Company Reports 2006 Revenue of $82.2 Million, up 30% Year over
Year
Results Include Positive Adjusted EBITDA for 4th Quarter 2006
NEWARK, N.J.--(BUSINESS WIRE)--Feb. 27, 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 4th
quarter and full year ended December 31, 2006.
Audible reported consolidated 4th quarter net revenues of $23.3
million, up 27.6% over the prior year period and 16.3% over the prior
quarter. Adjusted EBITDA (as defined below) of $0.8 million improved
by $3.6 million over the 4th quarter of 2005 and $1.1 million over the
prior quarter. Net loss for the 4th quarter 2006 was $0.7 million, or
($0.03) per share, which compares to a net loss of $2.2 million, or
($0.09) per share, in the 4th quarter of 2005 and a net loss of $2.5
million, or ($0.10) per share, in the 3rd quarter of 2006.
For the full year 2006, Audible reported net revenue of $82.2
million, up 30% year over year. Net loss for 2006 was $8.4 million or
($0.35) per share. This compares to a net loss of $0.6 million or
($0.03) per share, in 2005. The net loss in 2006 includes $5.9 million
of stock-based compensation expense, an increase of $5.0 million
compared to similar charges in 2005.
"The 4th quarter of 2006 delivered across-the-board improved
financial results for Audible," stated Donald Katz, CEO and Chairman,
Audible, Inc. "We saw a strong seasonal sales lift during the quarter,
as well as positive results from focused promotional merchandising
efforts."
"As we move with confidence into 2007," Mr. Katz continued, "we
are committed to continuously improving our audio service as we also
increase consumer awareness of our powerful listening products. We
expect the results of our efforts will be stronger profitability in
2007 and beyond."
4th Quarter 2006 Key Financial and Operating Metrics
Consolidated Net Revenue: Consolidated net revenue totaled $23.3
million in 4th quarter 2006, a 27.6% increase over the $18.3 million
reported in the 4th quarter 2005.
Adjusted EBITDA: Adjusted EBITDA was $0.8 million based upon a net
loss of $0.7 million excluding stock-based compensation of $1.8
million, depreciation and amortization of $1.3 million, income tax
benefit (net) of $0.8 million and interest income (net) of $0.8
million. Adjusted EBITDA improved by $3.6 million over the 4th quarter
2005, and $1.1 million over the 3rd quarter of 2006.
Deferred revenue: Deferred revenue was $14.4 million at December
31, 2006, a $2.3 million or 19.2% increase over an adjusted $12.0
million at September 30, 2006 and a $7.2 million or 109% increase over
the $6.6 million balance at December 31, 2005. (The changes in
deferred revenue exclude a $0.7 million prior period adjustment made
as of January 1, 2006 in accordance with SAB 108.)
Total New AudibleListener Members: 70,400 new AudibleListener
members were acquired during the 4th quarter 2006, a 13.3% increase
year over year.
Full Year Key Financial and Operating Metrics
Consolidated Net Revenue: Consolidated net revenue was $82.2
million, up 30% year over year from the $63.2 million reported in
2005.
Adjusted EBITDA: Adjusted EBITDA was negative $1.1 million based
upon a net loss of $8.4 million, excluding stock-based compensation of
$5.9 million, depreciation and amortization of $5.0 million, asset
impairment of $0.1 million, income tax benefit (net) of $0.8 million
and interest income (net) of $3.0 million.
Cash, Cash Equivalents, and Short-Term Investments: Audible's
cash, cash equivalents and short term investments totaled $66.2
million at the end of December 31, 2006 versus $67.2 million at
December 31, 2005.
Total New AudibleListener Members: AudibleListener members
acquired in 2006 were 285,300, up 25% versus the prior year. There
were approximately 383,000 AudibleListener members on December 31,
2006, including approximately 142,000 basic AudibleListener members.
