EXHBIT 99.1
AVP, Inc. Announces 2005 Full Year Results
LOS ANGELES, March 3 /PRNewswire-FirstCall/ -- AVP, Inc. (OTC Bulletin
Board: AVPI) today announced full year 2005 consolidated results for AVP, Inc.
and its wholly owned subsidiary AVP Pro Beach Volleyball Tour, Inc., a lifestyle
sports entertainment company focused on professional beach volleyball events.
2005 Full Year Highlights:
* Total revenue increased 27% to $15.6 million, compared to 2004 total
revenue of $12.3 million.
* Net loss excluding stock compensation and merger related expenses
decreased by 28% to $(2.1) million.
* Sponsorship revenue was $12.9 million, an increase of 30% from same period
last year.
* Local revenue increased to $1.2 million, a 104% increase from the same
period prior year.
* Began implementing strategic alliances with local event promotion
companies to extend the AVP brand and fan base.
* Increased fan base by 48%, according to Scarborough Sports Marketing.
* Added multiple new national sponsors, including Herbalife, Nature Valley
and Nautica.
* Expanded number of 2005 Tour events to 14 from 12 in 2004; 2005 prize
money totaled $3 million, an increase of nearly 80% over 2004.
* On-site event exposure, as measured by SMRI, increased to 1.12 million
people in 2005 from 808,000 in 2004.
* Strong additions to AVP's executive management team and board of
directors.
"By all accounts, 2005 was a terrific year of growth for AVP, and the
Company continues to progress in capitalizing on the popularity and commercial
potential of beach volleyball," said Leonard Armato, AVP's Chief Executive
Officer and Tour Commissioner. "During the year, we added two new tour events in
Cincinnati and Boulder, which brought the total number of tour events to 14 for
the 2005 season. The addition of these new tour stops coupled with an increase
in sponsorship revenue resulted in total revenue of $15.6 million, a 27%
increase over 2004. Sponsors continue to find AVP's unique integrated marketing
platform extremely appealing. For the year, we added several exciting new
national sponsors including Herbalife, Nature Valley and Nautica. In addition we
renewed existing agreements through 2006 and subsequent years with important AVP
supporters such as Gatorade, Xbox and McDonald's.
"While on-site event exposure improved significantly during 2005, we are
also extremely pleased with AVP's increased exposure on both cable and network
television. During the year, cable and network TV exposure including FOX Sports
Net, OLN and NBC Sports totaled more than 100 hours, more than double the total
television hours in 2004. Our television platform continued to reach more
viewers, with total gross rating points on cable and network television
increasing 58% and 41%, respectively. We expect these trends to continue into
the upcoming season as evidenced by the recently announced agreement with the
FOX Broadcasting Company to air two live event finals on the 2006 AVP Tour."
Mr. Armato continued, "AVP is poised for continued success with an
experienced management team and guidance from a strong board of directors that
was significantly enhanced during the year. With an exceptional background in
entertainment marketing and sales, Andy Goldman joined AVP as our Chief Revenue
Officer and assumed responsibilities for leading and expanding AVP's sales
efforts nationwide. Moreover, we are also quite pleased with the appointments of
new board members Roger Werner, co-founder of ESPN, and Jack Kemp, a former
cabinet member and nominee for Vice President of the U.S."
2005 Full Year Results
For the year ended December 31, 2005, total revenue was $15.6 million,
compared to $12.3 million in 2004, a 27% increase. Total revenue per event
increased to $1.1 million in 2005, compared to $1.0 million per event in 2004.
Sponsorship revenue from the period increased 30% during the year to $12.9
million. AVP recognizes sponsorship revenue as Tour events are held. The Company
held fourteen events in 2005, compared to twelve events in the same period last
year.
Local revenue for the year increased 104% to $1.2 million, due primarily
to two additional events held during 2005, along with increased revenue from
on-site tour event suites and corporate hospitality. During 2005, local revenue
per event also increased 75% over the prior year.
