MOVE Movano Inc

Move, Inc. (NASDAQ:MOVE) reported financial results for the first quarter ended March 31, 2010.

Revenue in the first quarter of 2010 was $48.6 million, compared to $54.9 million in the first quarter of 2009. Net loss applicable to common stockholders, including discontinued operations, was $20.3 million, or $0.13 loss per share, compared to a net loss of $10.2 million, or a loss of $0.07 per share in the first quarter of 2009. Net loss in the March 2010 quarter included an impairment charge of approximately $19.6 million related to our sale of auction rate securities as previously disclosed, with an impact of $0.13 per share. 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 first quarter of 2010 was $5.2 million, or 11% of revenue, compared to $6.7 million, or 12% of revenue, for the first quarter of 2009. 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 new year started on a positive note and we see the early signs of stabilization in our core business backed by strong progress in improving our technology," said Steve Berkowitz, chief executive officer at Move, Inc. “In the next few weeks we plan to release the beta version of our new Realtor.com platform. This relaunch leverages a completely new back end infrastructure that will enable a richer, more valuable online real estate experience for consumers and real estate professionals. With this improved platform, we will be positioned to take full advantage of Move’s market leading assets, including the richest and up-to-date real estate data, our deep relationships with hundreds of thousands of real estate professionals, and a dominant connection with consumers who trust Move to provide the most accurate and relevant content regarding their real estate needs.”

BUSINESS OUTLOOK

Move today provided guidance for the quarter ending June 30, 2010. For the quarter ending June 30, 2010, Move expects revenue to range between $48.5 - $49.5 million and expects to report Adjusted EBITDA margin range between 10% - 11%.

Move also provided updated guidance for the fiscal year ending December 31, 2010. The Company currently expects revenue to range between $191 million and $195 million, with an Adjusted EBITDA target of approximately 10% - 11%.

Conference Call

As previously announced, Move, Inc. will host a conference call, which will be broadcast live over the Internet today, Thursday, May 6, 2010, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). In order to participate in the call, please dial (888) 396-2384, or if outside the U.S., (617) 847-8711 with passcode 14549956, at least five minutes prior to the 1:30 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, May 6, 2010, and 11:59 p.m. ET, May 17, 2010, by calling (888) 286-8010, or (617) 801-6888, with passcode 44883425.

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 for the year ended December 31, 2009 on March 5, 2010. Move’s Form 10-Q for the quarter ended March 31, 2010 is expected to be filed with the Securities and Exchange Commission on, or before, May 10, 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 loss from continuing operations excluding interest income, net, provision for income taxes, impairment of auction rate securities and 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 month periods ended March 31, 2010 and 2009 that extracts stock-based compensation under ASC Topic 718 “Compensation – Stock Compensation.” 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 8.7 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, March 2010

MOVE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

      Three Months Ended March 31,   2010   2009 (unaudited)   Revenue $ 48,643 $ 54,868 Cost of revenue (1) 10,928   12,647   Gross profit 37,715   42,221     Operating expenses: (1) Sales and marketing 18,332 20,762 Product and web site development 8,526 6,383 General and administrative 10,689 23,637 Amortization of intangible assets 105   151   Total operating expenses 37,652   50,933   Operating income (loss) from continuing operations 63 (8,712 )   Interest income, net 556 135 Earnings of unconsolidated joint venture 106 — Impairment of auction rate securities (19,559 ) — Other income (expense), net (33 ) 105   Loss from continuing operations before income taxes (18,867 ) (8,472 )   Provision for income taxes 63   96     Loss from continuing operations (18,930 ) (8,568 )   Loss from discontinued operations —  

 

(356 ) Net loss (18,930 ) (8,924 )   Convertible preferred stock dividend and related accretion (1,333 ) (1,298 ) Net loss applicable to common stockholders $ (20,263 ) $ (10,222 )   Basic and diluted net loss per share applicable to common stockholders: Continuing operations $ (0.13 ) $ (0.06 ) Discontinued operations —   (0.00 ) Basic and diluted net loss per share applicable to common stockholders: $ (0.13 ) $ (0.07 )     Shares used in calculation of net loss per share applicable to common stockholders:   Basic and diluted 154,507   153,119       (1) Includes stock-based compensation as follows:   Cost of revenue $ 47 $ 37 Sales and marketing 410 273 Product and web site development 482 140 General and administrative 953   10,038   $ 1,892   $ 10,488    

MOVE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

     

 

March 31,

2010

 

