Metrics show improvement SEATTLE, July 31
SEATTLE, July 31 /PRNewswire-FirstCall/ -- Onvia, Inc. (Nasdaq: ONVI)
-- Onvia, a leading provider of comprehensive sales intelligence, announced
its second quarter financial results today. For the quarter ended June 30,
2008, revenue of $5.1 million was essentially flat with the second quarter of
2007 and down 4% compared to the first quarter of 2008. Onvia's net loss
increased to $1.3 million compared to a net loss of $358,000 in the second
quarter of 2007 and a net loss of $445,000 in the first quarter of 2008.
Year 2007 - 2008 Quarterly Results
(in millions, except per share data)
(unaudited)
2007 2008
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
Revenues $4.9$5.2 $5.4$5.5$5.3$5.1
Gross margin 83% 82%83% 81% 81% 78%
Net income (loss)$(1.0) $(0.4) $2.9 $(1.0) $(0.4) $(1.3)
Basic earnings per share$(0.13) $(0.04) $0.35 $(0.12) $(0.05) $(0.15)
Diluted earnings per share $(0.13) $(0.04) $0.33 $(0.12) $(0.05) $(0.15)
"Because we recognize subscription revenue ratably over the service period
according to Generally Accepted Accounting Principles or GAAP, the decline in
current period revenue reflects weakness in our business during the latter
part of 2007 and the first quarter of 2008," stated Mike Pickett, Onvia's
Chairman and Chief Executive Officer. "That weakness was partly attributable
to economic challenges facing a portion of our client base, partly
attributable to a planned change in focus of our sales organization, and
partly attributable to management issues that we believe we have addressed."
"We have begun to regain momentum as a result of changes made over the
first half of 2008 in response to our slowing revenue growth," Mr. Pickett
continued. "The best evidence of this improvement is demonstrated in the 4%
increase in Annual Contract Value compared to the first quarter of 2008.
Since the third quarter of 2007, Annual Contract Value had been essentially
flat. Additionally, the number of High Value Clients and Total Clients
remained stable for the first time in over a year. Ultimately, we expect
these improvements to be reflected in our GAAP statements."
Quarterly Metrics
(unaudited)
20072008
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
Annual Contract Value
(in millions) $16.6 $17.2 $17.5 $17.6 $17.5 $18.2
Total Clients 9,100 9,000 8,800 8,500 8,100 8,100
High Value Clients 8,000 8,000 7,900 7,700 7,500 7,500
Contract Value per Client $1,836 $1,920 $1,984 $2,064 $2,151 $2,242
Quarterly Contract
Value per Client $2,011 $2,067 $2,163 $2,204 $2,336 $2,393
At the end of 2007, under the direction of Mike Tannourji, our new SVP of
Sales, we significantly reduced our historic practice of offering early
renewal opportunities to our clients. This change in focus allows the sales
force to allocate more time advising expiring clients on the full suite of
Onvia's services, thereby creating up-sell and cross-sell opportunities. We
believe these changes will maximize the economic value of our existing
customer base over the long term. In the short-term, we underestimated the
impact of this transition on revenue and client retention rates. As a result
of the way GAAP revenue is recognized, the affect of this change will continue
to impact our income statement for the next few quarters.
Over the past last twelve months, Eric Gillespie, SVP of Products,
Technology and Information, Mike Tannourji, and Craig Lakey, VP of Marketing,
have joined the Company. These new senior managers only partly reflect the
level of change at Onvia as each of these professionals has made significant
changes on their teams. Eric and his team have largely rebuilt Onvia's
technology infrastructure and are making it possible to launch new products
more quickly and to substantially improve our existing offering. Mike and his
team are significantly improving our selling process and are creating a far
higher level of predictability around results. Craig, our most recent
addition, and his team, are working toward raising Onvia's profile and
delivering higher value leads to our sales force. Finally, these executives,
along with Michael Balsam, our Vice President of Products and Services, are
working to enhance Onvia's product road map so that we will consistently
deliver new and better products which will enhance the return our customers
realize from their investment in Onvia products.
In support of the initiatives underway, including our first quarter launch
of Onvia Planning and Construction, we have increased our acquisition sales
force nearly 40%. As a result, sales and marketing expenses increased
$275,000 over the second quarter of 2007. This commitment reflects our belief
that we will be able to drive revenue and revenue per salesperson despite the
economic headwinds. As an early indicator, new client sales increased 22% in
the quarter compared the second quarter of 2007. In addition, general and
administrative expenses include non-recurring charges aggregating $267,000 for
estimated historical state sales taxes limited to transactions between 2001
and 2006 and a write-down of capitalized software costs identified as part of
our new product and technology roadmap.
We also invested $1.3 million in new product development and technology
infrastructure during the quarter. This investment included a new CRM system
which has improved sales force effectiveness and technology enhancements which
will facilitate the launch of Onvia 2.0 anticipated for beta release in the
fourth quarter of 2008. Our long-range plan requires new technologies and
data sources to provide new, innovative and value-added services to our
clients with the objective of increasing Onvia's market share. Onvia 2.0 will
create a flexible and scalable platform for new product development, improve
our database search and indexing capabilities, and enhance the client
experience and usability of our information services. We will provide greater
detail about this product launch on our third quarter call.
