With new funding and lower losses, executives at Audible Inc. feel confident that the company is on the road to profitability. "We feel the days of fighting the head winds in order to survive are behind us now and the future looks very bright," said Audible president Donald Katz, as he disclosed the company's second-quarter financial results.
Consumer content revenue of $4.2 million was 73% higher than during the same period last year, and total revenue rose to $4.4 million, from $2.7 million, during the second quarter of 2002. Operating loss in the period fell to $917,101, from $4.7 million in last year's comparable quarter.
Katz's optimism owes less to the shrinking losses than to a new $6 million investment, including $4 million from private equity firm Apax Partners. Bertelsmann is putting up the other $2 million, with $1 million coming from Random House and $1 million from DirectGroup Bertelsmann. Bertelsmann has had a stake in the company for years. In May 2000, the two companies formed the Random House Audible imprint. As part of that agreement, Random House Ventures LLC purchased $1 million of Audible stock. With this latest investment, Bertelsmann now has a 7.5% stake in the company.
Audible had just $1.6 million in cash and cash equivalents at the end of the second quarter. Katz said the money from Apax and Bertelsmann will enable the company to invest in expansion, including overseas ventures similar to the one it launched earlier this year in Brazil. But Katz said the newly flush company isn't planning a spending binge. "We will invest in growth opportunities, but only when we firmly believe it will be a cost-effective growth opportunity," he said.