AVP, INC. ANNOUNCES 2007 SECOND QUARTER FINANCIAL RESULTS
LOS ANGELES, Calif., - July 31, 2007 - AVP, Inc. (OTC Bulletin Board: AVPI), a lifestyle sports entertainment company focused on professional beach volleyball, today announced financial results for the second quarter of calendar year 2007.
Second Quarter Results
For the second quarter, ended June 30, 2007, the Company reported revenue of $10.8 million a 48% increase when compared to the $7.3 million reported in the second quarter of 2006. Net income for the second quarter of 2007 was $0.9 million, or $0.03 per diluted share, which compares to a net income of $54 thousand, or $0.00 per diluted share, in the second quarter of 2006. Included in the second quarter results was a one-time cost of $0.6 million, or $0.02 per diluted share associated with the pending Shamrock Holdings transaction.
The Company ended the second quarter with cash and cash equivalents of $6.2 million.
For the Six Months Ended June 30, 2007
For the six months ended June 30, 2007, total revenue was $11.0 million, compared to $7.4 million for the same period in 2006. Net loss for the first six months was ($1.2 million), or a loss of ($0.06) per share, compared to a net loss, excluding deemed dividend, of ($1.4 million), or a loss of ($0.10) per share, for the same period last year. Included in the six month results was a one time cost of $0.9 million or $0.04 per basic share associated with the pending Shamrock Holdings transaction.
“This year we have increased the number of Tour events and sponsorship relationships, resulting in revenue growth of 48% for the first half of 2007, showing evidence of the strong demand for our product,” said Leonard Armato, Chief Executive Officer of AVP, Inc.
Mr. Armato continued, “This year our operating income has been affected by our decision to invest in ancillary revenue streams and personnel, as we build up our infrastructure to support our future growth opportunities. We have devoted substantial resources to increasing our number of local promoters, enhancing the capabilities of our sales department with the addition of several key hires, and investing heavily in creating additional video and digital content. We believe the benefits of today’s investments will materialize in the near future.”
Company Outlook
For the full year 2007, the Company is expecting total revenue between $24.7 million and $26.6 million, and a net loss in the range of ($2.1 million) to ($4.0 million). The expected net loss is due to several factors, including a one time cost associated with the pending Shamrock Holdings transaction, increases in prize money, increases in production and media cost associated with new revenue initiatives, and increases in staffing to support future growth opportunities.
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 William Chardavoyne Interim CFO (310) 426-8000 wchardavoyne@avp.com | MKR Group, Inc. Investor Relations Charles Messman (323) 468-2300 ir@mkr-group.com |
AVP, INC | ||||||||||
CONSOLIDATED BALANCE SHEETS |
(Unaudited) | |||||||
June 30, | December 31, | ||||||
2007 | 2006 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 6,168,302 | $ | 5,052,636 | |||
Accounts receivable, net of allowance for doubtful accounts of $77,897 and $25,193 | 4,185,440 | 2,653,473 | |||||
Prepaid expenses | 841,588 | 242,007 | |||||
Other assets - current portion | 176,158 | 301,477 | |||||
TOTAL CURRENT ASSETS | 11,371,488 | 8,249,593 | |||||
PROPERTY AND EQUIPMENT, net | 464,153 | 340,054 | |||||
OTHER ASSETS | 69,925 | 105,373 | |||||
TOTAL ASSETS | $ | 11,905,566 | $ | 8,695,020 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 1,677,774 | $ | 529,331 | |||
Accrued expenses | 1,867,540 | 1,049,439 | |||||
Deferred revenue | 3,553,762 | 1,056,960 | |||||