Ongoing Audit of Financial Results and Internal Controls
The company is undergoing an audit of its financial results for
the year 2006, and an audit of its internal controls over financial
reporting as required by Section 404 of the Sarbanes-Oxley Act of
2002. These audit procedures are not yet complete as of the date of
this press release. There can be no assurance that our financial
results as disclosed in this press release will not change following
the completion of the audits or that our internal controls will be
found to be effective.
Conference Call
Senior management will host an investor teleconference at 5:00
p.m. EDT today, to discuss 4th quarter results as well as related
financial and operational developments. A live webcast of the
conference call is 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, the company presents
financial measures that are non-GAAP measures, specifically adjusted
EBITDA. Adjusted EBITDA is net (loss) income excluding interest,
taxes, depreciation, amortization, impairment and stock based
compensation. The company believes that this non-GAAP measure, viewed
in addition to and not in lieu of the company's reported GAAP results,
provides useful information to investors regarding its performance and
overall results of operations. These metrics are an integral part of
the company'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 and on the company's Web site with this press
release. The GAAP financial measures presented are consistent with the
company'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 public
filings. Management also presents total cash sales. The measure total
cash sales is defined as change in deferred revenue plus consolidated
net sales. Management believes that total cash sales is a useful
measure when understanding the increase in deferred revenue.
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(R) computer-based and wireless mobile devices. Audible
has 127,000 hours of audio programs from more than 390 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, www.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
---------------------------------------
December 31, September 30, December 31,
2006 2006 2005
------------ ------------- ------------
Revenue, net:
Content and services:
Consumer content $22,682 $19,565 $17,716
Point of sale rebates (25) - (211)
Services 26 26 49
------------ ------------- ------------
Total content and services 22,683 19,591 17,554
Hardware 148 73 280
Related party revenue 395 222 349
Other 70 140 80
------------ ------------- ------------
Total revenue, net 23,296 20,026 18,263
Operating expenses:
Cost of content and services
revenue:
Royalties and other content
charges 9,734 8,240 7,028
Discount certificate
rebates 453 307 294
------------ ------------- ------------
Total cost of content and
services revenue 10,187 8,547 7,322
Cost of hardware revenue 246 826 1,493
Cost of related party
revenue 139 169 134
Operations 3,225 2,988 2,772
Technology and development 4,303 4,624 2,428
Marketing 4,001 3,340 5,019
General and administrative 3,387 2,743 2,765
------------ ------------- ------------
Total operating expenses 25,488 23,237 21,933
------------ ------------- ------------
Loss from operations (2,192) (3,211) (3,670)
Loss on equity investment (94) (90) -
------------ ------------- ------------
Net Interest income 822 779 654
------------ ------------- ------------
Loss before income taxes (1,464) (2,522) (3,016)
Income tax (expense) benefit (5) (3) 96
State income tax benefit 769 - 740
------------ ------------- ------------
Net loss $(700) $(2,525) $(2,180)
============ ============= ============
Basic and diluted net loss per
common share $(0.03) $(0.10) $(0.09)
Basic and diluted weighted
average common shares
outstanding 24,158,857 24,348,938 24,310,129
Year ended
--------------------------
December 31, December 31,
2006 2005
------------ -------------
Revenue, net:
Content and services:
Consumer content $80,363 $62,185
Point of sale rebates (318) (1,006)
Services 111 131
------------ -------------
Total content and services 80,156 61,310
