LOS ANGELES, CA--(Marketwire - April 29, 2009) - Internet Brands, Inc. (
NASDAQ:
INET)
-- Revenues and Adjusted EBITDA of $23.5 million and $8.3 million
-- Net Income of $0.05 per diluted share
-- Adjusted EBITDA growth of 4% year-over-year, 21% excluding a one-time
gain from prior year quarter
-- Unique Visitor Growth of 44% year-over-year
-- Reiterating 2009 guidance: adjusted EBITDA growth of 10% to 15% over
2008, or full year adjusted EBITDA of approximately $38.5 - $40.5 million
Internet Brands, Inc. (
NASDAQ:
INET) today reported financial results for
the first quarter ended March 31, 2009.
First Quarter Operating Results
Total revenues for the first quarter of 2009 were $23.5 million compared to
$24.9 million in the prior year period; last year's first quarter included
a one-time gain of $1.1 million.
Consumer Internet revenues were $16.2 million in the first quarter of 2009
compared to $16.3 million in the prior year period. In the quarter,
advertising revenues increased $2.6 million compared to the prior year
period, driven by acquisitions and organic growth in all areas excluding
automotive e-commerce. Total advertising revenue growth was more than 30%
on a year-over-year basis, with organic growth from websites owned more
than one year contributing significantly to the growth rate. The increase
in advertising revenues was offset by a $2.7 million decrease in automotive
e-commerce revenues due to continued weakness in consumer demand for new
cars resulting from the current economic climate.
Licensing revenues were $7.3 million in the first quarter of 2009 compared
to $8.6 million in the prior year period. Had foreign exchange rates
remained constant for the first quarter of 2008 through the first quarter
of 2009, licensing revenues for the first quarter of 2009 would have been
$0.5 million higher. Licensing revenues for the first quarter of 2008
included a $1.1 million benefit from the accelerated completion of a
long-term project at our Autodata Solutions division.
Net income for the first quarter of 2009 was $2.3 million, or $0.05 per
diluted common share compared to net income of $3.0 million, or $0.07 per
diluted common share in the prior year period.
For the first quarter of 2009, Adjusted EBITDA grew by 4% to $8.3 million
compared to $7.9 million in the same period last year. Excluding the
one-time gain from Autodata last year, Adjusted EBITDA grew by 21% compared
to the prior year period. Adjusted EBITDA margins were 35.1% in the
quarter, a 330 basis point expansion from the prior year period. The
Company defines Adjusted EBITDA as earnings before investment and other
income, income taxes, depreciation and amortization and stock-based
compensation.
Total monthly unique visitors to the Company's network of owned websites
grew to 49.7 million in March 2009, a 44% increase from 34.6 million in
March 2008, and a 15% increase from 43.2 million in December 2008.
Full Year 2009 Guidance
The Company is reiterating its full year guidance of Adjusted EBITDA growth
in the range of 10% to 15% over 2008, or full year Adjusted EBITDA of
approximately $38.5 - $40.5 million.
"We are very pleased with the performance of our business, especially the
rapid growth of our high margin advertising revenues," said Bob Brisco, CEO
of Internet Brands. "Our non-automotive advertising revenues organically
grew 10% year-over-year; that growth excludes revenues from acquisitions.
Our organic revenue growth is counter to general industry trends and
reflects the large monetization potential of our websites."
"Our EBITDA margin flow-through percentage continued to climb
year-over-year, again demonstrating our growing operating leverage," Brisco
added. "We continue to feel confident about our year and are excited about
how the business is evolving and growing."
Balance Sheet and Liquidity
As of March 31, 2009, the Company had $59.7 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 quarter of 2009 was
$10.1 million compared to $5.5 million in the prior year period.
Acquisitions
In a separate press release today, the Company announced its sixth
vertical, Money & Business. Currently, this vertical is comprised of six
websites.
