WASHINGTON, D.C. – August 4, 2005 — InPhonic, Inc. (NASDAQ: INPC), a leading online seller of wireless services, today reported financial results for its second quarter ended June 30, 2005.
Consolidated Financial Results
· Revenues were $81.6 million for the second quarter 2005, compared to $50.1 million for the second quarter 2004, an increase of 63% year over year.
· Net loss was $(1.7) million or $(0.05) per basic and diluted share for the second quarter 2005, a 74% improvement compared to a net loss, including preferred stock dividends and accretion to preferred redemption value, of $(6.5) million, or $(0.56) per basic and diluted share, for the second quarter 2004.
· The net loss for the second quarter 2005 included stock-based compensation of $(2.8) million, loss on investment of $(0.2) million, and depreciation and amortization of $(2.1) million. The net loss for the second quarter 2004 included stock-based compensation of $(2.7) million, loss on investment of $(0.2) million, and depreciation and amortization of $(1.4) million.
· General and administrative costs for the second quarter 2005 were $13.2 million, including stock-based compensation of $2.2 million. This compares to $11.9 million for the second quarter 2004, including stock-based compensation of $2.4 million. Sales and marketing costs for the second quarter 2005 were $20.6 million, including stock-based compensation of $0.6 million. This compares to $11.3 million for the second quarter 2004, including stock-based compensation of $0.3 million.
· Revenues were $81.6 million for the second quarter 2005, compared with revenues of $49.1 million for the second quarter 2004 (excluding, for comparison purposes, the effects of the one-time recognition of $1.0 million in revenues in the second quarter 2004 that were previously deferred in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition in Financial Statements), an increase of 66% year over year.
· Adjusted EBITDA for the second quarter 2005 was $6.9 million, compared to Adjusted EBITDA of $0.5 million for the second quarter 2004, an improvement of $6.4 million year over year.
· Adjusted Earnings before Taxes (“Adjusted EBT”) for the second quarter 2005 were $5.4 million, or $0.13 per diluted share, reflecting an improvement of $6.0 million compared to Adjusted EBT of $(0.6) million, or $(0.02) per diluted share for the second quarter 2004.
· General and administrative costs for the second quarter 2005 were $9.4 million, excluding stock-based compensation of $2.2 million, compared to $9.5 million, excluding stock-based compensation of $2.4 million, for the second quarter 2004. Sales and marketing costs for the second quarter 2005 were $19.1 million, excluding stock-based compensation of $0.6 million, compared to $11.0 million, excluding stock-based compensation of $0.3 million, for the second quarter 2004.
The components of Adjusted EBITDA, Adjusted EBT and Adjusted EBT per diluted share are discussed below under “Non-GAAP Financial Measures”, and a reconciliation between GAAP and Non-GAAP results is shown immediately following the Unaudited Consolidated Statements of Cash Flows.
“Our financial results reflect solid execution across our business,” said David A. Steinberg, chairman and chief executive officer. “We remain focused on expanding our business and enhancing our value proposition to the carriers, our marketing partners and customers. After having achieved our first half 2005 goals, InPhonic is well positioned to execute on our business plan for the remainder of the year and beyond.”
· Launched an online customer acquisition program for Sprint PCS, employing InPhonic’s expansive online marketing channels and comprehensive e-commerce platform;
· Signed multi-year wholesale contract with Cingular Wireless, the nation’s largest wireless provider, to resell wireless minutes and data services provisioned on the Cingular GSM nationwide network;
· Completed the integration of the A1 Wireless USA, Inc. acquisition;
· Acquired VMC Satellite, a leading satellite television activation company;
· Added Hawaii’s largest telecommunications provider, Hawaiian Telecom, previously Verizon Hawaii, as MVNO client;
· Launched premium Accessories and Device Protection programs;
· Initiated VoIP communication service offering through Vonage Partnership.
The following business outlook is based on current information and expectations as of August 4, 2005. InPhonic's business outlook as of today will be available on the Company's Investor Relations Web site throughout the current quarter. It is currently expected the outlook will not be updated until the release of InPhonic's next quarterly earnings announcement, notwithstanding subsequent developments; however, InPhonic may update the outlook or any portion thereof at any time.
InPhonic is providing guidance for the third quarter 2005 and reaffirming guidance for the full year 2005.
Figures in millions, except Adjusted EBT Q3 2005
Adjusted EBT, per share
This 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 our Annual Report on Form 10-K for the Year ended December 31, 2004 and our Quarterly Reports on Form 10-Q. 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.
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