-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O7qOnXgNkBqzY9RGnjAxMtqH1EK6C0gvBzanuF2YeV1y1YUPa+KtyUxvZCLjpKL0 R2LdjwLsJs/1rLL+xRZ2tw== 0001157523-04-010626.txt : 20041112 0001157523-04-010626.hdr.sgml : 20041111 20041112090037 ACCESSION NUMBER: 0001157523-04-010626 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041111 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041112 DATE AS OF CHANGE: 20041112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNOT INC CENTRAL INDEX KEY: 0001062292 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-NONSTORE RETAILERS [5960] IRS NUMBER: 133895178 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28271 FILM NUMBER: 041135444 BUSINESS ADDRESS: STREET 1: 462 BROADWAY 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2122198555 MAIL ADDRESS: STREET 1: 462 BROADWAY, 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 8-K 1 a4764752.txt THE KNOT ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): November 11, 2004 THE KNOT, INC. (Exact name of registrant as specified in its charter) Delaware 13-3895178 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification Number) 0-28271 (Commission File Number) 462 Broadway, 6th Floor, New York, New York 10013 (Address of Principal Executive Offices) (Zip Code) (212) 219-8555 (Registrant's telephone number, including area code) ================================================================================ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition On November 11, 2004, The Knot, Inc. ("The Knot") issued a press release announcing its financial results as of and for the quarter ended September 30, 2004. A copy of The Knot's press release announcing these financial results is attached as Exhibit 99.1 hereto, and is incorporated by reference into this report. The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) that is furnished pursuant to this Item 2.02 shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a) (2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of The Knot, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing. Item 9.01. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated November 11, 2004 regarding The Knot's announcement of its financial results as of and for the quarter ended September 30, 2004. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. THE KNOT, INC. (Registrant) Date: November 12, 2004 By: /s/ Richard Szefc ------------------------ Richard Szefc Chief Financial Officer EXHIBIT INDEX Exhibit - ------- 99.1 Press Release dated November 11, 2004 regarding The Knot, Inc.'s announcement of its financial results as of and for the quarter ended September 30, 2004. EX-99.1 2 a4764752ex991.txt PRESS RELEASE Exhibit 99.1 The Knot Reports Third Quarter Results; Online Advertising Revenue Rose 44%; Company Leverages Brand with Newlywed Site 'The Nest' NEW YORK--(BUSINESS WIRE)--Nov. 11, 2004-- Reminder: Conference Call Today at 2:30 dial-in 800-638-7172, ID# 1694519 The Knot, Inc. (OTCBB: KNOT.OB, www.theknot.com), one of the world's leading wedding media and services companies, today reported financial results for its third quarter and nine months ended September 30, 2004. For the third quarter, The Knot reported net revenues rose to $10.7 million from net revenues of $9.7 million in the same period of 2003. The revenue gain reflects a 44% increase in online advertising in both local and national markets. Publishing and other revenues for the period were up 18% primarily reflecting growth in national advertising pages for the 2004 Fall/Winter issue of The Knot Weddings magazine as well as growth of advertising programs in The Knot's local wedding magazines, which are published in 18 major U.S. markets. "We are experiencing a significant increase of national advertisers as well as growth within our local vendor base" said David Liu, CEO of The Knot. "This trend reflects rising recognition of The Knot's reach to its active membership of over one million couples, representing the largest aggregation of a prime audience that will be spending on their weddings in the coming 12-18 months." Merchandising revenue continues to under-perform, declining 18% from the prior year. "During the quarter we instituted further cost cutting measures at our Redding, California distribution facility that will begin to take effect in the fourth quarter. Concurrently, we are preparing to test launch our new e-commerce technology platform. Together, we believe these steps will improve our e-commerce performance in 2005," Liu added. The Knot reported net income for the third quarter of 2004 of $1.0 million, or $0.05 per basic and $0.04 per diluted