EX-99.1 3 doc2.txt Contacts: Andrew Kaplan Jonathan Korzen Executive Vice President and Director of Chief Financial Officer Public Relations Audible, Inc. Audible, Inc. (973) 837-2734 (973) 837-2718 akaplan@audible.com jkorzen@audible.com AUDIBLE, INC. ANNOUNCES STRONG THIRD QUARTER REVENUE GROWTH CONSUMER CONTENT REVENUE UP 14% OVER Q2 2003 AND 60% OVER Q3 OF 2002; MANAGEMENT TO DISCUSS RECENT APPLE ITUNES ALLIANCE AND NEW PRODUCT AND COMARKETING DEALS WITH SONY, PALMONE, AND GATEWAY DURING TODAY'S CONFERENCE CALL WAYNE, NJ, NOVEMBER 11, 2003-Audible, Inc. (OTC BB: ADBL) today announced results for the quarter ended September 30, 2003. Senior management will host an investor teleconference at 5:00 p.m. EST on Tuesday, November 11, to discuss the results and company outlook. New partnership initiatives with Sony, palmOne, Gateway, Madonna, and HarperCollins will also be covered. Details for the teleconference and webcast are provided below. Audible.com(R) is the leading provider of digitally delivered spoken word audio. During the third quarter 2003, Audible's consumer content revenue increased 14% over the second quarter 2003 to $4,789,921. This represents a 60% revenue increase over the third quarter of 2002. Audible gained a record 27,000 new customers during the quarter. Net cash used in operating and investing activities during the quarter was $593,000, which included a one time cost of $400,000 related to the closing of new financing with Apax Partners and Bertelsmann. Audible's cash and cash equivalents totaled $6.9 million at September 30, 2003. -more- -page 2- "This was an excellent quarter for Audible. We achieved major strategic advances that have added a new level of financial strength afforded by our cash injection from Apax Partners and Bertelsmann, a renewed marketing relationship with Amazon, and our recently launched product integration with the Apple iTunes Music Store. Today's addition of new AudibleReady(R) device deals with Sony, Gateway, and palmOne are indicative of continued progress on the audio device front. And we've also delivered a level of operational execution that allowed us to exceed our internal revenue plan," said Donald Katz, Audible, Inc. chairman and CEO. "The environment for premium digital media services is more hospitable by the day. We are proud of our work during the third quarter and extremely optimistic about the future." BREAKING DEVELOPMENTS - The Treo 600 palmOne smartphone will become the first AudibleReady smartphone, capable of playing hours of audiobooks and more from Audible.com. - Gateway and Audible announced today that the new Gateway DMP-X20 Digital Music Player is now shipping, and as an AudibleReady device, comes with a free trial AudibleListener(R) membership. - Madonna's new children's book Mr. Peabody's Apples and her first book, The English Roses, are available in audio only as a download from Audible and its distribution partners, the Apple iTunes Music Store and Amazon.com. - Audible and HarperCollins have entered an agreement that will lead to hundreds of top selling new audiobook titles at audible.com. THIRD QUARTER STRATEGIC HIGHLIGHTS - Bertelsmann and its U.S. publishing arm Random House joined with global investment firm Apax Partners in a $6 million investment in Audible. - Apple and Audible announced that approximately 5,000 audio titles from Audible are now available at Apple's industry-leading iTunes Music Store. - Audible and Amazon.com renewed a marketing agreement that maintains the position for Audible as the leading provider of downloadable audiobooks at Amazon.com. -more- -page 3- A live webcast of the financial results conference call is available today, Tuesday, November 11, 2003, at 5:00 p.m. EST (2:00 p.m. PST). Please click on www.audible.com/ir for online access to the call. ABOUT AUDIBLE.COM: Audible.com, named the best consumer Web service by CNet.com (April 2003), and one of the "Best of Today's Web" by PC World (August 2002), features daily audio editions of The Wall Street Journal and The New York Times - available on a subscription basis in time for the morning drive to work each day-as well as Forbes, Harvard Business Review, Scientific American and Fast Company. The site offers a powerful collection of audiobook best sellers and classics by authors such as Tom Clancy, Stephen King, John Grisham, Mary Higgins Clark, James Patterson, the Dalai Lama, David McCullough, Stephen Hawking, William Shakespeare, Emily Dickinson and Jane Austen. There are also speeches, lectures, and on-demand radio programs including Marketplace, All Things Considered, Car Talk, Fresh Air and This American Life, and original shows such as RobinWilliams@audible.com. All of the programs at audible.com are available for computer-based playback, burning to audio CD, and on-the-go listening using numerous