Move, Inc. Announces Third Quarter 2012 Financial Results

CAMPBELL, Calif., Nov. 5, 2012 /PRNewswire/ -- Move, Inc. (NASDAQ: MOVE), the leader in online real estate, today reported financial results for the third quarter ended September 30, 2012.

Revenue for the quarter was $49.4 million, an increase of $3.0 million, or six percent, from $46.5 million in the third quarter of 2011. Net income applicable to common stockholders was $1.8 million, or $0.04 per diluted share, compared to $242,000, or $0.01 per diluted share, in the third quarter of 2011. Non-GAAP Adjusted EBITDA was $6.9 million, an increase of $1.3 million, or 24 percent, from $5.5 million in the third quarter of 2011.  As a percentage of revenue, Adjusted EBITDA improved to 14 percent of revenue in the third quarter of 2012 compared to 12 percent in the third quarter of 2011.  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 of Move, Inc. said, "We continued to make solid progress across our key strategic initiatives, building strength in our core business while expanding our market opportunity through our recent acquisitions of TigerLead Solutions and Relocation.com. We are poised to exit the year in a stronger competitive position, with a broader and more stable product set that offers greater upside potential and with growing consumer engagement metrics that highlight our market leadership.  Combined with continued indicators of a slow but steady path to recovery in the housing market, we expect to end the year on a positive note and set the stage for revenue acceleration in 2013."

Recent Highlights:

  • Consumer Engagement -- Web:  Realtor.com continued to lead the industry in connecting real estate professionals with serious home buyers and sellers.  Consumers viewed nearly 1.2 billion pages and spent more than 1.1 billion minutes on the Realtor.com website in the third quarter, with more than 95 percent of that usage occurring on properties for sale.   Realtor.com continues to experience significant repeat usage with consumers visiting an average of approximately 4 times per month, nearly 50 percent more than the nearest competitor.
  • Consumer Engagement -- Mobile Apps: Mobile usage continues to grow dramatically.  Page views and leads from mobile apps grew by more than 125 percent year-over-year, and nearly 45 percent of homes viewed across all platforms now occur on mobile apps.  Additionally, mobile engagement as measured by pages viewed and leads delivered per user is 6-7x that of the website. 
  • Realtor.com Site Relaunch: Move recently debuted a site relaunch of Realtor.com that enhances the user experience, makes search more intuitive and increases functionality. 
  • Collaborative Search:  Move's recent launch of a free co-branded mobile application and collaborative search product for real-estate professionals, has generated extremely positive feedback from the agent community, and usage is climbing steadily.
  • 800 Number Tracking System: Move has enhanced its lead tracking capabilities through the launch of a toll-free 800 Number, providing customers with an additional tool to assess the value they are generating from their marketing dollars.
  • TigerLead Solutions: In September 2012, Move acquired TigerLead Solutions, a premier lead generation and lead management system for real estate professionals. The newest piece of the Move suite enables real estate professionals to generate, cultivate, and manage "Smarter Leads" and gain deep insights into consumer "DNA" with industry-leading analytics.
  • Relocation.com: In October 2012, Move acquired Relocation.com, an online marketplace that connects home buyers and renters with moving and storage professionals. Combining the acquisition with Move's existing Moving.com business, Move significantly strengthens its offering and creates the clear #1 player in moving services.

Business Outlook
For the quarter ending December 31, 2012, Move expects revenue to range between approximately $51.5 million and $52.0 million and expects to report Adjusted EBITDA margin of approximately 15 percent.

Conference Call
As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Monday, November 5, 2012. 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 Standard 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 Standard Time November 5, 2012, and 8:59 p.m. Pacific Standard Time November 9, 2012, (855) 859-2056 or (404) 537-3406, with Conference ID 26453667. 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 excluding net interest income, income tax expense 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, 2012 and 2011 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 provide a more consistent basis for comparison between quarters and should be carefully evaluated. 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.

