Comtex Reports 63% Increase in Fourth Quarter Revenues, Exceeding Internal Estimates
ALEXANDRIA, Va.--(BUSINESS WIRE)--Sept. 14, 2000--
Quarterly EBITDA Increases Significantly, Gross Margin At 70%
Top-line Growth Expected to Continue in Fiscal 2001
COMTEX News Network, Inc., (OTC BB:CMTX) today announced that for
the fourth quarter ended June 30, 2000, revenues increased 63% to $3.7
million, gross margin reached 70% of revenue, and EBITDA increased
significantly to $336,000 from $128,000. Net income for the quarter
increased 181% to $244,000, or $0.02 per diluted share.
For the fiscal year ended June 30, 2000, revenues increased 64% to
$12.4 million, gross margin was 70% of revenues and EBITDA increased
to $1.4 million from $647,000. Net income increased 142% to $1.1
million, or $0.09 per fully diluted share.
The above results for the quarter and year ended June 30, 2000
exclude a one-time client payment of $250,000 in the fourth quarter
ended June 30, 2000.
"Our business model works. Because we have longstanding
relationships with clients and understand their content and technology
needs, we have been able to consistently grow our top line. Because of
the success of our business model, we have been able to show
continuous increases in both EBITDA and net income. In fact, this is
our 17th consecutive profitable quarter ," noted Charlie Terry,
President and CEO of COMTEX News Network, Inc.
"The growth we have experienced throughout this fiscal year
reflects the inherent demands for our news products as information
usage on the web continues to explode and as our customers require
news content to attract and retain their end-users," Terry added.
"This growth rate also reflects our success at adding new
contracts at a record pace while simultaneously growing revenues with
existing clients. During the quarter, COMTEX added 78 new distribution
partners, reflecting both the success of our marketing programs and
the popularity of our topically-based aggregated news products. To
capitalize on our growth opportunity, we have already expanded our
sales force," Terry noted.
"Approximately 80% of revenues from our existing client base are
annuity-based," Mr. Terry explained. "With similar retention and
growth of this base and the productivity of the expanded sales
organization, we expect our top line growth for fiscal 2001 to
continue at a similar pace as fiscal 2000."
OPERATING HIGHLIGHTS
COMTEX grows its business by offering existing and new customers
constant improvements in content and technology enhancements.
Highlights for the quarter and the year include:
New Systems Increase Content Processing Capacity. During fiscal
2000, COMTEX launched its new real-time content processing system,
Equinox. This new system brings important advantages to COMTEX and our
customers including increased capacity of up to 100,000 stories per
day and multiple output formats including XML. Additionally, the new
processing platform provides for easy addition of new publishers,
content value-adds and the inclusion of multimedia and foreign
language content.
New Content Enhances Financial, Government And Business
Information. During the fourth quarter, COMTEX added new content from
publishers supplying thousands of stories each day and expanding our
content offering. COMTEX signed additional content sources for more
comprehensive financial, government and business information news,
including: Briefing.com, Federal Information & News Dispatch, Inc.
(FIND), JAGNotes.com, World Media Abstracts (Financial Times
Information Ltd.).
78 New Customers Added - Highest Quarterly Total To Date. During
the quarter, COMTEX expanded its presence in the market by securing
deals with 78 new distribution partners, expanding its valued
distribution network to over 750 points, including:
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- Asiagateway.com - iBolsa
- Business.com - iBoost Technology
- Choicecontent.com - Invest.com
- eNow.com - MarketXS.com
- e-Tenants.com - MyCity.com
- Earthramp.com - PowerAdz.com
- Fresher Information Corporation - Qtrade Investor
- FundsXpress Financial Network - RealTime Traders.com
- GeneralSearch.com - VertiSoft Corporation
- GoInvest.com - WeVest.com
- Hyperion Solutions Corporation - Yourst.com
FINANCIAL HIGHLIGHTS
Quarter ended June 30, 2000. On an as reported basis, the
company's fourth quarter revenues increased 74% to $4.0 million from
$2.3 million in the fourth quarter last year, including a one-time
client payment for previously unreported content usage during fiscal
2000 and prior years. This reflects a significant increase in business
from new accounts as well as continued growth of revenues from
existing accounts. At the same time, the company's gross margin grew
to 71% of revenues compared with 67% of revenues in the fourth quarter
of the last fiscal year. Gross margin improvements reflect the
implementation of a more cost effective and efficient delivery method
for the company's products.
Operating expenses increased to $2.5 million, or 74% over the
fourth quarter of fiscal year 1999. The increase in expenses reflects
the company's continued investment in the operations and
infrastructure of the company to support the rapid growth in revenues
and the development of additional products and technology.
