MOVE Movano Inc

Move, Inc. (NASDAQ:MOVE) reported financial results for the third quarter ended September 30, 2006. Total revenue for the third quarter was $75.7 million, a 14 percent increase compared to $66.3 million in the third quarter of 2005. Net income applicable to common stockholders for the third quarter of 2006 was $1.3 million, or $0.01 per share, compared to net income of $1.9 million, or $0.01 per share, for the third quarter of 2005. Excluding stock-based compensation expense, net income would have been $5.4 million for the third quarter of 2006. There was no stock-based compensation expense in the third quarter of 2005. Move�s EBITDA (earnings before interest, restructuring charges and certain other non-cash and non-recurring items, principally stock-based charges, depreciation, and amortization) for the third quarter of 2006 was $7.4 million, compared to $2.9 million for the third quarter of 2005. EBITDA for the third quarter of 2005 included $5.5 million in expense related to the Company�s obligation to advance the defense costs of former officers. The Company has reported 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. �During the third quarter we grew both revenue and profitability, while continuing to make important investments in our businesses and infrastructure,� said Mike Long, Move�s CEO. �These investments are allowing us to develop a consumer experience which addresses each phase of the move cycle, along with a range of marketing solutions for those advertisers interested in reaching consumers before, during and after their move. We believe the breadth of this strategy, together with the early adoption stage of online advertising in the move category, will allow us to deliver even stronger financial performance in the future.� CONFERENCE CALL As previously announced, Move will host a conference call, which will be broadcast live over the Internet today, Thursday, November 2, 2006, at 2:00 p.m. PT (5:00 p.m. ET). Chief Executive Officer, Mike Long, and Chief Financial Officer, Lew Belote, will discuss the Company's third quarter 2006 results. In order to participate in the call, investors should log on to http://investor.move.com and click on "Event Calendar." Please connect to the above Web site ten minutes prior to the call to load any necessary audio software. A replay of the call will be available in the same section of the Company's Web site approximately one hour after the end of the call. A telephone replay will be available from 4:00 p.m. PT (7:00 p.m. ET) until midnight on November 9, 2006 at 888-286-8010, conference ID 67192365. 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, 2006 is expected to be filed with the Securities and Exchange Commission on, or before, November 9, 2006. 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 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. We have also presented a non-GAAP table of our Segment Data for the three and nine months ended September 30, 2006 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), the world�s largest moving community, provides homebuyers and renters with the real estate and community information, and professional connections they need before, during and after a move. The Company operates Move.com� (http://www.move.com), the most comprehensive real estate search site for rentals and homes to buy and REALTOR.com� (http://www.realtor.com), the official Web site of the National Association of REALTORS�. Move also operates Welcome Wagon� (http://www.welcomewagon.com), a 78-year old neighborhood expert that provides new movers with valuable and comprehensive information about businesses and professionals in their new communities. Move.com is the official new homes Web site of the National Association of Home Builders. Move also operates Moving.com (http://www.moving.com), SeniorHousingNet� (http://www.seniorhousingnet.com), TOP PRODUCER� Systems (http://www.topproducer.com), FactoryBuiltHousing.com (http://www.factorybuilthousing.com) and Home Plans (http://www.homeplans.com). On the Net: http://investor.move.com. MOVE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) � Three Months Ended September 