Quarterly revenue grows 22% over prior year's quarter
SEATTLE, Feb. 20 /PRNewswire-FirstCall/ -- Onvia (NASDAQ:ONVI), a leading provider of comprehensive sales intelligence announced its fourth quarter and annual financial results today. 2007 revenues increased 25% to $20.9 million from $16.7 million in 2006 and gross margin increased to 82% from 80% over last year. Onvia recorded annual net income of $676,000 and Adjusted Net Loss of $964,000 for fiscal 2007. Adjusted Net Loss is net loss excluding the impact of a series of lease transactions executed in the third quarter of 2007. By adjusting net loss to exclude the impact of the lease transactions, Onvia believes that the financial results from its core business are more accurately presented.
For the quarter ended December 31, 2007, revenue grew to $5.5 million compared to $4.5 million in the fourth quarter of 2006, an increase of 22%. Onvia recorded a net loss of $811,000 and Adjusted Net Loss of $99,000. Fourth quarter operating expenses increased due to approximately $300,000 of additional costs associated with recruiting new leadership and talent in sales and technology. Net loss includes non-cash stock compensation of ($256,000) or ($0.03) per share in the fourth quarter of 2007, compared to ($303,000) or ($0.04) per share in the fourth quarter of 2006.
Year 2006 - 2007 Quarterly Results
(in millions, expect per share data)
(unaudited) 2006
Q1 06 Q2 06 Q3 06 Q4 06 Revenues $3.9 $4.1 $4.3 $4.5
Sequential Growth 6% 4% 5% 6%
YOY Growth 7% 10% 16% 23% Gross margin 76% 79% 81% 83%
Net income (loss) $(2.1) $(1.5) $(0.8) $(1.1)
Basic earnings per share $(0.27) $(0.20) $(0.11) $(0.13)
Diluted earnings per share $(0.27) $(0.20) $(0.11) $(0.13) Adjusted net income/(loss) $(2.1) $(1.5) $(0.8) $(1.1)
Year 2006 - 2007 Quarterly Results
(in millions, expect per share data)
(unaudited) 2007
Q1 07 Q2 07 Q3 07 Q4 07 Revenues $4.9 $5.2 $5.4 $5.5
Sequential Growth 7% 7% 4% 2%
YOY Growth 25% 27% 26% 22% Gross margin 83% 82% 83% 81%
Net income (loss) $(1.0) $(0.4) $2.9 $(0.8)
Basic earnings per share $(0.13) $(0.04) $0.35 $(0.10)
Diluted earnings per share $(0.13) $(0.04) $0.33 $(0.10) Adjusted net income/(loss) $(1.0) $(0.4) $0.5 $(0.1) "2007 was a successful year for Onvia," stated Mike Pickett, Onvia's Chairman and Chief Executive Officer. "We accelerated revenue growth, and for the first time, generated positive cash flow and achieved profitability. In the past quarter, we invested in additional experienced sales and technology team members in order to accelerate new product development, improve existing infrastructure and enhance sales productivity and growth in the future." Mr. Pickett continued, "Our revenue growth in the second half of 2007 slowed modestly for the first time since the launch of our last major product, Onvia Business Builder. Client upgrades have slowed as we approach the saturation point within our client base. Our acquisition sales force is smaller, but more productive than in prior years. To maximize future revenue growth rates, we are increasing the size of our sales force, and have introduced a major new product, Onvia Planning and Construction. This new product expands our solutions for the commercial and residential development market and plugs a major information gap in the marketplace by providing early-stage project information." Onvia's cash flow from operations was $1.3 million in the fourth quarter of 2007 compared to ($786,000) in the prior year. During 2007, Onvia generated positive operating cash flow of $2.0 million compared to ($3.6) million in negative cash flow in 2006. As of December 31, 2007, Onvia had a security deposit of $3.5 million on its prior office space and a $2.7 million receivable for tenant improvements reimbursable by Onvia's new landlord. These balances are expected to convert into cash in the first quarter of 2008.
