EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Press Release

AUDIBLE ANNOUNCES FIRST QUARTER 2007 FINANCIAL RESULTS

Company Reports Q1 2007 Revenue of $25.3 Million
Positive Adjusted EBITDA for Quarter

NEWARK, NJ, May 3, 2007 — Audible, Inc. (NASDAQ: ADBL; www.audible.com), the leader in spoken audio entertainment, information, and educational programming on the Internet, today announced unaudited financial results for the first quarter ended March 31, 2007.

Audible reported consolidated first quarter net revenues of $25.3 million, up 28% over the first quarter of 2006 and up 9% over the fourth quarter of 2006. Adjusted EBITDA of $ 0.9 million, increased by $2.4 million over the negative EBITDA reported in the first quarter of 2006. Net loss for the first quarter of 2007 was $1.2 million, or ($0.05) per share, a decrease from the net loss of $3.0 million, or ($0.12) per share, reported in the first quarter of 2006. During the quarter 72,000 AudibleListener members were acquired.

“The first quarter saw continued improvement on the bottom line, as well as a striking change in the mix of our new member additions,” noted Donald Katz, CEO and Chairman, Audible, Inc. “The mix of new members in the first quarter included an increased percentage of higher-revenue monthly AudibleListener members who responded to our introductory membership offer. This, plus strong, programmatic execution by our merchants - particularly with our email campaigns - led to a promising start to the year.”
 
First Quarter 2007 Key Financial and Operating Metrics
 
Consolidated Net Revenue: Consolidated net revenue totaled $25.3 million in first quarter of 2007, a 28% increase over the $19.7 million reported in the first quarter of 2006 and a sequential increase of 9% over $23.2 million in the fourth quarter of 2006.
 
Adjusted EBITDA: Adjusted EBITDA was $0.9 million. This is based upon a net loss of $1.2 million, which excludes stock-based compensation of $1.6 million, depreciation and amortization of $1.3 million, and interest income (net) of $0.8 million. Adjusted EBITDA increased by $2.4 million from $(1.5) million reported in the first quarter of 2006 and increased $0.4 million from $0.5 million in the fourth quarter of 2006, in each case excluding the same additional expenses from such amounts as listed above.

Deferred revenue: Deferred revenue was $15.8 million at March 31, 2007, a $1.4 million or 10% increase over the $14.4 million balance at December 31, 2006.
 
Total New AudibleListener Members: 71,874 new AudibleListener members were acquired during the first quarter of 2007, a 2% increase from the 70,400 reported in the previous quarter and down from 79,000 new AudibleListener members in first quarter of 2006.

 
Conference Call

Senior management will host an investor teleconference at 5:00 p.m. EDT today, to discuss first quarter results as well as related financial and operational developments. A live webcast of the conference call is available at www.audible.com/ir for audio streaming access to the call. To participate in the call, the dial-in number is (866)-904-6908 or +1-(416)-915-8329. Passcode 3009412.

Use of Non-GAAP Measures
 
In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, Audible presents financial measures that are non-GAAP measures, specifically adjusted EBITDA. Adjusted EBITDA is net (loss) income excluding interest, taxes, depreciation, amortization, impairment and stock based compensation. Audible believes that this non-GAAP measure, viewed in addition to and not in lieu of Audible's reported GAAP results, provides useful information to investors regarding its performance and overall results of operations. These metrics are an integral part of Audible’s internal reporting to measure the performance of the company and the overall effectiveness of senior management. Reconciliations to comparable GAAP measures are available in the accompanying schedules to this press release and on Audible's Web site. The GAAP financial measures presented are consistent with Audible's historical financial reporting practices. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies, and are not identical to corresponding measures used in our various agreements or other public filings. Management also presents total cash sales. The measurement of total cash sales is defined as the change in deferred revenue plus consolidated net sales. Management believes that total cash sales is a useful measurement when understanding the increase in deferred revenue.
 
