Company Reports Q1 2007 Revenue of $25.3 Million, Positive
Adjusted EBITDA for Quarter
NEWARK, N.J.--(BUSINESS WIRE)--May 3, 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 first quarter ended
March 31, 2007.
Audible reported consolidated first quarter net revenues of $25.3
million, up 28% over the first quarter of 2006 and up 9% over the
fourth quarter of 2006. Adjusted EBITDA of $0.9 million, increased by
$2.4 million over the negative EBITDA reported in the first quarter of
2006. Net loss for the first quarter of 2007 was $1.2 million, or
($0.05) per share, a decrease from the net loss of $3.0 million, or
($0.12) per share, reported in the first quarter of 2006. During the
quarter, 72,000 AudibleListener(R) members were acquired.
"The first quarter saw continued improvement on the bottom line,
as well as a striking change in the mix of our new member additions,"
noted Donald Katz, CEO and Chairman, Audible, Inc. "The mix of new
members in the first quarter included an increased percentage of
higher-revenue monthly AudibleListeners who responded to our
introductory membership offer. This, plus strong, programmatic
execution by our merchants - particularly with our email campaigns -
led to a promising start to the year."
First Quarter 2007 Key Financial and Operating Metrics
Consolidated Net Revenue: Consolidated net revenue totaled $25.3
million in first quarter of 2007, a 28% increase over the $19.7
million reported in the first quarter of 2006 and a sequential
increase of 9% over $23.2 million in the fourth quarter of 2006.
Adjusted EBITDA: Adjusted EBITDA was $0.9 million. This is based
upon a net loss of $1.2 million, which excludes stock-based
compensation of $1.6 million, depreciation and amortization of $1.3
million, and interest income (net) of $0.8 million. Adjusted EBITDA
increased by $2.4 million from ($1.5) million reported in the first
quarter of 2006 and increased $0.4 million from $0.5 million in the
fourth quarter of 2006, in each case excluding the same additional
expenses from such amounts as listed above.
Deferred revenue: Deferred revenue was $15.8 million at March 31,
2007, a $1.4 million or 10% increase over the $14.4 million balance at
December 31, 2006.
Total New AudibleListener Members: 71,874 new AudibleListener
members were acquired during the first quarter of 2007, a 2% increase
from the 70,400 reported in the previous quarter and down from 79,000
new AudibleListener members in first quarter of 2006.
Conference Call
Senior management will host an investor teleconference at 5:00
p.m. EDT today to discuss first 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 (866)-904-6908 or +1-(416)-915-8329. Passcode 3009412.
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, impairment 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
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
computer-based and wireless mobile devices. Audible has 130,000 hours
of audio programs from more than 420 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
--------------------------------------
March 31, December 31, March 31,
2007 2006 2006
------------ ------------ ------------
Revenue, net:
Content and services:
Consumer content $ 24,979 $ 22,536 $ 19,281
Point of sale rebates (19) (25) (167)
Services 24 26 33
------------ ------------ ------------
Total content and services 24,984 22,537 19,147
Hardware 77 148 125
Related party revenue 91 395 373
Other 112 70 70
------------ ------------ ------------
Total revenue, net 25,264 23,150 19,715
Operating expenses:
Cost of content and services
revenue:
Royalties and other content
charges 11,256 9,734 7,983
Discount certificate
rebates 260 418 298
------------ ------------ ------------
Total cost of content and
services revenue 11,516 10,152 8,281
Cost of hardware revenue 179 246 675
Cost of related party
revenue 129 139 158
Operations 3,826 3,225 3,102
Technology and development 4,571 4,303 3,694
Marketing 3,904 4,108 4,301
General and administrative 3,104 3,402 3,201
------------ ------------ ------------
Total operating expenses 27,229 25,575 23,412
------------ ------------ ------------
Loss from operations (1,965) (2,425) (3,697)
Loss on equity investment (60) (94) -
Other income (expense):
Interest income 845 822 660
Other expense (6) - -
------------ ------------ ------------
Other income, net 839 822 660
------------ ------------ ------------
Loss before income taxes (1,186) (1,697) (3,037)
Income tax expense (24) (5) (3)
State income tax benefit - 769 -
------------ ------------ ------------
Net loss $ (1,210) $ (933) $ (3,040)
============ ============ ============
Basic and diluted net loss per
common share $ (0.05) $ (0.04) $ (0.12)
Basic and diluted weighted
average common shares
outstanding 24,205,043 24,158,857 24,481,751
AUDIBLE INC. AND SUBSIDIARY
NON-GAAP INFORMATION
(Unaudited)
(in thousands, except share and per share amounts)
Three months ended
--------------------------------
March 31, December 31, March 31,
2007 2006 2006
--------- ------------ ---------
Stock-based compensation included in
expense line items:
Operations $ 347 $ 344 $ 143
Technology and development 293 294 131
Marketing 300 327 204
General and administrative 636 787 616