Year over year, unearned revenue increased 7% to $9.4 million from $8.8 million as of December 31, 2006. Growth in unearned revenue slowed in 2007 due to slowing revenue growth, a reduced focus on multi-year contracts and the increase in revenue from one-time deliverables, which is recognized upon delivery and is not included in unearned revenue.
Fourth Quarter Operating Metrics Onvia's last major product launch was the release of Onvia Business Builder in August 2005, followed by the launch of Onvia Navigator in April 2006. Clients receiving Onvia sales leads were able to upgrade their subscription levels to add database access and improve market research capabilities. Onvia has leveraged these products to increase the contract value of its client base; however, contract value and contract value per client growth rates have recently slowed due to a smaller acquisition sales force and the absence of new products. The launch of Onvia Planning and Construction in early February 2008 is intended to expand the market for Onvia's services, generate top line revenue growth and improve client and per-client metrics.
(unaudited)
2006
Q1 06 Q2 06 Q3 06 Q4 06 Annual Contract Value (in millions) $13.9 $14.4 $14.9 $15.5
Total Clients 9,800 9,500 9,200 9,200
High Value Clients 8,100 8,000 7,800 7,900
Contract Value per Client $1,423 $1,512 $1,629 $1,692
Quarterly Contract Value per Client $1,435 $1,673 $1,823 $1,810
(unaudited)
2007
Q1 07 Q2 07 Q3 07 Q4 07 Annual Contract Value (in millions) $16.6 $17.2 $17.5 $17.6
Total Clients 9,100 9,000 8,800 8,500
High Value Clients 8,000 8,000 7,900 7,700
Contract Value per Client $1,836 $1,920 $1,984 $2,064
Quarterly Contract Value per Client $2,011 $2,067 $2,163 $2,204
Annual Contract Value
At December 31, 2007, annual contract value for client subscriptions was $17.6 million, up from $15.5 million at December 31, 2006, an increase of 14%.
Clients At December 31, 2007, Onvia had approximately 8,500 clients, down from 8,800 at September 30, 2007, and 9,200 at December 30, 2006. High value clients, which exclude Onvia's entry level Metropolitan clients, decreased to 7,700 from 7,900 clients in the fourth quarter of 2006. The decline in high value clients is primarily due to the decline in new client acquisitions in the fourth quarter of 2007 compared to the prior year. In the fourth quarter of 2006, Onvia employed eight more acquisition sales people than in the fourth quarter of 2007. The sales force was more productive on a per sales person basis in the fourth quarter of 2007; however the productivity improvements did not offset the transaction volume lost due to the smaller sales force. Client count growth requires a larger acquisition sales force and new products to expand Onvia's addressable market, such as Onvia Planning and Construction.
Annual Contract Value per Client Annual contract value per client is the average annual contract value of existing clients on an individual client basis. As of December 31, 2007, annual contract value per client was $2,064 compared to $1,692 a year ago, and $1,984 at September 30, 2007.
Quarterly Contract Value per Client Quarterly contract value per client represents the average annual contract value of all new and renewing client transactions during the quarter. Quarterly contract value per client increased to $2,204 in the fourth quarter of 2007 compared to $1,810 in the fourth quarter of 2006, and $2,163 during the third quarter of 2007.
A conference call hosted by Onvia's management will be held today, Wednesday, February 20, 2008 at 1:30 p.m. PDT to further discuss Onvia's financial results. This call will be broadcast via the Internet and may be accessed from Onvia's website at http://www.onvia.com/. A replay of the broadcast will be available on Onvia's website or by dialing 1-800-675-9924, pass code 22008, 15 minutes after the conference call. For investor relations questions, please e-mail .
About Onvia Onvia (NASDAQ:ONVI) helps businesses achieve a competitive advantage by delivering timely and actionable sales opportunities and information. More than 8,500 subscribers across the United States rely on Onvia as a comprehensive resource for industry-specific information needed to make intelligent sales decisions. Onvia offers unparalleled coverage of government purchasing activity in addition to commercial and residential projects in development for markets such as architecture and engineering, IT/telecom, business consulting services, operations and maintenance, and transportation. Onvia was founded in 1996 and is headquartered in Seattle, Washington.
