Business Editors
NEW YORK--(BUSINESS WIRE)--Nov. 8, 2000
NetCreations, Inc. (Nasdaq:NTCR), the leading provider of 100% Opt-In(R) email marketing services, today reported results for its third quarter and nine months ended September 30, 2000.
For the quarter, net revenues were $14.2 million, a 187.7% increase over third quarter 1999 net revenues of $4.9 million. Operating income was $565,567, compared to $1.4 million reported in the third quarter of 1999. Net income for the third quarter was $576,347, or $0.04 per diluted share, compared to $1.3 million, or $0.11 per diluted share in the third quarter of 1999. Third quarter net revenues and net income were in line with previously announced expectations. The diluted weighted average common shares outstanding for the quarter were 15,675,463, compared to 11,700,000 in the prior year's quarter.
For the nine months ended September 30, 2000, net revenues increased 339.4% to $44.8 million, compared to $10.2 million in the first nine months of 1999. Operating income increased 130.8% to $6.7 million from $2.9 million reported for the same period a year ago. Net income increased 71.7% to $4.5 million, or $0.28 per diluted share, compared to $2.6 million, or $0.22 per diluted share in the comparable year ago period. The diluted weighted average common shares outstanding for the nine months were 15,754,871, compared to 11,700,000 in the prior year's comparable period.
Ms. Rosalind Resnick, Chief Executive Officer of NetCreations commented, "Throughout the third quarter, we increased our database of 100% Opt-in(R) e-mail addresses to 15.7 million e-mail addresses, averaging 55,000 net new e-mail addresses per day, compared to 30,000 e-mail addresses per day on average during the second quarter. In conjunction with the sharp increase, we successfully delivered over 101 million messages on behalf of our customers."
Ms. Resnick concluded, "Like other companies in our sector, NetCreations was adversely affected by the slowdown in demand for Internet advertising and marketing services by e-commerce companies and other dot-com customers. During the quarter, we initiated plans to diversify our cost-per-thousand (CPM) based email marketing business through the addition of cost-per-click (CPC) and cost-per-action (CPA) products that allow marketers to work with us on a results-only basis. However, in light of mounting financial pressures on our dot-com customers, we expect marketplace challenges to continue to affect our financial results in the fourth quarter and into next year."
About NetCreations
NetCreations, Inc. (Nasdaq:NTCR), the leader in 100% Opt-In(R) email marketing services, specializes in email address list management, brokerage and delivery. Through its PostMasterDirect.com service, NetCreations has conducted marketing campaigns on behalf of over 2,000 direct marketing clients to targeted consumers in its database of over 18 million 100% Opt-In(R) email addresses. These addresses belong to Internet users who have requested promotional information related to specific topics of interest (opt in) and confirmed their request (double opt in). NetCreations manages opt-in email lists for more than 380 third-party Web sites including CNET, Uproar, About.com, Network Solutions, internet.com, CBS Sportsline, CDROM Guide and LuckySurf.com. NetCreations protects the privacy of consumers on the Internet by not disclosing email addresses or any other personally identifiable information to direct marketers.
Note to Editors: NetCreations, PostMaster and 100% Opt-In are registered trademarks of NetCreations, Inc. NetCreations has filed applications to register POSTMASTERDIRECT.COM. Other company and product names herein may be trademarks of their respective owners. For more information on NetCreations, visit http://www/netcreations.com.
This release contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, reliance on key strategic alliances, fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
NETCREATIONS, INC. STATEMENTS OF OPERATIONS For the Quarters and Nine Months Ended September 30, 2000 and 1999 (Unaudited) Nine Months Ended Three Months Ended September 30, September 30, 2000 1999 2000 1999 ---- ---- ---- ---- ------------ ------ ------ -------- Net revenues $ 44,826,776 $ 10,202,614 $ 14,184,293 $ 4,930,020 Cost of revenues 26,761,005 4,961,667 9,536,907 2,383,700 ------------- ------------ ------------ ---------- Gross profit 18,065,771 5,240,947 4,647,386 2,546,320 Operating expenses Selling and marketing 4,305,966 1,118,883 1,363,586 516,923 Technology, support and development 1,351,687 339,515 519,766 147,710 General and administrative 4,681,708 789,148 1,803,990 424,259 Depreciation and amortization 1,001,383 79,756 394,477 34,605 ------------- ------------ ------------ ---------- Total operating expenses 11,340,744 2,327,302 4,081,819 1,123,497 ------------- ------------ ------------ ---------- Operating income 6,725,027 2,913,645 565,567 1,422,823 Interest income 1,647,651 -- 553,647 -- Interest expense 10,881 13,721 3,463 6,106 ------------- ------------ ------------ ---------- Interest - net 1,636,770 (13,721) 550,184 (6,106) Income before income tax provision 8,361,797 2,899,924 1,115,751 1,416,717 Income tax provision 3,900,679 302,355 539,404 144,355 ------------- ------------ ------------ ---------- NET INCOME $ 4,461,118 $ 2,597,569 $ 576,347 $ 1,272,362 ============= ============ ============ ========== Net income per common share Basic $ 0.29 $ 0.22 $ 0.04 $ 0.11 Diluted $ 0.28 $ 0.22 $ 0.04 $ 0.11 Weighted average common shares outstanding For basic net income per share 15,496,142 11,700,000 15,498,429 11,700,000 For dilutive net income per share 15,754,871 11,700,000 15,675,463 11,700,000 Pro forma data Historical Income before income taxes $ 8,361,797 $ 2,899,924 $ 1,115,751 $ 1,416,717 Pro forma income tax provision 3,900,679 1,342,000 539,404 665,000 ------------- ------------ ------------ ---------- Pro forma net income $ 4,461,118 $ 1,557,924 $ 576,347 $ 751.717 ============= ============ ============ ========== Pro forma net income per common share Basic $ 0.29 $ 0.13 $ 0.04 $ 0.06 Diluted $ 0.28 $ 0.13 $ 0.04 $ 0.06 Pro forma weighted average common shares outstanding For basic net income per share 15,496,142 11,700,000 15,498,429 11,700,000 For dilutive net income per share 15,754,871 11,700,000 15,675,463 11,700,000 NETCREATIONS, INC. BALANCE SHEETS As of September 30, 2000 and December 31, 1999 September 30, December 31, 2000 1999 (a) (Unaudited) ------------- ------------ ASSETS Current assets Cash and cash equivalents $30,217,424 $41,305,814 Accounts receivable - net 9,072,934 5,636,967 Prepaid commissions 6,899,117 3,000,000 Other current assets 705,279 132,395 ----------- ----------- Total current assets 46,894,754 50,075,176 Equipment - net 3,763,912 2,268,225 Deferred income taxes 1,150,821 -- Email address lists 6,320,571 -- Other assets 99,012 48,014 ----------- ----------- Total assets $58,229,070 $52,391,415 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 1,662,392 $ 2,765,301 Commissions payable 5,899,696 3,696,466 Current portion of capital lease obligations 101,655 112,350 Income taxes payable 77,989 325,552 Deferred income taxes -- 128,500 ----------- ----------- Total current liabilities 7,741,732 7,028,169 Capital lease obligations 73,419 101,225 ----------- ----------- Total liabilities 7,815,151 7,129,394 Total stockholders' equity 50,413,919 45,262,021 ----------- ----------- Total liabilities and stockholders' equity $58,229,070 $52,391,415 =========== ============
(a) Information derived from audited financial statements
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