MOVE Movano Inc

Move, Inc. (NASDAQ:MOVE) reported financial results for the third quarter ended September 30, 2008. Total revenue for the third quarter was $61.2 million compared to $63.4 million in the third quarter of 2007. Move's Adjusted EBITDA (earnings from continuing operations before interest, taxes, stock-based compensation and charges, depreciation, amortization and other non-recurring charges) on a non-GAAP basis for the third quarter of 2008 was $5.7 million, compared to $7.3 million for the third 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. Loss from continuing operations for the third quarter was $2.0 million, which includes a $4.0 million restructuring charge related to its cost reduction initiatives. Net loss from continuing operations was $1.0 million in the third quarter of 2007. Net loss applicable to common stockholders ("net loss") for the third quarter of 2008 was $22.6 million, or $0.15 per share, compared to a loss of $3.3 million, or $0.02 per share, for the third quarter of 2007. In the current quarter, the Company reported a loss on discontinued operations of $19.3 million, which includes an impairment charge of $15.9 million and a write-down of other operating assets of $2.1 million, to reflect the decline in value of the Welcome Wagon assets that are being marketed for sale. The loss on discontinued operations in the third quarter of 2007 was $1.0 million. �Our third quarter results demonstrate how MOVE is leveraging the significant advantages and benefits of our market leadership, comprehensive industry knowledge and deep customer relationships,� said Mike Long, Move's CEO. �In the face of the housing meltdown, mortgage freeze, government bailout, and global economic uncertainty, we grew our core Realtor.com, Top Producer and Rentals businesses quarter over quarter while maintaining revenue and EBITDA results.� �In September, we experienced a 17% year-over-year increase in total minutes spent on Realtor.com, even as the overall category experienced a 5% decline,� said Lorna Borenstein, Move�s President. �In fact, consumers spent more time on Realtor.com than the next seven competitors combined. These numbers show that consumers rely on, and trust, the Move Network and Realtor.com more than any other source for their real estate information. We are confident that the greatly improved consumer experience on our newly launched redesigned sites will only serve to further extend our market dominance.� Conference Call As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Wednesday, November 5, 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 third quarter 2008 results. In order to participate in the call, please dial (800) 901-5217, or if outside the U.S., (617) 786-2964 with passcode 84744619 to access the conference call at least five minutes prior to the 2:00 p.m. PT start time. A live webcast and replay of the call will also be available at http://investor.move.com under the Event Calendar menu. An audio replay will be available between 7:00 p.m. PT, November 5, 2008, and 11:59 p.m. PT, November 12, 2008, by calling (888) 286-8010, or (617) 801-6888, with passcode 52441629. 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, 2008 is expected to be filed with the Securities and Exchange Commission on, or before, November 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 EBITDA. The Company has also presented a non-GAAP table of Segment Data for the three and nine months ended September 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 7.7 million[1] monthly visitors to its online network of websites. Move, Inc. operates: Move.com(R), a leading destination for information on new homes and rental listings, moving, home and garden and home finance; REALTOR.com(R), the official Web site of the National Association of REALTORS(R); Welcome Wagon(R); Moving.com; SeniorHousingNet(TM); and TOP PRODUCER(R) Systems. Move, Inc. is based in Westlake Village, California. For more information: http://www.move.com. [1] comScore Media Metrix, August 2008 MOVE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) � � Three Months EndedSeptember 30, � Nine Months EndedSeptember 30, 2008 � 2007 2008 � 2007 (unaudited) Revenue $ 61,240 $ 63,380 $ 184,619 $ 186,356 Cost of revenue(1) 11,804 � 11,053 � 34,453 � 31,642 � Gross profit 49,436 � 52,327 � 150,166 � 154,714 � � Operating expenses:(1) Sales and marketing 24,002 23,212 71,268 68,289 Product and web site development 6,821 8,615 20,510 26,613 General and administrative 18,534 20,479 60,138 53,229 Amortization of intangible assets 188 194 582 564 Litigation settlement � 3,900 � 3,900 Restructuring charge 4,014 � � � 4,014 � � � Total operating expenses 53,559 � 56,400 � 156,512 � 152,595 � Operating income (loss) from continuing operations (4,123 ) (4,073 ) (6,346 ) 2,119 � Interest income, net 1,261 2,567 4,839 7,383 Other income, net 959 � 676 � 1,139 � 1,078 � Income (loss) from continuing operations before income taxes (1,903 ) (830 ) (368 ) 10,580 � Provision for income taxes 110 � 169 � 313 � 422 � � Income (loss) from continuing operations (2,013 ) (999 ) (681 ) 10,158 � Loss from discontinued operations (19,334 ) (1,044 ) (24,984 ) (5,142 ) Net income (loss) (21,347 ) (2,043 ) (25,665 ) 5,016 � Convertible preferred stock dividends and related accretion (1,282 ) (1,248 ) (3,819 ) (3,721 ) Net income (loss) applicable to common stockholders $ (22,629 ) $ (3,291 ) $ (29,484 ) $ 1,295 � � Basic and diluted income (loss) per share attributable to common stockholders: Continuing operations $ (0.02 ) $ (0.01 ) $ (0.03 ) $ 0.04 Discontinued operations (0.13 ) (0.01 ) (0.16 ) (0.03 ) Net income (loss) attributable to common stockholders $ (0.15 ) $ (0.02 ) $ (0.19 ) $ 0.01 � � Shares used to calculate net income (loss) per share attributable to common stockholders: Basic 152,184 � 155,015 � 151,652 � 154,749 � Diluted 152,184 � 155,015 � 151,652 � 165,166 � � � (1) Includes stock-based compensation as follows: � Cost of revenue $ 41 $ 38 $ 110 $ 87 Sales and marketing 161 259 370 905 Product and web site development 150 333 419 845 General and administrative 2,246 � 3,834 � 7,093 � 7,763 � $ 2,598 � $ 4,464 � $ 7,992 � $ 9,600 � MOVE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) � � � Nine Months Ended September 30, 2008 � 2007 Cash flows from operating activities: (unaudited) Income (loss) from continuing operations $ (681 ) $ 10,158 Adjustments to reconcile income (loss) from continuing operations to net cash provided by continuing operating activities: Depreciation 8,435 7,322 Amortization of intangible assets 582 564 Provision for doubtful accounts 511 653 Gain on sales of property and equipment (816 ) (333 ) Stock-based compensation and charges 8,209 10,049 Change in market value of embedded derivative liability (156 ) (688 ) Other non-cash items 411 (10 ) Changes in operating assets and liabilities: Accounts receivable 2,531 (1,027 ) Other assets (2,760 ) (4,473 ) Accounts payable and accrued expenses 366 4,888 Deferred revenue (4,312 ) (3,793 ) � Net cash provided by continuing operating activities 12,320 23,310 Net cash used in discontinued operating activities (5,777 ) (2,748 ) Net cash provided by operating activities 6,543 � 20,562 � � Cash flows from investing activities: Purchases of property and equipment (5,748 ) (15,897 ) Proceeds from sale of marketable equity securities 27 15,743 Proceeds from the surrender of life insurance policy � 5,200 Proceeds from sale of property and equipment 206 334 Purchases of intangible assets � (618 ) Maturities of short-term investments 96,918 45,200 Purchases of short-term investments (96,418 ) (67,275 ) Net used in continuing investing activities (5,015 ) (17,313 ) Net cash provided by (used in) discontinued investing activities 799 � (147 ) Net cash used in investing activities (4,216 ) (17,460 ) � Cash flows from financing activities: Proceeds from exercise of stock options 2,889 2,821 Borrowings from line of credit 64,700 � Restricted cash 166 952 Payments on capital lease obligations (1,516 ) (1,415 ) Net cash provided by financing activities 66,239 � 2,358 � Change in cash and cash equivalents 68,566 5,460 Cash and cash equivalents, beginning of period 45,713 � 14,873 � Cash and cash equivalents, end of period $ 114,279 � $ 20,333 � MOVE, INC. CONSOLIDATED BALANCE SHEETS (in thousands) � September 30, 2008 � December 31, 2007 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 114,279 $ 45,713 Short-term investments � 129,900 Accounts receivable, net 12,587 15,645 Other current assets 13,479 10,111 Assets held for sale � � 24,417 � Total current assets 140,345 225,786 � Property and equipment, net 26,836 29,930 Investments, long term 121,000 � Goodwill, net 17,181 17,181 Intangible assets, net 4,107 5,011 Restricted cash 3,203 3,369 Other assets 1,140 � 1,251 � Total assets $ 313,812 � $ 282,528 � � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities: Accounts payable $ 3,643 $ 4,337 Accrued expenses 29,390 28,446 Deferred revenue 30,443 34,975 Obligation under capital leases 651 1,894 Line of credit 64,700 � Liabilities held for sale � � 5,429 � Total current liabilities 128,827 75,081 � Obligation under capital leases � 273 Other liabilities 2,157 � 1,508 � Total liabilities 130,984 76,862 � Series B convertible preferred stock 105,008 101,189 � Stockholders� equity: Series A convertible preferred stock � � Common stock 153 151 Additional paid-in capital 2,087,314 2,076,074 Accumulated