Move, Inc. Announces Third Quarter 2009 Financial Results
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CAMPBELL, Calif.--(BUSINESS WIRE)-- Move, Inc. (NASDAQ: MOVE) reported financial results for the third quarter ended September 30, 2009.
The leader in online real estate reported revenue for the third quarter of $52.9 million, compared to $61.2 million in the third quarter of 2008. Income from continuing operations for the third quarter was $753,000, compared to a loss of $2.1 million in the third quarter of 2008. Net loss applicable to common stockholders was $758,000, or $0.00 per share, compared to a net loss of $22.7 million, or a loss of $0.15 per share in the third quarter of 2008.
Move's Adjusted EBITDA (earnings from continuing operations before interest, taxes, stock-based compensation and charges, depreciation, amortization and other non-recurring charges) on a non-GAAP basis for the third quarter of 2009 was $5.6 million, or 11% of revenue, compared to $5.7 million, or 9% of revenue, for the third quarter of 2008. The Company 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.
"The third quarter in 2009 was another very busy quarter for Move, as we continued to build the foundation for executing our long term growth strategy while keeping a short term focus on revenue, managing expenses and delivering positive Adjusted EBITDA," said Steve Berkowitz, chief executive officer at Move, Inc. "In the past few months, we've completed our executive management team by adding seasoned leaders who will run our technology and product operations, launched new services for our real estate customers to help them build their businesses and deepen their relationship with consumers, and began an extensive internal process to better align our business operations and integrate our sales functions across all product lines. At the same time, we have successfully maintained our clear market leadership position, as evidenced by the most recent data that shows Move continues to maintain a dominant position in terms of users, minutes on site and pages viewed."
BUSINESS OUTLOOK
Move today provided preliminary guidance for the quarter ending December 31, 2009. For the quarter ending December 31, 2009, Move expects revenue to range between $47 and $48 million, with an expected Adjusted EBITDA margin of approximately 9% - 10%.
Move also provided preliminary guidance for the fiscal year ending December 31, 2010. The Company currently expects revenue to range between $184 million and $192 million, with an expected Adjusted EBITDA target of approximately 10%.
"We will exit 2009 with a more stable cost structure and a greater focus on delivering consistent cash flow," stated Rob Krolik, chief financial officer. "We have eliminated several unprofitable revenue sources through a series of divestments and partnerships in 2009. With a strong balance sheet, we are well-positioned to continue making strategic investments in long term growth until we begin to benefit from our initiatives to refocus our company, launch new products for our customers, and take advantage of our clear position as the leading online real estate company."
Conference Call
As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, November 5, 2009, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). In order to participate in the call, please dial (800) 901-5231, or if outside the U.S., (617) 786-2961 with passcode 30748379, at least five minutes prior to the 2:00 p.m. PT start time. A live webcast and replay of the call will also be available at http://investor.move.com under the Event Calendar menu. An audio replay will be available between 8:00 p.m. ET, November 5, 2009, and 11:59 p.m. ET, November 19, 2009, by calling (888) 286-8010, or (617) 801-6888, with passcode 58931733.
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 for the year ended December 31, 2008 on March 9, 2009.
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 continuing operations excluding restructuring, impairment of long-lived assets, 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 Adjusted EBITDA. The Company has also presented a non-GAAP table of Financial Data for the three and nine month periods ended September 30, 2009 and 2008 that extracts stock-based compensation under ASC 718 "Compensation-Stock Compensation" (Previously 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.
Disclaimer as to Forward Looking Statements.
This press release may contain forward-looking statements, including, among others, statements regarding our future financial results and future financial position and 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 are based on our current expectations, forecasts and assumptions and are subject to, among other things, the finalization of Move's quarterly financial and accounting procedures, are not guarantees of future performance or results and are inherently subject to known and unknown risks, uncertainties and other factors which may cause the actual 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 9.3 million [1] monthly visitors to its online network of websites. 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(R), the official Web site of the National Association of REALTORS(R); Moving.com; SeniorHousingNet; and TOP PRODUCER Systems. Move, Inc. is based in Campbell, California. For more information: www.move.com.
