2004 Results For A21

Posted on 4/18/2005 by Jim Pickerell | Printable Version | Comments (0)

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2004 RESULTS FOR A21

April 18, 2005

A21, Inc. has reported fourth quarter 2004 revenue of $2.1 million and gross revenue or
$7.5 million for the full year of 2004. The fourth quarter revenue was $100,000 below SuperStock's fourth quarter revenue in 2003. a21 acquired SuperStock in the first quarter of 2004 so the $7.5 million only represents ten months of SuperStock's 2004 revenue. The second quarter was the best quarter for a21 with revenue of $2.5 million.

Net loss for the year ended December 31, 2004 was $2.1 million, or $0.06 per share, versus net loss of $1.3 million, or $0.08 per share, for the same period in 2003. Earnings per share for the year is calculated on the basis of 35.0 million weighted average shares outstanding, compared to 16.7 million weighted average shares outstanding for the same period in 2003.

"In our first year of operating SuperStock, we have repositioned the company as a viable and valuable alternative for creative professionals by focusing on making significant operational improvements in content, technology, sales, marketing, and copyright protection," said Albert H. Pleus, Chairman and CEO of a21. "We nearly doubled our content in the past year and recently surpassed the one million image mark, solidifying our place as one of the top image providers worldwide. We redesigned and updated our website and e-commerce engine, www.superstock.com, while introducing innovative features such as 'SuperSelects' and 'Show More Like This' that greatly enhance the accessibility and search capabilities for our customers.

We have also strengthened our global distribution network such that we are now available in 100 countries while generating increased awareness of the SuperStock brand. In addition, we have aggressively pursued copyright protection to track and prevent unauthorized use of our images."

"During the year, we added significant strength to our management team with the addition, among others, of seasoned technology and marketing executive Tom Butta as CEO of SuperStock and President of a21. Tom has brought discipline and focus to our core business while positioning the company for success in this rapidly changing industry. We improved our overall working capital by unlocking value in non-core assets including the $7.7 million sale and leaseback of our headquarters building and the subsequent $3.5mm six year sublease transaction of our underutilized space. Through all capital transactions, we have minimized dilution to our shareholders."

"The company is now well positioned to take advantage of the tremendous opportunities our expanding markets afford," Pleus concluded. "We believe that the creativity, professionalism and enthusiasm of our people assure our continued progress."

Pursuing Copyright Infringers

The company also noted that they began using PicScout in September 2004 to track the use of their images on the Internet and to identify unauthorized users. Copyright Enforcement Manager, Jennifer Walker, said, "Of the possible infringement cases PicScout has identified, the majority are well on the way to being resolved." It does take some time from identification of an infringement to settlement of the case and thus this activity is likely to have a positive impact on revenue in 2005.

"We regard protecting our artists against copyright infringement as essential to our relationship with our artists," says Haim Ariav, President and Chief Creative Officer of SuperStock. "Working with PicScout is an important part of SuperStock's continuing commitment to protecting the economic interests of our artist partners and their valuable work."

"Many of the infringers are unaware of the violation and eagerly cooperate in resolving the issues," Walker notes. "This creates a real opportunity to educate users and strengthen our customer relations. We use infringements as an opportunity to educate our customers, most of whom really appreciate it. Even better, many contractually agree to purchase images from us in the future in exchange for reduced penalties. We consider this a real 'win-win' situation for everyone involved. Our artists receive what would have been lost revenue for their work and our customers become more educated consumers of our products."


Copyright © 2005 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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