Published: February 10, 2011
The Knot Reports Fourth Quarter and Full Year 2010 Financial Results
NEW YORK - (BUSINESS WIRE) - The Knot, Inc. (NASDAQ: KNOT, www.theknot.com),
the premier media company devoted to weddings, nesting and babies, today
reported financial results for the fourth quarter and full year ended
December 31, 2010.
Fourth Quarter and 2010 Summary Results
Total revenue for the quarter was $27.5 million, up 10% from $25.1
million in the fourth quarter of 2009. The results were led by online
advertising, which showed strength in the fourth quarter of 2010
compared with last year, with national advertising up 23% and local
advertising up 4%. The solid gains in online advertising were boosted by
expected gains in publishing, which was up significantly year over year
due to increased revenue from the additional issues of The Knot
national magazine. These gains more than offset the anticipated declines
in registry services and merchandise revenue, which were primarily the
result of the change in the Macy's relationship announced last
January. The strong gains in the fourth quarter led to $112.9 million in
revenue for the year ended 2010, a 6% increase over the prior year.
For the quarter ended December 31, 2010, the Company's operating income
was $2.7 million, compared with operating income of $1.7 million in the
fourth quarter of 2009, excluding the $10.7 million intangible asset
impairment charge recorded in 2009. There were no impairment charges in
2010.
For the quarter ended December 31, 2010, the Company's net income was
$1.5 million, or $0.05 per basic and $0.04 per diluted share, compared
with a net loss of $6.0 million, or $0.19 per basic and diluted share,
in the fourth quarter of 2009, which includes the $10.7 million
intangible asset impairment charge.
The Company's balance sheet reflects cash and cash equivalents of $139.6
million and no debt.
"We are beginning to harvest the fruits from two years of platform and
infrastructure investments with sales momentum building in our most
attractive businesses: national and local online advertising," said
Chief Executive Officer David Liu. "New products, tools and applications
developed over the last 12 months have yielded critical acclaim and
praise from our advertisers as well as our toughest critics, our bride
members, with membership acquisition up by 18% in January 2011 compared
with January 2010 despite a decline in traffic due to our changed
registry relationship with Macy's."
Recent Developments
-
National online advertising strengthened in 2010, fueled by demand for
all three lifestage brands in several categories, including retail,
travel and consumer packaged goods. For 2011 to date, nine of the
Company's top 10 advertisers have renewed advertising contracts at
levels at or above 2010, and the national salesforce is selling larger
multiplatform, multimillion-dollar advertising programs to its
national advertisers.
-
The local sales team built on sales momentum reported during the
Company's third quarter earnings call, booking a record month in
December. The Knot ended the fourth quarter with over 17,500 local
vendors, a churn rate down to 34% compared with 36% at the end of
September, and a slight increase in average revenue per vendor
compared with the third quarter.
-
The WeddingChannel.com Reviews platform continues to generate fresh
reviews from brides, with over 175,000 reviews of more than 100,000
wedding vendors across the U.S. This provides a useful service to the
Company's bridal audience as well as a lead- generation tool for local
sales representatives.
-
The WeddingChannel.com Deals platform has now been launched in 33
additional markets, for a total of 40. The Company is expanding its
relationships with wedding-related vendors, while also providing
compelling offers for its online audience of brides.
-
The registry business continues to enhance its retail partner
relationships, recently extending the existing agreement with Bed Bath
& Beyond for several more years and adding JCPenney to the Gift
Registry 360 universal registry platform in December. As Gift Registry
360 transitions from the beta stage, the Company expects to add
additional retail partners. In December, the Company released the Gift
Registry 360 iPhone application, with initial sponsorship by
Cuisinart. This application enables brides to scan bar codes and add
products from anywhere.
-
In November, the Company officially launched Ai Jie (ijie.com). The
website provides Western inspiration and local resources for weddings
in China. With the launch of the website, the Company is positioning
itself to become the authority on Western-style weddings in China, a
market with approximately 10 million weddings per year (almost five
times the 2.2 million weddings per year in the U.S.).
