7A21 2006 SIX MONTHS RESULTS
August 24, 2006
a21, Inc. has reported $4,511,000 in revenues for Q2 2006, but only $3,023,000 of that was for the stock photo side of the business. ArtSelect which provides wall art for homes and businesses provided $1,488,000 in revenue in less that a month and a half. ArtSelect earned approximately $12 million in 2005 and so would be expected to earn about $3 million in a full quarter, equal to what the stock photo side of the business generates.
A21 lost $2.2 million or $0.03 per diluted share. For the same quarter in 2005 the company lost $985,000 or $0.02 per share. Wall Street reacted positively as investors pushed the company's share price up over 9 percent and the stock closed the day at $0.35 per share.
The following lists revenue per quarter for the last seven quarters for the stock photo side of the business. It should be noted that prior to October 2005 all the photo revenue was generated by the Superstock brand. At that point the company acquired Ingram, a RF and subscription brand, which it is believed may have added $300,000 to $400,000 per quarter to the total revenue stock photo revenue.
It seems clear from these number that the stock photo side of the business is not growing but investors may have been encouraged by the fact that a21 has moved to diversify its business and be less dependent on the licensing of stock photos. In addition the fact that, despite its losses, the company has more than $7 million in cash and cash equivalents remaining from the $15.5 million raised in April as a result of the issuance of Senior Secured Convertible Notes may have also been a factor in the rising interest in the stock.
Vice President and Chief Financial Officer Thomas Costanza said the company's goal is to move closer to profitability during the second half of 2006.