Abacus crushes Q3 consensus: 0.33 vs expected 0.26
Abacus Direct Announces Record Revenues
and Earnings; Net Income Up 71% on
Revenue Growth of 69
WESTMINSTER, Colo., Oct. 22 /PRNewswire/ --
Abacus Direct Corporation (Nasdaq: ABDR) today
announced record revenues and net income for the third
quarter and nine months ended September 30, 1997.
Revenues for the third quarter were $10,756,000, a
69% increase over revenues of $6,368,000 in the same
period a year ago. Net income for the quarter was
$3,377,000, or $0.33 per share, up 71% from the
$1,975,000, or $0.21 per share, reported in the same
period last year.
Revenues for the first nine months of fiscal 1997 were
$22,267,000, up 79% from the $12,415,000 reported
for the same period of fiscal 1996. Net income for the
period was $5,442,000, or $0.53 per share, up 109%
from $2,610,000, or $0.27 per share, reported in the
same period a year ago.
Commenting on these results, Tony White, Chairman &
CEO, said, "We are very pleased with the string of
record results we've been able to deliver to our
shareholders during Abacus' first full year as a public
company. Our core products delivered solid revenue
growth in the quarter with particular strength in our
Optimization and Housefile categories, up 82% and
76%, respectively."
"Our Optimization service, just shy of $1 million in
revenues in the third quarter," Mr. White stated, "helps
our customers select the most likely buyers from
acquired lists and, when used with the Abacus E-Net, is
a highly efficient way of optimizing a large mailing. Our
Housefile service, which exceeded $1 million in
quarterly revenues for the first time in the third quarter,
provides our clients with a more complete picture of
their customers' purchasing behavior to better determine
the best mailing prospects. The significant growth in
these two areas reflects the value our services add to
those customers seeking to improve the efficiency,
predictability and measurability of their direct marketing
efforts."
"Also in the third quarter," Mr. White said, "we
increased the number of catalogers joining the Abacus
Alliance, our cooperative membership database, from
the levels of the first two quarters. In the first quarter,
we added 25 participants while in the second quarter we
added another 40. The third quarter additions
accelerated to a record 53 participants bringing the total
to 818 consumer catalogs in our Alliance. Even with
these recent successes, however," Mr. White said, "we
believe there is ample opportunity to expand the Alliance
with new participants as more catalogers recognize the
quantifiable value of their association with Abacus."
Mr. White noted, "Our plan is to continue to expand the
Abacus Alliance, increase our share of our clients' data
expenditures, and explore and enter new areas outside
our core catalog business. To that end, we plan to
continue to make significant investments in the
infrastructure required to achieve these objectives and
continue to grow our business. In particular, our selling
expenses increased substantially in the third quarter
reflecting our resolve to gain additional market share in
our core business as well as an increased level of
investment to facilitate entry in areas outside catalogs.
We've hired seasoned people to engage in product
development, testing and modeling for the non-catalog
markets."
"We've also been investing in sales and support for our
core business," Mr. White added. "The catalog industry
has so far had a good year in 1997, and many catalogers
are cautiously optimistic about 1998. To support this
anticipated growth and increase market share, we are
aggressively adding and training people to ensure that
our customers continue to receive the level of attention
and support they have come to expect from Abacus. In
the third quarter alone, we expanded our employee base
by 17%. Since January 1, our employee roster has
grown by 43%. As the outlook for the remainder of
1997 and into 1998 remains favorable, we expect our
operating expenses to increase with the growth in our
core business and as a result of strategic investments to
develop non-catalog direct marketing opportunities."
"It is important to note," Mr. White continued, "that our
third quarter is seasonally our strongest of the year, and
that in the three subsequent quarters we generally report
lower revenues than in our third quarter. We expect this
trend to continue. Nevertheless, as we look ahead at the
next few quarters," Mr. White concluded, "we are
optimistic about the trends in our industry and the
growing awareness of our capabilities to improve our
current and potential customers' direct marketing
initiatives. We plan to translate this opportunity into
value for our shareholders."
Abacus Direct Corporation is a leading provider of
information products and marketing research services to
the direct marketing industry.
This press release contains statements that are forward
looking in nature, including those relating to the
Company's operating strategy and results and
seasonality and the cyclical nature of the industry. A
variety of important factors could cause actual results to
differ materially from such 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,
government regulation, changes in postal rates and
paper prices and the nature and the amount of the
Company's revenues and expenses.
ABACUS DIRECT CORPORATION
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Revenue from
operations $10,755,570 $6,368,161 $22,266,941 $12,415,431
Cost of operations 1,638,587 967,580 4,227,767 2,698,740
Gross profit 9,116,983 5,400,581 18,039,174 9,716,691
Other operating costs
Sales and marketing 2,394,870 1,256,766 5,759,296 3,100,516
General and
administrative 1,047,289 531,839 2,762,669 1,449,660
Research and
development 329,034 268,947 1,039,999 649,526
Total operating
expenses 3,771,193 2,057,552 9,561,964 5,199,702
Operating profit 5,345,790 3,343,029 8,477,210 4,516,989
Interest and other
income (expense) (28,026) (51,848) 93,130 (166,885)
Net income before
income taxes 5,317,764 3,291,181 8,570,340 4,350,104
Income tax expense 1,940,985 1,316,500 3,128,185 1,740,100
Net Income $3,376,779 $1,974,681 $5,442,155 $2,610,004
Earnings per common
share $0.33 $0.21 $0.53 $0.27
Weighted average number of common and common
equivalent shares
outstanding 10,243,477 9,522,917 10,191,035 9,529,937 |
