EXHIBIT 99.1
FOR IMMEDIATE RELEASE
THE KNOT REPORTS FOURTH QUARTER AND FISCAL 2003 FINANCIAL RESULTS
Full year 2003 revenues grow 24% and first profitable year achieved.
NEW YORK, NY (February 18, 2004) - The Knot, Inc.(OTCBB: KNOT.OB,
www.theknot.com), the nation's leading wedding resource, today reported
financial results for its fourth quarter and fiscal year ended December 31,
2003.
FOURTH QUARTER AND FISCAL 2003 RESULTS
The Knot reported net revenues of $8.1 million for the fourth quarter of 2003,
an increase of 16% from net revenues of $7.0 million for the comparable prior
year quarter. For the fiscal year ended December 31, 2003, net revenues were
$36.7 million, an increase of 24% over the $29.5 million reported for fiscal
2002. In fiscal year 2003, advertising revenue from national and local online
programs and merchandise revenue increased by 81% and 13% over fiscal year 2002,
respectively. The growth in these revenue sources substantially more than offset
a slight decline in publishing and other revenue.
The Knot reported net income for the fourth quarter of 2003 of $284,000 or $0.01
per basic and diluted share as compared to a net loss of $551,000 or $0.03 per
basic and diluted share, for the fourth quarter 2002. For the fiscal year ended
December 31, 2003, The Knot reported net income of $1.1 million, or $0.06 per
basic and $0.05 per diluted share compared to a net loss of $5.1 million or
$0.28 per basic and diluted share for fiscal 2002. In fiscal 2003, total
operating expenses were $24.0 million, which represented a small decrease from
the prior year.
"It is a significant accomplishment to have achieved our first profitable year
and a testament to our unique and sound business model," says David Liu, CEO of
The Knot. "This has been a principal goal of our Company; and now, with a strong
revenue base and the additional capital resources from our recent private
placement, we move forward committed to sustaining long-term growth for The Knot
and continuing to build shareholder value."
As of December 31, 2003, The Knot's cumulative membership totaled over 4.6
million, a 32% increase over the approximately 3.5 million members at the end of
December 2002. The Knot also reported over 92 million average monthly page views
on its Web site in the fourth quarter 2003, which is 80% greater than the 51
million average monthly page views recorded for the comparable 2002 period.
THE KNOT'S RECENT HIGHLIGHTS
In November 2003, The Knot announced a partnership with Comcast to offer The
Knot's top-rated wedding content and planning tools on the 'Relationships
Channel' on Comcast.net. The agreement extends The Knot brand and its trusted
wedding-planning expertise to five million Comcast households, making it even
easier for brides, grooms and wedding guests to find the wedding-related
information they need. In Comcast.net's Relationships Channel, The Knot provides
a wide range of wedding content including interactive tools, wedding gown
galleries, real wedding stories and a community for engaged couples. Comcast.net
also enables users to access The Knot Gift Store & Registry.
Also in November 2003, The Knot completed a private placement of 2,800,000 newly
issued shares of common stock to institutional investors for gross proceeds of
$10.5 million, before placement fees and other offering costs. The Knot intends
to use the net proceeds from this private placement for general corporate
purposes, including potential acquisitions of, or investments in, businesses,
technologies or products that are complementary to its business.
In January 2004, Oxygen aired the second season of "Real Weddings from The
Knot", a weeklong miniseries that brings to viewers the real stories behind the
weddings of five couples preparing for their trips down the aisle. Filmed in
documentary style, each episode of "Real Weddings from The Knot" takes a look at
the endlessly entertaining aspects of wedding planning, touching upon the issues
that many couples face today. New this season, each episode is narrated by the
bride-to-be, giving viewers a unique glimpse into the emotional roller coaster
of the planning process.
CONFERENCE CALL AND WEBCAST
The Knot will host a conference call with investors at 4:30 p.m., ET Wednesday,
February 18, 2004, to discuss its fourth quarter and year end 2003 financial
results. The conference call will be broadcast live over the Internet on the
Investor Relations section of The Knot Web site at
http://www.theknot.com/au_corpoverview.shtml. To access the webcast,
participants should visit The Knot Web site at least 15 minutes prior to the
conference call in order to download or install any necessary audio software. A
replay of the webcast will also be archived on The Knot Web site approximately 2
hours after the conference call ends for a period of eight days.
ABOUT THE KNOT, INC.
The Knot, Inc. (OTCBB: KNOT.OB; www.theknot.com) is one of the world's leading
wedding media and services companies, providing today's to-be-weds with
comprehensive wedding planning information, interactive tools, and
resources. Its award-winning website, TheKnot.com, is the leading online wedding
destination and wedding content provider to America Online, MSN and Yahoo!.
