viaLink Reports Third Quarter Results; Subscription Revenues up 31 Percent, Operating Loss Cut in Half
DALLAS--Oct. 3, 20030, 2003--The viaLink Company (OTCBB:VLNK), the leading provider of synchronization and scan based trading services to the retail supply chain today reported results for the third quarter ended September 30, 2003.Subscription revenue in the third quarter was $970,000, representing a 31% increase over the third quarter of 2002 and a 17% increase over the second quarter of 2003. This represents a new record for quarterly subscription revenue for the company. Total revenue for the quarter was $1,125,000, up slightly from the total revenue in the third quarter of 2002, and increasing 18% over the second quarter of 2003.
Total operating expenses in third quarter were $2.6 million including $250,000 in charges recorded for expense reductions made during the quarter. Operating expenses decreased from the levels recorded in the previous two quarters and are substantially lower than the operating expenses of $4.1 million in the third quarter of 2002. The company reported a net loss and net loss applicable to common stock for the third quarter of $2.9 million, or $0.02 per share, which includes $1.4 million of non-cash interest expense on notes payable. The loss from operations for the third quarter decreased to less than $1.5 million as compared to over $3.0 million for the third quarter of 2002 and $2.0 million for the second quarter of this year. Cash used in operating activities decreased to less than $1.4 million during the third quarter as compared to over $2.1 million used in the prior year third quarter and $1.7 million in the second quarter of this year.
"During the quarter we successfully reduced our operating expenses and we have been operating at these levels since August. We were able to reduce our loss before interest, taxes, depreciation and amortization to less than $1.25 million for the quarter, even including the $250,000 charge taken related to the expense reductions---this is a major milestone," said Brian Carter, CFO of viaLink. "We expect to report continued improvements in our operating results for the fourth quarter, including growth in our subscription revenues and continued reductions in our expenses and operating loss."
"The third quarter was exceptional for us in many ways," said Bob Noe, CEO of viaLink. "Our contract growth was solid in our Consumer Packaged Goods (CPG) and Retail business driven by our retailer customer's efforts to expand their trading communities; our automotive aftermarket Pay-On-Scan program now has several suppliers in production or various stages of implementation with Auto Zone; and we have doubled the number of customers for our UCCnet Agency services in each of the last 3 quarters.
"Our actions are based upon a deliberate and focused plan to become self-sufficient from a cash standpoint." added Noe. "The results in the third quarter are highlighted by growth from each of our key revenue sources and operating expenses at the lowest levels in the Company's recent history. We believe that these results represent measurable progress towards this objective."
Highlights for the third quarter include:
-- New retailer signings: Hy-Vee with its 218 stores in the
Midwestern region of the country signed an agreement to use
the full breadth of viaLink's services.
-- Supplier customer growth: The company added a number of new
supplier customers or expanded services with existing
customers during the quarter, including Jelly Belly Candy
Company, Rug Doctor, Select a Vision, National Dairy Holdings,
Dairy Fresh Farms, Bob Evans, and Champion Brands.
-- New UCCnet services clients: the company doubled the number of
clients for our UCCnet services including Tree of Life, Water
Pik, and Ashland, Inc. viaLink is a leader in helping
accelerate industry adoption of the standards for registering
data with UCCnet and publishing data to trading partners from
the registry.
-- Growth of advanced commerce services: the use of viaLink's
sbtLink scan based trading and viaLink Invoicing services
continued to grow in the third quarter. The number of
store-supplier connections using the services grew from 4,866
to 19,274 between June and September 2003.
The company's chief executive officer, Bob Noe, and chief financial officer, Brian Carter, will host an investor conference call today at 4:30 p.m. Eastern Standard Time, to review the company's results. The call will be broadcast live over the Internet and can be accessed by visiting www.vialink.com. For those who are not able to listen to the live broadcast, the conference call will be archived for 30 days and accessed through www.vialink.com.
The viaLink Company (OTCBB:VLNK) provides standards-compliant advanced Internet-based services to the retail supply chain. We help progressive manufacturers, suppliers, distributors, brokers/agents, and retailers improve the profitability of their trading relationships, increase sales and serve their customers more effectively. For more information about viaLink's data synchronization, scan based trading, supply chain visibility and UCCnet registry and publication solutions, call (972) 934-5500 or visit viaLink's website: www.vialink.com.
