-----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, DTM6ayP/cOTK8v0YRWh9rAhMahWuj+l2GPLi4eXOrPWvzJAzTbXZ7F92jQm/e39H QVMJsYB2v4Y1g5kj/OuPYw== 0001157523-06-007454.txt : 20060727 0001157523-06-007454.hdr.sgml : 20060727 20060727084519 ACCESSION NUMBER: 0001157523-06-007454 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060727 DATE AS OF CHANGE: 20060727 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: 06983020 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 a5196864.txt THE KNOT 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 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): July 27, 2006 The Knot, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 0-28271 13-3895178 (State or other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 462 Broadway, 6th Floor, New York, New York 10013 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 219-8555 --------------------- (Former name or former address, if changed since last report) --------------------- 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: [ ] 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 July 27, 2006, The Knot, Inc. ("The Knot") issued a press release announcing its financial results as of and for the quarter ended June 30, 2006. 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 in this Item and in the accompanying Exhibit 99.1 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. (d) Exhibits 99.1 Press Release dated July 27, 2006. SIGNATURE 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: July 27, 2006 By: /s/ RICHARD E. SZEFC ------------------------------------------------ Richard E. Szefc Chief Financial Officer, Treasurer and Secretary EXHIBIT INDEX 99.1 Press Release dated July 27, 2006. EX-99.1 2 a5196864ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 The Knot Reports Second Quarter and Six Month 2006 Financial Results; Net Income for the Second Quarter Increases to $3.9 Million on a 31% Revenue Gain; Reminder: Conference Call Today at 2:30 p.m. ET Dial-in 800-638-7172 (ID#3164202) NEW YORK--(BUSINESS WIRE)--July 27, 2006--The Knot, Inc. (NASDAQ: KNOT, www.theknot.com), a leading lifestage media company targeting couples planning their weddings and future lives together, today reported financial results for its second quarter and six months ended June 30, 2006. Second Quarter 2006 Results For the second quarter ended June 30, 2006, The Knot reported net revenues of $17.7 million, an increase of 31% from net revenues of $13.6 million for the second quarter of 2005. All three of the Company's revenue streams contributed to the gains, led by local and national online advertising revenue which was up 38% over the prior year. Publishing and other revenues rose by 30% and merchandise revenue increased by 20% over the prior year. "Online advertising and publishing revenues remained strong in the second quarter of 2006, and we saw an encouraging rebound in our merchandising revenue," said David Liu, Chief Executive Officer of The Knot. "The value of our ability to deliver a replenishing audience, poised to purchase goods and services within a defined time period, is being recognized by our advertisers with increased spending budgets and expanded campaigns." The Knot reported net income for the second quarter of 2006 of $3.9 million or $0.17 per basic and $0.15 per diluted share as compared to $1.3 million or $0.06 per basic and $0.05 per diluted share in 2005. Professional fees related to The Knot's litigation with WeddingChannel.com, Inc., which were $1.6 million in the second quarter of 2005, were minimal in the second quarter of 2006. On January 17, 2006, a stay was entered in connection with this litigation, for a period of not less than 60 days, upon the joint request of the parties. The stay has continued to remain in effect. On June 5, 2006, The Knot and WeddingChannel announced that they had entered into a definitive merger agreement. As previously announced, The Knot will, under the terms of the merger agreement, pay approximately $57.9 million in cash and issue 1,150,000 shares of its common stock in exchange for all of the capital stock and stock options of WeddingChannel. On July 20, 2006, The Knot filed a registration statement with the Securities and Exchange Commission relating to a proposed offering by The Knot of 3,500,000 newly-issued shares of common stock and by certain selling stockholders of 4,450,000 shares of common stock. The net proceeds to The Knot from this offering, which is subject to the registration statement becoming effective and market conditions, will be used to fund part of the cash portion of the merger consideration. The shares being offered in the proposed offering may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. Effective January 1, 2006, The Knot began recording expense associated with employee stock options including rights associated with its Employee Stock Purchase Plan, in accordance with Statement of Financial Accounting Standards No. 123(R). The adoption of this standard resulted in a reduction in net income of $144,000 and $272,000 for the three and six months ended June 30, 2006, respectively, or $0.01 per basic share for each period. There was no impact on diluted earnings per share for each period. Total stock-based compensation, including expense associated with restricted common shares, was $361,000 and $689,000 for the three and six months ended June 30, 2006, respectively. There was no stock-based compensation recorded in the three and six months ended June 30, 2005. Results for the Six Months Ended June 30, 2006 For the six months ended June 30, 2006, The Knot reported net revenues of $32.5 million and net income of $5.6 million or $0.24 per basic and $0.22 per diluted share as compared to net revenues of $25.5 million and net income of $1.7 million or $0.08 per basic and $0.07 per diluted share in 2005. Recent Highlights: During the second quarter, The Knot made a series of announcements regarding its strategic extension to offline media of The Nest lifestyle brand for young marrieds. These included the anticipated summer launch of THE NEST From The Knot magazine; a distribution deal with McClatchy-Tribune Information Services (formerly KnightRidder/Tribune) to distribute editorial content from The Nest; and a multiple book deal with Clarkson Potter to bring The Nest brand to bookshelves nationwide. The first book, "The Nest Newlywed Handbook: An Owner's Manual to Modern Married Life," will be published in early Fall 2006. On July 10, 2006, The Knot announced that it had completed a private placement of 2,750,000 newly-issued shares of common stock at $18.25 per share to three