Boosts Revenue by 30%

Electronic publishing division posts a profit.
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Continuing subscription growth and brisk advertising sales helped


post third-quarter revenue that was up 30% from a year ago despite a moribund stock market., which publishes this Web site and provides independent research, online financial commentary, analysis and news, lost $1.2 million, or 5 cents a share, in the three months ended Sept. 30, 2004, including a charge of $400,000 to exit a property lease. In the third quarter of 2003, the company lost $865,000, or 4 cents a share.

Overall net revenue was $8.7 million. By segment, subscription revenue rose 19% from the same quarter last year to $5.7 million, advertising revenue jumped 37% to $1.7 million, and commission revenue more than tripled to $1 million. In the second quarter of 2004, subscription revenue was $5.7 million, advertising revenue was $1.9 million, and commission revenue was $1.2 million.

The company produced cash flow of $122,000 in the third quarter, a $203,000 reduction over the same period last year. It ended the quarter with a cash balance of $31 million, up 9% from a year ago.

The company's electronic publishing division earned $400,000 in the quarter, or $800,000 before the charge. Its securities research and brokerage segment, Independent Research Group LLC, lost $1.7 million in the quarter.

"While we are pleased with our year-over-year results, we certainly saw that investor concerns about the economy, as evidenced by the lowest level of NYSE trading volume in almost three years, contributed to the challenges we faced during the third quarter," said Thomas J. Clarke Jr., chairman and CEO of

"We remain confident that the investments we have made in our businesses and the strategic direction we have chosen will produce the desired results," Clarke said. "Our year-to-date revenue growth of 37% over the same period last year, and a 30% reduction in our net loss, confirms that our long-term strategic direction is sound."

Expenses rose 31% from a year ago, reflecting a 53% jump in sales and marketing costs, higher overhead and the lease charge. In electronic publishing, expenses rose 14% from a year ago, while expenses more than doubled at IRG to about $2.7 million.

Deferred revenue, which represents subscription bookings that will be recognized in future quarters, was $8 million in the third quarter of 2004, up 16% from a year ago. Subscription bookings for the third quarter totaled $5.2 million, up 6% from last year and down 16% from the previous quarter. Average annual revenue per subscriber was $311 in the third quarter, up 5% from last year.