Exhibit 99.1
Greenfield Online Announces Third Quarter Financial Results
Net revenue increased 70% in the third quarter of 2004 over the prior year
period to $12.0 million
Gross profit increased 112% in the third quarter of 2004 over the prior year
period to $9.5 million
Operating income increased to $2.3 million in the third quarter of 2004 over
the prior year period
Net income increased to $1.2 million in the third quarter of 2004 over the
prior year period
WILTON, Conn., Nov. 3 /PRNewswire-FirstCall/ -- Greenfield Online, Inc
(Nasdaq: SRVY), a leading independent provider of Internet survey solutions to
the global marketing research industry, today reported financial results for
the third quarter ended September 30, 2004.
Net revenue for the third quarter ended September 30, 2004 was $12.0
million, a 70% increase compared to $7.0 million for the third quarter ended
September 30, 2003. Revenue for the nine months ended September 30, 2004 was
$30.9 million, a 76% increase compared to $17.6 million for the nine months
ended September 30, 2003.
Gross profit for the third quarter ended September 30, 2004 was $9.5
million, or 79% of revenue, and increased 112% compared to $4.5 million, or
63% of revenue, in the same period a year ago. Gross profit for the nine
months ended September 30, 2004 was $23.4 million, or 76% of revenue, and
increased 103% compared to $11.5 million, or 66% of revenue in the same period
a year ago.
Adjusted EBITDA, a non-GAAP financial measure, for the third quarter ended
September 30, 2004 increased 176% to $3.0 million compared to $1.1 million in
the same period a year ago. Adjusted EBITDA for the nine months ended
September 30, 2004 increased 136% to $6.9 million compared to $2.9 million for
the same period a year ago. Adjusted EBITDA is reconciled to GAAP net income
in the section entitled "Non-GAAP Financial Measure" below.
Operating income for the third quarter ended September 30, 2004 increased
to $2.3 million from $480,000 in the same period a year ago. Operating income
for the nine months ended September 30, 2004 increased to $4.7 million from
$1.1 million for the same period a year ago.
Net income for the third quarter of 2004 increased to $1.2 million
compared to $335,000 for the third quarter of 2003. Net income for the nine
months ended September 30, 2004 increased to $3.3 million compared to $1.2
million in the same period a year ago. The third quarter of 2004 includes a
non-recurring, non-operating write-off of approximately $1.0 million to
related-party interest expense of a debt discount on Series C-2 Preferred
Stock redeemed in connection with the Company's initial public offering.
Dean Wiltse, Greenfield Online's President and Chief Executive Officer,
commented, "This was another strong quarter for us, with results reaching the
high end of prior guidance. We achieved 70% year-over-year revenue growth, a
19% operating margin and a 25% adjusted EBITDA margin. Our revenue and the
overall growth in the number of projects this quarter reflect the growing
demand for our survey solutions from marketing research companies. Our
acquisition of the Opinion Surveys.com panel and related assets, which we
announced in August, was completed in October, and added another 1.1 million
households to our panel. With a total of 3.4 million households, representing
approximately 8 million individuals, we now have one of the industry's largest
panels, with the incremental capacity and panel depth to continue to meet
customer demand."
Sales bookings in the third quarter, defined as new signed contracts for
online survey work, reached $12.5 million, up 87% over the same period a year
ago and up 3% from the second quarter. Bid volume, defined as the total value
of online survey projects submitted for bid by clients, during the three
months ended September 30, 2004 was $77 million, up 107% over the same period
a year ago and up 16% from the second quarter. Fourth-quarter backlog, defined
as signed contracts for online survey projects to be completed and delivered
to clients during the three months ending December 31, 2004, is approximately
$10 million as of November 3, 2004.
Bob Bies, Greenfield Online's Executive Vice President and Chief Financial
Officer, commented, "Our results continue to reflect the significant operating
leverage we have achieved in our business. Our incremental revenues of $13.3
million on a year-to-date basis over last year, have converted to incremental
adjusted EBITDA of $4.0 million. This was achieved while making significant
operational and panel investments in the U.S., Canada, Europe and India, while
also bearing the material incremental costs of operating as a publicly traded
company."