EBITDA increased from $128,000 to $474,000 while net income in the
fourth quarter grew significantly reaching $383,000, or $0.03 per
fully diluted share. This compares with net income of $87,000 or $0.01
per fully diluted share in the fourth quarter of the prior year.
During the quarter ended June 30, 2000 the company received a
one-time client payment of $250,000 for previously unreported content
usage during fiscal 2000 and prior years. There was approximately
$112,000 in expenses associated with this payment.
Year ended June 30, 2000. For the fiscal year, revenues increased
67% to reach $12.6 million from $7.6 million in the prior year,
including the one-time client payment for previously unreported
content usage during fiscal 2000 and prior years. Gross margin
increased to 70% of revenues while EBITDA grew significantly from
$647,000 to $1.5 million. Net income for the year increased
significantly to $1.2 million, or $0.10 per fully diluted share on a
higher number of shares outstanding. This compares to net income of
$456,000, or $0.04 per fully diluted share, in the prior year. The
company added a record number of new accounts and continued to grow
revenues from existing accounts while continuing its investments in
operations and infrastructure of the company to support the rapid
growth in revenues and the development of additional products and
technology.
Earlier this month, the Company was named as a codefendant with
other news networks in a lawsuit in United States District Court,
Northern District of Alabama, which seeks damages for trading losses
relating to the false press release concerning Emulex Corp. COMTEX had
passed through to its distributors the Emulex story with full
attribution to Internet Wire as the source. The Company intends to ask
the Court to dismiss the lawsuit later this month.
About COMTEX News Network, Inc.
COMTEX News Network, Inc. (OTC BB:CMTX), a full service,
business-to-business infomediary, aggregates and redistributes
diverse, real-time global news and information to resellers in the
Internet, Wall Street and corporate markets. COMTEX' innovative
technology gathers nearly 20,000 stories a day from over 10,000
diverse, global sources to create its subject-specific, value-added
headline and vertical-market news products for distribution to over
750 information services and re-distributors throughout the world,
reaching millions of end users. COMTEX' products include
CustomWires(R), Newsroom Enhanced Products, Newsroom Direct, Publisher
Full-Feeds and Processing Services. Select publishers include
AllAfrica, Inc., The Associated Press, Business Wire, Bridge
Information Systems, Knight Ridder/Tribune, Newsbytes, ON24, PR
Newswire, South American Business Information, The Sports Network, UPI
and Xinhua. Located in Alexandria, VA, COMTEX can be found on the
World Wide Web at comtexnews.net.
Note: All product and company names may be trademarks or
registered trademarks of their respective holders.
Except for the historical information contained herein, this press
release contains forward-looking statements including those about
COMTEX' anticipated financial performance for the 2001 fiscal year,
demand for the company's products, performance of the sales force,
customer retention, etc. These statements involve risks and
uncertainties that could cause actual results to differ materially
from those contemplated herein, including the occurrence of
unanticipated events or circumstances relating to the fact that COMTEX
is in a highly competitive industry subject to rapid technological,
product and price changes. Other factors include the possibility that
demand for the Company's products may not occur or continue at
sufficient levels, changing global economic and competitive
conditions, technological and other risks, costs and delays associated
with the start-up and operation of major capital projects, changing
governmental regulations and other risks and uncertainties, including
those detailed in the Company's filings with the Securities and
Exchange Commission. COMTEX undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
(Financial Tables Follow)
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COMTEX News Network, Inc.
Selected Financial Data
(amounts in 000's, except per share amounts)
Years Ended Quarters Ended
June 30 June 30
2000 1999 2000 1999
Revenues 12,645 7,557 3,966 2,281
Cost of
Revenues 3,822 2,814 1,145 764
Gross Profit 8,823 4,743 2,821 1,517
Operating
Expenses 7,514 4,201 2,455 1,409
Operating Income 1,309 542 366 108
Other income
(expense) (67) (86) (1) (21)
------------------ ------------------
Income Before
Income Taxes 1,242 456 365 87
Income Taxes -- -- (18) --
------------------ ------------------
Net Income 1,242 456 383 87
Net Income
Per Share
Basic $ 0.14 $ 0.06 $ 0.04 $ 0.01
Diluted $ 0.10 $ 0.04 $ 0.03 $ 0.01
Weighted Avg
No. Shares:
Basic 9,051 7,984 9,890 8,085
Diluted 12,672 11,344 12,990 12,087
Note: Results for the fourth quarter and year ended June 30, 2000
includes a one-time payment for previously unreported content usage
during fiscal 2000 and prior years of $250,000, less associated
expenses.
CONTACT:
COMTEX News Network, Inc.
Amy Gutowski, Public Relations
703/820-2000, ext. 8132
agutowski@comtexnews.net
or
Dee McGonagle, Investor Relations
703/820-2000, ext. 8006
investor@comtexnews.net
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