24/7 Real Media (NASDAQ:TFSM)
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24/7 Real Media, Inc. (Nasdaq: TFSM), a leading global digital marketing
company, today announced financial results for the third quarter ended
September 30, 2006. Revenue for the third quarter of 2006 was $49.1
million, an increase of 40% over the $35.1 million reported for the
third quarter of 2005. Revenue contribution from international
operations was 61% for the quarter, driven in part by strong
year-over-year growth in the U.K. and Korea of 50% and 80%, respectively.
Pro forma operating income1 for the third
quarter of 2006 was $4.7 million, or $0.09 per share. This compares with
pro forma operating income of $2.3 million, or $0.05 per share, for the
third quarter of 2005.
Under generally accepted accounting principles (GAAP), net loss for the
third quarter of 2006 was $1.4 million, or $0.03 per share. This
compared to a GAAP net loss of $0.8 million, or $0.02 per share, for the
third quarter of 2005. Due to the differing treatment of certain
expenses in 2006 under the recent adoption of Statement of Financial
Accounting Standards (SFAS) No. 123(R), Stock Based Compensation,
results between these periods are not directly comparable. The
comparable figure for the third quarter of 2005, as disclosed under SFAS
No. 123, is a net loss of $2.2 million, or $0.05 per share.
Simultaneously with this release, 24/7 Real Media announced the
expansion of its existing search engine marketing partnership with
Dentsu to address strategic Asian markets outside of Japan. Under the
guidance of K.K. 24-7 Search, the existing Tokyo-based joint venture of
Dentsu and 24/7 Real Media, this new venture will establish operations
to service advertising markets throughout Asia, including China, India,
Korea, Thailand, and Taiwan.
“Our operations continue to generate strong
revenue growth and earnings leverage,” said
David J. Moore, chairman and chief executive officer of 24/7 Real Media. “Our
solid operating performance, combined with our technology know-how and
unmatched international experience, has provided us with the opportunity
to be the partner of choice for premier global players in advertising,
securing our relevancy to the advertising landscape of tomorrow.”
“Through our expanded partnership with Dentsu,
we are positioning 24/7 Real Media to be a significant beneficiary of
the incredible growth that is projected over the upcoming decade for
many of the markets throughout Asia and the Pacific Rim.”
Segment Overview
Revenue in the Media Solutions segment climbed 23% to $19.1
million in the third quarter of 2006 from $15.5 million in the third
quarter of 2005. Gross margins were 33.3% in the third quarter of 2006.
Search Solutions revenue advanced 65% to $22.7 million in the
third quarter of 2006 from $13.7 million in the third quarter of 2005.
Gross margins for the segment were 23.4% in the third quarter of 2006.
Technology Solutions revenue climbed 27% to $7.4 million in the
third quarter of 2006 from $5.8 million in the third quarter of 2005.
Technology gross margins, excluding stock based compensation expenses,
were 80.3% in the third quarter of 2006.
Financial Guidance and Business Outlook
Details regarding the expected financial impact of the announced venture
with Dentsu upon the Company’s consolidated
financial results for 2007 will be provided during 24/7 Real Media's
fourth quarter earnings call in early March 2007.
The Company expects fourth quarter revenue for 2006 to be between $55
million and $59 million, the mid-point of which represents an increase
of 37% from fourth quarter 2005 revenue of $41.7 million. The Company
expects diluted pro forma operating income per share in the fourth
quarter of 2006 to be between $0.11 and $0.12 per share. The Company
expects GAAP earnings per share in the fourth quarter of 2006 to be
between $0.01 and $0.02.
The Company expects full year 2006 revenue to be in the range of $195
million to $200 million, the mid-point of which represents an increase
of 41% from full year revenue of $139.8 million in 2005. The Company
expects diluted pro forma operating income per share for the full year
to be between $0.36 and $0.37 per share. The Company expects GAAP net
loss per share for full year 2006 to be between $0.15 and $0.16 per
share.
