Aptimus, Inc. Reports First Quarter 2001 Results

Apr 26, 2001, 01:00 ET from Aptimus, Inc.

    SEATTLE, April 26 /PRNewswire/ -- Aptimus, Inc. (Nasdaq:   APTM), a
 single-source online direct marketing network, today announced financial
 results for the first quarter ended March 31, 2001.
     "The first quarter of 2001 was one of significant transition for Aptimus
 as we adjusted our strategy to be positioned for the greatest long term
 opportunity given the changing business environment," said Tim Choate,
 Aptimus' President and CEO.  "During the quarter, we made significant strides
 toward shifting our business from a site-centric approach to a network model,
 which we feel holds the greatest promise for long term growth of our business
 and meeting the evolving needs of our clients."
     Aptimus reported revenues of $926,000 for Q1 2001.  Reported net loss for
 the quarter was $8.9 million, or $0.57 per share.  Pro forma operating losses
 for the first quarter were $5.8 million, or $0.37 per share.  Pro forma
 operating loss excludes equity-based compensation, amortization of acquisition
 costs and the one-time of costs relating to the restructuring.
     Aptimus ended the quarter with approximately $18.7 million in cash, cash
 equivalents and short-term investments.  The network-based model operates on a
 much smaller operating expense base than the company's former site-centric
 business, and therefore requires far less revenues to achieve profitability.
     During the quarter, due to its shift in strategy, Aptimus reduced its
 staffing from a high of 215 employees to 60 at the end of the quarter.  The
 company is also significantly reducing its marketing, technology, operations,
 and other expenses due to the new strategy.  "As a result of the first
 quarter's reductions, our core operating expenses for the second quarter,
 excluding revenue based fees to partners and commissions, are expected to be
 approximately 50% of those incurred in the first quarter," concluded John
 Wade, Chief Financial Officer.
     On the technology front, the company re-launched its Aptimus Network
 during the first quarter on the platform it acquired as part of its
 November 2000 acquisition of San Francisco-based XMarksTheSpot, Inc.  In
 addition, Aptimus signed an agreement to move its hosting and systems to
 LoudCloud, Inc., which is scheduled to occur during the second quarter.  With
 LoudCloud's outsourced services, the company will be positioned to rapidly
 scale volume without major infrastructure investments.  Aptimus is also
 developing a major platform upgrade, which is expected to launch early in the
 third quarter.  The upgrade is designed to enable broader creative options,
 easier new client implementation, and significantly more testing alternatives
 to improve the direct marketing performance of offers in the Aptimus Network.
     The Aptimus Network operates on a results-based pricing model focused
 around lead generation.  Targeting is based on actions and behavior or
 context, which is more powerful than profile driven targeting.  Thus, Aptimus
 presents targeted offers from marketers and is paid based on the response to
 those offers.  The Company feels that this is a more attractive pricing model
 to direct marketers than the cost per thousand pricing models offered by other
 major advertising networks.
     "On the client side of our network model," said Choate, "the company is
 focusing its energy on building new network-based relationships."  Many of the
 larger traditional direct marketers Aptimus is talking to move slowly and like
 to test smaller programs before rolling into larger ones.  "In spite of this
 fact," continued Choate, "we are making significant headway in growing our
 client base."  In total, Aptimus has signed 50 clients to be promoted via the
 Aptimus Network, including BMG Music Service, Gevalia Coffee, Expedia, and
 Omaha Steaks.  "Perhaps even more importantly, we are seeing major clients
 begin to expand their programs with us based on successful tests," added
 Choate.
     In addition, Aptimus just signed a new agreement with SynapseConnect,
 Inc., the online subsidiary of Synapse Group, Inc., one of the largest
 magazine agents in the world, to aggressively market a broad range of magazine
 titles and related offers through the Aptimus Network.
     "While we have a lot of work ahead of us and we feel short term results
 will continue to suffer given market challenges for both partners and clients,
 as well as the fact we are in the early stages of building our network model,
 we believe we are making progressive strides toward creating a powerful online
 direct marketing business over the coming year," concluded Choate.
 
