DM Firms Follow Positive Earnings Trend

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Direct marketing firms that reported quarterly earnings this week followed the broader stock market trend by posting positive results or surprises.


Data provider InfoUSA, Omaha, NE, reported earnings per share of 13 cents, more than doubling the consensus estimate of 6 cents, on net income of $6.3 million. That compares to a net loss of $1.1 million or 2 cents per share a year ago.


Revenues were flat at $55.5 million but the compiler of business and consumer databases and directories benefitted from a cost-reduction program that included staff reductions and stricter collection practices. CEO Vin Gupta said in a statement that "taking swift, corrective action over the past quarter‚" has stabilized its core business.


Gupta expects future growth to be bolstered by advertising and e-commerce revenue from its newly formed Internet division.


Cooperative catalog database firm Abacus Direct, Broomfield, CO, reported earnings per share of 22 cents, which were in line with earnings estimates. Net income was up 35 percent to $2.3 million and revenues jumped 41 percent to $12.8 million.


Abacus, which has introduced new services outside its core consumer catalog business, saw revenues from noncore services increase 54 percent to $2 million. Its foray into Europe has attracted 18 catalog titles, bringing its Alliance total to 1,103. The company also announced an alliance with HNC Software to develop predictive applications based on the reading of product SKU numbers.


Membership direct marketer and franchiser Cendant, New York, saw EPS climb 115 percent to 43 cents while net income increased 109 percent to $362 million. Revenues were up 17 percent to $1.3 billion. Revenues from its membership business grew 19 percent to $243.4 million and helped improve earnings before taxes, depreciation and amortization from a loss of $15.9 million to a gain of $11.9 million.


Continuing to adhere to the business model that has dug the company out of the throes of last April's accounting scandal, Cendant announced it will sell its Entertainment Publications Inc. business and has signed an agreement to sell its National Leisure Group travel business to the Leisure Company. The company expects its continuing sale of noncore assets to fetch an amount equal to the $1.3 billion in sales so far. Proceeds will be used to repurchase shares and pay down debt.


Customer relationship management software and services provider Exchange Applications, Boston, reported record results in its first quarter as a publicly traded company. Exchange saw earnings rise to $410,000 or 4 cents per share compared to a loss of $447,000 or 6 cents per share a year ago. Revenues increased 74 percent to $8.3 million.


Software licenses, which accounted for 60 percent of revenues, increased by 85 percent over 1998. Orders from nonfinancial services clients grew from 38 to 46 percent of total revenues and revenues from international clients edged up from 20 percent to 22 percent.


Direct marketing software maker MySoftware reported EPS of 6 cents on net income of $299,000, an improvement over a loss of 4 cents per share a year go. Revenues increased 38 percent to a record $4.3 million.


CEO Gregory Slayton attributed the revenue growth to strong reception to its new software products and the emergence of its Internet marketing services group. Slayton expects the Internet and Internet-related licensing partnerships to be a primary driver of growth going forward.
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