Quarterly Revenues of $130.2 Million
Quarterly Operating Income of $22.1 Million
Quarterly Adjusted OIBDA of $34.6 Million
Quarterly Cash Dividend of $0.20 per Share
WOODLAND HILLS, Calif., Feb. 9, 2006 (PRIMEZONE) -- United Online, Inc. (Nasdaq:UNTD), a leading provider of consumer Internet subscription services, today reported results for its fourth quarter and fiscal year ended December 31, 2005. The company also announced that its Board of Directors has declared a quarterly cash dividend of $0.20. The dividend is payable on February 28, 2006 to shareholders of record as of the close of business on February 14, 2006.
Summary of December 2005 Quarter Results:
-- Total revenues for the quarter were $130.2 million, up 9%
versus $119.6 million for the year-ago quarter.
-- Operating income for the quarter was $22.1 million, or 17.0% of
revenues, up 16% versus operating income of $19.0 million, or
15.9% of revenues, in the year-ago quarter.
-- Adjusted operating income before depreciation and amortization
("OIBDA")(1) for the quarter was a record $34.6 million, or
26.6% of revenues, an increase of 15% versus adjusted OIBDA of
$30.0 million, or 25.1% of revenues, in the year-ago quarter.
-- Pay accounts(2) decreased by 31,000 during the quarter to 5.0
million; subscriptions(3) increased by 1,000 to 6.4 million;
active accounts(2) totaled 17.6 million at December 31, 2005.
-- Net income for the quarter was $12.4 million, or $0.19 per share,
versus $80.2 million, or $1.27 per share, for the year-ago
quarter. The year-ago quarter results include a tax benefit of
$68.6 million, or $1.09 per share, related to the recognition of a
portion of the company's deferred tax assets. Excluding the
benefit, net income for the year-ago quarter was $11.6 million, or
$0.18 per share.
-- Adjusted net income(4) for the quarter was a record $18.6 million,
an increase of 12% versus $16.6 million for the year-ago quarter.
On a per share basis, adjusted net income for the quarter was
$0.28 per share, an increase of 8% versus $0.26 per share for the
year-ago quarter. Adjusted net income is calculated in a manner
consistent with the analyst consensus estimate as reported by
First Call.
-- Cash flows from operations were $22.8 million for the quarter,
versus $31.7 million for the year-ago quarter.
-- Free cash flow(5) for the quarter was $17.6 million, versus
$30.6 million for the year-ago quarter.
Summary of Fiscal 2005 Results:
-- Total revenues for 2005 were a record $525.1 million, up 17%
versus $448.6 million for 2004.
-- Operating income for 2005 was a record $86.6 million, or 16.5% of
revenues, up 9% versus operating income of $79.5 million, or 17.7%
of revenues, in 2004.
-- Adjusted OIBDA for 2005 was a record $133.8 million, or 25.5% of
revenues, an increase of 18% versus adjusted OIBDA of $113.6
million, or 25.3% of revenues, in 2004.
-- Net income for 2005 was $47.1 million, or $0.74 per share, versus
$117.5 million, or $1.81 per share, for 2004. Net income for 2004
included a tax benefit of $68.6 million, or $1.06 per share.
Excluding these benefits, net income for 2004 was $48.9 million,
or $0.75 per share.
-- Adjusted net income for 2005 was $71.1 million, an increase of 9%
versus $65.4 million for 2004. On a per share basis, adjusted net
income for 2005 was $1.09 per share, an increase of 8% versus
$1.01 per share for 2004. Adjusted net income is calculated in a
manner consistent with the analyst consensus estimate as reported
by First Call.
-- Cash flows from operations were $137.0 million for 2005, an
increase of 11% versus $124.0 million for 2004.
-- Free cash flow for 2005 was $115.4 million, versus $117.9 million
for 2004.
"We are pleased to report our fourth consecutive year of record revenues, operating income and adjusted OIBDA," said Mark R. Goldston, chairman, CEO and president of United Online. "Our access business continued to generate significant cash flows and profitability while the growth we experienced in 2005 was driven by our diversification into non-access businesses, particularly our Classmates social networking unit. During the fourth quarter we launched our VoIP initiative under the NetZero Voice brand name, which grew to 14,000 subscriptions and 44,000 active accounts at December 31, 2005. Going forward, we intend to continue to invest in our diversification strategy while maintaining our overall corporate focus on disciplined financial results."
