Audible, Inc. Reports 93% Consumer Content Revenue Increase over First Quarter 2002
WAYNE, N.J.--May 12, 2003--11% Content Revenue Growth Over Fourth Quarter 2002 with Lower Use
of Cash, Expenses, and 46% Decrease In Net Loss Over Fourth Quarter
2002
Audible, Inc. (OTC BB: ADBL), the leading provider of downloadable spoken word audio that informs and entertains anywhere and at any time with audio editions of books, newspapers, magazines, radio programs and original shows, announced results for the quarter ended March 31, 2003.
Senior management will host an investor teleconference at 5:00 p.m. EDT Monday, May 12, 2003 to discuss these results and the company outlook. Details for the teleconference and webcast are provided below.
During the first quarter of 2003, Audible.com's(R) consumer content revenue increased 11% over the fourth quarter 2002 to $3,887,585 and increased 93% from the first quarter 2002. Net loss per common share for the quarter was ($0.07). Net cash used during the quarter was $765,000, a 10% decrease from the previous quarter. Audible's cash and cash equivalents totaled $2 million at March 31, 2003.
"During the first quarter, Audible continued to achieve steady sequential growth with steadily decreasing operating expenses," observed Donald Katz, Chairman and CEO, Audible, Inc. "Our cost of acquiring customers decreased by 10% over the previous quarter. Meanwhile, we advanced our strategy of increasing distribution and awareness of the Audible service - recently named the "best consumer Web service" by CNET - with new or enhanced marketing and product integration efforts with Apple, Gateway, Palm and other partners."
Recent highlights include:
| -- | Growth to over 229,000 customers, an increase of 60% from Q1 2002. |
| -- | Marketing and promotional partnerships were launched with broadband providers RoadRunner and Grande Communications. |
| -- | Gateway announced that it would begin selling the Audible.com Otis and AudibleListener(TM) content memberships from all Gateway stores, its Web site and call centers. |
| -- | Palm Inc. launched the Zire 71 and Tungsten C AudibleReady(R) handhelds. |
| -- | Audible received extensive media coverage from The Wall Street Journal, San Jose Mercury News, The Sunday Times of London, Indianapolis Star, PC World magazine, Tech Edge magazine, Library Journal, and more; was named "Best Consumer Web Service" by CNet.com. |
A live webcast of the financial results conference call is available on Monday, May 12, 2003 at 5:00 p.m. EDT (2:00 p.m. PDT). Please click on www.audible.com/ir for online access to the call.
About Audible.com:
Audible.com, recently named the "Best Consumer Web Service" by CNet.com (April 2003), and one of the "Best of Today's Web" by PC World (August 2002) features daily audio editions of The Wall Street Journal and The New York Times -- available on a subscription basis in time for the morning drive to work each day--as well as Forbes, Harvard Business Review, Scientific American and Fast Company. The site offers a powerful collection of audiobook best sellers and classics by authors such as Tom Clancy, Stephen King, John Grisham, Mary Higgins Clark, James Patterson, the Dalai Lama, David McCullough, Stephen Hawking, William Shakespeare, Emily Dickinson and Jane Austen. There are also speeches, lectures, and on-demand radio programs including Marketplace, All Things Considered, Car Talk, Fresh Air and This American Life, and original shows such as RobinWilliams@audible.com. All of the programs at audible.com are available for computer-based playback, burning to audio CD, and on-the-go listening using numerous AudibleReady(TM) portable digital audio players offered by leading consumer electronics and computer manufacturers.
About Audible, Inc.:
Audible(R) (www.audible.com(R)) is the Internet's largest, most diverse provider of premium spoken audio services for content download and playback on personal computers, CD or AudibleReady(R) computer-based mobile devices. Audible has more than 34,000 hours of audio programs and 135 content partners that include leading audiobook publishers, broadcasters, entertainers, magazine and newspaper publishers and business information providers. Audible.com is Amazon.com's (www.amazon.com) exclusive provider of spoken word products for downloading or streaming via the Web. Additionally, the Company is strategically aligned with Random House, Inc., to pioneer the first-ever imprint to produce spoken word content specifically suited for digital distribution, Random House Audible. Among the Company's key business partners are Apple Corp., Card Access Inc., Casio Inc., Compaq Computer Corporation, Handspring, Hewlett-Packard Company, Microsoft Corporation, RealNetworks, Inc., SONICblue Incorporated's Rio Audio Group, Sony Electronics, Texas Instruments and VoiceAge Corp.
Audible, www.audible.com, AudibleManager and AudibleReady are registered trademarks of Audible, Inc.; Otis and AudibleListener are trademarks of Audible, Inc. and all are part of the family of Audible, Inc. trademarks.
Other product or service names mentioned herein are the trademarks of their respective owners.
AUDIBLE INC.