30, Nine Months Ended September 30, 2006� 2005� 2006� 2005� (unaudited) (unaudited) � Revenue $ 75,672� $ 66,338� $ 218,542� $ 186,047� Cost of revenue (1) 16,967� 13,901� 49,820� 40,341� Gross profit 58,705� 52,437� 168,722� 145,706� � Operating expenses: (1) Sales and marketing 28,928� 22,449� 82,581� 67,500� Product and web site development 8,438� 5,846� 25,586� 15,287� General and administrative 20,950� 22,155� 61,304� 58,224� Amortization of intangible assets 497� 734� 1,833� 2,889� Restructuring Charges (278) �� (278) (1,442) Total operating expenses 58,535� 51,184� 171,026� 142,458� Income (loss) from operations 170� 1,253� (2,304) 3,248� � Interest income, net 1,900� 521� 5,309� 1,370� Other income, net 99� 171� 602� 252� Net income 2,169� 1,945� 3,607� 4,870� � Convertible preferred stock dividends (893) -� (2,656) -� Net income applicable to common stockholders $ 1,276� $ 1,945� $ 951� $ 4,870� � Net income per common share: Basic net income applicable to common stockholders $ 0.01� $ 0.01� $ 0.01� $ 0.03� Diluted net income applicable to common stockholders $ 0.01� $ 0.01� $ 0.00� $ 0.03� � Shares used to calculate basic and diluted per share amounts Basic 151,916� 147,234� 150,556� 146,875� Diluted 164,394� 161,120� 165,145� 156,264� � � (1) Includes stock-based compensation as follows: � Cost of revenue $ 18� $ �� $ 176� $ �� Sales and Marketing 286� �� 1,077� �� Product and web site development 249� �� 1,088� �� General and administrative 3,602� �� 7,733� �� $ 4,155� $ �� $ 10,074� $ �� MOVE, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURE � INCOME (LOSS) FROM OPERATIONS EXCLUDING RESTRUCTURING CHARGES AND CERTAIN OTHER NON-CASH AND NON-RECURRING ITEMS, PRINCIPALLY STOCK-BASED COMPENSATION AND CHARGES, DEPRECIATION, AND AMORTIZATION (EBITDA) (in thousands) � Three Months Ended September 30, � Nine Months Ended September 30, � 2006� � 2005� � 2006� � 2005� (unaudited) (unaudited) � Income (loss) from operations $ 170� $ 1,253� $ (2,304) $ 3,248� � Plus: Stock-based charges 161� 152� 128� 669� Amortization of intangible assets 497� 734� 1,833� 2,889� Depreciation 2,718� 2,048� 7,733� 5,508� Stock-based compensation 4,155� �� 10,074� �� Restructuring charge reversal (278) �� (278) (1,442) Non-recurring refund of insurance premium �� �� (1,184) �� Non-recurring revenue �� (1,332) �� (2,664) EBITDA $ 7,423� $ 2,855� $ 16,002� $ 8,208� MOVE, INC. SEGMENT OPERATING RESULTS (in thousands) � Three Months Ended September 30, Nine Months Ended September 30, � 2006� � 2005� � 2006� � 2005� (unaudited) (unaudited) Revenue: Real Estate Services $ 53,395� $ 47,161� $ 154,743� $ 132,594� Move-Related Services 22,277� 19,177� 63,799� 53,453� Total revenue $ 75,672� $ 66,338� $ 218,542� $ 186,047� � Operating income (loss) (1) Real Estate Services $ 14,065� $ 15,971� $ 37,041� $ 39,442� Move-Related Services (909) 819� (2,163) 1,022� Unallocated (12,986) (15,537) (37,182) (37,216) Income (loss) from operations $ 170� $ 1,253� $ (2,304) $ 3,248� � � (1) Includes stock-based compensation as follows: � Real Estate Services $ 1,330� $ �� $ 3,678� $ �� Move-Related Services 378� �� 1,323� �� Unallocated 2,447� �� 5,073� �� $ 4,155� $ �� $ 10,074� $ �� MOVE, INC.SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) � Three months ended September 30, 2006 (unaudited) � Real Estate Services Move-Related Services Unallocated Stock-based Compensation Total � Revenue $ 53,395� $ 22,277� $ �� $ �� $ 75,672� Cost of Revenue 8,344� � 7,624� � 981� 18� 16,967� Gross Profit 45,051� 14,653� (981) (18) 58,705� � Sales and marketing 17,279� 9,723� 1,640� 286� 28,928� Product and website development 6,103� 1,143� 943� 249� 8,438� General and administrative 6,274� 4,318� 6,756� 3,602� 20,950� Amortization of intangibles �� �� 497� �� 497� Restructuring charge �� �� (278) �� (278) Total operating expenses 29,656� 15,184� 9,558� 4,137� 58,535� � Income (loss) from operations $ 15,395� $ (531) $ (10,539) $ (4,155) $ 170� Three months ended September 30, 2005 (unaudited) � Real Estate Services Move-Related Services Unallocated Stock-based Compensation Total � Revenue $ 47,161� $ 19,177� $ �� $ �� $ 66,338� Cost of Revenue 6,961� � 