"United Online grew its social networking and other web service pay accounts by 25% during 2005 and completed the year with these non-access businesses representing 43% of our total pay account base," said Charles S. Hilliard, executive vice president and CFO of United Online. "Beyond growing our non-access businesses in 2005, we also demonstrated our ability to manage the profitability and cash flow contribution of our access business, which declined by a net 125,000 pay accounts during the fourth quarter."
Additional Highlights:
-- Billable services margin(6) was 78.1% for the December 2005
quarter, versus 78.7% for the year-ago quarter.
-- Cash balances at December 31, 2005 were $244.4 million, including
cash, cash equivalents and short-term investments. During the
quarter, the company repaid $4.1 million of its senior term loan
facility, bringing the balance of the facility to $54.2 million at
December 31, 2005. On January 3, 2006, the company retired the
remaining $54.2 million balance on its senior term loan facility.
Business Outlook:
The following forward-looking information includes certain projections made by management as of the date of this release. United Online does not intend to revise or update this information and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. Factors include, without limitation, the factors referenced later in this announcement under the caption "Cautionary Information Regarding Forward-Looking Statements." These and other factors are discussed in more detail in the company's filings with the Securities and Exchange Commission. Stock-based compensation includes the estimated impact of expensing stock options under Financial Accounting Standards Board Statement No. 123R, "Share-Based Payment", which the company adopted effective January 1, 2006.
Following is the company's guidance for the March 2006 quarter and the year ending December 31, 2006:
---------------- ----------------
(in millions) Mar '06 Q Est. CY'06 Est.
---------------- ----------------
Operating income $16.8 -- $18.8 $73.6 -- $79.6
Depreciation 4.8 20.5
Amortization 4.4 15.9
Stock-based compensation 6.0 21.0
---------------- ----------------
Adjusted operating income
before depreciation and
amortization(1) $32.0 -- $34.0 $131.0 -- $137.0
---------------- ----------------
Weighted average diluted
shares 66.5 -- 67.5 67.5 -- 68.5
-- Total revenues for the March 2006 quarter are estimated to be
between approximately $125 million and approximately $128 million.
-- The company estimates that total pay accounts will be between
approximately 5.0 million and approximately 5.1 million at March
31, 2006.
(1) Adjusted operating income before depreciation and amortization (adjusted OIBDA) is defined as operating income before depreciation, amortization, stock-based compensation and facility-exit costs. Management believes that because adjusted OIBDA excludes (1) certain non-cash expenses (such as depreciation, amortization and stock-based compensation); and (2) items that management believes are not reflective of the company's core operating results over time (non-recurring facility-exit costs in the quarter and year ended December 31, 2004 related to the relocation of the company's corporate offices), this measure provides investors with additional useful information to measure the company's performance, particularly with respect to changes in performance from period to period. Management uses adjusted OIBDA to measure the company's performance and previously monitored adjusted OIBDA to ensure compliance with specific financial performance covenants under its term loan, which was repaid in January 2006. The company's Board of Directors uses this measure in determining certain compensation incentives for certain members of the company's management. Adjusted OIBDA is not determined in accordance with generally accepted accounting principles (GAAP) and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A limitation associated with the use of adjusted OIBDA is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the company's business. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures and purchase accounting. An additional limitation associated with this measure is that it does not include stock compensation expenses related to the company's workforce. Management compensates for this limitation by providing supplemental information about stock compensation expense on the face of the consolidated statements of operations. Management does not believe either of these limitations is material, particularly when such measure is disclosed with its most comparable GAAP financial measure, operating income. A reconciliation to operating income is provided in the accompanying tables.
(2) A pay account represents a unique billing relationship with a customer who subscribes to one or more of the company's services. A pay account does not equate to a unique subscriber since one subscriber could have several pay accounts. Active accounts are defined as all free access, VoIP, social network and email users that logged on to our services at least once during the preceding 31 days, together with all pay accounts. Additionally, active accounts include the number of free Web sites that received at least one unique visitor within the preceding 90 days and the number of free photo-sharing users that logged on to the service at least once within the preceding 90 days. A table entitled "Analysis of Pay Accounts and Subscriptions" is presented elsewhere in this release.