--------- ------------ ---------
$ 1,576 $ 1,752 $ 1,094
--------- ------------ ---------
Depreciation and amortization
included in expense line items:
Operations $ 11 $ 15 $ 14
Technology and development 1,131 1,148 994
Marketing - - -
General and administrative 168 145 114
--------- ------------ ---------
$ 1,310 $ 1,308 $ 1,122
--------- ------------ ---------
Reconciliation to Non-GAAP Financial
Measures (unaudited)
Net loss $(1,210) $ (933) $(3,040)
Add back:
Stock-based compensation 1,576 1,752 1,094
Depreciation and amortization 1,310 1,308 1,122
Income tax expense 24 5 3
Less:
Interest income, net (839) (822) (660)
State income tax benefit - (769) -
--------- ------------ ---------
Non-GAAP adjusted EBITDA $ 861 $ 541 $(1,481)
========= ============ =========
Reconciliation to Non-GAAP Financial
Measures (unaudited)
Total revenue, net $25,264 $23,150 $19,715
Add:
Change in deferred revenue 1,432 2,258 2,076
--------- ------------ ---------
Non-GAAP total cash sales $26,696 $25,408 $21,791
========= ============ =========
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
March 31, December 31,
Assets 2007 2006
----------- -------------
(unaudited)
Current Assets:
Cash and cash equivalents $ 19,086 $ 14,925
Short-term investments 46,415 51,295
Interest receivable on short-term
investments 379 626
Accounts receivable, net of allowance 3,589 4,181
Accounts receivable, related parties 169 100
Royalty advances 637 710
Prepaid expenses and other current assets 1,452 1,797
Inventory 125 212
----------- -------------
Total current assets 71,852 73,846
Property and equipment, net 10,989 8,149
Other assets 950 781
----------- -------------
Total Assets $ 83,791 $ 82,776
=========== =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,860 $ 3,121
Accrued expenses 5,180 4,678
Accrued royalties 7,323 9,028
Accrued compensation 844 778
Deferred revenue, current 15,180 13,840
----------- -------------
Total current liabilities 31,387 31,445
Deferred revenue, non current 603 513
Other liabilities, non current 525 262
Royalty obligations, non current 75 90
Commitments and contingencies
Stockholders' Equity:
Common stock 242 241
Additional paid-in capital 192,745 190,799
Accumulated other comprehensive (loss)
income (38) (36)
Accumulated deficit (141,748) (140,538)
----------- -------------
Total Stockholders' Equity 51,201 50,466
----------- -------------
Total Liabilities and Stockholders' Equity $ 83,791 $ 82,776
=========== =============
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three months ended
March 31,
-------------------
2007 2006
--------- ---------
Cash flows from operating activities:
Net loss $ (1,210) $ (3,040)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,310 1,122
Non-cash stock-based compensation charge 1,576 1,094
Accretion of discounts on short-term investments (259) (230)
Changes in assets and liabilities:
Interest receivable on short-term investments 247 35
Accounts receivable, net 591 (582)
Accounts receivable, related parties (68) (3)
Royalty advances 73 11
Prepaid expenses and other current assets 346 (1,083)
Inventory 86 223
Other assets (169) (774)
Accounts payable (261) (2,413)
Accrued expenses (227) (482)
Other liabilities, non current 263 -
Accrued royalties (1,707) 7
Accrued compensation 29 393
Deferred revenue 1,430 2,076
--------- ---------
Net cash provided by (used in) operating
activities 2,050 (3,646)
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment (3,284) (3,716)
Capitalized software development costs (115) (198)
Purchases of short-term investments (21,736) (14,964)
Proceeds from maturity of short-term investments 26,875 24,500
--------- ---------
Net cash provided by investing activities 1,740 5,622
--------- ---------
Cash flows from financing activities:
Proceeds from exercise of common stock options 371 151
Proceeds from exercise of common stock warrants - 750
Repurchase of treasury stock at cost - (360)
--------- ---------
Net cash provided by financing activities 371 541
--------- ---------
Effect of exchange rate changes on cash and cash
equivalents - (5)
--------- ---------
Increase in cash and cash equivalents 4,161 2,512
Cash and cash equivalents at beginning of period 14,925 11,549
--------- ---------
Cash and cash equivalents at end of period $ 19,086 $ 14,061
========= =========
Supplemental Cash Flow information
Accrued purchases of property and equipment $ 750 $ -
--------- ---------
AUDIBLE INC. AND SUBSIDIARY
UNAUDITED SUPPLEMENTAL OPERATING DATA
(Numbers in thousands)
New AudibleListener Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Membership Reporting: 2005 2005 2005 2005 2006 2006 2006 2006 2007
Total AudibleListener(R)
Members(1) 186 205 224 245 279 309 345 383 415
Year-over-year 77% 77% 70% 56% 50% 51% 54% 56% 49%
Quarter-over-quarter 18% 10% 9% 10% 14% 11% 12% 11% 8%
New AudibleListener(R)
Members(2) 54 52 60 62 79 65 71 70 72
Year-over-year 143% 141% 104% 58% 46% 25% 18% 13% -9%
Quarter-over-quarter 37% -3% 15% 4% 26% -17% 9% -1% 3%
Average Monthly Churn in
AudibleListener(R)
Members(3) 4.00%4.70%5.10%4.80%4.60%3.40%3.10%2.50%3.00%
Cost per New AL $52 $57 $57 $94 $51 $44 $45 $49 $41
(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.
