Message #42 From:
NewsBot Date: October 9, 2006 03:30:00 AM
VSTH News VitalStream Announces Preliminary Third Quarter Results; Reaffirms 2006 Guidance and Sets Preliminary 2007 Outlook
IRVINE, Calif.--(BUSINESS WIRE)--VitalStream Holdings, Inc. (NASDAQ:VSTH),
a leader in online content delivery and monetization solutions, today
announced preliminary results for the third quarter 2006, reaffirmed its
revenue guidance for fiscal 2006 and set preliminary targets for 2007.
Preliminary Results for the Third Quarter Ended September 30, 2006:
Expects record revenue of $6.9 million to $7.2 million, up
approximately 79% - 87% year-over-year and approximately 11% - 16%
over the second quarter
Projects gross margins to be roughly in line with the second quarter
“VitalStream expects to report record revenue
for the third quarter as we began to see the positive impact from
initiatives begun early this year to create complementary revenue
streams to our core content delivery revenue and to increase
international revenue. During the third quarter we recorded
contributions from our newly expanded field sales force in both Europe
and North America. For the first time we recognized advertising revenue
and won new ad-insertion customers including ABC Radio, and we also
began reporting European revenues related to the expansion of our
European data center,” said Jack Waterman,
Chairman and CEO.
Company Comments on MySpace Customer Relationship:
“MySpace, which is expected to constitute 31%
of revenues in the third quarter, has conveyed to us its intent to
develop its own in-house streaming capabilities. Although MySpace
continues to use certain VitalStream services, we expect to experience a
significant reduction in revenue from MySpace commencing in the fourth
quarter. Our third quarter gross margins were negatively impacted by
MySpace-related business, consequently we expect gross margins to
increase in the fourth quarter,” continued Mr.
Waterman.
Business Outlook:
Reaffirms 2006 revenue guidance of $25 million to $27 million
Expects 2007 revenue to be in the range of $38 million - $42 million,
and 2007 gross margins to be higher than 2006
VitalStream’s expected results of operations
for the fourth quarter of 2006 and fiscal 2007 include the impact of
expensing stock options resulting from the adoption of Statement of
Financial Accounting Standards No. 123R as of January 1, 2006.
“We are reiterating our 2006 guidance and
setting a 2007 growth outlook based on the substantial demand for our
content delivery and advertising solutions that we are currently
experiencing in the marketplace. Our fourth quarter guidance implies
that we expect to replace and exceed our lower margin revenues from
MySpace with growth from our core content delivery business and growth
of our advertising solutions in both North America and Europe. We
anticipate reporting higher gross margins moving forward, both from a
higher-margin revenue mix and from a reduction in depreciation and
amortization as we are replacing certain elements of our network with
upgraded systems. We believe that our strategy of reducing our customer
concentration, introducing new revenue streams and increasing our
geographic reach will allow us to realize our growth and profitability
outlook for 2007,” concluded Mr. Waterman.
About VitalStream
VitalStream Holdings, Inc., through its wholly owned subsidiaries, is a
global provider of integrated content delivery services that enable
businesses to stream digital media to large audiences over the Internet.
The company provides solutions, including video and audio streaming,
advertising placement, reporting and analysis, live event broadcasting,
media asset management, integrated Web hosting and consulting services.
Forward Looking Statements
This news release contains forward-looking statements made by
VitalStream in reliance upon the safe harbor provisions of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements may include statements
addressing future financial and operational results of the company and
include the statements regarding third quarter financial results
included herein, which are preliminary and are not a complete disclosure
of our quarterly financial results. Our actual third quarter results
could differ materially from those anticipated in such forward-looking
statements upon completion of the review of our third quarter results by
our independent registered public accounting firm. In addition, the
following factors, among others, could cause actual results for future
periods to differ materially from those described in any forward-looking
statements: the risk that the company’s
revenue may decrease on a quarter over quarter basis because of a slower
than projected growth in the demand for streaming, hosting, advertising
and other services; the risks that our existing customers may cease to
use or reduce our services and/or may not use our services at the
projected rate; uncertainties regarding the outcome of billing or
contractual disputes with customers; uncertainties regarding the future
demand for our products and services generally despite our recent
infrastructure investments, expansion into other markets, product
enhancements and expansion of our sales force; our new advertising
product offerings are new and evolving and may not predictably be
accepted by the intended market of customers, advertisers and end-users;
we may be unable to keep up with evolving industry standards and
changing user needs; the risk that we may experience technical, network,
power supply or security problems that injure our business or increase
our operating costs; and/or uncertainties regarding our ability to
pursue our proposed business strategy. More detailed information about
these factors and others are discussed in “Risk
Factors” and elsewhere in the Annual Report
on Form 10-K of VitalStream Holdings, Inc., as supplemented by the
Current Report on Form 8-K filed on September 13, 2006, and other
documents periodically filed by VitalStream Holdings, Inc. with the SEC.
Such forward-looking statements speak only as of the date of this
release. The company is under no obligation and expressly disclaims any
obligation to update or revise any forward-looking statements whether as
a result of new information, future events or otherwise.
VitalStream is a registered trademark of, VitalStream, Inc., a wholly
owned subsidiary of VitalStream Holdings, Inc. All other names or marks
are the property of their respective owners.
