are part of the family of Audible,
Inc. trademarks. Other product or service names mentioned herein are
the trademarks of their respective owners.
Forward-Looking Statements
The statements in this press release which are not historical
facts may be deemed to contain forward-looking statements about
Audible. Actual results may differ materially from those anticipated
in any forward-looking statements as a result of certain risks and
uncertainties, including, without limitation, Audible's limited
operating history, history of losses, uncertain market for its
services, and its inability to license or produce compelling audio
content and other risks and uncertainties detailed in Audible's
Securities and Exchange Commission filings. No forward-looking
statement can be guaranteed. Forward-looking statements speak only as
of the date on which they are made and Audible, Inc. undertakes no
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events, or otherwise.
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
Three months ended
-----------------------------------
June 30, March 31, June 30,
2007 2007 2006
----------- ----------- -----------
Revenue, net:
Content and services:
Consumer content $ 25,727 $ 24,979 $ 18,835
Point of sale rebates (10) (19) (126)
Services 38 24 26
----------- ----------- -----------
Total content and services 25,755 24,984 18,735
Hardware 87 77 85
Related party revenue 20 91 257
Other 85 112 64
----------- ----------- -----------
Total revenue, net 25,947 25,264 19,141
Operating expenses:
Cost of content and services
revenue:
Royalties and other content
charges 11,210 11,256 7,720
Discount certificate rebates 73 260 305
----------- ----------- -----------
Total cost of content and
services revenue 11,283 11,516 8,025
Cost of hardware revenue 121 179 206
Cost of related party revenue 108 129 171
Operations 3,406 3,826 2,854
Technology and development 4,569 4,571 4,362
Marketing 4,049 3,904 3,573
General and administrative 3,359 3,104 2,663
----------- ----------- -----------
Total operating expenses 26,895 27,229 21,854
----------- ----------- -----------
Loss from operations (948) (1,965) (2,713)
Loss on equity investment - (60) (180)
Other income (expense):
Interest income 857 845 714
Other expense (3) (6) -
----------- ----------- -----------
Other income, net 854 839 714
----------- ----------- -----------
Loss before income taxes (94) (1,186) (2,179)
Income tax expense (31) (24) (3)
----------- ----------- -----------
Net loss $ (125) $ (1,210) $ (2,182)
=========== =========== ===========
Basic and diluted net loss per
common share $ (0.01) $ (0.05) $ (0.09)
Basic and diluted weighted average
common shares outstanding 24,279,102 24,205,043 24,501,629
Six months ended
-----------------------
June 30, June 30,
2007 2006
----------- -----------
Revenue, net:
Content and services:
Consumer content $ 50,706 $ 38,116
Point of sale rebates (29) (293)
Services 62 59
----------- -----------
Total content and services 50,739 37,882
Hardware 164 210
Related party revenue 111 630
Other 197 134
----------- -----------
Total revenue, net 51,211 38,856
Operating expenses:
Cost of content and services revenue:
Royalties and other content charges 22,466 15,703
Discount certificate rebates 333 603
----------- -----------
Total cost of content and services revenue 22,799 16,306
Cost of hardware revenue 300 881
Cost of related party revenue 237 329
Operations 7,232 5,956
Technology and development 9,140 8,056
Marketing 7,953 7,874
General and administrative 6,463 5,864
----------- -----------
Total operating expenses 54,124 45,266
----------- -----------
Loss from operations (2,913) (6,410)
Loss on equity investment (60) (180)
Other income (expense):
Interest income 1,702 1,374
Other expense (9) -
----------- -----------
Other income, net 1,693 1,374
----------- -----------
Loss before income taxes (1,280) (5,216)
Income tax expense (55) (6)
----------- -----------
Net loss $ (1,335) $ (5,222)
