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(State or other jurisdiction
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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99.1
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Press release announcing Move, Inc.’s financial results for the quarter ended September 30, 2011
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MOVE, INC.
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Date: November 3, 2011
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By:
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/s/ Patricia A. Wehr
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Patricia A. Wehr
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Chief Accounting Officer
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Exhibit Number
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Description
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99.1
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Press release announcing Move, Inc.’s financial results for the quarter ended September 30, 2011
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Move, Inc. Announces Third Quarter 2011 Financial Results
CAMPBELL, Calif., Nov. 3, 2011 /PRNewswire/ -- Move, Inc. (NASDAQ: MOVE), the leader in online real estate, today reported financial results for the third quarter ended September 30, 2011.
(Logo: http://photos.prnewswire.com/prnh/20080213/MOVEINCLOGO)
Revenue in the third quarter of 2011 was $46.5 million, compared to $50.3 million in the third quarter of 2010. Net income applicable to common stockholders was $242,000, or break even per share, compared to net income of $375,000, or break even per share, in the third quarter of 2010. Non-GAAP Adjusted EBITDA (earnings from continuing operations before interest, taxes, stock-based compensation and charges, depreciation, amortization and other non-recurring charges) for the third quarter of 2011 was $5.5 million, or 12 percent of revenue, compared to $6.0 million, or 12 percent of revenue, for the third quarter of 2010. Move, Inc. has reported Adjusted EBITDA because management uses it to monitor and assess the Company's performance and believes it is helpful to investors in understanding the Company's business.
Steve Berkowitz, chief executive officer at Move, Inc. said, "Against the backdrop of today's challenging real estate market, our industry is making an important transition as it embraces new technologies. The real estate industry is increasingly becoming a multi-channel experience for consumers, with connections and interactions that occur in person, on the phone, on the web and especially on mobile devices. Move continues to take solid steps towards the future. We are in the process of rolling out the most aggressive product release schedule in our history, designed to leverage our market leadership. While we remain focused on achieving our near term financial goals, Move is continuing to focus on creating great consumer experiences and new revenue opportunities for growth in 2012 and beyond."
Financial Highlights:
Business Highlights:
Business Outlook
Move today provided guidance for the quarter and year ending December 31, 2011. For the quarter ending December 31, 2011, Move expects revenue of approximately $47 million and expects to report Adjusted EBITDA margin of approximately 16%.
For the year ending December 31, 2011, Move expects revenue of approximately $192 million and expects to report Adjusted EBITDA margin of approximately 13%.
Conference Call
As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, November 3, 2011. To access the call, please dial (877) 312-5848, or outside the U.S. (253) 237-1155, five minutes prior to 1:30 p.m. Pacific Daylight Time. A live webcast of the call will also be available at http://investor.move.com under the Events & Presentations menu.
An audio replay will be available between 4:30 p.m. Pacific Daylight Time November 3, 2011, and 11:59 p.m. Pacific Daylight Time November 17, 2011, by calling (855) 859-2056 or (404) 537-3406, with Conference ID 12314530. A replay of the call will also be available at http://investor.move.com.
Use of Non-GAAP Financial Measures
To supplement its consolidated financial statements presented in accordance with generally accepted accounting principles in the United States ("GAAP"), Move uses a non-GAAP measure of net income (loss) excluding interest income, net, income tax expense, impairment of auction rate securities and certain other non-cash and non-recurring items, principally depreciation, amortization and stock-based compensation and other charges, which is referred to as Adjusted EBITDA. The Company has also presented a non-GAAP table of Financial Data for the three and nine month periods ended September 30, 2011 and 2010 that extracts stock-based compensation under ASC Topic 718 "Compensation – Stock Compensation." A reconciliation of these non-GAAP measures to GAAP is provided in the attached tables. These non-GAAP adjustments are provided to enhance the user's overall understanding of Move's current financial performance and its prospects for the future and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP measures are the primary basis management uses for planning and forecasting its future operations. Move believes these non-GAAP results provide useful information to both management and investors by excluding certain expenses that it believes are not indicative of its core operating results and a more consistent basis for comparison between quarters and should be carefully evaluated.