     About Aptimus, Inc.
     Aptimus (formerly FreeShop.com Inc.) is seeking to create the most
 powerful online direct marketing network. We provide a single-source online
 solution for marketers to acquire new customers via online media.  The Aptimus
 Network presents consumers with relevant offers geared to their immediate
 interests, allowing marketers to reach consumers with the right offers when
 they are most likely to respond.  Our offer presentation serving technology
 platform enables us to promote offers contextually across the Internet.  Built
 on a technology platform that is flexible and scalable, the Aptimus Network
 can support millions of users and hundreds of marketers and Web site partners.
 Aptimus is headquartered in Seattle, and is publicly traded on Nasdaq under
 the symbol APTM.
     This press release contains statements that may constitute
 "forward-looking statements" within the meaning of the Securities Act of 1933
 and the Securities Exchange Act of 1934, as amended by the Private Securities
 Litigation Reform Act of 1995.  Such statements include comments regarding
 anticipated future operating expense levels, the expected results or success
 of particular programs or undertakings and the future rate of growth of
 Aptimus.  Prospective investors are cautioned that any such forward-looking
 statements are not guarantees of future performance and involve risks and
 uncertainties, and actual results may differ materially from those
 contemplated by such forward-looking statements.  Important factors currently
 known to management that could cause actual results to differ materially from
 those in forward-looking statements include, without limitation, fluctuation
 of the company's operating results, the ability to compete successfully, the
 ability of the company to maintain current client and distribution partner
 relationships and attract new ones, and the ability to integrate acquired
 companies. For additional factors that may cause actual results to differ
 materially from those contemplated by such forward-looking statements, please
 see the "Risk Factors" described in the company's Annual Report on Form 10-KA,
 dated April 11, 2001, and in other quarterly reports and filings on file with
 the SEC, which Risk Factors are incorporated herein as though fully set forth.
 The company undertakes no obligation to update or revise forward-looking
 statements to reflect changed assumptions, the occurrence of unanticipated
 events or changes to future operating results.
 
      John Wade
      Chief Financial Officer
      Aptimus, Inc.
      206-441-9100, ext. 170
      johnw@aptimus.com
 
 
                                   APTIMUS, INC.
 
                               STATEMENT OF OPERATION
                       (in thousands, except per share data)
                                    (unaudited)
                                                            Three months ended
                                                                March 31,
                                                            2000        2001
 
     Net Revenues                                          $5,147       $926
     Operating expenses
       Sales and marketing                                  7,511      3,989
       Internet and network connectivity                      412        656
       Research and development                               477        927
       General and administrative                             819        875
       Depreciation and amortization                          527        771
       Equity-based compensation                              251         39
       Restructuring costs                                             2,806
     Total operating expenses                               9,997     10,063
     Operating loss                                        (4,850)    (9,137)
       Interest expense                                         6         46
       Other (income) expense                                (681)      (325)
     Net loss                                             $(4,175)   $(8,858)
     Basic and diluted net loss per share                  $(0.27)    $(0.57)
     Weighted average shares used in computing
      net loss per share                                   15,544     15,498
 
     Pro-forma
     Net loss                                             $(4,175)   $(8,858)
     Add back certain non-cash charges:
       Amortization of acquired intangibles                   284        261
       Equity-based compensation                              251         39
       One-time costs related to restructuring                 --      2,806
     Supplemental net loss excluding certain
      non-cash charges                                    $(3,640)   $(5,752)
     Supplemental basic and diluted net loss per share     $(0.23)    $(0.37)
 
 
                                   APTIMUS, INC.
 
                                   BALANCE SHEET
                                   (in thousands)
                                    (unaudited)
                                                          Dec. 31,  March 31,
                                                            2000       2001
     ASSETS
     Cash and cash equivalents                            $12,854    $15,683
     Accounts receivable, net                               2,240      1,137
     Prepaid expenses and other assets                        646        788
     Short-term investments                                12,012      3,048
     Total current assets                                  27,752     20,656
     Fixed assets, net of accumulated depreciation          4,760      4,112
     Intangible assets, net                                 2,643      1,406
     Long-term investments                                    345        345
     Deposits                                                  32         32
                                                          $35,532    $26,551
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Accounts payable                                      $2,573     $1,618
     Accrued and other liabilities                          1,154      2,286
     Current portion of capital lease obligations             193        174
     Current portion of notes payable                         800        800
       Total current liabilities                            4,720      4,878
     Capital lease obligations, net of current portion        144        127
     Notes payable, net of current portion                    800        600
       Total liabilities                                    5,664      5,605
     Shareholders' equity
     Common stock, no par value                            65,874     65,771
     Additional paid-in capital                             2,518      2,282
     Deferred stock compensation                             (352)       (77)
     Accumulated deficit                                  (38,172)   (47,030)
     Total shareholders' equity                            29,868     20,946
                                                          $35,532    $26,551
 