Hardware 431 612
Related party revenue 1,247 1,146
Other 344 169
------------ -------------
Total revenue, net 82,178 63,237
Operating expenses:
Cost of content and services
revenue:
Royalties and other content
charges 33,677 22,613
Discount certificate
rebates 1,363 1,556
------------ -------------
Total cost of content and
services revenue 35,040 24,169
Cost of hardware revenue 1,953 2,934
Cost of related party
revenue 637 256
Operations 12,168 9,355
Technology and development 16,984 8,239
Marketing 15,215 13,387
General and administrative 11,994 8,366
------------ -------------
Total operating expenses 93,991 66,706
------------ -------------
Loss from operations (11,813) (3,469)
Loss on equity investment (364) -
------------ -------------
Net Interest income 2,975 2,077
------------ -------------
Loss before income taxes (9,202) (1,392)
Income tax (expense) benefit (14) (1)
State income tax benefit 769 740
------------ -------------
Net loss $(8,447) $(653)
============ =============
Basic and diluted net loss per
common share $(0.35) $(0.03)
Basic and diluted weighted
average common shares
outstanding 24,371,844 24,195,771
AUDIBLE INC. AND SUBSIDIARY
NON-GAAP INFORMATION
(Unaudited)
(in thousands)
Three months ended Year ended
--------------------------- -----------------
December September December December December
31, 30, 31, 31, 31,
2006 2006 2005 2006 2005
-------- --------- -------- -------- --------
Stock-based compensation
included in expense
line items:
Operations $344 $324 $73 $1,111 $171
Technology and
development 294 281 71 993 133
Marketing 327 271 52 1,123 101
General and
administrative 787 629 226 2,687 552
-------- --------- -------- -------- --------
$1,752 $1,505 $422 $5,914 $957
-------- --------- -------- -------- --------
Depreciation and
amortization included
in expense line items:
Operations $15 $15 $13 $57 $44
Technology and
development 1,148 1,268 303 4,378 772
Marketing -- -- -- -- --
General and
administrative 145 186 112 583 290
-------- --------- -------- -------- --------
$1,308 $1,469 $428 $5,018 $1,106
-------- --------- -------- -------- --------
Asset impairment
included in expense
line items:
Technology and
development $-- $-- $-- $144 $--
-------- --------- -------- -------- --------
$-- $-- $-- $144 $--
-------- --------- -------- -------- --------
Reconciliation to Non-
GAAP Financial Measures
Net loss $(700) $(2,525) $(2,180) $(8,447) $(653)
Add back:
Stock-based
compensation 1,752 1,505 422 5,914 957
Depreciation and
amortization 1,308 1,469 428 5,018 1,106
Asset impairment - - - 144 -
Income tax expense
(benefit) 5 3 (96) 14 1
Less:
Interest income, net (822) (779) (654) (2,975) (2,077)
State income tax
benefit (769) - (740) (769) (740)
-------- --------- -------- -------- --------
Non-GAAP adjusted EBITDA $774 $(327) $(2,820) $(1,101) $(1,406)
======== ========= ======== ======== ========
Reconciliation to Non-
GAAP Financial Measures
Total revenue, net $23,296 $20,026 $18,263 $82,178 $63,237
Add:
Change in deferred
revenue * 2,313 1,526 3,314 * 7,192 4,112
-------- --------- -------- -------- --------
Non-GAAP total cash
sales $25,609 $21,552 $21,577 $89,370 $67,349
======== ========= ======== ======== ========
*Excludes $658 SAB 108 adjustment
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 31, December 31,
Assets 2006 2005
------------ ------------
(unaudited)
Current Assets:
Cash and cash equivalents $ 14,925 $ 11,549
Short-term investments 51,295 55,616
Interest receivable on short-term
investments 626 428
Accounts receivable, net of allowance 4,104 2,337
Accounts receivable, related parties 101 594
Royalty advances 710 471
Prepaid expenses and other current assets 1,777 899
Inventory 212 498
------------ ------------
Total current assets 73,750 72,392
Property and equipment, net 8,149 8,159
Other assets 781 114
------------ ------------
Total Assets $ 82,680 $ 80,665
============ ============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 3,120 $ 4,750
Accrued expenses 3,809 4,802
Accrued royalties 9,028 5,104
Accrued compensation 778 868
Deferred revenue, current 13,895 6,459
