InPhonic Announces Record Revenues and Raises 2005 Revenue and EPS GuidanceReports Full Year 2004 Revenue of $204.2 million and Q4 2004 Revenue of $60.0 million and for the first time Free Cash Flow positiveWASHINGTON, DC, February 8, 2005 — InPhonic, Inc. (NASDAQ: INPC), a leading online seller of wireless services, today reported record revenues and raises 2005 Revenue and EPS Guidance above current analyst estimates. Fourth Quarter 2004 ResultsGAAP Results: Revenues were $60.0 million in the fourth quarter 2004, compared with $54.7 million in the fourth quarter 2003, an increase of 10% year over year. Net loss was $(1.4) million or $(0.37) per basic and diluted shares, in the fourth quarter 2004, reflecting a decrease of $(9.7) million compared with net income of $8.3 million, or $0.25 per diluted shares, in the fourth quarter 2003. The fourth quarter 2003 results included the effects of the one-time recognition of $17.3 million in revenues that were previously deferred in accordance with Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statement. This one-time recognition impacted both revenues and net income for the quarter. Non-GAAP Results: Revenues were $60.0 million in the fourth quarter 2004, compared with revenues of $37.4 million excluding the effects of the one-time recognition of $17.3 million in revenues in the fourth quarter 2003, an increase of 60% year over year. For the fourth quarter 2004, Adjusted EBITDA of $3.4 million, compared with $(5.0) million in the fourth quarter 2003, an improvement of $8.4 million year over year. Adjusted Earnings before Taxes ("Adjusted EBT") of $1.9 million in the fourth quarter 2004 or $0.05 per pro forma diluted share reflecting an improvement of $12.1 million compared with adjusted EBT of $(10.2) million or $(0.39) per pro forma diluted share. The components of Adjusted EBITDA and Adjusted EBT are discussed below under "Non-GAAP Financial Measures". This performance exceeded average analysts' expectations of revenue of $54.1 million, Adjusted EBITDA of $2.6 million and Adjusted EBT of $0.03 per pro forma diluted share for the fourth quarter 2004. Full Year 2004 ResultsGAAP Results: Revenues were $204.2 million for 2004, compared with $136.1 million for 2003, an increase of 50% year over year. Net loss was $(10.2) million or $(2.30) per diluted share in 2004, reflecting an increase of $10.0 million, compared with net loss of $(20.2) million, or $(2.46) per basic and diluted shares in 2003. The 2003 results included the effects of the one-time recognition of $13.6 million in revenues that were previously deferred in accordance with Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements. This one-time recognition impacted both revenues and net income for the year. Non-GAAP Results: Revenues were $204.2 million for 2004, compared with $122.5 million excluding the effects of the one-time recognition of $13.6 million in revenues for 2003, an increase of 67% year over year. For 2004, Adjusted EBITDA of $4.4 million, compared with $(21.3) million in 2003, an improvement of $25.7 million year over year. Adjusted Earnings before Taxes ("Adjusted EBT") of $(1.1) million for 2004 or $(0.04) per pro forma diluted share, reflecting an improvement of $26.3 million compared with adjusted EBT of $(28.0) million or $(1.11) per pro forma diluted share. This performance exceeded average analysts’ expectations of revenue of $198.3 million, Adjusted EBITDA of $3.4 million and Adjusted EBT of $(0.11) per pro forma diluted share for 2004. "We are very pleased with our strong 2004 and fourth quarter performance as we posted record top line growth and bottom-line improvement. We believe that our financial performance reflects the growing strength of our business and the compelling value proposition we provide to our customers." said David Steinberg, Chief Executive Officer. Operating Highlights
Other GAAP Fourth Quarter Financial Updates
See "Non-GAAP Financial Measures" for additional information. 2005 OutlookQ1 2005 Guidance Forward-looking guidance for the first quarter ending March 31, 2005, is as follows: Revenue is expected to be between $52 million and $54 million; up from analysts’ original guidance of $44 million to $46 million which was raised to $46 million to $48 million after giving effects for the results of the A-1 acquisition. This projected result can be compared to Revenues of $40.1 million achieved in Q1 2004. Adjusted EBITDA is expected to be between $1.5 million and $1.6 million; up from analysts’ previous guidance of $0.5 million to $0.6 million, which was raised $0.8 million to $0.9 million after giving effects for the results of the A-1 acquisition. This projected result can be compared to Adjusted EBITDA