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Hot Growth Special Report 2006 >

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59

Digital River (DRIV)

Back when Joel Ronning founded Digital River in 1994, the world of electronic commerce barely existed. Little wonder then that the company, which designs and hosts e-tail Web sites, lost money nonstop through 2002. Chief Executive Ronning is no longer ahead of his time, however. With Internet retailing growing overall at a clip of more than 20%, Digital River posted record profits of $54.3 million in 2005 as revenue tripled since 2002 to an all-time high of $220.4 million. Its 2006 numbers were better still, with first-quarter net income up 17%, even as the company got hit with a higher income-tax rate and had to book options expenses for the first time. Ronning is predicting $300 million in sales in 2006, but he warns that his 950-employee company is extraordinarily dependent on a single client: Symantec and its end users accounted for 44.1% of revenue in 2005.

Company Info

2005 Rank

NR

Market Value*
($ Millions)

1,525.4

Sales*
($ Millions)

243.9

Sales Growth
(3-yr. avg. annual)

42.6 %

Profits*
($ Millions)

56.7

Profit Growth
(3-yr. avg. annual)

78.1 %

Return on Inv. Capital (3-yr.)

11.0 %

Share Price
12-Mo. Hi/Lo

48/22

Share Price
As of 4/28/06

44

Return on Equity

11.1 %

P/E Ratio

31

No. of Employees

948

Industry Internet Software & Services
CURRENT
MARKET INFO

DRIV >

COMPANY WEB SITE >
Location Eden Prairie, Minn.
Phone 952 253-1234
*Trailing 12 months
Stock price data as of 4/28/06
DATA: Standard & Poor's Compustat

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Company Snapshot

Digital River provides e-commerce outsourcing solutions primarily to the software and high-tech products markets. Its services include online store design, development and hosting, store merchandising and optimization, order management, fraud prevention screening, export controls and management, tax management, digital product delivery via download, physical product fulfillment, multilingual customer service, e-mail marketing, Web-site optimization, Web analytics, and reporting. In addition, the company also offers paid search advertising, search engine optimization, affiliate marketing, store optimization, and email optimization. Digital River was founded by Joel A. Ronning in 1994 and is based in Eden Prairie, Minn.


Data provided by Capital IQ
 
Joel A. Ronning

Joel A. Ronning, 49

Chief Executive Officer and Director


Total Compensation*

$ 1,268,150

Total Options Value*

$ 41,694,000

* Fiscal Year 2005


Executive Bio

Joel Ronning has been CEO of Digital River since February, 1994, and served as the member of the office of the president since February, 2001. Ronning served as president of Digital River from February, 1994, to July, 1998. From May, 1995, to December, 1999, Ronning served as chairman of the board of Tech Squared, a direct catalog marketer of software and hardware products. From May, 1995, to July, 1998, Ronning served as CEO, chief financial officer, and secretary of Tech Squared. From May, 1995, to August, 1996, Ronning also served as president of Tech Squared. Ronning founded MacUSA, formerly a wholly owned subsidiary of Tech Squared, and served as CEO of MacUSA, from April, 1990, to July, 1998, and as a director of MacUSA from April, 1990, to December, 1999. Ronning is founder and has been a director of Digital River since February, 1994. Ronning also serves as a director of the Software Publishers Assn. and JASC.


Management Team

Key Executives

Joel A. Ronning; Thomas Donnelly

Board Directors

Perry Winter Steiner; William J. Lansing; Thomas F. Madison; Frederic Seegal; J. Paul Thorin; Joel A. Ronning


Executive Data provided by Capital IQ