Event costs, recognized on an event-by-event basis, increased to $11.5
million for 2005, compared with $9.1 million for 2004. The increase is a result
of two additional events held in 2005. Average event cost increased slightly
during 2005 to $820,000 from $760,000 in 2004, primarily due to additional costs
associated with the larger Tour event stadium introduced in 2005. Operating
expenses of $13.0 million for 2005 included a $5.6 million charge to consulting
expenses related to the warrants granted in connection with the February 2005
private placement and merger transaction, as well as approximately $1.3 million
in merger-related legal costs, SEC reporting costs and consulting fees related
to the merger, costs of the related financing and resale registration of the
Company's securities, which became effective on November 3, 2005. Excluding such
warrant consulting expense, merger-related costs and fees and financial
registration costs and fees, net loss for the year ended December 31, 2005 would
have been approximately $(2.1) million compared to $(2.9) million for the same
period in 2004, a decrease of 28%.
The Company's net loss increased to $(9.0) million for 2005, from $(2.9)
million for 2004. Loss per share was $(1.03) for 2005, compared to $(0.97) for
2004.
Regarding AVP's outlook for 2006, Mr. Armato said, "As the new season
approaches, AVP is aggressively engaged in brand building and revenue generating
activities to capitalize on the buzz and momentum garnered from the record 2005
season. AVP has experienced strong growth over the past several seasons, and we
look for these trends to continue in 2006. Looking ahead, we remain focused on
increasing our sponsor revenue, expanding our local promoter partnerships
nationwide, and taking advantage of additional revenue generating opportunities
as we increase AVP's media exposure. Our strategic alliances with top local
promotion companies allows the AVP Tour to have a strong presence in new markets
without the standard upfront capital resources, as well as gaining year-round,
aggressive marketing and outreach for each event."
About the AVP Pro Beach Volleyball Tour, Inc.
AVP Pro Beach Volleyball Tour, Inc. is a leading lifestyle sports
entertainment company focused on the production, marketing and distribution of
professional beach volleyball events worldwide. AVP operates the industry's most
prominent national touring series, the AVP Pro Beach Volleyball Tour, which was
organized in 1983. Featuring more than 200 of the top American men and women
competitors in the sport, AVP staged 14 events throughout the United States in
2005 and will stage 16 events in during the 2006 season. 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.
Contact:
Amy Cozamanis
General Information and Investor Inquiries
(310) 854-8314
acozamanis@financialrelationsboard.com
Financial Tables to Follow
AVP PRO BEACH VOLLEYBALL TOUR, INC.
F/K/A
ASSOCIATION OF VOLLEYBALL PROFESSIONALS, INC.
BALANCE SHEET
December 31,
2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,143,345
Accounts receivable, net of
allowance for doubtful accounts
of $49,232 484,770
Prepaid expenses 158,054
Current portion of investment in
sales-type lease 145,768
TOTAL CURRENT ASSETS 1,931,937
PROPERTY AND EQUIPMENT, net 288,409
OTHER ASSETS
Investment in sales-type lease 416,551
Other assets 38,641
TOTAL OTHER ASSETS 455,192
TOTAL ASSETS $ 2,675,538
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 600,071
Accounts payable 711,303
Accrued expenses 1,576,435
Accrued interest 125,989
Deferred revenue 116,000
TOTAL CURRENT LIABILITIES 3,129,798
OTHER LIABILITIES
Long-term deferred revenue 150,000
TOTAL LIABILITIES 3,279,798
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY
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,
94,488 shares issued and
outstanding 94
Common stock, $.001 par value,
80,000,000 shares authorized,
11,669,931 shares issued and
outstanding 11,670
Additional paid-in capital 32,183,810
Accumulated deficit (32,799,834)
TOTAL STOCKHOLDERS' DEFICIENCY (604,260)
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIENCY $ 2,675,538
AVP PRO BEACH VOLLEYBALL TOUR, INC.
F/K/A
ASSOCIATION OF VOLLEYBALL PROFESSIONALS, INC.
