EX-99.1 2 a5679996ex99_1.htm EXHIBIT 99.1

Exhibit 99.1

Move, Inc. Announces First Quarter 2008 Financial Results

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--Move, Inc. (NASDAQ: MOVE) reported financial results for the first quarter ended March 31, 2008.

Total revenue for the first quarter was $70.4 million compared to $68.9 million in the first quarter of 2007. Net loss applicable to common stockholders ("net loss") for the first quarter of 2008 was $4.6 million, or $0.03 per share, compared to net income of $163,000, or $0.00 per diluted share, for the first quarter of 2007.

"A great effort from Move’s employees, customers and partners helped us grow revenue in this difficult real estate environment," said Mike Long, Move’s CEO. "Our REALTOR customers continued strong purchases of our REALTOR.com® and Top Producer products, helping them reach qualified buyers in a tight market where existing home sales were 22% lower than last year.

"Although revenue from our real estate services increased, higher costs during the quarter from large one-time charges related to the shutdown of nonstrategic businesses and the cost of opening our new product development center in Silicon Valley contributed to a GAAP operating loss," continued Mike Long. "As the category leader in revenue, advertisers and consumer audience, we are growing our audience, adding new products and building a world class team so when the real estate market recovers we are extraordinarily well-positioned."

Move’s EBITDA (earnings from continuing operations before interest, taxes, stock-based compensation and charges, depreciation, and amortization) on a non-GAAP basis for the first quarter of 2008 was $2.2 million, compared to $7.1 million for the first quarter of 2007. 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.

The Company grew traffic during the quarter by 15% over the first quarter of last year and remained the uncontested leader in consumer real estate traffic, averaging 9.8 million unique users per month.(1)

"We continue to attract twice as many users as any other site in the real estate category," said Lorna Borenstein, Move’s president. "Consumers on the Move network spent eight times more minutes in the first quarter with us than any other competitor."

Move announced the launch of the new Beta version of REALTOR.com®. The Beta includes vastly improved user interface design and a streamlined search process that makes it easier for consumers to view, scan and search the site. The Beta also introduces significant improvements to help real estate professionals differentiate themselves and their listings on REALTOR.com®.

"Not only do we have the largest audience of online real estate consumers, our research shows that consumers are spending more time on the Beta site and consumer recall of broker/agent information displayed is significantly higher," continued Borenstein. "This data point provides powerful proof of the value proposition for advertising on REALTOR.com®."

Update on Investments in Auction Rate Securities

The Company holds $129.6 million in AAA rated FFELP-backed student loan auction rate securities that were considered short-term investments until the auctions for these securities failed in February. The auction rate securities continue to pay interest at LIBOR plus 1.5% and there has been no change in the AAA rating of these securities. However, as a result of the failed auctions, the Company has reclassified these assets to long-term investments on its March 31, 2008 balance sheet. Furthermore, as a result of the temporary loss of liquidity of these investments, the Company has determined that a temporary impairment charge of $8.4 million was required as of March 31, 2008 and is included in other comprehensive income. These funds may not be accessible until future auctions of these investments are successful or they are redeemed by the issuers or they mature.

The Company has entered into a revolving line of credit providing for borrowings of up to $65 million. The line of credit has been secured to provide flexibility to the Company as it continues to execute business plans. The Company currently has no plans to draw down on the line as it believes its liquidity, including $47.8 million in available cash and short-term investments, is adequate to execute its business plans.

Conference Call

As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, May 8, 2008, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Chief Executive Officer Mike Long, President Lorna Borenstein, and Chief Financial Officer Lew Belote will discuss the Company’s first quarter 2008 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 May 15, 2008, at 888-286-8010, conference ID 21730641. 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-Q for the quarter ended March 31, 2008 is expected to be filed with the Securities and Exchange Commission on, or before, May 12, 2008.

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, litigation settlement charges 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. The Company has also presented a non-GAAP table of Segment Data for the three months ended March 31, 2008 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), the leader in online real estate, is the essential resource for consumers seeking information and connections related to real estate, home financing, home and garden, rentals and professional moving services. Move, Inc. operates Move.com™ (http://www.move.com); REALTOR.com® (http://www.realtor.com), the official Web site of the National Association of REALTORS®; Welcome Wagon(R) (http://www.welcomewagon.com); Moving.com; and TOP PRODUCER® Systems. Move, Inc. is based in Westlake Village and employs more than 1600 individuals throughout North America. For more information: http://www.move.com.

