Business Services Industry
Audible, Inc. Announces Positive Free Cash Flow in Q4 2003 on Strong Consumer Content Revenue Growth; Company Also Announces Conversion of All Preferred Stock to Common Stock
Business Wire, Feb 10, 2004
AUDIBLE INC.
COMPARATIVE STATEMENTS OF OPERATIONS
Three months ended
-------------------------
December 31, September 30,
------------ ------------
2003 2003
------------ ------------
(unaudited) (unaudited)
Revenue, net:
Consumer content $5,607,316 $4,789,921
Services 25,651 20,337
------------ ------------
Total content and services 5,632,967 4,810,258
Hardware 177,062 136,198
Other 16,126 16,126
------------ ------------
Total revenue, net 5,826,155 4,962,582
------------ ------------
Operating expenses:
Cost of content and services revenue 1,884,174 1,331,162
Cost of hardware revenue 579,898 444,544
Operations 996,290 960,695
Technology and development 1,145,797 1,198,418
Marketing 898,110 1,038,313
General and administrative 558,918 867,025
------------ ------------
Total operating expenses 6,063,187 5,840,157
------------ ------------
Loss from operations (237,032) (877,575)
Other income, net 10,268 5,171
------------ ------------
Loss before state income tax benefit (226,764) (872,404)
State income tax benefit 250,408 -
------------ ------------
Net income (loss) 23,644 (872,404)
Accrued dividends on convertible preferred
stock (4,462,066) (454,197)
Preferred stock discount - (1,444,444)
------------ ------------
Total dividends (4,462,066) (1,898,641)
------------ ------------
Net loss applicable to common shareholders $(4,438,422) $(2,771,045)
============ ============
Basic and diluted net loss per common share $(0.13) $(0.09)
============ ============
Weighted average common shares outstanding 33,044,472 31,023,059
============ ============
AUDIBLE INC.
STATEMENTS OF OPERATIONS
Three months ended Year ended
December 31, December 31,
------------------------- ---------------------------
2003 2002 2003 2002
------------ ------------ ------------- -------------
(unaudited) (unaudited)
Revenue, net:
Consumer content $5,607,316 $3,497,801 $18,489,821 $10,939,871
Services 25,651 47,874 104,569 347,816
------------ ------------ ------------- -------------
Total content
and services 5,632,967 3,545,675 18,594,390 11,287,687
Hardware 177,062 196,908 665,584 931,785
Other 16,126 49,106 64,504 150,067
------------ ------------ ------------- -------------
Total revenue,
net 5,826,155 3,791,689 19,324,478 12,369,539
------------ ------------ ------------- -------------
Operating
Expenses:
Cost of content
and services
revenue 1,884,174 1,355,601 5,318,919 4,904,245
Cost of hardware
revenue 579,898 664,346 2,085,254 2,717,542
Operations 996,290 992,712 3,843,311 3,742,713
Technology and
Development 1,145,797 1,187,068 4,784,648 4,997,860
Marketing 898,110 2,703,499 4,494,702 11,107,981
General and
administrative 558,918 563,188 2,633,031 2,485,434
------------ ------------ ------------- -------------
Total operating
expenses 6,063,187 7,466,414 23,159,865 29,955,775
------------ ------------ ------------- -------------
Loss from
operations (237,032) (3,674,725) (3,835,387) (17,586,236)
Other income,
net 10,268 8,759 25,451 85,158
------------ ------------ ------------- -------------
Loss before
state income
tax benefit (226,764) (3,665,966) (3,809,936) (17,501,078)
State income tax
benefit 250,408 313,580 250,408 313,580
------------ ------------ ------------- -------------
Net income
(loss) 23,644 (3,352,386) (3,559,528) (17,187,498)
Accrued dividends
on convertible
preferred stock (4,462,066) (350,778) (5,656,894) (1,365,720)
Preferred stock
discount - - (1,444,444) -
------------ ------------ ------------- -------------
Total dividends (4,462,066) (350,778) (7,101,338) (1,365,720)
------------ ------------ ------------- -------------
Net loss
applicable to
common
shareholders $(4,438,422) $(3,703,164) $(10,660,866) $(18,553,218)
============ ============ ============= =============
Basic and
diluted net
loss per
common share $(0.13) $(0.12) $(0.34) $(0.61)
============ ============ ============= =============
Weighted average
common shares
outstanding 33,044,472 30,969,079 31,520,112 30,508,217
============ ============ ============= =============
AUDIBLE INC.
CONDENSED BALANCE SHEETS
December 31, December 31,
Assets 2003 2002
------------- -------------
(unaudited)
Current Assets
Cash and cash equivalents $9,074,987 $2,822,080
Accounts receivable, net of allowance 245,641 189,263
Royalty advances 72,338 58,425
Prepaid expenses and other current assets 596,720 736,823
Inventory 99,936 77,262
------------- -------------
Total current assets 10,089,622 3,883,853
Property and equipment, net 272,851 633,400
Other assets 418,524 90,805
------------- -------------
Total Assets $10,780,997 $4,608,058
============= =============
Liabilities and Stockholders' Equity
(Deficit)
Current Liabilities
Accounts payable $526,359 $1,077,509
Accrued expenses and compensation 2,809,860 3,231,893
Royalty obligations, current 408,000 598,500
Deferred revenue and advances, current 873,520 476,053
Accrued dividends on convertible preferred
stock - 125,257
------------- -------------
Total current liabilities 4,617,739 5,509,212
Deferred cash compensation 58,750 90,550
Royalty obligations, non current - 25,000
Advances, non current - 19,448
Redeemable convertible preferred stock:
Series A - 12,289,976
Stockholders' Equity (Deficit)
Convertible preferred stock: Series A 13,027,375 -
Convertible preferred stock: Series B 1,137,500 1,137,500
Common stock 450,469 316,872
Additional paid-in capital 110,207,527 98,032,967
Deferred compensation and services (239,425) (591,155)
Notes due from stockholders for common
stock (58,750) (289,545)
Treasury stock at cost (184,740) (184,740)
Accumulated deficit (118,235,448) (111,748,027)
------------- -------------
Total Stockholders' Equity (Deficit) 6,104,508 (13,326,128)
------------- -------------
Total Liabilities and Stockholders' Equity
(Deficit) $10,780,997 $4,608,058
============= =============
AUDIBLE INC.