=========== ===========
Basic and diluted net loss per common share $ (0.06) $ (0.21)
Basic and diluted weighted average common
shares outstanding 24,242,777 24,491,745
AUDIBLE INC. AND SUBSIDIARY
NON-GAAP INFORMATION
(Unaudited)
(in thousands)
Three months ended Six months ended
--------------------------- -----------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
-------- --------- -------- -------- --------
Stock-based compensation
included in expense
line items:
Operations $ 218 $ 347 $ 300 $ 565 $ 443
Technology and
development 271 293 287 564 417
Marketing 306 300 321 606 525
General and
administrative 737 636 655 1,373 1,271
-------- --------- -------- -------- --------
$ 1,532 $ 1,576 $ 1,563 $ 3,108 $ 2,656
-------- --------- -------- -------- --------
Depreciation and
amortization included
in expense line items:
Operations $ 7 $ 11 $ 14 $ 18 $ 28
Technology and
development 1,112 1,131 1,112 2,243 2,106
Marketing - - - - -
General and
administrative 201 168 137 369 252
-------- --------- -------- -------- --------
$ 1,320 $ 1,310 $ 1,263 $ 2,630 $ 2,386
-------- --------- -------- -------- --------
Asset impairment
included in expense
line items:
Technology and
development 160 - - 160 -
-------- --------- -------- -------- --------
$ 160 $ - $ - $ 160 $ -
-------- --------- -------- -------- --------
Reconciliation to Non-
GAAP Financial Measures
(unaudited)
Net loss $ (125) $ (1,210) $(2,182) $(1,335) $(5,222)
Add back:
Stock-based
compensation 1,532 1,576 1,563 3,108 2,656
Depreciation and
amortization 1,320 1,310 1,263 2,630 2,386
Asset impairment 160 - - 160 -
Loss on equity
investment - 60 180 60 180
Income tax expense 31 24 3 55 6
Less:
Interest income, net (854) (839) (714) (1,693) (1,374)
-------- --------- -------- -------- --------
Non-GAAP adjusted EBITDA $ 2,064 $ 921 $ 113 $ 2,985 $(1,368)
======== ========= ======== ======== ========
Reconciliation to Non-
GAAP Financial Measures
(unaudited)
Total revenue, net $ 25,947 $ 25,264 $ 19,141 $ 51,211 $ 38,856
Add:
Change in deferred
revenue 548 1,430 1,273 1,978 3,353
-------- --------- -------- -------- --------
Non-GAAP total cash
sales $ 26,495 $ 26,694 $ 20,414 $ 53,189 $ 42,209
======== ========= ======== ======== ========
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, December 31,
Assets 2007 2006
----------- ------------
(unaudited)
Current Assets:
Cash and cash equivalents $ 18,597 $ 14,925
Short-term investments 48,720 51,295
Interest receivable on short-term
investments 536 626
Accounts receivable, net of allowance 3,122 4,181
Accounts receivable, related parties 232 100
Royalty advances 504 710
Prepaid expenses and other current assets 3,106 1,797
Inventory 103 212
----------- ------------
Total current assets 74,920 73,846
Property and equipment, net 10,537 8,149
Other assets 1,416 781
----------- ------------
Total Assets $ 86,873 $ 82,776
=========== ============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,385 $ 3,121
Accrued expenses and other current
liabilities 5,391 4,678
Accrued royalties 6,543 9,028
Accrued compensation 2,049 778
Deferred revenue, current 15,691 13,840
----------- ------------
Total current liabilities 32,059 31,445
Deferred revenue, non current 644 513
Other liabilities, non current 1,703 262
Royalty obligations, non current 75 90
Commitments and contingencies
Stockholders' Equity:
Common stock 243 241
Additional paid-in capital 194,070 190,799
Accumulated other comprehensive loss (48) (36)
Accumulated deficit (141,873) (140,538)
----------- ------------
Total Stockholders' Equity 52,392 50,466
----------- ------------
Total Liabilities and Stockholders' Equity $ 86,873 $ 82,776
=========== ============
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Cash flows from operating
activities:
Net loss $ (125) $ (2,182) $ (1,335) $ (5,222)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating
activities:
Depreciation and
amortization 1,320 1,263 2,630 2,385
Impairment loss on purchased
