MOVE Movano Inc

Move, Inc. (NASDAQ:MOVE) reported financial results for the second quarter ended June 30, 2008. The company also announced today that it has engaged an investment banker to assist in the sale of its Welcome Wagon business and has reclassified its results as discontinued operations for all periods presented. Total revenue for the second quarter was $61.4 million compared to $62.5 million in the second quarter of 2007. Income from continuing operations for the second quarter was $2.1 million, compared to $7.7 million in the second quarter of 2007. Net loss applicable to common stockholders (�net loss�) for the second quarter of 2008 was $2.2 million, or $0.01 per share, compared to net income of $4.4 million, or $0.03 per share, for the second quarter of 2007. The second quarter of 2007 included a one-time reversal of stock-based charges of $6.5 million which contributed to improved income from continuing operations and net income in that period. Management is also reviewing the company�s overall operating structure and has initiated a process to lower the company�s total operating expenses. Management�s objective is to reduce annual operating expenses by more than $20 million by the end of 2008, the full effect of which will not be realized this year. It is likely the company will incur restructuring charges in future periods and eliminate unprofitable revenue as a result of this review. �The issues and challenges facing the residential real estate market are creating a permanent dislocation in the offline real estate advertising market with online spending benefiting in the long run,� said Mike Long, Move's CEO. �As the market recovers, the needs of consumers and advertisers will be quite different than they are today. We have a clear strategy to meet those needs and are adjusting our business to focus on assets and new development initiatives that are essential to our long term strategy while eliminating unprofitable revenue streams and improving cash flow to invest in growth. Our success has been, and will continue to be, driven by our clear market leadership, as consumers have shown through their actions that Move is the most trusted source in online real estate.� Move's Adjusted EBITDA (earnings from continuing operations before interest, taxes, stock-based compensation and charges, depreciation, and amortization) on a non-GAAP basis for the second quarter of 2008 was $5.7 million, compared to $8.2 million for the second quarter of 2007. The Company has reported Adjusted 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. The decline in Adjusted EBITDA was primarily due to increased legal and facilities costs compared to 2007. �We are focused on providing the best online experience for the consumer, so they will continue to return to MOVE for their real estate needs,� said Lorna Borenstein, Move�s President. �Our investment in the redesign of Realtor.com is delivering an increase in consumer engagement and advertiser value. We have experienced increases in listing page click-throughs, consumers referring listings to friends, agent and broker contacts, and total registrations. Our direct sales to realtors were at all time highs for June and July. We are demonstrating that we can provide the most effective advertising solutions for our customers and the best content for consumers and will use this turmoil in the market to extend our leadership position.� Conference Call As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, August 7, 2008, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Chief Executive Officer, Mike Long, President, Lorna Borenstein, and Chief Financial Officer, Lew Belote, will discuss the Company's second quarter 2008 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 7:00 p.m. Pacific Time (10:00 p.m. Eastern Time) until midnight on August 21, 2008 at 888-286-8010 or 617-801-6888, conference ID 99842063. 