Earning Report:
MINNEAPOLIS, Jan. 27 /PRNewswire/ -- Digital River, Inc., (Nasdaq: DRIV)
today reported sales of $27,461,000 for the fourth quarter ended Dec. 31,
1999, a 37 percent sequential increase from the third quarter of 1999 and a
192 percent increase from $9,407,000 in the fourth quarter of 1998.
Fourth-quarter gross margin increased to 19.4 percent from 19.0 percent for
the third quarter of 1999 and from 16.3 percent in the fourth quarter of 1998.
The company's fourth-quarter loss before the effect of amortization of
goodwill and acquisition-related costs was $4,634,000, or 22 cents per share.
After amortization of goodwill and acquisition related costs, the
fourth-quarter net loss was $6,943,000, or 33 cents per share, compared with a
net loss of $4,506,000, or 26 cents per share, in the fourth quarter of 1998.
For the year ended Dec. 31, 1999, sales were $75,050,000, compared with
$20,911,000 for 1998. The loss before amortization of goodwill and
acquisition-related costs was $20,767,000, or $1.02 per share, for 1999.
Including amortization of goodwill and acquisition-related costs, the net loss
for the year was $27,653,000, or $1.36 per share, compared with a net loss of
$13,798,000, or $1.01 per share, in 1998.
"Our fourth-quarter results illustrate how our business mission has
expanded in the past year -- and expanded dramatically," said Joel Ronning,
chief executive officer. "It's no secret that we dominate e-commerce
outsourcing in the software vertical market. We are a force in the online
software market, and we continue to grow this segment of our business
aggressively. But when we evaluate our technology and services -- and our
market position -- it's clear that our true core competency is e-commerce
outsourcing. As an outsource partner, we are managing e-commerce systems for
over 6,000 clients.
"Put simply, we are the largest e-commerce Application Service Provider in
the world sitting on a proprietary platform."
Earlier today, Digital River announced that it is segmenting its business
into two divisions -- Software and Digital Commerce Services and E-Business
Services. Both lines of business contributed to the company's fourth-quarter
growth in sales and margins, Ronning said.
"We will invest significantly this year to build the E-Business Services
division and to capitalize on the market opportunity we see for our sell-side
business-to-business e-commerce solutions," Ronning said. "We plan to
increase our spending by $18 to $20 million in 2000 over 1999 levels , but
have not changed our commitment to drive this company to profitability.
Again, our goal for the Software and Digital Commerce Services division is to
be profitable before depreciation and amortization by December of this year."
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