Modem Media Exceeds Revenue and Net Income Expectations in Third Quarter
NORWALK, Conn., Oct 27, 1999 (BUSINESS WIRE) --
Revenues up 93% to $21.1 million
Net Income of $0.12 per share, soars from -$0.15 per share
Modem Media . Poppe Tyson, Inc. (Nasdaq: MMPT), a leading builder and marketer of customer-focused e-businesses for
world-class brands, today announced record financial results for the third quarter ending September 30, 1999. Revenues
for the third quarter rose to a record $21.1 million, a 93% increase over $10.9 million in the third quarter of 1998 and
a 32% increase over $16.0 million in the second quarter of 1999. Margins after salary and benefit expenses improved to
45% from 32% in the third quarter of 1998 and 44% in the second quarter of 1999. Earnings before interest, taxes and
amortization of goodwill (EBITA) rose to $3.6 million from ($0.9) million in the third quarter of 1998 and increased 80%
over EBITA of $2.0 million achieved in the second quarter of 1999. Total employees for the quarter grew to 560 from 456
at the end of the second quarter of 1999. Billable employees grew to 455, up from 363 at the end of the second quarter
of 1999. Basic earnings per share increased to $0.12 from ($0.15) in the third quarter of 1998, and $0.05 in the second
quarter of 1999. "Our exceptional performance is the result of our customer-focused e-business vision, superior service
architecture and organic business model," said G.M. O'Connell, Chairman and CEO of Modem Media. "Our clients continue to
accelerate their global commitment to the Internet. This commitment, coupled with significant new business wins this
year, drove our better than expected results," said O'Connell.
Third quarter operational highlights include:
- Across the board increases in spending from the Top 10 clients,
with the notable addition of GE to the Top 10 after the signing
of an $11+ million contract in the second quarter. Average
annualized revenue for the Top 10 accounts in the third quarter
grew 27% to $6.4 million, up from $5.0 million in the second
quarter of 1999. Revenue from the Top 10 accounts amounted to 75%
of total revenue, reducing revenue concentration from 78% in the
second quarter of 1999.
- Solid recruiting during the quarter, with total employees growing
to 560 from 456 at the end of the second quarter of 1999.
Billable employees grew to 455, up from 363 at the end of the
second quarter of 1999. The total employee headcount now stands
at 591.
- Strong growth from domestic new business wins including: Toyota,
The Industry Standard and Starwood Hotels and Resorts.
- Successful penetration of the telecommunications sector with
wireless operators Vodafone in Europe and Sunday in Hong Kong.
- A 70% sequential increase in international revenue to $3.5
million, driven by additions in international spending from core
global accounts including Citibank, General Electric, General
Motors, IBM and Intel in Canada, Asia and Europe and new client
wins including Financial Times and Vodafone in London and
Coca-Cola in the newly established Tokyo office.
- Successful and rapid penetration of the Tokyo market with over
$500,000 in revenue driven by early new business wins including
Coca-Cola, Citibank and IBM.
- The addition of our eighth office in Munich, Germany via the
acquisition of MEX Multimedia Experts GmbH on October 4, 1999.
MEX is one of Germany's leading providers of digital
communication services with a client roster that includes
Mercedes-Benz, Braun, Allianz, Siemens, and IBM Germany. MEX
currently has 22 employees.
- Early "Pay for Performance" contract contributions amounting to
1% of revenue, which validates Modem's strategy to add leverage
to its business model.
"We've just hit our stride in Q3, and expect to finish the year strong," Mr. O'Connell added. "More importantly, we have
built solid momentum for 2000 and we remain confident that ongoing investment in sales and marketing efforts,
Me-Business(SM) technology and international operations will bear fruit through 2000." Modem Media (www.modemmedia.com)
is a leading builder and marketer of customer-focused e-businesses for world-class brands. Based on customer-driven
insights, Modem Media identifies e-business opportunities, and utilizes its conceptual, technological and marketing
expertise to build, distribute and manage unique e-business solutions for its clients. Headquartered in Norwalk, CT,
Modem Media's expanding global presence includes offices in New York City, San Francisco, Toronto, London, Munich,
Tokyo, Hong Kong and an affiliate office in Sao Paolo. With more than 590 professionals worldwide, Modem Media has
created customer-focused Internet solutions for global brands such as 3M, Citibank, Intel, Delta Air Lines, E*Trade,
General Electric, IBM, Sony Computer Entertainment of America, Unilever and Vodafone. This press release contains
statements that are "forward-looking" within the meaning of applicable federal securities laws, including the increasing
demand for the Company's services, the spending levels of the Company's clients and the Company's global expansion,
which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those
anticipated. Factors that could cause actual results to differ include timing of new projects and client initiatives,
costs related to the expansion of the Company's business and marketing efforts and other factors more fully discussed in
our filings with the Securities and Exchange Commission.
Modem Media . Poppe Tyson, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended
September 30,
1999 1998
(unaudited) (unaudited)
Revenues $ 21,121,000 $ 10,930,000
Costs and expenses:
Salaries and benefits 11,683,000 7,473,000
Office and general 5,793,000 4,319,000
Amortization of goodwill 756,000 461,000
Operating losses of True North
Units Held for Transfer -- 10,000
Total costs and expenses 18,232,000 12,263,000
Operating income (loss) 2,889,000 (1,333,000)
Interest income (expense), net 565,000 (1,000)
Income (loss) before income
taxes 3,454,000 (1,334,000)
Provision (benefit)
for income taxes 2,146,000 (208,000)
Net income (loss) $ 1,308,000 $ (1,126,000)
============ =============
Net income (loss) per share:
Basic $ 0.12 $ (0.15)
============ ============= Diluted $ 0.11 $ (0.15)
============ =============Cash earnings (loss) per share:
Basic $ 0.18 $ (0.09)
============ ============= Diluted $ 0.17 $ (0.09)
============ =============Weighted-average number of
common shares outstanding:
Basic 11,170,000 7,263,000
============ =============Diluted 11,812,000 7,263,000
============ =============
Nine Months Ended
September 30,
1999 1998
(unaudited)
Revenues $ 49,546,000 $ 30,397,000
Costs and expenses:
Salaries and benefits 29,163,000 20,793,000
Office and general 14,734,000 10,309,000
Amortization of goodwill 2,065,000 1,308,000
Operating losses of True
North Units Held
for Transfer -- 13,000
Total costs and expenses 45,962,000 32,423,000
Operating income (loss) 3,584,000 (2,026,000)
Interest income (expense), net 1,406,000 (5,000)
Income (loss) before income
taxes 4,990,000 (2,031,000)
Provision (benefit) for income
taxes 3,574,000 57,000
Net income (loss) $ 1,416,000 $ (2,088,000)
=========== =============Net income (loss) per share:
Basic $ 0.13 $ (0.29)
=========== ============= Diluted $ 0.13 $ (0.29)
=========== =============Cash earnings (loss) per share:
Basic $ 0.33 $ (0.11)
=========== ============= Diluted $ 0.31 $ (0.11)
=========== =============Weighted-average number of
common shares outstanding:
Basic 10,569,000 7,263,000
=========== ============= Diluted 11,172,000 7,263,000
=========== ============= |