Guidance Looking Forward
The following statements regarding future financial performance are based
on current expectations. These statements are forward looking. Actual
results may differ materially, especially in the current economic environment.
These statements do not reflect the potential impact of mergers, acquisitions
or other business combinations that may be completed by the Company after the
date of this release.
Wiltse commented, "We remain confident in our business based on the level
of sales bookings we have entering the fourth quarter. Demand continues to
increase as more marketing research companies understand the numerous and
compelling benefits Greenfield Online's Internet survey solutions offer. As
we enter the fourth quarter of 2004, we expect continued sequential growth in
revenue and operating income based on sales bookings and our backlog. For the
fourth quarter of 2004, we expect revenue in the range of $13.4 million to
$13.6 million compared to $8.3 million in the fourth quarter of 2003,
representing growth of approximately 61% to 64%. We expect operating income
for the fourth quarter of 2004 to be in the range of $2.4 million to $2.5
million compared to $618,000 in the fourth quarter of 2003. We expect
adjusted EBITDA for the fourth quarter of 2004 to be in the range of $3.2
million to $3.4 million compared to $1.4 million in the fourth quarter of
2003. Net income for the fourth quarter of 2004 is expected to be in the
range of $2.3 million to $2.4 million compared to $414,000 in the fourth
quarter of 2003."
"For the fiscal year 2004, we expect revenue in the range of $44.3 million
to $44.5 million, compared to $25.9 million for 2003, representing growth of
approximately 71% to 72%. We expect operating income for the fiscal year 2004
to be in the range of $7.1 million to $7.2 million, compared to $1.7 million
in 2003. We expect adjusted EBITDA for the fiscal year 2004 to be in the
range of $10.1 million to $10.3 million compared to $4.4 million in 2003. Net
income for the fiscal year 2004 is expected to be in the range of $5.6 million
to $5.7 million (including the aforementioned $1.0 million of Series C-2
Preferred Stock debt discount write-off) compared to $1.6 million in 2003."
Year 2005 Guidance
Dean Wiltse commented, "For the fiscal year 2005, we expect revenues in
the range of $67 to $71 million and operating margins of approximately 24%."
EPS Guidance for 2004
In conjunction with the initial public offering, which was completed on
July 16, 2004, the Company redeemed its Series C-2 Preferred Stock and
converted its Series B Preferred Stock into Common Stock.
The Series C-2 Preferred Stock carried an unamortized discount of
approximately $1.0 million as of the date of the IPO, which generally accepted
accounting principles require to be recorded to related party interest expense
as a one time charge. This charge was taken in the third quarter of 2004.
The Series B Preferred Stock carried certain redemption features, which
under GAAP required the Company to take a deduction below net income in
computing fully diluted EPS and net income available for common stockholders.
This adjustment amounts to approximately $28.1 million and reflects the
difference between the carrying value of the Series B Preferred Stock and the
value received by the Series B Preferred stockholders when the Series B
Preferred shares were converted to Common Stock at the IPO. This is a non-
recurring, non-operating and non-cash EPS adjustment and was taken in the
third quarter of 2004.
For purposes of reflecting for the third quarter 2004 EPS and guidance for
the full fiscal year 2004, the table below sets forth pro forma EPS
information assuming that the IPO occurred on January 1, 2004. In the IPO, we
issued 4.0 million new shares of Common Stock for cash and we converted 10.4
million shares of Preferred Stock to Common Stock. In addition, the table sets
forth full fiscal year 2004 EPS guidance calculated using GAAP:
(All figures are unaudited and are in thousands except EPS data)
Pro
Actual Actual Forma Forecast Forecast
EPS Guidance Assuming IPO Q-1 Q-2 Q-3 Q-4 Total
at 1-01-04 2004 2004 2004 2004 2004
Net Income $325 $1,727 $2,292 $2,350 $6,694
EPS - Basic $0.02 $0.10 $0.14 $0.14 $0.40
EPS - Fully Diluted $0.02 $0.10 $0.13 $0.14 $0.39
Weighted Average Shares
Outstanding
Basic 16,463 16,463 16,463 16,690 16,565
Fully Diluted 17,206 17,206 17,306 17,351 17,304
Note: These EPS calculations assume that the IPO occurred at January 1,
2004. For 3Q04, pro forma net income includes the addback of the write
off of unamortized discount on the C-2 preferred stock.
