Exhibit 99.1
United Online Reports Third Quarter Results
WOODLAND HILLS, Calif.--(BUSINESS WIRE)--November 3, 2010--United Online, Inc. (Nasdaq: UNTD), a leading provider of consumer products and services over the Internet, today reported financial results for its third quarter ended September 30, 2010.
“Revenues and adjusted OIBDA came in above our guidance ranges for the quarter,” commented Mark R. Goldston, Chairman, President and Chief Executive Officer of United Online. “And while 2010 has proven to be a challenging year for the company in many respects, during the quarter we repurchased 2.2 million shares of United Online common stock — our first stock repurchases in more than five years — underscoring our confidence in the company’s future.”
“I am encouraged by our progress managing the transition at Classmates.com to increasingly focus on nostalgic content,” Goldston added. “In a matter of months, we have made major enhancements to the website that now showcases a large compilation of nostalgic content including high school yearbooks, movie trailers, music tracks, and photographic images. Today, Classmates members can rekindle memories of popular movies, television shows, music, sports moments, and lifestyle trends during any year of their choosing from the 1940s through the 1990s. Looking forward, we plan to substantially increase the amount of nostalgic content available on Classmates.com to include a compelling range of vintage magazines, television commercials, newsreels, and other video content.”
“Separately, we announced today that FTD has entered into an exclusive agreement with Batesville Casket Company, one of the leaders in the very important sympathy category, to provide customized, co-branded floral websites to participating licensed funeral homes in the U.S. and Canada,” Goldston said. “We believe the partnership will be beneficial for our floral network members and will expand our presence in this critical market. In addition, we structured the Batesville agreement so that the vast majority of the floral orders generated will be fulfilled by members of FTD’s floral network.”
Summary Results for Third Quarter Ended September 30, 2010:
The following table summarizes key financial results for the third quarter ended September 30, 2010:
| (in millions, except per share and percentage figures) | |||||||||||
Financial Highlights | Q3 2010 | Q3 2009 | % Change | |||||||||
| FTD revenues | $ 105.0 | $ 107.5 | (2 | %) | ||||||||
| Classmates Media revenues | 49.1 | 58.7 | (16 | %) | ||||||||
| Communications revenues | 40.2 | 50.7 | (21 | %) | ||||||||
| Intersegment eliminations | (0.8 | ) | (0.7 | ) | N/A | |||||||
| Consolidated revenues | $ 193.5 | $ 216.2 | (10 | %) | ||||||||
| GAAP operating income | $ 25.6 | $ 32.7 | (22 | %) | ||||||||
| Adjusted OIBDA(1) | $ 46.4 | $ 57.5 | (19 | %) | ||||||||
| GAAP net income applicable to common stockholders | $ 11.4 | $ 14.9 | (24 | %) | ||||||||
| GAAP diluted net income per common share | $ 0.13 | $ 0.18 | (28 | %) | ||||||||
| Adjusted net income applicable to common stockholders(2) | $ 21.5 | $ 28.3 | (24 | %) | ||||||||
Adjusted diluted net income per common share(2) | $ 0.25 | $ 0.33 | (24 | %) | ||||||||
Scott H. Ray, Executive Vice President and Chief Financial Officer, commented, “During the quarter, we repurchased 2.2 million shares of our common stock in open market transactions for $11.0 million and paid $9.3 million in cash dividends. Since declaring our first dividend in 2005, United Online has now made a total of $266 million in cash dividend payments. At September 30, 2010, our balance sheet remained strong and included nearly $90 million in cash and cash equivalents.”
Cash Flows and Balance Sheet Highlights:
Dividends and Stock Repurchases:
Segment Results for Third Quarter Ended September 30, 2010:
FTD:
| (in millions, except percentages) | % Change @ | |||||||||||||||||
Financial Highlights | Q3 2010 | Q3 2009 | % Change | Constant Currency | ||||||||||||||
| Products revenues | $ | 77.8 | $ | 77.9 | — | |||||||||||||
| Services revenues | 27.1 | 28.5 | (5 | %) | ||||||||||||||
| Advertising revenues | 0.1 | 1.1 | (87 | %) | ||||||||||||||
| Segment revenues | $ | 105.0 | $ | 107.5 | (2 | %) | (1 | %) | ||||||||||
| Segment income from operations | $ | 12.7 | $ | 15.3 | (17 | %) | ||||||||||||
| Segment adjusted OIBDA(1) | $ | 14.2 | $ | 17.3 | (18 | %) | ||||||||||||
| as a % of segment revenues(1) | 13.5 | % | 16.1 | % | ||||||||||||||
| % Change @ | ||||||||||||||||||
| Metrics Highlights | Q3 2010 | Q3 2009 | % Change | Constant Currency | ||||||||||||||
| Consumer orders(4) (in thousands) | 1,085 | 1,075 | 1 | % | ||||||||||||||
| Average order value(4) | $ | 60.77 | $ | 61.29 | (1 | %) | 1 | % | ||||||||||
| British Pound / U.S. Dollar exchange rate (average) | 1.55 | 1.64 | (5 | %) | ||||||||||||||
Classmates Media:
| (in millions, except percentages) | |||||||||
Financial Highlights | Q3 2010 | Q3 2009 | % Change | ||||||
| Services revenues | $ 33.2 | $ 38.3 | (13%) | ||||||
| Advertising revenues | 15.9 | 20.4 | (22%) | ||||||
| Segment revenues | $ 49.1 | $ 58.7 | (16%) | ||||||
| Segment income from operations | $ 11.8 | $ 17.0 | (31%) | ||||||
| Segment adjusted OIBDA(1) | $ 13.8 | $ 20.4 | (32%) | ||||||
| as a % of segment revenues(1) | 28.2% | 34.8% | |||||||
| (in thousands, except percentages) | |||||||||
| Metrics Highlights | Q3 2010 | Q3 2009 | % Change | ||||||
| Segment pay accounts(5) | 4,795 | 4,785 | — | ||||||
| Net quarterly growth (decline) in segment pay accounts(5) | (187) | 164 | N/A | ||||||
| Segment active accounts(5) | 15.0 | 16.9 | (11%) | ||||||
| ARPU(6) | $ 2.26 | $ 2.71 | (17%) | ||||||
Communications:
| (in millions, except percentages) | ||||||||||||||
Financial Highlights | Q3 2010 | Q3 2009 | % Change | |||||||||||
| Services revenues | $ | 32.9 | $ | 42.1 | (22 | %) | ||||||||
| Advertising revenues | 7.3 | 8.6 | (16 | %) | ||||||||||
| Segment revenues | $ | 40.2 | $ | 50.7 | (21 | %) | ||||||||
| Segment income from operations | $ | 15.8 | $ | 15.6 | 1 | % | ||||||||
| Segment adjusted OIBDA(1) | $ | 18.4 | $ | 19.7 | (7 | %) | ||||||||
| as a % of segment revenues(1) | 45.7 | % | 39.0 | % | ||||||||||
| (in thousands, except percentages) | ||||||||||||||
| Metrics Highlights | Q3 2010 | Q3 2009 | % Change | |||||||||||
| Segment pay accounts(5) | 1,096 | 1,440 | (24 | %) | ||||||||||
| ARPU(6) | $ | 9.58 | $ | 9.43 | 2 | % | ||||||||
Business Outlook:
The following forward-looking information includes certain projections made by management as of the date of this press release. The company does not intend to revise or update this information, except as required by law, and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. Factors include, without limitation, the factors referenced later in this announcement under the caption “Cautionary Information Regarding Forward-Looking Statements.” These and other factors are discussed in more detail in the company’s filings with the Securities and Exchange Commission.
