ImageX.com, Inc. Achieves Ten-Fold Year-Over-Year Revenue Growth;
E-commerce Leader Reports Strong Third Quarter Results
BELLEVUE, Wash., Oct 27, 1999 (BUSINESS WIRE) -- ImageX.com, Inc.
(Nasdaq:IMGX), a leading business-to-business e-commerce company, today
announced revenues of $3.3 million for the quarter ended Sept. 30,
1999, a ten-fold improvement over $0.3 million in the same period a
year ago.
For the nine months ended Sept. 30, 1999 revenue was equal to $6.6
million, also a ten fold increase over the comparable period last year.
With growth in the revenues and increasing operational efficiencies,
the company achieved significant improvement in gross margins. Overall
gross margins were 25% for the third quarter 1999 versus less than 1% a
year ago. The Company's gross profit increased to $846,000 in the third
quarter 1999 from $1,000 in the same quarter last year. For the nine
months ending Sept. 30, 1999, gross profit reached $1.6 million
improving from a loss of $43,000 for the same period in 1998.
The Company incurred a net loss as it continued to invest in sales,
marketing and technology to build its customer base and brand. For the
third quarter of 1999, the net loss was $5.2 million, or $0.36 per
share, compared with a net loss of $2.1 million, or $0.39 per share in
the third quarter of 1998. The net loss for the nine months ended Sept.
30, 1999 was $10.8 million, or $0.97 per share, compared to a net loss
of $6.1 million, or $1.21 per share, for the comparable nine-month
period in 1998. All per-share amounts are computed on a pro forma
diluted basis, assuming conversion of preferred stock from original
date of issuance and giving effect to the one-for-two reverse stock
split effected in connection with ImageX.com's August 1999 IPO.
"This was an outstanding quarter for our company and the results
demonstrate the growing demand worldwide for ImageX.com's
business-to-business e-commerce procurement solution," commented Rich
Begert, president and chief executive officer. "As a first-mover, our
leadership position in the market is well-established. We are
revolutionizing an industry and are achieving excellent revenue and
customer growth, as well as gross margins. If our Sept. 20 acquisition
of Image Press had been included for the entire quarter, our revenues
would have been significantly higher."
"We're continuing to aggressively grow our customer base, as well as
expand our direct sales and vendor network," continued Begert. "When we
acquire customers, we quickly build a web connection to our e-commerce
procurement system, and deliver custom printed goods and services
enterprise-wide. We've also created business advantages for our
manufacturing partners. They not only receive custom print job data
from our customers via our online system, they also achieve process
efficiencies and improved accuracy rates because our proprietary,
software streamlines the process of file preparation, prepress and
transfer."
Highlights
Proceeds from initial public offering. The Company completed its
initial public offering on Aug. 26, 1999 and an over-allotment was sold
on Sept. 16, 1999 for approximate total proceeds of $21.3 million.
New Customers in third quarter. Thirty-one new online customers were
added in the third quarter, an increase of 20%, including names such as
USA Networks, Donaldson, Lufkin Jenrette, and Farmers Insurance.
New acquisition increases customer base. Image Press, a California
print broker was acquired Sept. 20, 1999 with 160 new customer
relationships to be tapped for conversion to the ImageX.com online
printing center technology.
Sales offices expanded. Six new offices opened in the past twelve
months. Eight new sales representatives were added in the third quarter
and will be calling on customers to introduce the unique ImageX.com
technology.
Alliances with Ariba and Eyewire. New alliances provided access to new
customers and complementary online service providers in the business to
business e-commerce arena.
New technology release enhances customer service. ImageX.com's version
2.3 designed especially for Fortune 1000 clients such as Merck and Bell
Atlantic Mobile provides new simplified shipping and delivery options.
ImageX.com Completes Initial Public Offering On Aug. 26, 1999,
ImageX.com completed an initial public offering of 3,000,000 shares of
Common Stock at a price of $7 per share, traded on the Nasdaq National
Market under the symbol `IMGX.' Volpe Brown Whelan & Company acted as
lead manager, with Prudential Securities and E-Trade Securities acting
as co-managers for the underwriting group. On Sept. 16, 1999, the
underwriters exercised their right to purchase an additional 450,000
shares of ImageX.com common stock pursuant to their over-allotment
option. Net proceeds of the offering of approximately $21.3 million
will fund continuing sales and marketing growth as well as product
development and customer acquisitions.
ImageX.com Customer Growth "We are delighted with customers' acceptance
of our procurement solution," said Begert. ImageX.com targets mid- to
large-sized corporations and the company's 156 corporate customers
include 31 added during the third quarter of 1999. Total custom
products available on the Company's customer websites reach over 1,500
by the end of the third quarter 1999. ImageX.com's e-commerce solution
serves top U.S. businesses, including ten of the Fortune 100, and has
penetrated a number of major industry segments. Customers include two
of the Big 5 accounting firms; a number of financial institutions,
including CIBC World Markets and Donaldson Lufkin & Jenrette;
pharmaceutical firms like Merck and Rhone-Poulenc; and over 35 dot
com's such as Amazon.com, Homegrocer.com, Infospace.com and
Shopnow.com.
