Q4 Revenue Up 43% Over Last Year; Record Net Income
SAN DIEGO, Feb. 24 /PRNewswire-FirstCall/ -- WebSideStory, Inc.
(Nasdaq: WSSI), a leading provider of on-demand web analytics, today announced
results of operations for the quarter and twelve months ended December 31,
2004 and confirmed its guidance for 2005.
These results are unaudited and are subject to adjustment, and final,
audited results could differ.
* Fourth quarter 2004 revenue was $6,534,000, an increase of 43% over
the $4,558,000 reported in the same period in 2003. Fourth quarter
2004 subscription revenue was $6,520,000, an increase of 48% over the
$4,405,000 reported in the same period in 2003. Annual revenue in
2004 was $22,602,000, an increase of 38% over the $16,360,000 reported
in 2003. Subscription revenue in 2004 was $22,476,000, an increase of
43% over the $15,678,000 reported in 2003.
* Fourth quarter 2004 net income was $840,000, an increase of 108% over
the $404,000 reported in the same period in 2003. Fourth quarter 2004
net income included stock-based compensation expenses of $193,000.
Net income in 2004 was $1,780,000 compared to a net loss of $1,867,000
in 2003. Net income in 2004 included stock-based compensation
expenses of $882,000. On a non-GAAP basis, fourth quarter pro forma
net income before stock-based compensation expenses was $1,033,000.
On a non-GAAP basis for the year, 2004 pro forma net income before
stock-based compensation expenses was $2,662,000.
* Fourth quarter 2004 net loss per share was $0.04. The net loss per
share included stock-based compensation expenses of $193,000 and a
one-time, non-cash constructive dividend of $1,389,000 that resulted
from repayment of the company's redeemable preferred stock prior to
the maturity date. For the year 2004, net loss per share was $0.13.
The net loss included $882,000 of stock-based compensation expenses,
accretion of a discount of the company's preferred stock of
$1,326,000, and a one-time, non-cash constructive dividend of
$1,389,000 that resulted from repayment of the company's redeemable
preferred stock prior to the maturity date. On a non-GAAP basis,
fourth quarter 2004 pro forma earnings per share before the stock-
based compensation and constructive dividend was $0.06. On a non-GAAP
basis for the year 2004, pro forma earning per share before stock-
based compensation, accretion of a discount of the company's preferred
stock, and a constructive dividend was $0.21.
"We are pleased to announce another record quarter, growing our core HBX
subscription business by 48% compared to last year and exceeding the high end
of our guidance on both revenue and earnings before stock-based compensation,"
said Jeff Lunsford, WebSideStory chairman and CEO. "The digital marketing
space continues to flourish, and our agreement to acquire Atomz and planned
roll-out of the WebSideStory Active Marketing Suite provide great
opportunities for continuing to capture that growth. We are also proud of
having our continuing market leadership position in the web analytics category
validated by receiving the highest score and only 'excellent' rating from
InfoWorld magazine in its recent review of web analytics products."
Recent Events
On February 8, 2005 the company announced an agreement to acquire Avivo
Corporation, a California corporation doing business as "Atomz," and the
launch of a new suite of integrated services for online marketing
professionals. Based in San Francisco, Ca., Atomz (http://www.atomz.com/) is
a leading provider of on-demand digital marketing applications, including site
search and web content management. Upon completion of the merger,
WebSideStory will combine Atomz's hosted site search and web content
management applications with WebSideStory's HBX web analytics service to
create the industry's first suite of integrated, on-demand digital marketing
applications. WebSideStory's Active Marketing Suite will also include a
keyword bid management product, scheduled for release this summer. The Active
Marketing Suite will offer a single, shared environment in which businesses
can more easily optimize their online performance across multiple marketing
channels, while reducing their vendor management costs. The Active Marketing
Suite will include:
* HBX Analytics -- An award winning, on-demand web analytics service
that helps enterprises measure their online marketing initiatives --
from search-engine marketing to banner campaigns -- and improve
overall web site return on investment
* Bid -- An on-demand keyword bid management product that will enable
marketers to both manage and measure their pay-per-click keyword
campaigns
* Search -- An on-demand web site search application that empowers
marketers to guide and influence site visitors and customers in
finding the information and products they need
* Content Manager -- An on-demand web content management solution that
puts the power of creating and updating web content in the hands of
marketers
Financial Guidance
WebSideStory reaffirms recently provided guidance as follows (in millions
except per share data):
Q1-05 Q2-05 Q3-05 Q4-05
Revenue (millions) $6.8-$6.9 $7.3-7.6 $8.0-8.5 $8.6-9.3
Pro forma net income before stock-based compensation
$1.2-1.3 $1.4-1.7
Stock-based compensation ($.18) ($.12)
Net Income $1.0-1.1 $1.3-1.6
Pro forma net income per share before stock-based compensation
$0.07-0.08 $0.08-0.10
Stock-based compensation per share
($0.01) ($0.01)
Net income per share $0.06-0.07 $0.07-0.09
Note On The Use Of Non-GAAP Financial Measures
Some of the financial measures in this press release, including the
guidance on future periods, are presented on a pro forma basis. These pro
forma numbers are considered non-GAAP financial measures within the meaning of
SEC Regulation G. WebSideStory believes that this presentation is useful to
investors, because it describes the operating performance of the company and
helps investors gauge the company's ability to generate cash flow, excluding
some non-cash charges that are included in the most directly comparable
measures calculated and presented in accordance with GAAP. Company management
uses these non-GAAP measures as important indicators of the company's past
performance and to plan and forecast performance in future periods. Investors
should not consider non-GAAP financial measures in isolation from, or in
substitution for, financial information presented in compliance with GAAP.