(3) A subscription represents a unique subscription to any individual pay service offered by the company. Internet access and accelerated dial-up are counted as two subscriptions, although most subscribers to the accelerated service purchase it bundled with our standard Internet access. A table entitled "Analysis of Pay Accounts and Subscriptions" is presented elsewhere in this release.
(4) Adjusted net income is defined as net income before the after-tax effect of amortization of intangible assets, stock-based compensation and facility-exit costs. Management believes that adjusted net income provides investors with additional useful information to measure the company's financial performance, particularly from period to period, exclusive of (1) certain non-cash expenses (such as amortization and stock-based compensation); and (2) other items which management believes are not reflective of the company's core operating results over time (non-recurring facility-exit costs in the quarter and year ended December 31, 2004 related to the relocation of the company's corporate offices). Management also uses adjusted net income for this purpose. Adjusted net income is not determined in accordance with generally accepted accounting principles (GAAP) and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The limitations of adjusted net income are that, similar to adjusted OIBDA, it does not include certain costs, and the term adjusted net income does not have a standardized meaning. Therefore, other companies may use the same, or a similarly named measure but exclude different items, which may not provide investors a comparable view of the company's performance in relation to other companies in the same industry. Management compensates for this limitation by presenting the most comparable GAAP measure, net income, directly ahead of adjusted net income in this earnings release and by providing a reconciliation that shows and describes the adjustments made. Management does not believe these limitations are material, particularly when such measure is disclosed with its most comparable GAAP financial measure, net income. A reconciliation to net income is provided in the accompanying tables.
(5) Free cash flow is defined as net cash provided by operating activities before cash paid for relocation costs, less capital expenditures. Management believes that free cash flow provides investors with additional useful information to measure operating liquidity because it reflects the company's operating cash flows after investing in capital assets, and excludes the cash impact of items which management believes are not reflective of the company's core operating results over time (non-recurring facility-exit costs in the quarter and year ended December 31, 2004 related to the relocation of the company's corporate offices). This measure is used by management, and may also be useful for investors, to assess the company's ability to pay its quarterly dividend, repay debt obligations and generate cash flow for a variety of strategic opportunities, including reinvestment in the business, and effecting potential acquisitions and share repurchases. Free cash flow is not determined in accordance with generally accepted accounting principles (GAAP) and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The limitation of free cash flow is that it excludes cash paid for non-recurring relocation costs during certain periods. Management does not believe that this is a material limitation, particularly when such measure is disclosed with its most comparable GAAP financial measure, net cash provided by operating activities. A reconciliation to net cash provided by operating activities is provided in the accompanying tables.
(6) Billable services margin represents billable services revenues less cost of billable services divided by billable services revenues.
Cautionary Information Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements containing words such as "guidance," "may," "believe," "will," "expect," "project," "projections," "business outlook" and "estimate" or similar expressions constitute forward-looking statements. These statements include, without limitation, expectations regarding: guidance for future financial performance; changes in pay accounts; weighted average diluted shares; depreciation and amortization; and stock-based compensation. Actual results may differ materially from those predicted and reported results should not be considered an indication of future performance. Potential risks and uncertainties include, among others: the effect of competition, including adoption of broadband services and changes in the company's pricing or competitors' pricing, and the use of promotional offers to acquire or retain subscribers; the company's inability to retain its existing subscribers and the rate at which new subscribers sign up for the company's services; changes in the mix of pay accounts; the effects of changes in marketing expenditures or shifts in marketing expenditures to support new products and services; the effects of seasonality and changes in Internet usage; changes in the projected number of weighted average diluted shares due to the issuance of stock, restricted stock units and stock options, stock repurchases, fluctuations in the company's stock price or other factors; the impact of new product releases, including VoIP; changes in the projected amortization and depreciation figures due to capital spending or other factors; potential impairment of goodwill and intangibles; changes in usage by subscribers, additional telecommunications costs or other factors negatively impacting the company's billable services margin; changes in active accounts; the company's inability to maintain its agreements with telecommunications providers on attractive terms; the company's ability to successfully integrate acquisitions; problems associated with the company's billing systems; the company's inability to retain key customers and key personnel; unanticipated technological problems or developments; risks associated with litigation; and unanticipated governmental regulation. From time to time, the company considers acquisitions that, if consummated, could be material. Forward-looking statements regarding financial metrics are based upon the assumption that no such acquisition is consummated during the relevant periods. If an acquisition were consummated, actual results could differ materially from any forward-looking statements. More information about potential factors that could affect the company's business and financial results is included in the company's annual and quarterly reports filed with the Securities and Exchange Commission (http://www.sec.gov), including, without limitation, information under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors."
