MOVE Movano Inc

Move, Inc. (NASDAQ:MOVE) reported financial results for the fourth quarter and fiscal year ended December 31, 2009.

Revenue in the fourth quarter of 2009 was $49.6 million, compared to $57.5 million in the fourth quarter of 2008. Net loss applicable to common stockholders, including discontinued operations, was $4.5 million, or a loss of $0.03 per share, compared to a net loss of $3.2 million, or a loss of $0.02 per share in the fourth quarter of 2008. Non-GAAP Adjusted EBITDA (earnings from continuing operations before interest, taxes, stock-based compensation and charges, depreciation, amortization and other non-recurring charges) for the fourth quarter of 2009 was $5.0 million, or 10% of revenue, compared to $7.3 million, or 13% of revenue, for the fourth quarter of 2008. 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 fourth quarter closed a year of tremendous change for Move, as we realigned our entire business to further extend our position as the leader in the online real estate market," said Steve Berkowitz, chief executive officer at Move, Inc. “In my first year leading the company, we have put in place the people, processes and operating plan to drive Move forward. Some of the changes we have implemented will have short term benefits, while others will take time before we fully realize the benefit of our efforts. However, I am confident that we have the focus and dedication to leverage our market leadership into long term success for our customers, our partners, and our consumers.”

2009 Highlights

In 2009, Move maintained its dominant market leadership, leading the industry in unique users and total engagement every month of the year. For the full year, Move averaged 8.9 million monthly unique users and 209 million monthly minutes. Among the top 8 companies in the online real estate market, consumers spent more time on Move’s sites than the next seven competitors combined. Other highlights from 2009 included:

• Steve Berkowitz was named CEO of Move in January, bringing 25 years of experience from companies including Microsoft, Ask.com and IDG Books.
• As CEO, Mr. Berkowitz built out a new management team, promoting Errol Samuelson to Chief Revenue Officer and hiring Rob Krolik (eBay, Shopping.com, DigitalThink) as Chief Financial Officer in July, followed by the September additions of David Story (Adobe, Intuit) as Chief Technology Officer and Scott Boecker (Ticketmaster, eToys) as Chief Product Officer.
• Launched new real estate professional products, including Search Assist, REALTOR Facebook widgets, Ask a Realtor, Realtor blogs, and in January 2010, the Realtor.com Real Estate Search iPhone app with 300,000 downloads in 50 days.
• Expanded marketing partnerships with leading real estate brokerage companies, including CENTURY 21 Real Estate and The Realty Alliance to increase listings exposure for tens of thousands of real estate professionals around the country.
• Launched Builders Design Experience, a joint venture with Builder Homesite, Inc. focused on helping new home builders reach buyers through the nation’s largest network of new home sites.
• Reduced annual expense run rate by more than $30 million to drive EBITDA and to free up capital for investment.

For the full year ended December 31, 2009, Move reported revenue of $212.0 million, compared to $242.1 million in the 2008 fiscal year. Net loss applicable to common stockholders in 2009 was $12.2 million, or a loss of $0.08 per share, compared to a net loss of $34.3 million, or a loss of $0.23 per share in 2008. 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 2009 was $24.3 million, or 11% of revenue, compared to $22.2 million, or 9% of revenue, for 2008.

BUSINESS OUTLOOK

Move today provided guidance for the quarter ending March 31, 2010. For the quarter ending March 31, 2010, Move expects revenue to be approximately $48 million and expects to report Adjusted EBITDA margin of approximately 10%.

Move also provided guidance for the fiscal year ending December 31, 2010. The Company currently expects revenue to range between $186 million and $192 million, with an Adjusted EBITDA target of approximately 10%.

Conference Call

As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, March 4, 2010, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). In order to participate in the call, please dial (888) 396-2386, or if outside the U.S., (617) 847-8712 with passcode 99111855, 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 8:00 p.m. ET, March 4, 2010, and 11:59 p.m. ET, March 18, 2010, by calling (888) 286-8010, or (617) 801-6888, with passcode 33878336.

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-K for the year ended December 31, 2009 is expected to be filed with the Securities and Exchange Commission on, or before March 8, 2010.

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 continuing operations excluding restructuring, impairment of long-lived assets, 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 Financial Data for the three and twelve month periods ended December 31, 2009 and 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 8.9 million [1] monthly visitors to its online network of websites. Move, Inc. operates: Move.com, a leading destination for information on new homes and rental listings, moving, home and garden and home finance; REALTOR.com®, the official Web site of the National Association of REALTORS®; Moving.com; SeniorHousingNet; and TOP PRODUCER Systems. Move, Inc. is based in Campbell, California. For more information: www.move.com.