Excluding any impact from the expanded partnership announced today, the
Company expects full year 2007 revenue to be in the range of $250
million to $260 million and diluted pro forma operating income per share
for the full year to be between $0.51 and $0.55 per share. The Company
is not providing GAAP net income per share guidance for the full year
2007 at this time, as certain items that would be included in that
figure are dependent on future events and accounting determinations.2
In conjunction with this release, a conference call will be held at 8:30
a.m. EST on Thursday, November 2, to discuss these results. The call
will be broadcast live over the Internet at www.247realmedia.com/about/investor.
Please allow extra time to visit our Web site prior to the call and
download the streaming media software required to listen to the Internet
broadcast. The online replay of the broadcast should be available within
two hours following the live call and will be available for three weeks.
About 24/7 Real Media, Inc.
24/7 Real Media, Inc. is a leading global digital marketing company,
empowering advertisers and publishers to engage their target audiences
with greater precision, transparency and ROI. Using its award winning ad
serving, targeting, tracking and analytics platform, powerful search
marketing capabilities and global network of specialized Web sites, the
company has turned the art of reaching audiences across virtually any
digital medium into a measurable science. The company is headquartered
in New York, with 20 offices in 12 countries throughout North America,
Europe and the Asia Pacific region. For more information, please visit www.247realmedia.com.
24/7 Real Media: The Science of Digital Marketing.
24/7 Real Media is a member of the NAI and adheres to the NAI privacy
principles that have been applauded by the FTC. These principles are
designed to help ensure Internet user privacy. For more information
about online data collection associated with ad serving, including
online preference marketing and an opportunity to opt-out of 24/7 Real
Media cookies, go to: www.networkadvertising.org.
Caution concerning forward-looking statements:
Certain statements in this news release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. For instance, words such as "expects," "anticipates," "predicts,"
"guidance" and similar expressions identify forward-looking statements.
Forward-looking statements also include any other passages that relate
to expected future events or trends that can only be evaluated by events
or trends that will occur in the future. Some of the forward-looking
statements in this news release include, without limitation, statements
regarding the expected financial performance for the fourth quarter of
2006, for the full year 2006 and for the full year 2007. Investors are
cautioned not to place undue reliance upon these forward-looking
statements, which speak only as of the date of this release. Except as
required by law, 24/7 Real Media undertakes no obligation to update any
forward-looking or other statements in this news release, whether as a
result of new information, future events or otherwise. Management may
reiterate these forward-looking statements subsequent to the date
hereof, but such reiterations should not be considered an update or
reaffirmation of these statements unless expressly so stated. The
forward-looking statements are based on the subjective opinions and
estimates of management at the time the statements were made and are
subject to substantial risks and uncertainties that could cause actual
results to differ materially from those anticipated in the
forward-looking statements. These substantial risks and uncertainties
include, among others, geopolitical, tax, exchange rate and other risks
associated with international operations, which currently comprise a
significant portion of the Company's revenue; the potential for enhanced
competition, including with competitors that have substantially greater
resources than those of the Company; potential issues that may arise in
the Company’s Search segment, which is a less
seasoned business than the Company’s other
segments and which is in an ultra competitive and rapidly evolving
industry, in which the Company’s business is
somewhat dependent on its ability to maintain good relations with a few
search engines; due to these factors, the Company’s
Search business may not be able to expand as rapidly as projected, nor
maintain its existing customer base or profitability structure; the
potential loss of key employees and inability to attract qualified new
employees, especially in our Search business, due to a very competitive
and tightening job market; risks that the Company's technology will be
insufficient to meet increased business levels; risk that the Company's
technology services will be disrupted by terrorist attack, disasters or
malicious intrusion, and that the Company's back-up facilities and
disaster recovery plans will not be adequate; customer concentration or
customer loss risks; potential deterioration or slower-than-expected
growth in the Internet advertising market; the uncertainties, costs and
business impacts of potential new legislation; accounting risks and the
risk of litigation or regulatory investigation involving the Company. In
particular, guidance on results in accordance with GAAP do not include
(i) the potential impact of any mergers, acquisitions or other business
combinations that may be completed after the date of this release, (ii)
any unanticipated non-recurring gains, charges or write-offs, or (iii)
unexpected changes in the Company’s effective
tax rate, which may be caused by, among other things, the geographical
location in which operating income is generated and the availability of
tax-loss carryforwards. Actual stock-based compensation expense impact
may differ from these estimates based on the timing and amount of
restricted stock and options granted, the assumptions used in option
valuation and other factors.
