-----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, E6oZz9Z8K8480fuvX1dgG1I0hLOvl7uWaITigLxriSZiy75iLsbJCqVlxTG8BKSy J0B2fIhFcqcyq1pWU5XnMg== 0001157523-07-008075.txt : 20070808 0001157523-07-008075.hdr.sgml : 20070808 20070808161512 ACCESSION NUMBER: 0001157523-07-008075 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070808 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070808 DATE AS OF CHANGE: 20070808 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: 071035879 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 a5467693.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): August 8, 2007 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 August 8, 2007, The Knot, Inc. ("The Knot") issued a press release announcing its financial results as of and for the quarter ended June 30, 2007. 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 August 8, 2007. 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: August 8, 2007 By: /s/ RICHARD E. SZEFC --------------------- Richard E. Szefc Chief Financial Officer, Treasurer and Secretary EXHIBIT INDEX 99.1 Press Release dated August 8, 2007. EX-99.1 2 a5467693-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 The Knot Reports Second Quarter 2007 Financial Results Online Advertising and Registry Services Lead Revenue Gains Conference Call Today at 4:30 p.m. ET Dial-In 800-638-7172 (ID#10416358) NEW YORK--(BUSINESS WIRE)--Aug. 8, 2007--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, 2007. Second Quarter 2007 Results For the second quarter ended June 30, 2007, The Knot reported net revenues of $28.5 million, an increase of 61% from net revenues of $17.7 million for the second quarter of 2006. Revenue from national and local online advertising programs increased 50% over the prior year's second quarter. Merchandise revenue from the sale of wedding supplies grew 35% while publishing and other revenues recorded a 30% gain. Registry services revenue, which is derived substantially through the WeddingChannel business that was acquired in September 2006, was $3.4 million in the recent quarter. Income before income taxes increased to $8.1 million in the second quarter of 2007 compared to $4.1 million a year ago. The provision for income taxes was $3.4 million in the second quarter of 2007 and $173,000 in the corresponding period in 2006. The provision for income taxes for the second quarter 2006 was reduced by the utilization of net operating loss carryforwards. Net income for the second quarter of 2007 was $4.8 million or $0.15 per basic and diluted share as compared to net income of $3.9 million or $0.17 per basic and $0.15 per diluted share in the second quarter of 2006. "Our second quarter results demonstrate the resilience of our business model; however, 2007 remains a challenging year, and I believe there is still room for significant improvement across all our business units," said David Liu, Chief Executive Officer of The Knot. "Online national advertising grew by 65% for the quarter, powered in part by short term buys. We must continue our efforts to increase our share of marketing budgets for both our online and offline businesses. Our challenge remains to extend our multi-media platform across multiple life stage brands and to educate our advertisers on how to build long term relationships with our valuable consumers. We continue to invest in updating our technology platform so that we may efficiently meet the ever changing needs of our audience and advertisers alike." Six Month Results For the six months ended June 30, 2007, The Knot reported net revenues of $49.5 million and net income of $6.4 million or $0.21 per basic and $0.19 per diluted share as compared to net revenues of $32.5 million and net income of $5.6 million or $0.24 per basic and $0.22 per diluted share in 2006. Income before income taxes was $10.9 million for the first six months of 2007 and $5.8 million in the corresponding period in 2006. The number of common shares outstanding were 31,417,909 and 23,448,397 as of June 30, 2007 and 2006, respectively. Second Quarter 2007 Financial Highlights: -- National online revenues were $4.9 million and $8.4 million, for the three and six months ended June 30, 2007, respectively, as compared to $3.0 million and $5.7 million for the corresponding periods in 2006. -- Local online revenues were $7.6 million and $14.9 million for the three and six months ended June 30, 2007, respectively, as compared to $5.4 million and $10.5 million for the corresponding periods in 2006. -- Gross profit margins for the six months ended June 30, 2007 were 80% as compared to 78% for the corresponding period in 2006. -- Stock-based compensation expense was $577,000 and $1.0 million for the three and six months ended June 30, 2007, respectively, as compared to $361,000 and $689,000 for the corresponding periods in 2006. -- Net cash provided by operating activities was $15.2 million for the six months ended June 30, 2007 while capital expenditures amounted to $1.3 million. Recent Highlights: -- In April, The Knot Best of Weddings magazine, a by-brides-for-brides guide to the top wedding sites, photographers, florists and more in over 40 key cities across the United States, was launched. The magazine is based on a unique survey of 25,000 recent brides and grooms capturing detailed feedback on every wedding business that couples hire. -- In June, Denise Favorule joined The Knot from Readers Digest Association as Senior Vice President, Group Publishing Director, a new position at the Company. Ms. Favorule is responsible for leading both national and local advertising sales and marketing as well as spearheading cross-platform sales efforts across all media properties. -- In June, The Knot announced the launch of TheNestBaby.com in response to the growing audience demand for pregnancy advice and