Fourth-Quarter 2010 Guidance:
| Fourth-Quarter 2010 (in millions) | Guidance | ||
| Revenues | $223.0 ─ $229.0 | ||
| Adjusted OIBDA(1) | $45.0 ─ $50.0 | ||
| Fourth-Quarter 2010 Supplemental Information (in millions) | Guidance | ||
| Net interest expense | $5.7 | ||
| Shares used to calculated diluted net income per common share | 86.6 | ||
| Shares used to calculated adjusted diluted net income per common share(2) | 86.7 | ||
The table below reconciles the company’s guidance for operating income, a GAAP measure, to adjusted OIBDA.
| Fourth-Quarter 2010 (in millions) | Guidance | ||
| Operating Income | $23.9 ─ $28.9 | ||
| Depreciation | 6.7 | ||
| Amortization of intangible assets | 7.9 | ||
| Stock-based compensation | 6.5 | ||
| Adjusted OIBDA(1) | $45.0 ─ $50.0 | ||
Investor Conference Call on November 3, 2010 at 5:00 p.m. ET (2:00 p.m. PT):
United Online will host a conference call on November 3, 2010 at 5:00 p.m. ET (2:00 p.m. PT) to discuss its third quarter 2010 results. To participate, please dial 888-389-5997 (or 719-457-2631 outside of the U.S.) and provide the confirmation code, 7731449. A live webcast of the call, along with a presentation containing financial highlights for the third quarter ended September 30, 2010, can also be accessed through the “investors” section of the company’s website located at www.unitedonline.com. The presentation and a replay of the broadcast will be available on the website for seven days, or by dialing 888-203-1112 (or 719-457-0820 outside of the U.S.) and the confirmation code, 7731449.
Non-GAAP Measures:
In evaluating the company’s performance, management uses one or more of the following measures that are not determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”): adjusted OIBDA, adjusted net income and free cash flow. These measures are adjusted to exclude certain non-cash expenses such as depreciation, amortization, stock-based compensation, and impairment of goodwill, intangible assets and long-lived assets. In addition, these measures are adjusted to exclude the items discussed below because such items are either operating expenses which would not otherwise have been incurred by the company in the normal course of the company’s business operations or are not reflective of the company’s core results over time. These items may include recurring as well as non-recurring items. These adjustments should not be construed as an inference that all of these adjustments or costs are unusual, infrequent or non-recurring. For example, certain restructuring charges may be considered recurring given the company’s ongoing efforts to be more cost effective and efficient, certain litigation or dispute settlement charges or gains may be viewed as recurring given that the company is continually involved in, and resolving, litigation, arbitration, investigations, disputes and similar matters, and certain transaction-related costs may be deemed recurring given the company’s regular evaluation of potential transactions. Notwithstanding that certain charges, costs or gains may be considered recurring, in order to provide meaningful comparisons, the company believes that it is appropriate to adjust for such charges, costs or gains because they are not reflective of the company’s core results and tend to vary based on timing, frequency and magnitude.
Restructuring Charges – Restructuring charges consist primarily of severance expense, facility closure and relocation costs.
Litigation or Dispute Settlement Charges or Gains – These charges or gains include estimated losses for which we have established a reserve, as well as actual settlements, judgments, fines, penalties, assessments or other resolutions against, or in favor of, the company related to litigation, arbitration, investigations, disputes or similar matters. Insurance recoveries received by the company related to such matters are also included in these adjustments.
Transaction-Related Costs – The company excludes certain expense items resulting from actual or potential transactions such as business combinations, mergers, acquisitions, and financing transactions, including (i) compensation expenses and (ii) expenses for advisors and representatives such as investment bankers, consultants, attorneys, and accounting firms. The compensation expenses may include transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees.
During the first quarter of 2010, in connection with the updated guidance issued by the Securities and Exchange Commission (“SEC”) in January 2010, the company updated its definitions of non-GAAP measures to modify the definition of restructuring charges and to include litigation or dispute settlement charges or gains and transaction-related costs. Such changes were made on a prospective basis and prior periods have not been adjusted. Comparable charges for the quarter and nine months ended September 30, 2009 were not material.