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 June 30, 2008 is expected to be filed with the Securities and Exchange Commission on, or before, August 11, 2008. 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, litigation settlement charges and certain other non-cash and non-recurring items, principally depreciation, amortization and stock based compensation and other charges, which is referred to as adjusted EBITDA. The Company has also presented a non-GAAP table of Segment Data for the three and six months ended June 30, 2008 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), is the leader in online real estate with 7.4 million (1) monthly visitors to its online network of websites. Move, Inc. operates Move.com� (http://www.move.com), a leading destination for information on new homes and rental listings; REALTOR.com� (http://www.realtor.com), the official Web site of the National Association of REALTORS�; Moving.com; SeniorHousingNet �; and TOP PRODUCER� Systems. Move, Inc. is based in Westlake Village and employs more than 1600 individuals throughout North America. For more information: http://www.move.com. (1) comScore Media Metrix, June 2008 MOVE, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts) � � Three Months EndedJune 30, � Six Months EndedJune 30, � 2008 � � 2007 � � 2008 � � 2007 � (unaudited) Revenue $ 61,437 $ 62,533 $ 123,379 $ 122,976 Cost of revenue (1) 11,214 � 10,598 � 22,649 � 20,589 � Gross profit 50,223 � 51,935 � 100,730 � 102,387 � � Operating expenses: (1) Sales and marketing 23,140 22,275 47,266 45,077 Product and web site development 6,802 9,223 13,689 17,998 General and administrative 19,433 14,528 41,604 32,750 Amortization of intangible assets 197 � 189 � 394 � 370 � Total operating expenses 49,572 � 46,215 � 102,953 � 96,195 � Operating income (loss) from continuing operations 651 5,720 (2,223 ) 6,192 � Interest income, net 1,521 2,503 3,578 4,816 Other income (expense), net 109 � (372 ) 180 � 402 � Income from continuing operations before income taxes 2,281 7,851 1,535 11,410 � Provision for income taxes 162 � 169 � 203 � 253 � � Income from continuing operations 2,119 7,682 1,332 11,157 � Loss from discontinued operations (3,076 ) (2,018 ) (5,650 ) (4,098 ) Net income (loss) (957 ) 5,664 (4,318 ) 7,059 � Convertible preferred stock dividends and related accretion (1,272 ) (1,241 ) (2,537 ) (2,473 ) Net income (loss) applicable to common stockholders $ (2,229 ) $ 4,423 � $ (6,855 ) $ 4,586 � � Basic income (loss) per share attributable to common stockholders: Continuing operations $ 0.01 $ 0.04 $ (0.01 ) $ 0.06 Discontinued operations (0.02 ) (0.01 ) (0.04 ) (0.03 ) Net income (loss) attributable to common stockholders $ (0.01 ) $ 0.03 � $ (0.05 ) $ 0.03 � � Diluted income (loss) per share attributable to common stockholders: Continuing operations $ 0.01 $ 0.04 $ (0.01 ) $ 0.05 Discontinued operations (0.02 ) (0.01 ) (0.04 ) (0.02 ) Net income (loss) attributable to common stockholders $ (0.01 ) $ 0.03 � $ (0.05 ) $ 0.03 � � Shares used in calculation of net income (loss) per share attributable to common stockholders: Basic 151,551 � 154,885 � 151,383 � 154,614 � Diluted 158,292 � 165,499 � 151,383 � 166,657 � � � (1) Includes stock-based compensation as follows: � Cost of revenue $ 31 $ 18 $ 69 $ 49 Sales and marketing 103 180 209 646 Product and web site development 84 237 269 512 General and administrative 1,777 � (643 ) 4,847 � 3,929 � $ 1,995 � $ (208 ) $ 5,394 � $ 5,136 � MOVE, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) � � Six Months EndedJune 30, � 2008 � � � 2007 � Cash flows from operating activities: (unaudited) Income from continuing operations $ 1,332 $ 11,157 Adjustments to reconcile income from continuing operations to net cash provided by continuing operating activities: Depreciation 5,512 4,722 Amortization of intangible assets 394 370 Loss (gain) on sales of property and equipment 51 (336 ) Provision for doubtful accounts 440 435 Stock-based compensation and charges 5,503 5,420 Change in market value of embedded derivative liability (155 ) (98 ) Other non-cash items 283 11 Changes in operating assets and liabilities: Accounts receivable 2,116 914 Other assets (2,865 ) (3,797 ) Accounts payable and accrued expenses (760 ) 2,534 Deferred revenue (1,092 ) (1,662 ) � Net cash provided by continuing operating activities 10,759 19,670 Net cash used in discontinued operating activities (4,366 ) (1,199 ) Net cash provided by operating activities 6,393 � 18,471 � � Cash flows from investing activities: Purchases of property and equipment (5,130 ) (12,538 ) Proceeds from the surrender of life insurance policy � 5,200 Proceeds from sale of marketable equity securities � 15,743 Maturities of short-term investments 1,800 36,350 Purchases of short-term investments (21,552 ) (43,475 ) Proceeds from sale of assets 31 336 Purchases of intangible assets � � (418 ) Net cash (used in) provided by continuing investing activities (24,851 ) 1,198 Net cash provided by (used in) discontinued investing activities 799 � (63 ) Net cash (used in) provided by investing activities (24,052 ) 1,135 � � Cash flows from financing activities: Proceeds from exercise of stock options 972 2,708 Restricted cash 176 993 Payments on capital lease obligations (1,002 ) (935 ) Net cash provided by financing activities 146 � 2,766 � Change in cash and cash equivalents (17,513 ) 22,372 Cash and cash equivalents, beginning of period 45,713 � 14,873 � Cash and cash equivalents, end of period $ 28,200 � $ 37,245 � MOVE, INC.CONSOLIDATED BALANCE SHEETS(in thousands) � � � June 30,2008 � � December 31,2007 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 28,200 $ 45,713 Short-term investments 20,266 129,900 Accounts receivable, net 13,151 15,645 Other current assets 13,373 10,111 Assets held for sale 21,659 � 24,417 � Total current assets 96,649 225,786 � Property and equipment, net 29,203 29,930 Investments, long term 121,000 � Goodwill, net 17,181 17,181 Intangible assets, net 4,317 5,011 Restricted cash 3,193 3,369 Other assets 696 � 1,251 � Total assets $ 272,239 � $ 282,528 � � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities: Accounts payable $ 3,108 $ 4,337 Accrued expenses 28,988 28,446 Obligation under capital leases 1,165 1,894 Deferred revenue 33,928 34,975 Liabilities held for sale 4,261 � 5,429 � Total current liabilities 71,450 75,081 � Obligation under capital leases � 273 Other liabilities 1,385 � 1,508 � Total liabilities 72,835 76,862 � Series B convertible preferred stock 103,726 101,189 � Stockholders� equity: Series A convertible preferred stock � � Common stock 152 151 Additional paid-in capital 2,082,613 2,076,074 Accumulated other comprehensive income (7,809 ) 675 Accumulated deficit (1,979,278 ) (1,972,423 ) Total stockholders� equity 95,678 � 104,477 � � Total liabilities and stockholders� equity $ 272,239 � $ 282,528 � MOVE, INC.SEGMENT OPERATING RESULTS(in thousands) � � Three Months EndedJune 30, � Six Months EndedJune 30, � 2008 � � 2007 � � 2008 � � 2007 � Revenue: (unaudited) Real Estate Services $ 54,214 $ 54,750 $ 110,008 $ 108,273 Consumer Media 7,223 � 7,783 � 13,371 � 14,703 � Total revenue $ 61,437 � $ 62,533 � $ 123,379 � $ 122,976 � � Operating income (loss) from continuing operations (1) Real Estate Services $ 14,228 $ 16,277 $ 25,774 $ 29,506 Consumer Media 623 36 (30 ) (999 ) Unallocated (14,200 ) (10,593 ) (27,967 ) (22,315 ) Operating income (loss) from continuing operations $ 651 � $ 5,720 � $ (2,223 ) $ 6,192 � � � (1) Includes stock-based compensation as follows: � Real Estate Services $ 669 $ (442 ) $ 2,400 $ 1,636 Consumer Media 95 (112 ) 179 489 Unallocated 1,231 � 346 � 2,815 � 3,011 � $ 1,995 � $ (208 ) $ 5,394 � $ 5,136 � MOVE, INC.SEGMENT OPERATING RESULTSNET OF STOCK-BASED COMPENSATION EXPENSE(in thousands) � � Three months ended � June 30, 2008 � (unaudited) � � Real EstateServices � ConsumerMedia � Unallocated � Stock-basedCompensation � Total � Revenue $ 54,214 $ 7,223 $ � $ � $ 61,437 Cost of revenue 9,424 1,531 � 228 � 31 � 11,214 Gross profit 44,790 5,692 (228 ) (31 ) 50,223 � Sales and marketing 17,998 3,402 1,637 103 23,140 Product and web site development 5,787 331 600 84 6,802 General and administrative 6,108 1,241 10,307 1,777 19,433 Amortization of intangibles � � � 197 � � � 197 Total operating expenses 29,893 4,974 � 12,741 � 1,964 � 49,572 � Operating income (loss) from continuing operations $ 14,897 $ 718 � $ (12,969 ) $ (1,995 ) $ 651 � � Three months ended June 30, 2007 (unaudited) � � Real EstateServices ConsumerMedia Unallocated Stock-basedCompensation Total � Revenue $ 54,750 $ 7,783 $ � $ � $ 62,533 Cost of revenue 8,463 1,482 � 635 � 18 � 10,598 Gross profit 46,287 6,301 (635 ) (18 ) 51,935 � Sales and marketing 17,003 3,568 1,524 180 22,275 Product and web site development 6,931 1,785 270 237 9,223 General and administrative 6,518 1,024 7,629 (643 ) 14,528 Amortization of intangibles � � � 189 � � � 189 Total operating expenses 30,452 6,377 � 9,612 � (226 ) 46,215 � Operating income (loss) from continuing operations $ 15,835 $ (76 ) $ (10,247 ) $ 208 � $ 5,720 MOVE, INC.SEGMENT OPERATING RESULTSNET OF STOCK-BASED COMPENSATION EXPENSE(in thousands) � Six months ended June 30, 2008 (unaudited) � � Real EstateServices � ConsumerMedia � Unallocated � Compensation � Total � Revenue $ 110,008 $ 13,371 $ � $ � $ 123,379 Cost of revenue 18,902 3,098 � 580 � 69 � 22,649 � Gross profit 91,106 10,273 (580 ) (69 ) 100,730 � Sales and marketing 37,264 6,776 3,017 209 47,266 Product and web site development 11,403 776 1,241 269 13,689 General and administrative 14,265 2,572 19,920 4,847 41,604 Amortization of intangibles � � � 394 � � � 394 � Total operating expenses 62,932 10,124 � 24,572 � 5,325 � 102,953 � � Operating income (loss) from continuing operations $ 28,174 $ 149 � $ (25,152 ) $ (5,394 ) $ (2,223 ) � � Six months ended June 30, 2007 (unaudited) � � Real EstateServices ConsumerMedia Unallocated Stock-basedCompensation Total � Revenue $ 108,273 $ 14,703 $ � $ � $ 122,976 Cost of revenue 16,698 2,646 � 1,196 � 49 � 20,589 � Gross profit 91,575 12,057 (1,196 ) (49 ) 102,387 � Sales and marketing 34,837 7,174 2,420 646 45,077 Product and web site development 13,458 3,255 773 512 17,998 General and administrative 12,138 2,138 14,545 3,929 32,750 Amortization of intangibles � � � 370 � � � 370 � Total operating expenses 60,433 12,567 � 18,108 � 5,087 � 96,195 � � Operating income (loss) from continuing operations $ 31,142 $ (510 ) $ (19,304 ) $ (5,136 ) $ 6,192 � MOVE, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURE OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS EXCLUDING STOCK-BASED COMPENSATION AND CHARGES, DEPRECIATION, AND AMORTIZATION (EBITDA) (in thousands) � � Three Months EndedJune 30, � Six Months EndedJune 30, 2008 � 2007 2008 � 2007 (unaudited) Operating income (loss) from continuing operations $ 651 $ 5,720 $ (2,223 ) $ 6,192 � Plus: Stock-based charges 13 136 109 284 Amortization of intangible assets 197 189 394 370 Depreciation 2,883 2,388 5,512 4,722 Stock-based compensation 1,995 (208 ) 5,394 � 5,136 Adjusted EBITDA $ 5,739 $ 8,225 � $ 9,186 � $ 16,704