Harris Interactive® Reports Second Quarter Fiscal 2011 Results

NEW YORK, Jan. 27, 2011 /PRNewswire/ -- Harris Interactive Inc. (Nasdaq: HPOL), a leading innovative global market research firm, today announced its second quarter fiscal 2011 financial results, which show growth in revenue, bookings, and operating income compared with the same prior year period. Excluding foreign exchange rate differences, revenue was up 2%, driven by growth in the U.K., Canada, France, Germany, and Asia, and bookings grew 4% as a result of strong sales performance in Canada, France, and Germany. Operating income improved by nearly 47%, making the second quarter the company's most profitable quarter in three years.

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Kimberly Till, President and Chief Executive Officer of Harris Interactive, said, "As these results indicate, we have made progress in stabilizing our overall business. Further, consistent with one of our key strategic initiatives, we are developing new products and solutions that leverage technology and will provide us with new revenue streams. Our new, social intelligence platform, Research Lifestreaming, and its associated products and solutions, are generating both direct and indirect sales. In addition, we are very focused on the mobile space and are beginning to implement our strategy of exploiting mobile devices for real-time data feeds, polling, and insights for our clients."

Key Financial Statistics

• Total revenue for the second quarter of fiscal 2011 was $44.9 million, as compared with $44.6 million for the same prior year period. Excluding foreign currency exchange rate differences, revenue for the second quarter was up 2% compared with the same prior year period.
• Operating income for the second quarter of fiscal 2011 was $0.9 million, as compared with operating income of $0.6 million for the same prior year period.
• Net income for the second quarter of fiscal 2011 was $0.3 million, or $0.01 per fully diluted share, as compared with net income of $1.3 million, or $0.02 per fully diluted share for the same prior year period. Net income for the second quarter of fiscal 2010 included the favorable impact of a tax law change that resulted in a $1.1 million tax benefit.
• As of December 31, 2010, we had $13.5 million in cash and $13.2 million in outstanding debt.  During the first six months of fiscal 2011, we have made $2.4 million in debt principal payments.  
• Cash provided by operations for the second quarter of fiscal 2011 was $3.3 million, as compared with $2.6 million provided by operations for the same prior year period.
• Bookings for the second quarter of fiscal 2011 were $55.3 million, as compared with $53.2 million for the same prior year period. Excluding foreign currency exchange rate differences, bookings for the second quarter were up 4% compared with the same prior year period.
• Secured revenue (formerly referred to as backlog) for the second quarter of fiscal 2011 was $55.4 million, as compared with $51.1 million for the same prior year period. Excluding foreign currency exchange rate differences, secured revenue for the second quarter was up 9% compared with the same prior year period.
• Non-GAAP adjusted EBITDA* with add-back of restructuring and other charges for the second quarter of fiscal 2011 was $3.7 million, as compared with $3.2 million for the same prior year period.

Ms. Till continued, "On a country by country basis, we are making progress in fixing the U.S. business, having rebuilt several industry verticals and applying a proven approach to improve performance in the others. Regarding Canada, I am pleased that our recent restructuring of the business has had a positive impact on performance, as we achieved meaningful year over year bookings, revenue, and operating income growth in the quarter for the first time since we acquired the business in August 2007. Germany, France and Asia also performed well in the quarter. Although we have more work to do in the U.K., having lost a large tracking study during the quarter, we are beginning to execute on our plan to reposition the business and get it back on track over the next few quarters."

Ms. Till concluded, "Over the past two years, we have made substantial improvements in our product offerings, pricing, work processes, global panel and survey platforms, financial stability, and talent at all levels of the company. While these improvements take time to impact the numbers, I believe that our business is in the strongest position since we began the turnaround."

Second Quarter Fiscal 2011 Results Conference Call and Webcast Access

Kimberly Till, President and Chief Executive Officer, will host a conference call to discuss these results on Thursday, January 27, 2011, at 5:00 p.m. ET. Formal remarks will be followed by a question and answer session.

To access the conference call, please dial toll-free 877.303.9858 in the United States and Canada, or 408.337.0139 internationally.

A live webcast of the conference call also will be accessible via the Investor Relations section of our website at http://ir.harrisinteractive.com/, where an archived replay of the webcast will be available for 30 days following the call. No telephone replay of the conference call will be provided. This media release will be available under the Investor Relations section of our website at http://ir.harrisinteractive.com/ prior to the call.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release and oral statements made by the Company on its conference call in relation to this release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, among others, statements as to future economic performance, projections as to financial items, estimates, and plans and objectives for future operations, products and services. In some cases, you can identify forward-looking statements by terminology such as, "may", "should", "expects", "plans", "anticipates", "feel", "believes", "estimates", "predicts", "potential", "continue", "consider", "possibility", or the negative of these terms or other comparable terminology. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation, risks detailed in the "Risk Factors" section of the Company's most recent Annual Report on Form 10-K, as updated quarterly in our Quarterly Reports on Form 10-Q to reflect additional material risks. The Company has filed its reports on Forms 10-K and 10-Q with the Securities and Exchange Commission, and they are available under the Investor Relations section of our website at http://ir.harrisinteractive.com/. Risks and uncertainties also include the continued volatility of the global macroeconomic environment and its impact on the Company and its clients, the Company's ability to sustain and grow its revenue base, the Company's ability to maintain and improve cost efficient operations, the impact of reorganization and restructuring and related charges, quarterly variations in financial results, actions of competitors, the Company's ability to develop and maintain products and services attractive to the market, and uncertainties surrounding compliance with certain NASDAQ listing requirements.

You are urged to consider these factors carefully in evaluating such forward-looking statements and are cautioned not to place undue reliance on them. The forward-looking statements are qualified in their entirety by this cautionary statement.

About Harris Interactive

Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us – and our clients – stay ahead of what's next. For more information, please visit www.harrisinteractive.com.

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SOURCE Harris Interactive