Abacus Direct Reports Record Second Quarter Results
Net Income Up 183% On Revenue Growth Of 83%
WESTMINSTER, Colo., July 23 /PRNewswire/ -- Abacus Direct Corporation (Nasdaq:ABDR)
today announced record revenues, operating profit, and net income for the second quarter and for
the six months ended June 30, 1997.
Net income for the second quarter was $1,085,000 or $0.11 per share compared to net income of
$384,000 or $0.04 per share for the same period last year, an increase of l83%. Revenues for the
second quarter increased 83% to $5.99 million, compared with $3.27 million for the same period
last year.
For the first half of 1997, net income more than tripled (increase of 216%) to $2,065,000 or $0.20
per share compared to net income of $653,000 or $O.07 per share for the same period last year.
Revenues increased 92% for the first half of 1997 to $11.51 million compared to revenues of $6.0
million for the same period last year.
Financial Highlights
(in millions except earnings per share)
Three Months Ended
June 30
1997 1996 % Change
Revenues $5.99 $3.27 83%
Net income $1.09 $.38 183%
Earnings per share $0.11 $0.04 175%
Commenting on these results, Tony White, Chairman & CEO said, ``Abacus Direct achieved
record second quarter revenues and net income by continuing to deliver superior results to our
customers through our traditional Prospecting products and the increased market acceptance of our
Optimization, Housefile and Market Research products. We strive to consistently offer our
customers improved measurable results and outstanding value. We are also very pleased with the
addition of 40 new catalogers to the Abacus Alliance during the quarter bringing the total number of
participants in the Alliance to an all time record of 765.''
``The significant efforts and resources devoted in late 1996 to improve our Optimization services,
build our sales staff and increase penetration of existing accounts have been well received by our
customers. Mr. White continued, ''We experienced strong demand and exceptional growth in all
core product lines and are uniquely positioned to increase our share of our customers' data
expenditures.``
Mr. White noted, ``In general, catalogers had a good first half and appear to be cautiously
optimistic about prospects for the seasonally strong third and fourth quarters. In light of the
industry's seasonality which traditionally experiences its lowest revenues and profits during the
first and second quarters of the year, we are pleased to note that second quarter revenues increased
8% from the strong results of the first quarter of 1997, making these results the second highest in
Abacus' history and a record for the second quarter.''
While revenues increased 83% over last year's second quarter, operating expenses increased 73%
over the same period. The increase was due to additions in personnel to service the strong demand
for Abacus' core products, increased spending to develop segments outside the catalog industry,
strategic hires and accelerated funding of research and development. Mr. White continued, ``We
achieved record operating margins for the quarter. This strong performance enabled us to fund
additions to our sales and research staffs for future growth and to invest in new initiatives while
maintaining excellent profitability.''
``During the second quarter,'' the Chairman added, ``we strengthened our management team with
the addition of Carlos Sala as our new CFO. He brings to us a strong planning and financial
discipline that will be essential in evaluating and executing the numerous growth opportunities
available to Abacus. To develop these opportunities, we intend to invest profits in excess of our
targeted margins that are generated from short term revenue growth. We continue to make progress
on our non-catalog direct marketing segments and have begun to generate orders for 'in the mail
tests' that will be executed in the fourth quarter. At the same time, we are formalizing our
marketing strategies for these segments.''
Abacus Direct Corporation is a leading provider of information products and marketing research
services to the direct marketing industry, specifically, the catalog industry.
This release contains statements that are forward looking in nature, including those relating to the
Company's thresholds, operating strategy and results, seasonality and cyclical nature of the
industry. A variety of important factors could cause actual results to differ materially from such
goals, expectations or potential results. These factors include, but are not limited to, the actions of
current and potential new competitors, rapid changes in technology, overall economic conditions,
changes in postal rates and paper prices and the nature and the amount of the Company's revenue
and expenses.
ABACUS DIRECT CORPORATION
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Revenue from operations $ 5,986,081 $ 3,267,012 11,511,372 6,047,269
Cost of operations 1,126,602 722,709 2,207,417 1,469,943
Gross Profit 4,859,479 2,544,303 9,303,955 4,577,326
Other Operating Costs
Sales and marketing 1,798,661 1,071,000 3,243,407 1,858,025
General and
administration 1,127,187 611,667 2,358,268 1,237,481
Research and development 283,914 168,361 570,860 307,860
Total Operating Expenses 3,209,762 1,851,028 6,172,535 3,403,366
Operating Profit 1,649,717 693,275 3,131,420 1,173,960
Interest and Other
Income (Expense) 58,386 (53,863) 121,157 (115,038)
Net Income Before
Income Taxes 1,708,103 639,412 3,252,577 1,058,922
Income tax expense 623,400 255,500 1,187,200 423,600
Net Income $1,084,703 $383,912 $2,065,377 $653,322
Earnings Per Common Share $0.11 $0.04 $0.20 $0.07
Weighted Average Number
of Common and Common
Equivalent shares
Outstanding 10,211,235 9,533,447 10,190,843 9,533,447
SOURCE: Abacus Direct Corporation
Contact: Investors-Analysts: Carlos Sala, 303-657-5204, or Media: Karen Peck, 914-345-0441, both for Abacus
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