Exhibit 99.1
The Knot Reports Strong Revenue and Net Income Gains for the Second Quarter and
First Half of 2005; Revenue Growth of 25% in Second Quarter Includes 45% Online
Advertising Gain
NEW YORK--(BUSINESS WIRE)--Aug. 11, 2005--
Reminder: Conference Call Today at 2:30
Dial-In 800-638-7172 (ID#7896103)
The Knot, Inc. (NASDAQ: KNOT, www.theknot.com), a life stage media
company offering the premier wedding resource, today reported
financial results for its second quarter and six months ended June 30,
2005.
Second Quarter 2005 Results
For the second quarter ended June 30, 2005, The Knot reported net
revenues of $13.6 million, up 25% from net revenues of $10.9 million
for the second quarter of 2004. The major contributor to the higher
revenues was an increase in local and national online advertising,
which rose 45% over the prior year. Publishing and other revenues rose
over the prior year's quarter by 28%, and merchandise revenue also
showed a gain.
"Local online advertising remains a very strong component of our
growth, up 56% over the prior year, as we continue to expand our
penetration into the local markets" said David Liu, CEO of the Knot.
"Our national online advertisers are increasing their average spend
with us and we are clearly benefiting from the combination of the
power of our brand and the growth in online advertising in general.
The Knot reported net income for the second quarter of 2005 of
$1.3 million or $0.06 per basic and $0.05 per diluted share as
compared to $182,000, or $0.01 per basic and diluted share in 2004.
Total operating expenses in the second quarter included approximately
$1.6 million in professional fees related to the Company's current
litigation with WeddingChannel.com, Inc. During the second quarter of
2004, these legal fees amounted to $625,000.
"Revenue from retail sales of wedding supplies has improved," Mr.
Liu continued, "and we are realizing savings from operating
efficiencies established at our distribution center in the past twelve
months. We were also pleased with the growth in our local publishing
programs in the second quarter."
Last year in the third quarter, the Knot launched TheNest.com,
which extends the relationship with its members through the initial
years of marriage. "We draw our audience by directing registered
couples on TheKnot.com to TheNest.com when they return from their
honeymoon," Mr. Liu said. "We are encouraged to see the steady growth
in TheNest.com online community over the first half of 2005."
According to recent industry statistics from Hitwise, in the month of
July, TheNest.com ranked 24th in visits for women's interest sites.
Results for the Six Months Ended June 30, 2005
For the six months ended June 30, 2005, The Knot reported net
revenues of $25.5 million and net income of $1.7 million or $0.08 per
basic and $0.07 per diluted share compared to net revenues of $20.7
million and net income of $85,000 or $0.00 per basic and diluted share
in 2004.
Recent Highlights
In June, The Knot relaunched its recently acquired referral-based
online dating websites, GreatBoyfriends.com and GreatGirlfriends.com.
The new sites feature the brand's trademark social-networking approach
to online dating, a smart design, simple navigation, enhanced profiles
and dating editorial from ELLE magazine relationship guru (and site
cofounder) E. Jean Carroll. The sites extend The Knot's lifestage
media brands and services to a wider audience on the Web.
Also, in June, The Knot announced the appointment to its Board of
Directors of Lisa Gersh Hall, President and Chief Operating Officer of
The Oxygen Network and Matthew Strauss, Vice President of Content and
Development at Comcast. Their experience in media and the development
of new media services will be a significant resource to The Knot as it
continues to expand its existing business and launch new services for
its members.
In May, The Knot teamed with Sony Classical to produce a
compilation of ceremony music featuring twenty-nine tracks handpicked
by The Knot's Editor in Chief Carley Roney including preludes,
processionals, interludes and recessionals from the world's most
renowned classical musicians. A one-stop ceremony music solution, the
CD is sold exclusively at Target stores and online at TheKnot.com and
was promoted through a radio media tour that generated over 655
airings and reached over 32 million listeners.
Also, in May, to leverage the height of the June wedding season,
The Knot executed a multi-platform public relations campaign
surrounding wedding gift shopping trends and etiquette. Over 15,000
brides and newly married couples participated in a wedding gift poll
on TheKnot.com. Carley Roney revealed survey findings and showcased
her top gift picks in a 20-city satellite media tour, a 20-city radio
media tour, and interviews with the nation's top press outlets,
generating over 41 million audience impressions.
