a21, Inc. has reported $5,696,000 in revenues for 2Q, down 7% from the previous quarter. Revenue was up $865,000 from the same period in 2006, but the company purchased ArtSelect on May 15, 2006, so the organic revenues are not comparable.
In 2Q, the SuperStock revenues were down $130,000, or 4% for the stock image division. Revenues for ArtSelect were $2,658,000, down $298,000 or 10% from the previous quarter.
Some 7% and 10% of a21 total revenues were based in the U.K. for the three months ended June 30, 2007 and 2006, respectively. 8% and 13% of total revenues were based in the U.K. for the six months ended June 30, 2007 and 2006, respectively. 92% and 85% of our total assets were based domestically in the U.S. as of June 30, 2007 and December 31, 2006.
Revenues have been up for eight consecutive quarters, but that is principally because of acquisitions. Not until 3Q 2007 will there be a truly organic comparison assuming they do not complete a new acquisition before the end of this quarter.
As was the case with the other public companies in the stock photo industry (Getty Images and Jupitermedia), 2Q was a challenging quarter.
Total cost of sales were $2.3 million, or 40% of revenues, compared to 38% of revenues for the same prior year period. Reductions in corporate and SuperStock overheads resulted in total selling, general, and administrative expenses falling by $173,000 compared to the year ago, despite absorbing ArtSelect's incremental expenses for the full quarter.
Operating performance for the second quarter improved significantly, with the operating loss reduced considerably to $847,000 from $1.8 million in 2006. The net loss for the second quarter was reduced by over $865,000 to $1.2 million.
For the first six months, revenues were $11.8 million and net loss was $2.2 million. For the corresponding 2006 period, revenues were $7.4 million and the net loss was $4.3 million.
The following chart shows the image licensing revenue for a21 for the last 13 quarters. Revenue over the three-year period has been flat quarter-to-quarter, with a single big jump in 4Q 2005 when they acquired Ingram, an RF and subscription brand.
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