STATEMENTS OF OPERATIONS
Year Ended December 31,
2005 2004
REVENUE
Sponsorships $ 12,918,471 $ 9,918,117
Other 2,662,811 2,390,888
TOTAL REVENUE 15,581,282 12,309,005
EVENT COSTS 11,512,511 9,125,829
Gross Profit 4,068,771 3,183,176
OPERATING EXPENSES
Marketing 2,447,802 2,435,124
Administrative 4,769,687 3,442,479
Impairment loss for fixed assets 119,277 --
Stock compensation expense 5,640,132 --
TOTAL OPERATING EXPENSES 12,976,898 5,877,603
OPERATING LOSS (8,908,127) (2,694,427)
OTHER INCOME (EXPENSE)
Interest expense (167,859) (245,870)
Interest income 112,030 67,185
TOTAL OTHER INCOME (EXPENSE) (55,829) (178,685)
LOSS BEFORE INCOME TAXES (8,963,956) (2,873,112)
INCOME TAXES -- --
NET LOSS $ (8,963,956) $ (2,873,112)
Basic and diluted loss per share $ (1.03) $ (0.97)
Weighted average common shares
outstanding 8,681,388 2,973,861
AVP PRO BEACH VOLLEYBALL TOUR, INC.
F/K/A
ASSOCIATION OF VOLLEYBALL PROFESSIONALS, INC.
STATEMENTS OF CASH FLOWS
Year Ended December 31,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(8,963,956) $(2,873,112)
Adjustments to reconcile net loss
to net cash flows from operating
activities:
Depreciation and amortization
of property and equipment 164,148 57,561
Loss on impairment of property
and equipment 119,277 --
Interest income on investment
in sales-type lease (39,596) (67,185)
Amortization of deferred
commissions 253,339 294,904
Other amortization 8,043 6,033
Amortization of deferred costs -- 1,352,100
Allowance for doubtful accounts 39,232 10,000
Compensation from issuance of
stock options and warrants 5,640,132 --
Decrease (increase) in operating
assets:
Accounts receivables 125,135 (169,442)
Investment in and due from
joint venture -- 291,084
Prepaid expenses (131,448) (26,606)
Other assets (3,946) (1,305)
Increase (decrease) in operating
liabilities:
Accounts payable 396,504 (625,052)
Accrued expenses 582,133 211,950
Accrued officer compensation (43,208) (167,625)
Accrued interest (7,308) 245,871
Deferred revenue (284,050) 275,050
NET CASH FLOWS FROM OPERATING
ACTIVITIES (2,145,569) (1,185,774)
CASH FLOWS FROM INVESTING
ACTIVITIES
Investment in property and
equipment (370,131) (228,416)
Investment in sales-type lease 105,600 158,400
NET CASH FLOWS FROM INVESTING
ACTIVITIES (264,531) (70,016)
AVP PRO BEACH VOLLEYBALL TOUR, INC.
F/K/A
ASSOCIATION OF VOLLEYBALL PROFESSIONALS, INC.
STATEMENTS OF CASH FLOWS (Continued)
Year Ended December 31,
2005 2004
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of capital stock $ 5,000,061 $ --
Offering costs (753,038) --
Proceeds from borrowing -- 2,000,000
Payment of registration penalty for
common stock 7,822 --
Debt repayments (1,333,333) (183,333)
NET CASH FLOWS FROM FINANCING
ACTIVITIES 2,921,512 1,816,667
NET INCREASE IN CASH AND CASH
EQUIVALENTS 511,412 560,877
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 631,933 71,056
CASH AND CASH EQUIVALENTS, END OF
PERIOD $ 1,143,345 $ 631,933
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 86,159 $ 48,939
Income taxes $ 800 $ --
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING INFORMATION
Net liabilities assumed in merger
Cash $ 4,217 $ --
Accounts payable (261,857) --
Accrued Expenses (173,934) --
$ (431,574) $ --
Conversion of Association redeemable
preferred stock into common stock $ 3,657,600 $ --
Conversion of 10% convertible notes
payable into common stock $ 2,290,348 $ --
Conversion of AEG note payable into
common stock $ 1,183,333 $ --