More information about factors that could cause actual results to differ
materially from those predicted in the Company's forward-looking
statements, as well as additional information regarding the Company's
business and financial results and condition, is set out in its annual
report on Form 10-K for the year ended December 31, 2005, and will be
set out in its Quarterly Report on Form 10-Q for the three months ended
September 30, 2006, which the Company expects to file with the
Securities and Exchange Commission on or before November 9, 2006.
Investors are strongly encouraged to read the Company's Form 10-K, Forms
10-Q and other filings with the Securities and Exchange Commission in
their entirety.
1 Pro forma operating income is a non-GAAP
financial measure. 24/7 Real Media believes pro forma reporting provides
meaningful insight into the Company’s ongoing
economic performance and therefore uses pro forma reporting internally
to assist in evaluating and managing the Company’s
operations. A full reconciliation of GAAP net income to pro forma
operating income for the three and nine months ended September 30, 2006
and 2005 appears in the financial statement portion of this release.
2 Our diluted pro forma operating income per
share guidance for full year 2007 excludes the following items that are
required to be included under GAAP: depreciation expense of $5.1
million; amortization expense of $3.0 million; stock based compensation
expense related to equity instruments already or anticipated to be
granted of $14.0 million; and interest income of $1.0 million. Also
excluded are income taxes, as we are still determining the amount of our
net operating loss carry forwards and our overall effective tax rate,
and the overall rate is dependent on the amount of revenue recognized
for tax purposes in each jurisdiction in which we operate; warrant
liabilities contingent on the price of our common stock; and amounts
related to stock-based compensation that will be granted in future
periods and are as yet undetermined.
24/7 REAL MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three months ended
Nine months ended
September 30,
September 30,
2006
2005
2006
2005
(unaudited)
(unaudited)
Revenues:
Media
$
19,082
$
15,547
$
58,646
$
46,460
Search
22,669
13,731
60,247
35,063
Technology
7,392
5,839
21,367
16,550
Total revenues
49,143
35,117
140,260
98,073
Cost of revenues:
Media
12,736
10,516
39,754
31,470
Search
17,357
10,026
45,243
24,405
Technology (inclusive of $139, $7, $384 and $23 in stock-based
compensation, respectively)
1,592
1,005
4,661
3,190
Total cost of revenues
31,685
21,547
89,658
59,065
Gross profit
17,458
13,570
50,602
39,008
Operating expenses:
Sales and marketing (inclusive of $1,109, $117, $3,269 and $323 of
stock-based compensation, respectively)
7,867
5,723
23,089
16,950
General and administrative (inclusive of $2,616, $318, $10,814 and
$950 of stock-based compensation, respectively)
7,638
5,203
25,982
15,407
Product development (inclusive of $471, $51, $1,734 and $151 of
stock-based compensation, respectively)
2,425
1,614
7,327
4,322
Other expenses:
Amortization of intangible assets and deferred financing costs
882
1,140
2,661
3,419
Restructuring costs
-
-
-
973
Total operating expenses
18,812
13,680
59,059
41,071
Operating loss
(1,354)
(110)
(8,457)
(2,063)
Interest income (expense), net
220
(48)
428
(190)
Change in fair value of warrant liability
22
(384)
(97)
(344)
Recovery of investment
-
-
-
2,100
Impairment of marketable securities
-
-
-
(588)
Loss on sale of marketable securities
-
(25)
-
(18)
Other income (expense), net
(27)
(55)
97
(95)
Loss before income taxes and minority interest in operations of
consolidated subsidiary
(1,139)
(622)
(8,029)
(1,198)
Provision for income taxes
(126)
(164)
(268)
(184)
Minority interest in operations of consolidated subsidiary
(103)
21
(98)
21
Net loss
(1,368)
(765)
(8,395)
(1,361)
Dividends on preferred stock
-
(3)
-
(25)
Net loss attributable to common stockholders
$
(1,368)
$
(768)
$
(8,395)
$
(1,386)