software 160 - 160 -
Non-cash stock-based
compensation charge 1,532 1,563 3,108 2,657
Accretion of discounts on
short-term investments (233) (219) (492) (449)
Changes in assets and
liabilities:
Interest receivable on
short-term investments (157) (102) 90 (67)
Accounts receivable, net 470 991 1,061 409
Accounts receivable, related
parties (64) (10) (132) (13)
Royalty advances 135 29 208 40
Prepaid expenses and other
current assets (404) 286 (58) (797)
Inventory 23 (524) 109 (301)
Other assets (465) (47) (634) (821)
Accounts payable (476) 356 (737) (2,057)
Accrued expenses 32 (707) (195) (1,189)
Other liabilities, non
current 106 - 369 -
Accrued royalties (785) (7) (2,492) -
Accrued compensation 1,240 32 1,269 425
Deferred revenue 548 1,273 1,978 3,349
--------- --------- --------- ---------
Net cash provided by (used in)
operating activities 2,857 1,995 4,907 (1,651)
--------- --------- --------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment (858) (257) (4,142) (3,973)
Capitalized software
development costs (212) (56) (327) (254)
Purchases of short-term
investments (17,620) (20,605) (39,356) (35,569)
Proceeds from maturity of
short-term investments 15,548 17,300 42,423 41,800
--------- --------- --------- ---------
Net cash (used in) provided by
investing activities (3,142) (3,618) (1,402) 2,004
--------- --------- --------- ---------
Cash flows from financing
activities:
Proceeds from exercise of
common stock options - 203 371 354
Proceeds from exercise of
common stock warrants - - - 750
Payment of taxes due on
vested restricted stock (206) (206)
Repurchase of treasury stock
at cost - (1,927) - (2,287)
--------- --------- --------- ---------
Net cash (used in) provided by
financing activities (206) (1,724) 165 (1,183)
--------- --------- --------- ---------
Effect of exchange rate
changes on cash and cash
equivalents 2 (7) 2 (12)
--------- --------- --------- ---------
(Decrease) increase in cash
and cash equivalents (489) (3,354) 3,672 (842)
Cash and cash equivalents at
beginning of period 19,086 14,061 14,925 11,549
--------- --------- --------- ---------
Cash and cash equivalents at
end of period $ 18,597 $ 10,707 $ 18,597 $ 10,707
========= ========= ========= =========
Supplemental Cash Flow
information
Accrued purchases of
property and equipment $ 709 - $ 709 -
--------- --------- --------- ---------
AUDIBLE INC. AND SUBSIDIARY
UNAUDITED SUPPLEMENTAL OPERATING DATA
(Numbers in thousands)
New AudibleListener
Membership Q2 Q3 Q4 Q1 Q2 Q3 Q4
Reporting: 2004 2004 2004 2005 2005 2005 2005
Total
AudibleListener(R)
Members(1) 115 132 157 186 205 224 245
Year-over-year -- -- -- 77% 78% 70% 56%
Quarter-over-
quarter 10% 15% 19% 18% 10% 9% 9%
New
AudibleListener(R)
Members(2) 22 29 39 54 52 60 62
Year-over-year -- -- -- 143% 136% 107% 59%
Quarter-over-
quarter -2% 32% 34% 38% -4% 15% 3%
Average Monthly Churn
in
AudibleListener(R)
Members(3) 3.0% 3.0% 2.6% 4.0% 4.7% 5.1% 4.8%
Cost per New AL $64 $62 $64 $52 $57 $57 $94
New AudibleListener
Membership Reporting: Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007
Total
AudibleListener(R)
Members(1) 279 309 345 383 415 431
Year-over-year 50% 51% 54% 56% 49% 39%
Quarter-over-quarter 14% 11% 12% 11% 8% 4%
New AudibleListener(R)
Members(2) 79 65 71 70 72 56
Year-over-year 46% 25% 18% 13% -9% -14%
Quarter-over-quarter 27% -18% 9% -1% 3% -22%
Average Monthly Churn
in AudibleListener(R)
Members(3) 4.6% 3.4% 3.1% 2.5% 3.0% 2.8%
Cost per New AL $51 $44 $45 $49 $41 $49
(1) Total number of AudibleListener(R) members at the end of the
period.
(2) Total number of new AudibleListener(R) members added during the
period. Members canceling and rejoining a membership within the same
day are counted as one membership.
(3) Churn is defined as member cancellations in the period divided by
the sum of members at the beginning of the period plus gross member
adds, divided by three months.
CONTACT: Audible, Inc.
James Pearson
973-820-0474
jpearson@audible.com
SOURCE: Audible, Inc.