(1) comScore Media Metrix

 

MOVE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 
Three Months Ended March 31,
2008   2007
(unaudited)
 
Revenue $ 70,401 $ 68,894
Cost of revenue (1) 15,050   13,337  
Gross profit 55,351   55,557  
 
Operating expenses: (1)
Sales and marketing 28,336 27,404
Product and web site development 6,903 8,775
General and administrative 24,297 20,386
Amortization of intangible assets 514   498  
Total operating expenses 60,050   57,063  
Loss from continuing operations (4,699 ) (1,506 )
 
Interest income, net 2,057 2,313
Other income, net 72   755  
Income (loss) from continuing operations before income taxes (2,570 ) 1,562
 
Provision for income taxes (41 ) (84 )
 
Net income (loss) from continuing operations (2,611 ) 1,478
 
Loss from discontinued operations (750 ) (83 )
Net income (loss) (3,361 ) 1,395
 
Convertible preferred stock dividends and related accretion (1,265 ) (1,232 )
Net income (loss) applicable to common stockholders $ (4,626 ) $ 163  
 
Basic net income (loss) per share attributable to common stockholders
Continuing operations $ (0.03 ) $ 0.00
Discontinued operations (0.00 ) (0.00 )
Net income (loss) attributable to common stockholders $ (0.03 ) $ 0.00  
 
Diluted net income (loss) per share attributable to common stockholders
Continuing operations $ (0.03 ) $ 0.00
Discontinued operations (0.00 ) (0.00 )
Net income (loss) attributable to common stockholders $ (0.03 ) $ 0.00  
 

Shares used in calculation of net income (loss) per share attributable to common stockholders

Basic 151,215   154,339  
Diluted 151,215   167,390  
 
 
(1) Includes stock-based compensation as follows:
 
Cost of revenue $ 53 $ 43
Sales and marketing 124 484
Product and web site development 185 275
General and administrative 3,027   4,584  
$ 3,389   $ 5,386  
 

MOVE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 
Three Months Ended March 31,
2008   2007

(unaudited)

Cash flows from operating activities:

 

Income (loss) from continuing operations $ (2,611 ) $ 1,478
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by continuing operating activities:
Depreciation 2,942 2,615
Amortization of intangible assets 514 498
Gain on sales of property and equipment — (336 )
Provision for doubtful accounts 248 292
Stock-based compensation and charges 3,485 5,534
Change in market value of embedded derivative liability (78 ) (473 )
Other non-cash items 305 11
Changes in operating assets and liabilities:
Accounts receivable 1,096 1,578
Other assets (306 ) (382 )
Accounts payable and accrued expenses (1,001 ) (2,566 )
Deferred revenue 627   2,021  
 
Net cash provided by continuing operating activities 5,221 10,270
Net cash (used in) provided by discontinued operating activities (416 ) 242  
Net cash provided by operating activities 4,805   10,512  
 
Cash flows from investing activities:
Purchases of property and equipment (3,477 ) (4,155 )
Proceeds from the surrender of life insurance policy — 5,200
Proceeds from sale of marketable equity securities — 15,743
Maturities of investments 150 10,950
Purchases of investments (21,494 ) (26,900 )
Proceeds from sale of assets — 336
Purchases of intangible assets —   (11 )
Net cash (used in) provided by investing activities (24,821 ) 1,163  
 
Cash flows from financing activities:
Proceeds from exercise of stock options 759 2,493
Restricted cash 180 926
Payments on capital lease obligations (496 ) (463 )
Net cash provided by financing activities 443   2,956  
 
Change in cash and cash equivalents (19,573 ) 14,631
 
Cash and cash equivalents, beginning of period 45,713   14,873  
 
Cash and cash equivalents, end of period $ 26,140   $ 29,504  
 

MOVE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

     
March 31,

2008

December 31,

2007

ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 26,140 $ 45,713
Short-term investments 21,647 129,900
Accounts receivable, net 16,727 18,016
Other current assets 14,613 13,906
Assets held for sale 1,000   1,335  