Actual Actual Pro Forma Forecast Forecast
Q-1 Q-2 Q-3 Q-4 Total
GAAP EPS Guidance 2004 2004 2004 2004 2004
Net Income $325 $1,727 $2,292 $2,350 $6,694
Adjustments Related to
Preferred Securities Required
by GAAP
Write-off of Unamortized
Discount on C-2 Preferred (1,049) (1,049)
Charge to Common Stockholders
for Series B Preferred
Beneficial Conversion at IPO (28,054) (28,054)
Cumulative Dividends on Series
B Preferred (168) (168) (46) (382)
Income Allocable to
Participating Preferred
Securities (131) (1,302) (131) (1,564)
Net Income Available to Common
Shareholders $26 $257 $(26,988) $2,350 $(24,355)
EPS Basic $0.01 $0.13 $(1.91) $0.14 $(2.79)
EPS Diluted $0.01 $0.10 $(1.91) $0.14 $(2.79)
Weighted Average Shares
Outstanding
Basic 2,054 2,052 14,145 16,690 8,735
Fully Diluted 3,046 2,693 14,969 17,351 9,515
Non-GAAP Financial Measure
We define adjusted EBITDA as earnings before interest expense, other
income, income taxes, depreciation and amortization and stock based
compensation. Adjusted EBITDA may not be comparable to similarly titled
measures reported by other companies. We are presenting adjusted EBITDA
because it provides an additional way to view our operations, when considered
with both our GAAP results and the reconciliation to net income, which we
believe provides a more complete understanding of our business than could be
obtained absent this disclosure. Adjusted EBITDA is presented solely as a
supplemental disclosure because: (i) we believe it is a useful tool for
investors to assess the operating performance of the business without the
effect of non-cash depreciation and amortization expenses; (ii) we believe
that investors will find it useful in assessing our ability to service or
incur indebtedness; and (iii) we use adjusted EBITDA internally to evaluate
the performance of our personnel and also as a benchmark to evaluate our
operating performance or compare our performance to that of our competitors.
The use of adjusted EBITDA has limitations and you should not consider
adjusted EBITDA in isolation from or as an alternative to GAAP measures such
as net income, cash flows from operating activities and consolidated income or
cash flow statement data prepared in accordance with GAAP, or as a measure of
profitability or liquidity. The following table sets forth the reconciliation
of adjusted EBITDA, a non-GAAP financial measure, to net income, our most
directly comparable financial measure presented in accordance with GAAP.
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
Net Income 1,243 335 3,295 1,234
Interest Expense - Net 1,017 128 1,187 365
Tax Provision 51 17 193 80
Depreciation and Amortization 488 348 1,126 1,016
EBITDA 2,799 828 5,801 2,695
Other Income (See Note) (600)
Stock-based compensation 250 277 1,098 830
Adjusted EBITDA 3,049 1,105 6,899 2,925
Note: Other Income relates to gain on sale of Custom Research Business.
Midpoint
Guidance Midpoint
3 Months 3 Months Guidance Actual
Dec 31, Dec 31, Year Year
2004 2003 2004 2003
Net Income 2,350 414 5,645 1,648
Interest Expense - Net (36) 130 1,151 495
Tax Provision 150 70 343 150
Depreciation and Amortization 600 376 1,726 1,392
EBITDA 3,064 990 8,865 3,685
Other Income (See Note) (600)
Stock-based compensation 250 454 1,348 1,284
Adjusted EBITDA 3,314 1,444 10,213 4,369
Note: Other Income relates to gain on sale of Custom Research Business.
Conference call and webcast access information
The Company has scheduled a conference call to discuss these results for
later this afternoon, Wednesday, November 3, 2004 at 5:00 PM EDT. Dean A.
Wiltse, CEO, will host the teleconference. Formal remarks will be followed by
a question and answer session.