6,545� � 395� �� 13,901� Gross Profit 40,200� 12,632� (395) �� 52,437� � Sales and marketing 14,506� 7,495� 448� �� 22,449� Product and website development 4,272� 1,111� 463� �� 5,846� General and administrative 5,451� 3,207� 13,497� �� 22,155� Amortization of intangibles �� �� 734� �� 734� Restructuring charges �� �� �� �� �� Total operating expenses 24,229� 11,813� 15,142� �� 51,184� � Income (loss) from operations $ 15,971� $ 819� $ (15,537) $ �� $ 1,253� MOVE, INC. SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) � Nine months ended September 30, 2006 (unaudited) Real Estate Services Move-Related Services Unallocated Stock-based Compensation Total � Revenue $ 154,743� $ 63,799� $ �� $ �� $ 218,542� Cost of Revenue 24,387� � 22,383� � 2,874� 176� 49,820� Gross Profit 130,356� 41,416� (2,874) (176) 168,722� � Sales and marketing 51,193� 27,314� 2,997� 1,077� 82,581� Product and website development 18,008� 3,275� 3,215� 1,088� 25,586� General and administrative 20,436� 11,667� 21,468� 7,733� 61,304� Amortization of intangibles �� �� 1,833� �� 1,833� Restructuring charge �� �� (278) �� (278) Total operating expenses 89,637� 42,256� 29,235� 9,898� 171,026� � Income (loss) from operations $ 40,719� $ (840) $ (32,109) $ (10,074) $ (2,304) Nine months ended September 30, 2005 (unaudited) � Real Estate Services Move-Related Services Unallocated Stock-based Compensation Total � Revenue $ 132,594� $ 53,453� $ �� $ �� $ 186,047� Cost of Revenue 20,718� � 18,506� � 1,117� �� 40,341� Gross Profit 111,876� 34,947� (1,117) �� 145,706� � Sales and marketing 44,968� 21,576� 956� �� 67,500� Product and website development 11,244� 2,772� 1,271� �� 15,287� General and administrative 16,222� 9,577� 32,425� �� 58,224� Amortization of intangibles �� �� 2,889� �� 2,889� Restructuring charges �� �� (1,442) �� (1,442) Total operating expenses 72,434� 33,925� 36,099� �� 142,458� � Income (loss) from operations $ 39,442� $ 1,022� $ (37,216) $ �� $ 3,248� MOVE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) � Nine Months Ended September 30, � 2006� � 2005� (unaudited) Cash flows from continuing operating activities: Net income $ 3,607� $ 4,870� Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 7,733� 5,508� Amortization of intangible assets 1,833� 2,889� Gain on sale of property and equipment �� (132) Provision for doubtful accounts 1,742� 554� Stock-based compensation and charges 10,202� 669� Other non-cash items (313) (72) Changes in operating assets and liabilities: Accounts receivable (3,035) (1,831) Other assets (514) (1,561) Accounts payable and accrued expenses (17,815) (7,237) Deferred revenue 9,695� 2,444� Net cash provided by operating activities 13,135� 6,101� � Cash flows from investing activities: Purchases of property and equipment (8,653) (7,740) Maturities of short-term investments 26,325� 17,475� Purchases of short-term investments (25,175) (9,785) Proceeds from sale of assets �� 164� Acquisitions, net (9,572) �� Net cash provided by (used in) investing activities (17,075) 114� � Cash flows from financing activities: Proceeds from exercise of stock options 5,215� 1,593� Restricted cash 804� 848� Payments on capital lease obligations (2,112) (1,378) Net cash provided by financing activities 3,907� 1,063� � Change in cash and cash equivalents (33) 7,278� � Cash and cash equivalents, beginning of period 13,272� 14,819� Cash and cash equivalents, end of period $ 13,239� $ 22,097� MOVE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) � � September 30,2006 December 31,2005 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 13,239� $ 13,272� Short-term investments 137,900� 139,050� Marketable securities 13,488� �� Accounts receivable, net 18,756� 15,966� Other current assets 20,301� 19,485� Total current assets 203,684� 187,773� � Property and equipment, net 27,840� 20,717� Goodwill, net 23,877� 19,502� Intangible assets, net 16,911� 14,264� Restricted cash 4,222� 5,026� Other assets 1,282� 1,744� Total assets $ 277,816� $ 249,026� � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities: Accounts payable $ 5,247� $ 6,427� Accrued expenses 24,765� 40,879� Obligation under capital leases 2,002� 1,005� Deferred