Basic net loss attributable to common stockholders per share
$
(0.03)
$
(0.02)
$
(0.17)
$
(0.03)
Shares used in per share calculation - basic
48,977,525
45,478,444
48,175,289
45,097,696
Pro forma:
Operating income (a)
$
4,743
$
2,305
$
13,079
$
5,876
Diluted operating income per share
$
0.09
$
0.05
$
0.24
$
0.12
Shares used in pro forma per share calculation
55,226,779
49,930,554
54,323,231
49,248,344
(a)
Pro forma operating income excludes certain other expenses computed
as follows:
Operating loss
$
(1,354)
$
(110)
$
(8,457)
$
(2,063)
Excluding:
Amortization of intangible assets and deferred financing costs
882
1,140
2,661
3,419
Stock-based compensation
4,335
493
16,201
1,447
Restructuring costs
-
-
-
973
Minority interest in pro forma operating loss of consolidated
subsidiary
(103)
21
(98)
21
Depreciation
983
761
2,772
2,079
Pro forma operating income
$
4,743
$
2,305
$
13,079
$
5,876
24/7 REAL MEDIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
September 30,
December 31,
2006
2005
(unaudited)
Cash
$
51,046
$
40,009
Accounts receivable
48,053
38,316
Total current assets
101,790
80,694
Total assets
161,486
142,804
Accounts payable and accrued liabilities
43,519
43,383
Deferred revenue
3,051
3,218
Short-term debt
7,500
14,542
Total current liabilities
54,070
61,143
Total liabilities
63,031
62,529
Minority interests
1,650
1,556
Total stockholders' equity
96,805
78,719
24/7 Real Media, Inc. (Nasdaq: TFSM), a leading global digital
marketing company, today announced financial results for the third
quarter ended September 30, 2006. Revenue for the third quarter of
2006 was $49.1 million, an increase of 40% over the $35.1 million
reported for the third quarter of 2005. Revenue contribution from
international operations was 61% for the quarter, driven in part by
strong year-over-year growth in the U.K. and Korea of 50% and 80%,
respectively.
Pro forma operating income(1) for the third quarter of 2006 was
$4.7 million, or $0.09 per share. This compares with pro forma
operating income of $2.3 million, or $0.05 per share, for the third
quarter of 2005.
Under generally accepted accounting principles (GAAP), net loss
for the third quarter of 2006 was $1.4 million, or $0.03 per share.
This compared to a GAAP net loss of $0.8 million, or $0.02 per share,
for the third quarter of 2005. Due to the differing treatment of
certain expenses in 2006 under the recent adoption of Statement of
Financial Accounting Standards (SFAS) No. 123(R), Stock Based
Compensation, results between these periods are not directly
comparable. The comparable figure for the third quarter of 2005, as
disclosed under SFAS No. 123, is a net loss of $2.2 million, or $0.05
per share.
Simultaneously with this release, 24/7 Real Media announced the
expansion of its existing search engine marketing partnership with
Dentsu to address strategic Asian markets outside of Japan. Under the
guidance of K.K. 24-7 Search, the existing Tokyo-based joint venture
of Dentsu and 24/7 Real Media, this new venture will establish
operations to service advertising markets throughout Asia, including
China, India, Korea, Thailand, and Taiwan.
"Our operations continue to generate strong revenue growth and
earnings leverage," said David J. Moore, chairman and chief executive
officer of 24/7 Real Media. "Our solid operating performance, combined
with our technology know-how and unmatched international experience,
has provided us with the opportunity to be the partner of choice for
premier global players in advertising, securing our relevancy to the
advertising landscape of tomorrow."
"Through our expanded partnership with Dentsu, we are positioning
24/7 Real Media to be a significant beneficiary of the incredible
growth that is projected over the upcoming decade for many of the
markets throughout Asia and the Pacific Rim."
Segment Overview
Revenue in the Media Solutions segment climbed 23% to $19.1
million in the third quarter of 2006 from $15.5 million in the third
quarter of 2005. Gross margins were 33.3% in the third quarter of
2006.
