ImageX.com Revenue Increases 163% to $14.6 Million
New Customer Additions Continue
EPS Performance Exceeds Revised Estimates
Cash Reserves Remain Strong
KIRKLAND, Wash.--(BUSINESS WIRE)--May 3, 2001--ImageX.com Inc. (Nasdaq:IMGX - news), the technology market leader in Web-enabled design and printing services, today reported revenues of $14.6 million for the quarter ended March 31, 2001, an increase of 163% compared with revenues of $5.6 million for the same period last year.
For the quarter ended March 31, 2001, the company reported a cash loss of $9.9 million, or ($0.37) per share, based on 26.4 million weighted average shares outstanding, versus the revised Thomson/First Call consensus estimate for the first quarter 2001 of ($0.38) per share. This compares with a cash loss of $8.2 million, or ($0.42) per share, based on 19.3 million shares outstanding for the same period last year.
Including noncash items, the company's net loss for the quarter ended March 31, 2001, was $15.2 million, or ($0.58) per share, on 26.4 million weighted average shares outstanding compared with a net loss of $9.5 million, or ($0.49) per diluted share, on 19.3 million weighted average shares outstanding for the period ended March 31, 2000.
The first quarter 2001 net loss included one-time charges of $2.2 million related to a 17% staff reduction and closure of a print marketplace subsidiary.
``While we experienced a softness in first quarter revenues due to customer reaction to short-term economic factors, we continue to add new customers and the return on investment of our Web-based printing solution has never been more compelling,'' said Rich Begert, president and chief executive officer.
``In times like these, when customers are looking for ROI, they start paying attention to the cost value we provide. For both medium and large corporate customers, our technology reduces cost for both clients and their suppliers.''
Financial Highlights
ImageX.com reported record gross profit, up 238%, to $4.7 million for the quarter ended March 31, 2001, compared with gross profit of $1.4 million for the same period last year. Total operating expenses before depreciation, amortization, and loss on disposal of assets totaled $14.9 million for the quarter ended March 31, 2001, compared with $10.3 million for the same period last year.
Comparing the first quarter 2001 to the fourth quarter 2000, cash operating expenses fell over 9%, demonstrating the company's continued focus on expense control. The company reported cash and cash equivalents of $29.4 million at March 31, 2001.
``With excellent cost management processes in place and a strong cash balance, we are well positioned to be the successful enterprise in our industry sector,'' said Robin L. Krueger, the company's chief financial officer. ``The second quarter results should show further improvements as the initiatives completed in the first quarter achieve full effect.''
Operational Highlights
``Our leadership position in our industry has never been so clear,'' said Begert. ``In this quarter, we added new customers, experienced accelerating volume, and introduced new customer interface technologies -- all while we were improving our cost performance.
``We are a top performer in the area of large corporate branding implementations and our successes with new customers such as Credit Suisse First Boston and UBS PaineWebber Inc. illustrate this capability,'' Begert continued. ``These are long-term relationships that will outlast short-term economic shifts.''
Major cost savings measures implemented. During the first quarter a 17% staff reduction was completed, nonstaff cost reductions were implemented, and the PrintBid.com marketplace was closed. As a result, annualized operating expenses are expected to decline by over $10 million during 2001. One-time charges related to the staff reduction plus the PrintBid.com closure totaled $2.2 million. ``These actions were a rapid response to revenue trends which developed during the first quarter,'' said Begert. ``As we achieve greater volumes through our system, new operating efficiencies will continue to occur.''
Online printing center continues to see steady customer growth. ImageX.com's Corporate Online Printing Center's online Fortune 1000 customers totaled 33 at March 31, 2001. Cumulative online printing customers reached 341 by the end of the first quarter, reflecting an addition of 10 new corporate relationships. During the first quarter, the company also received significant orders from existing customers, including UBS PaineWebber Inc. and IKON Office Solutions.
Order volume and number of online products continues growth. Order volume for the quarter ended March 31, 2001, grew to 46,935 items, an increase of 32% compared with 35,677 in the prior quarter and up 194% from 15,954 orders, one year ago. During the first quarter, 23 new customized corporate Web sites went live and 980 new products were set up on customer Web sites.
ImageX.com introduces new design and functionality for Corporate Online Printing Center. Version 8.0 of the core user interface of the Corporate Online Printing Center was fully implemented with customers during the first quarter. The new version provides improved shipment tracking, online customer service and more intuitive navigation through customized corporate Web sites. These features will increase speed to order and are accompanied by significant backroom efficiencies also completed during the quarter. ``The latest enhancements are in response to specific customer needs,'' said Begert. ``And we will continue to provide improvements that both serve the customer and improve operating efficiencies.'' ImageX.com currently has 81 patents pending to protect proprietary technologies companywide.
New internal systems for Operations and Finance. A major capital investment that will achieve ``no touch'' customer order processing was completed in March after an intense eight month effort. This Oracle-based operations and finance system will enable significant operating efficiencies and process cost reductions. ``This new system automates our entire process from customer order entry to invoicing and completes our investment in the highest quality and most scalable infrastructure available,'' said Begert.
