Exhibit 99.1
Move, Inc. Announces Revenue of $61.2 Million and Adjusted EBITDA of $5.7 Million for Third Quarter 2008
Company Takes One Time Restructuring and Impairment Charges Totaling $22 Million for Welcome Wagon and Expense Reductions
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--November 5, 2008--Move, Inc. (NASDAQ:MOVE) reported financial results for the third quarter ended September 30, 2008.
Total revenue for the third quarter was $61.2 million compared to $63.4 million in the third quarter of 2007. 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 2008 was $5.7 million, compared to $7.3 million for the third quarter of 2007. 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.
Loss from continuing operations for the third quarter was $2.0 million, which includes a $4.0 million restructuring charge related to its cost reduction initiatives. Net loss from continuing operations was $1.0 million in the third quarter of 2007. Net loss applicable to common stockholders ("net loss") for the third quarter of 2008 was $22.6 million, or $0.15 per share, compared to a loss of $3.3 million, or $0.02 per share, for the third quarter of 2007. In the current quarter, the Company reported a loss on discontinued operations of $19.3 million, which includes an impairment charge of $15.9 million and a write-down of other operating assets of $2.1 million, to reflect the decline in value of the Welcome Wagon assets that are being marketed for sale. The loss on discontinued operations in the third quarter of 2007 was $1.0 million.
“Our third quarter results demonstrate how MOVE is leveraging the significant advantages and benefits of our market leadership, comprehensive industry knowledge and deep customer relationships,” said Mike Long, Move's CEO. “In the face of the housing meltdown, mortgage freeze, government bailout, and global economic uncertainty, we grew our core Realtor.com, Top Producer and Rentals businesses quarter over quarter while maintaining revenue and EBITDA results.”
“In September, we experienced a 17% year-over-year increase in total minutes spent on Realtor.com, even as the overall category experienced a 5% decline,” said Lorna Borenstein, Move’s President. “In fact, consumers spent more time on Realtor.com than the next seven competitors combined. These numbers show that consumers rely on, and trust, the Move Network and Realtor.com more than any other source for their real estate information. We are confident that the greatly improved consumer experience on our newly launched redesigned sites will only serve to further extend our market dominance.”
Conference Call
As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Wednesday, November 5, 2008, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Chief Executive Officer, Mike Long, President, Lorna Borenstein, and Chief Financial Officer, Lew Belote, will discuss the Company's third quarter 2008 results. In order to participate in the call, please dial (800) 901-5217, or if outside the U.S., (617) 786-2964 with passcode 84744619 to access the conference call 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 7:00 p.m. PT, November 5, 2008, and 11:59 p.m. PT, November 12, 2008, by calling (888) 286-8010, or (617) 801-6888, with passcode 52441629.
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. Move's Form 10-Q for the quarter ended September 30, 2008 is expected to be filed with the Securities and Exchange Commission on, or before, November 11, 2008.
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 operations excluding restructuring, impairment, 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 EBITDA. The Company has also presented a non-GAAP table of Segment Data for the three and nine months ended September 30, 2008 that extracts stock based compensation under 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.
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 7.7 million[1] monthly visitors to its online network of websites. Move, Inc. operates: Move.com(R), 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); Welcome Wagon(R); Moving.com; SeniorHousingNet(TM); and TOP PRODUCER(R) Systems. Move, Inc. is based in Westlake Village, California. For more information: http://www.move.com.