Definitions of Non-GAAP Measures:
(1) Adjusted operating income before depreciation and amortization (“adjusted OIBDA”) is defined by the company as operating income before depreciation; amortization; stock-based compensation; restructuring charges; litigation or dispute settlement charges or gains; transaction-related costs; and impairment of goodwill, intangible assets and long-lived assets. The company’s definition of adjusted OIBDA has been modified from time to time. Management believes that because adjusted OIBDA excludes (i) certain non-cash expenses (such as depreciation, amortization, stock-based compensation, and impairment of goodwill, intangible assets and long-lived assets) and (ii) expenses that are not reflective of the company's core operating results over time (such as restructuring charges, litigation or dispute settlement charges or gains, and transaction-related costs), this measure provides investors with additional useful information to measure the company's financial performance, particularly with respect to changes in performance from period to period. Management uses adjusted OIBDA to measure the company's performance. The company's board of directors has used this measure as a basis in determining certain compensation incentives for certain members of the company's management. Adjusted OIBDA is not determined in accordance with GAAP and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A limitation associated with the use of adjusted OIBDA is that it does not reflect the periodic costs of certain tangible and intangible assets used in generating revenues in the company's business. Management evaluates the costs of such tangible and intangible assets through other financial activities such as evaluations of capital expenditures and purchase accounting. An additional limitation associated with this measure is that it does not include stock-based compensation expenses related to the company's workforce. Management compensates for this limitation by providing a summary of stock-based compensation expenses within the accompanying tables and in the footnotes accompanying its financial statements. A further limitation associated with the use of this measure is that it does not reflect the costs of restructuring charges, litigation or dispute settlement charges or gains, transaction-related costs, and the impairment of goodwill, intangible assets and long-lived assets. Management compensates for this limitation by providing supplemental information about such charges, gains and costs within its financial press releases and SEC filings, when applicable. An additional limitation associated with the use of this measure is that the term “adjusted OIBDA” does not have a standardized meaning. Therefore, other companies may use the same or a similarly named measure but exclude different items or use different computations, which may not provide investors a comparable view of the company's performance in relation to other companies. Management compensates for this limitation by presenting the most comparable GAAP measure, operating income, directly ahead of adjusted OIBDA within its financial press releases and by providing a reconciliation that shows and describes the adjustments made. A reconciliation to operating income is provided in the accompanying tables. In addition, many of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future.
Adjusted OIBDA for each of the company's segments is defined by the company as segment income from operations, as set forth in the company's Forms 10-K and Forms 10-Q, before stock-based compensation, restructuring charges, litigation or dispute settlement charges or gains, transaction-related costs, and the impairment of goodwill, intangible assets and long-lived assets. The company’s definition of adjusted OIBDA for each of the company’s segments has been modified from time to time. Management believes that because segment adjusted OIBDA and segment adjusted OIBDA as a percentage of segment revenues exclude (1) certain non-cash expenses (such as stock-based compensation, and the impairment of goodwill, intangible assets and long-lived assets); and (2) expenses that are not reflective of the segment’s core operating results over time (such as restructuring charges, litigation or dispute settlement charges or gains, and transaction-related costs), these measures provide investors with additional useful information to evaluate the company’s segment financial performance, particularly with respect to changes in performance from period to period. Segment adjusted OIBDA and segment adjusted OIBDA as a percentage of segment revenues are not determined in accordance with GAAP and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A limitation associated with these measures is that they do not include stock-based compensation expenses related to the company’s workforce. Management compensates for this limitation by providing a summary of stock-based compensation expenses within the accompanying tables and in the footnotes accompanying its financial statements. A further limitation associated with the use of these measures is that they do not reflect the costs of restructuring charges, litigation or dispute settlement charges or gains, transaction-related costs, and impairment charges related to an operating segment. Management compensates for this limitation by providing supplemental information about such charges, gains and costs by segment within its financial press releases and SEC filings, when applicable. A reconciliation to segment income from operations, its most comparable GAAP measure, is provided in the accompanying tables.
(2) Adjusted net income is defined by the company as net income before the after-tax effect of: stock-based compensation; amortization of intangible assets; impairment of goodwill, intangible assets and long-lived assets; restructuring charges; litigation or dispute settlement charges or gains; transaction-related costs; and the re-measurement of certain deferred tax assets. Adjusted diluted net income per common share includes the adjustment for shares resulting from the elimination of stock-based compensation. Management believes that adjusted net income and adjusted diluted net income per common share provide investors with additional useful information to measure the company’s financial performance, particularly with respect to changes in performance from period to period, because these measures are exclusive of (i) certain non-cash expenses (such as stock-based compensation, amortization of intangible assets, and the impairment of goodwill, intangible assets and long-lived assets) and (ii) expenses that are not reflective of the company’s core results over time (such as restructuring charges, litigation or dispute settlement charges or gains, and transaction-related costs). Management also uses adjusted net income and adjusted diluted net income per common share for this purpose. Adjusted net income and adjusted diluted net income per common share are not determined in accordance with GAAP and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The limitations of adjusted net income and adjusted diluted net income per common share are that, similar to adjusted OIBDA, they do not include certain costs, and the terms “adjusted net income” and “adjusted diluted net income per common share” do not have standardized meanings. Therefore, other companies may use the same or similarly named measures but exclude different items or use different computations, which may not provide investors a comparable view of the company’s performance in relation to other companies. Management compensates for this limitation by presenting the most comparable GAAP measures, net income and diluted net income per common share, directly ahead of adjusted net income and adjusted diluted net income per common share within its financial press releases and by providing a reconciliation of adjusted net income that shows and describes the adjustments made. A reconciliation of adjusted net income to net income, its most comparable GAAP measure, is provided in the accompanying tables.
(3) Free cash flow is defined by the company as net cash provided by operating activities, less capital expenditures and cash received for litigation or dispute settlement gains, and plus the excess tax benefits from equity awards, cash paid for restructuring charges, cash paid for litigation or dispute settlement charges, and cash paid for transaction-related costs. Management believes that free cash flow provides investors with additional useful information to measure operating liquidity because it reflects the company’s operating cash flows after investing in capital assets and prior to cash paid for restructuring charges, cash paid or received for litigation or dispute settlement charges or gains, and cash paid for transaction-related costs. It also fully reflects the tax benefits realized by the company from stock-based compensation. This measure is used by management, and may also be useful for investors, to assess the company’s ability to pay its quarterly dividend, repay debt obligations, generate cash flow for a variety of strategic opportunities, including reinvestment in the business, and effect potential acquisitions and share repurchases. Free cash flow is not determined in accordance with GAAP and should be considered in addition to, not as a substitute for or superior to, measures determined in accordance with GAAP. A limitation of free cash flow is that it does not represent the total increase or decrease in cash during the period. An additional limitation associated with the use of this measure is that the term “free cash flow” does not have a standardized meaning. Therefore, other companies may use the same or a similarly named measure but exclude different items or use different computations, which may not provide investors a comparable view of the company’s performance in relation to other companies. Management compensates for this limitation by presenting the most comparable GAAP measure, net cash provided by operating activities, directly ahead of free cash flow within its financial press releases and by providing a reconciliation that shows and describes the adjustments made. A reconciliation to net cash provided by operating activities is provided in the accompanying tables.