other comprehensive income (7,740 ) 675 Accumulated deficit (2,001,907 ) (1,972,423 ) Total stockholders� equity 77,820 � 104,477 � � Total liabilities and stockholders� equity $ 313,812 � $ 282,528 � MOVE, INC. SEGMENT OPERATING RESULTS (in thousands) � � Three Months EndedSeptember 30, � Nine Months EndedSeptember 30, 2008 � 2007 2008 � 2007 Revenue: (unaudited) Real Estate Services $ 54,493 $ 55,936 $ 164,501 $ 164,209 Consumer Media 6,747 � 7,444 � 20,118 � 22,147 � Total revenue $ 61,240 � $ 63,380 � $ 184,619 � $ 186,356 � � Operating income (loss) from continuing operations(1) Real Estate Services $ 13,390 $ 14,910 $ 39,164 $ 44,416 Consumer Media 664 175 634 (824 ) Unallocated (18,177 ) (19,158 ) (46,144 ) (41,473 ) Operating income (loss) from continuing operations $ (4,123 ) $ (4,073 ) $ (6,346 ) $ 2,119 � � � (1) Includes stock-based compensation as follows: � Real Estate Services $ 927 $ 1,445 $ 3,327 $ 3,081 Consumer Media 113 306 292 795 Unallocated 1,558 � 2,713 � 4,373 � 5,724 � $ 2,598 � $ 4,464 � $ 7,992 � $ 9,600 � MOVE, INC. SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) � � Three Months Ended September 30, 2008 (unaudited) Real Estate Services � Consumer Media � Unallocated � Stock-based Compensation � Total Revenue $ 54,493 $ 6,747 $ � $ � $ 61,240 Cost of revenue 9,660 1,855 248 � 41 � 11,804 � Gross profit 44,833 4,892 (248 ) (41 ) 49,436 � Sales and marketing 19,495 2,996 1,350 161 24,002 Product and web site development 5,359 433 879 150 6,821 General and administrative 5,411 608 10,269 2,246 18,534 Amortization of intangibles � � 188 � 188 Restructuring charges 251 78 3,685 � � � 4,014 � Total operating expenses 30,516 4,115 16,371 � 2,557 � 53,559 � � Operating income (loss) from continuing operations $ 14,317 $ 777 $ (16,619 ) $ (2,598 ) $ (4,123 ) � � Three Months Ended September 30, 2007 (unaudited) Real Estate Services Consumer Media Unallocated Stock-based Compensation Total Revenue $ 55,936 $ 7,444 $ � $ � $ 63,380 Cost of revenue 8,864 1,566 585 � 38 � 11,053 � Gross profit 47,072 5,878 (585 ) (38 ) 52,327 � Sales and marketing 18,018 3,230 1,705 259 23,212 Product and web site development 6,681 1,341 260 333 8,615 General and administrative 6,018 826 9,801 3,834 20,479 Amortization of intangibles � � 194 � 194 Litigation charges � � 3,900 � � � 3,900 � Total operating expenses 30,717 5,397 15,860 � 4,426 � 56,400 � � Operating income (loss) from continuing operations $ 16,355 $ 481 $ (16,445 ) $ (4,464 ) $ (4,073 ) MOVE, INC. SEGMENT OPERATING RESULTS NET OF STOCK-BASED COMPENSATION EXPENSE (in thousands) � � Nine Months Ended September 30, 2008 (unaudited) Real Estate Services � Consumer Media � Unallocated � � Stock-based Compensation � � Total Revenue $ 164,501 $ 20,118 $ � $ � $ 184,619 Cost of revenue 28,562 4,953 � 828 � 110 � 34,453 � Gross profit 135,939 15,165 (828 ) (110 ) 150,166 � Sales and marketing 56,759 9,772 4,367 370 71,268 Product and web site development 16,762 1,209 2,120 419 20,510 General and administrative 19,676 3,180 30,189 7,093 60,138 Amortization of intangibles � � 582 � 582 Restructuring charges 251 78 � 3,685 � � � 4,014 � Total operating expenses 93,448 14,239 � 40,943 � 7,882 � 156,512 � � Operating income (loss) from continuing operations $ 42,491 $ 926 � $ (41,771 ) $ (7,992 ) $ (6,346 ) � � Nine Months Ended September 30, 2007 (unaudited) Real Estate Services Consumer Media Unallocated � Stock-based Compensation � Total Revenue $ 164,209 $ 22,147 $ � $ � $ 186,356 Cost of revenue 25,562 4,212 � 1,781 � 87 � 31,642 � Gross profit 138,647 17,935 (1,781 ) (87 ) 154,714 � Sales and marketing 52,855 10,404 4,125 905 68,289 Product and web site development 20,139 4,596 1,033 845 26,613 General and administrative 18,156 2,964 24,346 7,763 53,229 Amortization of intangibles � � 564 � 564 Litigation charges � � � 3,900 � � � 3,900 � Total operating expenses 91,150 17,964 � 33,968 � 9,513 � 152,595 � � Operating income (loss) from continuing operations $ 47,497 $ (29 ) $ (35,749 ) $ (9,600 ) $ 2,119 � MOVE, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURE INCOME (LOSS) FROM CONTINUING OPERATIONS EXCLUDING STOCK-BASED COMPENSATION ANDCHARGES, DEPRECIATION, AND AMORTIZATION (EBITDA) (in thousands) � � Three Months Ended September 30, � Nine Months Ended September 30, 2008 � 2007 2008 � 2007 (unaudited) Operating income (loss) from continuing operations $ (4,123 ) $ (4,073 ) $ (6,346 ) $ 2,119 � Plus: Stock-based charges 108 165 217 449 Amortization of intangible assets 188 194 582 564 Depreciation 2,923 2,600 8,435 7,322 Restructuring charges 4,014 � 4,014 � Litigation charge � 3,900 � 3,900 Stock-based compensation 2,598 � 4,464 � 7,992 � 9,600 Adjusted EBITDA $ 5,708 � $ 7,250 � $ 14,894 � $ 23,954