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CORRECTING and REPLACING Traffix, Inc. Reports Second Quarter 2005 Results; Net Revenue of $16.6 Million, Representing an 82% Increase Over Prior Year`s Comparable Period
July 15, 2005 08:52:02 (ET)
PEARL RIVER, N.Y., Jul 15, 2005 (BUSINESS WIRE) -- Please replace the release with the following corrected version due to multiple revisions.
TRAFFIX, INC. REPORTS SECOND QUARTER 2005 RESULTS
NET REVENUE OF $16.6 MILLION, REPRESENTING AN 82% INCREASE OVER PRIOR YEAR'S COMPARABLE PERIOD
GAAP INCOME FROM OPERATIONS INCREASES 175% OVER PRIOR YEAR'S COMPARABLE PERIOD
Traffix, Inc. (TRFX, Trade), a premier interactive media company, today reported results for the quarter ended May 31, 2005.
Net revenue for the quarter ended May 31, 2005 increased 82% to $16.6 million from $9.1 million in the comparable quarter of fiscal 2004. On a sequential basis, net revenue increased $3.3 million, or 25%, to $16.6 million, as compared to $13.3 million in the first quarter of fiscal 2005.
Income from operations increased 175% to $1.1 million from $0.4 million in the comparable quarter of fiscal 2004. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2005 was $1.8 million compared to $0.7 million in the comparable quarter from 2004, an increase of 146%.
Net income was $0.7 million, or $0.05 per diluted share, compared to net income of $665,000, or $0.04 per diluted share, in the comparable quarter of fiscal 2004. Diluted earnings per share increased to $0.05, from diluted earnings per share of $0.04 in the first fiscal quarter of 2005.
The increases in the Company's net revenues, income from operations, net income and diluted earnings per share, both on a year-to-year and sequential basis, were attributable to organic growth from the Company's existing lines of business, as well as from the contributions of the June 2004 Send Traffic acquisition and the January 2005 Hot Rocket acquisition.
"We are very pleased with our financial and operating results for the second quarter," said Jeffrey L. Schwartz, Chairman and Chief Executive Officer of Traffix. "Our mission is to provide valuable content to our users, building premier media communities. The growth posted this quarter demonstrates a strong affirmation of that strategy. By continuing to expand our content offerings, and opening new media communities, we believe we are well positioned for future growth."
Mr. Schwartz concluded by stating that "during the second quarter, we continued to improve our websites and infrastructure. With the stabilization of our overhead, revenue growth is increasingly adding to our bottom-line results. The internet advertising market is projected to expand rapidly in the coming years. With our cross section of content and growing media network, we believe we are poised to capitalize on that growth."
Recent Business Highlights
-- Extended and expanded content licensing agreement with one of America's leading special interest publishing companies, which publishes more than 500 special interest titles and publications, enriching and expanding Traffix's access to travel, automotive, medical and health, inspirational, leisure, photos and digital stationary content.
-- New member registrations on Traffix network exceeded 5.2 million during the quarter, a 140% increase when compared with the 2.2 million generated during the same period one year ago.
-- Completed beta testing on a new breed of greeting card site, where users can send greeting cards to friends and family by email or instant messenger containing popular songs and music, using our proprietary content platform which we anticipate will allow us to rapidly deploy and scale new content communities.
About Traffix, Inc:
Traffix, Inc is a premier interactive media company that develops its own content and builds communities tailored to consumers' specific interests and lifestyles. Its full solution marketing services group delivers media, analytics and results to third parties through its three business groups:
-- Traffix Performance Marketing (http://www.traffixinc.com) offers marketers brand and performance based distribution solutions though the Traffix network of entertaining web destinations, via its proprietary ad-serving optimization technology.
-- Send Traffic (http://www.sendtraffic.com) is a performance focused, search engine marketing firm focused on building online presence, optimizing marketing expenditures and retaining customers.
-- Hot Rocket (http://www.hotrocketinc.com) is an online direct-response media firm servicing advertisers, publishers and agencies by leveraging vast online inventory across sites, networks, search engines and email to drive users to client web properties, generating qualified leads, registrations and sales.
For more information about Traffix, Inc., visit the website at www.traffixinc.com.
This release contains certain forward-looking statements and information relating to Traffix that are based on the beliefs of Traffix's management, as well as assumptions made by and information currently available to the Company. Such statements reflect the current views of the Company with respect to future events including estimates and projections about Traffix's business based on certain assumptions of Traffix's management, including those described in this Release. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict, including changes in demand for the Company's services and products, changes in technology and the regulatory environment affecting the Company's business, and difficulties encountered in the integration of acquired businesses. Should one or more of these underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not intend to update these forward-looking statements.