share. Gross margins rose to 71% from 65% in the prior year's third quarter due to a higher mix of advertising revenues. Total operating expenses for the third quarter, which increased to $6.6 million from $6.2 in the prior year, reflected a non-cash gain of $1.2 million due to the settlement of a previously recorded liability with a distribution partner. In addition, operating expenses for the recent quarter included approximately $985,000 of professional fees related to The Knot's current litigation with WeddingChannel.com, Inc. The Knot reported net income of $202,000 or $0.01 per basic and diluted share in the third quarter of 2003. Member activity on The Knot increased in the third quarter with 112 million average monthly page views versus 87 million average monthly page views in the year earlier quarter. Today, over 70% of traffic on TheKnot.com is direct without a referring URL, testament to the dominant brand and service offering. As of September 30, 2004, The Knot's cumulative membership was over 5.4 million compared to the approximately 4.4 million in 2003. For the first nine months of 2004, The Knot reported net revenues of $31.3 million, and net income of $1.1 million or $0.05 per basic and diluted share compared to net revenues of $28.5 million and net income of $778,000 or $0.04 per basic and diluted share in 2003. In October, the Company launched The Nest and transitioned the substantial base of couples who have wed in the last two years to a new site, www.thenest.com, which focuses exclusively on the needs of newlyweds. "Our focus is maximizing the lifetime value of our membership database," Mr. Liu said. "We have a very loyal and active audience which joins The Knot to prepare for a major event in their lives. Since a substantial proportion of 'Knotties' continue to remain active on our site after their weddings, we see a natural expansion of our business to the newlywed market. We are very encouraged by the early positive feedback from our audience base for this new business which further leverages our membership and operating infrastructure." THE KNOT'S RECENT HIGHLIGHTS During the third quarter, The Knot's recognized wedding expert, Editor in Chief Carley Roney, remained in the national broadcast spotlight with several high profile appearances, including a trio of appearances on NBC's TODAY Show annual wedding series. Carley also hosted a 30-city broadcast media tour in October. The media tour generated over 2.2 million viewers. In August, consistent with the Company's strategy to deliver smart and stylish wedding content to engaged couples wherever and whenever they need it, The Knot entered into a partnership with Comcast Cable to launch the first-ever all-weddings Video-on-Demand service. "The Knot Weddings" service, now available to Comcast cable subscribers nationwide, provides viewers with 24/7 access to over 45 hours of wedding-related programming including real wedding stories from the critically-acclaimed TV series, Real Weddings From The Knot as well as more than 60 exclusive runway fashion shows and special program packages on hot wedding trends. New programs are added to "The Knot Weddings" service each month. CONFERENCE CALL AND WEBCAST The Knot will host a conference call with investors at 2:30 p.m., ET on Thursday, November 11, 2004, to discuss its third quarter 2004 financial results. Participants should dial in 800-638-7172 at least 10 minutes before the call is scheduled to begin. Participants can also access the live broadcast over the Internet on the Investor Relations section of The Knot Web site, accessible at http://www.theknot.com/au_corpoverview.shtml. To access the Web cast, participants should visit The Knot Web site at least 15 minutes prior to the conference call in order to download or install any necessary audio software. REPLAY INFORMATION A replay of the Web cast will also be archived on The Knot Web site approximately 2 hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 passcode #1694519 ABOUT THE KNOT, INC. The Knot, Inc. (OTCBB: KNOT.OB; www.theknot.com) is one of the world's leading wedding media and services companies, providing today's to-be-weds with comprehensive wedding planning information, interactive tools and other resources including extensive online wedding-related shopping. Its award-winning website, TheKnot.com, is the leading online wedding destination and wedding content provider to America Online, MSN and Comcast. The Knot also offers a diverse collection of wedding-planning print publications. The Knot produces a national publication, The Knot Weddings Magazine, and publishes The Knot Weddings, regional wedding magazines