Search Solutions revenue advanced 65% to $22.7 million in the
third quarter of 2006 from $13.7 million in the third quarter of 2005.
Gross margins for the segment were 23.4% in the third quarter of 2006.
Technology Solutions revenue climbed 27% to $7.4 million in the
third quarter of 2006 from $5.8 million in the third quarter of 2005.
Technology gross margins, excluding stock based compensation expenses,
were 80.3% in the third quarter of 2006.
Financial Guidance and Business Outlook
Details regarding the expected financial impact of the announced
venture with Dentsu upon the Company's consolidated financial results
for 2007 will be provided during 24/7 Real Media's fourth quarter
earnings call in early March 2007.
The Company expects fourth quarter revenue for 2006 to be between
$55 million and $59 million, the mid-point of which represents an
increase of 37% from fourth quarter 2005 revenue of $41.7 million. The
Company expects diluted pro forma operating income per share in the
fourth quarter of 2006 to be between $0.11 and $0.12 per share. The
Company expects GAAP earnings per share in the fourth quarter of 2006
to be between $0.01 and $0.02.
The Company expects full year 2006 revenue to be in the range of
$195 million to $200 million, the mid-point of which represents an
increase of 41% from full year revenue of $139.8 million in 2005. The
Company expects diluted pro forma operating income per share for the
full year to be between $0.36 and $0.37 per share. The Company expects
GAAP net loss per share for full year 2006 to be between $0.15 and
$0.16 per share.
Excluding any impact from the expanded partnership announced
today, the Company expects full year 2007 revenue to be in the range
of $250 million to $260 million and diluted pro forma operating income
per share for the full year to be between $0.51 and $0.55 per share.
The Company is not providing GAAP net income per share guidance for
the full year 2007 at this time, as certain items that would be
included in that figure are dependent on future events and accounting
determinations.(2)
In conjunction with this release, a conference call will be held
at 8:30 a.m. EST on Thursday, November 2, to discuss these results.
The call will be broadcast live over the Internet at
www.247realmedia.com/about/investor. Please allow extra time to visit
our Web site prior to the call and download the streaming media
software required to listen to the Internet broadcast. The online
replay of the broadcast should be available within two hours following
the live call and will be available for three weeks.
About 24/7 Real Media, Inc.
24/7 Real Media, Inc. is a leading global digital marketing
company, empowering advertisers and publishers to engage their target
audiences with greater precision, transparency and ROI. Using its
award winning ad serving, targeting, tracking and analytics platform,
powerful search marketing capabilities and global network of
specialized Web sites, the company has turned the art of reaching
audiences across virtually any digital medium into a measurable
science. The company is headquartered in New York, with 20 offices in
12 countries throughout North America, Europe and the Asia Pacific
region. For more information, please visit www.247realmedia.com.
24/7 Real Media: The Science of Digital Marketing.
24/7 Real Media is a member of the NAI and adheres to the NAI
privacy principles that have been applauded by the FTC. These
principles are designed to help ensure Internet user privacy. For more
information about online data collection associated with ad serving,
including online preference marketing and an opportunity to opt-out of
24/7 Real Media cookies, go to: www.networkadvertising.org.
