- Home
- » About Constant Contact
- » Press Releases
- » 2008
Press Releases
Current | 2008 | 2007 | 2006 | 2005 | 2004CONSTANT CONTACT ANNOUNCES FOURTH QUARTER AND FULL YEAR 2007 FINANCIAL RESULTS
Quarterly revenue increases 87 percent year over year; annual revenue increases 83 percent Email marketing customer base exceeds 164,000
WALTHAM, MA - February 20, 2008
Constant Contact®, Inc (NasdaqGM: CTCT), a leading provider of on-demand email marketing and online surveys for small organizations, today announced its financial results for the fourth quarter ended December 31, 2007.
Constant Contact reported total revenue of $15.9 million for the quarter ended December 31, 2007, an increase of 87 percent compared with $8.5 million for the comparable period in 2006. Constant Contact ended 2007 with 164,669 email marketing customers, an increase of 84 percent over the number of customers at December 31, 2006.
"The Company's fourth quarter results were very strong, highlighted by net new email marketing customer additions, revenue growth, and adjusted EBITDA performance which each surpassed our expectations," said Gail Goodman, CEO of Constant Contact. "In addition to strong operating results, our key customer metrics - customer retention, the average email marketing invoice amount, and the percentage of email customers paying us $15 and $30 per month - remained consistent and stayed within our narrow, historical bands. We believe that our low price point, strong customer value proposition, and highly diversified customer base without any industry concentration, position Constant Contact well in any economic environment. Based on this belief, we are optimistic about our 2008 outlook due to the continued strong adoption of email marketing by small organizations and Constant Contact's expanding leadership position."
Constant Contact reported an operating loss of $54 thousand for the quarter ended December 31, 2007, an improvement from an operating loss of $3.5 million for the comparable period in 2006. Constant Contact reported an adjusted EBITDA profit of $1.0 million for the quarter ended December 31, 2007, an improvement from an adjusted EBITDA loss of $3.0 million for the comparable period in 2006. Adjusted EBITDA is a non-GAAP financial measure that is calculated by taking GAAP net income or net loss, adding back other expense, depreciation and amortization, and stock-based compensation, then subtracting interest income, net. A reconciliation of the most comparable GAAP financial measure to the non-GAAP measure used in this press release is included at the end of this release.
Other income and expense for the fourth quarter of 2007 included the anticipated $2.1 million non-cash expense resulting from the mark-to-market adjustment of the carrying value of a convertible preferred stock warrant that was exercised at the time of the Company's initial public offering. This final adjustment was recorded on October 9, 2007, the closing day for the initial public offering, and reflected the closing stock price on the prior day.
Constant Contact reported a net loss of $1.1 million for the quarter ended December 31, 2007, as compared with a net loss of $3.6 million for the comparable period in 2006. The Company reported a net loss attributable per common share of $0.04 for the quarter ended December 31, 2007, as compared with a net loss attributable per common share of $1.06 for the comparable period in 2006.
"The fourth quarter of 2007 represented a strong finish to a record-setting year for Constant Contact," said Steven R. Wasserman, vice president and chief financial officer of Constant Contact. "During 2007, we attained several noteworthy milestones, including the completion of our IPO, a significant expansion of our customer base, the launch of our online survey product, and the attainment of positive adjusted EBITDA on a quarterly basis."
Other Business and Operational Highlights for the Fourth Quarter 2007
- Added 21,791 net new email marketing customers.
- Launched franchise partnerships with seven new entities including Cartridge World, Dale Carnegie Training, and United Franchise Group.
- Constant Contact, Inc. was added to the Russell 2000® stock index.
- Email Marketing for Dummies®, authored by a company employee, was released nationwide by Wiley Publishing.
- Total active channel partners surpassed 2,300.
For the full year, Constant Contact reported revenue of $50.5 million, an increase of 83 percent as compared with revenue of $27.6 million in 2006, and an operating loss of $5.7 million in 2007 as compared with an operating loss of $7.6 million in 2006. The full year adjusted EBITDA loss was $2.4 million, an improvement of $3.6 million over the 2006 adjusted EBITDA loss of $6.0 million. For the full year, Constant Contact reported a net loss of $8.3 million, as compared with a net loss of $7.8 million in 2006 and a net loss attributable per common share of $0.97 as compared with a net loss attributable per common share of $3.38 in 2006.
Business Outlook
Based on information available as of February 20, 2008, Constant Contact is issuing guidance for the first quarter of 2008 and full year 2008 as follows:
First Quarter 2008: The Company expects first quarter revenue to be in the range of $17.5 to $17.8 million, adjusted EBITDA to be in the range of $0.2 to $0.3 million, net loss to be in the range of $0.8 to $0.9 million, and net loss per share to be $0.03. This is based on weighted average shares outstanding of 27.6 million shares and stock-based compensation of $0.6 million.