New accounts added in the third quarter include USA Networks, USA
Broadcasting, Ticketmaster Online -- CitySearch, Automatic Data
Processing (ADP), Donaldson, Lufkin & Jenrette, Farmers Insurance, and
Home Shopping Network. "When customers see the operational efficiencies
that our online procurement application presents, they are driven to
roll out the solution enterprise-wide -- directly to their employees'
desktops." says VP Sales and Marketing, Dana Manciagli. "Frequently,
ImageX.com is the first e-commerce solution experienced by our
customers."
Growth in Business-to-Business E-Commerce According to Forrester
Research, Inc., U.S. business-to-business e-commerce of goods and
services will grow to $1.3 trillion by 2003, compared to $108 billion
of consumer e-commerce in the same time period. "Clearly, our customers
see the power and simplicity our e-commerce solution brings to their
businesses and there is tremendous opportunity within the
business-to-business e-commerce segment," said Begert. "We believe that
delivery of goods and services over the web will be the largest
component of the business to business e-commerce marketplace."
Image Press Acquisition On Sept. 21, 1999, the company announced the
acquisition of Image Press, Inc., a San Leandro-based print sales
organization with 160 customers, 50 print manufacturers and unaudited
1998 revenues in excess of $6 million. The customer relationships
acquired through Image Press include such names as Wells Fargo,
American Red Cross, Mervyn's California and others. Image Press also
provided six new sales representatives in the growing California
market.
Sales Force Expansion in Metropolitan Markets To support its growth,
ImageX.com has strengthened its presence in major metropolitan markets,
opening up six sales offices in the last 12 months. The company's
direct sales force has expanded from seven to 26 over the past year,
with eight of those added during the third quarter. ImageX.com has a
direct sales presence in New York, New Jersey, Connecticut, Washington,
D.C., Los Angeles, Orange County, Chicago, Seattle, Portland, and San
Francisco. In addition, a national accounts management team targets
U.S. headquarter locations of Fortune 500 corporations.
New Business Alliances In September, ImageX.com announced the addition
of Ariba to its alliance network. ImageX.com will be linked to Ariba
Network, an interactive distribution and procurement resource channel
to major corporations. ImageX.com and Ariba make sales calls to
potential joint customers and share access to existing customers.
ImageX.com also formed an alliance with EyeWire, a division of Getty
Images, to market online e-procurement services to the graphic design
industry. ImageX.com's other alliance partners include Concur, Silicon
Valley Bank, and Corporate Express.
New Technology Release On Sept. 30, 1999, the Company greatly enhanced
its e-procurement technology and user interface with the release of
Version 2.3 of the ImageX.com system. Embodying the needs of major
Fortune 1000 clients such as Merck and Bell Atlantic Mobile, v2.3,
among other things, simplifies complex shipping and delivery options
for customer employees at order entry, while streamlining back-end
processes for improved efficiency. As with all of the Company's
technology releases, the capabilities of v2.3 are immediately available
to all customers as a result of its proprietary scalable design. This
represents the seventh major release of the ImageX.com system since
commercial deployment of Version 1.0 in October 1997.
Additionally, three major development initiatives commenced in the
third quarter which were designed to enhance the Company's technology
foundation for the rapid conversion of customers to e-procurement. The
first was completion of an Oracle Financials solution for our finance
and accounting systems. The Oracle system is electronically integrated
into our e-procurement site and our back-end manufacturing automation
system, both of which are based on Oracle database technology.
The Company also concluded a strategic arrangement with SafeHarbor.com
for the outsourcing of real-time, technical support. As the number of
ImageX.com e-procurement users increases, SafeHarbor.com will provide a
scalable solution for common technical support expertise.
In October, an agreement was signed with Level III Communications
providing a world-class, dedicated private network as well as
technology hosting services. This will support accelerated growth with
minimal concern for bandwidth and hardware considerations and improved
disaster recovery.
Growth Strategy ImageX.com will continue its strategy of rapidly
acquiring customers through direct sales, acquisitions and strategic
alliances. The company generates recurring customer revenues via its
e-procurement solution. "All three aspects of our growth strategy
support customer acquisition in new markets," said Begert. "Our goal is
to become a de-facto standard for e-commerce procurement of printed
materials, and our national expansion supports our first-to-market
advantage in key commerce centers across the U.S."
"Additionally, our strategic alliances are providing new channel and
co-marketing partnerships that will generate leads and revenue growth,"
added Begert. "With a combination of joint sales calls and joint
marketing efforts with our alliance partners, we have the means to
efficiently grow our customer base quickly, targeting high-quality,
high-margin accounts that are positioned to significantly benefit from
ImageX.com's e-procurement services."
