Move, Inc. Reports Fourth Quarter 2013 Financial Results:

14% Year-Over-Year Annual Revenue Growth; Seventh Straight Quarter of Year-Over-Year Revenue Growth

Feb 13, 2014, 16:05 ET from Move, Inc.

SAN JOSE, Calif., Feb. 13, 2014 /PRNewswire/ -- Move, Inc. (NASDAQ: MOVE), the leader in online real estate, today reported financial results for the fourth quarter ended December 31, 2013.

Fourth Quarter 2013 Highlights

  • Q4 Revenue increased 7% year-over-year to $56.5 million
  • Consumer Advertising revenue increased 6% year-over-year to $43.5 million
  • Software and Services revenue increased 12% year-over-year to $12.9 million
  • Non-GAAP Adjusted EBITDA was $7.7 million
  • Average monthly unique users of Move's web and mobile sites grew 13% year-over-year to 23.9 million in the fourth quarter

"Our achievements in 2013, including technology integrations, new content offerings and strategic acquisitions, have laid the foundation to make 2014 what we believe will be a groundbreaking year—for delivering outstanding performance and reaching new heights of innovation for our industry clients, buyers and sellers," said Steve Berkowitz, CEO of Move.  "Leveraging our comprehensive consumer experience, deep industry ties and unparalleled quality of data content enables us to provide the most superior and trustworthy customer experience for REALTORS® and consumers alike."

Fourth Quarter 2013 Financial Results Revenue for the quarter was $56.5 million, an increase of $3.7 million, or 7%, from $52.7 million in the fourth quarter of 2012.  Revenue from Consumer Advertising products increased 6% to $43.5 million in the fourth quarter of 2013 compared to the same period in 2012.  Revenue from Software and Services products increased 12% to $12.9 million compared to the fourth quarter of 2012.

Non-GAAP Adjusted EBITDA ("Adjusted EBITDA") was $7.7 million in the fourth quarter of 2013 compared to $7.8 million in the fourth quarter of 2012.  As a percentage of revenue, Adjusted EBITDA was 14% in the fourth quarter of 2013.  Non-GAAP Earnings Per Share was $0.11 per diluted share in the fourth quarter of 2013 compared to $0.13 per diluted share in the fourth quarter of 2012.  Move has reported Adjusted EBITDA and Non-GAAP Earnings Per Share 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.

Cash provided by operating activities was $11.9 million and $10.3 million for the quarters ended December 31, 2013 and 2012, respectively.

Operating and Business Results

  • Move started 2014 ringing the opening bell at NASDAQ after an exciting fourth quarter where it:
    • Acquired FiveStreet, Inc., which provides a lead consolidation and response tool for agents, agent-teams and brokerages;
    • Expanded its longstanding business relationship with Bankrate with a multi-year extension of their alliance and expansion of mortgage content across Move brands;
    • Grew its technology efficiencies and outputs, as well as increased its media share of voice by over 10 times (as compared with last year); and
    • Provided REALTORS® with webinars focused on optimizing and growing their businesses with Move solutions.
  • In the fourth quarter of 2013, realtor.com® made great strides in for its brand, customers and consumers as it expanded content, as well as new features, on its website and mobile apps. Among its accomplishments, realtor.com®:
    • Enhanced its rentals app to offer location-based listing notifications and iOS 7 AirDrop sharing;
    • Significantly grew the number of new homes and rentals listings available on realtor.com®;
    • Became an official and category exclusive sponsor of the San Jose Sharks for the 2013-14 NHL season;
    • Expanded REALTOR® profiles through SocialBios, the profile management platform that connects agents with consumers; and
    • Realtor.com® international was honored with a Global Achievement Award from the National Association of REALTORS®.
  • In the last quarter of 2013, ListHub expanded its reach to Houston Association of REALTORS® and now provides services to their 26,000 members; and
  • Move grew average monthly unique users 13% year-over-year during the fourth quarter of 2013, to 23.9 million, up from 21.2 million in the fourth quarter of 2012.

Business Outlook For the quarter ending March 31, 2014, Move expects revenue of approximately $58 million and expects to report Adjusted EBITDA of approximately $5 million.

For the year ending December 31, 2014, Move expects revenue of $254–$258 million and expects to report Adjusted EBITDA of approximately $30 million.