Strategic Alliance with IKON Office Solutions creates new customer growth opportunities. A new cooperative sales and marketing arrangement with IKON Office Solutions provides access to a pool of over 350,000 new customers. ``Through IKON's Digital Express, the ImageX.com Corporate Online Printing Center product will be potentially visible to thousands of new customers,'' stated Begert. ``We continue to believe that strategic alliances can provide efficient distribution networks for our products.''
Financial Outlook
``The revenue softness in the first quarter will impact our longer term outlook,'' stated Krueger. ``As a consequence of staffing reductions and other cost measures, our first quarter expenses declined 9% over the previous quarter and are expected to decline another 15% by the end of the second quarter.
``Revenues are expected to recover at least 5-7% in the June quarter as compared with the quarter ended March 31, 2001. Based on revenue trends observed year to date, full year 2001 revenue is expected to range between $60 and $65 million, or 20% to 30% growth over full year 2000.
``Cash operating expenses are expected to continue to decline and reach 75% of revenue for the full year compared to 111% of revenue in 2000. Based on the current revenue forecast and cost reductions, our cash balance is sufficient to reach cash flow breakeven and beyond.''
Conference Call Information
ImageX.com will hold a conference call to discuss first quarter 2001 results and offer financial guidance today at 5:30 p.m. (EDT). Interested parties can call 877/691-0879 (domestic callers) or 973/633-6740 (international callers).
No reservation number is required. A replay will be available until May 10, 2001, at 877/519-4471 (domestic callers) or 973/341-3080 (international callers) and enter access code 2568172.
Also, a live Webcast and Internet replay of the call can be accessed at the investor relations section of ImageX.com's Web site, www.imagex.com, or from the StreetEvents site, www.streetevents.com.
About ImageX.com
Founded in 1995 and based in Kirkland, ImageX.com (Nasdaq:IMGX - news) is the technology market leader in Web-enabled design and printing services, dedicated to streamlining the workflow process from the design, production, delivery and management of branded communication materials.
With 81 patents pending, the company's unique Web-based systems cater to all types of companies and creative professionals. ImageX.com's branded service areas include the Corporate Online Printing Center, Extensis Products Group, Creativepro.com and the Small Business Printing Center.
ImageX.com's blue chip customer base includes AT&T, Automatic Data Processing (ADP), CB Richard Ellis, GE, Kraft, Merck and Co., Liz Claiborne and many others. More information on the company and its services can be obtained from imagex.com or by calling 877/682-0880.
Registered trademarks and service marks are the property of their respective owners.
Certain statements in this news release contain ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the opinions and estimates of management only as of the date of this release and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words ``believe,'' ``expect,'' ``intend,'' ``anticipate,'' variations of such words, and similar expressions identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in ImageX.com's registration statements and periodic reports filed with the Securities and Exchange Commission, including its 10-K for the year ended Dec. 30, 2000, which was filed on March 22, 2001. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this news release. ImageX.com undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
ImageX.com Inc.
Condensed Consolidated Statements of Operations Data
(Expressed in U.S. dollars;
all amounts in thousands except per share data)
Three Months Ended
March 31, March 31,
2001 2000
Revenues $ 14,625 $ 5,569
Cost of sales 9,973 4,191
Gross profit 4,652 1,378
Operating expenses:
Sales and marketing 5,949 3,995
Product development 3,127 1,775
General and administrative 5,818 4,506
Total operating expenses before
depreciation, amortization and
loss on disposal of assets 14,894 10,276
Income (loss) from operations before
depreciation, amortization and
loss on disposal of assets (10,242) (8,898)
Interest income (expense), net 377 720
Income (loss) before depreciation,
amortization and loss on
disposal of assets (9,865) (8,178)
Depreciation (1,386) (571)
Amortization of unearned compensation,
goodwill, intangibles and software (2,459) (791)
Loss on disposal of assets (1,459) 0
Net income (loss) $ (15,169) $ (9,540)
Income (loss) before depreciation,
amortization, and loss on disposal
of assets per common share $ (0.37) $ (0.42)
Net income (loss) per common share $ (0.58) $ (0.49)
Weighted average shares outstanding 26,359 19,307
-0-
ImageX.com Inc.
Condensed Consolidated Balance Sheets
(Expressed in U.S. dollars; all amounts in thousands)
March 31, Dec. 31,
2001 2000
Assets
Cash and cash equivalents $ 29,383 $ 40,420
Other current assets 14,483 17,366
Total current assets 43,866 57,786
Property and equipment, net 21,860 22,748
Other assets 52,907 55,772
Total assets $ 118,633 $ 136,306
Liabilities and Shareholders' Equity
Current liabilities $ 9,446 $ 10,400
Long-term liabilities 7,000 8,800
Shareholders' equity 102,187 117,106
Total liabilities and
shareholders' equity $ 118,633 $ 136,306
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Contact:
ImageX.com Inc., Kirkland
Robin Krueger, 425/576-7062
or
The Berlin Group
Lawrence Delaney Jr., 310/577-5282 |