(4) Consumer orders are orders delivered during the period that originated in the U.S. and Canada, primarily from the www.ftd.com website and the 1-800-SEND-FTD telephone number, and in the U.K. and the Republic of Ireland, primarily from the www.interflora.co.uk and www.interflora.ie websites and various telephone numbers. Orders originating with a florist or other retail location for delivery to consumers are not included.
Average order value represents the average U.S. Dollar amount received for consumer orders delivered during a period. This average U.S. Dollar amount is determined after translating the local currency amounts received for orders delivered in the U.K. and the Republic of Ireland into U.S. Dollars. Average order value includes merchandise revenue and shipping and service fees paid by the consumer, less certain discounts and certain refunds.
(5) A pay account is defined as a member who has subscribed to, and paid for, our Classmates Media or Communications services, and whose subscription has not terminated or expired. A pay account does not equate to a unique subscriber since one subscriber could have several pay accounts. At any point in time, our pay account base includes a number of accounts receiving a free period of service as either a promotion or retention tool and a number of accounts that have notified us that they are terminating their service but whose service remains in effect.
Classmates Media segment active accounts are defined as the sum of all social networking pay accounts as of the date presented; the monthly average for the period of all free social networking accounts who have visited the company’s domestic or international social networking websites (excluding The Names Database) at least once during the period; and the monthly average for the period of all online loyalty marketing members who have earned or redeemed points during such period. Communications segment active accounts include all Communications segment pay accounts as of the date presented combined with the number of free Internet access and email accounts that logged on to the company’s services at least once during the preceding 31 days.
(6) ARPU is calculated by dividing services revenues generated from the pay accounts of our Classmates Media or Communications segment, as applicable, for a period by the average number of pay accounts for that period, divided by the number of months in that period.
(7) Churn is calculated as the total number of pay accounts that terminated or expired in a period divided by the average number of pay accounts for that period, divided by the number of months in that period.
About United Online®:
United Online, Inc. (Nasdaq: UNTD) is a leading provider of consumer products and services over the Internet, where the company’s brands have attracted a large online audience that includes more than 60 million registered consumer accounts. The company’s floral and related offerings include products and services for consumers and retail florists, as well as for other retail locations offering floral products and services, in the U.S., Canada, the United Kingdom, and the Republic of Ireland. The floral business utilizes the highly recognized FTD (www.ftd.com) and Interflora (www.interflora.co.uk) brands, both supported by the Mercury Man logo that is displayed in more than 40,000 retail floral shops worldwide. The company’s Classmates Media services include online social networking (www.classmates.com) and online loyalty marketing (www.mypoints.com) in North America. Classmates Media also operates online social networking websites in a number of European countries. The company’s Communications services include value-priced Internet access and email provided by NetZero (www.netzero.com) and Juno (www.juno.com).
Headquartered in Woodland Hills, CA, United Online operates through a global network of locations in the U.S., the United Kingdom, Germany, and India. More information about United Online is available on the company’s website located at: www.unitedonline.com.
Cautionary Information Regarding Forward-Looking Statements:
This release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,” “business outlook,” “estimate,” or similar expressions constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements about future financial performance; revenues; operating expenses; operating income; capital expenditures; depreciation and amortization; stock-based compensation; and planned business initiatives, products, services and features. Potential factors that could cause actual results to differ materially from those in the forward-looking statements include, among others: the severity and duration of current economic conditions; risks associated with the commercialization of new products, services or features or the success of new business models; risks associated with litigation and governmental regulations or investigations, including reviews of business practices such as marketing, billing, renewal, and post-transaction sales practices; changes in the floral industry; the company’s inability to retain or grow its free and pay accounts and the members of the floral network; the effect of competition; changes in marketing conditions and laws; the company’s inability to maintain or increase its advertising revenues; changes in the online advertising market; financial market risk resulting from fluctuations in foreign currency exchange rates, particularly the British Pound and Euro; the effects of seasonality; the company’s inability to enforce or defend its ownership and use of intellectual property; changes in stock-based compensation due to future equity issuances or other reasons; changes in amortization or depreciation