-----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, TdzgcZ8+IRH9k1nar6F/Wkt/Fmj0LD4n+MLMxpja6A3+9l8eA6o5Qtl6G3PIWbN7 Lx1A/U3k0q+V/1g2nyuh1g== 0001157523-06-011200.txt : 20061113 0001157523-06-011200.hdr.sgml : 20061110 20061113074516 ACCESSION NUMBER: 0001157523-06-011200 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061113 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061113 DATE AS OF CHANGE: 20061113 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: 061205201 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 a5272142.txt THE KNOT, INC. 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): November 13, 2006 The Knot, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 0-28271 13-3895178 (State or other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) 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 November 13, 2006, The Knot, Inc. ("The Knot") issued a press release announcing its financial results as of and for the quarter ended September 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 November 13, 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: November 13, 2006 By: /s/ RICHARD E. SZEFC ----------------------------------- Richard E. Szefc Chief Financial Officer, Treasurer and Secretary EXHIBIT INDEX 99.1 Press Release dated November 13, 2006. EX-99.1 2 a5272142ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 The Knot Reports Third Quarter and Nine Month 2006 Financial Results Net Income Increases to $3.3 Million on a 41% Revenue Gain Reminder: Conference Call Today at 2:30 Dial-In 800-638-7172 (ID#8734121) NEW YORK--(BUSINESS WIRE)--Nov. 13, 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 third quarter and nine months ended September 30, 2006. WeddingChannel Acquisition As previously announced, on September 8, 2006, The Knot completed its acquisition of WeddingChannel.com, Inc. The results of operations for WeddingChannel are included in the results of operations for The Knot since that date. Third Quarter 2006 Results For the third quarter of 2006, The Knot reported net revenues of $18.5 million, up 41% from net revenues of $13.1 million in the third quarter of 2005. The current period includes revenue contributed from the WeddingChannel operation of approximately $1.5 million. Each of the Knot's revenue streams contributed to the remaining gain of $3.9 million which represented growth of 30% over the prior year. National and local online advertising revenues led the increase, up 35% over the prior year. Merchandising revenue continued to rebound and was ahead by 25% while publishing and other revenue rose by 24%. "As the clear market leader in the bridal category, we are moving quickly to maximize our platforms for our advertisers who want to directly reach the largest audience of brides and grooms," said Knot CEO David Liu. "We are pleased with the progress we are making in the integration of the WeddingChannel operations. We initially focused on the consolidation of the warehouse and fulfillment functions for the wedding supplies business at our facility in Redding, California. This was completed in September." The Knot reported net income for the third quarter of 2006 of $3.3 million, or $0.12 per basic and $0.11 per diluted share, up sharply from net income of $722,000 or $0.03 per basic and diluted share in the third quarter of 2005. Total operating expenses in the third quarter of 2006 include approximately $295,000 of amortization of acquired intangibles recorded in connection with the acquisition of WeddingChannel. Total operating expenses in the third quarter of 2005 included approximately $1.5 million in professional fees related to the Company's prior litigation with WeddingChannel. "During the quarter, we made a further investment to extend our reach in the newlywed space with the launch of the premier issue of The NEST magazine, which we have started publishing on a controlled circulation basis," Mr. Liu said. "The response so far has been enthusiastic, and the November holiday issue has new advertisers on board. Our brand strategy calls for cross platform product extensions, and we are following the same plan that has built a loyal audience for The Knot. The purchasing power of our audience from engagement to first time parents is beginning to attract a wide range of advertisers who want to influence our audience early in the buying cycle," Mr. Liu concluded. 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 $111,000 and $383,000 for the three and nine months ended September 30, 2006, respectively, or $0.02 and $0.01 per basic and diluted share. There was no impact on basic and diluted earnings per share for the three months ended September 30, 2006. Total stock-based compensation, including expenses associated with restricted common shares, was $388,000 and $1.1 million for the three and nine months ended September 30, 2006, respectively. Stock-based compensation expense was $24,000 for each of the three and nine months ended September 30, 2005. For the nine months ended September 30, 2006, The Knot reported net revenues of $51.0 million and net income of $8.8 million, or $0.36 per basic and $0.33 per diluted share, compared to net revenues of $38.6 million and net income of $2.5 million or $0.11 per basic and $0.10 per diluted share in 2005. Professional fees related to the Company's prior litigation with WeddingChannel.com, Inc. were approximately $3.7 million for the nine months in 2005. Recent Highlights On September 8, 2006, The Knot completed its acquisition of WeddingChannel.com, Inc. The Knot issued approximately 1.15 million shares of its common stock and paid approximately $61.7 million in cash, which includes an estimated working capital adjustment of $3.8 million, in exchange for all of the capital stock and stock options of WeddingChannel. The Knot funded the cash portion of the purchase