During the first quarter of 2009 and through April 29, 2009, the Company
acquired 5 websites for an aggregate purchase price of approximately $1.6
million. The 5 acquisitions include two small forum-based vertical
websites, two websites in the new Money & Business vertical, FinWeb.com and
SmallBusinessNotes.com, and one website in the Shopping vertical,
Outblush.com, a leading shopping blog for women.
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 our 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
March 31,
--------------------
2009 2008
--------- ---------
(unaudited)
Net income $ 2,263 $ 3,020
Provision for income taxes 1,539 2,102
Depreciation and amortization 3,843 2,747
Stock-based compensation 677 657
Investment and other income (63) (591)
--------- ---------
Adjusted EBITDA $ 8,259 $ 7,935
========= =========
Conference Call and Webcast
The Company will host a conference call to discuss its first quarter 2009
financial results beginning at 4:30 pm ET (1:30 pm PT), today, April 29,
2009. Participants may access the call by dialing 800-762-8779 (domestic)
or 480-629-9031 (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 May 13, 2009. To access the replay, please
dial 800-406-7325 (domestic) or 303-590-3030 (international), passcode
4054894.
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 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 80 each receive more than 100,000 monthly
unique visitors. In March of 2009, the company's websites received more
than 49 million unique visitors. More than 95% of the traffic to the
company's websites is from non-paid sources.
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
April 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)
March 31, December 31,
2009 2008
----------- -----------
Unaudited
ASSETS
Current assets
Cash and cash equivalents $ 51,916 $ 43,648
Investments, available for sale 7,753 13,723
Accounts receivable, less allowances for
doubtful accounts of $1,849 and $1,513 at
March 31, 2009 and December 31, 2008,
Respectively 12,850 16,353
Deferred income taxes 8,704 9,591
Prepaid expenses and other current assets 1,059 1,299
----------- -----------
Total current assets 82,282 84,614
Property and equipment, net 12,045 11,460
Goodwill 204,963 203,806
Intangible assets, net 22,336 24,556
Deferred income taxes 57,645 56,262
Other assets 628 767
----------- -----------
Total assets $ 379,899 $ 381,465
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 13,461 $ 17,043
Deferred revenue 7,029 7,325
----------- -----------
Total current liabilities 20,490 24,368
Stockholders' equity
Common stock, Class A, $.001 par value;
125,000,000 shares authorized and 41,654,973
and 40,946,826 issued and outstanding
at March 31, 2009 and December 31, 2008 42 41
Common stock, Class B, $.001 par value;
6,050,000 authorized and 3,025,000 shares
issued and outstanding at March 31, 2009
and December 31, 2008 3 3
Additional paid-in capital 608,045 607,434
Accumulated deficit (248,155) (250,418)
Accumulated other comprehensive (loss) income (526) 37
----------- -----------
Total stockholders' equity 359,409 357,097
----------- -----------
----------- -----------
Total liabilities and stockholders' equity $ 379,899 $ 381,465
=========== ===========
INTERNET BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share amounts)
Three Months Ended
March 31,
---------------------
2009 2008
---------- ----------
Revenues
Consumer Internet $ 16,189 $ 16,303
Licensing 7,339 8,638
---------- ----------
Total revenues 23,528 24,941
Costs and operating expenses
Cost of revenues 4,783 5,387
Sales and marketing 4,776 6,207
Technology 2,101 1,420
General and administrative 4,286 4,649
Depreciation and amortization of intangibles 3,843 2,747
---------- ----------
Total costs and operating expenses 19,789 20,410
---------- ----------
Income from operations 3,739 4,531
Investment and other income 63 591
---------- ----------
Income before income taxes 3,802 5,122
Provision for income taxes 1,539 2,102
---------- ----------
Net income $ 2,263 $ 3,020
========== ==========
Basic net income per share $ 0.05 $ 0.07
Diluted net income per share $ 0.05 $ 0.07
Weighted average number of shares - Basic 43,326,372 42,764,092
Weighted average number of shares - Diluted 45,197,966 44,758,372
Stock-based compensation expense by function
Sales and marketing $ 85 $ 49
Technology 39 20
General and administrative 553 588
---------- ----------
$ 677 $ 657
========== ==========