of $(2.8) million achieved in Q1 2004. Adjusted Earnings before Taxes ("Adjusted EBT") is expected to be between $0.00 to $0.01 per share; up from analysts’ previous guidance of $(0.01) to $(0.02). This projected result can be compared to Adjusted EBT per share of $(0.40) achieved in Q1 2004. Full Year 2005 Guidance Forward-looking guidance for the full-year ending December 31, 2005, is as follows: Revenue is expected to be between $315 million to $325 million; up from analysts’ previous guidance of $250 million to $260 million which was raised to $280 million to $290 million after giving effects for the results of the A-1 acquisition. This projected result can be compared to Revenues of $204 million achieved in 2004. Adjusted EBITDA is expected to be between $35 million and $36 million; up from analysts’ previous guidance of $28 million to $30 million which was raised to $32 million to $33 million after giving effects for the results of the A-1 acquisition. This projected result can be compared to Adjusted EBITDA of $4.4 million achieved in 2004. Adjusted Earnings before Taxes ("Adjusted EBT") is expected to be between of $0.74 to $0.76 per share, up from analysts’ previous guidance of $0.67 to $0.69. This projected result can be compared to Adjusted EBT per share of $0.07 achieved in 2004. Forward-Looking StatementsThis press release contains forward-looking statements, including, without limitation, all statements related to future financial performance, plans to grow our business and build our brand. Words such as "expect," "anticipate" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon our current expectations. Forward-looking statements involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to our fluctuating operating results, seasonality in our business, our ability to acquire products on reasonable terms, our online business model, demand for our products, the strength of our brand, competition, our ability to fulfill orders and other risks detailed in our filings with the Securities and Exchange Commission, including the Prospectus with respect to our initial public offering filed pursuant to Rule 424(b)(4) on November 16, 2004. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and InPhonic undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof. Conference CallCompany management will be holding a conference call to discuss its fourth quarter and full year 2004 financial results on Tuesday, February 8, 2005 after the close of the day’s trading on the NASDAQ Stock Market. The company will host a conference call, open to the general public, at 5:00 PM Eastern Time to discuss the financial results of the fourth quarter and full year 2004, and provide a Company update. The conference call can be accessed by the following: Non-GAAP Financial MeasureTo supplement the Company’s consolidated financial statements, which are presented in accordance with GAAP, InPhonic uses Non-GAAP measures of certain components of financial performance, including Non-GAAP revenues in the fourth quarter 2003, Non-GAAP earnings before interest, taxes, depreciation and amortization and stock-based compensation ("EBITDA"), Non-GAAP net income per diluted share excluding stock-based compensation and depreciation and amortization related to acquisitions, Non-GAAP gross profit and Non-GAAP free cash flow generated by operations. Non-GAAP revenues in the fourth quarter 2003. InPhonic uses the calculation of Non-GAAP revenues in the fourth quarter of 2003 to ensure accurate comparison of revenues to future period revenues. In the fourth quarter of 2003, InPhonic recognized $17.3 million of revenues previously deferred under SAB 101 and this amount is excluded from Non-GAAP fourth quarter 2003 revenues for comparative purposes. Similarly, InPhonic uses the calculation of Non-GAAP revenues for the full year 2003 to ensure accurate comparison to future period revenues. InPhonic excludes $13.6 million in 2003 revenues previously deferred under SAB 101 in calculating non-GAAP revenue for the full year 2003. Adjusted EBITDA - Earnings before Interest, Taxes, Depreciation and Amortization adjusted for Stock-based Compensation Adjusted EBT - Net Income (loss) excluding stock-based compensation and depreciation and amortization related to acquisitions These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for, or superior to, GAAP results. The Company has reconciled Non-GAAP financial measures included in this press release to the nearest GAAP measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these Non-GAAP financial measures to their most directly comparable GAAP financial measure. SOURCE: InPhonic, Inc. 02/08/05 Contact
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