MessageMedia Reports Exceptional First-Quarter Growth; Revenues Up 835% on Year and Up 43% Quarter over Quarter
BOULDER, Colo.--(BUSINESS WIRE)--April 24, 2000--
First Quarter New Order Input Increases 85% over Prior Quarter
MessageMedia, Inc. (Nasdaq:MESG), the leading provider of e-messaging solutions and services, today announced substantial revenue growth for the first quarter ending March 31, 2000.
The company also saw a significant increase in gross margins and a record number of new contracts signed resulting from its continued regional and international sales expansion.
In the first quarter, MessageMedia reported revenue of $7.0 million, an increase of over 835% from the $0.8 million reported in the first quarter of 1999 and a 43% increase over fourth quarter 1999 revenues of $4.9 million. For the first quarter of 2000, net loss before amortization of goodwill was $5.7 million, or a loss per share of $0.10. Including the amortization of goodwill, MessageMedia reported a net loss of $18.6 million, or $0.34 per share, based on 55.3 million weighted average shares outstanding. These results compare to a net loss before goodwill amortization in the 1999 first quarter of $3.9 million. Including goodwill amortization, a net loss of $7.0 million or $0.17 per share was reported for the first quarter of 1999, based on 40.6 million weighted average shares outstanding. The 2000 results include the startup costs associated with the launch of MessageMedia Europe. MessageMedia Europe results included $31,000 in revenue and a loss after minority interest of $733,000 or $0.01 per weighted average share outstanding.
"During the first quarter of this year, we have achieved solid business results based upon our sound business strategy: market leadership, domestic and international growth, and broad value-added software and service offerings," said Larry Jones, president and chief executive officer of MessageMedia.
Margins Improve
For the first quarter, gross profit margins improved to 58% from 49% in the fourth quarter of 1999. The increased margins were due to two factors: increased margins in the Company's growing services business and a greater software license mix than in prior quarters. Compared to the fourth quarter 1999, activity in the messaging business performed well with the number of mailings increasing 17% and revenue per mailing increasing 6%. Revenue from this quarter's top 10 messaging clients grew 45% from their fourth quarter 1999 level. MessageMedia also realized strong contract growth on the enterprise software side of its business. During the first quarter 2000, the Company released a major upgrade to its flagship software platform, Unity Mail 3.1. Additionally, the refocusing of the software sales organization that began in the latter part of the fourth quarter 1999 and the new ASP program yielded a 156% increase in software revenue over fourth quarter 1999 levels.
"Our breadth of outsourced services, hosted applications and software offerings allows us to deliver solutions tailored to client capabilities and growth plans," Jones continued. "Once a client integrates messaging into its communications plan, the role of messaging tends to expand to include advanced messaging services, further customer database segmentation, execution of more mailings per customer and higher revenue per mailing."
New Contracts Up Significantly Over Q4 1999
During the quarter, MessageMedia signed a total of 139 new contracts from new and existing clients, more than doubling the 67 contracts signed in the fourth quarter of 1999. Those contracts represent an estimated value of $8.5 million compared to $4.6 million in the fourth quarter of 1999.
The Company signed 86 new outsourced messaging, hosting services and customer intelligence (survey) service contracts during the quarter, which are included in the new contract total noted above. The estimated value of these contracts is $6.3 million. New clients include Dell, Columbia House, netLibrary, Jaguar, Rosenbluth Interactive, Hoovers Online, Inc.com, and PeopleSoft. Further extending the reach of its outsourced services, the company initiated its co-marketing relationship with Grey Advertising, one of the world's leading ad agencies.
Also included in the new contract total, the Company entered into 53 new software licensing agreements in the first quarter of 2000, worth $2.2 million. Among the companies signing new software license agreements were TravelNow.com, Costco Wholesale, EDS and PlanetOutdoors.com. To further stimulate software sales, the Company launched an ASP program to license MessageMedia's UnityMail platform to large hosting companies who then deliver their own branded information delivery services for e-mail marketing and information delivery. Six new ASP contracts were signed in the first quarter.
Expanding Regional Sales Operations
MessageMedia has expanded its sales force, with regional sales managers in offices in New York, Chicago, San Francisco and a dedicated software sales force. The company also announced that Peter Hopfensperger has been named Vice President of Sales. Most recently he was Group Vice President at TransUnion L.L.C. where he was responsible for the Marketing Services Division and National Accounts. These groups combined for annual revenue in excess of $100 million.
"Peter has the experience and the resources to meet our primary goals of attracting new business and advancing existing clients up the e-messaging sophistication curve in order to grow account value," Jones said.