The dial-in number for the live conference call beginning at 5:00 PM EDT
is 973-935-2048. The password confirmation is 5279648. Please call in at
4:50PM EDT to avoid delays. A live web cast of the conference call will be
available on Greenfield Online's website at http://www.greenfield.com
through the "Investor Overview" link. This call will contain forward-looking
statements and other material information regarding the Company's financial
and operating results. In the event that any Non-GAAP financial measure is
discussed on the conference call that is not described in this release,
related complementary information will be made available at
http://www.greenfield.com, through the "Investor Overview" link as soon as
practicable after the conclusion of the conference call.
A replay of the call will be available from 7:00 PM EDT on Wednesday,
November 3 through midnight EDT on Wednesday, November 17 by telephone at
973-341-3080. The password for the replay is 5279648. The webcast of the
conference call will be available for 30 days following the call at
http://www.greenfield.com, through the "Investor Overview" link.
About Greenfield Online
Greenfield Online, headquartered in Wilton, CT, is a leading independent
provider of Internet survey solutions to the global marketing research
industry. The company has built and actively manages the Greenfield Online
panel, a 100% double opt-in Internet-based panel of over 3.4 million
individuals residing in households containing an estimated 8.8 million people.
This proprietary panel allows Greenfield to supply its clients with diverse,
demographically representative survey research data. For more information
visit http://www.Greenfield.com.
Company Contact:
Cynthia Brockhoff
Vice President - Investor Relations
Greenfield Online
Ph: (203)-846-5772
Cbrockhoff@Greenfield.com
Agency Contact:
David Pasquale
The Ruth Group
Ph: (646)-536-7006
Dpasquale@theruthgroup.com
Safe Harbor Statement
Certain statements in this press release and oral statements made from
time to time by representatives of the company constitute forward-looking
statements for purposes of the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995. These statements include, without
limitation, predictions and guidance relating to the Company's future
financial performance and growing customer demand for online marketing
research, sales bookings, bid volume, and backlog. In some cases, you can
identify forward-looking statements by terminology such as, "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential", "continue", or the negative of these terms or other comparable
terminology. The forward-looking statements contained herein are based on the
Company's current expectations but they involve a number of risks and,
uncertainties and do not reflect the potential impact of mergers, acquisitions
or other business combinations that may be completed by the Company after the
date of this release. Our actual results and the timing of events could
differ materially from those anticipated in the forward-looking statements as
a result of risks and uncertainties, which include, without limitation, risks
related to our ability to maintain the size and demographic composition of the
Greenfield Online panel, our panelists' responsiveness to our surveys, our
reliance on our largest customers, our ability to compete with marketing
research firms and other potential competitors, our ability to manage our
growth and international expansion, our online business model, demand for our
products and services, the strength of our brand and other risks detailed in
our filings with the Securities and Exchange Commission available at
www.sec.gov. You are urged to consider these factors carefully in evaluating
the forward-looking statements herein and are cautioned not to place undue
reliance on such forward-looking statements, which are qualified in their
entirety by this cautionary statement. The forward-looking statements made
herein speak only as of the date of this press release and the Company
undertakes no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.
Greenfield Online, Inc.