You may register to receive Traffix's future press releases or to download a complete Digital Investor Kit(TM) including press releases, regulatory filings and corporate materials by clicking on the "Digital Investor Kit(TM)" icon at www.kcsa.com.
TRAFFIX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE: (UNAUDITED) Three Months Ended Six Months Ended May 31, May 31, ------------------------ ------------------------- 2005 2004 2005 2004 ------------ ----------- ------------ ------------ Net revenue $16,610,569 $9,139,855 $29,886,385 $16,310,149 Cost of sales 10,526,749 5,137,014 18,941,119 8,942,968 ------------ ----------- ------------ ------------ Gross profit 6,083,820 4,002,841 10,945,266 7,367,181 Selling expenses 974,120 515,158 1,791,295 963,088 General and administrative expenses 3,914,134 3,147,860 7,675,379 6,007,437 Bad Debt expense 80,382 (65,656) 165,607 (112,113) ------------ ----------- ------------ ------------ Income from operations 1,115,184 405,479 1,312,985 508,769 Other income (expense): Interest income and dividends 237,514 113,989 425,337 222,721 Realized gains on marketable securities (11,218) 11,647 574,050 22,670 Realized gain on sale of subsidiary - 199,900 195,000 394,900 Other non- operating income (expense) 2,326 292,694 (6,384) 338,887 Minority interest in income of subsidiary (150,529) - (248,174) - ------------ ----------- ------------ ------------ Income before provision for income taxes 1,193,277 1,023,709 2,252,814 1,487,947 Provision for income taxes 485,593 358,917 921,849 470,264 ------------ ----------- ------------ ------------ Effective tax rate 40.7% 35.1% 40.9% 31.6% Net income $707,684 $664,792 $1,330,965 $1,017,683 ------------ ----------- ------------ ------------ Diluted income per share: Net income $0.05 $0.04 $0.09 $0.07 ------------ ----------- ------------ ------------ Weighted average shares outstanding 14,233,711 13,765,499 14,245,027 13,659,127 ------------ ----------- ------------ ------------ TRAFFIX, INC. AND SUBSIDIARIES SUMMARY CONSOLIDATED BALANCE SHEETS May 31, November 30, Assets 2005 2004 ------------ ------------ (UNAUDITED) Current assets: Cash and cash equivalents $7,283,691 $7,553,285 Marketable securities 23,354,021 28,251,348 Accounts receivable, trade, net of allowance for doubtful accounts of $840,367 at May 31, 2005 and $691,229 at November 30, 2004 9,498,405 4,744,220 All other current assets 1,671,448 2,129,165 ------------ ------------ Total current assets 41,807,565 42,678,018 Total non-current assets 11,945,117 9,280,492 ------------ ------------ Total assets $53,752,682 $51,958,510 ------------ ------------ Liabilities Total liabilities - current $8,641,174 $8,119,796 Total liabilities - non-current - (deferred taxes payable) 316,279 316,279 Minority Interest 169,278 - Total shareholders' equity 44,625,951 43,522,435 ------------ ------------ Total liabilities and shareholders' equity $53,752,682 $51,958,510 ------------ ------------ Working Capital (Current assets less current liabilities) $33,166,391 $34,558,222 Current Ratio $4.84 $5.26 Combined Cash and Marketable Securities $30,637,712 $35,804,633 Common stock issuable and outstanding 14,061,174 13,510,605 Tangible Book Value per share $2.49 $2.73 Combined Cash and Marketable Securities per share $2.18 $2.65 Other Unaudited Operations Data for the periods presented: Three Months Ended May 31, ------------------------- 2005 2004 ------------ ------------ Income from operations $1,115,184 $405,479 Depreciation and amortization 648,062 312,457 ------------ ------------ EBITDA (a) $1,763,246 $717,936 ------------ ------------ Six Months Ended May 31, ------------------------- 2005 2004 ------------ ------------ Income from operations $1,312,985 $508,769 Depreciation and amortization 1,098,170 635,095 ------------ ------------ EBITDA (a) $2,411,155 $1,143,864 ------------ ------------ (a) EBITDA is net income excluding special charges, interest expense, interest and dividend income, net gains (losses) on the sale of marketable securities, realized gains on subsidiary sales, permanent impairment charges to long lived assets, other nonoperating income (expense) and minority interest (income) loss, depreciation, amortization and income taxes.
SOURCE: Traffix, Inc.
Traffix, Inc. Daniel Harvey, 845-620-1212 ext. 231 danh@traffixinc.com or KCSA Todd Fromer / Erica Levy, 212-682-6300 ext. 215 / 208 tfromer@kcsa.com / elevy@kcsa.com http://www.kcsa.com Copyright Business Wire 2005
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