Exhibit 99.1
EDGAR Online Third Quarter Subscription Revenue Increases 18%, Gross Margins
Increase to 86%
SOUTH NORWALK, Conn.--(BUSINESS WIRE)--Nov. 1, 2004--EDGAR(R) Online(R),
Inc. (NASDAQ: EDGR) today reported third quarter 2004 subscription growth of 18%
over the same period last year. Since inception, the Company's subscription
revenues, which consist of billings for EDGAR Online Pro and EDGAR Online
Access, have grown incrementally each quarter. EDGAR Online is a leading
provider of value-added global business and financial information.
EDGAR Online reported overall revenue of $3.2 million for the quarter ended
September 30, 2004 compared to $3.3 million in the same quarter last year.
Strong growth in the Company's core subscription business was offset by lower
advertising sales and an anticipated decline in the Company's technical services
revenues. Technical services are expected to remain relatively flat for the
remainder of 2004. The Company's deferred revenue at the end of the third
quarter 2004 was $2.8 million, a 31% increase over the same quarter last year.
This represents billings that will be recognized as revenue in future quarters.
The Company expects overall revenue increases on a sequential and year-over-year
basis in the fourth quarter of 2004.
Strengthening the Company's focus on subscription revenue, in October 2004,
it discontinued its FreeEDGAR.com service which offered free access to SEC
documents. The company is migrating the former FreeEDGAR.com users to its paid
subscriptions by offering free trials of the premium service. The Company
believes that this initiative, along with its introduction of new content and
functionality to desktop products, will accelerate the Company's growth in
subscription revenue.
Susan Strausberg, EDGAR Online's President and CEO, said, "We are very
pleased with our growth in our core business, subscription revenue, and we
remain squarely focused on developing the alliances and products that will help
subscription revenue continue to increase. For example, during the third quarter
we formed an alliance with Hitachi America, Ltd., through which EDGAR Online and
Hitachi will make financial information from U.S. and Japanese public companies
available throughout the U.S. and Japan. Also during the third quarter, we have
made significant progress in the development of product enhancements that will
make complete financial reports of U.S. publicly-traded companies available in
eXtensible Business Reporting Language (XBRL)."
During the third quarter of 2004, gross margins increased slightly to 86%
from 85% for the same quarter last year and the prior quarter. EDGAR Online
expects gross margins to be in a range from 85% to 87% as the Company continues
to expand its sales and marketing efforts that drive acquisition and retention.
Operating loss was ($736,000), or ($0.03) per share, for the third quarter
of 2004, compared to operating loss of ($492,000), or ($0.03) per share, for the
same quarter last year. Net loss for the third quarter of 2004 was ($720,000),
or ($0.03) per share compared to a net loss of ($519,000), or ($0.03) per share,
in the same period a year ago.
Revenues for the nine months ended September 30, 2004 were $9.6 million
compared to $11.1 million last year. Prior year results included $2.5 million of
technical services revenue. Net loss was ($2.4 million) or ($0.12) per share for
the nine months ended September 30, 2004 compared to a net loss of ($1.6
million), or ($0.10) per share in the same period a year ago.
At September 30, 2004, cash totaled $5.1 million compared to $3.9 million
at December 31, 2003. During the year, the Company received net proceeds of $4.2
million related to its completed secondary offering and made a final payment of
$1.9 million in promissory notes. Cash used in operations for the nine months
ended September 30, 2004 was $832,000. The Company has no debt other than normal
operating payables and accrued expenses.
KEY FINANCIAL METRICS
(in thousands, except per share amounts)
Quarters Ended Nine Months Ended
3Q'04 3Q'03 3Q'04 3Q'03
----- ----- ----- -----
Seat-based Subscriptions $1,775 $1,502 $5,095 $4,410
Data Sales 1,145 1,169 3,402 3,662
Technical Services 204 423 617 2,458
Advertising and E-commerce 113 207 506 601
------ ------ ------ -------
Total Revenues $3,237 $3,301 $9,620 $11,131
Net Loss $(720) $(519) $(2,363) $(1,612)
Interest (Income)/Expense, net (16) 27 (23) 104
------ ------ ------ -------
Operating Loss $(736) $(492) $(2,386) $(1,508)
Amortization and Depreciation 556 620 1,744 1,907
------ ------ ------ -------
EBITDA $(180) $128 $(642) $399
Net Loss per share $(0.03) $(0.03) $(0.12) $(0.10)
EBITDA per share $(0.01) $ 0.01 $(0.03) $0.02
In addition to disclosing financial results prepared in accordance with
GAAP, the Company discloses information regarding EBITDA. EBITDA is a non-GAAP
financial measure defined as earnings before interest, taxes, depreciation and
amortization. The Securities and Exchange Commission ("SEC") has adopted new
rules concerning the use of non-GAAP financial measures. As required by the SEC,
the Company provides the above reconciliation to net income (loss), which is the
most directly comparable GAAP measure. The Company presents EBITDA as it is a
common alternative measure of performance that is used by management as well as
investors when analyzing the financial position and operating performance of the
Company. As EBITDA is a non-GAAP financial measure, it should not be considered
in isolation or as a substitute for net loss or any other GAAP measure. Because
all companies do not calculate EBITDA in the same manner, the Company's
definition of EBITDA may not be consistent with that of other companies.
