Copyright 2010 PR Newswire. All Rights Reserved
2009-11-10
Revenue Up 28% Year-Over-Year to $6.6 Million, Driving EBITDA of $0.08
per Share and Net Income of $0.02 per Share
SEATTLE, Nov. 10 /PRNewswire-FirstCall/ -- Onvia, Inc. (Nasdaq: ONVI), a leading
provider of comprehensive public sector market intelligence, reported financial
results for the third quarter ended September 30, 2009.
Q3 2009 Highlights
-- Revenue up 28% over Q3 2008 to $6.6 million
-- Gross margin increased 4% over Q3 2008 to 82%
-- EBITDA of $671,000 or $0.08 per share, up 135% sequentially and vs.
year-ago loss
-- Net income of $167,000 or $0.02 per share - first profitable quarter
since Q3 2007
-- Sixth consecutive quarter of Annual Contract Value growth, up 23% over
Q3 2008 to $23.5 million
Q3 2009 Operational Performance Summary
Client Metrics Variance Variance
(as defined below) Q3 09 Q2 09 % Q3 09 Q3 08 %
------------------- ----- ----- ---- ----- ----- ----
Annual Contract Value
(ACV) (in millions) $23.5 $21.7 8% $23.5 $19.0 23%
Total Clients 8,300 8,500 -2% 8,300 8,100 2%
High Value Clients 7,900 8,000 -1% 7,900 7,500 5%
Annual Contract Value per
Client (ACVC) $2,818 $2,567 10% $2,818 $2,338 21%
Quarterly Contract Value
per Client (QCVC) $3,103 $2,806 11% $3,103 $2,351 32%
Q3 2009 Financial Results
Revenue for the third quarter of 2009 increased 6% to $6.6 million from $6.2
million in the previous quarter and increased 28% from $5.2 million in the same
year-ago period.
Onvia management believes growth in government spending has stimulated increased
demand in the market, as more companies seek to do business with government
agencies at the federal, state and local levels. This has appeared to drive
increased traffic to the company's economic stimulus tracking website,
Recovery.org, which has enhanced the company's position as an authoritative
source for government spending analytics. The demand for public sector
information appeared particularly strong in the first half of 2009, which
management believes contributed to Onvia's accelerating third quarter 2009
revenue growth rate.
The improvement in revenue was also due to the continued growth in Annual
Contract Value (ACV). ACV represents the aggregate annual revenue value of the
company's subscription contracts. ACV increased 8% to $23.5 million from $21.7
million in the previous quarter, and increased 23% from $19.0 million in the
same year-ago quarter (for more information about ACV, see "About Annual
Contract Value (ACV) and Quarterly Contract Value per Client (QCVC)" below).
A significant driver of ACV is Annual Contract Value per Client (ACVC), which
increased 10% to an average of $2,818 per client from the previous quarter and
increased 21% from the third quarter of 2008. ACVC improved in the third
quarter, in part by targeting higher value clients and emphasizing higher value
database products. Of the 8,300 total clients in the third quarter,
approximately 57% subscribed to the higher value database products, an increase
of 14% from 50% in the same year-ago period.
At the end of the quarter, the company's total client base decreased 2% to 8,300
from 8,500 in the previous quarter and increased 2% from 8,100 in the same
year-ago period. Of the 8,300 total clients in the third quarter, approximately
7,900 were categorized as high value clients (i.e., excludes subscribers to the
company's entry level Metropolitan notification product). High value clients
decreased 1% from approximately 8,000 in the previous quarter and increased 5%
from approximately 7,500 in the same period a year ago. The sequential quarter
decrease in the customer base is primarily attributed to the seasonality of the
business related to the summer months, and the current economic challenges faced
by many existing customers.
Operating expenses in the quarter increased 2% to $5.3 million from $5.2 million
in the previous quarter and increased 5% from $5.0 million in the same year ago
quarter. Sales and marketing expenses increased as a result of the company's
planned investment in sales personnel offset by lower technology and development
expenses. Outsourced development projects resulted in reduced internal,
non-capitalizable headcount costs.
For the third quarter of 2009, net income totaled $167,000 or $0.02 per basic
and diluted share, an improvement from a net loss of $197,000 or $(0.02) per
basic and diluted share in the previous quarter and a net loss of $831,000 or $
(0.10) per basic and diluted share in the third quarter of 2008.