Total current assets

80,127 208,870
 
Property and equipment, net 32,953 32,515
Investments, long term 121,200 —
Goodwill, net 21,097 21,097
Intangible assets, net 14,492 15,306
Restricted cash 3,189 3,369
Other assets 992   1,371  
Total assets $ 274,050   $ 282,528  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 2,719 $ 4,971
Accrued expenses 30,948 29,349
Obligation under capital leases 1,583 1,894
Deferred revenue 39,190 38,532
Liabilities held for sale 25   335  
Total current liabilities 74,465 75,081
 
Obligation under capital leases 88 273
Other liabilities 1,440   1,508  
Total liabilities 75,993   76,862  
 
Series B convertible preferred stock 102,454 101,189
 
Stockholders’ equity:
Series A convertible preferred stock — —
Common stock 152 151
Additional paid-in capital 2,080,322 2,076,074
Accumulated other comprehensive income (7,822 ) 675
Accumulated deficit (1,977,049 ) (1,972,423 )
Total stockholders’ equity 95,603   104,477  
 
Total liabilities and stockholders’ equity $ 274,050   $ 282,528  
 

MOVE, INC.

SEGMENT OPERATING RESULTS

(in thousands)

 
Three Months Ended March 31,
2008   2007

(unaudited)

Revenue:

 

Real Estate Services $ 55,794 $ 53,523
Consumer Media 14,607   15,371  
Total revenue $ 70,401   $ 68,894  
 
Income (loss) from continuing operations (1)
Real Estate Services $ 11,546 $ 13,229
Consumer Media (2,162 ) (2,696 )
Unallocated (14,083 ) (12,039 )
Loss from continuing operations $ (4,699 ) $ (1,506 )
 
 
(1) Includes stock-based compensation as follows:
 
Real Estate Services $ 1,731 $ 2,078
Consumer Media 74 643
Unallocated 1,584   2,665  
$ 3,389   $ 5,386  
 

MOVE, INC.

SEGMENT OPERATING RESULTS

NET OF STOCK-BASED COMPENSATION EXPENSE

(in thousands)

       
Three Months Ended
March 31, 2008
(unaudited)
 
Real Estate Consumer Stock-based
Services Media Unallocated Compensation Total
Revenue $ 55,794 $ 14,607 $ — $ — $ 70,401
Cost of revenue 9,478 5,168   351   53   15,050  
Gross profit 46,316 9,439 (351 ) (53 ) 55,351
 
Sales and marketing 19,266 7,565 1,381 124 28,336
Product and web site development 5,616 462 640 185 6,903
General and administrative 8,157 3,500 9,613 3,027 24,297
Amortization of intangibles — —   514   —   514  
Total operating expenses 33,039 11,527   12,148   3,336   60,050  
 
Income (loss) from continuing operations $ 13,277 $ (2,088 ) $ (12,499 ) $ (3,389 ) $ (4,699 )
 
 
 
Three Months Ended
March 31, 2007
(unaudited)
 
Real Estate Consumer Stock-based
Services Media Unallocated Compensation Total
Revenue $ 53,523 $ 15,371 $ — $ — $ 68,894
Cost of revenue 8,235   4,498     561   43   13,337  
Gross profit 45,288 10,873 (561 ) (43 ) 55,557
 
Sales and marketing 17,834 8,190 896 484 27,404
Product and web site development 6,527 1,470 503 275 8,775
General and administrative 5,620 3,266 6,916 4,584 20,386
Amortization of intangibles — —   498   —   498  
Total operating expenses 29,981 12,926   8,813   5,343   57,063  
 
Income (loss) from continuing operations $ 15,307 $ (2,053 ) $ (9,374 ) $ (5,386 ) $ (1,506 )
 

MOVE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

LOSS FROM CONTINUING OPERATIONS EXCLUDING STOCK-BASED COMPENSATION AND CHARGES,

DEPRECIATION, AND AMORTIZATION (EBITDA)

(in thousands)

 

 

Three Months Ended March 31,

2008   2007

 

(unaudited)

 
Loss from continuing operations $ (4,699 ) $ (1,506 )
 
Plus:
Stock-based charges 96 148
Amortization of intangible assets 514 498
Depreciation 2,942 2,615
Stock-based compensation 3,389   5,386  
EBITDA $ 2,242   $ 7,141  

CONTACT:
The Blueshirt Group
Todd Friedman/Stacie Bosinoff, (415) 217-7722
todd@blueshirtgroup.com
stacie@blueshirtgroup.com