Full Year 2008: The Company expects full year 2008 revenue to be in the range of $81.0 to $83.5 million, adjusted EBITDA to be in the range of $3.1 to $3.5 million, net loss to be in the range of $2.5 to $3.0 million, and net loss per share to be in the range of $0.09 to $0.11. This is based on weighted average shares outstanding of 27.8 million shares and stock-based compensation of $3.0 million.
Non-GAAP Financial Measures
This press release contains a non-GAAP financial measure, adjusted EBITDA. Constant Contact believes that this non-GAAP measure of financial results provides useful information to management and investors regarding certain financial and business trends relating to Constant Contact's financial condition and results of operations. The Company's management uses this non-GAAP measure to compare the Company's performance to that of prior periods for trend analyses, for purposes of determining executive incentive compensation, and for budgeting and planning purposes. This measure is used in monthly financial reports prepared for management and in quarterly financial reports presented to the Company's board of directors. The Company believes that the use of this non-GAAP financial measure provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other companies in its industry, many of which present similar non-GAAP financial measures to investors.
Management of the Company does not consider this non-GAAP measure in isolation or as an alternative to such measures determined in accordance with GAAP. The principal limitation of this non-GAAP financial measure is that it excludes significant expenses that are required by GAAP to be recorded. In addition, it is subject to inherent limitations as it reflects the exercise of judgments by management about which charges are excluded from the non-GAAP financial measure.
In order to compensate for these limitations, management of the Company presents its non-GAAP financial measure in connection with its GAAP results. Constant Contact urges investors and potential investors in the Company's securities to review the reconciliation of its non-GAAP financial measure to the comparable GAAP financial measures, which it includes in press releases announcing earnings information, including this press release, and not to rely on any single financial measure to evaluate the Company's business.
A reconciliation table of the most comparable GAAP financial measures to the non-GAAP measure used in this press release is included at the end of this release.
Conference Call Information
| When: | Wednesday, February 20, 2008 |
| Time: | 5:00 p.m. ET |
| Live Call: | (877) 397-0286, domestic
(719) 325-4889, international |
| Replay: | (888) 203-1112, passcode 6323794, domestic
(719) 457-0820, passcode 6323794, international |
| Webcast: | http://investor.constantcontact.com/ (live and replay) |
About Constant Contact, Inc.
Launched in 1998, Constant Contact is a leading provider of on-demand email marketing and online survey solutions for small businesses, nonprofits, and associations. To learn more, please visit www.constantcontact.com or call (781) 472-8100.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated growth of the Company's customer base, the Company's potential expanding leadership position, the company's ability to grow during periods of economic uncertainty and the Company's financial guidance for the first quarter of 2008 and for the full year 2008. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of our management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Constant Contact's control. Constant Contact's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, the Company's ability to attract new customers and retain existing customers, the Company's dependence on the market for email marketing services for small businesses, nonprofits, and associations, general economic conditions and economic conditions specifically affecting the markets in which the Company operates, adverse regulatory or legal developments, the Company's ability to continue to promote and maintain its brand in a cost-effective manner, the Company's ability to compete effectively, the continued growth and acceptance of email as a communications tool, the Company's ability to develop and introduce new products or enhancements to existing products, the Company's ability to manage growth, the Company's ability to attract and retain key personnel, the Company's ability to protect its intellectual property and other proprietary rights, and other risks detailed in Constant Contact's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 15, 2007 as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Constant Contact's views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. Constant Contact undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Constant Contact's views as of any date subsequent to the date of this press release.
Constant Contact is a registered trademark and the Constant Contact Logo is a trademark of Constant Contact, Inc. All other company names or references may be trademarks or service marks of their respective owners.
###
Constant Contact, Inc.
Consolidated Condensed Statements of Operations (unaudited)
(In thousands, except share and per share data)

Calculation of Adjusted EBITDA (unaudited)
(In thousands)

Constant Contact, Inc.
Consolidated Condensed Balance Sheets (unaudited)
(In Thousands)

Constant Contact, Inc.
Consolidated Condensed Statements of Cash Flows (unaudited)
(In thousands)

| Please direct all press inquiries to: |
|
Kevin Mullins
Constant Contact 781-472-6206 kmullins@constantcontact.com |