CONDENSED STATEMENTS OF CASH FLOWS
Three months ended
December 31,
------------------------
2003 2002
----------- ------------
(unaudited)
Cash flows from operating activities:
Net income (loss) $23,644 $(3,352,386)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 94,651 294,071
Services rendered for common stock and
warrants 251,956 1,559,775
Services rendered for preferred stock - 92,502
Non-cash compensation charge 34,113 73,278
Non-cash forgiveness of notes due from
stockholders for common stock - -
Non-cash bonus in satisfaction of note
receivable due from stockholder - -
Deferred cash compensation - -
Changes in assets and liabilities:
Interest receivable on short term
investments - -
Accounts receivable, net 4,952 38,447
Royalty advances (25,674) 34,575
Prepaid expenses and other current
assets (254,552) (217,464)
Inventory 100,388 321,457
Other assets (89,292) -
Accounts payable (89,534) (137,682)
Accrued expenses and compensation 431,306 419,003
Royalty obligations (83,000) (67,000)
Advances 192,629 70,899
----------- ------------
Net cash provided by (used in)
operating activities 591,587 (870,525)
----------- ------------
Cash flows from investing activities:
Purchases of property and equipment (43,678) (4,412)
----------- ------------
Net cash used in investing
activities (43,678) (4,412)
----------- ------------
Cash flows from financing activities:
Proceeds from sale of Series C preferred
stock, net - -
Proceeds from sale of common stock, net - 27,000
Proceeds from exercise of common stock
warrants 1,237,539 -
Proceeds from exercise of common stock
options 407,020 -
Payments received on notes due from
stockholders for common stock - -
----------- ------------
Net cash provided by financing
activities 1,644,559 27,000
----------- ------------
Increase (decrease) in cash and
cash equivalents 2,192,468 (847,937)
Cash and cash equivalents at beginning of
period 6,882,519 3,670,017
----------- ------------
Cash and cash equivalents at end of period $9,074,987 $2,822,080
=========== ============
Non-GAAP Free Cash Flow reconciliation:
Net cash provided by (used in) operating
activities $591,587 $(870,525)
Purchases of property and equipment (43,678) (4,412)
----------- ------------
Non-GAAP Free Cash Flow 547,909 (874,937)
----------- ------------
Year ended
December 31,
--------------------------
2003 2002
------------ -------------
(unaudited)
Cash flows from operating activities:
Net income (loss) $(3,559,528) $(17,187,498)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 498,206 1,506,815
Services rendered for common stock and
warrants 1,136,024 6,153,998
Services rendered for preferred stock - 547,500
Non-cash compensation charge 173,743 293,112
Non-cash forgiveness of notes due from
stockholders for common stock 198,995 -
Non-cash bonus in satisfaction of note
receivable due from stockholder - 40,250
Deferred cash compensation - (3,000)
Changes in assets and liabilities:
Interest receivable on short term
investments - 1,260
Accounts receivable, net (56,378) (36,141)
Royalty advances (13,913) (1,743)
Prepaid expenses and other current
assets 140,103 (76,891)
Inventory (22,674) 371,958
Other assets (327,719) (75,000)
Accounts payable (551,150) (442,077)
Accrued expenses and compensation 1,077,968 1,476,605
Royalty obligations (215,500) (321,950)
Advances 378,019 (100,092)
------------ -------------
Net cash provided by (used in)
operating activities (1,143,804) (7,852,894)
------------ -------------
Cash flows from investing activities:
Purchases of property and equipment (137,657) (149,545)
------------ -------------
Net cash used in investing
activities (137,657) (149,545)
------------ -------------
Cash flows from financing activities:
Proceeds from sale of Series C preferred
stock, net 5,859,772 -
Proceeds from sale of common stock, net - 3,186,250
Proceeds from exercise of common stock
warrants 1,237,539 -
Proceeds from exercise of common stock
options 437,057 5,556
Payments received on notes due from
stockholders for common stock - 4,911
------------ -------------
Net cash provided by financing
activities 7,534,368 3,196,717
------------ -------------
Increase (decrease) in cash and
cash equivalents 6,252,907 (4,805,722)
Cash and cash equivalents at beginning of
period 2,822,080 7,627,802
------------ -------------
Cash and cash equivalents at end of period $9,074,987 $2,822,080
============ =============
Non-GAAP Free Cash Flow reconciliation:
Net cash provided by (used in) operating
activities $(1,143,804) $(7,852,894)
Purchases of property and equipment (137,657) (149,545)
------------ -------------
Non-GAAP Free Cash Flow (1,281,461) (8,002,439)
------------ -------------
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