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization,
including non-cash stock-based compensation) for the quarter increased 135% to a
$671,000 or $0.08 per basic and diluted share from $285,000 or $0.03 per basic
and diluted share in the previous quarter, and improved from a loss of $388,000
or $(0.05) per basic and diluted share in the same year-ago period (see
discussion about the presentation of EBITDA, a non-GAAP term, below).
Quarter-end cash, cash equivalents and short-term investments totaled $14.0
million, an improvement from $13.8 million in the previous quarter.
Management Commentary
"Our fifth sequential quarter of revenue growth has led to our first profitable
quarter since 2007," said Mike Pickett, Onvia's chairman and CEO. "Q3 2009 also
represents our highest revenue quarter since we changed the direction of the
company to focus on delivering comprehensive public sector market intelligence.
"During the quarter we continued to achieve double-digit ACV growth by
increasing adoption of our higher valued products and expanding our
relationships with our existing clients," said Pickett. "These achievements
drove higher ACVC, which offset some of the seasonal effects to our business
that makes the third quarter the low watermark for the year in terms of new
client acquisition.
"In the third quarter we continued migrating existing clients onto our new
technology platform. Our new platform delivers distinctively powerful market
intelligence through a more flexible and relevant interface to drive more value
to our clients. These new platform capabilities, combined with our existing
comprehensive database on government procurement spending, are designed to
support new product development and should continue to drive growth and
profitability well into the future."
Conference Call
Onvia will hold a conference call later today (November 10, 2009) to discuss
these third quarter 2009 financial results. CEO Mike Pickett and CFO Cameron Way
will host the call starting at 4:30 p.m. Eastern time. A question and answer
session will follow management's presentation.
To participate in the call, dial the appropriate number 5-10 minutes prior to
the start time, request the Onvia conference call and provide the conference ID:
Date: Tuesday, November 10, 2009
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial-In Number: 1-800-862-9098
International: 1-785-424-1051
Conference ID#: 7ONVIA
The conference call will be broadcast simultaneously and available for replay
via the investor section of the company's Website at www.onvia.com.
Please call the conference telephone number 5-10 minutes prior to the start
time. An operator will register your name and organization and ask you to wait
until the call begins. If you have any difficulty connecting with the conference
call, please contact the Liolios Group at 949-574-3860.
A replay of the call will be available after 7:30 p.m. Eastern time on the same
day and until December 10, 2009:
Toll-free replay number: 1-800-374-0934
International replay number: 1-402-220-0680
(No passcode required)
Use of Non-GAAP Financial Information
EBITDA is not a financial measure calculated and presented in accordance with
U.S. generally accepted accounting principles ("GAAP") and should not be
considered as an alternative to net income, operating income or any other
financial measures so calculated and presented, nor as an alternative to cash
flow from operating activities as a measure of the company's liquidity. Onvia
defines EBITDA as net income/(loss) before interest expense and other non-cash
financing costs; taxes; depreciation; amortization; and non-cash stock-based
compensation. Other companies (including the company's competitors) may define
EBITDA differently. The company presents EBITDA because it believes it to be an
important supplemental measure of performance that is commonly used by
securities analysts, investors and other interested parties in the evaluation of
companies in a similar industry. Management also uses this information
internally for forecasting and budgeting. It may not be indicative of the
historical operating results of Onvia nor is it intended to be predictive of
potential future results. Investors should not consider EBITDA in isolation or
as a substitute for analysis of results as reported under GAAP. See
"Reconciliation of GAAP Income (Loss) to EBITDA (Loss)" below for further
information on this non-GAAP measure and reconciliation of EBITDA to GAAP net
loss for the periods indicated.
Onvia, Inc.