The company continues to target six industry segments -- ISPs/Portals, Publishing, retail/e-tail, financial services, high-tech and travel/entertainment. "We are deploying dedicated client services teams for each of these industries," Jones said. "We are developing customized solution sets to meet the needs of these targets in both business-to-business and business-to-consumer applications."
International Expansion Continues
The company also continued its aggressive international expansion in the first quarter. MessageMedia Europe, headquartered in Paris, expects to have 50 employees by the end of June 2000. MessageMedia also recently announced that it has signed a letter of intent to form joint ventures with News Corp. affiliates eVentures UK and eVentures Holdings Pty Ltd to establish operations in the UK and Australia, respectively.
"This is a worldwide market," Jones said. "We will gain an early-player advantage in the European and Australian markets. Our ongoing strategy includes monitoring additional international opportunities and seizing them early on as we did in Europe. We expect further international activities in the coming months."
Market Leadership Moves
"One of MessageMedia's greatest strengths is its leadership position in the e-messaging industry," said Jones. "To support that leadership, we maintain an ongoing commitment to education and the establishment of best practices. We have led the industry in setting permission standards and have invested heavily in educational programs such as our seminar series and E-mail University in order to evangelize responsible -- and effective -- e-mail marketing strategies.
"In the first quarter we announced the ClickZ/MessageMedia E-Mail Excellence Awards, which will recognize the firms that have demonstrated excellence in their e-messaging campaigns through inspiring creative content, innovative strategic use of e-messaging and the generation of measurable results from the campaign. The awards are designed to showcase best practices in online communication for the benefit of the entire marketplace."
About MessageMedia Inc.
MessageMedia (Nasdaq:MESG) provides e-commerce services, permission-based direct marketing, ongoing customer communication and real-time customer feedback solutions using industry standard Internet protocols. MessageMedia's customer portfolio features Cisco, E*TRADE, AOL, Yahoo!, Microsoft, GeoCities, CMP Media, Barclays Bank, EDS, Universal Studios, Hoover's Online and Bertelsmann.
Investors in MessageMedia include SOFTBANK and its affiliates, which constitute the world's largest investors in the Internet, and Pequot Capital Management, a Connecticut-based research-intensive investment firm.
"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, MessageMedia's limited operating history, the integration of recent acquisitions, risks associated with pending and future acquisitions, the anticipated fluctuations in operating results, the uncertain acceptance of new services being offered, and undeveloped and rapidly changing market and other factors detailed in MessageMedia's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 1999. All companies and product names are trademarks of their respective owners. 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. 6060 Spine Road, Boulder, Colo. 80301 Phone: 303/440-7550; Fax: 303/440-0303 www.messagemedia.com Investor Relations inquiries should be sent to investor@messagemedia.com
MessageMedia, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
Three months ended
March 31,
2000 1999
(unaudited) (unaudited)
Net revenues $ 7,043 $ 754
Cost of revenues 2,931 108
Gross profit 4,112 645
Operating Expenses:
Marketing and sales 5,499 942
Research, development & engineering 1,265 937
General & administrative 3,493 1,347
Depreciation 739 296
Amortization of Goodwill 12,971 3,117
Restructuring Charge -- 1,025
Write-off of in-process technology -- --
Total operating expenses 23,967 7,664
Interest income, net (509) (32)
Other expense 4 17
Net loss before Minority Interest (19,350) (7,004)
Minority Interest 705 --
Preferred stock dividend -- --
Net loss applicable to common shares $(18,645) $ (7,004)
Net loss per share, basic and diluted $ (0.34) $ (0.17)
Shares used in per share computation,
basic and diluted 55,324 40,583
MessageMedia, Inc.
Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2000 1999
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 28,160 $ 37,920
Accounts receivable trade, net 7,249 4,140
Accounts receivable other 1,190 138
Prepaid expenses and other 2,091 749
Total current assets 38,690 42,947
Furniture equipment and software, net 8,508 4,728
Intangibles assets, net 62,191 75,162
Deposits and other 288 354
Total assets $109,677 $123,191
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,815 $ 2,482
Accrued compensation and related liabilities 2,047 1,912
Deferred revenue 492 324
Current portion, debt obligations 18 25
Other accrued liabilities 1,723 1,022
Payable to Joint Venture partner 915 0
Total current liabilities 8,010 5,765
Debt obligations 31 36
Minority interest (705) 0
Total stockholders' equity 102,341 117,390
Total liabilities and stockholders' equity $ 109,677 $123,191
CONTACT:
MessageMedia Inc.
Tork Johnson, 303/381-7500 (Investors)
tork@messagemedia.com
Beth Mayfield, 303/381-7500 (Investors)
investor@messagemedia.com
or
The Ruth Group, Inc.
Stefanie King, 917/639-4110 (Media)
slking@theruthgroup.com
KEYWORD: COLORADO
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