AudibleReady(TM) portable digital audio players offered by leading consumer electronics and computer manufacturers. ABOUT AUDIBLE, INC.: Audible(R) (www.audible.com(R)) is the Internet's largest, most diverse provider of premium spoken audio services for content download and playback on personal computers, CD or AudibleReady(R) computer-based mobile devices. Audible has more than 34,000 hours of audio programs and 135 content partners that include leading audiobook publishers, broadcasters, entertainers, magazine and newspaper publishers and business information providers. Audible.com is Amazon.com's (www.amazon.com) exclusive provider of spoken word products for downloading or streaming via the Web. Additionally, the Company is strategically aligned with Random House, Inc., to pioneer the first-ever imprint to produce spoken word content specifically suited for digital distribution, Random House Audible. Among the Company's key business partners are Apple Corp., Casio Inc., Handspring, Hewlett-Packard Company, Microsoft Corporation, Palm, Inc., Royal Philips Electronics, RealNetworks, Inc., Sony Electronics, Texas Instruments and VoiceAge Corp. Audible, www.audible.com, Audible Otis, AudibleListener, and AudibleReady are registered trademarks of Audible, Inc. and all are part of the family of Audible, Inc. trademarks. Other product or service names mentioned herein are the trademarks of their respective owners. This press release contains information about Audible, Inc. that is not historical fact and may be deemed to contain forward-looking statements about the company. Actual results may differ materially from those anticipated in any forward-looking statements as a result of certain risks and uncertainties, including, without limitation, Audible's limited operating history, history of losses, uncertain market for its services, and its inability to license or produce compelling audio content and other risks and uncertainties detailed in the company's Securities and Exchange Commission filings. -more-
AUDIBLE INC. COMPARATIVE STATEMENT OF OPERATIONS Three months ended ----------------------------- September 30, June 30, --------------- ------------ 2003 2003 --------------- ------------ (unaudited) (unaudited) Revenue, net: Consumer content $ 4,789,921 $ 4,204,999 Services 20,337 30,485 --------------- ------------ Total content and services 4,810,258 4,235,484 Hardware 136,198 175,109 Other 16,126 16,126 --------------- ------------ Total revenue, net 4,962,582 4,426,719 --------------- ------------ Operating expenses: Cost of content and services revenue 1,351,606 1,157,131 Cost of hardware revenue 444,544 512,508 Production expenses 1,034,313 811,233 Development 590,434 608,556 Sales and marketing 1,514,568 1,525,782 General and administrative 904,692 728,616 --------------- ------------ Total operating expenses 5,840,157 5,343,826 --------------- ------------ Loss from operations (877,575) (917,107) Other income, net 5,171 4,097 --------------- ------------ Net loss (872,404) (913,010) Accrued dividends on convertible preferred stock (454,197) (376,982) Preferred stock discount (1,444,444) - --------------- ------------ Total dividends (1,898,641) (376,982) --------------- ------------ Net loss applicable to common shareholders $ (2,771,045) $(1,289,992) =============== ============ Basic and diluted net loss per common share $ (0.09) $ (0.04) =============== ============ Weighted average common shares outstanding 31,023,059 30,997,944 --------------- ------------
AUDIBLE INC. CONDENSED STATEMENT OF OPERATIONS Three months ended Nine months ended September 30, September 30, -------------------------- --------------------------- 2003 2002 2003 2002 ------------ ------------ ------------ ------------- (unaudited) (unaudited) Revenue, net: Consumer content $ 4,789,921 $ 3,002,039 $12,882,505 $ 7,442,070 Services 20,337 64,316 78,918 299,942 ------------ ------------ ------------ ------------- Total content and services 4,810,258 3,066,355 12,961,423 7,742,012 Hardware 136,198 152,243 488,522 734,877 Other 16,126 68,709 48,378 100,961 ------------ ------------ ------------ ------------- Total revenue, net 4,962,582 3,287,307 13,498,323 8,577,850 ------------ ------------ ------------ ------------- Operating Expenses: Cost of content and services revenue 1,351,606 1,475,558 3,493,540 3,596,012 Cost of hardware revenue 444,544 604,644 1,505,356 2,053,196 Production expenses 1,034,313 1,029,185 2,785,469 2,946,614 Development 590,434 702,463 1,808,422 1,778,349 Sales and marketing 1,514,568 3,016,255 4,924,963 9,264,769 General and administrative 904,692 1,005,892 2,578,928 2,850,421 ------------ ------------ ------------ ------------- Total operating expenses 5,840,157 7,833,997 17,096,678 22,489,361 ------------ ------------ ------------ ------------- Loss from