[1] comScore Media Metrix, August 2008
MOVE, INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
(unaudited) | ||||||||||||||||
Revenue | $ | 61,240 | $ | 63,380 | $ | 184,619 | $ | 186,356 | ||||||||
Cost of revenue(1) | 11,804 | 11,053 | 34,453 | 31,642 | ||||||||||||
Gross profit | 49,436 | 52,327 | 150,166 | 154,714 | ||||||||||||
Operating expenses:(1) | ||||||||||||||||
Sales and marketing | 24,002 | 23,212 | 71,268 | 68,289 | ||||||||||||
Product and web site development | 6,821 | 8,615 | 20,510 | 26,613 | ||||||||||||
General and administrative | 18,534 | 20,479 | 60,138 | 53,229 | ||||||||||||
Amortization of intangible assets | 188 | 194 | 582 | 564 | ||||||||||||
Litigation settlement | — | 3,900 | — | 3,900 | ||||||||||||
Restructuring charge | 4,014 | — | 4,014 | — | ||||||||||||
Total operating expenses | 53,559 | 56,400 | 156,512 | 152,595 | ||||||||||||
Operating income (loss) from continuing operations | (4,123 | ) | (4,073 | ) | (6,346 | ) | 2,119 | |||||||||
Interest income, net | 1,261 | 2,567 | 4,839 | 7,383 | ||||||||||||
Other income, net | 959 | 676 | 1,139 | 1,078 | ||||||||||||
Income (loss) from continuing operations before income taxes | (1,903 | ) | (830 | ) | (368 | ) | 10,580 | |||||||||
Provision for income taxes | 110 | 169 | 313 | 422 | ||||||||||||
Income (loss) from continuing operations | (2,013 | ) | (999 | ) | (681 | ) | 10,158 | |||||||||
Loss from discontinued operations | (19,334 | ) | (1,044 | ) | (24,984 | ) | (5,142 | ) | ||||||||
Net income (loss) | (21,347 | ) | (2,043 | ) | (25,665 | ) | 5,016 | |||||||||
Convertible preferred stock dividends and related accretion | (1,282 | ) | (1,248 | ) | (3,819 | ) | (3,721 | ) | ||||||||
Net income (loss) applicable to common stockholders | $ | (22,629 | ) | $ | (3,291 | ) | $ | (29,484 | ) | $ | 1,295 | |||||
Basic and diluted income (loss) per share attributable to common stockholders: | ||||||||||||||||
Continuing operations | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.04 | |||||
Discontinued operations | (0.13 | ) | (0.01 | ) | (0.16 | ) | (0.03 | ) | ||||||||
Net income (loss) attributable to common stockholders | $ | (0.15 | ) | $ | (0.02 | ) | $ | (0.19 | ) | $ | 0.01 | |||||
Shares used to calculate net income (loss) per share attributable to common stockholders: | ||||||||||||||||
Basic | 152,184 | 155,015 | 151,652 | 154,749 | ||||||||||||
Diluted | 152,184 | 155,015 | 151,652 | 165,166 | ||||||||||||
(1) Includes stock-based compensation as follows: | ||||||||||||||||
Cost of revenue | $ | 41 | $ | 38 | $ | 110 | $ | 87 | ||||||||
Sales and marketing | 161 | 259 | 370 | 905 | ||||||||||||
Product and web site development | 150 | 333 | 419 | 845 | ||||||||||||
General and administrative | 2,246 | 3,834 | 7,093 | 7,763 | ||||||||||||
$ | 2,598 | $ | 4,464 | $ | 7,992 | $ | 9,600 |
MOVE, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
| Nine Months Ended September 30, | |||||||
2008 | 2007 | |||||||
Cash flows from operating activities: | (unaudited) | |||||||
Income (loss) from continuing operations | $ | (681 | ) | $ | 10,158 | |||
Adjustments to reconcile income (loss) from continuing operations to net cash provided by continuing operating activities: | ||||||||
Depreciation | 8,435 | 7,322 | ||||||
Amortization of intangible assets | 582 | 564 | ||||||
Provision for doubtful accounts | 511 | 653 | ||||||