Fourth Quarter and Full Year 2010 Financial Highlights
"National online revenue grew over 20% in the fourth quarter, and local
online's key operating metrics of vendor growth, churn and average
revenue per vendor are all building momentum. With the improving economy
and the anniversary of the Macy's transition in the first quarter, the
Company is poised for improving growth in 2011," said Chief Financial
Officer John Mueller.
-
For the full year ended December 31, 2010, The Knot reported net
revenue of $112.9 million, a 6% increase over net revenue of $106.4
million in 2009. Net income for the full year ended December 31, 2010,
was $3.7 million, or $0.11 per basic and diluted share, as compared
with a net loss of $4.9 million, or $0.15 per basic and diluted share,
for the full year ended December 31, 2009.
-
National online revenue was $7.1 million and $24.6 million for the
three and 12 months ended December 31, 2010, respectively, growing 23%
and 17% over the $5.8 million and $21.0 million in revenue recorded
for the corresponding periods in 2009.
-
Local online revenue was $9.2 million and $35.9 million for the three
and 12 months ended December 31, 2010, respectively, compared with
$8.8 million and $34.7 million for the corresponding periods in 2009.
-
Merchandise revenue from the sale of wedding supplies was $3.8 million
and $26.2 million for the three and 12 months ended December 31, 2010,
respectively, compared with $3.9 million and $24.7 million for the
corresponding periods in 2009. The e-commerce acquisition completed in
May 2009 accounted for approximately $2.3 million in revenue growth
during the first four months of 2010.
-
Gross profit margins approximated 83% and 79% for the three and 12
months ended December 31, 2010, compared with 83% and 80% for the
corresponding periods in 2009.
-
Operating expense was $20.0 million and $83.0 million for the three
and 12 months ended December 31, 2010, respectively, compared with
$19.0 million and $80.7 million for the corresponding periods in 2009
(excluding the $10.7 million impairment charge recorded in the fourth
quarter of 2009).
-
Stock-based compensation expense was $902,000 and $4.0 million for the
three and 12 months ended December 31, 2010, respectively, compared
with $1.0 million and $4.2 million for the corresponding periods in
2009.
-
Net cash provided by operating activities was $11.1 million for the 12
months ended December 31, 2010, while capital expenditures amounted to
$2.9 million for the same period.
Conference Call and Replay Information
The Knot will host a conference call with investors at 4:30 p.m. ET on
Thursday, February 10, 2011, to discuss its fourth quarter and full year
2010 financial results. Participants should dial (866) 430-3457,
Reference #41337811 at least 10 minutes before the call is scheduled
to begin. Participants can also access the live broadcast over the
Internet on the Investor Relations section of the Company's website,
accessible at www.theknot.com/investor-relations.
To access the webcast, participants should visit The Knot website at
least 15 minutes prior to the conference call in order to download or
install any necessary audio software.
A replay of the webcast will also be archived on the Company's website
approximately two hours after the conference call ends. A replay of the
call will be available at (800) 642-1687, conference ID #41337811.
About The Knot, Inc.
The Knot, Inc. (NASDAQ: KNOT; www.theknot.com),
is the premier media company devoted to weddings, pregnancy, and
everything in between, providing young women with the trusted
information, products and advice they need to guide them through the
most transformative events of their lives. Our family of premium brands
began with the industry's #1 wedding brand, The Knot, and has grown to
include WeddingChannel.com, The Nest and The Bump. Our groundbreaking
community platforms and incomparable content have ignited passionate
communities across the country. The Knot, Inc. is recognized by the
industry for being innovative in all media -- from the web to social
media and mobile, to magazines and books, television and video. For our
advertisers and partners, The Knot, Inc. offers the consummate
opportunity to connect with our devoted communities as they make the
most important decisions of their lives. Founded in 1996, The Knot, Inc.
is made up of four major revenue categories: online sponsorship and
advertising, registry services, merchandise and publishing. The company
is publicly listed on NASDAQ (KNOT) and is headquartered in New York
City.