[1] comScore Media Metrics, September 2009
MOVE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amount)
Three Months Ended September Nine Months Ended September 30,
30,
2009 2008 2009 2008
(unaudited) (unaudited)
(Restated) (Restated)
Revenue $ 52,866 $ 61,240 $ 162,371 $ 184,619
Cost of 12,014 11,804 37,465 34,453
revenue(1)
Gross profit 40,852 49,436 124,906 150,166
Operating
expenses: (1)
Sales and 18,787 24,002 60,936 71,268
marketing
Product and
web site 7,650 6,821 20,458 20,510
development
General and 16,226 18,639 51,227 61,763
administrative
Amortization
of intangible 107 188 366 582
assets
Litigation -- -- 975 --
settlement
Restructuring (1,192 ) 4,014 (1,192 ) 4,014
charges
Total
operating 41,578 53,664 132,770 158,137
expenses
Operating loss
from (726 ) (4,228 ) (7,864 ) (7,971 )
continuing
operations
Interest 279 1,261 728 4,839
income, net
Other income, 1,250 959 1,741 1,139
net
Income (loss)
from
continuing 803 (2,008 ) (5,395 ) (1,993 )
operations
before income
taxes
Provision for 50 110 227 313
income taxes
Income (loss)
from 753 (2,118 ) (5,622 ) (2,306 )
continuing
operations
Loss from
discontinued (196 ) (19,334 ) (445 ) (24,984 )
operations
Gain on
disposition of -- -- 2,303 --
discontinued
operations
Net income 557 (21,452 ) (3,764 ) (27,290 )
(loss)
Convertible
preferred
stock (1,315 ) (1,282 ) (3,920 ) (3,819 )
dividends and
related
accretion
Net loss
applicable to $ (758 ) $ (22,734 ) $ (7,684 ) $ (31,109 )
common
stockholders
Basic and
diluted net
loss per share
applicable to
common
stockholders:
Continuing $ (0.00 ) $ (0.02 ) $ (0.06 ) $ (0.04 )
operations
Discontinued (0.00 ) (0.13 ) 0.01 (0.16 )
operations
Basic and
diluted net
loss per share $ (0.00 ) $ (0.15 ) $ (0.05 ) $ (0.21 )
applicable to
common
stockholders
Shares used in
calculation of
net loss per
share
applicable to
common
stockholders:
Basic and 153,344 152,184 153,139 151,652
diluted
(1) Includes
stock-based
compensation
as follows:
Cost of $ 54 $ 41 $ 137 $ 110
revenue
Sales and 472 161 1,349 370
marketing
Product and
web site 166 150 493 419
development
General and 2,919 2,351 13,291 8,718
administrative
$ 3,611 $ 2,703 $ 15,270 $ 9,617
MOVE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2009 2008
(unaudited) (Restated)
ASSETS
Current assets:
Cash and cash equivalents $ 115,873 $ 108,935
Accounts receivable, net 11,628 12,833
Other current assets 11,935 11,399
Restricted cash 462 --
Total current assets 139,898 133,167
Property and equipment, net 21,953 21,934
Long-term investments 111,800 111,800
Goodwill, net 16,969 16,969
Intangible assets, net 3,567 3,933
Restricted cash -- 3,209
Other assets 2,270 995
Total assets $ 296,457 $ 292,007
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,349 $ 4,051
Accrued expenses 18,708 22,747
Deferred revenue 17,572 23,991
Obligation under capital leases -- 339
Line of credit 64,700 64,700
Total current liabilities 108,329 115,828
Other non-current liabilities 1,160 2,043
Total liabilities 109,489 117,871
Series B convertible preferred stock 110,217 106,297
Stockholders' equity:
Series A convertible preferred stock -- --
Common stock 156 153
Additional paid-in capital 2,110,638 2,094,135
Accumulated other comprehensive income (17,093 ) (17,183 )
Accumulated deficit (2,016,950 ) (2,009,266 )
Total stockholders' equity 76,751 67,839
Total liabilities and stockholders' equity $ 296,457 $ 292,007
MOVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended September 30,
2009 2008
Cash flows from continuing operating activities: (unaudited)
(Restated)
Loss from continuing operations $ (5,622 ) $ (2,306 )
Adjustments to reconcile loss from continuing
operations to net cash provided by continuing
operating activities:
Depreciation 7,853 8,435
Amortization of intangible assets 366 582
Provision for doubtful accounts 1,024 511
Gain on sale of assets (1,308 ) (816 )
Stock-based compensation and charges 15,647 9,834
Change in market value of embedded derivative (536 ) (156 )
liability
Other non-cash items (83 ) 411
Changes in operating assets and liabilities:
Accounts receivable 130 2,531
Other assets (998 ) (2,760 )
Accounts payable and accrued expenses 155 366
Deferred revenue (6,433 ) (4,312 )
Net cash provided by continuing operating 10,195 12,320
activities
Net cash used in discontinued operating (1,843 ) (5,777 )
activities
Net cash provided by operating activities 8,352 6,543