About Audible, Inc.:
 
Audible (www.audible.com) is the leader in spoken audio information and entertainment on the Internet. Content from Audible is downloaded and played back on personal computers, CDs, or AudibleReady computer-based and wireless mobile devices. Audible has 130,000 hours of audio programs from more than 420 content partners that include leading audiobook publishers, broadcasters, entertainers, magazine and newspaper publishers, and business information providers. Audible is the preeminent provider of spoken-word audio products for Apple’s iTunes Store. Among Audible’s key business relationships are Apple Inc., Amazon.com, Palm, Inc, Creative Labs, Inc., SanDisk, and XM Satellite Radio. Audible has approximately 170 employees with headquarters in Newark, NJ and an office in London, England.
 
Audible, audible.com, 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.

Forward-Looking Statements

The statements in this press release which are not historical facts may be deemed to contain forward-looking statements about Audible. 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 Audible's Securities and Exchange Commission filings. No forward-looking statement can be guaranteed. Forward-looking statements speak only as of the date on which they are made and Audible, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

 

AUDIBLE INC. AND SUBSIDIARY
  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  
(in thousands, except share and per share data)
  
(Unaudited)
  
               
   
Three months ended
  
   
March 31,
  
December 31,
  
March 31,
  
   
2007
  
2006
  
2006
  
               
Revenue, net:
              
Content and services:
              
Consumer content
  
$
24,979
  
$
22,536
  
$
19,281
  
Point of sale rebates
    
(19
)
  
(25
)
  
(167
)
Services
    
24
   
26
   
33
 
Total content and services
   
24,984
   
22,537
   
19,147
 
Hardware
    
77
   
148
   
125
 
Related party revenue
    
91
   
395
   
373
 
Other
   
112
   
70
   
70
 
Total revenue, net
    
25,264
   
23,150
   
19,715
 
                     
Operating expenses:
                   
Cost of content and services revenue:
                    
Royalties and other content charges
    
11,256
   
9,734
   
7,983
 
Discount certificate rebates
    
260
   
418
   
298
 
Total cost of content and services revenue
    
11,516
   
10,152
   
8,281
 
Cost of hardware revenue
    
179
   
246
   
675
 
Cost of related party revenue
    
129
   
139
   
158
 
Operations
    
3,826
   
3,225
   
3,102
 
Technology and development
    
4,571
   
4,303
   
3,694
 
Marketing
   
3,904
   
4,108
   
4,301
 
General and administrative
    
3,104
   
3,402
   
3,201
 
Total operating expenses
    
27,229
   
25,575
   
23,412
 
                     
Loss from operations
    
(1,965
)
  
(2,425
)
  
(3,697
)
                     
Loss on equity investment
    
(60
)
  
(94
)
  
-
 
                     
Other income (expense):
                    
Interest income
    
845
   
822
   
660
 
Other expense
    
(6
)
  
-
   
-
 
Other income, net
    
839
   
822
   
660
 
                     
Loss before income taxes
    
(1,186
)
  
(1,697
)
  
(3,037
)
                     
Income tax expense
    
(24
)
  
(5
)
  
(3
)
State income tax benefit
    
-
   
769
   
-
 
                     
Net loss
  
$
(1,210
)
$
(933
)
$
(3,040
)
                     
                     
Basic and diluted net loss per common share
  
$
(0.05
)
$
(0.04
)
$
(0.12
)
                     
Basic and diluted weighted average common shares outstanding
    
24,205,043
   
24,158,857
   
24,481,751
 
 
 
 
 
AUDIBLE INC. AND SUBSIDIARY
  
NON-GAAP INFORMATION
  
(Unaudited)
  
(in thousands, except share and per share amounts)
  
               
   
Three months ended
  
   
March 31,
  
December 31,
  
March 31,
  
   
2007
  
2006
  
2006
  
               
Stock-based compensation included in expense line items:
              
Operations
  
$
347
  
$
344
  
$
143
  
Technology and development
    
293
   
294
   
131
 
Marketing
   
300
   
327
   
204
 
General and administrative
    
636
   
787
   
616
 
   
$
1,576
  
$
1,752
  
$
1,094
  
                     
                     