This release contains forward-looking statements that involve risks and uncertainties. The viaLink Company resembles a development stage company, which has commenced its planned operations but is only beginning to generate significant revenue. Risk factors affecting our business have been detailed in viaLink's filings with the Securities and Exchange Commission.
The viaLink Company
Condensed Consolidated Statements of Operations
(UNAUDITED)
For the Three Months Ended
September 30,
2003 2002
--------------- ---------------
Revenues $1,125,183 $1,114,951
Customer operations 1,003,186 1,147,181
Development 393,890 543,230
Selling and marketing 348,833 593,289
General and administrative 736,732 1,572,640
Depreciation and amortization 130,103 289,014
--------------- -----------------
Total operating expenses 2,612,744 4,145,354
Loss from operations $(1,487,561) $(3,030,403)
Interest expense, net (1,427,192) -
Gain, extinguishment of debt - 1,628,817
--------------- -----------------
Net Loss $(2,914,753) $(1,401,586)
=============== =================
Dividends on Preferred Stock:
Warrants and beneficial
conversion feature - (6,388,934)
Stated dividends - (13,315)
--------------- -----------------
Net loss applicable to
common stock $(2,914,753) $(7,803,835)
=============== =================
Net loss, per common share:
Basic and diluted $(0.02) $(0.01)
Net loss applicable to common stock
per common share:
Basic and diluted $(0.02) $(0.08)
Weighted average shares
outstanding:
Basic and diluted 178,199,016 99,669,943
=============== =================
For the Nine Months Ended
September 30,
2003 2002
---- ----
Revenues $2,918,744 $3,179,124
Customer operations 3,072,265 4,030,384
Development 1,377,767 1,682,323
Selling and marketing 1,355,465 1,819,963
General and administrative 2,182,122 2,729,136
Depreciation and amortization 502,827 969,488
--------------- ------------------
Total operating expenses 8,490,446 11,231,294
Loss from operations $(5,571,702) $(8,052,170)
Interest expense, net (2,128,741) -
Gain, extinguishment of debt - 1,628,817
--------------- ------------------
Net Loss $(7,700,443) $(6,423,353)
=============== ==================
Dividends on Preferred Stock:
Warrants and beneficial
conversion feature (1,260,000) (9,599,655)
Stated dividends - (39,945)
--------------- ------------------
Net loss applicable to
common stock $(8,960,443) $(16,062,953)
=============== ==================
Net loss, per common share:
Basic and diluted $(0.04) $(0.08)
Net loss applicable to common stock
per common share:
Basic and diluted $(0.05) $(0.19)
Weighted average shares
outstanding:
Basic and diluted 174,190,624 84,672,567
=============== ==================
The viaLink Company
Condensed Consolidated Balance Sheets
As of September 30, 2003 and December 31, 2002
(UNAUDITED)
September 30, December 31,
2003 2002
--------------- ------------------
ASSETS
Cash and short-term investments $474,968 $561,617
Accounts receivable, net 827,186 965,158
Other current assets 58,676 156,503
--------------- ------------------
Total current assets 1,360,830 1,683,278
Other assets, net 340,240 1,253,665
--------------- ------------------
Total assets $1,701,070 $2,936,943
=============== ==================
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Accounts payable and other current
liabilities $972,053 $1,293,257
Deferred revenue 93,521 44,459
Notes payable, current net of discount 1,998,494 -
Capital lease liabilities 281,618 385,778
--------------- ------------------
Total liabilities 3,345,686 1,723,494
Common Stock 178,921 160,520
Series D Preferred Stock 10,094,850 9,584,850
Additional paid in capital 81,038,155 76,724,178
Accumulated deficit (92,956,542) (85,256,099)
--------------- ------------------
Stockholders' equity (deficit) (1,644,616) 1,213,449
--------------- ------------------
Total liabilities and stockholders'
equity (deficit) $1,701,070 $2,936,943
=============== ==================