Strategic Acquisitions Acquisitions provide a key source of established
customers and accelerated demand for ImageX.com's e-commerce
procurement solution. On Sept. 20, 1999, the company acquired Image
Press, Inc., a San Leandro-based print sales organization. This is
ImageX.com's second major acquisition this year. The first, which
occurred in April, 1999, was Fine Arts Graphics, a print manufacturing
organization with print facilities in Oregon, and New Jersey with over
600 customers relationships and 1998 revenues of $10.5 million.
E-Commerce Procurement System ImageX.com builds custom e-procurement
Web sites for mid- to large-sized corporations. The Online Printing
Centers, featuring electronic catalogs containing customers' branded
printed materials, provide the ability for ordering, management, and
modification of a variety of materials ranging from office stationery
to complex marketing materials. Accessible from any Internet-connected
desktop computer, ImageX.com's service provides consistent quality,
locks in corporate design standards, allows for quick modification and
proofing, and enables distributed ordering for businesses with offices
worldwide. ImageX.com gives the customer tremendous control over the
procurement process.
ImageX.com, outsources its manufacturing to a network of partners, who
through its proprietary patent-pending software, receive digital files
directly from the customer and ready for production. Increased
efficiencies are achieved by ImageX.com's manufacturing partners
because the proprietary, patents-pending system streamlines the
processes of file preparation, prepress and transfer. This results in
greater file consistency, fewer errors, and higher quality as well as
simplified tracking and reporting processes.
About ImageX.com Headquartered in Bellevue, Wash., ImageX.com, Inc.
(Nasdaq:IMGX) provides e-commerce solutions that will revolutionize the
way businesses manage and acquire marketing communications materials,
ranging from office stationery to complex marketing materials. Founded
in 1995, ImageX.com has more than 225 employees, and has sales offices
in 10 major markets including Los Angeles, New York, San Francisco,
Washington D.C., Chicago, and more. ImageX.com is a key e-procurement
resource for top U.S. businesses, including Amazon.com, CIBC World
Markets, CB Richard Ellis, VeriFone, Merck & Co., Visio, Nielsen Media
Research, Automatic Data Processing, Donaldson, Lufkin & Jenrette,
among others. To facilitate product delivery to ImageX.com's customer
base, the company uses an integrated manufacturing partner network of
more than 30 printers nationwide. More information on the company and
an interactive demonstration of the Online Printing Center can be found
at imagex.com or by calling 800/959-7845.
ImageX.com, Inc.
Condensed Consolidated Statements of Operations
Expressed in U.S. dollars; all amounts in thousands except per share
data (Unaudited)
Three Months Ended Year to Date
----------------------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1998 1999 1998 1999
-------- ------- ------- --------
Revenues $ 314 $ 3,320 $ 614 $ 6,627
Cost of sales 313 2,474 657 4,999
-------- ------- ------- --------
Gross profit (loss) 1 846 (43) 1,628
Operating expenses:
Sales and marketing 454 1,929 1,741 3,776
Product development 558 1,181 1,884 2,051
General, administrative,
and other 1,080 3,024 2,367 6,679
-------- ------- ------ -------
Total operating
expenses 2,092 6,134 5,992 12,506
Income (Loss) from
operations (2,091) (5,288) (6,035) (10,878)
Interest income
(expense), net ( 37) 109 (39) 86
-------- ------- ------- --------
Net income (loss) $ (2,128) $ (5,179) $(6,074) $(10,792)
======== ======= ======= ========Net income (loss) per
common share
Basic $ (0.39) $ (.36) $ (1.21) $ (0.97)
Diluted $ (0.39) $ (.36) $ (1.21) $ (0.97)
ImageX.com, Inc.
Condensed Consolidated Balance Sheets
Expressed in U. S. dollars; all amounts in thousands (Unaudited)
June 30, Sept. 30,
1998 1999
------- -------
Assets
Cash and cash equivalents $16,599 $27,256
Other current assets 2,952 5,002
------- -------
Total current assets 19,551 32,258
Property and equipment, net 4,423 5,173
Other assets 2,348 4,319
------- -------
Total assets $26,322 $41,750
======= =======Liabilities and Shareholders' Equity
Current liabilities $ 3,701 $ 4,214
------- -------
Long term liabilities 1,731 0
------- -------
Shareholders' equity 20,890 37,536
------- -------
Total liabilities and shareholders'
equity $26,322 $41,750
======= =======
Certain statements in this press release are "forward-looking
statements" within the meaning of the Securities Act of 1933, as
amended. Forward-looking statements are based on the opinions and
estimates of management at the time the statements are made and are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those anticipated in the
forward-looking statements. Factors that could affect ImageX.com's
actual results include, but are not limited to, the "Risk Factors"
described in our Securities and Exchange Commission filings, including
the Prospectus related to our initial public offering dated August 26,
1999. Readers are cautioned not to place undue reliance upon these
forward-looking statements that speak only as to the date of this
release.
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Copyright (C) 1999 Business Wire. All rights reserved.
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