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 and operator of REALTOR.com®, the official website of the National Association of REALTORS®; Move.com, a leading destination for new homes and rental listings, moving, home and garden, and home finance; ListHub™, the leading syndicator of real estate listings; Moving.com™; SeniorHousingNet; SocialBios; TigerLead®;; and TOP PRODUCER® Systems. Move, Inc. is based in Campbell, California. SOURCE Move, Inc.

 

MOVE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts) 



Three Months Ended September 30,


Nine Months Ended September 30,


2012


2011


2012


2011



(unaudited)



(unaudited)













Revenue

$

49,446


$

46,466


$

146,496


$

144,456

Cost of revenue(1)


10,236



9,959



29,509



31,203

Gross profit 


39,210



36,507



116,987



113,253













Operating expenses:












Sales and marketing(1)


17,235



16,281



53,005



52,524

Product and web site development(1)


9,412



8,437



27,603



26,899

General and administrative(1)


10,464



10,823



31,514



30,352

Amortization of intangible assets 


500



397



1,294



1,108

Total operating expenses


37,611



35,938



113,416



110,883

Operating income


1,599



569



3,571



2,370













Interest (expense) income, net 


(1)



(2)





33

Earnings of unconsolidated joint venture


290



367



710



718

Other (expense) income, net




(99)



(69)



278

Income from operations before income taxes


1,888



835



4,212



3,399













Income tax expense


103



31



175



123













Net income


1,785



804



4,037



3,276













Convertible preferred stock dividend and related accretion




(562)



(942)



(3,506)

Net income (loss) applicable to common stockholders

$

1,785


$

242


$

3,095


$

(230)

























Basic net income (loss) per share applicable to common stockholders

$

0.05


$

0.01


$

0.08


$

(0.01)













Diluted net income (loss) per share applicable to common stockholders

$

0.04


$

0.01


$

0.08


$

(0.01)













Shares used to calculate net income (loss) per share applicable to common stockholders:












Basic


38,798



39,279



38,661



39,430













Diluted


39,895



39,977



39,660



39,430













Comprehensive income:












Net income

$

1,785


$

804


$

4,037


$

3,276

Foreign currency translation gain (loss)


11



(62)



(21)



(98)

Comprehensive income

$

1,796


$

742


$

4,016


$

3,178

























(1) Includes stock-based compensation as follows:



















     Cost of revenue

$

71


$

52


$

193


$

170

     Sales and marketing


361



307



1,554



1,066

     Product and web site development


527



238



1,412



915

     General and administrative


938



488



2,428



1,979


$

1,897


$

1,085


$

5,587


$

4,130













 

 

 

MOVE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)  









September 30,
2012



December 31,
2011



(unaudited)




ASSETS






Current assets:






Cash

$

30,876


$

87,579

Accounts receivable, net


12,382



11,719

Other current assets


6,950



7,086

Total current assets


50,208



106,384







Property and equipment, net


20,023



20,487

Investment in unconsolidated joint venture


5,442



5,711

Goodwill, net


33,551



24,450

Intangible assets, net


18,825



7,319

Other assets 


851



570

Total assets 

$

128,900


$

164,921







LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities: 






Accounts payable 

$

4,748


$

5,851

Accrued expenses 


18,321



14,782

Deferred revenue 


8,672



9,809

Total current liabilities 


31,741



30,442







Other noncurrent liabilities


3,107



3,264

Total liabilities 


34,848



33,706







Series B convertible preferred stock




48,555







Stockholders' equity: 






Series A convertible preferred stock




Common stock 


39



39

Additional paid-in capital 


2,129,801



2,121,483

Accumulated other comprehensive income


237



258

Accumulated deficit


(2,036,025)



(2,039,120)

Total stockholders' equity


94,052



82,660

Total liabilities and stockholders' equity

$

128,900


$

164,921







 

 

 

MOVE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)




Nine Months Ended September 30,



2012



2011


(unaudited)

Cash flows from operating activities:






