Despite having its Web site go dark for 10 days following the September 11 attack on the World Trade Center, Audible Inc. was able to increase its customer base by 17%, to 102,000, in the third quarter ended September 30, 2001. Total revenues in the quarter jumped 94.0% to $2.2 million, and the net loss was cut to $5.9 million from $7.8 million.
The company's revenue gain was led by a 191% increase in revenues, to just over $2 million, in its content and services business. Company chairman Don Katz said that 79% of customer content revenue came from subscription and membership services, led by the 29,000 subscribers to the company's Audible Listener program. Sales of hardware fell to $140,044 from $234,307 in last year's third quarter, due in part to the company's incentive program that offers a free digital player to new Audible Listener members.
The company spent $5.6 million in cash in the third quarter, but expects its burn rate to be about $3.7 million in the current quarter, the first full period that will reflect the company's downsizing this summer (News, July 30). Katz predicted that the company's burn rate will steadily decline throughout 2002, and that, with $9.6 million in cash and cash equivalents as of September 30, the company will become cash-flow positive by the end of next year and will not need to seek additional financing.
Looking at the fourth quarter, Audible expects to add 25,000 new customers, but because it will continue to provide free players to new customers, Audible executives don't expect to realize the financial benefit from those customers until the first quarter in 2002. On the programming side, the company said that among its new releases in the quarter will be the first original Audible title the company has produced in "some time."
Despite Audible's optimistic financial projections, the company has been notified by Nasdaq that it is facing de-listing for failure to comply with the minimum net tangible assets requirement. Audible has appealed the ruling, and will continue to trade on the Nasdaq national market until a final decision has been reached.
For the nine-month period, sales were up 138%, to $6.4 million, and the net loss was down to $21.5 million, compared to $25.1 million in last year's third quarter.