Reconciliation of GAAP Income (Loss) to EBITDA (Loss)
(in thousands, except per share amounts)
(unaudited)
September June September
30, 30, 30,
2009 2009 2008
---- ---- ----
GAAP net income (loss) $167 $(197) $(831)
Reconciling items from GAAP to EBITDA (loss)
Interest income, net (15) (8) (99)
Taxes --- --- ---
Depreciation and amortization 452 388 412
Amortization of stock-based compensation 67 102 130
--- --- ---
EBITDA (loss) $671 $285 $(388)
==== ==== =====
EBITDA (loss) per common share:
Basic $0.08 $0.03 $(0.05)
Diluted $0.08 $0.03 $(0.05)
===== ===== ======
Weighted average common shares outstanding:
Basic 8,265 8,262 8,236
Diluted 8,564 8,262 8,236
About Annual Contract Value (ACV) and Quarterly Contract Value per Client (QCVC)
The company also supplements its financial statements in this release and in its
annual report on Form 10-K and quarterly reports on Form 10-Q with a calculation
of Annual Contract Value, or ACV, which represents the annualized aggregate
revenue value of all subscription contracts as of the end of the quarter. ACV is
driven by Annual Contract Value per Client (ACVC) and the growth in the number
of clients. Most of the company's revenues are generated from subscription
contracts, which are typically prepaid and have a minimum term of one year, with
revenues recognized ratably over the term of the subscription. The company also
receives revenues from multi-year content reseller licenses, management reports,
document download services, and list rental services, which are not included in
the calculation of ACV. ACV is not a financial measure calculated and presented
in accordance with U.S. generally accepted accounting principles ("GAAP") and
should not be considered as an alternative to revenue or any other financial
measures so calculated. Management uses this information as a basis for planning
and forecasting core business activity for future periods and believes it is
useful in understanding the results of its operations. Quarterly Contract Value
per Client (QCVC) is similar to ACVC, but represents the average annual contract
value of all new and renewing client transactions signed during the quarter
only.
Forward-Looking Statements
This release may contain, in addition to historical information, forward-
looking statements as defined in the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations or
beliefs, and involve risks and uncertainties, including statements regarding
Onvia's financial performance, profitability, client count and client
information, and other operating metrics. Onvia's business is subject to certain
risks and uncertainties that may cause actual results to differ materially from
those suggested by the forward-looking statements in this release, including
changes in general economic and business conditions in the information and
internet services industries and changes in our business strategy.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: Onvia's
investments in sales and marketing, technology infrastructure, and content
collection and sourcing fail to improve sales penetration and client retention
rates; Onvia's technology fails to handle the increased demands on its
infrastructure caused by increasing network traffic and the volume of aggregated
data; disruptions with Onvia's outsourcing relationships fail to decrease
incremental expense and delays product delivery schedules;client adoption of new
and higher valued products is slower than expected; and Onvia fails to increase
the number of clients and/or Annual Contract Value.
Additional information on factors that may impact these forward-looking
statements can be found in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Risk Factors" sections in
the company's 2008 Annual Report on Form 10-K. The information contained in this
presentation is as of the date indicated. We assume no obligation to update any
forward-looking statements contained in this presentation as a result of new
information or future events or developments.
About Onvia, Inc.
For more than a decade Onvia has been the leading provider of
Business-to-Government solutions in the United States, covering the broadest set
of industries, projects and products at every level of government. Thousands of
companies rely on Onvia's customized information services to grow sales
opportunities, understand buyer and seller activities, and research markets. For
information, call 1-800-331-2320 or visit www.onvia.com. To view Economic
Recovery-funded projects tracked by Onvia, visit www.recovery.org.
Onvia, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
September December
30, 2009 31, 2008
--------- ---------
(Unaudited)
(In thousands,
except share data)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $6,219 $13,043
Short-term investments, available-for-sale 7,737 -
Accounts receivable, net of allowance for
doubtful accounts of $154 and $32 1,387 1,645
Prepaid expenses and other assets, current portion 600 785
Reimbursable tenant improvements - 147
Security deposits, current portion 135 135
--- ---
Total current assets 16,078 15,755
LONG TERM ASSETS:
Property and equipment, net of accumulated
depreciation of $3,303 and $2,782 1,341 1,710
Reimbursable tenant improvements 147 -
Security deposits, net of current portion 269 404
Internal use software, net of accumulated
amortization of $2,430 and $1,752 6,325 4,447
Prepaid expenses and other assets,
net of current portion 28 7
-- --
Total long term assets 8,110 6,568
----- -----
TOTAL ASSETS $24,188 $22,323
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $1,690 $853
Accrued expenses 1,215 1,491
Obligations under capital leases, current portion 12 82
Unearned revenue, current portion 10,692 8,979
Deferred rent, current portion 81 61
--- ---
Total current liabilities 13,690 11,466
LONG TERM LIABILITIES:
Obligations under capital leases,
net of current portion - 6
Unearned revenue, net of current portion 175 139
Deferred rent, net of current portion 854 919
--- ---
Total long term liabilities 1,029 1,064
----- -----
TOTAL LIABILITIES 14,719 12,530
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock; $.0001 par value: 2,000,000 shares
authorized; no shares issued or outstanding - -
Common stock; $.0001 par value: 11,000,000 shares
authorized; 8,273,838 and 8,254,909 shares issued;
and 8,273,812 and 8,246,828 outstanding 1 1
Treasury stock, at cost: 26 and 8,081 shares - (40)
Additional paid in capital 352,425 352,127
Accumulated other comprehensive income 1 -
Accumulated deficit (342,958) (342,295)
-------- --------
Total stockholders' equity 9,469 9,793
----- -----
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $24,188 $22,323
======= =======
Onvia, Inc.