This press release may contain forward-looking statements, including information about management's view of Move's future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of Move, its subsidiaries, divisions and concepts to be materially different than those expressed or implied in such statements. These risk factors and others are included from time to time in documents Move files with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on Move's future results. The forward-looking statements included in this press release are made only as of the date hereof. Move cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Move expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.
ABOUT MOVE, INC.
Move, Inc. (NASDAQ: MOVE) is the leader in online real estate with over 20.3 million visitors [1] to its online network of websites within the Realtor.com Real Estate Network. Move, Inc. operates: Move.com, a leading destination for information on new homes and rental listings, moving, home and garden and home finance; REALTOR.com®, the official website of the National Association of REALTORS®; MortgageMatch.com, Moving.com; SeniorHousingNet; ListHub; and TOP PRODUCER Systems. Move, Inc. is based in Campbell, California.
(1) comScore Media Metrix, Key Measures Report, September 2011
MOVE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||
(unaudited) | (unaudited) | |||||||||||
Revenue | $ | 46,466 | $ | 50,256 | $ | 144,456 | $ | 148,590 | ||||
Cost of revenue (1) | 9,959 | 10,766 | 31,203 | 32,782 | ||||||||
Gross profit | 36,507 | 39,490 | 113,253 | 115,808 | ||||||||
Operating expenses: (1) | ||||||||||||
Sales and marketing | 16,281 | 18,631 | 52,524 | 55,835 | ||||||||
Product and web site development | 8,437 | 8,855 | 26,899 | 25,517 | ||||||||
General and administrative | 10,823 | 10,877 | 30,352 | 32,366 | ||||||||
Amortization of intangible assets | 397 | 139 | 1,108 | 348 | ||||||||
Total operating expenses | 35,938 | 38,502 | 110,883 | 114,066 | ||||||||
Operating income | 569 | 988 | 2,370 | 1,742 | ||||||||
Interest (expense) income, net | (2) | 33 | 33 | 767 | ||||||||
Earnings of unconsolidated joint venture | 367 | 342 | 718 | 641 | ||||||||
Impairment of auction rate securities | — | — | — | (19,559) | ||||||||
Other (expense) income, net | (99) | (42) | 278 | (1,144) | ||||||||
Income (loss) from operations before income taxes | 835 | 1,321 | 3,399 | (17,553) | ||||||||
Income tax expense (benefit) | 31 | (404) | 123 | (313) | ||||||||
Net income (loss) | 804 | 1,725 | 3,276 | (17,240) | ||||||||
Convertible preferred stock dividend and related accretion | (562) | (1,350) | (3,506) | (4,024) | ||||||||
Net income (loss) applicable to common stockholders | $ | 242 | $ | 375 | $ | (230) | $ | (21,264) | ||||
Basic net income (loss) per share applicable to common stockholders | $ | 0.00 | $ | 0.00 | $ | (0.00) | $ | (0.14) | ||||
Diluted net income (loss) per share applicable to common stockholders | $ | 0.00 | $ | 0.00 | $ | (0.00) | $ | (0.14) | ||||
Shares used in calculation of net income (loss) per share applicable to common stockholders: | ||||||||||||
Basic | 157,117 | 155,711 | 157,720 | 154,957 | ||||||||
Diluted | 159,908 | 159,527 | 157,720 | 154,957 | ||||||||
(1) Includes stock-based compensation as follows: | ||||||||||||
Cost of revenue | $ | 52 | $ | 44 | $ | 170 | $ | 136 | ||||
Sales and marketing | 307 | 400 | 1,066 | 1,240 | ||||||||
Product and web site development | 238 | 453 | 915 | 1,243 | ||||||||
General and administrative | 488 | 875 | 1,979 | 2,792 | ||||||||
$ | 1,085 | $ | 1,772 | $ | 4,130 | $ | 5,411 | |||||
MOVE, INC. CONSOLIDATED BALANCE SHEETS (in thousands) | ||||||
September 30, | December 31, | |||||
(unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 81,264 | $ | 158,517 | ||
