LOS ANGELES, CA--(Marketwire - July 29, 2009) - Internet Brands, Inc. (
NASDAQ:
INET)
-- Record Adjusted EBITDA Margin of 40.2%; Year-over-year Adjusted EBITDA
growth of 10%
-- Revenues and Adjusted EBITDA of $23.2 million and $9.3 million
-- Net Income of $0.06 per diluted common share
-- Reaffirming 2009 Adjusted EBITDA guidance: 10 - 15% growth expected
over 2008; full year Adjusted EBITDA of approximately $38.5 - $40.5 million
-- 2009 full year Revenue guidance of $98 - $102 million
Internet Brands, Inc. (
NASDAQ:
INET) today reported financial results for
the three and six months ended June 30, 2009.
Second Quarter Operating Results
Total revenues for the second quarter of 2009 were $23.2 million compared
to $25.3 million in the prior year period.
Consumer Internet revenues were $15.8 million in the second quarter of 2009
compared to $18.1 million in the prior year period. In the quarter, the
Company's advertising revenues increased $1.2 million compared to the prior
year period, driven by acquisitions and organic growth from the Company's
websites. Organic growth from websites owned more than one year
contributed significantly to the increase. The increase in advertising
revenues was offset by a $3.5 million year-over-year decrease in automotive
e-commerce revenues due to continued weakness in consumer demand for
automobiles.
Licensing revenues increased to $7.4 million in the second quarter of 2009
from $7.2 million in the prior year period, due primarily to continued
growth of vBulletin software licenses. Had foreign exchange rates remained
constant for the second quarter of 2008 through the second quarter of 2009,
licensing revenues for the second quarter of 2009 would have been $0.4
million higher than reported.
Net income for the second quarter of 2009 was $2.5 million, or $0.06 per
diluted common share, compared to net income of $2.9 million, or $0.07 per
diluted common share, in the prior year period.
For the second quarter of 2009, Adjusted EBITDA grew 10% to $9.3 million
from $8.5 million in the prior year period. Adjusted EBITDA margins in the
quarter expanded 670 basis points to 40.2%. The Company's EBITDA margins
have continued to expand throughout the past year, a result of the shift
from lower margin automotive e-commerce revenues to higher margin
advertising revenues, and from the continued leverage from the Company's
operating platform.
Total monthly unique visitors to the Company's network of websites grew to
50 million in June 2009, a 35% increase from 37 million in June 2008. More
than 95% of the traffic to the Company's websites is from non-paid sources.
First Half 2009 Operating Results
Total revenues for the first half of 2009 were $46.8 million compared to
$50.2 million in the prior year period.
Consumer Internet revenues were $32.0 million in the first half of 2009
compared to $34.4 million in the prior year period. The Company's higher
margin advertising revenues increased $3.9 million in the first half of
2009 compared to the prior year period. The increase was a result of
acquisitions and organic growth from the Company's websites. The increase
in advertising revenue during the first half of 2009 was offset by a $6.3
million year-over-year decrease in automotive e-commerce revenues due to
continued weakness in consumer demand for automobiles.
Licensing revenues were $14.8 million for the first half of 2009 compared
to $15.8 million in the prior year period. Had foreign exchange rates
remained constant for the six months ended June 30, 2008 through the six
months ended June 30, 2009, licensing revenues for the six months ended
June 30, 2009 would have been $0.9 million higher than reported.
Net income for the first half of 2009 was $4.8 million, or $0.11 per
diluted common share, compared to net income of $5.9 million, or $0.13 per
diluted common share, in the prior year period.
For the first half of 2009, Adjusted EBITDA grew 7% to $17.6 million from
$16.4 million in the same period last year. Adjusted EBITDA margins for
the six-month period ended June 30, 2009 expanded 490 basis points to
37.6%.
Q3 and Full Year 2009 Guidance
The Company is reaffirming its full year Adjusted EBITDA guidance of growth
in the range of 10% to 15% over 2008, or full year Adjusted EBITDA of
approximately $38.5 to $40.5 million. The Company expects full year
revenues to range from $98 to $102 million.
For the third quarter of 2009, the Company anticipates revenues to range
from $25.0 to $25.8 million and Adjusted EBITDA to range from $10.0 to
$10.7 million.
"We are pleased with our results for the first half of the year and have
good visibility on sequential growth for each of the next two quarters,"
said Bob Brisco, CEO of Internet Brands. "As importantly, our longer-term
growth initiatives continue to gain traction paving the way to both revenue
growth and EBITDA margin expansion."
Balance Sheet and Liquidity
As of June 30, 2009, the Company had $61.7 million of cash and investments,
and no outstanding debt under its $35 million revolving line of credit.
Net cash provided by operating activities in the first half of 2009 was
$19.5 million compared to $16.2 million in the prior year period. From
March 31, 2009 through June 30, 2009, the Company's accounts receivable
balance decreased approximately $3.5 million. This decline was primarily
the result of significant cash collections in the Autodata Solutions
division, including amounts paid-in-full as part of OEM restructuring
programs.