Consolidated Balance Sheets
($ In Thousands, Except Share Data)
(Unaudited)
September 30, December 31,
2004 2003
ASSETS
Current assets:
Cash, restricted cash and cash equivalents $38,431 $3,721
Accounts receivable trade (net of allowances
of $238 and $219 at September 30, 2004 and
December 31, 2003, respectively) 8,403 4,234
Prepaid expenses and other current assets 1,467 498
Total current assets 48,301 8,453
Property and equipment, net 3,872 2,420
Other intangible assets, net 262 311
Security deposits 873 745
Other long term assets 34 --
Total assets $53,342 $11,929
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $2,538 $1,563
Accrued expenses and other current liabilities 4,417 4,579
Current portion of capital lease obligations 1,120 874
Deferred revenues 371 394
Total current liabilities 8,446 7,410
Long-term debt -- --
Capital lease obligations 914 705
Other long-term liabilities 23 84
Series C-2 redeemable preferred stock
(aggregate liquidation preference of none and
$2,053 at September 30, 2004 and
December 31, 2003, respectively)
-- 943
Total liabilities 9,383 9,142
Series B convertible preferred stock;
par value $0.0001 per share; 30,211,595 shares
authorized, issued and outstanding as of
December 31, 2003; zero authorized, issued
and outstanding as of September 30, 2004 -- 9,114
Commitments and contingencies
Stockholders' deficit:
Series A convertible preferred stock; par value
$0.0001 per share; 40,874,511 shares authorized;
zero and 40,874,511 shares issued and outstanding
(aggregate liquidation preference of none
and $5,953) as of September 30, 2004 and
December 31, 2003, respectively -- 4
Series C-1 convertible preferred stock; par value
$0.0001 per share; zero and 74,627,182 shares
authorized, issued and outstanding (aggregate
liquidation preference of none and $9,127)
as of September 30, 2004 and December 31, 2003,
respectively) -- 7
Common stock; par value $0.0001 per share;
100,000,000 shares authorized; 16,471,435
and 2,054,485 shares issued and outstanding
at September 30, 2004 and December 31, 2003,
respectively 2 --
Additional paid-in capital 128,186 82,440
Accumulated deficit (81,094) (84,389)
Unearned stock-based compensation (3,004) (4,258)
Treasury stock, at cost; Common stock - 9,643
and zero shares at September 30, 2004 and
December 31, 2003, respectively (131) --
Note receivable from stockholder -- (131)
Total stockholders' equity (deficit) 43,959 (6,327)
Total liabilities, temporary equity and
stockholders' equity (deficit) $53,342 $11,929
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Net revenues $12,015 $7,048 $30,867 $17,587
Cost of revenues
(including stock-based
compensation of $50 and $4,
respectively for the three
months ended September 30,
2004 and 2003, and $156 and
$13,respectively for the nine
months ended September 30,
2004 and 2003 and excluding
depreciation shown below) 2,515 2,574 7,508 6,061
Gross profit 9,500 4,474 23,359 11,526
Operating expenses:
Selling, general and
administrative (including
stock-based compensation of
$200 and $273, respectively
for the three months ended
September 30, 2004 and 2003,
and $942 and $817, respectively
for the nine months ended
September 30, 2004 and 2003) 5,884 3,237 15,247 8,126
Panel acquisition expenses 599 311 1,771 1,058
Depreciation and amortization 388 279 851 812
Research and development 308 167 789 451
Total operating expenses 7,179 3,994 18,658 10,447
Operating income 2,321 480 4,701 1,079
Other income (expense):
Interest income (expense), net 36 (99) (94) (338)
Related party interest income
(expense), net (1,053) (29) (1,093) (27)
Other income (expense), net (10) -- (26) 600
Total other income (expense)(1,027) (128) (1,213) 235
Income before income taxes 1,294 352 3,488 1,314
Provision for income taxes 51 17 193 80
Net income 1,243 335 3,295 1,234
Less: Accretion of Series
C-2 redeemable preferred
stock dividends -- -- -- (63)
Charge to common stockholders
for Series B convertible
preferred liquidation preference
in excess of fair market
value (28,054) -- (28,054) --
Cumulative dividends on
Series B convertible
preferred stock (46) (168) (382) (504)
Income allocable to
participating preferred
securities (131) (139) (1,564) (556)
Net income (loss) available to
common stockholders $(26,988) $28 $(26,705) $111
Net income (loss) per share
available to common
stockholders:
Basic $(1.91) $0.01 $(4.39) $0.05
Diluted $(1.91) $0.01 $(4.39) $0.05
Weighted average shares
outstanding:
Basic 14,145 2,054 6,084 2,054
Diluted 14,969 2,439 6,799 2,263
SOURCE Greenfield Online, Inc.
-0- 11/03/2004
/CONTACT: Cynthia Brockhoff, Vice President - Investor Relations of
Greenfield Online, +1-203-846-5772, Cbrockhoff@Greenfield.com; or Agency
Contact, David Pasquale of The Ruth Group, +1-646-536-7006,
Dpasquale@theruthgroup.com, for Greenfield Online, Inc./
/Web site: http://www.greenfield.com /
(SRVY)
CO: Greenfield Online, Inc.
ST: Connecticut
IN: CPR ITE
SU: ERN CCA