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 fails to improve sales penetration and marketing of new products; client adoption of new products is slower than expected; Onvia's technology fails to handle the increased demands on its online network caused by the new product offerings; Onvia fails to increase annual contract value; Onvia's focus on high value clients is misplaced; Onvia fails to continue to upgrade its existing client base into new and higher valued products; Onvia has overestimated the value of sales intelligence to companies; Onvia fails to recruit, hire and retain key employees necessary to accelerate new product development and enhance sales productivity and growth; and increased construction costs related to tenant improvements at Onvia's new corporate offices may impact cash flow and operating expenses.
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 our 2006 Annual Report on Form 10-K and our most recent quarterly report on Form 10-Q, as applicable. 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.
We may discuss various non-GAAP measures. Please refer to our press release, our 8-K filing, or our website for the most directly comparable GAAP measures together with our reconciliation of the two.
ONVIA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, 2007 December 31, 2006
(Unaudited)
(in thousands, except share amounts)
ASSETS CURRENT ASSETS:
Cash and cash equivalents $14,206 $8,430
Short-term investments, available-for-sale - 6,005
Accounts receivable, net of allowance
for doubtful accounts of $52 and $48 1,393 815
Prepaid expenses and other current assets 551 781
Reimbursable tenant improvements 2,663 -
Security deposits, current portion 3,500 - Total current assets 22,313 16,031 LONG TERM ASSETS:
Property and equipment, net of accumulated
depreciation of $6,209 and $4,641 957 2,145
Long-term investments - 1,478
Security deposits, net of current portion 538 3,500
Other assets, net 1,838 837 Total long term assets 3,333 7,960 TOTAL ASSETS $25,646 $23,991 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable $2,126 $455
Accrued expenses 1,152 1,107
Idle lease accrual, current portion - 1,071
Capital leases, current portion 113 -
Unearned revenue, current portion 9,097 8,481
Deferred rent, current portion 3 29 Total current liabilities 12,491 11,143 LONG TERM LIABILITIES:
Idle lease accrual, net of current portion - 2,708
Capital leases, net of current portion 88 -
Unearned revenue, net of current portion 342 359
Deferred rent, net of current portion 279 186 Total long term liabilities 709 3,253 TOTAL LIABILITIES 13,200 14,396 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;
8,207,465 and 7,929,153 shares
issued and outstanding 1 1
Treasury stock, at cost:
16,918 and 32,369 shares (83) (159)
Additional paid in capital 351,268 349,175
Accumulated other comprehensive (loss) - (6)
Accumulated deficit (338,740) (339,416) Total stockholders' equity 12,446 9,595 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $25,646 $23,991 ONVIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE (LOSS) / INCOME (UNAUDITED) Three Months Twelve Months
Ending December Ending December
31, 31,
2007 2006 2007 2006 Revenue
Subscription $4,651 $3,945 $17,824 $14,412
Content license 589 541 2,442 2,111
Other 273 39 662 216 Total revenue 5,513 4,525 20,928 16,739 Cost of revenue 1,032 784 3,731 3,395
Gross margin 4,481 3,741 17,197 13,344 Operating expenses:
Sales and marketing 2,981 2,900 11,546 11,712
Technology and development 1,261 1,107 4,411 4,215
General and administrative 1,289 871 4,199 3,980
Idle lease expense - 163 (2,653) (67) Total operating expenses 5,531 5,041 17,503 19,840 Loss from operations (1,050) (1,300) (306) (6,496)
Other income, net 239 242 982 952 Net (loss) / income $(811) $(1,058) $676 $(5,544) Unrealized (loss) / gain on
available-for-sale securities (8) (4) 6 17 Comprehensive (loss) / income $(819) $(1,062) $682 $(5,527) Basic net (loss) / income per common