Gain on sales of property and equipment | (816 | ) | (333 | ) | ||||
Stock-based compensation and charges | 8,209 | 10,049 | ||||||
Change in market value of embedded derivative liability | (156 | ) | (688 | ) | ||||
Other non-cash items | 411 | (10 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 2,531 | (1,027 | ) | |||||
Other assets | (2,760 | ) | (4,473 | ) | ||||
Accounts payable and accrued expenses | 366 | 4,888 | ||||||
Deferred revenue | (4,312 | ) | (3,793 | ) | ||||
Net cash provided by continuing operating activities | 12,320 | 23,310 | ||||||
Net cash used in discontinued operating activities | (5,777 | ) | (2,748 | ) | ||||
Net cash provided by operating activities | 6,543 | 20,562 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (5,748 | ) | (15,897 | ) | ||||
Proceeds from sale of marketable equity securities | 27 | 15,743 | ||||||
Proceeds from the surrender of life insurance policy | — | 5,200 | ||||||
Proceeds from sale of property and equipment | 206 | 334 | ||||||
Purchases of intangible assets | — | (618 | ) | |||||
Maturities of short-term investments | 96,918 | 45,200 | ||||||
Purchases of short-term investments | (96,418 | ) | (67,275 | ) | ||||
Net used in continuing investing activities | (5,015 | ) | (17,313 | ) | ||||
Net cash provided by (used in) discontinued investing activities | 799 | (147 | ) | |||||
Net cash used in investing activities | (4,216 | ) | (17,460 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 2,889 | 2,821 | ||||||
Borrowings from line of credit | 64,700 | — | ||||||
Restricted cash | 166 | 952 | ||||||
Payments on capital lease obligations | (1,516 | ) | (1,415 | ) | ||||
Net cash provided by financing activities | 66,239 | 2,358 | ||||||
Change in cash and cash equivalents | 68,566 | 5,460 | ||||||
Cash and cash equivalents, beginning of period | 45,713 | 14,873 | ||||||
Cash and cash equivalents, end of period | $ | 114,279 | $ | 20,333 |
MOVE, INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands) | |||||||
| |||||||
September 30, 2008 | December 31, 2007 | ||||||
ASSETS | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 114,279 | $ | 45,713 | |||
Short-term investments | — | 129,900 | |||||
Accounts receivable, net | 12,587 | 15,645 | |||||
Other current assets | 13,479 | 10,111 | |||||
Assets held for sale | — | 24,417 | |||||
Total current assets | 140,345 | 225,786 | |||||
Property and equipment, net | 26,836 | 29,930 | |||||
Investments, long term | 121,000 | — | |||||
Goodwill, net | 17,181 | 17,181 | |||||
Intangible assets, net | 4,107 | 5,011 | |||||
Restricted cash | 3,203 | 3,369 | |||||
Other assets | 1,140 | 1,251 | |||||
Total assets | $ | 313,812 | $ | 282,528 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,643 | $ | 4,337 | |||
Accrued expenses | 29,390 | 28,446 | |||||
Deferred revenue | 30,443 | 34,975 | |||||
Obligation under capital leases | 651 | 1,894 | |||||
Line of credit | 64,700 | — | |||||
Liabilities held for sale | — | 5,429 | |||||
Total current liabilities | 128,827 | 75,081 | |||||
Obligation under capital leases | — | 273 | |||||
Other liabilities | 2,157 | 1,508 | |||||
Total liabilities | 130,984 | 76,862 | |||||
Series B convertible preferred stock | 105,008 | 101,189 | |||||
Stockholders’ equity: | |||||||
Series A convertible preferred stock | — | — | |||||
Common stock | 153 | 151 | |||||
Additional paid-in capital | 2,087,314 | 2,076,074 | |||||