About United Online
United Online, Inc. (Nasdaq:UNTD) is a leading provider of consumer Internet subscription services through a number of brands, including NetZero, NetZero Voice, Juno and Classmates. The company's services include Internet access, accelerated dial-up services, Voice-over-Internet Protocol (VoIP) calling plans, premium email, personal Web hosting and domain services, photo-sharing services and social networking. At December 31, 2005, United Online had 900 employees worldwide. United Online is headquartered in Woodland Hills, CA, with offices in New York City, NY; Renton, WA; San Francisco, CA; Orem, UT; Munich, Germany; and Hyderabad, India. For more information about United Online and its Internet services, please visit http://www.untd.com.
United Online will be hosting a conference call today at 2:00PM PT (5:00PM ET) to discuss its quarterly results. A live Web cast of the call can be accessed on the Investors section of the company's Web site at www.untd.com. A recording of the call will be available on the site for seven days.
UNITED ONLINE, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2005 2004
---------- ----------
ASSETS
Cash, cash equivalents and short-term
investments $ 244,362 $ 232,793
Accounts receivable, net 19,201 17,534
Deferred tax assets, net 68,355 76,203
Property and equipment, net 33,093 27,006
Goodwill and intangible assets, net 139,837 147,016
Other assets 16,340 19,300
---------- ----------
Total assets $ 521,188 $ 519,852
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 46,955 $ 45,379
Accrued liabilities 36,249 18,320
Deferred revenue 56,284 50,954
Capital leases 698 1,319
Term loan 54,208 100,000
Other liabilities 4,379 2,181
---------- ----------
Total liabilities 198,773 218,153
---------- ----------
Stockholders' equity 322,415 301,699
---------- ----------
Total liabilities and stockholders'
equity $ 521,188 $ 519,852
========== ==========
UNITED ONLINE, INC.
Unaudited Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues:
Billable services $ 114,591 $ 108,530 $ 465,980 $ 410,821
Advertising and
commerce 15,641 11,090 59,081 37,796
--------- --------- --------- ---------
Total revenues 130,232 119,620 525,061 448,617
Operating expenses:
Cost of billable
services 25,057 23,096 97,974 94,983
Cost of free
services 3,132 2,474 12,515 7,393
Sales and marketing 48,306 47,962 208,338 178,905
Product development 10,902 7,966 38,940 27,422
General and
administrative 12,718 10,918 48,983 37,569
Stock-based
compensation (a) 3,120 517 9,952 2,449
Amortization of
intangible assets 4,915 7,651 21,799 20,403
--------- --------- --------- ---------
Total operating
expenses 108,150 100,584 438,501 369,124
--------- --------- --------- ---------
Operating income 22,082 19,036 86,560 79,493
Interest and other
income, net 2,201 902 6,885 5,138
Interest expense (1,328) (256) (6,073) (1,202)
--------- --------- --------- ---------
Income before
income taxes 22,955 19,682 87,372 83,429
Provision for
income taxes 10,581 (60,507) 40,245 (34,051)
--------- --------- --------- ---------
Net income $ 12,374 $ 80,189 $ 47,127 $ 117,480
========= ========= ========= =========
Basic net income
per share $ 0.20 $ 1.33 $ 0.77 $ 1.91
========= ========= ========= =========
Diluted net income
per share $ 0.19 $ 1.27 $ 0.74 $ 1.81
========= ========= ========= =========
Shares used to
calculate basic
net income per
share 61,899 60,307 61,135 61,404
========= ========= ========= =========
Shares used to
calculate diluted
net income per
share 64,996 63,250 63,815 65,012
========= ========= ========= =========
Shares outstanding
at end of period 62,606 61,074 62,606 61,074
========= ========= ========= =========
(a) Stock-based
compensation is
allocated as
follows:
Cost of billable
services $ 52 $ 16 $ 183 $ 16
Sales and marketing 333 (255) 954 76
Product development 327 32 1,069 32
General and
administrative 2,408 724 7,746 2,325