Conference Call As previously announced, Move will host a conference call, which will be broadcast live over the Internet today, Thursday, February 13, 2014 at 1:30 p.m. Pacific Standard Time (4:30 p.m. Eastern Standard Time).  To access the call, please dial (877) 870-4263, or outside the U.S. (412) 317-0790, 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 2:30 p.m. Pacific Standard Time February 13, 2014 and 6:00 a.m. Pacific Standard Time February 21, 2014, by calling (877) 344-7529 or (412) 317-0088, with Conference ID 10039382.  An audio archive of the call will also be available at http://investor.move.com.

Use of Non-GAAP Financial Measures—Adjusted EBITDA and Non-GAAP Earnings Per Share 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 expense, income tax expense and certain other noncash and nonrecurring items, principally depreciation, amortization and stock-based compensation and charges, which is referred to as Adjusted EBITDA.  Move also uses a non-GAAP measure of net income applicable to common shareholders excluding convertible preferred stock dividends and related accretion, stock-based compensation and charges, amortization of intangible assets, and amortization of debt discount and issuance costs, on a per share basis, which is referred to as Non-GAAP Earnings Per Share.  Additionally, the Company has presented a non-GAAP table of Financial Data for the three- and twelve-month periods ended December 31, 2013 and 2012 that extracts stock-based compensation and charges. 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 and Non-GAAP Earnings Per Share 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.

Unique Users Move calculates total average monthly unique users across its network of websites and mobile apps as follows:  We count a unique user the first time an individual accesses one of our mobile applications using a mobile device during a calendar month and the first time an individual accesses one of our websites using a web browser during a calendar month.  If an individual accesses our mobile applications using different mobile devices within a given calendar month, the first instance of access by each such mobile device is counted as a separate unique user.  If an individual accesses our websites using different web browsers within a calendar month, the first instance of access by each such web browser is counted as a separate unique user.  If an individual accesses more than one of our websites from the same web browser in a calendar month, the first instance of access to each website is counted as a separate unique user.  We measure unique users to our mobile apps using Omniture.  We primarily measure unique users to our network of websites using Omniture.  We use Google Analytics to measure unique users to certain websites that amount to less than 5% of our total unique user metric.  Prior to the first quarter of 2013, we reported unique users using comScore measurements, rather than internal calculations.

Forward-Looking Statements 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, operates:  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; Doorsteps®; TigerLead®; Top Producer® Systems and FiveStreet.  Move, Inc. is based in San Jose, California.  

 

 

MOVE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended December 31,

Twelve Months Ended December 31,

2013

2012

2013

2012

(unaudited)

Revenue

$

56,480

$

52,737

$

227,033

$

199,233

Costs and operating expenses:

   Cost of revenue(1)(2)

11,465

10,432

45,868

37,421

Sales and marketing(1)(2)

22,393

19,564

90,012

75,089

Product and web site development(1)

9,566

9,738

38,889

37,341

General and administrative(1)

11,550

10,846

47,282

42,360

Amortization of intangible assets 

1,249

981

4,421

2,275

Total costs and operating expenses

56,223

51,561

226,472

194,486

Operating income

257

1,176

561

4,747

Interest expense, net 

(1,615)

(6)

(2,559)

(6)

Earnings of unconsolidated joint venture

705

482

2,355

1,192

Other income, net

197

158

116

89

(Loss) income before income taxes

(456)

1,810

473

6,022

Income tax (benefit) expense

(526)

222

(101)

397

Net income

70

1,588

574

5,625

Convertible preferred stock dividend and related accretion

(942)

Net income applicable to common stockholders

$

70

$

1,588

$

574

$

4,683

Basic net income per share applicable to common stockholders

$

0.00

$

0.04

$

0.01

$

0.12

Diluted net income per share applicable to common stockholders

$

0.00

$

0.04

$

0.01

$

0.12

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

Basic

38,714

38,834

39,089

38,705

Diluted

41,741

39,800

41,236

39,721

(1) Includes stock-based compensation and charges as follows:

     Cost of revenue

$

79

$

75

$

340

$

268

     Sales and marketing

633

408

2,379

1,962

     Product and web site development

669

526

2,719

1,938

     General and administrative

1,066

1,407

5,250

4,104

$

2,447

$

2,416

$

10,688

$

8,272

(2)  Effective October 1, 2013, the Company elected to change the presentation of certain lead acquisition costs and to reclassify these costs from "Cost of revenue" to "Sales and marketing" within its Consolidated Statements of Operations in order to be more consistent with certain of its peers and to combine all traffic acquisition costs that are not considered directly related to the fulfillment of products into "Sales and marketing."  This had the effect of decreasing "Cost of revenue" and increasing "Sales and marketing" expense by $4.0 million, or 2% of revenue, for the year ended December 31, 2012.  For the quarter ended December 31, 2012, the amount reclassified was $1.5 million, or 3% of revenue.

 

MOVE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31,

2013

2012

ASSETS

Current assets:

Cash and cash equivalents

$

118,679

$

27,122

Accounts receivable, net

11,760

11,759

Other current assets

8,203

7,215

Total current assets

138,642

46,096

Property and equipment, net

23,960

21,975

Investment in unconsolidated joint venture

4,596

4,924

Goodwill, net

41,630

38,560

Intangible assets, net

24,403

24,444

Other assets 

3,558

870

Total assets 

$

236,789

$

136,869

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities: 

Accounts payable 

$

5,912

$

4,741

Accrued expenses 

26,929

20,512

Deferred revenue 

7,783

8,520

Total current liabilities 

40,624

33,773

Convertible senior notes

82,459

Other noncurrent liabilities

4,876

5,086

Total liabilities 

127,959

38,859

Stockholders' equity: 

Series A convertible preferred stock

Common stock 

39

39

Additional paid-in capital 

2,142,516

2,132,189

Accumulated other comprehensive income

138

219

Accumulated deficit

(2,033,863)

(2,034,437)

Total stockholders' equity

108,830

98,010

Total liabilities and stockholders' equity

$

236,789

$

136,869

 

MOVE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Twelve Months Ended December 31,

2013

2012

Cash flows from operating activities:

Net income

$

574

$

5,625

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

Depreciation and amortization of property and equipment

10,505

9,551

Amortization of intangible assets

4,421

2,275

Amortization of debt discount and issuance costs

1,491

Provision for doubtful accounts

619

528

Stock-based compensation and charges

10,688

8,272

Loss on sales and disposals of assets

61

Earnings of unconsolidated joint venture

(2,355)

(1,192)

Return on investment in unconsolidated joint venture

2,102

1,192

Other noncash items

21

(74)

Changes in operating assets and liabilities:

Accounts receivable

(606)

(422)

Other assets

(833)

(328)

Accounts payable and accrued expenses

6,669

5,047

Deferred revenue 

(614)

(1,435)

Net cash provided by operating activities

32,682

29,100

Cash flows from investing activities:

Purchases of property and equipment

(12,586)

(11,025)

Acquisitions, net of cash acquired

(5,930)

(31,725)

Return of investment in unconsolidated joint venture

582

787

Other investing activities

(250)

9

Net cash used in investing activities

(18,184)

(41,954)

Cash flows from financing activities:

Principal payments on loan payable

(1,019)

(111)

Proceeds from borrowings on convertible senior notes, net of issuance costs

96,606

Redemption of convertible preferred stock

(49,044)

Payment of dividends on convertible preferred stock

(882)

Proceeds from exercise of stock options

10,056

3,108

Tax payments related to net share settlements of equity awards

(2,574)

(605)

Repurchases of common stock

(26,010)

(69)

Net cash provided by (used in) financing activities

77,059

(47,603)

Change in cash and cash equivalents

91,557

(60,457)

Cash and cash equivalents, beginning of period

27,122

87,579

Cash and cash equivalents, end of period

$

118,679

$

27,122

 

MOVE, INC.

REVENUE BY TYPE

(in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2013

2012

2013

2012

(unaudited)

(unaudited)

Revenue

  Consumer advertising

$

43,542

$

41,156

$

175,890

$

161,817

  Software and services

12,938

11,581

51,143

37,416

    Total revenue

$

56,480

$

52,737

$

227,033

$

199,233

Percentage of revenue

  Consumer advertising

77%

78%

77%

81%

  Software and services

23%

22%

23%

19%

    Total

100%

100%

100%

100%

 

MOVE, INC.

RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA

(in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2013

2012

2013

2012

(unaudited)

(unaudited)

Net income

$

70

$

1,588

$

574

$

5,625

Plus: 

Stock-based compensation and charges

2,447

2,416

10,688

8,272

Depreciation and amortization of property and equipment

2,825

2,356

10,505

9,551

Amortization of intangible assets, including unconsolidated joint venture

1,249

1,178

4,421

3,064

Interest expense, net

1,615

6

2,559

6

Income tax (benefit) expense

(526)

222

(101)

397

Non-GAAP Adjusted EBITDA

$

7,680

$

7,766

$

28,646

$

26,915

MOVE, INC.

RECONCILIATION OF EARNINGS PER SHARE TO NON-GAAP EARNINGS PER SHARE

(in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2013

2012

2013

2012

(unaudited)

(unaudited)

Net income applicable to common stockholders

$

70

$

1,588

$

574

$

4,683

Plus: 

      Convertible preferred stock dividend and related accretion

942

   Stock-based compensation and charges

2,447

2,416

10,688

8,272

   Amortization of intangible assets, including unconsolidated joint venture

1,249

1,178

4,421

3,064

   Amortization of debt discount and issuance costs

975

1,491

Non-GAAP net income applicable to common stockholders

$

4,741

$

5,182

$

17,174

$

16,961

Basic earnings per share

$

0.00

$

0.04

$

0.01

$

0.12

Diluted earnings per share

$

0.00

$

0.04

$

0.01

$

0.12

Non-GAAP basic earnings per share

$

0.12

$

0.13

$

0.44

$

0.44

Non-GAAP diluted earnings per share

$

0.11

$

0.13

$

0.42

$

0.43

Shares used to calculate earnings per share:

Basic

38,714

38,834

39,089

38,705

Diluted

41,741

39,800

41,236

39,721

 

MOVE, INC.

OPERATING RESULTS NET OF STOCK-BASED COMPENSATION AND CHARGES

(in thousands)

Three Months Ended

Three Months Ended

December 31, 2013

December 31, 2012

(unaudited)

(unaudited)

As Reported

Stock-based Compensation and Charges

Excluding Stock-based Compensation and Charges

As Reported

Stock-based Compensation and Charges

Excluding Stock-based Compensation and Charges

Revenue

$

56,480

$

$

56,480

$

52,737

$

$

52,737

Costs and operating expenses:

Cost of revenue

11,465

(79)

11,386

10,432

(75)

10,357

Sales and marketing

22,393

(633)

21,760

19,564

(408)

19,156

Product and web site development

9,566

(669)

8,897

9,738

(526)

9,212

General and administrative

11,550

(1,066)

10,484

10,846

(1,407)

9,439

Amortization of intangible assets

1,249

1,249

981

981

Total costs and operating expenses

56,223

(2,447)

53,776

51,561

(2,416)

49,145

Operating income

$

257

$

2,447

$

2,704

$

1,176

$

2,416

$

3,592

Twelve Months Ended

Twelve Months Ended

December 31, 2013

December 31, 2012

(unaudited)

(unaudited)

As Reported

Stock-based Compensation and Charges

Excluding Stock-based Compensation and Charges

As Reported

Stock-based Compensation and Charges

Excluding Stock-based Compensation and Charges

Revenue

$

227,033

$

$

227,033

$

199,233

$

$

199,233

Costs and operating expenses:

Cost of revenue

45,868

(340)

45,528

37,421

(268)

37,153

Sales and marketing

90,012

(2,379)

87,633

75,089

(1,962)

73,127

Product and web site development

38,889

(2,719)

36,170

37,341

(1,938)

35,403

General and administrative

47,282

(5,250)

42,032

42,360

(4,104)

38,256

Amortization of intangible assets

4,421

4,421

2,275

2,275

Total costs and operating expenses

226,472

(10,688)

215,784

194,486

(8,272)

186,214

Operating income

$

561

$

10,688

$

11,249

$

4,747

$

8,272

$

13,019

 

MOVE, INC.

AVERAGE MONTHLY UNIQUE USERS

(in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2013

2012

% Change

2013

2012

% Change

(unaudited)

(unaudited)

Unique users

23,942

21,249

13%

27,110

23,604

15%

 

SOURCE Move, Inc.



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