Navidec Reports Q1 Losses Up 700%
4 May 2000
GREENWOOD VILLAGE, Colo. - Navidec, Inc. reported that consolidated revenues
for the first quarter rose 47% to $6.6 million, compared to $4.5 million in the
prior year period. Consolidated gross margin for the first quarter was $3.1
million, compared to a gross margin of $1.7 million in the 1999 quarter.
Net loss equaled ($6.1) million, or ($0.56) per diluted share for the 2000
quarter, compared to a net loss of ($0.8) million, or ($0.14) per diluted share
in 1999. Revenue for the first quarter from E-Solutions, Navidec's core
operating division, rose 94% to $6.0 million, compared to $3.1 million in the
prior year period. E-Solutions' gross margin for the first quarter increased
211% to $2.8 million, compared to a gross margin of $0.9 million in the 1999
quarter.
Ralph Armijo, President and CEO, commented on the results, "We are
extremely pleased that results for the first quarter of 2000 are on-track and
believe that this is indicative of our ability to generate another year of
record financial and operational performance. The addition of 17 new clients,
as well as 20 projects completed for existing clients reflects continued
market acceptance of our transformational E-Solutions application portfolio.
Of particular importance in our expansion strategy was the breadth of our new
client relationships, ranging from our traditional base of Fortune 1000 firms
to leading middle market and international firms. In addition, we continued
to realize the benefit of our strategic operating model, generating new
revenue opportunities from our existing capabilities, as with our joint
venture with Avis Europe, and are starting to realize the benefits of our
expanding national presence through 10 regional offices. In all, we are
greatly encouraged by the start to 2000 and anticipate translating the
substantial market opportunity into significant value for our shareholders."
E -Solutions Division
Navidec's core operating division, E-Solutions, generated revenues of
$6.0 million, 94% greater than the $3.1 million reported in the first quarter
of 1999. Navidec continued to execute on its strategic goal of moving clients
higher up the E-business transformation curve, generating both more projects
per relationship and an average increased engagement size. Total projects for
the first quarter rose by 145% to 49, while the average engagement size grew
to $300,000. Gross profit climbed by 211% to $2.8 million for the quarter,
while the gross margin improved to 46.6%, compared to 42.0% in the fourth
quarter of 1999 and 30.7% in the first quarter of last year.
Commenting on the results from E-Solutions, Armijo stated, "Our core
operating division continued to capitalize on the tremendous demand for
corporate Internet solutions and applications. Our clients require innovative
Internet applications that integrate their current operations fully into the
Internet, allowing them to fully realize the benefits available from today's
Internet environment. Through a combination of rapid turnaround times, a
unique mix of creative and technical capabilities and a proven portfolio of
effective solutions, we have developed a strong market reputation for meeting
these needs."
First quarter metrics for the E-Solutions Division include:
-- The addition of 21 new billable consultants from December 31, 1999,
reaching 119 total billable head count.
-- 17 new client relationships, and work done for 37 clients during the
first quarter
-- An average consultant utilization rate of 80% during the quarter
-- Total projects climbed to 49, a 145% increase
-- Average size of engagement increased to $300,000
-- Average revenue per billable employee increased to $257,000, up 10.3%
from the 1999 average of $233,000
Operational highlights include:
-- A major launch into the European market through a joint venture with
Avis Europe to sell used cars via the Internet
-- Continued to deepen senior management ranks through the addition of
several key officers during the quarter, specifically marketing and
sales
-- The opening of sales and customer support offices in Chicago, Austin
and Atlanta
Incubations
The Company's current incubations continue to progress in their
developments, with Driveoff.com and Journeylink.com entering into full market
service. As previously disclosed, Navidec is on track to realize the value in
Driveoff.com prior to the end of the fiscal year through a financial and/or
strategic transaction. During the first quarter, incubated operations
contributed $0.3 million of revenue to the E-Solutions Division.
Driveoff.com reported total revenue of $250,000, approximately 150% above
analysts' expectations for the quarter and 64.6% below revenue from the
Company's previous lead based auto solutions operations. Exceeding Company
expectations, the revenue from Driveoff.com reflects its success in
transitioning to the next generation vehicle sales model.
Armijo commented, "During the first quarter, Driveoff.com achieved a
number of notable successes, including the addition of the 2000th auto dealer
to its network and the introduction of Driveoff.com's affiliate program. As a
result of the transition to a comprehensive direct auto sales model, we
curtailed our customer referral operations, negatively impacting auto
solutions revenue when compared to the first quarter of 1999. We believe,
however, that as Driveoff.com continues to capitalize on its position as the
most advanced and user-friendly auto sales solution, sales from its direct
operations and affiliate programs will drive strong revenue growth."
Key metrics for Driveoff.com during the first quarter include:
-- Total member dealers rose to over 2000, a 122% increase over the year
end 1999 figure
-- Introduction of the affiliate program, designed to drive sales and
revenue growth while minimizing marketing expenses
-- 64.4% of closed transactions used Driveoff.com financing
-- Increased presence from 10 markets to 39 markets, representing 75% of
the U.S. population and 80% of new U.S. car sales
-- Closed 31.5% of approved applications
Quarter Ended
March 31,
2000 1999
Revenue $6,557,000 $4,458,000
COGS 3,423,000 2,769,000
Gross Profit 3,134,000 1,689,000
Operating Expense 8,719,000 2,331,000
EBITA (5,585,000) (642,000)
Depreciation/Amortization Expense 796,000 126,000
Other Income (Expenses) 243,000 5,000
Net Income $(6,138,000) $(762,000)
Net Loss Per Share ($0.56) ($0.14)
Weighted Average Common Shares and
Equivalents Outstanding 10,948,000 5,497,000