AUGUST 11 CONFERENCE CALL AND WEBCAST
The Knot will host a conference call with investors at 2:30 p.m.,
ET on Thursday, August 11, 2005, to discuss its second quarter 2005
financial results. Participants should dial in 800-638-7172 (#
7896103) at least 10 minutes before the call is scheduled to begin.
Participants can also access the live broadcast over the Internet on
the Investor Relations section of The Knot Web site, accessible at
www.theknot.com/investor-relations.
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.
REPLAY INFORMATION
A replay of the webcast will also be archived on The Knot website
approximately two hours after the conference call ends for a period of
two weeks and will also be available at 800-642-1687 reference #
7896103.
ABOUT THE KNOT, INC.
The Knot, Inc. (NASDAQ: KNOT; www.theknot.com) is a leading
lifestage media and services company. The Company's flagship brand,
The Knot, is the nation's leading wedding resource that reaches over
one million engaged couples each year through the Web, newsstands,
bookstores, national television and more. Its award-winning website,
TheKnot.com, is the most-trafficked online wedding destination. The
Knot also offers a diverse collection of print publications including
national and regional editions of "The Knot Weddings" magazine, a book
trilogy with Broadway Books, and a gift book series with Chronicle
Books. The Company also produces a TV series on The Oxygen Network, a
video-on-demand (VOD) service for Comcast Cable and has content
distribution partnerships with America Online, MSN and Comcast.
The Knot, Inc. has recently launched several brands targeted
before and beyond the wedding day, including teen-oriented
PromSpot.com and newlywed site TheNest.com, as well as the recently
acquired online personals site, GreatBoyfriends.com. 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 risks and related costs
associated with ongoing litigation, (v) the seasonality of the wedding
industry and (vi) 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/A 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)
June 30, December 31,
2005 2004
------------------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 15,655 $ 3,488
Short-term investments 10,000 19,550
Accounts receivable, net 3,461 3,152
Inventories 1,487 1,411
Deferred production and marketing costs 355 269
Other current assets 629 726
-----------------------
Total current assets 31,587 28,596
Property and equipment, net 3,168 2,468
Intangible assets, net 9,171 8,634
Other assets 290 296
-----------------------
Total assets $ 44,216 $ 39,994
=======================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 4,897 $ 4,181
Deferred revenue 6,746 5,910
Current portion of long-term debt 43 43
-----------------------
Total current liabilities 11,686 10,134
Long term debt 153 153
Other liabilities 497 505
-----------------------
Total liabilities 12,336 10,792
Stockholders' equity:
Common stock 227 223
Additional paid-in-capital 76,079 75,154
Accumulated deficit (44,426) (46,175)
-----------------------
Total stockholders' equity 31,880 29,202
-----------------------
Total liabilities and stockholders' equity $ 44,216 $ 39,994
=======================
The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
-----------------------------------------------
2005 2004 2005 2004
-----------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues:
Sponsorship and online
advertising $ 6,054 $ 4,174 $ 11,829 $ 8,135
Merchandise 4,067 4,013 7,453 7,233
Publishing and other 3,445 2,696 6,217 5,293
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Total net revenues 13,566 10,883 25,499 20,661
Cost of revenues 2,875 3,119 5,787 5,928
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Gross profit 10,691 7,764 19,712 14,733
Operating expenses:
Product and content
development 1,774 1,264 3,454 2,460
Sales and marketing 3,530 3,603 7,157 7,051
General and
administrative 3,856 2,526 6,974 4,793
Depreciation and
amortization 280 201 561 398
-----------------------------------------------
Total operating
expenses 9,440 7,594 18,146 14,702
Income from operations 1,251 170 1,566 31
Interest and other
income, net 167 57 297 111
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Income before income
taxes 1,418 227 1,863 142
===============================================
Provision for income
taxes 78 45 114 57
Net income $ 1,340 $ 182 $ 1,749 $ 85
===============================================
Basic earnings per
share $ 0.06 $ 0.01 $ 0.08 $ 0.00
===============================================
Diluted earnings per
share $ 0.05 $ 0.01 $ 0.07 $ 0.00
===============================================
Weighted average
number of common
shares outstanding
Basic 22,654,055 22,020,775 22,532,971 21,924,910
===============================================
Diluted 24,717,359 23,547,450 24,507,398 23,655,992
===============================================
CONTACT: VMW Corporate & Investor Relations:
Vicki Weiner or Sylvia Dresner, 212-616-6161
info@vmwcom.com