Move, Inc. Announces Third Quarter 2011 Financial Results

Nov 03, 2011, 16:05 ET from Move, Inc.

CAMPBELL, Calif., Nov. 3, 2011 /PRNewswire/ -- Move, Inc. (NASDAQ: MOVE), the leader in online real estate, today reported financial results for the third quarter ended September 30, 2011.

(Logo:  http://photos.prnewswire.com/prnh/20080213/MOVEINCLOGO)

Revenue in the third quarter of 2011 was $46.5 million, compared to $50.3 million in the third quarter of 2010.  Net income applicable to common stockholders was $242,000, or break even per share, compared to net income of $375,000, or break even per share, in the third quarter of 2010. Non-GAAP Adjusted EBITDA (earnings from continuing operations before interest, taxes, stock-based compensation and charges, depreciation, amortization and other non-recurring charges) for the third quarter of 2011 was $5.5 million, or 12 percent of revenue, compared to $6.0 million, or 12 percent of revenue, for the third quarter of 2010.  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 at Move, Inc. said, "Against the backdrop of today's challenging real estate market, our industry is making an important transition as it embraces new technologies.  The real estate industry is increasingly becoming a multi-channel experience for consumers, with connections and interactions that occur in person, on the phone, on the web and especially on mobile devices.  Move continues to take solid steps towards the future.  We are in the process of rolling out the most aggressive product release schedule in our history, designed to leverage our market leadership.  While we remain focused on achieving our near term financial goals, Move is continuing to focus on creating great consumer experiences and new revenue opportunities for growth in 2012 and beyond."

Financial Highlights:

  • Move continues its financial leadership in the online real estate market place with revenue of $46.5 million and Adjusted EBITDA of $5.5 million in the third quarter of 2011.
  • Move repurchased 5.9 million shares of common stock, using $9.6 million of cash during the third quarter.
  • The Company filed paperwork to initiate the 1-for-4 reverse stock split, which had been previously authorized by the Board of Directors and the Company's shareholders.

Business Highlights:

  • Move continues its audience and engagement leadership in the month of September by attracting more than 20 million consumers who visited our sites 77 million times, viewed 619 million pages and spent 290 million minutes on the Realtor.com Real Estate Network.
  • Move continues to provide the most comprehensive, current and accurate information available in the industry, on both web and mobile devices, by updating 82% of all for-sale listings on Realtor.com every 15-minutes.  The remainder is updated every one to 24 hours directly from our MLS partners across the country.  
  • Move continues its leadership in the mobile category with our award winning line of mobile applications, with mobile leads up 350% year-over-year.  
  • In August, Move and AOL launched the new search experience on AOL Real Estate, powered by Move.
  • Move recently launched the Connection for Co-Brokerage product line, which allows consumers to connect with real estate professionals on all Realtor.com listings in an industry-friendly manner.  
  • The Company is rolling out upgraded reporting and analytics tools for real estate professionals, providing better insight to the industry on how effectively they are spending their marketing dollars.
  • Move re-launched its mortgage prequalification decision engine, PreQualPlus, in partnership with MetLife Home Loans.  Unlike any other online mortgage offering, PreQualPlus allows consumers to prequalify for a mortgage entirely online and ultimately close a mortgage loan with MetLife.
  • Move launched Realtor.com International, delivering all for-sale property listings displayed on Realtor.com and residential properties provided by foreign content providers.  The site will offer translation tools for 11 languages and conversion tools for currency.
  • Top Producer released an Open Beta version of our new HTML 5 Customer Relationship Management product.  This new HTML 5 CRM web-app will better serve our customers by delivering a more relevant product that enables cross-platform functionalities and supports the fast-paced mobile work style of our Top Producer customers, and real estate professionals in general.

Business Outlook

Move today provided guidance for the quarter and year ending December 31, 2011.  For the quarter ending December 31, 2011, Move expects revenue of approximately $47 million and expects to report Adjusted EBITDA margin of approximately 16%.

For the year ending December 31, 2011, Move expects revenue of approximately $192 million and expects to report Adjusted EBITDA margin of approximately 13%.