Accumulated other comprehensive income | (7,740 | ) | 675 | ||||
Accumulated deficit | (2,001,907 | ) | (1,972,423 | ) | |||
Total stockholders’ equity | 77,820 | 104,477 | |||||
Total liabilities and stockholders’ equity | $ | 313,812 | $ | 282,528 |
MOVE, INC. | ||||||||||||||||
SEGMENT OPERATING RESULTS | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenue: | (unaudited) | |||||||||||||||
Real Estate Services | $ | 54,493 | $ | 55,936 | $ | 164,501 | $ | 164,209 | ||||||||
Consumer Media | 6,747 | 7,444 | 20,118 | 22,147 | ||||||||||||
Total revenue | $ | 61,240 | $ | 63,380 | $ | 184,619 | $ | 186,356 | ||||||||
Operating income (loss) from continuing operations(1) | ||||||||||||||||
Real Estate Services | $ | 13,390 | $ | 14,910 | $ | 39,164 | $ | 44,416 | ||||||||
Consumer Media | 664 | 175 | 634 | (824 | ) | |||||||||||
Unallocated | (18,177 | ) | (19,158 | ) | (46,144 | ) | (41,473 | ) | ||||||||
Operating income (loss) from continuing operations | $ | (4,123 | ) | $ | (4,073 | ) | $ | (6,346 | ) | $ | 2,119 | |||||
(1) Includes stock-based compensation as follows: | ||||||||||||||||
Real Estate Services | $ | 927 | $ | 1,445 | $ | 3,327 | $ | 3,081 | ||||||||
Consumer Media | 113 | 306 | 292 | 795 | ||||||||||||
Unallocated | 1,558 | 2,713 | 4,373 | 5,724 | ||||||||||||
$ | 2,598 | $ | 4,464 | $ | 7,992 | $ | 9,600 |
MOVE, INC. | ||||||||||||||||||
SEGMENT OPERATING RESULTS | ||||||||||||||||||
NET OF STOCK-BASED COMPENSATION EXPENSE | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
September 30, 2008 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Real Estate Services | Consumer Media | Unallocated | Stock-based Compensation | Total | ||||||||||||||
Revenue | $ | 54,493 | $ | 6,747 | $ | — | $ | — | $ | 61,240 | ||||||||
Cost of revenue | 9,660 | 1,855 | 248 | 41 | 11,804 | |||||||||||||
Gross profit | 44,833 | 4,892 | (248 | ) | (41 | ) | 49,436 | |||||||||||
Sales and marketing | 19,495 | 2,996 | 1,350 | 161 | 24,002 | |||||||||||||
Product and web site development | 5,359 | 433 | 879 | 150 | 6,821 | |||||||||||||
General and administrative | 5,411 | 608 | 10,269 | 2,246 | 18,534 | |||||||||||||
Amortization of intangibles | — | — | 188 | — | 188 | |||||||||||||
Restructuring charges | 251 | 78 | 3,685 | — | 4,014 | |||||||||||||
Total operating expenses | 30,516 | 4,115 | 16,371 | 2,557 | 53,559 | |||||||||||||
Operating income (loss) from continuing operations | $ | 14,317 | $ | 777 | $ | (16,619 | ) | $ | (2,598 | ) | $ | (4,123 | ) | |||||
Three Months Ended | ||||||||||||||||||
September 30, 2007 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Real Estate Services | Consumer Media | Unallocated | Stock-based Compensation | Total | ||||||||||||||
Revenue | $ | 55,936 | $ | 7,444 | $ | — | $ | — | $ | 63,380 | ||||||||
Cost of revenue | 8,864 | 1,566 | 585 | 38 | 11,053 | |||||||||||||
Gross profit | 47,072 | 5,878 | (585 | ) | (38 | ) | 52,327 | |||||||||||
Sales and marketing | 18,018 | 3,230 | 1,705 | 259 | 23,212 | |||||||||||||
Product and web site development | 6,681 | 1,341 | 260 | 333 | 8,615 | |||||||||||||
General and administrative | 6,018 | 826 | 9,801 | 3,834 | 20,479 | |||||||||||||
Amortization of intangibles | — | — | 194 | — | 194 | |||||||||||||
Litigation charges | — | — | 3,900 | — | 3,900 | |||||||||||||
Total operating expenses | 30,717 | 5,397 | 15,860 | 4,426 | 56,400 | |||||||||||||