Conference Call and Webcast Information
Management will host a quarterly conference call and simultaneous webcast
to discuss the results, later today, on Thursday, February 24, 2005, at
1:30 p.m. Pacific Time. To participate in the call, investors should dial
800 237-9752 (domestic) or 617 547-8706 (international) 10 minutes prior to
the scheduled call. The pass code is 53755363. Additionally, a live
audio-only webcast of the call may be accessed via the Internet at
http://www.websidestory.com. An archived version of the webcast will also be
available for at least twelve months, beginning two hours after completion of
the call, at the same location.
Forward-Looking Statements
Statements in this press release that are not a description of historical
facts are forward-looking statements. For example, statements about financial
condition, possible or assumed future results of operations, growth
opportunities, and plans and objectives of management are all forward-looking
statements. In addition, statements about the anticipated synergies of
WebSideStory's and Atomz's business and about the projected future financial
performance of Atomz's and WebSideStory's business are also forward-looking
statements. You should not regard any forward-looking statement as a
representation by WebSideStory that any of its plans will be achieved. Actual
results may differ materially from those set forth in this release due to the
risks and uncertainties inherent in WebSideStory's business. Such risks
include, without limitation: WebSideStory's limited experience in an emerging
market with unproven business and technology models, the risk of incurring
higher than expected costs associated with integrating the operations of Atomz
with those of WebSideStory, WebSideStory's reliance on its web analytics
services for the majority of its revenue, the risk that the acquisition of
Atomz may not occur or that sales of Atomz's services will not be as high as
anticipated, WebSideStory's recent achievement of profitability and the risk
that it may not maintain its profitability, the highly competitive markets in
which WebSideStory operates that may make it difficult for the company to
retain customers, the risk that WebSideStory's customers fail to renew their
agreements or that Atomz's customers fail to renew their agreements following
the acquisition, the risk that WebSideStory's services may become obsolete in
a market with rapidly changing technology and industry standards, and the risk
that WebSideStory may incur unanticipated or unknown losses or liabilities if
it completes the acquisition of Atomz, as well as the other risks described in
WebSideStory's filings with the Securities and Exchange Commission, including
WebSideStory's prospectus dated September 27, 2004 and its form 10-Q for the
quarter ended September 30, 2004. Do not place undue reliance on these
forward-looking statements, which speak only as of the date of this news
release. All forward-looking statements are qualified in their entirety by
this cautionary statement and WebSideStory undertakes no obligation to revise
or update this news release to reflect events or circumstances after the date
of this news release.
About WebSideStory
WebSideStory is a leading provider of on-demand web analytics services.
WebSideStory's services collect data from web browsers, process that data and
deliver reports of online behavior to its customers on demand. More than
700 enterprises currently use WebSideStory's services to understand how
Internet users respond to web site design and content, online marketing
campaigns and e-commerce offerings. As a result, WebSideStory's customers can
make more effective marketing decisions and improve the merchandising, sales,
support and design of their web sites. For more information, contact
WebSideStory, Inc. Voice: 858.546.0040. Fax: 858.546.0480. Address: 10182
Telesis Court, 6th Floor, San Diego, CA 92121. E-mail:
wsspress@websidestory.com. web site: http://www.websidestory.com/. HBX is a
trademark, and WebSideStory is a registered trademark of WebSideStory. Other
trademarks belong to their respective owners.