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X98355467
 
 

SOURCE Aptimus, Inc.
    SEATTLE, April 26 /PRNewswire/ -- Aptimus, Inc. (Nasdaq:   APTM), a
 single-source online direct marketing network, today announced financial
 results for the first quarter ended March 31, 2001.
     "The first quarter of 2001 was one of significant transition for Aptimus
 as we adjusted our strategy to be positioned for the greatest long term
 opportunity given the changing business environment," said Tim Choate,
 Aptimus' President and CEO.  "During the quarter, we made significant strides
 toward shifting our business from a site-centric approach to a network model,
 which we feel holds the greatest promise for long term growth of our business
 and meeting the evolving needs of our clients."
     Aptimus reported revenues of $926,000 for Q1 2001.  Reported net loss for
 the quarter was $8.9 million, or $0.57 per share.  Pro forma operating losses
 for the first quarter were $5.8 million, or $0.37 per share.  Pro forma
 operating loss excludes equity-based compensation, amortization of acquisition
 costs and the one-time of costs relating to the restructuring.
     Aptimus ended the quarter with approximately $18.7 million in cash, cash
 equivalents and short-term investments.  The network-based model operates on a
 much smaller operating expense base than the company's former site-centric
 business, and therefore requires far less revenues to achieve profitability.
     During the quarter, due to its shift in strategy, Aptimus reduced its
 staffing from a high of 215 employees to 60 at the end of the quarter.  The
 company is also significantly reducing its marketing, technology, operations,
 and other expenses due to the new strategy.  "As a result of the first
 quarter's reductions, our core operating expenses for the second quarter,
 excluding revenue based fees to partners and commissions, are expected to be
 approximately 50% of those incurred in the first quarter," concluded John
 Wade, Chief Financial Officer.
     On the technology front, the company re-launched its Aptimus Network
 during the first quarter on the platform it acquired as part of its
 November 2000 acquisition of San Francisco-based XMarksTheSpot, Inc.  In
 addition, Aptimus signed an agreement to move its hosting and systems to
 LoudCloud, Inc., which is scheduled to occur during the second quarter.  With
 LoudCloud's outsourced services, the company will be positioned to rapidly
 scale volume without major infrastructure investments.  Aptimus is also
 developing a major platform upgrade, which is expected to launch early in the
 third quarter.  The upgrade is designed to enable broader creative options,
 easier new client implementation, and significantly more testing alternatives
 to improve the direct marketing performance of offers in the Aptimus Network.
     The Aptimus Network operates on a results-based pricing model focused
 around lead generation.  Targeting is based on actions and behavior or
 context, which is more powerful than profile driven targeting.  Thus, Aptimus
 presents targeted offers from marketers and is paid based on the response to
 those offers.  The Company feels that this is a more attractive pricing model
 to direct marketers than the cost per thousand pricing models offered by other
 major advertising networks.
     "On the client side of our network model," said Choate, "the company is
 focusing its energy on building new network-based relationships."  Many of the
 larger traditional direct marketers Aptimus is talking to move slowly and like
 to test smaller programs before rolling into larger ones.  "In spite of this
 fact," continued Choate, "we are making significant headway in growing our
 client base."  In total, Aptimus has signed 50 clients to be promoted via the
 Aptimus Network, including BMG Music Service, Gevalia Coffee, Expedia, and
 Omaha Steaks.  "Perhaps even more importantly, we are seeing major clients
 begin to expand their programs with us based on successful tests," added
 Choate.
     In addition, Aptimus just signed a new agreement with SynapseConnect,
 Inc., the online subsidiary of Synapse Group, Inc., one of the largest
 magazine agents in the world, to aggressively market a broad range of magazine
 titles and related offers through the Aptimus Network.
     "While we have a lot of work ahead of us and we feel short term results
 will continue to suffer given market challenges for both partners and clients,
 as well as the fact we are in the early stages of building our network model,
 we believe we are making progressive strides toward creating a powerful online
 direct marketing business over the coming year," concluded Choate.
 