Acquisitions
In a separate press release today, the Company announced three website
acquisitions in the Money & Business and Leisure verticals.
During the second quarter of 2009 and through July 29, 2009, the Company
acquired four websites for an aggregate purchase price of approximately
$4.0 million. The four acquisitions include two websites in the Money &
Business vertical, BusinessMart.com and BusinessFinance.com, one website in
the Travel & Leisure vertical, KidsCamps.com, and one previously announced
acquisition, Outblush.com, in the Shopping vertical.
For the first half of 2009 and through July 29, 2009, the Company completed
eight website-related acquisitions for an aggregate purchase price of
approximately $5.3 million. Total spend related to acquisition purchases,
earnouts and holdbacks totaled $11.4 million in the first half of 2009. The
financial impact of these acquisitions is included in the Company's 2009
business outlook.
Non-GAAP Financial Measures
This press release includes a discussion of "Adjusted EBITDA," which is a
non-GAAP financial measure. The Company defines EBITDA as net income
before (a) investment and other income; (b) income tax provision (benefit);
and (c) depreciation and amortization. The Company defines Adjusted EBITDA
as a further adjustment of EBITDA to exclude share-based compensation
expense related to the Company's grant of stock options and other equity
instruments.
The Company believes these non-GAAP financial measures provide important
supplemental information to management and investors. These non-GAAP
financial measures reflect an additional way of viewing aspects of the
Company's operations that, when viewed with the GAAP results and the
accompanying reconciliations to corresponding GAAP financial measures,
provide a more complete understanding of factors and trends affecting the
Company's business and results of operations.
Management uses EBITDA and Adjusted EBITDA as measurements of the Company's
operating performance because they assist in comparisons of the Company's
operating performance on a consistent basis by removing the impact of items
not directly resulting from core operations. Internally, these non-GAAP
measures are also used by management for planning purposes, including the
preparation of internal budgets; to allocate resources to enhance financial
performance; to evaluate the effectiveness of operational strategies; and
to evaluate the Company's capacity to fund capital expenditures and to
expand its business. The Company also believes that analysts and investors
use EBITDA and Adjusted EBITDA as supplemental measures to evaluate the
overall operating performance of companies in its industry.
These non-GAAP financial measures are used in addition to and in
conjunction with results presented in accordance with GAAP and should not
be relied upon to the exclusion of GAAP financial measures. Management
strongly encourages investors to review the Company's consolidated
financial statements in their entirety and to not rely on any single
financial measure. Because non-GAAP financial measures are not
standardized, it may not be possible to compare these financial measures
with other companies' non-GAAP financial measures having the same or
similar names. In addition, the Company expects to continue to incur
expenses similar to the non-GAAP adjustments described above, and exclusion
of these items from the Company's non-GAAP measures should not be construed
as an inference that these costs are unusual, infrequent or non-recurring.
The table below reconciles net income and Adjusted EBITDA for the periods
presented (in thousands):
Three months ended Six months ended
June 30 June 30
------------------- -------------------
2009 2008 2009 2008
--------- --------- --------- ---------
(unaudited)
Net income $ 2,545 $ 2,923 $ 4,808 $ 5,943
Provision for income taxes 1,807 2,179 3,346 4,281
Depreciation and amortization 3,983 3,370 7,826 6,117
Stock-based compensation 869 550 1,544 1,207
Investment and other income 140 (549) 77 (1,140)
--------- --------- --------- ---------
Adjusted EBITDA $ 9,344 $ 8,473 $ 17,601 $ 16,408
========= ======== ========= ========
Conference Call and Webcast
The Company will host a conference call to discuss its second quarter 2009
financial results beginning at 4:30 pm ET (1:30 pm PT), today, July 29,
2009. Participants may access the call by dialing 877-941-6011 (domestic)
or 480-248-5085 (international). In addition, the call will be broadcast
live over the Internet hosted at the Investor Relations section of the
Company's website at
www.internetbrands.com and will be archived online
within one hour of the completion of the conference call. A telephone
replay will be available through August 12, 2009. To access the replay,
please dial 800-406-7325 (domestic) or 303-590-3030 (international),
passcode 4117022.
About Internet Brands, Inc.
Los Angeles-based Internet Brands, Inc. (
NASDAQ:
INET) is a leading
Internet media company that owns, operates and grows community and
e-commerce websites in the automotive, careers, home, money & business,
shopping and travel & leisure categories. With a flexible and scalable
platform, Internet Brands operates a rapidly growing network of more than
200 websites, of which more than 90 each receive more than 100,000 monthly
unique visitors. In June of 2009, the company's websites received 50
million unique visitors.
Safe Harbor Statement
This press release includes forward-looking information and statements,
including but not limited to its 2009 business outlook, management comments
and guidance, that are subject to risks and uncertainties that could cause
actual results to differ materially. Forward-looking statements include
information concerning our possible or assumed future results of
operations, business strategies, competitive position, industry
environment, potential growth opportunities and the effects of regulation.