Accounts receivable, net | 11,230 | 9,680 | ||||
Other current assets | 8,283 | 7,621 | ||||
Total current assets | 100,777 | 175,818 | ||||
Property and equipment, net | 19,857 | 21,934 | ||||
Investment in unconsolidated joint ventures | 6,444 | 7,165 | ||||
Goodwill, net | 24,450 | 24,450 | ||||
Intangible assets, net | 7,716 | 8,324 | ||||
Other assets | 578 | 1,327 | ||||
Total assets | $ | 159,822 | $ | 239,018 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 3,504 | $ | 6,403 | ||
Accrued expenses | 15,919 | 16,281 | ||||
Deferred revenue | 11,059 | 13,696 | ||||
Total current liabilities | 30,482 | 36,380 | ||||
Other non-current liabilities | 3,352 | 3,300 | ||||
Total liabilities | 33,834 | 39,680 | ||||
Series B convertible preferred stock | 48,422 | 116,564 | ||||
Stockholders’ equity: | ||||||
Series A convertible preferred stock | — | — | ||||
Common stock | 154 | 159 | ||||
Additional paid-in capital | 2,119,680 | 2,124,554 | ||||
Accumulated other comprehensive income | 273 | 372 | ||||
Accumulated deficit | (2,042,541) | (2,042,311) | ||||
Total stockholders’ equity | 77,566 | 82,774 | ||||
Total liabilities and stockholders’ equity | $ | 159,822 | $ | 239,018 | ||
MOVE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | ||||||
Nine Months Ended September 30, | ||||||
2011 | 2010 | |||||
(unaudited) | ||||||
Cash flows from operating activities: | ||||||
Net income (loss) | $ | 3,276 | $ | (17,240) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation | 6,979 | 7,637 | ||||
Amortization of intangible assets | 1,108 | 348 | ||||
Provision for (reversal of) doubtful accounts | 99 | (84) | ||||
Loss on sales and disposals of assets | 126 | — | ||||
Stock-based compensation and charges | 4,441 | 5,765 | ||||
Impairment of auction rate securities | — | 19,559 | ||||
Earnings of unconsolidated joint venture | (718) | (641) | ||||
Other non-cash items | (52) | (153) | ||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||
Accounts receivable | (1,649) | 1,346 | ||||
Other assets | 88 | 1,059 | ||||
Accounts payable and accrued expenses | (3,189) | 675 | ||||
Deferred revenue | (2,649) | (602) | ||||
Net cash provided by operating activities | 7,860 | 17,669 | ||||
Cash flows from investing activities: | ||||||
Purchases of property and equipment | (5,075) | (7,838) | ||||
Acquisitions, net of cash acquired | (500) | (12,371) | ||||
Proceeds from dissolution of joint venture | 499 | — | ||||
Proceeds from the sale of auction rate securities | — | 109,841 | ||||
Principal payments on notes receivable | — | 1,000 | ||||
Proceeds from the sale of marketable equity securities | — | 14 | ||||
Distribution of earnings from unconsolidated joint venture | 940 | — | ||||
Net cash (used in) provided by continuing investing activities | (4,136) | 90,646 | ||||
Cash flows from financing activities: | ||||||
Proceeds from exercise of stock options | 608 | 4,467 | ||||
Restricted cash | — | 462 | ||||
Redemption of convertible preferred stock | (70,000) | — | ||||
Proceeds from line of credit | — | 64,700 | ||||
Proceeds from loan payable | — | 316 | ||||
Principal payments on line of credit | — | (129,330) | ||||
Repurchases of company's common stock | (9,617) | — | ||||
Payment of dividend on convertible preferred stock | (1,579) | — | ||||
Tax payment related to net share settlements of restricted stock awards | (312) | (98) | ||||
Principal payments on loan payable | (77) | (58) | ||||
Net cash used in financing activities | (80,977) | (59,541) | ||||
Change in cash and cash equivalents | (77,253) | 48,774 | ||||
Cash and cash equivalents, beginning of period | 158,517 | 106,847 | ||||
Cash and cash equivalents, end of period | $ | 81,264 | $ | 155,621 | ||
