EX-99.1 2 a5340534-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 Move, Inc. Announces Fourth Quarter and Full Year 2006 Financial Results Full Year Revenue Increased 15 Percent; Record 12% EBITDA Margin in Q4 WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--Feb. 22, 2007--Move, Inc. (NASDAQ:MOVE) reported financial results for the fourth quarter and full year ended December 31, 2006. Total revenue for the fourth quarter was $71.8 million, an eight percent increase compared to $66.6 million in the fourth quarter of 2005. Revenue for the full year 2006 was $290.4 million, a 15 percent increase compared to $252.6 million for the full year 2005. Net income applicable to common stockholders ("net income") for the fourth quarter of 2006 was $17.6 million, or $0.09 per diluted share, compared to a net loss of $4.6 million, or $0.03 per diluted share, for the fourth quarter of 2005. Net income in the fourth quarter of 2006 includes $15.7 million in "Other Income" from the sale of investments and expense of $5.3 million for stock-based compensation. Net income for the full year 2006 was $18.6 million, or $0.10 per diluted share, compared to $234,000, or $0.00 per diluted share, for the full year 2005. Net income for the full year 2006 includes $15.7 million in "Other Income" from the sale of investments and expense of $15.4 million in stock-based compensation. Move's EBITDA (earnings before interest, restructuring charges and certain other non-cash and non-recurring items, principally stock-based compensation charges, depreciation, and amortization) on a non-GAAP basis for the fourth quarter of 2006 was $8.6 million, compared to a loss of $2.8 million for the fourth quarter of 2005. EBITDA for the fourth quarter of 2005 included $5.9 million in expense related to the Company's obligation to advance the defense costs of former officers. EBITDA for the full year 2006 was $24.6 million, compared to $5.4 million for the full year 2005. EBITDA for the full year 2005 included $15.6 million in expense related to the Company's obligation to advance the defense costs of former officers. The Company has reported 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. "2006 was our strongest year ever for concurrent financial improvements in revenue, profitability and liquidity," said Mike Long, Move's CEO. "Entering 2007, we are well positioned to enhance our value proposition for both consumers and customers while improving results for shareholders." At December 31, 2006, Move had $157.8 million in cash and short-term investments available to fund operations. The Company's fourth quarter and full year 2006 results also included income tax expense of $134,000. As a result of the Company's profitability, it expects to have income tax expense in future periods, but its effective rate will be substantially lower than statutory tax rates due to the utilization of historical net operating losses against future income. CONFERENCE CALL As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, February 22, 2007, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Chief Executive Officer, Mike Long, and Chief Financial Officer, Lew Belote, will discuss the Company's fourth quarter and full year 2006 results. In order to participate in the call, investors should log on to http://investor.move.com and click on "Event Calendar." Please connect to the above Web site ten minutes prior to the call to load any necessary audio software. A replay of the call will be available in the same section of the Company's Web site approximately one hour after the end of the call. A telephone replay will be available from 4:00 p.m. Pacific Time (7:00 p.m. Eastern Time) until midnight on March 1, 2007 at 888-286-8010, conference ID 72240063. For additional information regarding the Company's results, please go to the "SEC Filings" section at http://investor.move.com to view annual reports as filed with the Securities and Exchange Commission on Form 10-K. Move's Form 10-K for the year ended December 31, 2006 is expected to be filed with the Securities and Exchange Commission on, or before, March 2, 2007. 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 income (loss) from operations excluding restructuring, impairment and certain other non-cash and non-recurring items, principally depreciation, amortization and stock based compensation and other charges, which is referred to as EBITDA. We have also presented a non-GAAP table of our Segment Data for the three and twelve months ended December 31, 2006 that extracts stock based compensation under SFAS 123R "Share Based Payment". 