------------ ------------
Total current liabilities 30,630 21,983
Deferred revenue, non current 513 99
Other liabilities, non current 262 --
Royalty obligations, non current 90 188
Commitments and contingencies
Stockholders' Equity:
Common stock 241 243
Additional paid-in capital 190,799 192,547
Deferred compensation - (3,696)
Accumulated other comprehensive (loss)
income (36) 15
Accumulated deficit (139,819) (130,714)
------------ ------------
Total Stockholders' Equity 51,185 58,395
------------ ------------
Total Liabilities and Stockholders' Equity $ 82,680 $ 80,665
============ ============
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three months ended Year ended
December 31, December 31,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Cash flows from operating
activities:
Net loss $(700) $(2,180) $(8,447) $(653)
Adjustments to reconcile net
(loss) income to net cash
provided by operating
activities:
Depreciation and
amortization 1,308 428 5,018 1,106
Impairment loss on
internally developed
software - - 144 -
Non-cash stock-based
compensation charge 1,752 422 5,914 957
Accretion of discounts on
short-term investments (280) (252) (1,004) (1,184)
Income tax benefit from
exercise of stock options - (97)
Changes in assets and
liabilities:
Interest receivable on
short-term investments (121) (186) (198) (352)
Accounts receivable, net (1,260) (913) (1,756) (1,550)
Accounts receivable, related
parties 427 (417) 494 (506)
Royalty advances (191) 71 (239) (330)
Prepaid expenses and other
current assets 222 (165) (876) (233)
Inventory (52) (399) 293 (104)
Other assets 24 21 (664) (93)
Accounts payable 762 3,017 (1,640) 3,903
Accrued expenses (512) 251 (1,107) 3,062
Other liabilities, non-
current 263 -- 263 --
Accrued royalties 3,129 (202) 3,902 3,222
Accrued compensation (295) (93) (101) 420
Deferred revenue 2,306 3,316 7,178 4,114
--------- --------- --------- ---------
Net cash provided by operating
activities 6,782 2,622 7,174 11,779
--------- --------- --------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment (231) (1,599) (4,280) (3,706)
Capitalized software
development costs (427) (3,872) (872) (4,640)
Purchases of short-term
investments (25,367) (17,828) (85,465) (79,546)
Proceeds from maturity of
short-term investments 21,725 18,600 90,790 73,500
--------- --------- --------- ---------
Net cash (used in) provided by
investing activities (4,300) (4,699) 173 (14,392)
--------- --------- --------- ---------
Cash flows from financing
activities:
Proceeds from exercise of
common stock options 248 67 633 690
Proceeds from exercise of
common stock warrants - - 750 295
Principal payments made on
capital lease obligations - - - (121)
Repurchase of treasury stock
at cost (1,363) - (5,351) -
--------- --------- --------- ---------
Net cash (used in) provided by
financing activities (1,115) 67 (3,968) 864
--------- --------- --------- ---------
Effect of exchange rate
changes on cash and cash
equivalents 2 (12) (3) 2
--------- --------- --------- ---------
Increase in cash and cash
equivalents 1,369 (2,022) 3,376 (1,747)
Cash and cash equivalents at
beginning of period 13,556 13,571 11,549 13,296
--------- --------- --------- ---------
Cash and cash equivalents at
end of period $14,925 $11,549 $14,925 $11,549
========= ========= ========= =========
AUDIBLE INC. AND SUBSIDIARY
UNAUDITED SUPPLEMENTAL OPERATING DATA
(Numbers in thousands)
New AudibleListener Q2 Q3 Q4 Q1 Q2 Q3 Q4
Membership 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) 3.00% 3.00% 2.60% 4.00% 4.70% 5.10% 4.80%
Cost per New AL $64 $62 $64 $52 $58 $58 $95
Q1 Q2 Q3 Q4
New AudibleListener Membership Reporting: 2006 2006 2006 2006
----------------------------------------------
Total AudibleListener(R) Members(1) 279 309 345 383
Year-over-year 50% 51% 54% 57%
Quarter-over-quarter 14% 11% 12% 11%
New AudibleListener(R) Members(2) 79 65 71 70
Year-over-year 46% 25% 18% 13%
Quarter-over-quarter 27% -18% 9% -1%
Average Monthly Churn in AudibleListener(R)
Members(3) 4.60% 3.40% 3.10% 2.50%
Cost per New AL $52 $45 $47 $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.