MOVE, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURE NET INCOME (LOSS) EXCLUDING INTEREST INCOME, INCOME TAX EXPENSE, STOCK-BASED COMPENSATION AND CHARGES, DEPRECIATION, AMORTIZATION AND IMPAIRMENT OF AUCTION RATE SECURITIES (ADJUSTED EBITDA) (in thousands) | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||
(unaudited) | (unaudited) | |||||||||||
Net Income (loss) | $ | 804 | $ | 1,725 | $ | 3,276 | $ | (17,240) | ||||
Plus: | ||||||||||||
Interest (expense) income, net | 2 | (33) | (33) | (767) | ||||||||
Income tax expense (benefit) | 31 | (404) | 123 | (313) | ||||||||
Stock-based compensation | 1,085 | 1,772 | 4,130 | 5,411 | ||||||||
Stock-based charges | 72 | 87 | 311 | 354 | ||||||||
Depreciation | 2,340 | 2,482 | 6,979 | 7,637 | ||||||||
Impairment of auction rate securities | — | — | — | 19,559 | ||||||||
Loss on sale of auction rate securities | — | — | — | 1,098 | ||||||||
Termination costs from dissolution of joint venture | 619 | — | 619 | — | ||||||||
Amortization of intangible assets, including unconsolidated joint venture | 594 | 336 | 1,700 | 1,024 | ||||||||
Adjusted EBITDA | $ | 5,547 | $ | 5,965 | $ | 17,105 | $ | 16,763 | ||||
MOVE, INC. NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) | |||||||
Three Months Ended | |||||||
September 30, 2011 | |||||||
(unaudited) | |||||||
As | Stock-based | Excluding | |||||
Revenue | $ | 46,466 | $ | — | $ | 46,466 | |
Cost of revenue | 9,959 | (52) | 9,907 | ||||
Gross profit | 36,507 | 52 | 36,559 | ||||
Sales and marketing | 16,281 | (307) | 15,974 | ||||
Product and web site development | 8,437 | (238) | 8,199 | ||||
General and administrative | 10,823 | (488) | 10,335 | ||||
Amortization of intangibles | 397 | — | 397 | ||||
Total operating expenses | 35,938 | (1,033) | 34,905 | ||||
Operating income | $ | 569 | $ | 1,085 | $ | 1,654 | |
Three Months Ended | |||||||
September 30, 2010 | |||||||
(unaudited) | |||||||
As | Stock-based | Excluding | |||||
Revenue | $ | 50,256 | $ | — | $ | 50,256 | |
Cost of revenue | 10,766 | (44) | 10,722 | ||||
Gross profit | 39,490 | 44 | 39,534 | ||||
Sales and marketing | 18,631 | (400) | 18,231 | ||||
Product and web site development | 8,855 | (453) | 8,402 | ||||
General and administrative | 10,877 | (875) | 10,002 | ||||
Amortization of intangibles | 139 | — | 139 | ||||
Total operating expenses | 38,502 | (1,728) | 36,774 | ||||
Operating income | $ | 988 | $ | 1,772 | $ | 2,760 | |
Nine Months Ended | |||||||
September 30, 2011 | |||||||
(unaudited) | |||||||
As Reported | Stock-based | Excluding | |||||
Revenue | $ | 144,456 | $ | — | $ | 144,456 | |
Cost of revenue | 31,203 | (170) | 31,033 | ||||
Gross profit | 113,253 | 170 | 113,423 | ||||
Sales and marketing | 52,524 | (1,066) | 51,458 | ||||
Product and web site development | 26,899 | (915) | 25,984 | ||||
General and administrative | 30,352 | (1,979) | 28,373 | ||||
Amortization of intangibles | 1,108 | — | 1,108 | ||||
Total operating expenses | 110,883 | (3,960) | 106,923 | ||||
Operating income | $ | 2,370 | $ | 4,130 | $ | 6,500 | |
Nine Months Ended | |||||||
September 30, 2010 | |||||||
(unaudited) | |||||||
As | Stock-based | Excluding | |||||
Revenue | $ | 148,590 | $ | — | $ | 148,590 | |
Cost of revenue | 32,782 | (136) | 32,646 | ||||
Gross profit | 115,808 | 136 | 115,944 | ||||
Sales and marketing | 55,835 | (1,240) | 54,595 | ||||
Product and web site development | 25,517 | (1,243) | 24,274 | ||||
General and administrative | 32,366 | (2,792) | 29,574 | ||||
Amortization of intangibles | 348 | — | 348 | ||||
Total operating expenses | 114,066 | (5,275) | 108,791 | ||||
Operating income | $ | 1,742 | $ | 5,411 | $ | 7,153 | |
CONTACT: Todd Friedman, todd@blueshirtgroup.com, or Stacie Bosinoff, Stacie@blueshirtgroup.com, both of The Blueshirt Group, +1-415-217-7722