ImageX.com Reports Earnings, Expects 80% Growth in 2001
Press release from the issuing company
KIRKLAND, Wash. - February 1, 2001 - ImageX.com, Inc. (Nasdaq: IMGX), the technology market leader in Web-enabled design and printing services, today reported record-setting revenues of $50.7 million for the year ended December 31, 2000, an increase of 341% from revenues of $11.5 million last year. Revenues for the fourth quarter ended December 31, 2000 were $19.5 million, an increase of 301% compared with revenues of $4.9 million for the same period last year.
For the year ended December 31, 2000, the company reported a better-than-expected cash loss of $35.9 million, or ($1.53) per basic and diluted share, based on 23.5 million weighted average shares outstanding, soundly beating the Thomson/First Call consensus estimate of a full-year cash loss of ($1.63) per share. For the same period last year, the company reported a cash loss of $16.6 million, or ($2.44) per share, based on 6.8 million weighted average shares outstanding.
For the fourth quarter ended December 31, 2000, the company reported a cash loss of $9.1 million, or ($0.35) per share, based on 26.2 million weighted average shares outstanding, versus the Thompson/First Call consensus estimate for the fourth quarter 2000 of ($0.43) per share. This compares with a cash loss of $6.5 million, or ($0.39) per share, based on 16.7 million shares outstanding for the same period last year.
Including non-cash items, the company's 2000 year-end net loss was $47.5 million, or ($2.02) per share, compared with $21.0 million, or ($3.07) per share for 1999. For the quarter ended December 31, 2000, the company's net loss, including non-cash items, was $12.8 million, or ($0.49) per share, on 26.2 million weighted average shares outstanding compared with a net loss of $8.2 million, or ($0.49) per diluted share, on 16.7 million weighted average shares outstanding for the period ended December 31, 1999.
"These solid fourth quarter and year-end results are proof that our business model is working," said Rich Begert, president and chief executive officer. "Our strategy has been consistent, revenues continue to grow, expenses are declining and cash balances remain strong. Our continued success is based on our ability to manage operations by focusing on our core business, targeting Fortune 1000 companies and imposing stringent financial discipline on our organization."
ImageX.com reported record gross profit, up 467%, to $16.8 million for the year ended December 31, 2000 compared with gross profit of $3.0 million for the prior year. Gross profit for the fourth quarter of 2000 was $6.7 million, a 416% increase over the same period last year. Gross margin (gross profit as a percentage of revenues) improved to 33% for the year ended 2000 compared with gross margin of 26% for the same period last year.
Total operating expenses before depreciation, amortization and write-off of in-process research and development totaled $56.4 million for the full year 2000 compared with $19.8 million for 1999, reflecting the addition of two acquisitions in June 2000. Quarter-over-quarter cash operating expenses fell nearly 9% in real terms and dropped to 84% of total revenues in the fourth quarter from 97% of total revenues in the third quarter.
The company reported cash and cash equivalents of $40.4 million at December 31, 2000 compared with $51.1 million at September 30, 2000 and $18.3 million at December 31, 1999.
"Our cash resources are sufficient to achieve cash flow break-even and bottom line profitability," said Robin L. Krueger, the company's chief financial officer. "We have a successful expense management program in place, our quarter-over-quarter cash losses declined from $10.7 million to $9.1 million, and our cash consumption continues to decline. These are indicators that we remain on track to start generating cash within the next year."
"Our focus on increased operating efficiencies paid off during the fourth quarter," said Begert. "ImageX.com's operating expenses, before depreciation and amortization, decreased both in real terms and as a percentage of total revenues. Simultaneously, order volume more than doubled, attesting to the scalability of our technologies."
"We also continue to add new customer relationships while increasing revenue from existing customers," Begert continued. "Mining our existing customer base is key, and we have proven that as our customer relationships deepen and mature, top-line numbers grow accordingly."
Online printing center continues to see steady customer growth. ImageX.com's Corporate Online Printing Center's total online Fortune 1000 customers increased to 32 at December 31, 2000. Total online printing customers for the year equaled 331, reflecting an addition of 13 corporate relationships during the fourth quarter of 2000. Customers added during the fourth quarter include: Amersham Pharmacia BioTech and Johnson & Johnson Consumer Products Division. During the fourth quarter, the company also received significant orders from existing customers, including Blue Shield of California, XO Communications, IKON Office Solutions and SFX Entertainment.
Order volume and number of online products show explosive growth. Order volume for the quarter ended December 31, 2000 grew to more than 35,500 items, an increase of more than 230% compared with the same period last year and a 15% increase over third quarter 2000. The number of customized products on ImageX.com's customer Web sites grew to 5,400, a 140% increase compared with the same period in 1999 and an increase of nearly 35% over the previous quarter. During the fourth quarter, 25 new customized corporate Web sites went live. The company had 817 full-time employees at December 31, 2000.
ImageX.com maintains technology leadership position. During the fourth quarter of 2000, ImageX.com completed requirements for integration with Ariba's buy-side application, "Ariba Buyer," by attaining Ariba-Readyª status. This will provide mutual customers seamless compatibility of the two systems for print e-procurement. In addition, the company released the eighth version of its Corporate Online Printing Center technology since inception. "We are committed to listening to our customers' needs and continuously improving our print e-procurement solution as well as increasing efficiencies for our internal operations," said Begert. ImageX.com currently has 83 patents pending to protect proprietary technologies company-wide.
PrintBid.com technology refocused. As part of examining all aspects of the business and related costs, the company announced a restructuring of the operations and technology developed under the PrintBid.com name. The PrintBid.com technology will be integrated into ImageX.com's core product offering, the Corporate Online Printing Center, and will no longer operate as a separate marketplace. "With our intense focus on profitability, additional funding of the PrintBid.com marketplace business model didn't make sense at this time," stated Begert. "We believe the PrintBid.com technology is a valuable asset to our Fortune 1000 customers and are pursuing efforts to integrate that technology into our Corporate Online Printing Center offering."
Extensis Products Group ups international presence. During the fourth quarter, Extensis Products Group launched new products in the UK, France, Germany and Japan. In addition, a new European distribution agreement was signed, which will enable customers to purchase Suitcaseª, a font manager product, off the shelf at most large retail outlets in Europe. New international customers include Nestle, TDI Advertising and KPMG, which join new domestic customers such as American Express, MTV Networks, Sun Media, Pier 1 Imports, Pacific Bell, and Deloitte & Touche.
Preflight Online web-based service launched. Extensis Products Group launched the first online preflighting system, Preflight Online, during the fourth quarter. Preflight Online allows users to seamlessly inspect graphic files from their desktops via the Internet for potential production problems prior to sending the file to a printer. Most notably, AP AdSEND, the digital advertising delivery service of the Associated Press, selected Preflight Online to inspect the approximately 1.5 million digital advertisements delivered to them each year.
"Our intense focus on profitability will continue in our future outlook," stated Krueger. As a consequence of general economic conditions and the restructure of PrintBid.com, the company expects first quarter revenue of $20.1 million. Full year 2001 revenue is conservatively estimated at $90 million and would represent an increase of nearly 80% over full year 2000. Cash operating expenses are expected to decline steadily from 82% of revenue in the first quarter of 2001 and drop to 66% of revenue for the full year. Net cash losses will be impacted by one-time expenses related to the restructure of PrintBid.com in the first quarter, and are expected to be in the range of $8 to $9 million. For the full year 2001, cash losses are estimated at $26 to $28 million.
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