[1] comScore Media Metrics, January 2010

MOVE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

   

Three Months Ended December 31,

Twelve Months Ended December 31, 2009   2008 2009   2008 (unaudited)   Revenue $ 49,638 $ 57,450 $ 212,009 $ 242,069 Cost of revenue (1) 11,033   11,588   48,498   46,041   Gross profit 38,605   45,862   163,511   196,028     Operating expenses: (1) Sales and marketing 17,126 22,263 78,062 93,531 Product and web site development 7,374 5,832 27,832 26,342 General and administrative 13,717 15,808 64,944 77,571 Amortization of intangible assets 107 174 473 756 Restructuring charges — 398 (1,192 ) 4,412 Litigation settlements 3,888 — 4,863 — Impairment of long-lived assets —   1,670   —   1,670   Total operating expenses 42,212   46,145   174,982   204,282   Operating loss from continuing operations (3,607 ) (283 ) (11,471 ) (8,254 )   Interest income, net 119 848 847 5,687 Other income (expense), net 157   (48 ) 1,898   1,091   Income (loss) from continuing operations before income taxes (3,331 ) 517 (8,726 ) (1,476 )   Provision for income taxes (190 ) 236   37   549     Income (loss) from continuing operations (3,141 ) 281 (8,763 ) (2,025 )   Loss from discontinued operations (41 ) (2,181 ) (486 ) (27,165 ) Gain on disposition of discontinued operations —   —   2,303   —   Net loss (3,182 ) (1,900 ) (6,946 ) (29,190 )   Convertible preferred stock dividends and related accretion (1,324 ) (1,289 ) (5,244 ) (5,108 ) Net loss applicable to common stockholders $ (4,506 ) $ (3,189 ) $ (12,190 ) $ (34,298 )   Basic and diluted net income (loss) per share applicable to common stockholders: Continuing operations $ (0.03 ) $ (0.01 ) $ (0.09 ) $ (0.05 ) Discontinued operations (0.00 ) (0.01 ) 0.01   (0.18 ) Basic and diluted net income (loss) per share applicable to common stockholders: $ (0.03 ) $ (0.02 ) $ (0.08 ) $ (0.23 )   Shares used in calculation of net loss per share applicable to common stockholders:   Basic and diluted 154,053   152,844   153,369   151,952     (1) Includes stock-based compensation as follows:   Cost of revenue $ 44 $ 34 $ 181 $ 144 Sales and marketing 387 388 1,736 758 Product and web site development 194 147 687 566 General and administrative 1,299   1,813   14,590   10,531   $ 1,924   $ 2,382   $ 17,194   $ 11,999    

MOVE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

    December 31,

2009

December 31,

2008

  ASSETS Current assets: Cash and cash equivalents $ 106,847 $ 108,935 Accounts receivable, net 10,782 12,833 Other current assets 12,101   11,399   Total current assets 129,730 133,167   Property and equipment, net 21,139 21,934 Long-term investments 111,800 111,800

Investment in unconsolidated joint venture

6,649 — Goodwill, net 16,969 16,969 Intangible assets, net 3,460 3,933 Restricted cash — 3,209 Other assets 1,548   995   Total assets $ 291,295   $ 292,007     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,545 $ 4,051 Accrued expenses 18,335 22,747 Obligation under capital leases — 339 Deferred revenue 15,951 23,991 Line of credit 64,630   64,700   Total current liabilities 104,461 115,828   Other non-current liabilities 1,096   2,043   Total liabilities 105,557 117,871   Series B convertible preferred stock 111,541 106,297   Stockholders’ equity: Series A convertible preferred stock — — Common stock 156 153 Additional paid-in capital 2,112,613 2,094,135 Accumulated other comprehensive income (17,116 ) (17,183 ) Accumulated deficit (2,021,456 ) (2,009,266 ) Total stockholders’ equity 74,197   67,839     Total liabilities and stockholders’ equity $ 291,295   $ 292,007    

MOVE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

  Twelve Months Ended December 31, 2009   2008   Cash flows from continuing operating activities: Loss from continuing operations $ (8,763 ) $ (2,025 ) Adjustments to reconcile loss from continuing operations to net cash provided by continuing operating activities: Depreciation 10,494 11,246 Amortization of intangible assets 473 756 Provision for doubtful accounts 1,298 823 Gain on sale of assets (1,185 ) (687 ) Stock-based compensation and charges 17,602 12,325 Impairment of long-lived assets — 1,670 Earnings of unconsolidated joint venture (149 ) — Change in market value of embedded derivative liability (600 ) (411 ) Other non-cash items (171 ) 651 Changes in operating assets and liabilities: Accounts receivable 702 1,965 Other assets 26 (557 ) Accounts payable and accrued expenses (2,016 ) (6,067 ) Deferred revenue (8,059 ) (10,834 )   Net cash provided by continuing operating activities 9,652 8,855 Net cash used in discontinued operating activities (1,894 ) (7,334 ) Net cash provided by operating activities 7,758   1,521     Cash flows from investing activities: Purchases of property and equipment (9,608 ) (5,935 ) Investment in joint venture (6,500 ) —

Proceeds from sale of marketable equity securities

— 27 Purchases of short-term investments — (96,418 ) Maturities of short-term investments — 96,918 Proceeds from sale of assets 1,370   206   Net cash used in investing activities of continuing operations (14,738 ) (5,202 ) Net cash provided by investing activities of discontinued operations 1,739   813   Net cash used in investing activities (12,999 ) (4,389 )   Cash flows from financing activities: Proceeds from exercise of stock options 1,879 3,058