COMPARATIVE STATEMENT OF OPERATIONS
Three months ended
--------------------------
March 31, December 31,
------------ ------------
2003 2002
------------ ------------
(unaudited) (unaudited)
Revenue, net:
Consumer content $ 3,887,585 $ 3,497,801
Services 28,096 47,874
Hardware 177,215 196,908
Other 16,126 49,106
------------ ------------
Total revenue, net 4,109,022 3,791,689
------------ ------------
Operating expenses:
Cost of content and services revenue 984,803 1,374,005
Cost of hardware revenue 548,304 664,346
Production expenses 939,923 935,706
Development 609,432 492,563
Sales and marketing 1,884,613 3,202,800
General and administrative 945,620 796,994
------------ ------------
Total operating expenses 5,912,695 7,466,414
------------ ------------
Loss from operations (1,803,673) (3,674,725)
Other income, net 5,915 8,759
------------ ------------
Loss before state income tax benefit (1,797,758) (3,665,966)
State income tax benefit 0 313,580
------------ ------------
Net loss (1,797,758) (3,352,386)
Accrued dividends on redeemable convertible
preferred stock (363,649) (350,778)
------------ ------------
Net loss applicable to common shareholders ($2,161,407) ($3,703,164)
============ ============
Basic and diluted net loss per common share $ (0.07)$ (0.12)
============ ============
Weighted average common shares outstanding 30,988,644 30,969,079
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AUDIBLE INC.
CONDENSED STATEMENT OF OPERATIONS
Three months ended
March 31,
-------------------------
2003 2002
------------ ------------
(unaudited)
Revenue, net:
Consumer content $ 3,887,585 $ 2,010,971
Services 28,096 174,694
Hardware 177,215 345,947
Other 16,126 16,126
------------ ------------
Total revenue, net 4,109,022 2,547,738
------------ ------------
Operating Expenses:
Cost of content and services revenue 984,803 967,928
Cost of hardware revenue 548,304 663,928
Production expenses 939,923 1,028,818
Development 609,432 521,523
Sales and marketing 1,884,613 3,039,994
General and administrative 945,620 951,393
------------ ------------
Total operating expenses 5,912,695 7,173,584
------------ ------------
Loss from operations (1,803,673) (4,625,846)
Other income, net 5,915 29,806
------------ ------------
Net loss (1,797,758) (4,596,040)
Accrued dividends on redeemable convertible
preferred stock (363,649) (326,945)
------------ ------------
Net loss applicable to common shareholders ($2,161,407) ($4,922,985)
============ ============
Basic and diluted net loss per common share $ (0.07)$ (0.17)
============ ============
Weighted average common shares outstanding 30,988,644 29,140,383
============ ============
AUDIBLE INC.
CONDENSED BALANCE SHEETS
March 31, December 31,
Assets 2003 2002
------------ ------------
(unaudited)
Current Assets
Cash and cash equivalents $ 2,056,861 $ 2,822,080
Accounts receivable, net of allowance 240,830 189,263
Royalty advances 186,166 58,425
Prepaid expenses and other current assets 611,337 736,823
Inventory 217,505 77,262
------------ ------------
Total current assets 3,312,699 3,883,853
Property and equipment, net 443,477 633,400
Other assets 90,805 90,805
------------ ------------
Total Assets $ 3,846,981 $ 4,608,058
============ ============
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable $ 1,206,351 $ 1,077,509
Accrued expenses and compensation 3,287,197 3,231,893
Royalty obligations, current 565,000 598,500
Advances, current 447,193 476,053
Accrued dividends on redeemable convertible
preferred stock 488,906 125,257
------------ ------------
Total current liabilities 5,994,647 5,509,212
Deferred cash compensation 58,750 90,550
Royalty obligations, non current 97,500 25,000
Advances, non current 4,865 19,448
Redeemable convertible preferred stock:
Series A 12,289,976 12,289,976
Stockholders' Deficit
Convertible preferred stock: Series B 1,137,500 1,137,500
Common stock 316,779 316,779
Additional paid-in capital 98,201,098 98,033,060
Deferred compensation and services (101,210) (591,155)
Notes due from stockholders for common stock (58,750) (289,545)
Treasury stock at cost (184,740) (184,740)
Accumulated deficit (113,909,434)(111,748,027)
------------ ------------
Total Stockholders' Deficit (14,598,757) (13,326,128)
------------ ------------
Total Liabilities and Stockholders' Deficit $ 3,846,981 $ 4,608,058
============ ============
AUDIBLE INC.
CONDENSED STATEMENTS OF CASH FLOWS
Three months ended
March 31,
-------------------------
2003 2002
------------ ------------
(unaudited)
Cash flows from operating activities:
Net loss $ (1,797,758)$ (4,596,040)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 212,541 432,837
Services rendered for common stock and
warrants 584,705 1,529,772
Non-cash compensation charge 73,278 73,278
Non-cash forgiveness of notes due from
stockholders for common stock 198,995 -
Changes in assets and liabilities:
Interest receivable on short term
investments - (602)
Accounts receivable, net (51,567) 15,432
Royalty advances (127,741) 26,043
Prepaid expenses and other current
assets 125,486 70,828
Inventory (140,243) 277,801
Accounts payable 128,842 (6,604)
Accrued expenses and compensation 55,304 203,114
Royalty obligations 39,000 (148,750)
Advances (43,443) (174,833)
------------ ------------
Net cash used in operating
activities (742,601) (2,297,724)
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (22,618) (7,195)
------------ ------------
Net cash used in investing
activities (22,618) (7,195)
------------ ------------
Cash flows from financing activities:
Proceeds from sale of common stock, net - 3,159,250
Proceeds from exercise of common stock
options - 5,556
------------ ------------
Net cash provided by financing
activities - 3,164,806
------------ ------------
(Decrease) increase in cash and
cash equivalents (765,219) 859,887
Cash and cash equivalents at beginning of
period 2,822,080 7,627,802
------------ ------------
Cash and cash equivalents at end of period $ 2,056,861 $ 8,487,689
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