Operating income (loss) from continuing operations | $ | 16,355 | $ | 481 | $ | (16,445 | ) | $ | (4,464 | ) | $ | (4,073 | ) |
MOVE, INC. | |||||||||||||||||||
SEGMENT OPERATING RESULTS | |||||||||||||||||||
NET OF STOCK-BASED COMPENSATION EXPENSE | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Nine Months Ended | |||||||||||||||||||
September 30, 2008 | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Real Estate Services | Consumer Media | Unallocated | Stock-based Compensation | Total | |||||||||||||||
Revenue | $ | 164,501 | $ | 20,118 | $ | — | $ | — | $ | 184,619 | |||||||||
Cost of revenue | 28,562 | 4,953 | 828 | 110 | 34,453 | ||||||||||||||
Gross profit | 135,939 | 15,165 | (828 | ) | (110 | ) | 150,166 | ||||||||||||
Sales and marketing | 56,759 | 9,772 | 4,367 | 370 | 71,268 | ||||||||||||||
Product and web site development | 16,762 | 1,209 | 2,120 | 419 | 20,510 | ||||||||||||||
General and administrative | 19,676 | 3,180 | 30,189 | 7,093 | 60,138 | ||||||||||||||
Amortization of intangibles | — | — | 582 | — | 582 | ||||||||||||||
Restructuring charges | 251 | 78 | 3,685 | — | 4,014 | ||||||||||||||
Total operating expenses | 93,448 | 14,239 | 40,943 | 7,882 | 156,512 | ||||||||||||||
Operating income (loss) from continuing operations | $ | 42,491 | $ | 926 | $ | (41,771 | ) | $ | (7,992 | ) | $ | (6,346 | ) | ||||||
Nine Months Ended | |||||||||||||||||||
September 30, 2007 | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Real Estate Services | Consumer Media | Unallocated | Stock-based Compensation | Total | |||||||||||||||
Revenue | $ | 164,209 | $ | 22,147 | $ | — | $ | — | $ | 186,356 | |||||||||
Cost of revenue | 25,562 | 4,212 | 1,781 | 87 | 31,642 | ||||||||||||||
Gross profit | 138,647 | 17,935 | (1,781 | ) | (87 | ) | 154,714 | ||||||||||||
Sales and marketing | 52,855 | 10,404 | 4,125 | 905 | 68,289 | ||||||||||||||
Product and web site development | 20,139 | 4,596 | 1,033 | 845 | 26,613 | ||||||||||||||
General and administrative | 18,156 | 2,964 | 24,346 | 7,763 | 53,229 | ||||||||||||||
Amortization of intangibles | — | — | 564 | — | 564 | ||||||||||||||
Litigation charges | — | — | 3,900 | — | 3,900 | ||||||||||||||
Total operating expenses | 91,150 | 17,964 | 33,968 | 9,513 | 152,595 | ||||||||||||||
Operating income (loss) from continuing operations | $ | 47,497 | $ | (29 | ) | $ | (35,749 | ) | $ | (9,600 | ) | $ | 2,119 |
MOVE, INC. | |||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE | |||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS EXCLUDING STOCK-BASED COMPENSATION AND | |||||||||||||||
(in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||
(unaudited) | |||||||||||||||
Operating income (loss) from continuing operations | $ | (4,123 | ) | $ | (4,073 | ) | $ | (6,346 | ) | $ | 2,119 | ||||
Plus: | |||||||||||||||
Stock-based charges | 108 | 165 | 217 | 449 | |||||||||||
Amortization of intangible assets | 188 | 194 | 582 | 564 | |||||||||||
Depreciation | 2,923 | 2,600 | 8,435 | 7,322 | |||||||||||
Restructuring charges | 4,014 | — | 4,014 | — | |||||||||||
Litigation charge | — | 3,900 | — | 3,900 | |||||||||||
Stock-based compensation | 2,598 | 4,464 | 7,992 | 9,600 | |||||||||||
Adjusted EBITDA | $ | 5,708 | $ | 7,250 | $ | 14,894 | $ | 23,954 |
CONTACT:
The Blueshirt Group
Todd Friedman/Stacie Bosinoff, 415-217-7722
todd@blueshirtgroup.com
Stacie@blueshirtgroup.com