AVP, INC. ANNOUNCES 2007 FIRST QUARTER FINANCIAL RESULTS
LOS ANGELES, Calif., -May 14, 2007 - AVP, Inc. (OTC Bulletin Board: AVPI), a lifestyle sports entertainment company focused on professional beach volleyball, today announced financial results for its 2007 first quarter ended March 31, 2007.
AVP’s business is seasonal; therefore revenues, gross profits and operating income or loss amounts and percentages for the first and fourth quarters are not representative of our performance. The majority of AVP’s revenues are derived from sponsorship and advertising contracts with national and local sponsors. AVP recognizes sponsorship and advertising revenue only during the tour as the events occur and collections are reasonably assured. During the first quarter of 2007 the Company did not recognize any sponsorship revenues, activation fees, or local revenue.
For the first quarter ended March 31, 2007 the Company reported “other” revenue of $169 thousand, compared to “other” revenue of $123 thousand reported in the first quarter of 2006.
The net loss for the first quarter of 2007 was $2.1 million, or $0.11 loss per share, that compared to a net loss of $1.5 million, or $0.12 loss per share, in the first quarter of 2006.
The Company ended the first quarter with cash and cash equivalents of $8.0 million compared to $5.1 million reported on December 31, 2006 and deferred revenue of $4.5 million and $1.1 million at those respective dates.
“We are very excited about the launch of the 2007 AVP Crocs Tour that began on April 14, 2007 in Miami. This year we have added two additional tour stops bringing the total of AVP Crocs Tour events to 18, signed new sponsors, and entered into agreements with local event promoters for 10 cities. Our strategy to engage local event promoters is a cornerstone to our future growth. We look forward to a successful season this year,” said Leonard Armato, Chief Executive Officer of AVP, Inc.
About AVP, Inc.
AVP, Inc. is a lifestyle sports entertainment company focused on the production, marketing and distribution of professional beach volleyball events worldwide. AVP operates the industry's most prominent volleyball tour in the United States, the AVP Crocs Tour. Featuring more than 200 of the top American men and women competitors in the sport, AVP will hold 18 AVP Crocs Tour events throughout the United States in 2007. In 2004, AVP athletes successfully represented the United States during the Olympics in Athens, Greece, winning gold and bronze medals, the first medals won by U.S. women in professional beach volleyball. For more information, please visit www.avp.com.
All above-mentioned trademarks are the property of their respective owners.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that these statements involve risks and uncertainties and actual results might differ materially from those in the forward-looking statements, if we receive less sponsorship and advertising revenue than anticipated, or if attendance is adversely affected by unfavorable weather. Event-related expenses, such as for the stadium, transportation and accommodations, or security might be greater than expected; or marketing or administrative costs might be increased by our hiring, not currently planned, of a particularly qualified prospect. Additional factors have been detailed in the Company’s filings with the Securities and Exchange Commission, including our recent filings on Forms 10-KSB and 10-QSB.
Contacts:
| AVP, Inc | MKR Group, Inc. |
| William Chardavoyne | Investor Relations |
| Interim CFO | Charles Messman |
| (310) 426-8000 | (323) 468-2300 |
| wchardavoyne@avp.com | ir@mkr-group.com |
- Financial tables to follow -
AVP, INC |
CONSOLIDATED BALANCE SHEETS |
| | | March 31, | | December 31, | |
| | | 2007 | | 2006 | |
| | | (Unaudited) | | | |
ASSETS | | | | | |