Financial Statements
WebSideStory, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31, December 31,
2004 2003
(unaudited)
Assets
Current assets:
Cash and cash equivalents $5,710 $5,690
Short-term investments 16,316 --
Accounts receivable 3,704 2,257
Prepaid expenses and other current assets 838 433
Total current assets 26,568 8,380
Property and equipment, net 1,884 1,244
Investments 8,683 --
Other assets 341 226
Total assets $37,476 $9,850
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $307 $618
Accrued liabilities 2,065 1,054
Deferred revenue 6,364 3,934
Capital lease short term 18 19
Note payable 27 --
Total current liabilities 8,781 5,625
Equipment term loan -- --
Deferred rent 320 393
Capital lease long term 100 --
Other liabilities 54 54
Total liabilities 9,255 6,072
Redeemable preferred stock -- 14,056
Convertible preferred stock -- 28,837
-- 42,893
Stockholders' equity (deficit)
Common stock 16 5
Additional paid-in capital 82,895 17,733
Unearned stock-based compensation (779) (1,157)
Accumulated other comprehensive income 281 276
Accumulated deficit (54,192) (55,972)
Total stockholders' deficit 28,221 (39,115)
Total liabilities and stockholders' equity
(deficit) $37,476 $9,850
Consolidated Statement of Operations
(in thousands, except share and per share data)
Three Months Ended Year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(unaudited) (unaudited)
2004 2003 2004 2003
Revenues:
Subscriptions $6,520 $4,405 $22,476 $15,678
Advertising 14 153 126 682
Total revenues 6,534 4,558 22,602 16,360
Cost of revenues:
Cost of revenues 910 817 3,300 3,236
Stock-based
compensation expenses 2 6 15 11
Total cost of revenues 912 823 3,315 3,247
Gross profit 5,622 3,735 19,287 13,113
Operating expenses
Sales and marketing 2,935 1,996 9,739 7,355
Technology development 857 893 3,774 3,417
General and
administrative 980 685 3,309 3,431
Stock-based expenses(*) 191 293 867 1,334
Total operating
expenses 4,963 3,867 17,689 15,537
Income (loss) from
operations 659 (132) 1,598 (2,424)
Interest expense (3) -- (4) (19)
Interest income 153 -- 205 56
Other income 1 505 5 489
Income (loss) before
provision for
(benefit from)
income taxes 810 373 1,804 (1,898)
Provision for
(benefit from)
income taxes (30) (31) 24 (31)
Net income (loss) 840 404 1,780 (1,867)
Constructive dividend $(1,389) $(1,389)
Accretion of discount
on redeemable
preferred stock -- (406) (1,326) (1,566)
Net income (loss)
attributable to
common stockholders $(549) $(2) $(935) $(3,433)
Net income (loss)
per share attributable
to common shareholders:
Basic $(0.04) $(0.00) $(0.13) $(0.86)
Diluted $(0.04) $(0.00) $(0.13) $(0.86)
Weighted-average
number of shares used
in per share amounts
Basic 15,402,002 4,158,656 7,300,809 4,001,979
Diluted 15,402,002 4,158,656 7,300,809 4,001,979
(*)Stock-based compensation expenses
Sales and
marketing 42 71 209 330
Technology
development 5 22 37 76
General and
administrative 144 200 621 928
191 293 867 1,334
Reconciliation of GAAP Net Income Attributable to Common Shareholders to
Non-GAAP Pro forma
Earnings Per Share
(in thousands, except share and per share data)
Three Months Ended Year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(unaudited) (unaudited)
2004 2003 2004 2003
Net income (loss)
attributable to
common stockholders $(549) $(2) $(935) $(3,433)
Constructive dividend 1,389 -- 1,389 --
Accretion of discount
on redeemable
preferred stock -- 406 1,326 1,566
Stock-based compensation 193 299 882 1,345
Non-GAAP Net income
(loss) $1,033 $703 $2,662 $(522)
Non-GAAP Net income
(loss) per share
attributable to
common shareholders:
Basic 0.07 0.17 0.36 (0.13)
Diluted 0.06 0.06 0.21 (0.13)
Weighted-average number
of shares used in
per share amounts
Basic 15,402,002 4,158,585 7,300,809 4,001,979
Diluted 16,855,949 11,157,510 12,895,828 4,001,979
Reconciliation of Net Income to Pro Forma Net Income Before Stock-based
Compensation
(in thousands)
Net income before
stock-based
compensation 840 404 1,780 (1,867)
Stock-based compensation 193 299 882 1,345
Pro forma net income 1,033 703 2,662 (522)
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