due to a variety of factors; potential write down, reserve against or impairment of assets including receivables, goodwill, intangible assets or other assets; changes in tax laws, the company’s business or other factors that would impact anticipated tax benefits; the company’s inability to achieve the expected benefits of its reductions-in-force or any other cost-reduction initiatives; that the company will incur restructuring and related charges; problems associated with the company’s operations, systems or technologies; the company’s inability to retain key customers, vendors and personnel; the impact of, and restrictions associated with, the company’s indebtedness; as well as the risk factors disclosed in the company’s filings with the Securities and Exchange Commission (http://www.sec.gov), including, without limitation, information under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as the date hereof. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that may cause actual performance and results to differ materially from those predicted. Reported results should not be considered an indication of future performance. Except as required by law, the company undertakes no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
| UNITED ONLINE, INC. | ||||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues: | ||||||||||||||||
| Services | $ | 115,781 | $ | 138,337 | $ | 363,734 | $ | 434,919 | ||||||||
| Products | 77,760 | 77,869 | 324,218 | 305,723 | ||||||||||||
| Total revenues | 193,541 | 216,206 | 687,952 | 740,642 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenues-services (a) | 25,008 | 26,274 | 75,688 | 83,879 | ||||||||||||
| Cost of revenues-products (a) | 59,386 | 58,288 | 244,799 | 223,466 | ||||||||||||
| Sales and marketing(a) | 34,783 | 46,146 | 133,926 | 155,584 | ||||||||||||
| Technology and development(a) | 14,334 | 15,700 | 42,329 | 49,637 | ||||||||||||
| General and administrative(a) | 26,333 | 28,111 | 84,576 | 88,632 | ||||||||||||
| Amortization of intangible assets | 8,020 | 9,013 | 24,298 | 26,252 | ||||||||||||
| Restructuring charges | 70 | - | 1,061 | - | ||||||||||||
| Total operating expenses | 167,934 | 183,532 | 606,677 | 627,450 | ||||||||||||
| Operating income | 25,607 | 32,674 | 81,275 | 113,192 | ||||||||||||
| Interest income | 382 | 498 | 1,259 | 1,184 | ||||||||||||
| Interest expense | (5,471 | ) | (7,542 | ) | (18,934 | ) | (24,547 | ) | ||||||||
| Other income (expense), net | (40 | ) | 567 | 95 | 698 | |||||||||||
| Income before income taxes | 20,478 | 26,197 | 63,695 | 90,527 | ||||||||||||
| Provision for income taxes | 8,319 | 10,042 | 26,358 | 38,052 | ||||||||||||
| Net income | $ | 12,159 | $ | 16,155 | $ | 37,337 | $ | 52,475 | ||||||||
| Income allocated to participating securities | (747 | ) | (1,222 | ) | (2,334 | ) | (3,491 | ) | ||||||||
| Net income applicable to common stockholders | $ | 11,412 | $ | 14,933 | $ | 35,003 | $ | 48,984 | ||||||||
| Basic net income per common share | $ | 0.13 | $ | 0.18 | $ | 0.40 | $ | 0.59 | ||||||||
| Shares used to calculate basic net income per common share | 86,649 | 84,028 | 86,479 | 83,372 | ||||||||||||
| Diluted net income per common share | $ | 0.13 | $ | 0.18 | $ | 0.40 | $ | 0.58 | ||||||||
| Shares used to calculate diluted net income per common share | 87,069 | 84,688 | 87,134 | 83,807 | ||||||||||||
| Shares outstanding at end of period | 85,565 | 84,236 | 85,565 | 84,236 | ||||||||||||
| (a) Stock-based compensation was allocated as follows: | ||||||||||||||||
| Cost of revenues-services | $ | 112 | $ | 201 | $ | 426 | $ | 728 | ||||||||
| Cost of revenues-products | 7 | 20 | 37 | 20 | ||||||||||||
| Sales and marketing | 976 | 1,421 | 3,179 | 4,120 | ||||||||||||
| Technology and development | 722 | 1,202 | 2,550 | 3,713 | ||||||||||||
| General and administrative | 4,875 | 6,748 | 14,721 | 20,623 | ||||||||||||
| Total stock-based compensation | $ | 6,692 | $ | 9,592 | $ | 20,913 | $ | 29,204 | ||||||||
| UNITED ONLINE, INC. | ||||||||||||||||||
| Unaudited Reconciliations of Non-GAAP Financial Measures | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||
| Unaudited Reconciliation of Operating Income to Adjusted OIBDA (1) | ||||||||||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| Operating income | $ | 25,607 | $ | 32,674 | $ | 81,275 | $ | 113,192 | ||||||||||
| Depreciation | 6,604 | 6,177 | 20,168 | 18,809 | ||||||||||||||
| Amortization of intangible assets | 8,054 | 9,013 | 24,335 | 26,252 | ||||||||||||||
| Operating income before depreciation and amortization | 40,265 | 47,864 | 125,778 | 158,253 | ||||||||||||||
| Stock-based compensation | 6,692 | 9,592 | 20,913 | 29,204 | ||||||||||||||
| Restructuring charges | 70 | - | 1,061 | - | ||||||||||||||
| Litigation or dispute settlement charges (gains) | (600 | ) | - | 1,367 | - | |||||||||||||
| Transaction-related costs | - | - | 1,989 | - | ||||||||||||||
| Adjusted OIBDA | $ | 46,427 | $ | 57,456 | $ | 151,108 | $ | 187,457 | ||||||||||
| Unaudited Reconciliation of Segment Income from Operations to Segment Adjusted OIBDA(1) | ||||||||||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| FTD: | ||||||||||||||||||
| Segment income from operations | $ | 12,680 | $ | 15,253 | $ | 44,302 | $ | 58,392 | ||||||||||
| Stock-based compensation | 1,701 | 2,005 | 5,576 | 6,058 | ||||||||||||||
| Restructuring charges | 70 | - | 1,152 | - | ||||||||||||||
| Litigation or dispute settlement charges (gains) | (240 | ) | - | 400 | - | |||||||||||||
| Transaction-related costs | - | - | 659 | - | ||||||||||||||
| Segment adjusted OIBDA | $ | 14,211 | $ | 17,258 | $ | 52,089 | $ | 64,450 | ||||||||||
| Classmates Media: | ||||||||||||||||||