Conference Call

As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, November 3, 2011. 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 Daylight 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 Daylight Time November 3, 2011, and 11:59 p.m. Pacific Daylight Time November 17, 2011, by calling (855) 859-2056 or (404) 537-3406, with Conference ID 12314530. 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 (loss) excluding interest income, net, income tax expense, impairment of auction rate securities 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, 2011 and 2010 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 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) is the leader in online real estate with over 20.3 million visitors [1] to its online network of websites within the Realtor.com Real Estate Network. 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®, the official website of the National Association of REALTORS®; MortgageMatch.com, Moving.com; SeniorHousingNet; ListHub; and TOP PRODUCER Systems. Move, Inc. is based in Campbell, California.

(1)  comScore Media Metrix, Key Measures Report, September 2011

MOVE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2011

2010

2011

2010

(unaudited)

(unaudited)

Revenue

$

46,466

$

50,256

$

144,456

$

148,590

Cost of revenue (1)

9,959

10,766

31,203

32,782

Gross profit

36,507

39,490

113,253

115,808

Operating expenses: (1)

Sales and marketing

16,281

18,631

52,524

55,835

Product and web site development

8,437

8,855

26,899

25,517

General and administrative

10,823

10,877

30,352

32,366

Amortization of intangible assets

397

139

1,108

348

Total operating expenses

35,938

38,502

110,883

114,066

Operating income

569

988

2,370

1,742

Interest (expense) income, net

(2)

33

33

767

Earnings of unconsolidated joint venture

367

342

718

641

Impairment of auction rate securities

(19,559)

Other (expense) income, net

(99)

(42)

278

(1,144)

Income (loss) from operations before income taxes

835

1,321

3,399

(17,553)

Income tax expense (benefit)

31

(404)

123

(313)

Net income (loss)

804

1,725

3,276

(17,240)

Convertible preferred stock dividend and related accretion

(562)

(1,350)

(3,506)

(4,024)

Net income (loss) applicable to common stockholders

$

242

$

375

$

(230)

$

(21,264)

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

$

0.00

$

0.00

$

(0.00)

$

(0.14)

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

$

0.00

$

0.00

$

(0.00)

$

(0.14)

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

    Basic

157,117

155,711

157,720

154,957

    Diluted

159,908

159,527

157,720

154,957

(1) Includes stock-based compensation as follows:

    Cost of revenue

$

52

$

44

$

170

$

136

    Sales and marketing

307

400

1,066

1,240

    Product and web site development

238

453

915

1,243

    General and administrative

488

875

1,979

2,792

$

1,085

$

1,772

$

4,130

$

5,411

MOVE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30, 2011

December 31, 2010

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

81,264

$

158,517

Accounts receivable, net

11,230

9,680

Other current assets

8,283

7,621

Total current assets

100,777

175,818

Property and equipment, net

19,857

21,934

Investment in unconsolidated joint ventures

6,444

7,165

Goodwill, net

24,450

24,450

Intangible assets, net

7,716

8,324

Other assets

578

1,327

Total assets

$

159,822

$

239,018

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

3,504

$

6,403

Accrued expenses

15,919

16,281

Deferred revenue

11,059

13,696

Total current liabilities

30,482

36,380

Other non-current liabilities

3,352

3,300

Total liabilities

33,834

39,680

Series B convertible preferred stock

48,422

116,564

Stockholders’ equity:

Series A convertible preferred stock

Common stock

154

159

Additional paid-in capital

2,119,680

2,124,554

Accumulated other comprehensive income

273

372

Accumulated deficit

(2,042,541)

(2,042,311)

Total stockholders’ equity

77,566

82,774

Total liabilities and stockholders’ equity

$

159,822

$

239,018

MOVE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended September 30,

2011

2010

(unaudited)

Cash flows from operating activities:

Net income (loss)

$

3,276

$

(17,240)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation

6,979

7,637

Amortization of intangible assets

1,108

348

Provision for (reversal of) doubtful accounts

99

(84)