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2009 and September 30, 2008
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
(In thousands, (In thousands,
except per except per
share data) share data)
Revenue
Subscription $5,728 $4,488 $16,127 $13,391
Content license 623 562 1,753 1,655
Management information reports 188 73 645 389
Other 73 43 190 196
--- --- --- ---
Total revenue 6,612 5,166 18,715 15,631
Cost of revenue 1,160 1,066 3,613 3,228
----- ----- ----- -----
Gross margin 5,452 4,100 15,102 12,403
Operating expenses:
Sales and marketing 3,300 3,069 10,018 8,854
Technology and development 853 975 2,252 3,069
General and administrative 1,147 986 3,520 3,418
----- --- ----- -----
Total operating expenses 5,300 5,030 15,790 15,341
----- ----- ------ ------
Income / (Loss) from operations 152 (930) (688) (2,938)
Interest and other income, net 15 99 26 410
---- ----- ----- -------
Net income / (loss) $167 $(831) $(662) $(2,528)
==== ===== ===== =======
Unrealized gain on
available-for-sale securities 2 - 1 -
---- ----- ----- -------
Comprehensive income / (loss) $169 $(831) $(661) $(2,528)
==== ===== ===== =======
Basic net income / (loss) per
common share $0.02 $(0.10) $(0.08) $(0.31)
===== ====== ====== ======
Diluted net income / (loss) per
common share $0.02 $(0.10) $(0.08) $(0.31)
===== ====== ====== ======
Basic weighted average
shares outstanding 8,265 8,236 8,258 8,226
===== ===== ===== =====
Diluted weighted average
shares outstanding 8,564 8,236 8,258 8,226
===== ===== ===== =====
Onvia, Inc.
Condensed Consolidated Statements of Cash Flows
Three and Nine Months Ended September 30, 2009 and September 30, 2008
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
(In thousands) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income / (loss) $167 $(831) $(662) $(2,528)
Adjustments to reconcile net
loss to net cash provided
by / (used in) operating activities:
Depreciation and amortization 452 412 1,235 1,114
Loss on abandoned assets - - - 97
Stock-based compensation 67 130 284 557
Change in operating
assets and liabilities:
Accounts receivable (392) (44) 258 197
Prepaid expenses and other assets 76 1 196 (86)
Accounts payable 346 11 199 (1,051)
Accrued expenses 57 215 (305) 78
Unearned revenue (32) (106) 1,750 (686)
Deferred rent (16) 177 (45) 590
--- --- --- ---
Net cash provided by / (used in)
operating activities 725 (35) 2,910 (1,718)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (52) (301) (154) (1,568)
Proceeds from sales of property
and equipment - - - 3
Additions to internal use software (558) (858) (1,953) (2,352)
Purchases of investments (5,087) - (7,737) -
Return of security deposits - - 135 3,500
Reimbursable tenant improvements - 101 - 2,516
--- --- --- -----
Net cash (used in) / provided by
investing activities (5,697) (1,058) (9,709) 2,099
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital
lease obligations (12) (28) (76) (83)
Proceeds from exercise of
stock options and purchases
under employee stock
purchase plan 14 - 51 94
--- --- --- ---
Net cash provided by / (used in)
financing activities 2 (28) (25) 11
--- --- --- ---
Net (decrease) / increase in cash
and cash equivalents (4,970) (1,121) (6,824) 392
Cash and cash equivalents,
beginning of period 11,189 15,814 13,043 14,301
------ ------ ------ ------
Cash and cash equivalents,
end of period $6,219 $14,693 $6,219 $14,693
====== ======= ====== =======
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Issuance of treasury stock for 401K
matching contribution - - (44) -
Unrealized gain on available-for-sale
investments 2 - 1 (69)
Property and equipment additions
in accounts payable 26 - 33 -
Internal use software additions
in accounts payable 329 - 603 -
SOURCE Onvia, Inc.