in sixteen U.S. markets and The Knot Real Weddings in two additional markets. The Company also publishes a wedding-planning book trilogy with Random House's Broadway Books and a gift book series with Chronicle Books and produces a televised documentary series on The Oxygen Network, "Real Weddings From The Knot" and a weddings Video On Demand service for Comcast Cable. The Knot is based in New York and has several other offices across the country. This release may contain projections or other forward-looking statements regarding future events or the future financial performance of The Knot. These statements are only predictions and reflect the current beliefs and expectations of The Knot. Actual events or results may differ materially from those contained in the projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which The Knot bases its expectations may change prior to the end of the quarter. Although these expectations may change, The Knot will not necessarily inform you if they do. The Knot's policy is to provide its expectations not more than once per quarter, and not to update that information until the next quarter. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation, (i) The Knot's unproven business model and limited operating history, (ii) The Knot's history of losses, (iii) the significant fluctuation to which The Knot's quarterly revenues and operating results are subject, (iv) the seasonality of the wedding industry and (v) other factors detailed in documents The Knot files from time to time with the Securities and Exchange Commission, including its recent filings on Forms 10-K and 10-Q. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. The Knot Inc. Consolidated Balance Sheets (in thousands) September 30, December 31, 2004 2003 ---------------------- (Unaudited) (Audited) Assets Current assets: Cash and cash equivalents $22,688 $22,511 Accounts receivable, net 2,917 2,883 Inventories 1,932 1,195 Deferred production and marketing costs 246 318 Other current assets 486 747 ---------------------- Total current assets 28,269 27,654 Property and equipment, net 2,089 2,006 Intangible assets, net 8,659 8,734 Other assets 291 313 ---------------------- Total assets $39,308 $38,707 ====================== Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $3,702 $5,790 Deferred revenue 5,951 4,891 Current portion of long-term debt 40 40 ---------------------- Total current liabilities 9,693 10,721 Long term debt 196 196 Other liabilities 502 490 ---------------------- Total liabilities 10,391 11,407 Stockholders' equity: Common stock 222 217 Additional paid-in-capital 75,055 74,533 Accumulated deficit (46,360) (47,450) ---------------------- Total stockholders' equity 28,917 27,300 ---------------------- Total liabilities and stockholders' equity $39,308 $38,707 ====================== The Knot Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, -------------------------------------------- 2004 2003 2004 2003 -------------------------------------------- (Unaudited)(Unaudited)(Unaudited)(Unaudited) Net revenues: Sponsorship and advertising $4,478 $3,117 $12,613 $8,888 Merchandise 3,717 4,520 10,951 13,320 Publishing and other 2,476 2,102 7,769 6,340 -------------------------------------------- Total net revenues 10,671 9,739 31,333 28,548 Cost of revenues 3,081 3,394 9,009 9,628 -------------------------------------------- Gross profit 7,590 6,345 22,324 18,920 Operating expenses: Product and content development 1,283 1,112 3,744 3,216 Sales and marketing 2,099 3,020 9,150 8,639 General and administrative 3,074 1,852 7,866 5,618 Non-cash compensation - 1 - 32 Depreciation and amortization 190 174 589 665 -------------------------------------------- Total operating expenses 6,646 6,159 21,349 18,170 Income from operations 944 186 975 750 Interest and other income, net 82 21 193 63 -------------------------------------------- Income before income taxes 1,026 207 1,168 813 ============================================ Provision for income taxes 21 5 78 35 Net income $1,005 $202 $1,090 $778 ============================================ Basic earnings per share $0.05 $0.01 $0.05 $0.04 ============================================ Diluted earnings per share $0.04 $0.01 $0.05 $0.04 ============================================ Weighted average number of common shares outstanding Basic 22,189,580 18,605,468 22,013,776 18,470,638 ============================================ Diluted 23,505,692 20,492,003 23,606,535 19,734,658 ============================================ CONTACT: The Knot Inc. Amy Shey Jacobs, 212-219-8555, ext. 1246 ashey@theknot.com -----END PRIVACY-ENHANCED MESSAGE-----