This release may contain projections or other forward-looking statements
regarding future events or our future financial performance. These
statements are only predictions and reflect our current beliefs and
expectations. Actual events or results may differ materially from those
contained in the projections or forward-looking statements. It is
routine for internal projections and expectations to change as the
quarter progresses, and therefore it should be clearly understood that
the internal projections and beliefs upon which we base our expectations
may change prior to the end of the quarter. Although these expectations
may change, we will not necessarily inform you if they do. Our policy is
to provide expectations not more than once per quarter, and not to
update that information until the next quarter. Some of the factors that
could cause actual results to differ materially from the forward-looking
statements contained herein include, without limitation, (i) our online
wedding-related and other websites may fail to generate sufficient
revenue to survive over the long term, (ii) our history of losses, (iii)
inability to adjust spending quickly enough to offset any unexpected
revenue shortfall, (iv) delays or cancellations in spending by our
advertisers and sponsors, (v) the significant fluctuation to which our
quarterly revenue and operating results are subject, (vi) the
seasonality of the wedding industry, (vii) our expectation of a decline
in WeddingChannel.com membership and traffic to the WeddingChannel.com
online shop as a result of the termination of the old Macy's registry
services agreement, (viii) the dependence of the WeddingChannel.com
registry services business on third parties, and (ix) other factors
detailed in documents we file from time to time with the Securities and
Exchange Commission. Forward-looking statements in this release are made
pursuant to the safe harbor provisions contained in the Private
Securities Litigation Reform Act of 1995.
|
The Knot, Inc.
|
|
Consolidated Statements of Operations
|
|
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Net revenue:
|
|
|
|
|
|
Online sponsorship and advertising
|
|
$
|
16,295
|
|
|
$
|
14,568
|
|
|
Registry services
|
|
|
875
|
|
|
|
1,875
|
|
|
Merchandise
|
|
|
3,804
|
|
|
|
3,937
|
|
|
Publishing and other
|
|
|
6,555
|
|
|
|
4,675
|
|
|
Total net revenue
|
|
|
27,529
|
|
|
|
25,055
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
4,781
|
|
|
|
4,305
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
22,748
|
|
|
|
20,750
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
Product and content development
|
|
|
6,036
|
|
|
|
5,272
|
|
|
Sales and marketing
|
|
|
9,163
|
|
|
|
7,485
|
|
|
General and administrative
|
|
|
3,542
|
|
|
|
4,087
|
|
|
Long-lived asset impairment charges
|
|
|
-
|
|
|
|
10,702
|
|
|
Depreciation and amortization
|
|
|
1,265
|
|
|
|
2,178
|
|
|
Total operating expenses
|
|
|
20,006
|
|
|
|
29,724
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
2,742
|
|
|
|
(8,974
|
)
|
|
|
|
|
|
|
|
Loss in equity interest
|
|
|
(82
|
)
|
|
|
(61
|
)
|
|
Interest and other income, net
|
|
|
97
|
|
|
|
63
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
2,757
|
|
|
|
(8,972
|
)
|
|
|
|
|
1,243
|
|
|
|
(2,924
|
)
|
|
Provision (benefit) for income taxes
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,514
|
|
|
$
|
(6,048
|
)
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
0.05
|
|
|
$
|
(0.19
|
)
|
|
Diluted earnings (loss) per share
|
|
$
|
0.04
|
|
|
$
|
(0.19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
Basic
|
|
|
33,153,994
|
|
|
|
32,227,365
|
|
|
Diluted
|
|
|
33,906,405
|
|
|
|
32,227,365
|
|
|
The Knot, Inc.