A conference call hosted by Onvia's management will be held today,
Thursday, July 31, 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 www.onvia.com. A replay of the broadcast will be
available on Onvia's website or by dialing 1-888-266-2081 pass code 886892, 15
minutes after the conference call. For investor relations questions please
e-mail investorrelations@onvia.com
About Onvia
Onvia (Nasdaq: ONVI) helps businesses achieve a competitive advantage by
delivering timely and actionable sales opportunities and information. More
than 8,100 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's
investments in technology infrastructure, sales and marketing fails to improve
sales penetration and client retention rates; client adoption of new and
higher valued products continues to be slower than expected; Onvia's
technology fails to handle the increased demands on its infrastructure caused
by increasing network traffic and the volume of aggregated data; Onvia fails
to increase the number of clients and/or Annual Contract Value; Onvia has
overestimated the value of sales intelligence to companies; and Onvia fails to
recruit, hire and retain key employees.
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 2007 Annual Report on Form 10-K. 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.
Onvia, Inc.
Unaudited Condensed Consolidated Balance Sheets
June 30, 2008 December 31, 2007
(Unaudited)
(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$15,814 $14,301
Accounts receivable, net of allowance
for doubtful accounts of $49 and $52 1,152 1,393
Prepaid expenses and other current assets646 549
Reimbursable tenant improvements 248 2,663
Security deposits, current portion 134 3,500
Total current assets17,99422,406
LONG TERM ASSETS:
Property and equipment, net of
accumulated depreciation of $2,865
and $6,2091,829 957
Security deposits, net of current portion404 538
Other assets, net 2,929 1,840
Total long term assets 5,162 3,335
TOTAL ASSETS $23,156 $25,741
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,158$2,220
Accrued expenses 1,187 1,335
Obligations under capital leases,
current portion 120 113
Unearned revenue, current portion 8,689 9,096
Deferred rent, current portion30 3
Total current liabilities 11,18412,767
LONG TERM LIABILITIES:
Obligations under capital leases, net
of current portion 2789
Unearned revenue, net of current portion 168 342
Deferred rent, net of current portion665 279
Total long term liabilities860 710
TOTAL LIABILITIES 12,04413,477
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;
8,243,746 and 8,224,383 shares
issued; and 8,235,665 and 8,207,465
outstanding 1 1
Treasury stock, at cost: 8,081 and 16,918
shares (40) (83)
Additional paid in capital 351,769 351,268
Accumulated deficit (340,618) (338,922)
Total stockholders' equity 11,11212,264
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $23,156 $25,741
Onvia, Inc.
Unaudited Condensed Consolidated Statements of Operations and
Comprehensive Loss
Three MonthsSix Months Ended
Ended June 30, June 30,
2008 20072008 2007
(Unaudited) (Unaudited)
(In thousands,(In thousands,
except per share except per share
data)data)
Revenue
Subscription $4,359 $4,402 $8,903 $8,594
Content license 568 6741,0931,246
Management information reports 94 36 316 61
Other 97 60 153 124
Total revenue5,118 5,172 10,465 10,025
Cost of revenue 1,125 9392,1611,771
Gross margin 3,993 4,2338,3048,254
Operating expenses:
Sales and marketing 3,062 2,7845,7865,865
Technology and development980 1,1322,0932,367
General and administrative 1,339 9302,4331,888
Total operating expenses 5,381 4,846 10,312 10,120
Loss from operations (1,388) (613) (2,008) (1,866)
Interest and other income, net 136 255 311 497
Net loss$(1,252) $(358) $(1,697) $(1,369)
Unrealized gain on available-for-sale
securities -(6) - (5)
Comprehensive loss $(1,252) $(364) $(1,697) $(1,374)
Basic and diluted net loss per common
share $(0.15) $(0.04) $(0.21) $(0.17)
Basic and diluted weighted average
shares outstanding 8,230 8,0388,2218,013
Onvia, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
Three MonthsSix Months Ended
Ended June 30, June 30,
2008 20072008 2007
(Unaudited) (Unaudited)
(In thousands)(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,252) $(358) $(1,697) $(1,369)
Adjustments to reconcile net loss to
net cash (used in) / provided by
operating activities:
Depreciation and amortization 391 298 702 599
Loss on abandoned assets97 - 97-
Loss on sale of property and equipment - --7
Stock-based compensation 212 226 428 453
Change in operating assets and
liabilities:
Accounts receivable (72) (243) 241 (116)
Prepaid expenses and other current
assets 146 82 (97) (59)
Other assets 5 - 101
Accounts payable (287)240 (1,062) 199
Accrued expenses 17(129)(137) 87
Idle lease accrual-(306) - (594)
Unearned revenue(28)339 (581) 1,342
Deferred rent 210 (8) 413 (14)
Net cash (used in) / provided by
operating activities (561)141 (1,683) 536
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (419)(27) (1,267) (50)
Proceeds from sales of property and
equipment - -3-
Additions to internal use software (913) (111) (1,494)(153)
Purchases of investments- (5,024) - (6,279)
Maturities of investments - 1,105-3,609
Return of security deposits - -3,500-
Reimbursable tenant improvements 359 -2,415-
Net cash (used in) / provided by
investing activities (973) (4,057) 3,157 (2,873)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease
obligations (27) (6) (55) (6)
Proceeds from exercise of stock options
and purchases under employee stock
purchase plan 84 99 94 394
Net cash provided by financing
activities 57 93 39 388
Net (decrease) / increase in cash and
cash equivalents(1,477) (3,823) 1,513 (1,949)
Cash and cash equivalents, beginning of
period 17,291 10,304 14,3018,430
Cash and cash equivalents, end of
period $15,814 $6,481 $15,814 $6,481
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Unrealized gain on available-for-sale
investments $- $6 $- $5
Issuance of treasury stock for 401K
matching contribution (69)(83) (69) (83)
Purchases under capital lease
obligations(250) - (250)
SOURCE Onvia, Inc.
