Motricity Updates IPO Filing: 2009 Revenues Up, Losses Improve

Motricity increased revenues, narrowed its losses and even generated cash in 2009, according to new documents filed today as part of the company’s IPO ambitions.
When the company first filed paperwork in January, it reported results for the first nine months of the year. Today, in an updated registration statement filed with the SEC, Motricity reported complete results for 2009 that put the company’s performance into a more positive light.
Still, the company’s net losses continue and its revenues going forward are uncertain given that contracts for its two largest customers — AT&T (NYSE: T) and Verizon Wireless — are up for renewal this year. The company is seeking $250 million to expand into international markets, to develop new technologies and to acquire companies.
The company, which provides back-end infrastructure to carriers for managing portals and delivering mobile content, such as ringtones, said revenues in 2009 totaled $114 million, up 10.7 percent from the year-ago period, and the company’s net loss attributable to common shareholders was $40.3 million, shrinking from $100.5 million in 2008. The company’s cash flow from operations totaled $33 million — reversing two straight years of significant negative cash flows. At the end of December, the company’s cash balance grew to $35.9 million.
The company explained that cash flows were positive despite a net loss of $16.3 million because of non-cash items included in the operating results that negatively affected earnings.
Going forward, a loss of either AT&T or Verizon’s business would be devastating to the company. In 2009, it generated about 53 percent and 20 percent of its total revenue from contracts with AT&T and Verizon Wireless, respectively. Both of those contracts are up for renewal this year, it said.
There were few other changes made since the original document was filed in January. Perhaps, most notably, the company appointed two new directors to the board in January 2010: Brett C. Icahn and Lady Barbara Judge. Icahn serves as an investment analyst for various investment funds on behalf of Carl Icahn, who has invested in Motricity. Judge is chairman of the United Kingdom Atomic Energy Authority, and previously was deputy chairman of the United Kingdom Financial Reporting Council in London. She was tapped for her corporate governance, compliance, disclosure and international business conduct experience, which includes a stint as a former commissioner of the SEC.