share $(0.10) $(0.13) $0.08 $(0.70) Diluted net (loss) / income per common
share $(0.10) $(0.13) $0.08 $(0.70) Basic weighted average shares
outstanding 8,199 7,918 8,087 7,888 Diluted weighted average shares
outstanding 8,199 7,918 8,606 7,888 ONVIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended Twelve Months
December 31, Ended December 31,
2007 2006 2007 2006
(Unaudited) (Unaudited)
(In thousands) (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) / income $(811) $(1,058) $676 $(5,544)
Adjustments to reconcile net (loss) /
income to net cash provided by /
(used in) operating activities:
Depreciation and amortization 782 281 2,014 1,076
Impairment of assets - - 45 -
Loss / (gain) on sale of property and
equipment - - 7 (2)
Stock-based compensation 256 303 927 1,258
Change in operating assets and
liabilities:
Accounts receivable (496) 78 (578) (25)
Prepaid expenses and other current
assets 335 96 259 157
Other assets 12 9 19 69
Accounts payable 859 (199) 1,670 (372)
Accrued expenses 325 95 70 (78)
Idle lease accrual (197) (904) (3,779) (2,759)
Unearned revenue 104 519 598 2,580
Deferred rent 145 (6) 68 (8) Net cash provided by / (used in)
operating activities 1,314 (786) 1,996 (3,648) CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (215) (405) (345) (1,070)
Proceeds from sales of property and
equipment - - - 5
Additions to internally developed
software (507) (135) (1,321) (422)
Purchases of investments - (7,491) (9,044) (21,083)
Sales of investments 8,270 3,010 8,270 3,010
Maturities of investments 2 4 8,263 19,060
Reimbursable tenant improvements (2,428) - (2,663) -
Additions to security deposits - - (538) -
Return of security deposits - 231 - 231 Net cash provided by / (used in)
investing activities 5,122 (4,786) 2,622 (269) CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease
obligations (25) - (49) -
Proceeds from exercise of stock
options and purchases under employee
stock purchase plan 122 98 1,207 260 Net cash provided by financing
activities 97 98 1,158 260 Net increase / (decrease) in cash and
cash equivalents 6,533 (5,474) 5,776 (3,657) Cash and cash equivalents, beginning
of period 7,673 13,904 8,430 12,087 Cash and cash equivalents, end of
period $14,206 $8,430 $14,206 $8,430 Three Months Ended Twelve Months Ended
December 31, 2007 December 31, 2007
(Unaudited) (Unaudited)
(In thousands, except (In thousands, except
per share data) per share data) As Lease As Lease
Reported Impact Adjusted Reported Impact Adjusted Revenue
Subscription $4,651 $- $4,651 $17,824 $- $17,824
Content license 589 - 589 2,442 - 2,442
Other 273 - 273 662 - 662 Total revenue $5,513 $- $5,513 $20,928 $- $20,928 Cost of revenue 1,032 - 1,032 3,731 - 3,731 Gross margin 4,481 - 4,481 17,197 - 17,197 Operating expenses:
Sales and marketing 2,981 (559) 2,422 11,546 (800) 10,746
Technology and
development 1,261 (107) 1,154 4,411 (146) 4,265
General and
administrative 1,289 (46) 1,243 4,199 (67) 4,132
Idle lease expense - - - (2,653) 2,653 - Total operating
expenses 5,531 (712) 4,819 17,503 1,640 19,143 (Loss) / Gain from
operations (1,050) 712 (338) (306) (1,640) (1,946)
Other income, net 239 - 239 982 - 982 Net (loss) / income $(811) $712 $(99) $676 $(1,640) $(964) Unrealized (loss) / gain
on available-for-sale
securities (8) - (8) 6 - 6 Comprehensive (loss) /
income $(819) $712 $(107) $682 $(1,640) $(958) Basic net (loss) /
income per common share $(0.10) $0.09 $(0.01) $0.08 $(0.20) $(0.12) Basic and diluted net
(loss) / income per
common share $(0.10) $0.09 $(0.01) $0.08 $(0.20) $(0.12) Basic weighted average
shares outstanding 8,199 8,199 8,199 8,087 8,087 8,087 Basic and diluted
weighted average shares
outstanding 8,199 8,199 8,199 8,606 8,087 8,087
DATASOURCE: Onvia, Inc.
CONTACT: Cameron Way of Onvia, Inc., +1-206-373-9034 Web site: http://www.onvia.com/
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