Message #47 From:
NewsBot Date: November 14, 2006 04:48:00 PM
VSTH News VitalStream Reports Record Revenue for the Third Quarter 2006
IRVINE, Calif.--(BUSINESS WIRE)--VitalStream Holdings, Inc. (Nasdaq:VSTH), a world leader in audio and
video streaming, today reported results for the third quarter of fiscal
2006. In light of VitalStream’s pending
acquisition by Internap Network Services Corporation (Nasdaq:INAP),
VitalStream is not holding a conference call to discuss these results or
providing forward guidance. The companies are preparing to file a joint
proxy statement/prospectus with the Securities and Exchange Commission
in the coming weeks that will provide further information about each
company and the pending transaction.
Management Commentary
“VitalStream continued to experience strong
demand for its unique content delivery and monetization solutions in the
third quarter, resulting in record revenue,”
said Jack Waterman, VitalStream’s Chairman and
CEO. “During the quarter we closed our first
significant advertising related customer win as ABC Radio, the largest
radio network in the U.S., selected VitalStream as its exclusive
provider of online ad-insertion and streaming media solutions. We have
strong momentum heading into the peak period for both Internet
viewership and online advertising.”
Third Quarter Financial Results
The Company’s GAAP results of operations for
2006 include the impact of expensing stock options resulting from the
adoption of Statement of Financial Accounting Standards No. 123R.
Revenues for the quarter ended September 30, 2006 were $7.05 million, an
increase of 83% over the prior year quarter and up 15% from $6.2 million
in the second quarter of 2006.
Net loss for the quarter ended September 30, 2006 was ($2,372,095), or
($0.10) per share, which includes $667,902, or $0.03 per share, of
non-cash share-based compensation charges, compared to a net loss of
($999,090), or ($0.06) per share in the third quarter of fiscal 2005 and
($1,403,145), or ($0.06) per share in the second quarter of fiscal 2006.
Adjusted EBITDA for the quarter ended September 30, 2006 was ($535,916),
which includes approximately $350,000 of Sarbanes Oxley related expenses
and approximately $200,000 of additional bad debt allowance due to
increased sales activity. This compares to Adjusted EBITDA of ($338,583)
in the comparable period last year and to ($168,128) in the second
quarter of fiscal 2006. (See “Use of Non-GAAP
Financial Measures” below for definition of
Adjusted EBITDA).
Gross margin for the quarter was 48.7% compared to gross margin of 50.2%
in the second quarter of 2006.
Customer Wins
VitalStream serves more than 846 enterprise customers, including many of
the largest and fastest growing streamers of audio and video content.
Notable new customers added during the third quarter of 2006 include ABC
Radio, Gordet & Schmidt, AT&T, Aramark, Farmer’s
Insurance, Vail Resorts, Merck, PricewaterhouseCoopers Europe, Anderson
Windows and Wayans’ Brothers.
Use of Non-GAAP Financial Measures
VitalStream defines Adjusted EBITDA as net income (loss) before
interest, income taxes, depreciation, amortization, non-recurring asset
sales, and stock-based compensation. Adjusted EBITDA attempts to
eliminate significant non-cash items and items that are not part of the
Company's core operations. Adjusted EBITDA is not a measure used in
financial statements reported in accordance with generally accepted
accounting principles, does not represent funds available for
discretionary use and is not intended to represent cash flow from
operations as measured under generally accepted accounting principles.
Adjusted EBITDA should not be considered as an alternative to net loss
or net cash used in operating activities. VitalStream’s
calculation of Adjusted EBITDA may not be comparable to the computation
of similarly titled measures of other companies. A tabular
reconciliation of Adjusted EBITDA to net income is set forth on the last
page of this press release.
VitalStream’s management uses Adjusted EBITDA
as a measure of its operating performance. In addition, VitalStream
believes that Adjusted EBITDA may be useful to existing and potential
creditors of VitalStream, and to analysts and investors that follow
VitalStream’s performance, because it is one
measure of the income generated that is available to service any
outstanding debt.
About VitalStream, Inc.
VitalStream Holdings, Inc. (Nasdaq:VSTH), 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. For more information, visit www.vitalstream.com.
Forward-Looking Statements
This news release contains forward-looking statements made in reliance
upon the safe harbor provision of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Actual
results may differ materially from those indicated by these statements.
Forward-looking statements may include statements addressing future
financial and operational results of the company. The following factors,
among others, could cause actual results 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 most recently filed Annual Report on Form 10-K of VitalStream
Holdings, Inc., 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 and marks
are property of their respective holders.
VITALSTREAM HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2006 AND 2005
(Unaudited)
ASSETS
September 30,
December 31,
2006
2005
(Unaudited)
(Audited)
Current assets:
Cash
$
16,894,296
$
4,118,308
Accounts receivable, net of allowance for doubtful
accounts/credits of $565,006 and $454,182 at September 30, 2006
and December 31, 2005, respectively
5,107,074
3,123,006
Prepaid expenses
1,090,931
628,576
Other current assets
357,219
238,274
Total current assets
23,449,520
8,108,164
Fixed assets, net
12,143,223
7,802,278
Restricted cash
201,077
200,626
Goodwill
19,404,284
3,577,678
Other intangibles, net
1,125,555
167,500
Other assets
163,933
172,915
TOTAL ASSETS
$
56,487,592
$
20,029,161
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
3,968,052
$
1,842,440
Accrued compensation
842,066
487,604
Current portion of capital lease obligations
2,070,204
642,136
Current portion of line of credit obligations
3,991,621
2,991,621
Accrued expenses
1,301,899
807,719
Total current liabilities
12,173,842
6,771,520
Capital lease obligations
1,137,641
208,767
Line of credit obligations
500,000
743,716
Deferred rent
79,938
86,549
1,717,579
1,039,032
Shareholders' equity
Common stock, par value $0.001; authorized shares, 290,000,000;
issued and outstanding shares, 23,211,045 and 17,580,083 at
September 30, 2006 and December 31, 2005, respectively,