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) provides homebuyers and renters with the real estate and community information, and professional connections they need before, during and after a move. The Company operates Move.com(TM) (http://www.move.com), a comprehensive real estate search site for rentals and homes to buy and REALTOR.com(R) (http://www.realtor.com), the official Web site of the National Association of REALTORS(R). Move also operates Welcome Wagon(R) (http://www.welcomewagon.com), a 78-year old neighborhood expert that provides new movers with valuable and comprehensive information about businesses and professionals in their new communities. Move.com is the official new homes listing Web site of the National Association of Home Builders. Move also operates Moving.com (http://www.moving.com), SeniorHousingNet(TM) (http://www.seniorhousingnet.com), TOP PRODUCER(R) Systems (http://www.topproducer.com), FactoryBuiltHousing.com (http://www.factorybuilthousing.com) and HomePlans (http://www.homeplans.com). On the Net: http://investor.move.com. MOVE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended Twelve Months Ended December 31, December 31, ---------------------- ------------------- 2006 2005 2006 2005 ------------ --------- --------- --------- (unaudited) Revenue $ 71,842 $ 66,575 $290,384 $252,622 Cost of revenue (1) 15,499 15,847 65,319 56,188 ----------- -------- -------- -------- Gross profit 56,343 50,728 225,065 196,434 ----------- -------- -------- -------- Operating expenses: (1) Sales and marketing 27,682 23,571 110,263 91,071 Product and web site development 8,321 6,772 33,907 22,059 General and administrative 19,964 24,321 81,268 82,545 Amortization of intangible assets 498 735 2,331 3,624 Restructuring charges -- 111 (278) (1,331) Litigation settlement -- 1,750 -- 1,750 ----------- -------- -------- -------- Total operating expenses 56,465 57,260 227,491 199,718 ----------- -------- -------- -------- Loss from operations (122) (6,532) (2,426) (3,284) Interest income, net 1,946 981 7,255 2,351 Other income, net 16,808 371 17,410 623 ----------- -------- -------- -------- Income (loss) from continuing operations before income taxes 18,632 (5,180) 22,239 (310) Provision for income taxes (134) -- (134) -- ----------- -------- -------- -------- Income (loss) from continuing operations 18,498 (5,180) 22,105 (310) Gain on disposition of discontinued operations -- 855 -- 855 ----------- -------- -------- -------- Net income (loss) 18,498 (4,325) 22,105 545 Convertible preferred stock dividends (901) (311) (3,557) (311) ----------- -------- -------- -------- Net income (loss) applicable to common stockholders $ 17,597 $ (4,636) $ 18,548 $ 234 =========== ======== ======== ======== Basic net income (loss) per share attributable to common stockholders Continuing operations $ 0.10 $ (0.04) $ 0.11 $ (0.01) Discontinued operations -- 0.01 -- 0.01 ----------- -------- -------- -------- Net income (loss) attributable to common stockholders $ 0.10 $ (0.03) $ 0.11 $ 0.00 =========== ======== ======== ======== Diluted net income (loss) per share attributable to common stockholders Continuing operations $ 0.09 $ (0.04) $ 0.10 $ (0.00) Discontinued operations -- 0.01 -- 0.00 ----------- -------- -------- -------- Net income (loss) attributable to common stockholders $ 0.09 $ (0.03) $ 0.10 $ (0.00) =========== ======== ======== ======== Shares used in calculation of net income (loss) per share attributable to common stockholders Basic 152,992 148,065 151,170 147,175 =========== ======== ======== ======== Diluted 165,721 148,065 163,394 182,548 =========== ======== ======== ======== (1) Includes stock-based compensation as follows: Cost of revenue $ 45 $ -- $ 221 $ -- Sales and marketing 626 -- 1,703 -- Product and web site development 383 -- 1,471 -- General and administrative 4,258 -- 11,991 -- ----------- -------- -------- -------- $ 5,312 $ -- $ 15,386 $ -- =========== ======== ======== ======== MOVE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Twelve Months Ended December 31, -------------------- 2006 2005 --------- ---------- Cash flows from continuing operating activities: Income (loss) from continuing operations $ 22,105 $ (310) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 10,497 7,500 Amortization of intangible assets 2,331 3,624 Gain on sales of property