price with cash on hand and the net proceeds of its Follow-On Offering of common stock completed on August 15, 2006. The Company also added three new members to its Board of Directors in September. The new directors are: Eileen Naughton, Regional Sales Director of Google, Ira Carlin, Chairman-International of MAGNA Global Worldwide, and Peter Sachse, Chairman and CEO of Macys.com. These new additions to the Board bring a unique blend of collective experience and leadership in growing media brands, expanding global operations, managing media and marketing initiatives and steering companies through important transitions. The Nest brand celebrated the launch of the first book directed to its growing newlywed audience, The Nest Newlywed Handbook: An Owner's Manual to Modern Married Life. The first in a series of four with Clarkson Potter, The Nest Newlywed Handbook debuted on October 11th with a six-city media tour featuring editor in chief, Carley Roney. The tour was an overwhelming success producing broadcast publicity in each market with appearances on Good Day Atlanta, Fox 5 Morning News D.C. and PBS "To the Contrary" among others. NOVEMBER 13 CONFERENCE CALL AND WEBCAST The Knot will host a conference call with investors at 2:30 p.m. ET today to discuss its third quarter financial results. Participants should dial in at 800-638-7172 ((ID#8734121) 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 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 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 # 8734121 About The Knot, Inc. The Knot (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 wedding websites, TheKnot.com and WeddingChannel.com are the most-trafficked online wedding destinations for information and registry gifts. The Company also offers a diverse collection of print publications including national and regional wedding magazines, seven books, a video on demand (VOD) service for Comcast Cable, and content distribution partnerships with MSN, Scripps Howard, and The McClatchy Company. The Knot owns and operates several brands targeted before and beyond the wedding day, including newlywed resource The Nest (www.thenest.com), party-planning portal PartySpot.com, teen site PromSpot.com, online personals site GreatBoyfriends.com, and a localized information resource for parents, "the lilaguide" (lilaguide.com). 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, 2006 2005 (Unaudited) (Audited) ------------- ------------ Assets Current assets: Cash and cash equivalents $ 70,652 $ 17,685 Short-term investments 7,000 11,550 Accounts receivable, net 8,901 4,805 Inventories 1,913 1,622 Deferred production and marketing costs 541 419 Other current assets 1,571 881 ------------- ------------ Total current assets 90,578 36,962 Property and equipment, net 10,018 2,987 Intangible assets, net 45,522 205 Goodwill 38,786 8,905 Deferred tax assets 11,860 -- Other assets 506 326 ------------- ------------ Total assets $ 197,270 $ 49,385 ============= ============ Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $ 11,162 $ 5,574 Deferred revenue 11,449 7,816 Current portion of long-term debt 47 47 ------------- ------------ Total current liabilities 22,658 13,437 Deferred tax liabilities 18,401 -- Long term debt 106 106 Other liabilities 811 505 ------------- ------------ Total liabilities 41,976 14,048 Stockholders' equity: Common stock 310 230 Additional paid-in-capital 188,372 77,550 Deferred compensation -- (221) Accumulated deficit (33,388) (42,222) ------------- ------------ Total stockholders' equity 155,294 35,337 ------------- ------------ Total liabilities and stockholders' equity $ 197,270 $ 49,385 ============= ============ Note: Certain amounts as of December 31, 2005 have been reclassified to conform to the current presentation. The Knot Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, --------------------------------------------------- 2006 2005 2006 2005 --------------------------------------------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net revenues: Online sponsorship and advertising $ 9,380 $ 6,687 $ 25,533 $ 18,516 Registry services 955 63 1,098 210 Merchandise 4,273 3,275 12,166 10,581 Publishing and other 3,898 3,092 12,190 9,309 ------------ ------------ ------------ ------------ Total net revenues 18,506 13,117 50,987 38,616 Cost of revenues 4,200 3,048 11,388 8,835 --------------------------------------------------- Gross profit 14,306 10,069 39,599 29,781 Operating expenses: Product and content development 2,170 1,743 5,784 5,197 Sales and marketing 4,657 3,516 13,740 10,674 General and administrative 4,233 3,917 10,820 10,891 Depreciation and amortization 975 341 1,800 901 --------------------------------------------------- Total operating expenses 12,035 9,517 32,144 27,663 Income from operations 2,271 552 7,455 2,118 Interest and other income, net 1,082 207 1,745 504 --------------------------------------------------- Income before income taxes $ 3,353 759 $ 9,200 2,622 Provision for income taxes 90 37 366 151 Net income $ 3,263 $ 722 $ 8,834 $ 2,471 =================================================== Basic earnings per share $ 0.12 $ 0.03 $ 0.36 $ 0.11 =================================================== Diluted earnings per share $ 0.11 $ 0.03 $ 0.33 $ 0.10 =================================================== Weighted average number of common shares outstanding Basic 27,472,080 22,802,123 24,592,760 22,623,619 =================================================== Diluted 29,766,300 25,085,676 27,059,012 24,701,236 =================================================== Note: Certain amounts for the three and nine months ended September 30, 2005 have been reclassified to conform to the current presentation. CONTACT: VMW Corporate & Investor Relations Vicki Weiner/Sylvia Dresner, 212-616-6161 info@vmwcom.com -----END PRIVACY-ENHANCED MESSAGE-----