Loss on sales and disposals of assets

126

Stock-based compensation and charges

4,441

5,765

Impairment of auction rate securities

19,559

Earnings of unconsolidated joint venture

(718)

(641)

Other non-cash items

(52)

(153)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

(1,649)

1,346

Other assets

88

1,059

Accounts payable and accrued expenses

(3,189)

675

Deferred revenue

(2,649)

(602)

Net cash provided by operating activities

7,860

17,669

Cash flows from investing activities:

Purchases of property and equipment

(5,075)

(7,838)

Acquisitions, net of cash acquired

(500)

(12,371)

Proceeds from dissolution of joint venture

499

Proceeds from the sale of auction rate securities

109,841

Principal payments on notes receivable

1,000

Proceeds from the sale of marketable equity securities

14

Distribution of earnings from unconsolidated joint venture

940

Net cash (used in) provided by continuing investing activities

(4,136)

90,646

Cash flows from financing activities:

Proceeds from exercise of stock options

608

4,467

Restricted cash

462

Redemption of convertible preferred stock

(70,000)

Proceeds from line of credit

64,700

Proceeds from loan payable

316

Principal payments on line of credit

(129,330)

Repurchases of company's common stock

(9,617)

Payment of dividend on convertible preferred stock

(1,579)

Tax payment related to net share settlements of restricted stock awards

(312)

(98)

Principal payments on loan payable

(77)

(58)

Net cash used in financing activities

(80,977)

(59,541)

Change in cash and cash equivalents

(77,253)

48,774

Cash and cash equivalents, beginning of period

158,517

106,847

Cash and cash equivalents, end of period

$

81,264

$

155,621

MOVE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

NET INCOME (LOSS) EXCLUDING INTEREST INCOME, INCOME TAX EXPENSE, STOCK-BASED COMPENSATION AND CHARGES, DEPRECIATION, AMORTIZATION  AND IMPAIRMENT OF AUCTION RATE SECURITIES

(ADJUSTED EBITDA)

(in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2011

2010

2011

2010

(unaudited)

(unaudited)

Net Income (loss)

$

804

$

1,725

$

3,276

$

(17,240)

Plus:

Interest (expense) income, net

2

(33)

(33)

(767)

Income tax expense (benefit)

31

(404)

123

(313)

Stock-based compensation

1,085

1,772

4,130

5,411

Stock-based charges

72

87

311

354

Depreciation

2,340

2,482

6,979

7,637

Impairment of auction rate securities

19,559

Loss on sale of auction rate securities

1,098

Termination costs from dissolution of joint venture

619

619

Amortization of intangible assets, including unconsolidated joint venture

594

336

1,700

1,024

Adjusted EBITDA

$

5,547

$

5,965

$

17,105

$

16,763

MOVE, INC. OPERATING RESULTS

NET OF STOCK-BASED COMPENSATION EXPENSE

(in thousands)

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

Three Months Ended

September 30, 2010

(unaudited)

As Reported

Stock-based Compensation

Excluding Stock-Based Compensation

Revenue

$

50,256

$

$

50,256

Cost of revenue

10,766

(44)

10,722

Gross profit

39,490

44

39,534

Sales and marketing

18,631

(400)

18,231

Product and web site development

8,855

(453)

8,402

General and administrative

10,877

(875)

10,002

Amortization of intangibles

139

139

Total operating expenses

38,502

(1,728)

36,774

Operating income

$

988

$

1,772

$

2,760

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

Nine Months Ended

September 30, 2010

(unaudited)

As Reported

Stock-based Compensation

Excluding Stock-Based Compensation

Revenue

$

148,590

$

$

148,590

Cost of revenue

32,782

(136)

32,646

Gross profit

115,808

136

115,944

Sales and marketing

55,835

(1,240)

54,595

Product and web site development

25,517

(1,243)

24,274

General and administrative

32,366

(2,792)

29,574

Amortization of intangibles

348

348

Total operating expenses

114,066

(5,275)

108,791

Operating income

$

1,742

$

5,411

$

7,153

SOURCE Move, Inc.



RELATED LINKS

http://www.move.com