December 31,

2009

  ASSETS Current assets: Cash and cash equivalents $ 108,055 $ 106,847 Short-term investments 109,841 — Accounts receivable, net 10,240 10,782 Other current assets 11,506   12,101   Total current assets 239,642 129,730   Property and equipment, net 22,110 21,139 Long-term investments — 111,800 Investment in unconsolidated joint venture 6,755 6,649 Goodwill, net 16,969 16,969 Intangible assets, net 3,355 3,460 Other assets 1,443   1,548   Total assets $ 290,274   $ 291,295     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,106 $ 5,545 Accrued expenses 16,768 18,335 Deferred revenue 15,988 15,951 Line of credit 64,173   64,630   Total current liabilities 102,035 104,461   Other non-current liabilities 1,473   1,096   Total liabilities 103,508 105,557   Series B convertible preferred stock 112,874 111,541   Stockholders’ equity: Series A convertible preferred stock — — Common stock 156 156 Additional paid-in capital 2,114,984 2,112,613 Accumulated other comprehensive income 471 (17,116 ) Accumulated deficit (2,041,719 ) (2,021,456 ) Total stockholders’ equity 73,892   74,197     Total liabilities and stockholders’ equity $ 290,274   $ 291,295    

MOVE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

   

 

Three Months Ended March 31,

2010

    2009   Cash flows from continuing operating activities: Loss from continuing operations $ (18,930 ) $ (8,568 ) Adjustments to reconcile loss from continuing operations to net cash provided by continuing operating activities: Depreciation 2,601 2,619 Amortization of intangible assets 105 151 Provision for doubtful accounts (198 ) 542 Impairment of auction rate securities 19,559 — Stock-based compensation and charges 2,068 10,637 Earnings of unconsolidated joint venture (106 ) — Change in market value of embedded derivative liability — (90 ) Other non-cash items (76 ) (20 ) Changes in operating assets and liabilities, net of discontinued operations: Accounts receivable 740 675 Other assets 523 (1,029 ) Accounts payable and accrued expenses (1,628 ) 3,984 Deferred revenue 37   (2,821 )   Net cash provided by continuing operating activities 4,695 6,080 Net cash used in discontinued operating activities —   (468 ) Net cash provided by operating activities 4,695   5,612     Cash flows from investing activities: Purchases of property and equipment (3,509 ) (2,097 ) Proceeds from the sale of marketable equity securities 14 — Proceeds from sale of assets —   2   Net cash used in investing activities (3,495 ) (2,095 )   Cash flows from financing activities:

Proceeds from exercise of stock options and share issuances under employee stock purchase plans

303 9 Restricted cash 162 10 Proceeds from line of credit 64,700 — Principal payments on line of credit (65,157 ) — Tax payment related to net share settlements of restricted stock awards — (1,064 ) Payments on capital lease obligations —   (251 ) Net cash provided by (used in) financing activities 8   (1,296 )   Change in cash and cash equivalents 1,208 2,221   Cash and cash equivalents, beginning of period 106,847   108,935     Cash and cash equivalents, end of period $ 108,055   $ 111,156    

MOVE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

LOSS FROM CONTINUING OPERATIONS EXCLUDING INTEREST INCOME, PROVISION FOR INCOME TAXES, STOCK-BASED COMPENSATION AND CHARGES, DEPRECIATION, AMORTIZATION,  IMPAIRMENT OF AUCTION RATE SECURITIES AND NON-RECURRING SEVERANCE COSTS (EBITDA)

(in thousands)

 

 

Three Months Ended March 31,

2010

  2009 (unaudited)   Loss from continuing operations $ (18,930 ) $ (8,568 )   Plus: Interest income, net (556 ) (135 ) Provision for income taxes 63 96 Stock-based compensation 1,892 10,488 Stock-based charges 176 149 Depreciation 2,601 2,619 Impairment of auction rate securities 19,559 — Amortization of intangible assets, including unconsolidated joint venture 387 151 Non-recurring severance costs —   1,900   Adjusted EBITDA $ 5,192   $ 6,700    

MOVE, INC.

OPERATING RESULTS

NET OF STOCK-BASED COMPENSATION EXPENSE

(in thousands)

  Three Months Ended March 31, 2010 (unaudited) As Reported  

Stock-basedCompensation

   

ExcludingStock-BasedCompensation

Revenue $ 48,643 $ — $ 48,643 Cost of revenue 10,928   (47 ) 10,881 Gross profit 37,715 47 37,762   Sales and marketing 18,332 (410 ) 17,922 Product and web site development 8,526 (482 ) 8,044 General and administrative 10,689 (953 ) 9,736 Amortization of intangibles 105   —   105 Total operating expenses 37,652   (1,845 ) 35,807   Operating income from continuing operations $ 63   $ 1,892   $ 1,955       Three Months Ended March 31, 2009 (unaudited) As Reported

Stock-basedCompensation

 

ExcludingStock-BasedCompensation

Revenue $ 54,868 $ — $ 54,868 Cost of revenue 12,647   (37 ) 12,610 Gross profit 42,221 37 42,258   Sales and marketing 20,762 (273 ) 20,489 Product and web site development 6,383 (140 ) 6,243 General and administrative 23,637 (10,038 ) 13,599 Amortization of intangibles 151   —   151 Total operating expenses 50,933   (10,451 ) 40,482   Operating income (loss) from continuing operations $ (8,712 ) $ 10,488   $ 1,776