--------- --------- --------- ---------
Total stock-based
compensation $ 3,120 $ 517 $ 9,952 $ 2,449
========= ========= ========= =========
UNITED ONLINE, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 12,374 $ 80,189 $ 47,127 $ 117,480
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation,
amortization and
stock-based compensation 12,538 10,936 47,232 31,600
Deferred taxes, tax
benefits and other 4,165 (58,931) 17,495 (35,317)
Change in operating
assets and liabilities
(excluding the effects
of acquisitions):
Accounts receivable 1,678 (723) (1,669) 220
Other assets (1,764) (674) 1,806 (4,122)
Accounts payable and
accrued liabilities (5,231) 1,272 17,677 11,356
Other liabilities 45 706 2,198 1,895
Deferred revenue (1,034) (1,034) 5,181 848
--------- --------- --------- ---------
Net cash provided by
operating activities 22,771 31,741 137,047 123,960
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of short-term
investments (38,151) (99,466) (320,869) (329,083)
Proceeds from maturities
and sales of short-term
investments 101,755 119,234 353,333 344,519
Purchases of rights,
patents and trademarks (8) (10) (5,562) (926)
Cash paid for
acquisitions, net of
cash acquired -- (98,168) (8,638) (110,102)
Purchases of property and
equipment (5,199) (1,312) (21,653) (12,510)
Proceeds from sales of
assets, net -- -- -- 92
--------- --------- --------- ---------
Net cash provided by
(used for) investing
activities 58,397 (79,722) (3,389) (108,010)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Payments on capital
leases (91) (166) (621) (166)
Proceeds from term loan
and line of credit, net -- 107,569 -- 107,569
Payments on term loan (4,125) (10,300) (45,792) (10,300)
Payment for dividends (12,808) -- (38,067) --
Proceeds from employee
stock purchase plan 1,491 1,409 3,169 3,045
Repurchases of common
stock -- (792) (14,206) (74,509)
Proceeds from exercises
of stock options 1,142 992 5,874 6,015
--------- --------- --------- ---------
Net cash provided by
(used for) financing
activities (14,391) 98,712 (89,643) 31,654
--------- --------- --------- ---------
Effect of exchange rate
changes on cash and cash
equivalents (39) -- (130) --
Change in cash and cash
equivalents 66,738 50,731 43,885 47,604
Cash and cash
equivalents, beginning
of period 33,659 5,781 56,512 8,908
--------- --------- --------- ---------
Cash and cash
equivalents, end of
period $ 100,397 $ 56,512 $ 100,397 $ 56,512
========= ========= ========= =========
UNITED ONLINE, INC.
Reconciliation of Net Income to Adjusted Net Income (4)
(in thousands, except per-share data)
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net income $ 12,374 $ 80,189 $ 47,127 $ 117,480
Add:
Facility-exit costs (a) -- 10 -- 3,257
Stock-based compensation 3,120 517 9,952 2,449
Amortization of
intangible assets 4,915 7,651 21,799 20,403
--------- --------- --------- ---------
20,409 88,367 78,878 143,589
Income tax effect of
adjusting entries and
re-measurement of
certain deferred tax
assets (1,819) (71,722) (7,769) (78,230)
--------- --------- --------- ---------
Adjusted net income $ 18,590 $ 16,645 $ 71,109 $ 65,359
========= ========= ========= =========
Adjusted basic net income
per share $ 0.30 $ 0.28 $ 1.16 $ 1.06
========= ========= ========= =========
Adjusted diluted net
income per share $ 0.28 $ 0.26 $ 1.09 $ 1.01
========= ========= ========= =========
Shares used to calculate
adjusted basic net
income per share 61,899 60,307 61,135 61,404
========= ========= ========= =========
Shares used to calculate
adjusted diluted net
income per share (b) 66,236 63,250 65,127 65,012
========= ========= ========= =========
---------------------------------------------------------------------
(a) Facility-exit costs incurred as a result of the relocation of the
company's corporate offices. These costs are attributable to lease
termination fees and accelerated depreciation incurred in connection
with terminated leases.