The Knot also offers a diverse collection of wedding-planning print
publications. The Knot produces a national publication, The Knot Magazine, and,
through its subsidiary Weddingpages, Inc., publishes The Knot WEDDINGPAGES,
regional wedding magazines in 18 U.S. markets. In addition, the Company
publishes a wedding-planning book trilogy with Random House's Broadway Books and
a gift book series with Chronicle Books. The Knot is based in New York and has
several other offices across the country.
This release may contain projections or other forward-looking statements
regarding future events or the future financial performance of The Knot. These
statements are only predictions and reflect the current beliefs and expectations
of The Knot. Actual events or results may differ materially from those contained
in the projections or forward-looking statements. It is routine for internal
projections and expectations to change as the quarter progresses, and therefore
it should be clearly understood that the internal projections and beliefs upon
which The Knot bases its expectations may change prior to the end of the
quarter. Although these expectations may change, The Knot will not necessarily
inform you if they do. The Knot's policy is to provide its expectations not more
than once per quarter, and not to update that information until the next
quarter. Some of the factors that could cause actual results to differ
materially from the forward-looking statements contained herein include, without
limitation, (i) The Knot's unproven business model and limited operating
history, (ii) The Knot's history of losses, (iii) the significant fluctuation to
which The Knot's quarterly revenues and operating results are subject, (iv) the
seasonality of the wedding industry and (v) other factors detailed in documents
The Knot files from time to time with the Securities and Exchange Commission,
including its recent filings on Forms 10-K and 10-Q. Forward-looking statements
in this release are made pursuant to the safe harbor provisions contained in the
Private Securities Litigation Reform Act of 1995.
IR Contact:
Heidi Davis
The Knot, Inc.
212-219-8555 x. 1128
ir@theknot.com
Press Contact:
Amy Shey Jacobs
Public Relations Manager
The Knot, Inc.
212-219-8555 x.1246
516-509-0191 - cell
ashey@theknot.com
The Knot Inc.
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2003 2002
------------ ------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 22,511 $ 9,306
Restricted cash 252
Accounts receivable, net 2,883 4,791
Inventories 1,195 1,292
Deferred production and marketing costs 318 444
Other current assets 747 556
-------- --------
Total current assets 27,654 16,641
Property and equipment, net 2,006 1,948
Intangible assets, net 8,734 8,834
Other assets 313 352
-------- --------
Total assets $ 38,707 $ 27,775
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 5,790 $ 5,113
Deferred revenue 4,891 5,827
Current portion of long-term debt 40 138
-------- --------
Total current liabilities 10,721 11,078
Long term debt 196 235
Other liabilities 490 445
-------- --------
Total liabilities 11,407 11,758
Stockholders' equity:
Common stock 217 184
Additional paid-in-capital 74,533 64,400
Deferred compensation -- (55)
Accumulated deficit (47,450) (48,512)
-------- --------
Total stockholders' equity 27,300 16,017
-------- --------
Total liabilities and stockholders' equity $ 38,707 $ 27,775
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The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Twelve months ended
December 31, December 31
------------------------- -------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Net revenues:
Sponsorship and advertising $ 3,574 $ 2,292 $ 12,463 $ 6,888
Merchandise 2,191 2,233 15,510 13,674
Publishing and other 2,384 2,509 8,724 8,914
----------- ----------- ----------- -----------
Total net revenues 8,149 7,034 36,697 29,476
Cost of revenues 2,089 2,008 11,717 10,224
----------- ----------- ----------- -----------
Gross profit 6,060 5,026 24,980 19,252
Operating expenses:
Product and content development 1,004 889 4,220 3,870
Sales and marketing 2,716 2,671 11,354 11,243
General and administrative 1,887 1,601 7,505 7,295
Non cash compensation 22 33 139
Non cash sales and marketing -- 163 -- 653
Depreciation and amortization 193 264 858 1,244
----------- ----------- ----------- -----------
Total operating expenses 5,800 5,610 23,970 24,444
Income (loss) from operations 260 (584) $ 1,010 (5,192)
Interest and other income, net 39 33 102 112
----------- ----------- ----------- -----------
Income (loss) before income taxes $ 299 ($551) $ 1,112 ($5,080)
----------- ----------- ----------- -----------
Provision for income taxes 15 -- 50 --
----------- ----------- ----------- -----------
Net income (loss) $ 284 ($551) $ 1,062 ($5,080)
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Basic earnings (loss) per share $ 0.01 ($0.03) $ 0.06 ($0.28)
=========== =========== =========== ===========
Diluted earnings (loss) per share $ 0.01 ($0.03) $ 0.05 ($0.28)
=========== =========== =========== ===========
Weighted average number of common shares
outstanding
Basic 20,177,498 18,373,327 18,900,861 17,909,492
=========== =========== =========== ===========
Diluted 22,016,629 18,373,327 20,308,658 17,909,492
=========== =========== =========== ===========