Depreciation and amortization included in expense line items:
                    
Operations
  
$
11
  
$
15
  
$
14
  
Technology and development
    
1,131
   
1,148
   
994
 
Marketing
   
-
   
-
   
-
 
General and administrative
    
168
   
145
   
114
 
   
$
1,310
  
$
1,308
  
$
1,122
  
                     
                     
Reconciliation to Non-GAAP Financial Measures (unaudited)
                    
Net loss
 
$
(1,210
)
$
(933
)
$
(3,040
)
Add back:
                    
Stock-based compensation
    
1,576
   
1,752
   
1,094
 
Depreciation and amortization
    
1,310
   
1,308
   
1,122
 
Income tax expense
    
24
   
5
   
3
 
Less:
                    
Interest income, net
    
(839
)
  
(822
)
  
(660
)
State income tax benefit
    
-
   
(769
)
  
-
 
                     
Non-GAAP adjusted EBITDA
  
$
861
  
$
541
  
$
(1,481
)
                     
                     
Reconciliation to Non-GAAP Financial Measures (unaudited)
                    
Total revenue, net
  
$
25,264
  
$
23,150
  
$
19,715
  
Add:
                    
Change in deferred revenue
    
1,432
   
2,258
   
2,076
 
Non-GAAP total cash sales
  
$
26,696
  
$
25,408
  
$
21,791
  
                     
 
 
 
 

AUDIBLE INC. AND SUBSIDIARY
  
CONDENSED CONSOLIDATED BALANCE SHEETS
  
(dollars in thousands)
  
           
   
March 31,
 
December 31,
 
Assets
  
2007
  
2006
  
   
(unaudited)
      
           
Current Assets:
          
Cash and cash equivalents
  
$
19,086
  
$
14,925
  
Short-term investments
    
46,415
   
51,295
 
Interest receivable on short-term investments
    
379
   
626
 
Accounts receivable, net of allowance
   
3,589
   
4,181
 
Accounts receivable, related parties
    
169
   
100
 
Royalty advances
    
637
   
710
 
Prepaid expenses and other current assets
    
1,452
   
1,797
 
Inventory
    
125
   
212
 
Total current assets
    
71,852
   
73,846
 
               
Property and equipment, net
    
10,989
   
8,149
 
Other assets
    
950
   
781
 
               
Total Assets
  
$
83,791
  
$
82,776
  
               
Liabilities and Stockholders' Equity
             
               
Current Liabilities:
              
Accounts payable
  
$
2,860
  
$
3,121
  
Accrued expenses
   
5,180
   
4,678
 
Accrued royalties
    
7,323
   
9,028
 
Accrued compensation
    
844
   
778
 
Deferred revenue, current
    
15,180
   
13,840
 
Total current liabilities
    
31,387
   
31,445
 
               
Deferred revenue, non current
    
603
   
513
 
Other liabilities, non current
    
525
   
262
 
Royalty obligations, non current
    
75
   
90
 
               
Commitments and contingencies
              
               
Stockholders' Equity:
              
Common stock
    
242
   
241
 
Additional paid-in capital
    
192,745
   
190,799
 
Accumulated other comprehensive (loss) income
    
(38
)
  
(36
)
Accumulated deficit
    
(141,748
)
  
(140,538
)
Total Stockholders' Equity
   
51,201
   
50,466
 
               
Total Liabilities and Stockholders' Equity
 
$
83,791
  
$
82,776
  
               
 
 
 
 
 
AUDIBLE INC. AND SUBSIDIARY
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(dollars in thousands)
  
(unaudited)
  
           
   
Three months ended
  
   
March 31,
 
   
2007
  
2006
  
           
Cash flows from operating activities:
          
Net loss
  
$
(1,210
)
$
(3,040
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
              
Depreciation and amortization
    
1,310
   
1,122
 
Non-cash stock-based compensation charge
    
1,576
   
1,094
 
Accretion of discounts on short-term investments
    
(259
)
  