and equipment -- (156) Provision for doubtful accounts 2,200 731 Stock-based compensation and charges 15,675 1,115 Other non-cash items (305) (109) Changes in operating assets and liabilities: Accounts receivable (3,017) (4,165) Other assets (14,695) (1,882) Accounts payable and accrued expenses (17,128) (680) Deferred revenue 5,756 141 -------- --------- Net cash provided by continuing operating activities 23,419 5,809 Net cash provided by discontinued operating activities -- 855 -------- --------- Net cash provided by operating activities 23,419 6,664 -------- --------- Cash flows from investing activities: Purchases of property and equipment (12,923) (11,154) Maturities of short-term investments 26,325 22,275 Purchases of short-term investments (30,250) (116,285) Proceeds from sale of assets -- 203 Purchases of intangible assets (300) -- Acquisitions, net (9,572) -- -------- --------- Net cash used in investing activities (26,720) (104,961) -------- --------- Cash flows from financing activities: Proceeds from exercise of stock options 6,890 3,619 Restricted cash 747 814 Payments on capital lease obligations (2,735) (1,760) Proceeds from sale of convertible preferred stock -- 94,077 -------- --------- Net cash provided by financing activities 4,902 96,750 -------- --------- Change in cash and cash equivalents 1,601 (1,547) Cash and cash equivalents, beginning of period 13,272 14,819 -------- --------- Cash and cash equivalents, end of period $ 14,873 $ 13,272 ======== ========= MOVE, INC. CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 2006 2005 -------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 14,873 $ 13,272 Short-term investments 142,975 139,050 Accounts receivable, net 18,279 15,966 Other current assets 34,468 19,485 ------------- ------------- Total current assets 210,595 187,773 Property and equipment, net 29,245 20,717 Goodwill, net 23,877 19,502 Intangible assets, net 16,715 14,264 Restricted cash 4,279 5,026 Other assets 1,238 1,744 ------------- ------------- Total assets $ 285,949 $ 249,026 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,904 $ 6,427 Accrued expenses 26,738 40,879 Obligation under capital leases 1,904 1,005 Deferred revenue 50,075 43,652 ------------- ------------- Total current liabilities 83,621 91,963 Obligation under capital leases 2,167 -- Other liabilities 2,497 3,790 ------------- ------------- Total liabilities 88,285 95,753 ------------- ------------- Series B convertible preferred stock 96,212 91,349 Stockholders' equity: Series A convertible preferred stock -- -- Common stock 154 149 Additional paid-in capital 2,069,399 2,047,456 Deferred stock-based charges -- (351) Accumulated other comprehensive income 326 343 Accumulated deficit (1,968,427) (1,985,673) ------------- ------------- Total stockholders' equity 101,452 61,924 ------------- ------------- Total liabilities and stockholders' equity $ 285,949 $ 249,026 ============= ============= MOVE, INC. SEGMENT OPERATING RESULTS (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, ----------------------- ---------------------- 2006 2005 2006 2005 ------------ --------- ------------ --------- Revenue: (unaudited) (unaudited) Real Estate Services $ 53,596 $ 48,730 $ 208,339 $181,324 Move-Related Services 18,246 17,845 82,045 71,298 ----------- -------- ----------- -------- Total revenue $ 71,842 $ 66,575 $ 290,384 $252,622 =========== ======== =========== ======== Operating income (loss) (1) Real Estate Services $ 12,864 $ 15,183 $ 49,905 $ 54,625 Move-Related Services (1,569) (2,300) (3,732) (1,279) Unallocated (11,417) (19,415) (48,599) (56,630) ----------- -------- ----------- -------- Loss from operations $ (122) $ (6,532) $ (2,426) $ (3,284) =========== ======== =========== ======== (1) Includes stock-based compensation as follows: Real Estate Services $ 1,917 $ -- $ 5,595 $ -- Move-Related Services 512 -- 1,835 -- Unallocated 2,883 -- 7,956 -- ----------- -------- ----------- -------- $ 5,312 $ -- $ 15,386 $ -- =========== ======== =========== ======== MOVE, INC. SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) Three months ended December 31, 2006 --------------------------------------------------- (unaudited) Stock- Real Move- based Estate Related Un- Compen- Services Services allocated sation Total Revenue $ 53,596 $ 18,246 $ -- $ -- $71,842 Cost of revenue 8,817 6,370 267 45 15,499 --------- ---------- ----------- -------- ------- Gross profit 44,779 11,876 (267) (45) 56,343 Sales and