MessageMedia Inc. Reports Significant Increase in Revenue for First Quarter 1999
Growth Driven by Focus On Internet-Based Messaging Business
BOULDER, Colo.--(BUSINESS WIRE)--April 29, 1999--MessageMedia Inc. (Nasdaq:MESG - news), the leading provider of email-based information delivery, direct marketing, e-commerce and customer relationship management services, today announced revenue of $753,527 for the quarter ended March 31, 1999, an increase of 168% over revenue of $280,669 for the same quarter of last year.
MessageMedia attributed the increase in revenue to its strategic focus on its Internet-based email messaging business, which was first commercialized in the second quarter of 1998. Primarily, all first quarter 1999 revenue was generated through sales of the Company's email messaging services, whereas all of the revenue in the first quarter of 1998 came from the Company's previous Internet Payment System business, which was terminated in August 1998. Contributing to the revenue growth was the addition of new contracts, as well as the Company's merger with Email Publishing and Distributed Bits in December 1998. The merger brought together the people, core competencies and synergies to be a leader in both outbound and inbound email messaging services.
Net loss for the first quarter of 1999 was $7,003,583, including a restructuring charge of $1,025,000 related to merger integration and relocation of the Company's headquarters from San Diego to Boulder and $3,116,700 in amortization of goodwill associated with the Company's acquisition of Email Publishing and Distributed Bits. Net loss per share was $0.17 based on weighted average shares outstanding of 40,583,425. These results compare to a net loss of $3,664,638 for the first quarter of 1998, or $0.38 per share based on weighted average shares outstanding of 9,605,870. Excluding the restructuring charge, net loss for the first quarter of 1999 would have been $5,978,583, or $.15 per share. Loss before interest, taxes, depreciation and amortization (EBITDA) including the restructuring charge was $3,605,218. Excluding the restructuring charge, EBITDA would have been a loss of $2,580,218 in the first quarter of 1999, compared to a loss of $3,195,585 in the same quarter last year. As of March 31, 1999, the Company had 43,034,597 shares outstanding.
Total operating expenses in the first quarter of 1999 were $4,250,698, including the previously mentioned restructuring charge of $1,025,000, without the restructuring charge, operating expenses would have been $3,225,698, compared to $3,457,654 in the first quarter of 1998. Without the restructuring charge, operating expenses would have shown a decline from 1998 of approximately 7%. Included in operating expenses for the first quarter of 1999 were higher marketing and sales expenses due to increased sales efforts and higher general and administrative costs due to increased legal, accounting and consulting expenses. These increases were offset by lower research and development costs as a result of the discontinuation of the Company's Internet Payment System.
''We are pleased with the significant revenue growth achieved during the first quarter,'' said Larry Jones, president and chief executive officer of MessageMedia. ''During this past quarter we accomplished many things. Most significant was the signing of new contracts, including Mail.com and Standard and Poor's. These agreements and our robust pipeline of new business prospects will fuel our recurring revenue growth for the future and are a testimonial to our strong market acceptance. In addition, MessageMedia has added exceptional new players to our board and management team, raised $10 million of new capital, and largely completed our consolidation efforts to Boulder. In the future we will continue to focus our efforts on growing our recurring revenue, strengthening our organization and management team, growing our sales organization, expanding our marketing and public relations initiatives, developing new channel partnerships, and pursuing an aggressive acquisition strategy.''
''MessageMedia is uniquely positioned with technology and people to be the dominant leader in this explosive new industry segment,'' added Bradley Feld, co-chairman of MessageMedia and a general partner of SOFTBANK Technology Ventures. ''Leading companies are accelerating their use of e-messaging to gain competitive advantage through the use of email for information delivery, email marketing, e-customer care, and e-commerce messaging.''
About MessageMedia Inc.
MessageMedia (Nasdaq:MESG - news) is the leading provider of email-based customer relationship management and direct marketing services. The Company offers a comprehensive suite of outsource messaging services for information delivery, permission-based direct marketing and ongoing customer communications using industry standard Internet protocols. MessageMedia's customer portfolio includes clients from the financial services, publishing, direct marketing, retailing and electronic commerce industries. Clients include E-TRADE, USA Today, GeoCities, Intuit, CMP Media, Barclays Bank and Bertelsmann.
SOFTBANK and its affiliates own approximately 49% of the outstanding common stock of MessageMedia Inc. Pequot Capital Management, a Connecticut-based research-intensive investment firm with more than $5 billion in assets under management, is also a major investor in MessageMedia.
''Safe Harbor'' Statement Under the Private Securities Litigation Reform Act. With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements that involve risk and uncertainties. These risk factors include, but are not limited to, the integration of a new senior management team, the Company's limited operating history, the integration of recent acquisitions, the anticipated fluctuations in operating results, the uncertain acceptance of new services being offered, and undeveloped and rapidly changing market. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. MessageMedia undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
MessageMedia Inc. 6685 Gunpark Drive East, Suite 240, Boulder, Colo. 80301 Phone: 303/440-7550; Fax: 303/440-0303; www.messagemedia.com
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