Net income

$

4,037


$

3,276

Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation


7,195



6,979

Amortization of intangible assets


1,294



1,108

Provision for doubtful accounts


486



99

Loss on sales and disposals of assets


38



126

Stock-based compensation and charges


5,856



4,441

Earnings of unconsolidated joint venture


(710)



(718)

Return on investment in unconsolidated joint venture


255



280

Other noncash items


(78)



(52)

Changes in operating assets and liabilities:






Accounts receivable


(1,100)



(1,649)

Other assets


(144)



88

Accounts payable and accrued expenses


2,816



(3,189)

Deferred revenue 


(1,163)



(2,649)

Net cash provided by operating activities


18,782



8,140







Cash flows from investing activities:






Purchases of property and equipment


(6,672)



(5,075)

Proceeds from sale of assets


9



Acquisitions, net of cash acquired


(22,000)



(500)

Proceeds from dissolution of joint venture




499

Return of investment in unconsolidated joint venture


724



660

Net cash used in investing activities


(27,939)



(4,416)







Cash flows from financing activities:






Principal payments on loan payable


(82)



(77)

Redemption of convertible preferred stock


(49,044)



(70,000)

Payment of dividends on convertible preferred stock


(882)



(1,579)

Proceeds from exercise of stock options


3,060



608

Tax payment related to net share settlements of restricted stock awards


(529)



(312)

Repurchases of common stock


(69)



(9,617)

Net cash used in financing activities


(47,546)



(80,977)







Change in cash and cash equivalents


(56,703)



(77,253)







Cash and cash equivalents, beginning of period


87,579



158,517







Cash and cash equivalents, end of period

$

30,876


$

81,264







 

 

 

MOVE, INC.

RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA

(in thousands)






Three Months Ended September 30,


Nine Months Ended September 30,



2012



2011



2012



2011



(unaudited)



(unaudited)













Net income

$

1,785


$

804


$

4,037


$

3,276













Plus: 












Stock-based compensation


1,897



1,085



5,587



4,130

Stock-based charges 


99



72



269



311

Depreciation


2,282



2,340



7,195



6,979

Amortization of intangible assets, including unconsolidated joint venture


697



594



1,886



1,700

Interest expense (income), net


1



2





(33)

Income tax expense


103



31



175



123

Termination costs from dissolution of joint venture




619





619

Adjusted EBITDA

$

6,864


$

5,547


$

19,149


$

17,105

 

 

 

MOVE, INC.
OPERATING RESULTS

NET OF STOCK-BASED COMPENSATION EXPENSE

(in thousands) 






Three Months Ended



September 30, 2012



(unaudited)



As Reported


Stock-based
Compensation


Excluding
Stock-based
Compensation

Revenue

$

49,446

$

$

49,446

Cost of revenue


10,236


(71)


10,165

Gross profit


39,210


71


39,281








Sales and marketing


17,235


(361)


16,874

Product and web site development


9,412


(527)


8,885

General and administrative


10,464


(938)


9,526

Amortization of intangibles


500



500

Total operating expenses


37,611


(1,826)


35,785








Operating income

$

1,599

$

1,897

$

3,496

















Three Months Ended



September 30, 2011



(unaudited)



As Reported


Stock-based
Compensation


Excluding
Stock-based
Compensation

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









Nine Months Ended



September 30, 2012



(unaudited)



As Reported


Stock-based
Compensation


Excluding
Stock-Based
Compensation

Revenue

$

146,496

$

$

146,496

Cost of revenue


29,509


(193)


29,316

Gross profit


116,987


193


117,180








Sales and marketing


53,005


(1,554)


51,451

Product and web site development


27,603


(1,412)


26,191

General and administrative


31,514


(2,428)


29,086

Amortization of intangibles


1,294



1,294

Total operating expenses


113,416


(5,394)


108,022








Operating income

$

3,571

$

5,587

$

9,158

















Nine Months Ended



September 30, 2011



(unaudited)



As Reported


Stock-based
Compensation


Excluding
Stock-Based
Compensation

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








 

SOURCE Move, Inc.



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