revenue 54,218� 43,652� Total current liabilities 86,232� 91,963� � Obligation under capital leases 2,692� �� Other liabilities 3,236� 3,790� Total liabilities 92,160� 95,753� � Series B convertible preferred stock 94,896� 91,349� � Stockholders� equity: Series A convertible preferred stock �� �� Common stock 152� 149� Additional paid-in capital 2,062,322� 2,047,456� Deferred stock-based charges �� (351) Accumulated other comprehensive income 13,896� 343� Accumulated deficit (1,985,610) (1,985,673) Total stockholders� equity 90,760� 61,924� � Total liabilities and stockholders� equity $ 277,816� $ 249,026� Move, Inc. (NASDAQ:MOVE) reported financial results for the third quarter ended September 30, 2006. Total revenue for the third quarter was $75.7 million, a 14 percent increase compared to $66.3 million in the third quarter of 2005. Net income applicable to common stockholders for the third quarter of 2006 was $1.3 million, or $0.01 per share, compared to net income of $1.9 million, or $0.01 per share, for the third quarter of 2005. Excluding stock-based compensation expense, net income would have been $5.4 million for the third quarter of 2006. There was no stock-based compensation expense in the third quarter of 2005. Move's EBITDA (earnings before interest, restructuring charges and certain other non-cash and non-recurring items, principally stock-based charges, depreciation, and amortization) for the third quarter of 2006 was $7.4 million, compared to $2.9 million for the third quarter of 2005. EBITDA for the third quarter of 2005 included $5.5 million in expense related to the Company's obligation to advance the defense costs of former officers. The Company has reported 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. "During the third quarter we grew both revenue and profitability, while continuing to make important investments in our businesses and infrastructure," said Mike Long, Move's CEO. "These investments are allowing us to develop a consumer experience which addresses each phase of the move cycle, along with a range of marketing solutions for those advertisers interested in reaching consumers before, during and after their move. We believe the breadth of this strategy, together with the early adoption stage of online advertising in the move category, will allow us to deliver even stronger financial performance in the future." CONFERENCE CALL As previously announced, Move will host a conference call, which will be broadcast live over the Internet today, Thursday, November 2, 2006, at 2:00 p.m. PT (5:00 p.m. ET). Chief Executive Officer, Mike Long, and Chief Financial Officer, Lew Belote, will discuss the Company's third quarter 2006 results. In order to participate in the call, investors should log on to http://investor.move.com and click on "Event Calendar." Please connect to the above Web site ten minutes prior to the call to load any necessary audio software. A replay of the call will be available in the same section of the Company's Web site approximately one hour after the end of the call. A telephone replay will be available from 4:00 p.m. PT (7:00 p.m. ET) until midnight on November 9, 2006 at 888-286-8010, conference ID 67192365. 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, 2006 is expected to be filed with the Securities and Exchange Commission on, or before, November 9, 2006. 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 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. We have also presented a non-GAAP table of our Segment Data for the three and nine months ended September 30, 2006 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), the world's largest moving community, provides homebuyers and renters with the real estate and community information, and professional connections they need before, during and after a move. The Company operates Move.com(TM) (http://www.move.com), the most comprehensive real estate search site for rentals and homes to buy and REALTOR.com(R) (http://www.realtor.com), the official Web site of the National Association of REALTORS(R). Move also operates Welcome Wagon(R) (http://www.welcomewagon.com), a 78-year old neighborhood expert that