Third Quarter Conference Call Reminder
EDGAR Online will hold its quarterly conference call to review its results
for the third quarter ended September 30, 2004 today, Monday, November 1st,
2004, at 5:00 p.m. Eastern Standard Time. Susan Strausberg, President and CEO,
and Greg D. Adams, CFO and COO, will host the call. To participate, please call:
Domestic: 1-800-404-1354, International: 1-706-643-0825. Investors also have the
option of calling 800-642-1687 (Domestic) or 706-645-9291 (International),
conference ID 1528104, for the teleconference replay, which will be available
for approximately one week beginning at 7:00 p.m. Eastern Standard Time November
1st, 2004. The call will also be broadcast simultaneously over the Internet at
http://www.edgar-online.com/investor.
About EDGAR(R) Online(R), Inc.
EDGAR Online, Inc. (http://www.edgar-online.com) is a leading provider of
value-added global business and financial information. The company makes
financial information and a variety of analysis tools available via online
subscriptions and licensing agreements to professionals in financial
institutions, corporations and law firms.
"Forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995 may be included in this news release. These
statements relate to future events and/or our future financial performance.
These statements are only predictions and may differ materially from actual
future events or results. EDGAR Online, Inc. disclaims any intention or
obligation to revise any forward-looking statements whether as a result of new
information, future developments or otherwise. Please refer to the documents
filed by EDGAR Online, Inc. with the Securities and Exchange Commission, which
identify important risk factors that could cause actual results to differ from
those contained in forward-looking statements, including, but not limited to
risks associated with our ability to (i) increase revenues, (ii) obtain
profitability, (iii) obtain additional financing, (iv) changes in general
economic and business conditions (including in the online business and financial
information industry), (v) actions of our competitors, (vi) the extent to which
we are able to develop new services and markets for our services, (vii) risks in
connection with acquisitions, (viii) the time and expense involved in such
development activities, (ix) the level of demand and market acceptance of our
services and (x) changes in our business strategies.
EDGAR(R) is a federally registered trademark of the U.S. Securities and
Exchange Commission. EDGAR Online is not affiliated with or approved by the U.S.
Securities and Exchange Commission.
EDGAR Online, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
(unaudited) (unaudited)
2004 2003 2004 2003
------- ------- ------- -------
Revenues:
Seat-based subscriptions $1,775 $1,502 $5,095 $4,410
Data sales 1,145 1,169 3,402 3,662
Technical services 204 423 617 2,458
Advertising and e-commerce 113 207 506 601
------- ------- ------- -------
Total revenues 3,237 3,301 9,620 11,131
Total cost of sales 450 510 1,419 1,561
------- ------- ------- -------
Gross profit 2,787 2,791 8,201 9,570
Sales and marketing 632 529 1,876 1,625
Product development 369 388 1,135 1,316
General and administrative 1,966 1,746 5,832 5,446
Restructuring and severance
charges - - - 784
Amortization and depreciation 556 620 1,744 1,907
------- ------- ------- -------
Total operating expenses 3,523 3,283 10,587 11,078
Operating loss (736) (492) (2,386) (1,508)
Interest income/(expense), net 16 (27) 23 (104)
------- ------- ------- -------
Net loss $(720) $(519) $(2,363) $(1,612)
======= ======= ======= =======
Weighted average shares
outstanding - basic and
diluted 22,442 16,915 19,528 16,966
Net loss per share - basic and
diluted $(0.03) $(0.03) $(0.12) $(0.10)
EDGAR Online, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2004 2003
(unaudited) ----
-----------
Assets
Cash $5,056 $3,860
Accounts receivable, net 2,235 1,430
Other assets 294 439
------------- ------------
Total current assets 7,585 5,729
Property and equipment, net 1,213 1,477
Goodwill 2,189 2,189
Intangible assets, net 8,247 9,465
Other assets 379 285
------------- ------------
Total assets $19,613 $19,145
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $958 $1,061
Deferred revenues 2,752 2,040
Notes payable and accrued interest - 1,926
------------- ------------
Total current liabilities 3,710 5,027
Other long term payables 61 103
------------- ------------
Total liabilities 3,771 5,130
Stockholders' equity:
Common stock 226 172
Treasury stock (332) (332)
Additional paid-in capital 62,455 58,319
Accumulated deficit (46,507) (44,144)
------------- ------------
Total stockholders' equity 15,842 14,015
Total liabilities and stockholders'
equity $19,613 $19,145
CONTACT: EDGAR Online, Inc.
Greg Adams, 203-852-5666
gadams@edgar-online.com