Capital Position Strengthened Following Asset Sale of MIVA Media; Streamlined Operation to Focus on ALOT Toolbar, Homepage and Desktop Products
NEW YORK – MIVA, Inc. (NASDAQ: MIVA), reported financial results for the first quarter ended March 31, 2009.
Summary of First Quarter 2009 Results from Continuing Operations:
* Revenue of $6.2 million in Q1 2009, compared to revenue of $8.5 million in Q4 2008;
* Gross margins of 93% in Q1 2009, compared to 96% in Q4 2008;
* EBITDA loss of $2.7 million in Q1 2009, which included $0.5 million non-cash compensation expense, compared to an EBITDA loss of $9.2 million in Q4 2008. Q4 2008 EBITDA included $7.9 million non-cash tangible and intangible asset impairment charges and $0.5 million non-cash compensation expense;
* Adjusted EBITDA loss of $2.3 million in Q1 2009, compared to Adjusted EBITDA loss of $0.9 million in Q4 2008; and
* GAAP net loss from continuing operations of $2.8 million or $(0.08) per basic share in Q1 2009, compared to GAAP net loss from continuing operations of $8.9 million or $(0.27) per basic share in Q4 2008.
“There were significant changes to our business in the first quarter of 2009 following the asset sale of our MIVA Media U.S. and E.U. operations. We believe the sale represents the important final stage in our strategy of transitioning out of our third-party ad network and into our consumer-oriented MIVA Direct business and we are optimistic about the opportunities that this transition presents.”
“Following the transaction, we believe we have an advertising strategy in place for 2009 that should enable us to leverage our strengthened capital position in order to further develop and expand our ALOT product portfolio,” commented Peter Corrao, President and Chief Executive Officer.
First Quarter Results from Continuing Operations1
Revenue was $6.2 million in Q1 2009, compared to revenue of $8.5 million in Q4 2008. The $2.3 million decrease was due primarily to a combination of a decline in active users of our toolbar, homepage and desktop products and a decrease in revenue rates per user.
Gross margins were 93% in Q1 2009, compared to 96% in Q4 2008. Gross margin excludes advertising spend of $4.3 million in Q1 2009 and $5.2 million in Q4 2008, which is included in consolidated operating expenses within the marketing, sales and service category.
Total operating expenses were $8.5 million in Q1 2009, compared to $17.3 million in Q4 2008. The operating expenses in Q1 2009 included $0.5 million of non-cash compensation expense. The operating expenses in Q4 2008 included $7.9 million non-cash tangible and intangible asset impairment charges and $0.5 million of non-cash compensation expense.
EBITDA was a loss of $2.7 million in Q1 2009, compared to an EBITDA loss of $9.2 million in Q4 2008. Q1 2009 EBITDA included $0.5 million non-cash compensation expense. Q4 2008 EBITDA included $7.9 million non-cash tangible and intangible asset impairment charges and $0.5 million non-cash compensation expense.
Adjusted EBITDA was a loss of $2.3 million in Q1 2009, compared to Adjusted EBITDA loss of $0.9 million in Q4 2008. Q1 2009 Adjusted EBITDA loss excluded $0.5 million non-cash compensation expense. Q4 2008 Adjusted EBITDA loss excluded $7.9 million non-cash tangible and intangible asset impairment charges and $0.5 million non-cash compensation expense.
GAAP net loss from continuing operations of $2.8 million or $(0.08) per basic share in Q1 2009, compared to GAAP net loss from continuing operations of $8.9 million or $(0.27) per basic share in Q4 2008.
Adjusted net loss from continuing operations was $2.4 million or $(0.07) per diluted share in Q1 2009, compared to Adjusted net loss from continuing operations of $0.5 million or $(0.02) per diluted share in Q4 2008. Q1 2009 Adjusted net loss excluded $0.5 million non-cash compensation expense. Q4 2008 Adjusted net loss excluded $7.9 million non-cash tangible and intangible asset impairment charges and $0.5 million non-cash compensation expense.
Cash and cash equivalents were $11.6 million at March 31, 2009, an increase of $4.9 million from December 31, 2008 cash of $6.7 million. The Q4 2008 balance included a $4.0 million draw down from the Company’s line of credit with Bridge Bank, N.A. The increase of $4.9 million from Q4 2008 to Q1 2009 included the net proceeds from the sale of the Company’s MIVA Media U.S. and E.U. operations.
As of March 31, 2009, the Company had an active base of approximately 50 full time employees, down from 129 at December 31, 2008. The decrease from December 31, 2008 is due primarily to the transfer of approximately 75 of Company’s staff to Adknowledge as part of the sale of the Company’s MIVA Media U.S. and E.U. operations.
Management Conference Call
A replay of the conference call will be available on the investor relations area of MIVA’s website at http://ir.mivainc.com/events.cfm. Interested parties may email questions in advance to Peter Corrao of MIVA, Inc. at peter.corrao@miva.com.
MIVA believes that “Adjusted EBITDA”, “Adjusted net income/loss” and “Adjusted net income/loss per share” provide meaningful measures for comparison of the Company’s current and projected operating performance with its historical results due to the significant changes in non-cash amortization that began in 2004 primarily due to certain intangible assets resulting from mergers and acquisitions that have since been written off. MIVA defines Adjusted EBITDA as EBITDA (earnings before interest, income taxes, depreciation and amortization) plus non-cash compensation expense and plus or minus certain identified revenues or expenses that are not expected to recur or be representative of future ongoing operation of the business. MIVA uses Adjusted EBITDA as an internal measure of its business and believes it is utilized as an important measure of performance by the investment community. MIVA sets goals and awards bonuses in part based on performance relative to Adjusted EBITDA. MIVA defines Adjusted net income/loss as net income/loss plus amortization and non-cash compensation expense, plus or minus certain identified revenues or expenses that are not expected to recur or be representative of future ongoing operation of the business, in each case including the tax effects (if any) of the adjustment. MIVA believes the use of these measures does not lessen the importance of GAAP measures.
About MIVA, Inc.
MIVA, Inc. (NASDAQ:MIVA) is an Internet company that owns and operates the ALOT product portfolio. ALOT’s products are designed to ‘Make the Internet Easy’ by enhancing the way consumers engage with content online. The company’s millions of active users utilize ALOT to discover ‘best-of-the-web’ third party content, display that content through customizable toolbar, homepage and desktop products and deliver high value search traffic to the Company for in-house and third-party monetization.