| Segment income from operations | $ | 11,790 | $ | 16,998 | $ | 32,844 | $ | 43,276 | ||||||||||
| Stock-based compensation | 2,415 | 3,451 | 6,730 | 10,881 | ||||||||||||||
| Restructuring benefits | - | - | (91 | ) | - | |||||||||||||
| Litigation or dispute settlement charges (gains) | (360 | ) | - | 967 | - | |||||||||||||
| Transaction-related costs | - | - | 663 | - | ||||||||||||||
| Segment adjusted OIBDA | $ | 13,845 | $ | 20,449 | $ | 41,113 | $ | 54,157 | ||||||||||
| Communications: | ||||||||||||||||||
| Segment income from operations | $ | 15,795 | $ | 15,613 | $ | 48,632 | $ | 56,585 | ||||||||||
| Stock-based compensation | 2,576 | 4,136 | 8,607 | 12,265 | ||||||||||||||
| Transaction-related costs | - | - | 667 | - | ||||||||||||||
| Segment adjusted OIBDA | $ | 18,371 | $ | 19,749 | $ | 57,906 | $ | 68,850 | ||||||||||
| UNITED ONLINE, INC. | ||||||||||||||||||||
| Unaudited Reconciliation of Net Income to Adjusted Net Income(2) | ||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
| Net income | $ | 12,159 | $ | 16,155 | $ | 37,337 | $ | 52,475 | ||||||||||||
| Income allocated to participating securities | (747 | ) | (1,222 | ) | (2,334 | ) | (3,815 | ) | ||||||||||||
| Net income applicable to common stockholders | 11,412 | 14,933 | 35,003 | 48,660 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||
| Stock-based compensation | 6,692 | 9,592 | 20,913 | 29,204 | ||||||||||||||||
| Amortization of intangible assets | 8,054 | 9,013 | 24,335 | 26,252 | ||||||||||||||||
| Restructuring charges | 70 | - | 1,061 | - | ||||||||||||||||
| Litigation or dispute settlement charges (gains) | (600 | ) | - | 1,117 | - | |||||||||||||||
| Transaction-related costs | - | - | 1,989 | - | ||||||||||||||||
| 25,628 | 33,538 | 84,418 | 104,116 | |||||||||||||||||
| Income tax effect of adjusting entries | (4,142 | ) | (5,259 | ) | (14,873 | ) | (15,706 | ) | ||||||||||||
| Adjusted net income applicable to common stockholders | $ | 21,486 | $ | 28,279 | $ | 69,545 | $ | 88,410 | ||||||||||||
| GAAP net income per common share: | ||||||||||||||||||||
| Basic net income per common share | $ | 0.13 | $ | 0.18 | $ | 0.40 | $ | 0.59 | ||||||||||||
| Shares used to calculate basic net income per common share | 86,649 | 84,028 | 86,479 | 83,372 | ||||||||||||||||
| Diluted net income per common share | $ | 0.13 | $ | 0.18 | $ | 0.40 | $ | 0.58 | ||||||||||||
| Shares used to calculate diluted net income per common share | 87,069 | 84,688 | 87,134 | 83,807 | ||||||||||||||||
| Adjusted net income per common share: | ||||||||||||||||||||
| Adjusted basic net income per common share | $ | 0.25 | $ | 0.34 | $ | 0.80 | $ | 1.06 | ||||||||||||
| Shares used to calculate adjusted basic net income per common share | 86,649 | 84,028 | 86,479 | 83,372 | ||||||||||||||||
| Adjusted diluted net income per common share | $ | 0.25 | $ | 0.33 | $ | 0.80 | $ | 1.05 | ||||||||||||
| Shares used to calculate adjusted diluted net income per common share | 87,119 | 84,878 | 87,240 | 84,075 | ||||||||||||||||
| UNITED ONLINE, INC. | ||||||||
| Unaudited Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| September 30, | December 31, | |||||||
| 2010 | 2009 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 89,680 | $ | 115,509 | ||||
| Accounts receivable, net | 45,096 | 55,874 | ||||||
| Deferred tax assets, net | 15,711 | 15,797 | ||||||
| Property and equipment, net | 62,092 | 63,547 | ||||||
| Goodwill and intangible assets, net | 728,804 | 756,671 | ||||||
| Other assets | 34,418 | 42,536 | ||||||
| Total assets | $ | 975,801 | $ | 1,049,934 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Accounts payable | $ | 53,214 | $ | 71,668 | ||||
| Accrued liabilities | 47,322 | 50,428 | ||||||
| Member redemption liability | 24,074 | 25,755 | ||||||
| Deferred revenue | 75,360 | 77,634 | ||||||
| Debt, net of discounts | 277,085 | 328,946 | ||||||
| Deferred tax liabilities, net | 40,477 | 44,788 | ||||||
| Other liabilities | 18,280 | 18,064 | ||||||
| Total liabilities | 535,812 | 617,283 | ||||||
| Stockholders' equity | 439,989 | 432,651 | ||||||
| Total liabilities and stockholders' equity | $ | 975,801 | $ | 1,049,934 | ||||
| UNITED ONLINE, INC. | ||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||
| Net income | $ | 12,159 | $ | 16,155 | $ | 37,337 | $ | 52,475 | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation, amortization and stock-based compensation | 21,350 | 24,782 | 65,416 | 74,265 | ||||||||||||||||
| Provision for doubtful accounts receivable | 1,525 | 1,811 | 4,070 | 4,687 | ||||||||||||||||
| Accretion of discounts and amortization of debt issue costs | 617 | 1,061 | 3,337 | 3,883 | ||||||||||||||||
| Deferred taxes and other | (1,385 | ) | 1,130 | (4,114 | ) | (4,089 | ) | |||||||||||||
| Tax shortfalls from equity awards | (423 | ) | (1,078 | ) | (521 | ) | (2,704 | ) | ||||||||||||
| Excess tax benefits from equity awards | (93 | ) | (81 | ) | (442 | ) | (94 | ) | ||||||||||||
| Change in operating assets and liabilities: | ||||||||||||||||||||
| Accounts receivable | (4,253 | ) | (4,638 | ) | 6,414 | 2,211 | ||||||||||||||
| Other assets | 430 | 2,466 | 7,280 | 10,312 | ||||||||||||||||
| Accounts payable and accrued liabilities | (10,264 | ) | (9,905 | ) | (20,504 | ) | (33,933 | ) | ||||||||||||
| Member redemption liability | 78 | 74 | (1,681 | ) | (1,086 | ) | ||||||||||||||
| Deferred revenue | (640 | ) | (3,049 | ) | (1,624 | ) | (1,254 | ) | ||||||||||||
| Other liabilities | 31 | (507 | ) | 453 | (398 | ) | ||||||||||||||
| Net cash provided by operating activities | 19,132 | 28,221 | 95,421 | 104,275 | ||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
| Purchases of property and equipment | (4,918 | ) | (4,758 | ) | (19,064 | ) | (17,190 | ) | ||||||||||||