TOTAL CURRENT LIABILITIES | 7,099,076 | 2,635,730 | |||||
NON-CURRENT LIABILITIES | 131,722 | 190,766 | |||||
TOTAL LIABILITIES | 7,230,798 | 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, 47,152 and 69,548 shares issued and outstanding | 48 | 70 | |||||
Common stock, $.001 par value, 80,000,000 shares authorized, 20,440,577 and 19,751,838 shares issued and outstanding | 20,441 | 19,752 | |||||
Additional paid-in capital | 39,122,514 | 39,077,065 | |||||
Accumulated deficit | (34,468,235 | ) | (33,228,363 | ) | |||
TOTAL STOCKHOLDERS' EQUITY | 4,674,768 | 5,868,524 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 11,905,566 | $ | 8,695,020 |
AVP, INC | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
(Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
REVENUE | |||||||||||||
Sponsorships/Advertising (1) | $ | 8,990,790 | $ | 6,233,090 | $ | 8,990,790 | $ | 6,233,090 | |||||
Other | 1,857,611 | 1,078,062 | 2,026,611 | 1,200,878 | |||||||||
TOTAL REVENUE | 10,848,401 | 7,311,152 | 11,017,401 | 7,433,968 | |||||||||
EVENT COST (2) | 7,185,169 | 5,360,237 | 7,237,468 | 5,360,237 | |||||||||
GROSS PROFIT | 3,663,232 | 1,950,915 | 3,779,933 | 2,073,731 | |||||||||
OPERATING EXPENSES | |||||||||||||
Sales and Marketing (3) | 862,503 | 721,210 | 1,738,216 | 1,223,796 | |||||||||
Administrative (4) | 1,958,237 | 1,317,281 | 3,404,540 | 2,448,046 | |||||||||
TOTAL OPERATING EXPENSES | 2,820,740 | 2,038,491 | 5,142,756 | 3,671,842 | |||||||||
OPERATING LOSS | 842,492 | (87,576 | ) | (1,362,823 | ) | (1,598,111 | ) | ||||||
OTHER INCOME (EXPENSE) | |||||||||||||
Interest expense | - | (3,718 | ) | - | (11,931 | ) | |||||||
Interest income | 57,520 | 33,807 | 113,977 | 54,946 | |||||||||
Gain on sale of asset | 1,325 | - | 9,774 | 9,863 | |||||||||
Gain on warrant derivative | - | 111,042 | 111,042 | ||||||||||
TOTAL OTHER INCOME (EXPENSE) | 58,845 | 141,131 | 123,751 | 163,920 | |||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 901,337 | 53,555 | (1,239,072 | ) | (1,434,191 | ) | |||||||
INCOME TAXES | - | - | (800 | ) | (800 | ) | |||||||
NET INCOME (LOSS) | 901,337 | 53,555 | (1,239,872 | ) | (1,434,991 | ) | |||||||
Deemed Dividend to Series B Preferred Stock Shareholders | - | 91,973 | - | 91,973 | |||||||||
Net Income (Loss) Available to Common Shareholder | $ | 901,337 | $ | (38,418 | ) | $ | (1,239,872 | ) | $ | (1,526,964 | ) | ||
Earnings (loss) per common share: | |||||||||||||
Basic | $ | 0.05 | $ | (0.00 | ) | $ | (0.06 | ) | $ | (0.11 | ) | ||
Diluted | $ | 0.03 | $ | (0.00 | ) | $ | (0.06 | ) | $ | (0.11 | ) | ||
Shares used in computing earning (loss) per share: | |||||||||||||
Basic | 19,960,250 | 15,885,300 | 19,872,269 | 14,098,748 | |||||||||
Diluted | 27,596,052 | 15,885,300 | 19,872,269 | 14,098,748 |
(1) Sponsorship/advertising includes $0 and $ 94,346 in stock base contra revenue for the three months ended June 30, 2007 and 2006, respectively and $0 and $ 94,346 for the six months ended June 30, 2007 and 2006, respectively. | |||||||||||||
(2) Event costs include stock based expenses of $0 and $1,000,000 for the three months ended June 30, 2007 and 2006, respectively and $0 and $1,000,000 for the six months ended June 30, 2007 and 2006, respectively. | |||||||||||||
(3) Sales and marketing expenses includes stock based expenses of $9,313 and $33,974 for the three months ended June 30, 2007 and 2006, respectively and $82,220 and $33,974 for the six months ended June 30, 2007 and 2006, respectively. | |||||||||||||
(4) Administrative expenses includes stock based expenses of $21,596 and $203,241 for the three months ended June 30, 2007 and 2006, respectively and $42,956 and $213,967 for the six months ended June 30, 2007 and 2006, respectively. |