Caution concerning forward-looking statements:
Certain statements in this news release are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. For instance, words such as "expects,"
"anticipates," "predicts," "guidance" and similar expressions identify
forward-looking statements. Forward-looking statements also include
any other passages that relate to expected future events or trends
that can only be evaluated by events or trends that will occur in the
future. Some of the forward-looking statements in this news release
include, without limitation, statements regarding the expected
financial performance for the fourth quarter of 2006, for the full
year 2006 and for the full year 2007. Investors are cautioned not to
place undue reliance upon these forward-looking statements, which
speak only as of the date of this release. Except as required by law,
24/7 Real Media undertakes no obligation to update any forward-looking
or other statements in this news release, whether as a result of new
information, future events or otherwise. Management may reiterate
these forward-looking statements subsequent to the date hereof, but
such reiterations should not be considered an update or reaffirmation
of these statements unless expressly so stated. The forward-looking
statements are based on the subjective opinions and estimates of
management at the time the statements were made and are subject to
substantial risks and uncertainties that could cause actual results to
differ materially from those anticipated in the forward-looking
statements. These substantial risks and uncertainties include, among
others, geopolitical, tax, exchange rate and other risks associated
with international operations, which currently comprise a significant
portion of the Company's revenue; the potential for enhanced
competition, including with competitors that have substantially
greater resources than those of the Company; potential issues that may
arise in the Company's Search segment, which is a less seasoned
business than the Company's other segments and which is in an ultra
competitive and rapidly evolving industry, in which the Company's
business is somewhat dependent on its ability to maintain good
relations with a few search engines; due to these factors, the
Company's Search business may not be able to expand as rapidly as
projected, nor maintain its existing customer base or profitability
structure; the potential loss of key employees and inability to
attract qualified new employees, especially in our Search business,
due to a very competitive and tightening job market; risks that the
Company's technology will be insufficient to meet increased business
levels; risk that the Company's technology services will be disrupted
by terrorist attack, disasters or malicious intrusion, and that the
Company's back-up facilities and disaster recovery plans will not be
adequate; customer concentration or customer loss risks; potential
deterioration or slower-than-expected growth in the Internet
advertising market; the uncertainties, costs and business impacts of
potential new legislation; accounting risks and the risk of litigation
or regulatory investigation involving the Company. In particular,
guidance on results in accordance with GAAP do not include (i) the
potential impact of any mergers, acquisitions or other business
combinations that may be completed after the date of this release,
(ii) any unanticipated non-recurring gains, charges or write-offs, or
(iii) unexpected changes in the Company's effective tax rate, which
may be caused by, among other things, the geographical location in
which operating income is generated and the availability of tax-loss
carryforwards. Actual stock-based compensation expense impact may
differ from these estimates based on the timing and amount of
restricted stock and options granted, the assumptions used in option
valuation and other factors.
More information about factors that could cause actual results to
differ materially from those predicted in the Company's
forward-looking statements, as well as additional information
regarding the Company's business and financial results and condition,
is set out in its annual report on Form 10-K for the year ended
December 31, 2005, and will be set out in its Quarterly Report on Form
10-Q for the three months ended September 30, 2006, which the Company
expects to file with the Securities and Exchange Commission on or
before November 9, 2006. Investors are strongly encouraged to read the
Company's Form 10-K, Forms 10-Q and other filings with the Securities
and Exchange Commission in their entirety.
(1) Pro forma operating income is a non-GAAP financial measure.
24/7 Real Media believes pro forma reporting provides meaningful
insight into the Company's ongoing economic performance and therefore
uses pro forma reporting internally to assist in evaluating and
managing the Company's operations. A full reconciliation of GAAP net
income to pro forma operating income for the three and nine months
ended September 30, 2006 and 2005 appears in the financial statement
portion of this release.
(2) Our diluted pro forma operating income per share guidance for
full year 2007 excludes the following items that are required to be
included under GAAP: depreciation expense of $5.1 million;
amortization expense of $3.0 million; stock based compensation expense
related to equity instruments already or anticipated to be granted of
$14.0 million; and interest income of $1.0 million. Also excluded are
income taxes, as we are still determining the amount of our net
operating loss carry forwards and our overall effective tax rate, and
the overall rate is dependent on the amount of revenue recognized for
tax purposes in each jurisdiction in which we operate; warrant
liabilities contingent on the price of our common stock; and amounts
related to stock-based compensation that will be granted in future
periods and are as yet undetermined.