(b) Includes the adjustment of shares used to calculate diluted net
income per share resulting from the elimination of stock-based
compensation.
UNITED ONLINE, INC.
Reconciliation of Non-GAAP Financial Data
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Adjusted Operating Income
Before Depreciation and
Amortization (1)
Operating income $ 22,082 $ 19,036 $ 86,560 $ 79,493
Depreciation 4,503 2,768 15,481 8,003
Amortization 4,915 7,651 21,799 20,403
--------- --------- --------- ---------
Operating income before
depreciation and
amortization 31,500 29,455 123,840 107,899
Stock-based compensation 3,120 517 9,952 2,449
Facility-exit costs (a) -- 10 -- 3,257
--------- --------- --------- ---------
Adjusted operating income
before depreciation and
amortization $ 34,620 $ 29,982 $ 133,792 $ 113,605
========= ========= ========= =========
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Free Cash Flow (5)
Net cash provided by
operating activities $ 22,771 $ 31,741 $ 137,047 $ 123,960
Add (deduct):
Capital expenditures (5,199) (1,312) (21,653) (12,510)
Cash paid for
relocation costs (b) -- 200 -- 6,410
--------- --------- --------- ---------
Free cash flow $ 17,572 $ 30,629 $ 115,394 $ 117,860
========= ========= ========= =========
---------------------------------------------------------------------
(a) Represents costs incurred in connection with the relocation of
the company's corporate offices. These costs are attributable to
lease termination fees and accelerated depreciation incurred in
connection with terminated leases.
(b) Represents cash payments made in connection with the relocation
of the company's corporate offices. These payments relate
primarily to lease termination fees and capital expenditures for
the new corporate offices.
UNITED ONLINE, INC.
Selected Quarterly Historical Financial Data and Key Metrics (a)
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2005 2005 2005 2005 2004
-------- -------- -------- -------- --------
Total revenues
(in thousands) $130,232 $132,778 $131,520 $130,531 $119,620
Net income (in
thousands) $ 12,374 $ 12,594 $ 10,672 $ 11,487 $ 80,189 (b)
Net income per
diluted share $ 0.19 $ 0.20 $ 0.17 $ 0.18 $ 1.27
Pay accounts
(2) (in
thousands) 5,009 5,040 5,033 4,952 4,826
Active accounts
(2) (in
millions) 17.6 16.9 16.9 17.0 15.2
Number of
employees at
end of period 900 868 828 769 742
---------------------------------------------------------------------
(a) More information on the financial results for these quarters can
be found in the company's filings with the Securities and
Exchange Commission.
(b) Includes $68.6 million tax benefit related to the recognition of
a portion of the company's deferred tax assets.
UNITED ONLINE, INC.
Analysis of Pay Accounts (2) and Subscriptions (3)
(in thousands)
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2005 2005 2005 2005 2004
-------- -------- -------- -------- --------
Internet access 2,855 2,980 3,078 3,130 3,100
Non-access
services (a) 2,154 2,060 1,955 1,822 1,726
-------- -------- -------- -------- --------
Total pay
accounts (2) 5,009 5,040 5,033 4,952 4,826
======== ======== ======== ======== ========
Internet access 2,855 2,980 3,078 3,130 3,100
Accelerator 1,214 1,205 1,196 1,170 1,105
Non-access
services (a) 2,303 2,186 2,064 1,900 1,781
-------- -------- -------- -------- --------
Total
subscriptions
(3) 6,372 6,371 6,338 6,200 5,986
======== ======== ======== ======== ========
---------------------------------------------------------------------
(a) Non-access services include VoIP, social networking, premium
email, Web-hosting and domain name registration, premium content
and photo sharing.