| Purchases of rights, content and intellectual property | (1,035 | ) | - | (2,205 | ) | - | ||||||||||||||
| Proceeds from sales of assets, net | 170 | - | 219 | 14 | ||||||||||||||||
| Net cash used for investing activities | (5,783 | ) | (4,758 | ) | (21,050 | ) | (17,176 | ) | ||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
| Payments on term loans | - | (9,452 | ) | (54,819 | ) | (42,930 | ) | |||||||||||||
| Proceeds from exercises of stock options | 243 | 410 | 254 | 535 | ||||||||||||||||
| Proceeds from employee stock purchase plan | - | - | 2,612 | 2,490 | ||||||||||||||||
| Repurchases of common stock | (12,430 | ) | (1,843 | ) | (19,125 | ) | (5,217 | ) | ||||||||||||
| Dividends and dividend equivalents paid on outstanding shares and restricted stock units | (9,342 | ) | (9,203 | ) | (27,804 | ) | (27,118 | ) | ||||||||||||
| Excess tax benefits from equity awards | 93 | 81 | 442 | 94 | ||||||||||||||||
| Net cash used for financing activities | (21,436 | ) | (20,007 | ) | (98,440 | ) | (72,146 | ) | ||||||||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | 2,838 | 546 | (1,760 | ) | 1,957 | |||||||||||||||
| Change in cash and cash equivalents | (5,249 | ) | 4,002 | (25,829 | ) | 16,910 | ||||||||||||||
| Cash and cash equivalents, beginning of period | 94,929 | 117,422 | 115,509 | 104,514 | ||||||||||||||||
| Cash and cash equivalents, end of period | $ | 89,680 | $ | 121,424 | $ | 89,680 | $ | 121,424 | ||||||||||||
| UNITED ONLINE, INC. | ||||||||||||||||||||
| Unaudited Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow(3) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
| Net cash provided by operating activities | $ | 19,132 | $ | 28,221 | $ | 95,421 | $ | 104,275 | ||||||||||||
| Adjustments: | ||||||||||||||||||||
| Capital expenditures | (4,918 | ) | (4,758 | ) | (19,064 | ) | (17,190 | ) | ||||||||||||
| Excess tax benefits from equity awards | 93 | 81 | 442 | 94 | ||||||||||||||||
| Cash paid for restructuring charges | 304 | - | 1,163 | - | ||||||||||||||||
| Cash paid for litigation or dispute settlement charges | 1,185 | - | 1,102 | - | ||||||||||||||||
| Cash paid for transaction-related costs | - | - | 1,994 | - | ||||||||||||||||
| Free cash flow | $ | 15,796 | $ | 23,544 | $ | 81,058 | $ | 87,179 | ||||||||||||
| UNITED ONLINE, INC. | ||||||||||||||||||||
| Unaudited Segment Information | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
FTD | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Services | $ | 27,145 | $ | 28,535 | $ | 89,421 | $ | 93,690 | ||||||||||||
| Products | 77,760 | 77,869 | 324,218 | 305,723 | ||||||||||||||||
| Advertising | 141 | 1,122 | 763 | 5,316 | ||||||||||||||||
Total revenues | 105,046 | 107,526 | 414,402 | 404,729 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenues | 64,149 | 62,995 | 259,663 | 238,701 | ||||||||||||||||
| Sales and marketing | 16,524 | 16,757 | 71,541 | 67,684 | ||||||||||||||||
| Technology and development | 3,319 | 3,462 | 10,570 | 10,319 | ||||||||||||||||
| General and administrative | 10,284 | 10,236 | 33,072 | 33,100 | ||||||||||||||||
| Amortization of intangible assets | 6,491 | 6,698 | 19,728 | 19,891 | ||||||||||||||||
| Restructuring charges | 70 | - | 1,152 | - | ||||||||||||||||
| Total operating expenses | 100,837 | 100,148 | 395,726 | 369,695 | ||||||||||||||||
| Operating income | 4,209 | 7,378 | 18,676 | 35,034 | ||||||||||||||||
| Depreciation | 1,980 | 1,177 | 5,898 | 3,467 | ||||||||||||||||
| Amortization of intangible assets | 6,491 | 6,698 | 19,728 | 19,891 | ||||||||||||||||
| Segment income from operations | 12,680 | 15,253 | 44,302 | 58,392 | ||||||||||||||||
| Stock-based compensation | 1,701 | 2,005 | 5,576 | 6,058 | ||||||||||||||||
| Restructuring charges | 70 | - | 1,152 | - | ||||||||||||||||
| Litigation or dispute settlement charges (gains) | (240 | ) | - | 400 | - | |||||||||||||||
| Transaction-related costs | - | - | 659 | - | ||||||||||||||||
| Segment adjusted OIBDA | $ | 14,211 | $ | 17,258 | $ | 52,089 | $ | 64,450 | ||||||||||||
Classmates Media | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Services | $ | 33,203 | $ | 38,283 | $ | 100,368 | $ | 115,222 | ||||||||||||
| Advertising | 15,902 | 20,399 | 48,023 | 60,088 | ||||||||||||||||
| Total revenues | 49,105 | 58,682 | 148,391 | 175,310 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenues | 10,299 | 9,416 | 29,488 | 30,206 | ||||||||||||||||
| Sales and marketing | 14,579 | 19,229 | 47,716 | 58,318 | ||||||||||||||||
| Technology and development | 6,592 | 6,299 | 18,450 | 21,148 | ||||||||||||||||
| General and administrative | 8,730 | 9,288 | 28,276 | 30,074 | ||||||||||||||||
| Amortization of intangible assets | 1,267 | 2,053 | 3,784 | 5,572 | ||||||||||||||||
| Restructuring benefits | - | - | (91 | ) | - | |||||||||||||||
| Total operating expenses | 41,467 | 46,285 | 127,623 | 145,318 | ||||||||||||||||
| Operating income | 7,638 | 12,397 | 20,768 | 29,992 | ||||||||||||||||
| Depreciation | 2,851 | 2,548 | 8,255 | 7,712 | ||||||||||||||||
| Amortization of intangible assets | 1,301 | 2,053 | 3,821 | 5,572 | ||||||||||||||||
| Segment income from operations | 11,790 | 16,998 | 32,844 | 43,276 | ||||||||||||||||
| Stock-based compensation | 2,415 | 3,451 | 6,730 | 10,881 | ||||||||||||||||
| Restructuring benefits | - | - | (91 | ) | - | |||||||||||||||
| Litigation or dispute settlement charges (gains) | (360 | ) | - | 967 | - | |||||||||||||||
| Transaction-related costs | - | - | 663 | - | ||||||||||||||||
| Segment adjusted OIBDA | $ | 13,845 | $ | 20,449 | $ | 41,113 | $ | 54,157 | ||||||||||||
Communications | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Services | $ | 32,896 | $ | 42,050 | $ | 105,179 | $ | 135,757 | ||||||||||||