|
|
Consolidated Statements of Operations
|
|
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
Net revenue:
|
|
|
|
|
|
Online sponsorship and advertising
|
|
$
|
60,441
|
|
|
$
|
55,731
|
|
|
Registry services
|
|
|
6,727
|
|
|
|
10,018
|
|
|
Merchandise
|
|
|
26,246
|
|
|
|
24,674
|
|
|
Publishing and other
|
|
|
19,467
|
|
|
|
15,993
|
|
|
Total net revenue
|
|
|
112,881
|
|
|
|
106,416
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
23,184
|
|
|
|
21,618
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
89,697
|
|
|
|
84,798
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
Product and content development
|
|
|
22,812
|
|
|
|
20,516
|
|
|
Sales and marketing
|
|
|
35,489
|
|
|
|
31,260
|
|
|
General and administrative
|
|
|
19,518
|
|
|
|
19,095
|
|
|
Long-lived asset impairment charges
|
|
|
-
|
|
|
|
10,702
|
|
|
Depreciation and amortization
|
|
|
5,212
|
|
|
|
9,847
|
|
|
Total operating expenses
|
|
|
83,031
|
|
|
|
91,420
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
6,666
|
|
|
|
(6,622
|
)
|
|
|
|
|
|
|
|
Loss in equity interest
|
|
|
(357
|
)
|
|
|
(81
|
)
|
|
Interest and other income, net
|
|
|
203
|
|
|
|
676
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
6,512
|
|
|
|
(6,027
|
)
|
|
|
|
|
2,858
|
|
|
|
(1,153
|
)
|
|
Provision (benefit) for income taxes
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
3,654
|
|
|
$
|
(4,874
|
)
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
0.11
|
|
|
$
|
(0.15
|
)
|
|
Diluted earnings (loss) per share
|
|
$
|
0.11
|
|
|
$
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
Basic
|
|
|
32,767,533
|
|
|
|
32,092,219
|
|
|
Diluted
|
|
|
33,659,958
|
|
|
|
32,092,219
|
|
|
The Knot, Inc.
|
|
Consolidated Balance Sheets
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
139,586
|
|
|
$
|
94,993
|
|
|
Short-term investments
|
|
|
-
|
|
|
|
36,498
|
|
|
Accounts receivable, net
|
|
|
10,421
|
|
|
|
8,704
|
|
|
Accounts receivable from affiliate
|
|
|
798
|
|
|
|
444
|
|
|
Inventories
|
|
|
3,735
|
|
|
|
2,708
|
|
|
Deferred production and marketing costs
|
|
|
1,059
|
|
|
|
685
|
|
|
Deferred tax assets, current portion
|
|
|
2,661
|
|
|
|
2,441
|
|
|
Other current assets
|
|
|
5,267
|
|
|
|
2,948
|
|
|
Total current assets
|
|
|
163,527
|
|
|
|
149,421
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
5,642
|
|
|
|
6,148
|
|
|
Intangible assets, net
|
|
|
8,609
|
|
|
|
10,341
|
|
|
Goodwill
|
|
|
37,750
|
|
|
|
37,757
|
|
|
Deferred tax assets
|
|
|
18,775
|
|
|
|
20,588
|
|
|
Other assets
|
|
|
936
|
|
|
|
620
|
|
|
Total assets
|
|
$
|
235,239
|
|
|
$
|
224,875
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
10,389
|
|
|
$
|
8,861
|
|
|
Deferred revenue
|
|
|
11,291
|
|
|
|
10,190
|
|
|
Total current liabilities
|
|
|
21,680
|
|
|
|
19,051
|
|
|
Deferred tax liabilities
|
|
|
3,088
|
|
|
|
3,504
|
|
|
Other liabilities
|
|
|
95
|
|
|
|
214
|
|
|
Total liabilities
|
|
|
24,863
|
|
|
|
22,769
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Common stock
|
|
|
343
|
|
|
|
337
|
|
|
Additional paid-in-capital
|
|
|
214,050
|
|
|
|
209,440
|
|
|
Accumulated deficit
|
|
|
(4,017
|
)
|
|
|
(7,671
|
)
|
|
Total stockholders' equity
|
|
|
210,376
|
|
|
|
202,106
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
235,239
|
|
|
$
|
224,875
|
|
The Knot, Inc.
Malindi Davies, 212-219-8555 x1322
Investor
Relations Manager
IR@theknot.com
Copyright © 2012, Business Wire, Inc., All rights reserved. Copyright © 2012, NewsBlaze, Daily News
|
Search News