institutional investors for gross proceeds of $50.2 million, before placement fees and offering expenses. As previously announced, these proceeds will be used for general corporate purposes other than in relation to the WeddingChannel merger. On July 25, 2006, The Knot announced that it had acquired "the lilaguide", a collection of localized pocket-sized, for-parents-by-parents guidebooks on all-things babies. The acquisition of "the lilaguide" represents The Knot's first step into the business of catering to the specific needs of first-time parents. JULY 25 CONFERENCE CALL AND WEBCAST The Knot will host a conference call with investors at 2:30 p.m. ET on Thursday, July 27, 2006, to discuss its second quarter 2006 financial results. Participants should dial in 800-638-7172 (# 3164202) 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 www.theknot.com/investor-relations. To access the webcast, participants should visit The Knot website 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 webcast will also be archived on The Knot website approximately two hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 reference # 3164202 About The Knot, Inc. The Knot, Inc. (NASDAQ: KNOT; www.theknot.com) is a leading lifestage media and services company. The Company's flagship brand, The Knot, is the nation's leading wedding resource that reaches over 1 million engaged couples each year through the Web, newsstands, bookstores, national television and more. Its award-winning website, TheKnot.com, is the most-trafficked online wedding destination. The Company also offers a diverse collection of print publications including national and regional editions of "The Knot Weddings" magazine, seven books, a popular TV series on The Oxygen Network, a Video On Demand (VOD) service for Comcast Cable and content distribution partnerships with MSN and Comcast. The Knot, Inc. has recently launched several brands targeted before and beyond the wedding day, including newlywed resource The Nest (www.thenest.com), teen site PromSpot.com, and online personals site, GreatBoyfriends.com. The Knot, Inc. is based in New York and has several other offices across the country. FORWARD-LOOKING STATEMENTS This release contains forward-looking statements regarding future events or the future financial performance of The Knot. These statements, which are usually accompanied by word such as "may", will", "could", "intends" and "expects", 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. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, among others, (i) the risk that the proposed merger may not be approved by the stockholders of WeddingChannel or that the necessary regulatory approvals are not obtained, (ii) the risk that other closing conditions of the merger may not be satisfied, (iii) the risk that the two companies' businesses will not be integrated successfully and (iv) the significant costs related to the proposed merger. In addition, other factors relating solely to The Knot's business could cause actual events or results to differ materially from the forward-looking statements contained herein including, among others, (i) The Knot's unproven business model, (ii) The Knot's history of significant losses, (iii) the significant fluctuation to which The Knot's quarterly revenues and operating results are subject, (iv) the risks and related costs associated with ongoing litigation, (v) the seasonality of the wedding industry and (vi) other factors detailed in documents The Knot files from time to time with the Securities and Exchange Commission. 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) June 30, December 31, 2006 2005 (Unaudited) (Audited) ------------ ------------ Assets Current assets: Cash and cash equivalents $24,662 $17,685 Short-term investments 9,600 11,550 Accounts receivable, net 4,783 4,805 Inventories 1,786 1,622 Deferred production and marketing costs 623 419 Other current assets 815 881 ------------ ------------ Total current assets 42,269 36,962 Property and equipment, net 4,056 2,987 Intangible assets, net 9,077 9,110 Other assets 1,454 326 ------------ ------------ Total assets $56,856 $49,385 ============ ============ Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $5,018 $5,574 Deferred revenue 8,785 7,816 Current portion of long-term debt 47 47 ------------ ------------ Total current liabilities 13,850 13,437 Long term debt 106 106 Other liabilities 480 505 ------------ ------------ Total liabilities 14,436 14,048 Stockholders' equity: Common stock 234 230 Additional paid-in-capital 78,837 77,550 Deferred compensation -- (221) Accumulated deficit (36,651) (42,222) ------------ ------------ Total stockholders' equity 42,420 35,337 ------------ ------------ Total liabilities and stockholders' equity $56,856 $49,385 ============ ============ The Knot Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Six months ended June 30, June 30, ------------------------------------------------ 2006 2005 2006 2005 ------------------------------------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net revenues: Sponsorship and advertising $8,354 $6,054 $16,153 $11,829 Merchandise 4,897 4,067 8,035 7,453 Publishing and other 4,478 3,445 8,292 6,217 ------------------------------------------------ Total net revenues 17,729 13,566 32,480 25,499 Cost of revenues 4,058 2,875 7,187 5,787 ------------------------------------------------ Gross profit 13,671 10,691 25,293 19,712 Operating expenses: Product and content development 1,828 1,774 3,613 3,454 Sales and marketing 4,368 3,530 9,083 7,157 General and administrative 3,326 3,856 6,588 6,974 Depreciation and amortization 453 280 825 561 ------------------------------------------------ Total operating expenses 9,975 9,440 20,109 18,146 Income from operations 3,696 1,251 5,184 1,566 Interest and other income, net 363 167 663 297 ------------------------------------------------ Income before income taxes $4,059 $1,418 $5,847 $1,863 Provision for income taxes 173 78 276 114 Net income $3,886 $1,340 $5,571 $1,749 ================================================ Basic earnings per share $0.17 $0.06 $0.24 $0.08 ================================================ Diluted earnings per share $0.15 $0.05 $0.22 $0.07 ================================================ Weighted average number of common shares outstanding Basic 23,173,216 22,654,055 23,129,238 22,532,971 ================================================ Diluted 25,783,965 24,717,359 25,681,506 24,507,398 ================================================ CONTACT: VMW Corporate & Investor Relations Vicki Weiner/Sylvia Dresner, 212-616-6161 info@vmwcom.com -----END PRIVACY-ENHANCED MESSAGE-----