| Advertising | 7,269 | 8,629 | 22,266 | 27,047 | ||||||||||||||||
| Total revenues | 40,165 | 50,679 | 127,445 | 162,804 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenues | 10,144 | 12,187 | 31,759 | 38,608 | ||||||||||||||||
| Sales and marketing | 4,257 | 10,805 | 16,532 | 31,612 | ||||||||||||||||
| Technology and development | 4,423 | 5,939 | 13,309 | 18,170 | ||||||||||||||||
| General and administrative | 7,319 | 8,587 | 23,228 | 25,460 | ||||||||||||||||
| Amortization of intangible assets | 262 | 262 | 786 | 788 | ||||||||||||||||
| Total operating expenses | 26,405 | 37,780 | 85,614 | 114,638 | ||||||||||||||||
| Operating income | 13,760 | 12,899 | 41,831 | 48,166 | ||||||||||||||||
| Depreciation | 1,773 | 2,452 | 6,015 | 7,630 | ||||||||||||||||
| Amortization of intangible assets | 262 | 262 | 786 | 789 | ||||||||||||||||
| Segment income from operations | 15,795 | 15,613 | 48,632 | 56,585 | ||||||||||||||||
| Stock-based compensation | 2,576 | 4,136 | 8,607 | 12,265 | ||||||||||||||||
| Transaction-related costs | - | - | 667 | - | ||||||||||||||||
| Segment adjusted OIBDA | $ | 18,371 | $ | 19,749 | $ | 57,906 | $ | 68,850 | ||||||||||||
| Consolidated adjusted OIBDA | $ | 46,427 | $ | 57,456 | $ | 151,108 | $ | 187,457 | ||||||||||||
| Reconciliation of segment revenues to consolidated revenues: | ||||||||||||||||||||
| FTD | $ | 105,046 | $ | 107,526 | $ | 414,402 | $ | 404,729 | ||||||||||||
| Classmates Media | 49,105 | 58,682 | 148,391 | 175,310 | ||||||||||||||||
| Communications | 40,165 | 50,679 | 127,445 | 162,804 | ||||||||||||||||
| Intersegment eliminations | (775 | ) | (681 | ) | (2,286 | ) | (2,201 | ) | ||||||||||||
| Consolidated revenues | $ | 193,541 | $ | 216,206 | $ | 687,952 | $ | 740,642 | ||||||||||||
| Reconciliation of segment operating expenses to consolidated operating expenses: | ||||||||||||||||||||
| FTD | $ | 100,837 | $ | 100,148 | $ | 395,726 | $ | 369,695 | ||||||||||||
| Classmates Media | 41,467 | 46,285 | 127,623 | 145,318 | ||||||||||||||||
| Communications | 26,405 | 37,780 | 85,614 | 114,638 | ||||||||||||||||
| Intersegment eliminations | (775 | ) | (681 | ) | (2,286 | ) | (2,201 | ) | ||||||||||||
| Consolidated operating expenses | $ | 167,934 | $ | 183,532 | $ | 606,677 | $ | 627,450 | ||||||||||||
| Reconciliation of segment income from operations to consolidated operating income: | ||||||||||||||||||||
| FTD | $ | 12,680 | $ | 15,253 | $ | 44,302 | $ | 58,392 | ||||||||||||
| Classmates Media | 11,790 | 16,998 | 32,844 | 43,276 | ||||||||||||||||
| Communications | 15,795 | 15,613 | 48,632 | 56,585 | ||||||||||||||||
| Total segment income from operations | 40,265 | 47,864 | 125,778 | 158,253 | ||||||||||||||||
| Depreciation | (6,604 | ) | (6,177 | ) | (20,168 | ) | (18,809 | ) | ||||||||||||
| Amortization of intangible assets | (8,054 | ) | (9,013 | ) | (24,335 | ) | (26,252 | ) | ||||||||||||
| Consolidated operating income | $ | 25,607 | $ | 32,674 | $ | 81,275 | $ | 113,192 | ||||||||||||
| UNITED ONLINE, INC. | |||||||||||||||||||||||||
| Unaudited Selected Quarterly Historical Key Metrics (a) | |||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||
| 2010 | 2010 | 2010 | 2009 | 2009 | |||||||||||||||||||||
| Consolidated: | |||||||||||||||||||||||||
| Revenues (in thousands) | $ | 193,541 | $ | 242,686 | $ | 251,725 | $ | 249,490 | $ | 216,206 | |||||||||||||||
| FTD: | |||||||||||||||||||||||||
| Revenues (in thousands) | $ | 105,046 | $ | 152,669 | $ | 156,687 | $ | 141,116 | $ | 107,526 | |||||||||||||||
| % of consolidated revenues | 54 | % | 63 | % | 62 | % | 57 | % | 50 | % | |||||||||||||||
| Consumer orders(4) (in thousands) | 1,085 | 1,851 | 1,813 | 1,594 | 1,075 | ||||||||||||||||||||
| Average order value(4) | $ | 60.77 | $ | 58.76 | $ | 59.42 | $ | 60.14 | $ | 61.29 | |||||||||||||||
| Average foreign currency exchange rate: GBP to USD | 1.55 | 1.49 | 1.54 | 1.63 | 1.64 | ||||||||||||||||||||
| Classmates Media: | |||||||||||||||||||||||||
| Segment revenues (in thousands) | $ | 49,105 | $ | 48,784 | $ | 50,502 | $ | 60,712 | $ | 58,682 | |||||||||||||||
| % of consolidated revenues | 25 | % | 20 | % | 20 | % | 24 | % | 27 | % | |||||||||||||||
| Pay accounts(5) (in thousands) | 4,795 | 4,982 | 4,988 | 4,886 | 4,785 | ||||||||||||||||||||
| Segment churn(7) | 3.5 | % | 3.1 | % | 3.2 | % | 3.8 | % | 3.8 | % | |||||||||||||||
| ARPU(6) | $ | 2.26 | $ | 2.22 | $ | 2.29 | $ | 2.53 | $ | 2.71 | |||||||||||||||
| Segment active accounts(5) (in millions) | 15.0 | 16.1 | 17.5 | 19.4 | 16.9 | ||||||||||||||||||||
| Communications: | |||||||||||||||||||||||||
| Segment revenues (in thousands) | $ | 40,165 | $ | 42,039 | $ | 45,241 | $ | 48,429 | $ | 50,679 | |||||||||||||||
| % of consolidated revenues | 21 | % | 17 | % | 18 | % | 19 | % | 23 | % | |||||||||||||||
| Pay accounts(5) (in thousands): | |||||||||||||||||||||||||
| Access | 801 | 880 | 967 | 1,036 | 1,118 | ||||||||||||||||||||
| Other | 295 | 300 | 306 | 314 | 322 | ||||||||||||||||||||
| Total Communications pay accounts | 1,096 | 1,180 | 1,273 | 1,350 | 1,440 | ||||||||||||||||||||
| Segment churn(7) | 4.0 | % | 4.2 | % | 4.3 | % | 4.4 | % | 4.6 | % | |||||||||||||||
| ARPU(6) | $ | 9.58 | $ | 9.57 | $ | 9.41 | $ | 9.43 | $ | 9.43 | |||||||||||||||
| Segment active accounts(5) (in millions) | 1.9 | 2.0 | 2.1 | 2.2 | 2.3 | ||||||||||||||||||||
(a) More information on the financial results for these quarters can be found in the company's filings with the Securities and Exchange Commission.
CONTACT:
United Online, Inc.
Investors:
Erik Randerson, CFA
818-287-3350
investor@untd.com
or
Press:
Scott Matulis
818-287-3388
pr@untd.com