marketing 17,635 8,636 785 626 27,682 Product and web site development 6,097 987 854 383 8,321 General and administrative 6,266 3,310 6,130 4,258 19,964 Amortization of intangibles -- -- 498 -- 498 Restructuring charge -- -- -- -- -- --------- --------- ---------- -------- ------- Total operating expenses 29,998 12,933 8,267 5,267 56,465 --------- --------- ---------- -------- ------- Income (loss) from operations $ 14,781 $ (1,057) $ (8,534) $ (5,312) $ (122) ========= ========= ========== ======== ======= Three months ended December 31, 2005 --------------------------------------------------- (unaudited) Stock- Real Move- based Estate Related Un- Compen- Services Services allocated sation Total Revenue $ 48,730 $ 17,845 $ -- $ -- $66,575 Cost of revenue 7,184 7,840 823 -- 15,847 --------- ---------- ----------- -------- ------- Gross profit 41,546 10,005 (823) -- 50,728 Sales and marketing 15,157 8,068 346 -- 23,571 Product and web site development 4,678 983 1,111 -- 6,772 General and administrative 6,528 3,254 14,539 -- 24,321 Amortization of intangibles -- -- 735 -- 735 Litigation settlement -- -- 1,750 -- 1,750 Restructuring charges -- -- 111 -- 111 --------- --------- ---------- -------- ------- Total operating expenses 26,363 12,305 18,592 -- 57,260 --------- --------- ---------- -------- ------- Income (loss) from operations $ 15,183 $ (2,300) $ (19,415) $ -- $(6,532) ========= ========= ========== ======== ======= MOVE, INC. SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) Twelve months ended December 31, 2006 --------------------------------------------------- (unaudited) Stock- Real Move- based Estate Related Un- Compen- Services Services allocated sation Total Revenue $ 208,339 $ 82,045 $ -- $ -- $290,384 Cost of revenue 33,204 28,753 3,141 221 65,319 --------- ---------- ---------- -------- -------- Gross profit 175,135 53,292 (3,141) (221) 225,065 Sales and marketing 68,828 35,950 3,782 1,703 110,263 Product and web site development 24,105 4,262 4,069 1,471 33,907 General and administrative 26,702 14,977 27,598 11,991 81,268 Amortization of intangibles -- -- 2,331 -- 2,331 Restructuring charge -- -- (278) -- (278) --------- --------- --------- -------- -------- Total operating expenses 119,635 55,189 37,502 15,165 227,491 --------- --------- --------- -------- -------- Income (loss) from operations $ 55,500 $ (1,897) $ (40,643) $(15,386) $ (2,426) ========= ========= ========= ======== ======== Twelve months ended December 31, 2005 --------------------------------------------------- (unaudited) Stock- Real Move- based Estate Related Un- Compen- Services Services allocated sation Total Revenue $ 181,324 $ 71,298 $ -- $ -- $252,622 Cost of revenue 27,902 26,346 1,940 -- 56,188 --------- ---------- ---------- -------- -------- Gross profit 153,422 44,952 (1,940) -- 196,434 Sales and marketing 60,125 29,644 1,302 -- 91,071 Product and web site development 15,922 3,755 2,382 -- 22,059 General and administrative 22,750 12,832 46,963 -- 82,545 Amortization of intangibles -- -- 3,624 -- 3,624 Litigation settlement -- -- 1,750 -- 1,750 Restructuring charges -- -- (1,331) -- (1,331) --------- --------- --------- -------- -------- Total operating expenses 98,797 46,231 54,690 -- 199,718 --------- --------- --------- -------- -------- Income (loss) from operations $ 54,625 $ (1,279) $ (56,630) $ -- $ (3,284) ========= ========= ========= ======== ======== MOVE, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURE LOSS FROM OPERATIONS EXCLUDING RESTRUCTURING CHARGES AND CERTAIN OTHER NON-CASH AND NON-RECURRING ITEMS, PRINCIPALLY STOCK-BASED COMPENSATION AND CHARGES, DEPRECIATION, AND AMORTIZATION (EBITDA) (in thousands) Three Months Twelve Months Ended December Ended December 31, 31, ----------------- ----------------- 2006 2005 2006 2005 ------- -------- -------- -------- (unaudited) (unaudited) Loss from operations $ (122) $(6,532) $(2,426) $(3,284) Plus: Stock-based charges 161 446 289 1,115 Amortization of intangible assets 498 735 2,331 3,624 Depreciation 2,764 1,992 10,497 7,500 Stock-based compensation 5,312 -- 15,386 -- Restructuring charge (reversal) -- 111 (278) (1,331) Litigation settlement -- 1,750 -- 1,750 Non-recurring refund of insurance premium -- -- (1,184) -- Non-recurring revenue -- (1,333) -- (3,997) ------ ------- ------- ------- EBITDA $8,613 $(2,831) $24,615 $ 5,377 ====== ======= ======= ======= CONTACT: Move, Inc. Mollie O'Brien, Investor Relations, 805-557-3846 investorrelations@move.com