Proceeds from line of credit

— 64,700

Tax payment related to net share settlements of restricted stock awards

(1,064 ) — Restricted cash 2,747 160

Principal repayments on line of credit

(70 ) — Payments on capital lease obligations (339 ) (1,828 ) Net cash provided by financing activities 3,153   66,090     Change in cash and cash equivalents (2,088 ) 63,222   Cash and cash equivalents, beginning of period 108,935   45,713     Cash and cash equivalents, end of period $ 106,847   $ 108,935    

MOVE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

OPERATING LOSS FROM CONTINUING OPERATIONS EXCLUDING STOCK-BASED COMPENSATION AND CHARGES, DEPRECIATION, AMORTIZATION, LITIGATION SETTLEMENT, RESTRUCTURING CHARGES, NON-RECURRING SEVERANCE COSTS AND IMPAIRMENT OF LONG LIVED ASSETS (EBITDA)

(in thousands)

    Three Months Ended December 31, Twelve Months Ended December 31, 2009   2008 2009   2008 (unaudited) (unaudited)   Operating loss from continuing operations $ (3,607 ) $ (283 ) $ (11,471 ) $ (8,254 )   Plus: Stock-based compensation 1,924 2,382 17,194 11,999 Stock-based charges 31 109 408 326 Depreciation 2,641 2,811 10,494 11,246 Amortization of intangible assets 107 174 473 756 Litigation settlements 3,888 — 4,863 — Restructuring charges — 398 (1,192 ) 4,412 Non-recurring severance costs — — 3,490 — Impairment of long-lived assets —   1,670   —   1,670   Adjusted EBITDA $ 4,984   $ 7,261   $ 24,259   $ 22,155    

MOVE, INC.

OPERATING RESULTS

NET OF STOCK-BASED COMPENSATION EXPENSE

(in thousands)

    Three months ended December 31, 2009 (unaudited)

As Reported

 

Stock-basedCompensation

ExcludingStock-BasedCompensation

Revenue $ 49,638 $ — $ 49,638 Cost of revenue 11,033   (44 ) 10,989   Gross profit 38,605 44 38,649   Sales and marketing 17,126 (387 ) 16,739 Product and web site development 7,374 (194 ) 7,180 General and administrative 13,717 (1,299 ) 12,418 Amortization of intangibles 107 — 107 Litigation settlements 3,888   —   3,888   Total operating expenses 42,212   (1,880 ) 40,332     Operating income (loss) from continuing operations $ (3,607 ) $ 1,924   $ (1,683 )     Three months ended December 31, 2008 (unaudited) As Reported

Stock-basedCompensation

ExcludingStock-BasedCompensation

Revenue $ 57,450 $ — $ 57,450 Cost of revenue 11,588   (34 ) 11,554   Gross profit 45,862 34 45,896   Sales and marketing 22,263 (388 ) 21,875 Product and web site development 5,832 (147 ) 5,685 General and administrative 15,808 (1,813 ) 13,995 Amortization of intangibles 174 — 174 Restructuring charges 398 — 398 Impairment of long-lived assets 1,670   —   1,670   Total operating expenses 46,145   (2,348 ) 43,797     Operating income (loss) from continuing operations $ (283 ) $ 2,382   $ 2,099    

MOVE, INC.

OPERATING RESULTS

NET OF STOCK-BASED COMPENSATION EXPENSE

(in thousands)

    Twelve months ended December 31, 2009 (unaudited)

As Reported

 

Stock-basedCompensation

ExcludingStock-BasedCompensation

Revenue $ 212,009 $ — $ 212,009 Cost of revenue 48,498   (181 ) 48,317   Gross profit 163,511 181 163,692   Sales and marketing 78,062 (1,736 ) 76,326 Product and web site development 27,832 (687 ) 27,145 General and administrative 64,944 (14,590 ) 50,354 Amortization of intangibles 473 — 473 Restructuring charges (1,192 ) — (1,192 ) Litigation settlements 4,863   —     4,863   Total operating expenses 174,982   (17,013 )   157,969     Operating income (loss) from continuing operations $ (11,471 ) $ 17,194   $ 5,723       Twelve months ended December 31, 2008 (unaudited) As Reported

Stock-basedCompensation

ExcludingStock-BasedCompensation

Revenue $ 242,069 $ — $ 242,069 Cost of revenue 46,041   (144 ) 45,897   Gross profit 196,028 144 196,172   Sales and marketing 93,531 (758 ) 92,773 Product and web site development 26,342 (566 ) 25,776 General and administrative 77,571 (10,531 ) 67,040 Amortization of intangibles 756 — 756 Restructuring charges 4,412 — 4,412 Impairment of long-lived assets 1,670   —   1,670   Total operating expenses 204,282   (11,855 ) 192,427     Operating income (loss) from continuing operations $ (8,254 ) $ 11,999   $ 3,745