operations (877,575) (4,546,690) (3,598,355) (13,911,511) Other income, net 5,171 17,134 15,183 76,399 ------------ ------------ ------------ ------------- Net loss (872,404) (4,529,556) (3,583,172) (13,835,112) Accrued dividends on convertible preferred stock (454,197) (354,195) (1,194,828) (1,014,942) Preferred stock discount (1,444,444) - (1,444,444) - ------------ ------------ ------------ ------------- Total dividends (1,898,641) (354,195) (2,639,272) (1,014,942) ------------ ------------ ------------ ------------- Net loss applicable to common shareholders $(2,771,045) $(4,883,751) $(6,222,444) $(14,850,054) ============ ============ ============ ============= Basic and diluted net loss per common share $ (0.09) $ (0.16) $ (0.20) $ (0.49) ============ ============ ============ ============= Weighted average common shares outstanding 31,023,059 30,947,340 31,006,408 30,352,908 ------------ ------------ ------------ -------------
AUDIBLE INC. CONDENSED BALANCE SHEETS September 30, December 31, Assets 2003 2002 --------------- -------------- (unaudited) Current Assets Cash and cash equivalents $ 6,882,519 $ 2,822,080 Accounts receivable, net of allowance 250,593 189,263 Royalty advances 46,664 58,425 Prepaid expenses and other current assets 342,168 736,823 Inventory 200,324 77,262 --------------- -------------- Total current assets 7,722,268 3,883,853 Property and equipment, net 323,824 633,400 Other assets 329,232 90,805 --------------- -------------- Total Assets $ 8,375,324 $ 4,608,058 =============== ============== Liabilities and Stockholders' Deficit Current Liabilities Accounts payable $ 615,893 $ 1,077,509 Accrued expenses and compensation 2,378,555 3,231,893 Royalty obligations, current 418,500 598,500 Advances, current 680,891 476,053 Accrued dividends on convertible preferred stock 582,686 125,257 --------------- -------------- Total current liabilities 4,676,525 5,509,212 Deferred cash compensation 58,750 90,550 Royalty obligations, non current 72,500 25,000 Advances, non current - 19,448 Redeemable convertible preferred stock: Series A - 12,289,976 Stockholders' Deficit Convertible preferred stock: Series A 13,027,375 - Convertible preferred stock: Series B 1,137,500 1,137,500 Convertible preferred stock: Series C 5,859,772 - Common stock 317,683 316,872 Additional paid-in capital 101,712,718 98,032,967 Deferred compensation and services (273,538) (591,155) Notes due from stockholders for common stock (58,750) (289,545) Treasury stock at cost (184,740) (184,740) Accumulated deficit (117,970,471) (111,748,027) --------------- -------------- Total Stockholders' Deficit 3,567,549 (13,326,128) --------------- -------------- Total Liabilities and Stockholders' Deficit $ 8,375,324 $ 4,608,058 =============== ==============
AUDIBLE INC. CONDENSED STATEMENTS OF CASH FLOWS Nine months ended September 30, --------------------------- 2003 2002 ------------ ------------- (unaudited) Cash flows from operating activities: Net loss $(3,583,172) $(13,835,112) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 403,555 1,212,744 Services rendered for common stock and warrants 884,068 4,594,223 Services rendered for preferred stock - 454,998 Non-cash compensation charge 139,630 219,834 Non-cash forgiveness of notes due from stockholders for common stock 198,995 - Non-cash bonus in satisfaction of note receivable due from stockholder - 40,250 Deferred cash compensation - (3,000) Changes in assets and liabilities: Interest receivable on short term investments - 1,260 Accounts receivable, net (61,330) (74,588) Royalty advances 11,761 (36,318) Prepaid expenses and other current assets 394,655 140,573 Inventory (123,062) 50,501 Other assets (238,427) (75,000) Accounts payable (461,616) (304,395) Accrued expenses and compensation 646,662 1,057,602 Royalty obligations (132,500) (254,950) Advances 185,390 (170,991) ------------ ------------- Net cash used in operating activities (1,735,391) (6,982,369) ------------ ------------- Cash flows from investing activities: Purchases of property and equipment (93,979) (145,133) ------------ ------------- Net cash used in investing activities (93,979) (145,133) ------------ ------------- Cash flows from financing activities: Proceeds from sale of Series C preferred stock, net 5,859,772 - Proceeds from sale of common stock, net - 3,159,250 Proceeds from exercise of common stock options 30,037 5,556 Payments received on notes due from stockholders for common stock - 4,911 ------------ ------------- Net cash provided by financing activities 5,889,809 3,169,717 ------------ ------------- Increase (decrease) in cash and cash equivalents 4,060,439 (3,957,785) Cash and cash equivalents at beginning of period 2,822,080 7,627,802 ------------ ------------- Cash and cash equivalents at end of period $ 6,882,519 $ 3,670,017 ============ =============