     About Aptimus, Inc.
     Aptimus (formerly FreeShop.com Inc.) is seeking to create the most
 powerful online direct marketing network. We provide a single-source online
 solution for marketers to acquire new customers via online media.  The Aptimus
 Network presents consumers with relevant offers geared to their immediate
 interests, allowing marketers to reach consumers with the right offers when
 they are most likely to respond.  Our offer presentation serving technology
 platform enables us to promote offers contextually across the Internet.  Built
 on a technology platform that is flexible and scalable, the Aptimus Network
 can support millions of users and hundreds of marketers and Web site partners.
 Aptimus is headquartered in Seattle, and is publicly traded on Nasdaq under
 the symbol APTM.
     This press release contains statements that may constitute
 "forward-looking statements" within the meaning of the Securities Act of 1933
 and the Securities Exchange Act of 1934, as amended by the Private Securities
 Litigation Reform Act of 1995.  Such statements include comments regarding
 anticipated future operating expense levels, the expected results or success
 of particular programs or undertakings and the future rate of growth of
 Aptimus.  Prospective investors are cautioned that any such forward-looking
 statements are not guarantees of future performance and involve risks and
 uncertainties, and actual results may differ materially from those
 contemplated by such forward-looking statements.  Important factors currently
 known to management that could cause actual results to differ materially from
 those in forward-looking statements include, without limitation, fluctuation
 of the company's operating results, the ability to compete successfully, the
 ability of the company to maintain current client and distribution partner
 relationships and attract new ones, and the ability to integrate acquired
 companies. For additional factors that may cause actual results to differ
 materially from those contemplated by such forward-looking statements, please
 see the "Risk Factors" described in the company's Annual Report on Form 10-KA,
 dated April 11, 2001, and in other quarterly reports and filings on file with
 the SEC, which Risk Factors are incorporated herein as though fully set forth.
 The company undertakes no obligation to update or revise forward-looking
 statements to reflect changed assumptions, the occurrence of unanticipated
 events or changes to future operating results.
 
      John Wade
      Chief Financial Officer
      Aptimus, Inc.
      206-441-9100, ext. 170
      johnw@aptimus.com
 
 
                                   APTIMUS, INC.
 
                               STATEMENT OF OPERATION
                       (in thousands, except per share data)
                                    (unaudited)
                                                            Three months ended
                                                                March 31,
                                                            2000        2001
 
     Net Revenues                                          $5,147       $926
     Operating expenses
       Sales and marketing                                  7,511      3,989
       Internet and network connectivity                      412        656
       Research and development                               477        927
       General and administrative                             819        875
       Depreciation and amortization                          527        771
       Equity-based compensation                              251         39
       Restructuring costs                                             2,806
     Total operating expenses                               9,997     10,063
     Operating loss                                        (4,850)    (9,137)
       Interest expense                                         6         46
       Other (income) expense                                (681)      (325)
     Net loss                                             $(4,175)   $(8,858)
     Basic and diluted net loss per share                  $(0.27)    $(0.57)
     Weighted average shares used in computing
      net loss per share                                   15,544     15,498
 
     Pro-forma
     Net loss                                             $(4,175)   $(8,858)
     Add back certain non-cash charges:
       Amortization of acquired intangibles                   284        261
       Equity-based compensation                              251         39
       One-time costs related to restructuring                 --      2,806
     Supplemental net loss excluding certain
      non-cash charges                                    $(3,640)   $(5,752)
     Supplemental basic and diluted net loss per share     $(0.23)    $(0.37)
 
 
                                   APTIMUS, INC.
 
                                   BALANCE SHEET
                                   (in thousands)
                                    (unaudited)
                                                          Dec. 31,  March 31,
                                                            2000       2001
     ASSETS
     Cash and cash equivalents                            $12,854    $15,683
     Accounts receivable, net                               2,240      1,137
     Prepaid expenses and other assets                        646        788
     Short-term investments                                12,012      3,048
     Total current assets                                  27,752     20,656
     Fixed assets, net of accumulated depreciation          4,760      4,112
     Intangible assets, net                                 2,643      1,406
     Long-term investments                                    345        345
     Deposits                                                  32         32
                                                          $35,532    $26,551
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Accounts payable                                      $2,573     $1,618
     Accrued and other liabilities                          1,154      2,286
     Current portion of capital lease obligations             193        174
     Current portion of notes payable                         800        800
       Total current liabilities                            4,720      4,878
     Capital lease obligations, net of current portion        144        127
     Notes payable, net of current portion                    800        600
       Total liabilities                                    5,664      5,605
     Shareholders' equity
     Common stock, no par value                            65,874     65,771
     Additional paid-in capital                             2,518      2,282
     Deferred stock compensation                             (352)       (77)
     Accumulated deficit                                  (38,172)   (47,030)
     Total shareholders' equity                            29,868     20,946
                                                          $35,532    $26,551
 
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X98355467
 
 SOURCE  Aptimus, Inc.