These statements are based on our management's current expectations and
beliefs, as well as a number of assumptions concerning future events. Such
forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions and other important factors, many of which are
outside our management's control that could cause actual results to differ
materially from the results discussed in the forward-looking statements.
These risks, uncertainties, assumptions and other important factors
include, but are not limited to, our pursuit of an acquisition-based growth
strategy entailing significant execution, integration and operational
risks, the impact of the recent downturn in the economy and the automotive
industry in particular on our revenues from automotive dealers and
manufacturers, our ability to compete effectively against a variety of
Internet and traditional offline competitors, and our reliance on the
public to continue to contribute content without compensation to our
websites that depend on such content. These and other risks are described
more fully in our Annual Report on Form 10-K for the annual period ended
December 31, 2008, filed with the U.S. Securities and Exchange Commission
(SEC) on March 6, 2009. You should consider these factors in evaluating
forward-looking statements. For additional information regarding the risks
related to our business, see our prospectus in the Registration Statement,
and other related documents, that we have filed with the SEC. You may get
these documents for free by visiting EDGAR on the SEC website at
http://www.sec.gov. All information provided in this release is as of July
29, 2009 and should not be unduly relied upon because we undertake no duty
to update this information.
INTERNET BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
June 30, December 31,
2009 2008
------------ ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 42,452 $ 43,648
Investments, available for sale 19,266 13,723
Accounts receivable, less allowances for
doubtful accounts of $1,161 and $1,513 at
June 30, 2009 and December 31, 2008,
Respectively 9,379 16,353
Deferred income taxes 9,591 9,591
Prepaid expenses and other current assets 1,054 1,299
------------ ------------
Total current assets 81,742 84,614
Property and equipment, net 12,774 11,460
Goodwill 211,077 203,806
Intangible assets, net 20,544 24,556
Deferred income taxes 53,884 56,262
Other assets 460 767
------------ ------------
Total assets $ 380,481 $ 381,465
============ ============
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses $ 10,635 $ 17,043
Deferred revenue 6,188 7,325
------------ ------------
Total current liabilities 16,823 24,368
Commitments and contingencies - -
Stockholders’ equity
Class A Common stock, $.001 par value;
125,000,000 shares authorized; 41,762,846
and 40,946,826 issued and outstanding
at June 30, 2009 and December 31, 2008,
respectively 42 41
Class B Common stock, $.001 par value;
6,050,000 authorized; 3,025,000 shares
issued and outstanding at June 30, 2009
and December 31, 2008, respectively 3 3
Additional paid-in capital 609,097 607,434
Accumulated deficit (245,609) (250,418)
Accumulated other comprehensive income 125 37
------------ ------------
Total stockholders’ equity 363,658 357,097
------------ ------------
------------ ------------
Total liabilities and stockholders’ equity $ 380,481 $ 381,465
============ ============
INTERNET BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ----------- ---------- -----------
Revenues
Consumer Internet $ 15,787 $ 18,075 $ 31,976 $ 34,378
Licensing 7,441 7,189 14,780 15,827
---------- ----------- ---------- -----------
Total revenues 23,228 25,264 46,756 50,205
Costs and operating
expenses
Cost of revenues 4,406 5,558 9,189 10,945
Sales and marketing 4,561 5,140 9,337 11,347
Technology 2,305 2,333 4,406 3,753
General and
administrative 3,481 4,310 7,767 8,959
Depreciation and
amortization of
intangibles 3,983 3,370 7,826 6,117
---------- ----------- ---------- -----------
Total costs and operating
expenses 18,736 20,711 38,525 41,121
---------- ----------- ---------- -----------
Income from operations 4,492 4,553 8,231 9,084
Investment and other
(expense) income (140) 549 (77) 1,140
---------- ----------- ---------- -----------
Income before income taxes 4,352 5,102 8,154 10,224
Provision for income taxes 1,807 2,179 3,346 4,281
---------- ----------- ---------- -----------
Net income $ 2,545 $ 2,923 $ 4,808 $ 5,943
========== =========== ========== ===========
Basic net income per share
- Class A $ 0.06 $ 0.07 $ 0.11 $ 0.14
Diluted net income per
share - Class A $ 0.06 $ 0.07 $ 0.11 $ 0.13
Basic net income per share
- Class B $ 0.06 $ 0.07 $ 0.11 $ 0.14
Diluted net income per
share - Class B $ - $ - $ - $ -
Class A weighted average
number of shares - Basic 40,358,805 39,968,963 40,563,113 39,857,910
Class A weighted average
number of shares -
Diluted 46,083,251 44,895,800 45,781,327 44,814,452
Class B weighted average
number of shares - Basic 3,025,000 3,025,000 3,025,000 3,025,000
Class B weighted average
number of shares -
Diluted - - - -
Stock-based compensation
expense by function
Sales and marketing $ 108 $ 77 $ 194 $ 126
Technology 57 31 94 51
General and
administrative 704 442 1,256 1,030
---------- ----------- ---------- -----------
$ 869 $ 550 $ 1,544 $ 1,207
========== =========== ========== ===========