Getty Reports A Successful Third Quarter
Business Wire - October 27, 1998 17:27
LONDON--(BUSINESS WIRE)--October 27, 1998--Getty Images (NASDAQ: GETY), one of the leading international providers of visual content, today announced financial results for the third quarter of 1998. Sales for the quarter increased by 85% over the third quarter of 1997 to $49 million. Reported earnings before interest, taxes, exchange gains/losses, depreciation, amortization and non-recurring charges ("EBITDA") for the quarter were $9.8 million, representing growth of 96% over the third quarter of 1997. Full web commerce sales for the quarter reached more than 10% of sales and digital sales for the quarter were $16.8 million, representing 34% of total sales.
Getty's strategy has been to consolidate leading brands in all of the industry's market sectors and, through the leverage of digital expertise, to provide full web commerce for all of the company's products. Getty has already brought together leading image providers in the areas of historic and contemporary photography and film as well as in current affairs, sports and photojournalism, and in royalty-free digital stock photography.
Getty already operates three successful full commerce web sites and recently launched a fourth, for its largest business, Tony Stone Images, a world leading stock photography business. Getty plans to launch full web commerce for Hulton Getty, one of the two largest archival collections of imagery in the world, next year.
Chairman, Mark Getty said, "We are delighted with the speed with which our strategy is being implemented. The take up of our online products among our customers has exceeded our expectations. PhotoDisc continues to report growth each quarter; Allsport is increasing its customer base for online delivery, and demand for electronic delivery among Tony Stone Images' customers has grown impressively from a standing start four months ago. Full electronic commerce for Tony Stone Images has just been launched and we are very excited about the possibilities for growth that it brings."
Jonathan Klein, Chief Executive Officer, said "The third quarter of 1998 has been our most successful to date with strong sales, improvements in margin and the introduction of important strategic initiatives including the Preview service at Tony Stone Images. All of our businesses performed well with many divisions reporting record results. Regionally, all of our markets showed strong growth with the exception of Japan and South East Asia. Although we have had to adjust our growth expectations for the remainder of this year and for next, we are confident that our company will continue to report solid growth."
Highlights of the third quarter
-- Tony Stone Images launched a full commerce web site at the
beginning of October. In the first week of operation following
launch, volume and value of transactions exceeded expectations.
Getty believes that new and existing customers will be attracted
to the added benefits, greater service levels and extended choice
that the web site brings. Getty expects the web site to increase
its customer base, increase sales opportunities and lower
operating costs.
-- Tony Stone Images' Preview service, launched at the end of last
quarter, exceeded expectations with over 30% of North American
selections and 15% of UK selections being dispatched
electronically in the quarter. The Preview service allows
customers to request selections from picture research personnel
and have the required images delivered online.
-- Tony Stone Images performed well in all of its key markets.
September was a record month for the business. Regionally,
European offices showed the greatest growth rates.
-- In the third quarter, Tony Stone Images introduced new contracts
for its contributing photographers that include new rates for
online sales of 40% for in territory sales and 30% for out of
territory sales, which compares to the rate for analog sales of
50% for in territory sales and 30% for out of territory sales.
-- In the quarter, Getty acquired an exclusive license to grant
reproduction rights for the Weegee Archive and Collection. A
noted pioneer of tabloid photojournalism, Weegee's collection,
until now housed at the International Center of Photography,
comprises approximately 12,000 images. Getty plans to digitize a
core collection of 1,000 and make them available online through
the Hulton Getty full commerce web site which will be launched
next year.
-- PhotoDisc had its best performance to date in the third quarter,
with total sales growth of 44% over the third quarter of 1997.
Web sales in the quarter sustained rapid growth with $2.1 million
being generated online in September alone and an increase in the
overall average invoice value. Sales in Europe were particularly
strong in the quarter.
-- Allsport exceeded expectations in the quarter. In the US
Allsport's sales were 35% higher than the third quarter of 1997
due to increased penetration in all sports as well as an
exceptional baseball season and the onset of NFL pre-season
coverage. Motor racing and soccer sales were strong in the UK and
the newly opened Australian office performed well with extensive
coverage of the Commonwealth Games.
-- Hulton Getty sales improved on the third quarter of last year.
Progress towards full electronic commerce was also made with the
addition of 1,600 Ernst Haas images online. 175,000 images may
now be searched on the Hulton Getty website and full web commerce
for the brand will be introduced next year.
-- Liaison showed strong performance in the quarter, particularly in
North America. The integration of the brand's stock photography
business into Tony Stone Images, has meant a greater focus, for
Liaison, on its core strength of photojournalism and press
activities.
-- Energy Film Library reported increases in sales at its offices in
New York and Los Angeles as well as the continued success of
sales to the motion picture industry. Energy's footage will
appear in many new releases including Universal's 'Psycho';
Disney's 'My Favorite Martian', and 'Next Stop Hollywood' from
Miramax. In the quarter, Energy also began the integration of
Imageways, a notable collection of archival footage that was
acquired by Getty in August this year.
Financial results for the quarter ended September 30, 1998
-- Getty's reported sales increased by 85% to $49 million in the
third quarter of 1998, compared to $27 million in the third
quarter of 1997.
-- Gross margin for the quarter improved to 72.3% from 62.6% of
sales in the third quarter of 1997.
-- Selling, general and administrative expenses were $25.6 million,
representing 52.4% of sales, compared to 53.7% for the second
quarter of this year.
-- EBITDA for the quarter increased by 96% to $9.8 million compared
to $5.0 million in 1997.
-- The EBITDA margin was 19.9%, up from 17.4% in the second quarter
of 1998 and 18.8% in the third quarter of 1997. |