-0-
*T
24/7 REAL MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three months ended Nine months ended
------------------------- -------------------------
September 30, September 30,
2006 2005 2006 2005
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Revenues:
Media $ 19,082 $ 15,547 $ 58,646 $ 46,460
Search 22,669 13,731 60,247 35,063
Technology 7,392 5,839 21,367 16,550
------------ ------------ ------------ ------------
Total
revenues 49,143 35,117 140,260 98,073
------------ ------------ ------------ ------------
Cost of revenues:
Media 12,736 10,516 39,754 31,470
Search 17,357 10,026 45,243 24,405
Technology
(inclusive of
$139, $7, $384
and $23 in stock-
based
compensation,
respectively) 1,592 1,005 4,661 3,190
------------ ------------ ------------ ------------
Total cost
of revenues 31,685 21,547 89,658 59,065
------------ ------------ ------------ ------------
Gross profit 17,458 13,570 50,602 39,008
------------ ------------ ------------ ------------
Operating expenses:
Sales and
marketing
(inclusive of
$1,109, $117,
$3,269 and $323
of stock-based
compensation,
respectively) 7,867 5,723 23,089 16,950
General and
administrative
(inclusive of
$2,616, $318,
$10,814 and $950
of stock-based
compensation,
respectively) 7,638 5,203 25,982 15,407
Product
development
(inclusive of
$471, $51, $1,734
and $151 of
stock-based
compensation,
respectively) 2,425 1,614 7,327 4,322
Other expenses:
Amortization
of
intangible
assets and
deferred
financing
costs 882 1,140 2,661 3,419
Restructuring
costs - - - 973
------------ ------------ ------------ ------------
Total
operating
expenses 18,812 13,680 59,059 41,071
------------ ------------ ------------ ------------
Operating
loss (1,354) (110) (8,457) (2,063)
Interest income
(expense), net 220 (48) 428 (190)
Change in fair
value of warrant
liability 22 (384) (97) (344)
Recovery of
investment - - - 2,100
Impairment of
marketable
securities - - - (588)
Loss on sale of
marketable
securities - (25) - (18)
Other income
(expense), net (27) (55) 97 (95)
------------ ------------ ------------ ------------
Loss before income
taxes and minority
interest in
operations of
consolidated
subsidiary (1,139) (622) (8,029) (1,198)
Provision for
income taxes (126) (164) (268) (184)
Minority interest
in operations of
consolidated
subsidiary (103) 21 (98) 21
------------ ------------ ------------ ------------
Net loss (1,368) (765) (8,395) (1,361)
Dividends on
preferred stock - (3) - (25)
------------ ------------ ------------ ------------
Net loss
attributable to
common
stockholders $ (1,368) $ (768) $ (8,395) $ (1,386)
============ ============ ============ ============
Basic net loss
attributable to
common
stockholders per
share $ (0.03) $ (0.02) $ (0.17) $ (0.03)
============ ============ ============ ============
Shares used in per
share calculation
- basic 48,977,525 45,478,444 48,175,289 45,097,696
============ ============ ============ ============
Pro forma:
Operating income
(a) $ 4,743 $ 2,305 $ 13,079 $ 5,876
Diluted operating
income per share $ 0.09 $ 0.05 $ 0.24 $ 0.12
============ ============ ============ ============
Shares used in pro
forma per share
calculation 55,226,779 49,930,554 54,323,231 49,248,344
============ ============ ============ ============
(a) Pro forma
operating
income
excludes
certain
other
expenses
computed as
follows:
Operating loss $ (1,354) $ (110) $ (8,457) $ (2,063)
Excluding:
Amortization
of
intangible
assets and
deferred
financing
costs 882 1,140 2,661 3,419
Stock-based
compensation 4,335 493 16,201 1,447
Restructuring
costs - - - 973
Minority
interest in
pro forma
operating
loss of
consolidated
subsidiary (103) 21 (98) 21
Depreciation 983 761 2,772 2,079
------------ ------------ ------------ ------------
Pro forma
operating income $ 4,743 $ 2,305 $ 13,079 $ 5,876
============ ============ ============ ============
*T
-0-
*T
24/7 REAL MEDIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
September 30, December 31,
2006 2005
------------- ------------
(unaudited)
Cash $ 51,046 $ 40,009
Accounts receivable 48,053 38,316
Total current assets 101,790 80,694
Total assets 161,486 142,804
Accounts payable and accrued liabilities 43,519 43,383
Deferred revenue 3,051 3,218
Short-term debt 7,500 14,542
Total current liabilities 54,070 61,143
Total liabilities 63,031 62,529
Minority interests 1,650 1,556
Total stockholders' equity 96,805 78,719
*T