(230
)
Changes in assets and liabilities:
              
Interest receivable on short-term investments
    
247
   
35
 
Accounts receivable, net
    
591
   
(582
)
Accounts receivable, related parties
    
(68
)
  
(3
)
Royalty advances
   
73
   
11
 
Prepaid expenses and other current assets
    
346
   
(1,083
)
Inventory
    
86
   
223
 
Other assets
    
(169
)
  
(774
)
Accounts payable
    
(261
)
  
(2,413
)
Accrued expenses
   
(227
)
  
(482
)
Other liabilities, non current
    
263
   
-
 
Accrued royalties
    
(1,707
)
  
7
 
Accrued compensation
    
29
   
393
 
Deferred revenue
   
1,430
   
2,076
 
Net cash provided by (used in) operating activities
    
2,050
   
(3,646
)
               
Cash flows from investing activities:
              
Purchases of property and equipment
    
(3,284
)
  
(3,716
)
Capitalized software development costs
    
(115
)
  
(198
)
Purchases of short-term investments
    
(21,736
)
  
(14,964
)
Proceeds from maturity of short-term investments
    
26,875
   
24,500
 
Net cash provided by investing activities
    
1,740
   
5,622
 
               
Cash flows from financing activities:
              
Proceeds from exercise of common stock options
    
371
   
151
 
Proceeds from exercise of common stock warrants
    
-
   
750
 
Repurchase of treasury stock at cost
    
-
   
(360
)
Net cash provided by financing activities
    
371
   
541
 
               
Effect of exchange rate changes on cash and cash equivalents
    
-
   
(5
)
               
Increase in cash and cash equivalents
    
4,161
   
2,512
 
               
Cash and cash equivalents at beginning of period
    
14,925
   
11,549
 
Cash and cash equivalents at end of period
  
$
19,086
  
$
14,061
  
               
               
Supplemental Cash Flow information
              
Accrued purchases of property and equipment
  
$
750
  
$
-
  
               
 
 
 
 

AUDIBLE INC. AND SUBSIDIARY
  
UNAUDITED SUPPLEMENTAL OPERATING DATA
  
(Numbers in thousands)
  
                                       
New AudibleListener Membership Reporting:
  
Q1 2005
  
Q2 2005
  
Q3 2005
  
Q4 2005
  
Q1 2006
  
Q2 2006
  
Q3 2006
  
Q4 2006
  
Q1 2007
  
Total AudibleListener® Members1
    
186
    
205
    
224
    
245
    
279
    
309
    
345
    
383
    
415
  
Year-over-year
    
77
%
  
78
%
  
70
%
  
56
%
  
50
%
  
51
%
  
54
%
  
56
%
  
49
%
Quarter-over-quarter
    
18
%
  
10
%
  
9
%
  
9
%
  
14
%
  
11
%
  
12
%
  
11
%
  
8
%
New AudibleListener® Members2
    
54
    
52
    
60
    
62
    
79
    
65
    
71
    
70
    
72
  
Year-over-year
    
143
%
  
136
%
  
107
%
  
59
%
  
46
%
  
25
%
  
18
%
  
13
%
  
-9
%
Quarter-over-quarter
    
38
%
  
-4
%
  
15
%
  
3
%
  
27
%
  
-18
%
  
9
%
  
-1
%
  
3
%
Average Monthly Churn in AudibleListener® Members3
    
4.00
%
  
4.70
%
  
5.10
%
  
4.80
%
  
4.60
%
  
3.40
%
  
3.10
%
  
2.50
%
  
3.00
%
Cost per New AL
  
$
52
  
$
57
  
$
57
  
$
94
  
$
51
  
$
44
  
$
45
  
$
49
  
$
41
  
(1) Total number of AudibleListener® members at the end of the period.
  
(2) Total number of new AudibleListener® members added during the period. Members canceling and rejoining a membership within the same day are counted as one membership.
  
(3) Churn is defined as member cancellations in the period divided by the sum of members at the beginning of the period plus gross member adds, divided by three months.