CURRENT ASSETS | | | | | |
| Cash and cash equivalents | | $ | 7,965,514 | | $ | 5,052,636 | |
| Accounts receivable, net of allowance for | | | | | | | |
| doubtful accounts of $25,193 and $49,232 | | | 626,172 | | | 2,653,473 | |
| Prepaid expenses | | | 889,091 | | | 242,007 | |
| Other assets - current portion | | | 162,820 | | | 301,477 | |
| TOTAL CURRENT ASSETS | | | 9,643,597 | | | 8,249,593 | |
| | | | | | | | |
PROPERTY AND EQUIPMENT, net | | | 453,893 | | | 340,054 | |
| | | | | | | | |
OTHER ASSETS | | | 87,191 | | | 105,373 | |
| | | | | | | | |
| TOTAL ASSETS | | | 10,184,681 | | | 8,695,020 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
CURRENT LIABILITIES | | | | | | | |
| Accounts payable | | $ | 451,813 | | $ | 529,331 | |
| Accrued expenses | | | 1,288,160 | | | 1,049,439 | |
| Deferred revenue | | | 4,475,915 | | | 1,056,960 | |
| TOTAL CURRENT LIABILITIES | | | 6,215,888 | | | 2,635,730 | |
| | | | | | | | |
NON-CURRENT LIABILITIES | | | 162,499 | | | 190,766 | |
| | | | | | | | |
| TOTAL LIABILITIES | | | 6,378,387 | | | 2,826,496 | |
| | | | | | | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | |
| | | | | | | | |
STOCKHOLDERS' EQUITY | | | | | | | |
| | | | | | | | |
| Preferred stock, 2,000,000 shares authorized: | | | | | | | |
| | | | | | | | |
| Series A convertible preferred stock, $.001 par value, 1,000,000 shares authorized, | | | | | | | |
| no shares issued and outstanding | | | - | | | - | |
| | | | | | | | |
| Series B convertible preferred stock, $.001 par value, 250,000 shares authorized, | | | | | | | |
| 69,256 and 69,548 shares issued and outstanding | | | 70 | | | 70 | |
| | | | | | | | |
| Common stock, $.001 par value, 80,000,000 shares authorized, | | | | | | | |
| 19,824,539 and 19,751,838 shares issued and outstanding | | | 19,825 | | | 19,752 | |
| | | | | | | | |
| Additional paid-in capital | | | 39,155,971 | | | 39,077,065 | |
| | | | | | | | |
| Accumulated deficit | | | (35,369,572 | ) | | (33,228,363 | ) |
| | | | | | | | |
| TOTAL STOCKHOLDERS' EQUITY | | | 3,806,294 | | | 5,868,524 | |
| | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 10,184,681 | | $ | 8,695,020 | |
AVP, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
| | | Three Months Ended March 31, | |
| | | 2007 | | 2006 | |
| | | (Unaudited) | |
| | | | | | |
REVENUE | | | | | |
| Sponsorships/Advertising | | $ | - | | $ | - | |
| Other | | | 169,000 | | | 122,816 | |
| TOTAL REVENUE | | | 169,000 | | | 122,816 | |
| | | | | | | | |
EVENT COST | | | 52,299 | | | - | |
| GROSS PROFIT | | | 116,701 | | | 122,816 | |
| | | | | | | | |
OPERATING EXPENSES | | | | | | | |
| Sales and Marketing (1) | | | 875,713 | | | 502,585 | |
| Administrative | | | 1,446,303 | | | 1,120,903 | |
| TOTAL OPERATING EXPENSES | | | 2,322,016 | | | 1,623,488 | |
| | | | | | | | |
| OPERATING LOSS | | | (2,205,315 | ) | | (1,500,672 | ) |
| | | | | | | | |
OTHER INCOME (EXPENSE) | | | | | | | |
| Interest expense | | | - | | | (8,213 | ) |
| Interest income | | | 56,457 | | | 21,139 | |
| Gain on sale of asset | | | 8,449 | | | - | |
| TOTAL OTHER INCOME (EXPENSE) | | | 64,906 | | | 12,926 | |
| | | | | | | | |
| LOSS BEFORE INCOME TAXES | | | (2,140,409 | ) | | (1,487,746 | ) |
| | | | | | | | |
INCOME TAXES | | | (800 | ) | | (800 | ) |
| | | | | | | | |
| NET LOSS | | | (2,141,209 | ) | $ | (1,488,546 | ) |
| | | | | | | | |
| Loss per common share: | | | | | | | |
| Basic | | $ | (0.11 | ) | $ | (0.12 | ) |
| Diluted | | $ | (0.11 | ) | $ | (0.12 | ) |
| | | | | | | | |
| Shares used in computing loss per share: | | | | | | | |
| Basic | | | 19,783,309 | | | 12,468,848 | |
| Diluted | | | 19,783,309 | | | 12,468,848 | |
| (1) Sales and marketing expenses includes stock based expenses of $72,907 and $0 for the three months ended March 31, 2007 and 2006, respectively. |
