Exhibit 99.1
The Knot Reports First Quarter 2004 Financial Results;
First Quarter Revenues Grew 13%; Online Advertising Revenue Grew 39%
NEW YORK--(BUSINESS WIRE)--May 12, 2004--The Knot, Inc. (OTCBB:
KNOT.OB, www.theknot.com), 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
other resources including extensive online wedding-related shopping,
today reported financial results for its first quarter ended March 31,
2004.
First Quarter 2004 Results
The Knot reported net revenues of $9.8 million for the first
quarter of 2004, an increase of 13% from net revenues of $8.7 million
for the comparable prior year quarter. Advertising revenue from
national and local online programs increased by 39% over the prior
year while revenue from publishing activities grew by 28%. The strong
growth from these revenue sources more than offset a 15% decrease in
merchandise revenue.
The Knot reported a net loss for the first quarter of 2004 of
$98,000, or $0.00 per basic and diluted share, as compared to a net
loss of $195,000, or $0.01 per basic and diluted share, in the first
quarter of 2003.
"We are pleased with the continued expansion of our advertiser
base both at the national and local levels," said David Liu, CEO of
The Knot. "Our advertisers and sponsors recognize our value in
delivering visibility to their target audience through a combination
of online programs and print publications. We provide the most
efficient reach to the largest audience of engaged couples who regard
The Knot as the trusted leader for wedding planning information and
advice."
"On the commerce side of our business, during the first quarter,
we experienced customer service related issues which arose from the
installation of new warehouse management software at our distribution
facility in California. While we have addressed these operational
issues, they did impact our merchandise revenue numbers for the
quarter," continued Mr. Liu. "We continued to invest in our new
e-commerce platform that will launch later this year. This platform
will improve the online shopping experience and product selection for
our members and their guests and allow for enhanced customer service."
The Knot also reported over 160 million average monthly page views
on its Web site in the first quarter 2004, which is 120% greater than
the 73 million average monthly page views recorded for the comparable
2003 period. As of March 31, 2004, The Knot's cumulative membership
totaled over 4.9 million, a 28% increase over the approximately 3.8
million members at the end of March 2003.
"We are very pleased with the increase in traffic on our site. Our
members look to us for advice on a variety of topics from selecting a
photographer, gifts for attendants to their honeymoon plans. As more
consumers visit our site and we continue to build the value of our
brand and our database of members, we believe The Knot has a unique
opportunity to extend the relationship with our members into the first
years of marriage. The Knot is the only media and commerce company
that has a trusted relationship with this consumer and knows the exact
moment they become a newlywed," said Mr. Liu.
THE KNOT'S RECENT HIGHLIGHTS
In February, The Knot's website was once again recognized for its
excellence. PC Magazine's "Best of the Internet", a book authored by
Don Willmott, a contributing editor to PC Magazine, ranked The Knot
site as the best wedding website. PC Magazine's "Best of the Internet"
Guide is a new guide to top websites in more than one hundred
categories.
In March, Oxygen Media re-signed The Knot for ten more episodes of
"Real Weddings from The Knot." The signing of the latest agreement,
which calls for twice as many episodes as the previous agreements,
followed the highly successful airing of the second season of "Real
Weddings from The Knot" in January 2004. The series' ratings were up
100% from the January 2003 premiere -- drawing 2.7 million viewers to
the January 2004 Oxygen's Weddings Week. The miniseries brought to
viewers the real stories behind the weddings of five couples preparing
for their trips down the aisle.
CONFERENCE CALL AND WEBCAST
The Knot will host a conference call with investors at 4:30 p.m.,
ET Wednesday, May 12, 2004, to discuss its first quarter 2004
financial results. The conference call will be broadcast live over the
Internet on the Investor Relations section of The Knot Web site,
accessible at http://www.theknot.com/au_corpoverview.shtml. To access
the Web cast, 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 other resources including extensive online
wedding-related shopping. Its award-winning website, TheKnot.com, is
the leading online wedding destination and wedding content provider to
America Online and MSN.
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.
The Knot Inc.
Consolidated Balance Sheets
(in thousands)
March December
31, 31,
2004 2003
---------------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $22,587 $22,511
Accounts receivable, net 3,050 2,883
Inventories 1,433 1,195
Deferred production and marketing costs 301 318
Other current assets 786 747
---------------------
Total current assets 28,157 27,654
Property and equipment, net 1,990 2,006
Intangible assets, net 8,709 8,734
Other assets 307 313
---------------------
Total assets $39,163 $38,707
=====================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $5,702 $5,790
Deferred revenue 5,239 4,891
Current portion of long-term debt 40 40
---------------------
Total current liabilities 10,981 10,721
Long term debt 196 196
Other liabilities 498 490
---------------------
Total liabilities 11,675 11,407
Stockholders' equity:
Common stock 220 217
Additional paid-in-capital 74,816 74,533
Accumulated deficit (47,548) (47,450)
---------------------
Total stockholders' equity 27,488 27,300
---------------------
Total liabilities and stockholders' equity $39,163 $38,707
=====================
The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended
March 31,
-----------------------
2004 2003
----------- -----------
(Unaudited) (Unaudited)
Net revenues:
Sponsorship and advertising $3,961 $2,859
Merchandise 3,220 3,777
Publishing and other 2,597 2,029
----------- -----------
Total net revenues 9,778 8,665
Cost of revenues 2,809 2,930
----------- -----------
Gross profit 6,969 5,735
Operating expenses:
Product and content development 1,196 1,072
Sales and marketing 3,448 2,862
General and administrative 2,267 1,739
Non-cash compensation - 20
Depreciation and amortization 197 253
----------- -----------
Total operating expenses 7,108 5,946
Loss from operations (139) (211)
Interest income, net 53 16
----------- -----------
Loss before income taxes (86) (195)
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Provision for taxes on income 12 -
Net loss ($98) ($195)
=========== ===========
Loss per share - basic and diluted: ($0.00) ($0.01)
=========== ===========
Weighted average number of shares
used in calculating basic and diluted
loss per share 21,829,044 18,394,233
=========== ===========
CONTACT: IR Contact:
The Knot, Inc.
Heidi Davis, 212-219-8555 ext. 1128
ir@theknot.com
or
Press Contact:
The Knot, Inc.
Amy Shey Jacobs, 212-219-8555 ext. 1246
Cell: 516-509-0191
ashey@theknot.com