RelationServe Media, Inc. Announces Second Quarter Results RelationServe Media, Inc. (OTC Bulletin Board: RSVM) a leading provider of permission-based e-marketing solutions, today announced financial results for the second quarter ended June 30, 2005. The Company's quarterly results were highlighted by $3.9 million in revenues, an increase of 57.5% in revenues compared to the corresponding period in 2004. Total revenues for the six month period ended June 30, 2005 were $6.7 million, an increase of 73.8% from the corresponding period in 2004. Earnings for the quarter were $703,797 or earnings per diluted share of $0.04. Earnings for the six-month period were $1,050,827 or earnings per diluted share of $0.06. Earnings in the 2004 periods benefited from the predecessor company's status as a partnership thereby resulting in no tax impact on earnings.
"We are extremely pleased with our performance this quarter and especially with the expansion in our business development efforts," said Warren Musser, Chairman of RelationServe Media. "Our recurring customer base has been steadily increasing and has facilitated an ongoing expansion in our database. Consequently, we have been able to grow the business efficiently by leveraging our growing database as evidenced by the company's improved margins."
Quarterly gross profit grew during the quarter to $3.6 million representing 90.5% of revenues compared to $2.2 million representing 85.6% of revenues in the corresponding period in 2004. Operating income for the quarter was $1.1 million, an increase of 59.9% from the corresponding period in 2004. However, on a percentage of revenues basis, operating income grew at a more moderate rate to 28.6% in the 2005 second quarter, compared to 28.2% in the corresponding period in 2004, primarily due to the initiation of a reserve for receivables in 2005.
As of June 30, 2005, the Company had only $700,000 of debt outstanding. Total cash and short-term investments available was approximately $2.9 million.
"We believe that RelationServe has established an excellent foundation for future growth as evidenced by our healthy and growing financial condition and expanding client base," commented Mr. Musser. "We expect the strength of our brand and the quality of our customer experience will enable us to continue to expand our client base and unearth complementary acquisition opportunities as we execute our business model."
About RelationServe Media, Inc.
Headquartered in Fort Lauderdale, Florida, RelationServe Media develops and executes client-tailored online and offline marketing programs. As part of its full suite of marketing solutions, RelationServe Media owns and manages one of the industry's largest email databases with over 175 million email addresses and a total postal database of 180 million records for its client's direct marketing initiatives. RelationServe Media believes that it has the industry's largest and most accurate database for appending and enhancing customer database records with information on more than 85 million opt-in consumers. In addition, RelationServe Media owns a collection of over 60 web-mining properties that generate over 10 million online registration page views per month for client lead generation initiatives. For more information, visit http://www.relationserve.com.
Safe Harbor Statement under the Private Securities Litigation reform Act of 1995: Forward-looking statements often are proceeded by words such as "believes", "expects", "may", "anticipates", "plans", "intends", "assumes", "will" or similar expressions. Forward-looking statements reflect management's current expectations, as of the date of this press release, and involve certain risks and uncertainties. RelationServe Media's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. The statements that are not historical facts contained in this press release are "forward-looking statements" that involve certain risks and uncertainties, including, but not limited to, risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, the effectiveness, probability and marketability of such products, the ability to protect proprietary information, the impact of current, pending or future legislation and regulation on the electronic marketing industry, the impact of competitive products or pricing, technological changes, the effect of general economic and business conditions and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission.
RELATIONSERVE MEDIA, INC. AND SUBSIDIARIES BALANCE SHEET June 30, 2005 (Unaudited)
ASSETS
CURRENT ASSETS: Cash $ 2,907,801 Accounts receivable, less allowance for doubtful accounts of $1,682,619 2,970,199 Prepaid expenses and other assets 84,283 ------------
Total current assets 5,962,283 ------------
Property and equipment, net 737,745
Intangibles, net 1,250,304 Other assets 28,966 ------------
SHAREHOLDERS' EQUITY: Preferred stock ($.001 Par value; 10,000,000 share authorized; No shares issued and outstanding) - Common stock ($.001 Par value; 90,000,000 share authorized; 18,641,015 shares issued and outstanding) 18,641 Common stock issuable (1,130,000 shares) 1,130 Paid-in capital 7,088,156 Accumulated deficit (43,693) Less: Deferred compensation (2,048,601) ------------
Total shareholders' equity 5,015,633 ------------
Total liabilties and shareholders' equity $ 7,979,298 ============
RELATIONSERVE MEDIA, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS (Unaudited)
For the For the Three Months Ended Six Months Ended June 30, June 30, ------------------------- ------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues, net $ 3,986,353 $ 2,530,907 $ 6,678,023 $ 3,842,193
Income before provision for income taxes 1,135,156 713,895 1,694,882 491,544
Provision for income taxes (431,359) - (644,055) - ------------ ------------ ------------ ------------
Net income $ 703,797 $ 713,895 $ 1,050,827 $ 491,544 ============ ============ ============ ============
Net income per common share: Net income per common share - basic $ 0.05 $ 0.06 $ 0.08 $ 0.04 ============ ============ ============ ============ Net income per common share - diluted $ 0.04 $ 0.06 $ 0.06 $ 0.04 ============ ============ ============ ============
Weighted average common shares outstanding - basic 13,469,852 12,001,000 12,739,483 12,001,000 ============ ============ ============ ============ Weighted average common shares outstanding - diluted 17,934,012 12,001,000 17,036,254 12,001,000 ============ ============ ============ ============
RELATIONSERVE MEDIA, INC. AND SUBSIDIARIES STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, ------------------------ 2005 2004 ------------ ------------ (Unaudited) (Unaudited) Cash Flows From Operating Activities: Net income $ 1,050,827 $ 491,544 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 348,547 195,789 Stock-based compensation and consulting 131,799 - Changes in assets and liabilities: Accounts receivable (2,347,138) (1,179,137) Due from principal member 140,312 (5,654) Prepaid expenses and other current assets (17,749) 57,691 Other assets - 28,966 Accounts payable (18,492) (108,048) Accrued expenses 209,547 10,971 Accrued commissions 342,065 201,739 Income taxes payable 644,055 Deferred rent (12,235) 172,238 Customer deposits (199,052) 286,528 ------------ ------------
Net cash provided by operating activities 272,486 152,627 ------------ ------------
Cash Flows From Investing Activities: Cash used in acquisition (150,000) - Purchase of property and equipment (50,480) (116,997) Purchase of intangible assets (708,767) (525,695) ------------ ------------
Net cash used in investing activities (909,247) (642,692) ------------ ------------
Cash Flows From Financing Activities: Net proceeds from sales of common stock 3,459,807 - Proceeds from exercise of warrants 137,500 Contributions from members - 1,030,001 Draws by members (207,124) - Payments on notes payable - (674,499) ------------ ------------
Net cash provided by financing activities 3,390,183 355,502 ------------ ------------
Net increase (decrease) in cash 2,753,422 (134,563)
Cash - Beginning of period 154,379 213,943 ------------ ------------
Cash - End of period $ 2,907,801 $ 79,380 ============ ============
Supplemental Disclosures of Cash Flow Information Cash payments for interest $ 810 $ - ============ ============ Cash payments for income taxes $ - $ - ============ ============
Non-cash investing and financing activities: Note payable assumed in connection with acquisition $ 700,000 $ - ============ ============ Common stock issued for future services $ 2,180,000 $ - ============ ============ Distribution of software to member (pre- acquisition) $ 200,000 $ - ============ ============
for RelationServe Media: Summit Financial Partners, LLC Anthony D. Altavilla, President 317-218-0204
Source: Business Wire (August 11, 2005 - 5:21 PM EDT)
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