Cash flows from investing activities:
Purchases of property and equipment (7,711 ) (5,748 )
Proceeds form sales of marketable equity -- 27
securities
Purchases of short-term investments -- (96,418 )
Maturities of short-term investments -- 96,918
Proceeds from sale of assets 1,355 206
Net cash used in investing activities of (6,356 ) (5,015 )
continuing operations
Net cash provided by investing activities of 1,739 799
discontinued operations
Net cash used in investing activities (4,617 ) (4,216 )
Cash flows from financing activities:
Proceeds from exercise of stock options 1,859 2,889
Borrowings from line of credit -- 64,700
Tax withholdings related to net share (1,064 ) --
settlements of restricted stock awards
Restricted cash 2,747 166
Payments on capital lease obligations (339 ) (1,516 )
Net cash provided by financing activities 3,203 66,239
Change in cash and cash equivalents 6,938 68,566
Cash and cash equivalents, beginning of period 108,935 45,713
Cash and cash equivalents, end of period $ 115,873 $ 114,279
MOVE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
OPERATING LOSS FROM CONTINUING OPERATIONS EXCLUDING STOCK-BASED COMPENSATION AND
CHARGES, DEPRECIATION, AMORTIZATION, LITIGATION SETTLEMENT, RESTRUCTURING
CHARGES AND NON-RECURRING SEVERANCE COSTS (ADJUSTED EBITDA)
(in thousands)
Three Months Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
(unaudited) (unaudited)
(Restated) (Restated)
Operating
loss from $ (726 ) $ (4,228 ) $ (7,864 ) $ (7,971 )
continuing
operations
Plus:
Stock-based 3,611 2,703 15,270 9,617
compensation
Stock-based 111 108 377 217
charges
Depreciation 2,566 2,923 7,853 8,435
Amortization
of intangible 107 188 366 582
assets
Litigation -- -- 975 --
settlement
Restructuring (1,192 ) 4,014 (1,192 ) 4,014
charges
Non-recurring
severance 1,093 -- 3,490 --
costs
Adjusted $ 5,570 $ 5,708 $ 19,275 $ 14,894
EBITDA
MOVE, INC.
OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE
(in thousands)
Three months ended
September 30, 2009
(unaudited)
Excluding
Stock-based
As Reported Stock-based
Compensation
Compensation
Revenue $ 52,866 $ -- $ 52,866
Cost of revenue 12,014 (54 ) 11,960
Gross profit 40,852 54 40,906
Sales and marketing 18,787 (472 ) 18,315
Product and web site 7,650 (166 ) 7,484
development
General and administrative 16,226 (2,919 ) 13,307
Amortization of intangibles 107 -- 107
Litigation Settlement -- -- 0
Restructuring charges (1,192 ) -- (1,192 )
Total operating expenses 41,578 (3,557 ) 38,021
Operating income (loss) from $ (726 ) $ 3,611 $ 2,885
continuing operations
Three months ended
September 30, 2008
(unaudited)
Excluding
Stock-based
As Reported Stock-Based
Compensation
Compensation
(Restated)
Revenue $ 61,240 $ -- $ 61,240
Cost of revenue 11,804 (41 ) 11,763
Gross profit 49,436 41 49,477
Sales and marketing 24,002 (161 ) 23,841
Product and web site 6,821 (150 ) 6,671
development
General and administrative 18,639 (2,351 ) 16,288
Amortization of intangibles 188 -- 188
Restructuring charges 4,014 -- 4,014
Total operating expenses 53,664 (2,662 ) 51,002
Operating income (loss) from $ (4,228 ) $ 2,703 $ (1,525 )
continuing operations
Nine months ended
September 30, 2009
(unaudited)
Excluding
Stock-based
As Reported Stock-Based
Compensation
Compensation
Revenue $ 162,371 $ -- $ 162,371
Cost of revenue 37,465 (137 ) 37,328
Gross profit 124,906 137 125,043
Sales and marketing 60,936 (1,349 ) 59,587
Product and web site 20,458 (493 ) 19,965
development
General and administrative 51,227 (13,291 ) 37,936
Amortization of intangibles 366 -- 366
Litigation settlement 975 -- 975
Restructuring charges (1,192 ) -- (1,192 )
Total operating expenses 132,770 (15,133 ) 117,637
Operating income (loss) from $ (7,864 ) $ 15,270 $ 7,406
continuing operations
Nine months ended
September 30, 2008
(unaudited)
Excluding
Stock-based
As Reported Stock-Based
Compensation
Compensation
(Restated)
Revenue $ 184,619 $ -- $ 184,619
Cost of revenue 34,453 (110 ) 34,343
Gross profit 150,166 110 150,276
Sales and marketing 71,268 (370 ) 70,898
Product and web site 20,510 (419 ) 20,091
development
General and administrative 61,763 (8,718 ) 53,045
Amortization of intangibles 582 -- 582
Restructuring charges 4,014 -- 4,014
Total operating expenses 158,137 (9,507 ) 148,630
Operating income (loss) from $ (7,971 ) $ 9,617 $ 1,646
continuing operations
Source: Move, Inc.
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