provides new movers with valuable and comprehensive information about businesses and professionals in their new communities. Move.com is the official new homes Web site of the National Association of Home Builders. Move also operates Moving.com (http://www.moving.com), SeniorHousingNet(TM) (http://www.seniorhousingnet.com), TOP PRODUCER(R) Systems (http://www.topproducer.com), FactoryBuiltHousing.com (http://www.factorybuilthousing.com) and Home Plans (http://www.homeplans.com). On the Net: http://investor.move.com. -0- *T MOVE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ---------------------- ---------------------- 2006 2005 2006 2005 ------------ --------- ------------ --------- (unaudited) (unaudited) Revenue $ 75,672 $ 66,338 $ 218,542 $186,047 Cost of revenue (1) 16,967 13,901 49,820 40,341 ----------- -------- ----------- -------- Gross profit 58,705 52,437 168,722 145,706 ----------- -------- ----------- -------- Operating expenses: (1) Sales and marketing 28,928 22,449 82,581 67,500 Product and web site development 8,438 5,846 25,586 15,287 General and administrative 20,950 22,155 61,304 58,224 Amortization of intangible assets 497 734 1,833 2,889 Restructuring Charges (278) -- (278) (1,442) ----------- -------- ----------- -------- Total operating expenses 58,535 51,184 171,026 142,458 ----------- -------- ----------- -------- Income (loss) from operations 170 1,253 (2,304) 3,248 Interest income, net 1,900 521 5,309 1,370 Other income, net 99 171 602 252 ----------- -------- ----------- -------- Net income 2,169 1,945 3,607 4,870 Convertible preferred stock dividends (893) - (2,656) - ----------- -------- ----------- -------- Net income applicable to common stockholders $ 1,276 $ 1,945 $ 951 $ 4,870 =========== ======== =========== ======== Net income per common share: Basic net income applicable to common stockholders $ 0.01 $ 0.01 $ 0.01 $ 0.03 =========== ======== =========== ======== Diluted net income applicable to common stockholders $ 0.01 $ 0.01 $ 0.00 $ 0.03 =========== ======== =========== ======== Shares used to calculate basic and diluted per share amounts Basic 151,916 147,234 150,556 146,875 =========== ======== =========== ======== Diluted 164,394 161,120 165,145 156,264 =========== ======== =========== ======== (1) Includes stock-based compensation as follows: Cost of revenue $ 18 $ -- $ 176 $ -- Sales and Marketing 286 -- 1,077 -- Product and web site development 249 -- 1,088 -- General and administrative 3,602 -- 7,733 -- ----------- -------- ----------- -------- $ 4,155 $ -- $ 10,074 $ -- =========== ======== =========== ======== *T -0- *T MOVE, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURE INCOME (LOSS) FROM OPERATIONS EXCLUDING RESTRUCTURING CHARGES AND CERTAIN OTHER NON-CASH AND NON-RECURRING ITEMS, PRINCIPALLY STOCK- BASED COMPENSATION AND CHARGES, DEPRECIATION, AND AMORTIZATION (EBITDA) (in thousands) Three Months Ended Nine Months Ended September 30, September 30, ------------------------------------------- 2006 2005 2006 2005 ------------ -------- ------------ -------- (unaudited) (unaudited) Income (loss) from operations $ 170 $ 1,253 $ (2,304) $ 3,248 Plus: Stock-based charges 161 152 128 669 Amortization of intangible assets 497 734 1,833 2,889 Depreciation 2,718 2,048 7,733 5,508 Stock-based compensation 4,155 -- 10,074 -- Restructuring charge reversal (278) -- (278) (1,442) Non-recurring refund of insurance premium -- -- (1,184) -- Non-recurring revenue -- (1,332) -- (2,664) ----------- ------- ----------- ------- EBITDA $ 7,423 $ 2,855 $ 16,002 $ 8,208 =========== ======= =========== ======= *T -0- *T MOVE, INC. SEGMENT OPERATING RESULTS (in thousands) Three Months Ended Nine Months Ended September 30, September 30, ---------------------- ---------------------- 2006 2005 2006 2005 ------------ --------- ------------ --------- (unaudited) (unaudited) Revenue: Real Estate Services $ 53,395 $ 47,161 $ 154,743 $132,594 Move-Related Services 22,277 19,177 63,799 53,453 ----------- -------- ----------- -------- Total revenue $ 75,672 $ 66,338 $ 218,542 $186,047 =========== ======== =========== ======== Operating income (loss) (1) Real Estate Services $ 14,065 $ 15,971 $ 37,041 $ 39,442 Move-Related Services (909) 819 (2,163) 1,022 Unallocated (12,986) (15,537) (37,182) (37,216) ----------- -------- ----------- -------- Income (loss) from operations $ 170 $ 1,253 $ (2,304) $ 3,248 =========== ======== =========== ======== (1) Includes stock-based compensation as follows: Real Estate Services $ 1,330 $ -- $ 3,678 $ -- Move-Related Services 378 -- 1,323 -- Unallocated 2,447 -- 5,073 -- ----------- -------- ----------- -------- $ 4,155 $ -- $ 10,074 $ -- =========== ======== =========== ======== *T -0- *T MOVE, INC. SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) Three months ended September 30, 2006 ------------------------------------ (unaudited) Real Move- Estate Related Services Services Unallocated Revenue $ 53,395 $ 22,277 $ -- Cost of Revenue 8,344 7,624 981 --------- ---------- -------------- Gross Profit 45,051 14,653 (981) Sales and marketing 17,279 9,723 1,640 Product and website development 6,103 1,143 943 General and administrative 6,274 4,318 6,756 Amortization of intangibles -- -- 497 Restructuring charge -- -- (278) --------- --------- ------------- Total operating expenses 29,656 15,184 9,558 --------- --------- ------------- Income (loss) from operations $ 15,395 $ (531) $ (10,539) ========= ========= ============= Stock-based Compensation Total Revenue $ -- $75,672 Cost of Revenue 18 16,967 ------------- ------- Gross Profit (18) 58,705 Sales and marketing 286 28,928 Product and website development 249 8,438 General and administrative 3,602 20,950 Amortization of intangibles -- 497 Restructuring charge -- (278) ------------- ------- Total operating expenses 4,137 58,535 ------------- ------- Income (loss) from operations $ (4,155) $ 170 ============= ======= *T -0- *T Three months ended September 30, 2005 ---------------------------------- (unaudited) Real Move- Estate Related Services Services Unallocated Revenue $ 47,161 $ 19,177 $ -- Cost of Revenue 6,961 6,545 395 --------- ---------- ------------- Gross Profit 40,200 12,632 (395) Sales and marketing 14,506 7,495 448 Product and website development 4,272 1,111 463 General and administrative 5,451 3,207 13,497 Amortization of intangibles -- -- 734 Restructuring charges -- -- -- --------- --------- ------------ Total operating expenses 24,229 11,813 15,142 --------- --------- ------------ Income (loss) from operations $ 15,971 $ 819 $ (15,537) ========= ========= ============ Stock-based Compensation Total Revenue $ -- $66,338 Cost of Revenue -- 13,901 ------------- ------- Gross Profit -- 52,437 Sales and marketing -- 22,449 Product and website development -- 5,846 General and administrative -- 22,155 Amortization of intangibles -- 734 Restructuring charges -- -- ------------- ------- Total operating expenses -- 51,184 ------------- ------- Income (loss) from operations $ -- $ 1,253 ============= ======= *T -0- *T MOVE, INC. SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) Nine months ended September 30, 2006 ---------------------------------- (unaudited) Real Move- Estate Related Services Services Unallocated Revenue $ 154,743 $ 63,799 $ -- Cost of Revenue 24,387 22,383 2,874 --------- ---------- ------------ Gross Profit 130,356 41,416 (2,874) Sales and marketing 51,193 27,314 2,997 Product and website development 18,008 3,275 3,215 General and administrative 20,436 11,667 21,468 Amortization of intangibles -- -- 1,833 Restructuring charge -- -- (278) --------- --------- ----------- Total operating expenses 89,637 42,256 29,235 --------- --------- ----------- Income (loss) from operations $ 40,719 $ (840) $ (32,109) ========= ========= =========== Stock-based Compensation Total Revenue $ -- $218,542 Cost of Revenue 176 49,820 ------------- -------- Gross Profit (176) 168,722 Sales and marketing 1,077 82,581 Product and website development 1,088 25,586 General and administrative 7,733 61,304 Amortization of intangibles -- 1,833 Restructuring charge -- (278) ------------- -------- Total operating expenses 9,898 171,026 ------------- -------- Income (loss) from operations $ (10,074) $ (2,304) ============= ======== *T -0- *T Nine months ended September 30, 2005 ------------------------------------ (unaudited) Real Move- Estate Related Services Services Unallocated Revenue $ 132,594 $ 53,453 $ -- Cost of Revenue 20,718 18,506 1,117 --------- ---------- ------------- Gross Profit 111,876 34,947 (1,117) Sales and marketing 44,968 21,576 956 Product and website development 11,244 2,772 1,271 General and administrative 16,222 9,577 32,425 Amortization of intangibles -- -- 2,889 Restructuring charges -- -- (1,442) --------- --------- ------------ Total operating expenses 72,434 33,925 36,099 --------- --------- ------------ Income (loss) from operations $ 39,442 $ 1,022 $ (37,216) ========= ========= ============ Stock-based Compensation Total Revenue $ -- $186,047 Cost of Revenue -- 40,341 ------------- -------- Gross Profit -- 145,706 Sales and marketing -- 67,500 Product and website development -- 15,287 General and administrative -- 58,224 Amortization of intangibles -- 2,889 Restructuring charges -- (1,442) ------------- -------- Total operating expenses -- 142,458 ------------- -------- Income (loss) from operations $ -- $ 3,248 ============= ======== *T -0- *T MOVE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, --------------------- 2006 2005 ------------ -------- (unaudited) Cash flows from continuing operating activities: Net income $ 3,607 $ 4,870 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 7,733 5,508 Amortization of intangible assets 1,833 2,889 Gain on sale of property and equipment -- (132) Provision for doubtful accounts 1,742 554 Stock-based compensation and charges 10,202 669 Other non-cash items (313) (72) Changes in operating assets and liabilities: Accounts receivable (3,035) (1,831) Other assets (514) (1,561) Accounts payable and accrued expenses (17,815) (7,237) Deferred revenue 9,695 2,444 ----------- ------- Net cash provided by operating activities 13,135 6,101 ----------- ------- Cash flows from investing activities: Purchases of property and equipment (8,653) (7,740) Maturities of short-term investments 26,325 17,475 Purchases of short-term investments (25,175) (9,785) Proceeds from sale of assets -- 164 Acquisitions, net (9,572) -- ----------- ------- Net cash provided by (used in) investing activities (17,075) 114 ----------- ------- Cash flows from financing activities: Proceeds from exercise of stock options 5,215 1,593 Restricted cash 804 848 Payments on capital lease obligations (2,112) (1,378) ----------- ------- Net cash provided by financing activities 3,907 1,063 ----------- ------- Change in cash and cash equivalents (33) 7,278 Cash and cash equivalents, beginning of period 13,272 14,819 ----------- ------- Cash and cash equivalents, end of period $ 13,239 $22,097 =========== ======= *T -0- *T MOVE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2006 2005 -------------- ------------ ASSETS (unaudited) Current assets: Cash and cash equivalents $ 13,239 $ 13,272 Short-term investments 137,900 139,050 Marketable securities 13,488 -- Accounts receivable, net 18,756 15,966 Other current assets 20,301 19,485 ------------- ------------ Total current assets 203,684 187,773 Property and equipment, net 27,840 20,717 Goodwill, net 23,877 19,502 Intangible assets, net 16,911 14,264 Restricted cash 4,222 5,026 Other assets 1,282 1,744 ------------- ------------ Total assets $ 277,816 $ 249,026 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,247 $ 6,427 Accrued expenses 24,765 40,879 Obligation under capital leases 2,002 1,005 Deferred revenue 54,218 43,652 ------------- ------------ Total current liabilities 86,232 91,963 Obligation under capital leases 2,692 -- Other liabilities 3,236 3,790 ------------- ------------ Total liabilities 92,160 95,753 ------------- ------------ Series B convertible preferred stock 94,896 91,349 Stockholders' equity: Series A convertible preferred stock -- -- Common stock 152 149 Additional paid-in capital 2,062,322 2,047,456 Deferred stock-based charges -- (351) Accumulated other comprehensive income 13,896 343 Accumulated deficit (1,985,610) (1,985,673) ------------- ------------ Total stockholders' equity 90,760 61,924 ------------- ------------ Total liabilities and stockholders' equity $ 277,816 $ 249,026 ============= ============ *T