Here are the numbers -.26
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Monday October 25, 4:12 pm Eastern Time
Company Press Release
SOURCE: Digital River, Inc.
Digital River Sales Top $20 Million in Third Quarter
MINNEAPOLIS, Oct. 25 /PRNewswire/ -- Digital River, Inc., (Nasdaq: DRIV - news) today reported sales of
$20,068,000 for the third quarter ended Sept. 30, 1999, up 27 percent from the second quarter of this year and 249 percent
from $5,758,000 in last year's third quarter. Gross margins for the quarter increased to 19 percent from 18.9 percent for the
second quarter of this year.
The company's third-quarter loss before the effect of amortization of goodwill and acquisition-related costs was
$5,413,000, or 26 cents per share. After amortization of goodwill and acquisition related costs, the third- quarter net loss
was $8,688,000, or 42 cents per share, compared with a net loss of $3,940,000, or 26 cents per share, in the third quarter
of 1998.
For the nine months ended Sept. 30, 1999, sales were $47,589,000 vs. $11,504,000 in the same period last year. This
year's nine-month loss before amortization of goodwill and acquisition-related costs was $16,134,000, or 80 cents per
share . Including amortization of goodwill and acquisition- related costs, the net loss for the period was $20,711,000, or
$1.03 per share, compared with a net loss of $9,292,000, or 74 cents per share, in the first nine months last year.
''We're pleased to report another successful quarter for Digital River, not only in terms of key financial measures such as
sales growth and improved gross margin, but also in terms of our progress in the strategic positioning of the company,'' said
Joel Ronning, chief executive officer. ''Building on the underlying strength of our core business of electronic software
delivery, we are developing a complementary array of e-business initiatives that have begun to contribute to our growth and
competitive advantage.
''Our core software business is very strong and, with our emerging CommerceBridge business, we achieved a solid
expansion in client base and gross margins for the quarter,'' Ronning continued. ''CommerceBridge, which applies our
e-commerce outsourcing capabilities outside the software market, has clearly begun to take hold. We are now managing
e-commerce for divisions of several major companies and have momentum building into the final quarter of the year.
''The acquisition earlier this month of the PC download assets of Walnut Creek CDROM will strengthen our software
business and provide an additional means of distributing eBot with one of the largest providers of digital downloads on the
Internet.''
Perry Steiner, president, said the early client and customer feedback on the company's new eBot product has been very
positive.
''In September we introduced eBot, our exciting new permission-based smart-agent technology, which identifies relevant
updates for PC software and helps consumers download free and discounted software, as well as the latest software
upgrades, patches and bug fixes,'' Steiner said. ''Ebot was recently named Best Productivity/Internet Product of the Year at
the RetailVision Fall'99 conference in Chicago.
''We believe the economics of eBot are very compelling,'' Steiner added. ''Our goal is to have eBot on millions of
desktops, and we will work closely with our publisher clients to bring the best discounts to the eBot subscriber base.
Because our publishers will have a very efficient and inexpensive communications channel, they have expressed a
willingness to increase the margin paid to us. Further, they will achieve better response rates and save on marketing costs --
and be able to pass the savings along to the consumer. It is a win-win situation for everyone involved.''
During the third quarter Digital River processed 469,000 sales transactions for 401,000 unique customers, Steiner said.
That increases the company's cumulative customer data base to more than 2 million unique users.
Digital River, Inc., based in Minneapolis, is the largest online source of software and a leading outsource provider of
Web-based commerce solutions. The company provides more than 5,000 software publishers and online retailers with its
proprietary technology for Internet delivery of more than 100,000 digital products, including 30,000 software products and
applications. For more information, visit Digital River's Web site at digitalriver.com
Except for the historical information contained herein, this press release contains forward-looking statements, including
statements containing the words, ''believes,'' ''anticipates,'' ''expects'' and similar words. Such forward- looking statements
involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or
achievements of the Company, or industry results, to be materially different from any future results, performance or
achievements expressed or implied by such forward- looking statements. Such factors include, among others: the
Company's limited operating history and variability of operating results; market acceptance of electronic software delivery;
the Company's ability to maintain relationships with software publishers and online retailers; competition in the electronic
commerce market; and other risk factors referenced in the Company's public filings with the Securities and Exchange
Commission.
For more information, contact Tom Langenfeld of Swenson NHB Investor Relations, 612-371-0000, for Digital River, Inc.
or Bob Strawman of Digital River, Inc., 612-253-1234.
DIGITAL RIVER, INC.
Third Quarter Results
(in thousands, except per-share amounts)
Condensed Consolidated Statement of Operations (unaudited)
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
Sales $ 20,068 $5,758 $ 47,589 $ 11,504
Cost of Sales 16,253 4,819 38,889 9,610
Gross Profit 3,815 939 8,700 1,894
Operating Expenses
Sales and marketing 4,857 3,105 12,826 6,538
Product development
and operations 4,025 1,292 11,315 2,903
General and administrative 1,098 751 3,123 2,164
Amortization of goodwill and
acquisition related costs 3,275 -- 4,577 --
Total operating expenses 13,255 5,148 31,841 11,605
Loss from operations (9,440) (4,209) (23,141) (9,711)
Interest income 752 269 2,430 419
Net loss $ (8,688) $ (3,940) $(20,711) $ (9,292)
Net loss per share
before amortization
of goodwill and
acquisition costs $ (.26) $ (.26) $(.80) $ (.74)
Net loss per share $ (.42) $ (.26) $ (1.03) $ (.74)
Weighted average shares
outstanding 20,604 14,894 20,137 12,484
Condensed Consolidated Balance Sheets
September 30, 1999
(unaudited) December 31, 1998
Assets
Current assets
Cash and investments $58,267 $74,397
Other current assets 2,728 1,907
Total current assets 60,995 76,304
Property and equipment, net 5,338 3,914
Goodwill and other assets 20,752 110
Total assets $87,085 $80,328
Liabilities and stockholders' equity
Current liabilities
Accounts payable $8,839 $3,880
Accrued payroll and other liabilities 2,801 1,861
Total current liabilities 11,640 5,741
Stockholders' equity 75,445 74,587
Total liabilities and
stockholders' equity $87,085 $80,328 |