resources. TheNestBaby.com brings modern advice, an active community and detailed local content together in a single website. -- In June, The Knot TV launched a new series that adds 360 minutes of this season's exciting new wedding fashions to its already extensive lineup of original wedding programming. Summer 2007 marks the second year that The Knot TV has been live as the world's only 24/7 wedding TV channel. The channel, streamed to a bride-to-be audience, features wedding-themed programming that includes fashion shows, bridal makeovers, honeymoon specials, real-wedding videos and style inspiration from celebrity wedding planners and The Knot's TV personality Carley Roney. Conference Call and Replay Information The Knot will host a conference call with investors at 4:30 p.m. ET on Wednesday, August 8, 2007 to discuss its second quarter 2007 financial results. Participants should dial in 800-638-7172 Reference # 10416358 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. 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 # 10416358. About The Knot, Inc. The Knot, Inc. (NASDAQ: KNOT; www.theknot.com) is a leading lifestage media company targeting couples planning their weddings and future lives together. The Company's flagship brand, The Knot, is the nation's leading wedding resource, reaching over a million engaged couples each year through the most visited wedding website TheKnot.com, The Knot national and local wedding magazines, The Knot books (published by Random House and Chronicle) and television programming bearing The Knot name. The Company also owns WeddingChannel.com, the second most visited wedding website overall and the most visited wedding gift registry website, which further increases the Company's share of the bridal market. Company brand The Nest focuses on the newlywed-to-pregnancy lifestage with popular lifestyle website TheNest.com, The Nest magazine, a home decor book series with Clarkson Potter and baby offshoot TheNestBaby.com. Other websites under The Knot, Inc. umbrella are party planning site PartySpot.com; teen-oriented PromSpot.com; online personals site GreatBoyfriends.com; local baby site Lilaguide.com; and e-commerce and service sites for the wedding category such as ShopforWeddings.com, WeddingTracker.com, and GiftRegistryLocator.com. 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) risks related to The Knot's recent acquisition of WeddingChannel, (iv) the significant fluctuation to which The Knot's quarterly revenues and operating results are subject, (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, 2007 2006 (Unaudited) (Audited) ----------- ------------ Current assets: Cash and cash equivalents $44,737 $73,633 Short-term investments 50,857 7,000 Accounts receivable, net 11,663 9,743 Inventories 2,099 1,345 Deferred production and marketing costs 394 584 Deferred tax assets, current portion 5,966 8,369 Other current assets 1,141 1,500 ----------- ------------ Total current assets 116,857 102,174 Property and equipment, net 8,079 9,376 Intangible assets, net 32,832 34,015 Goodwill 33,280 33,854 Deferred tax assets 22,010 24,490 Other assets 290 342 ----------- ------------ Total assets $213,348 $204,251 =========== ============ Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $7,710 $7,661 Deferred revenue 11,821 10,497 Current portion of long-term debt 51 51 ----------- ------------ Total current liabilities 19,582 18,209 Deferred tax liabilities 14,534 15,014 Long term debt 55 55 Other liabilities 500 548 ----------- ------------ Total liabilities 34,671 33,826 Stockholders' equity: Common stock 314 311 Additional paid-in-capital 190,764 188,909 Accumulated deficit (12,401) (18,795) ----------- ------------ Total stockholders' equity 178,677 170,425 ----------- ------------ Total liabilities and stockholders' equity $213,348 $204,251 =========== ============ The Knot, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Three months ended Six months ended June 30, June 30, ----------------------- ----------------------- 2007 2006 2007 2006 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net revenues: Online sponsorship and advertising $12,521 $8,354 $23,298 $16,153 Registry Services 3,356 84 5,117 143 Merchandise 6,500 4,813 11,130 7,892 Publishing and other 6,109 4,478 9,970 8,292 ----------- ----------- ----------- ----------- Total net revenues 28,486 17,729 49,515 32,480 Cost of revenues 5,651 4,058 9,667 7,187 ----------- ----------- ----------- ----------- Gross profit 22,835 13,671 39,848 25,293 Operating expenses: Product and content development 3,306 1,828 6,450 3,613 Sales and marketing 6,447 4,368 12,337 9,083 General and administrative 3,987 3,326 8,072 6,588 Depreciation and amortization 2,198 453 4,306 825 ----------- ----------- ----------- ----------- Total operating expenses 15,938 9,975 31,165 20,109 Income from operations 6,897 3,696 8,683 5,184 Interest and other income, net 1,236 363 2,223 663 ----------- ----------- ----------- ----------- Income before income taxes $8,133 $4,059 $10,906 $5,847 Provision for income taxes 3,373 173 4,512 276 Net income $4,760 $3,886 $6,394 $5,571 =========== =========== =========== =========== Basic earnings per share $0.15 $0.17 $0.21 $0.24 =========== =========== =========== =========== Diluted earnings per share $0.15 $0.15 $0.19 $0.22 =========== =========== =========== =========== Weighted average number of common shares outstanding Basic 30,898,378 23,173,216 30,855,336 23,129,238 =========== =========== =========== =========== Diluted 32,759,935 25,783,965 32,795,590 25,681,506 =========== =========== =========== =========== Note: Certain prior year amounts have been reclassified to conform to the current year's presentation. CONTACT: VMW Corporate & Investor Relations Vicki Weiner/Sylvia Dresner 212-616-6161 info@vmwcom.com -----END PRIVACY-ENHANCED MESSAGE-----