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The Knot Reports First Quarter 2010 Financial Results

^{Published on 2010-05-07 05:15:18 - Market Wire}
 

NEW YORK--([ BUSINESS WIRE ])--The Knot, Inc. (NASDAQ: KNOT, [ www.theknot.com ]), the premier media company devoted to weddings, babies and everything in between, today reported financial results for the first quarter ended March 31, 2010.

"We are focused on further leveraging the strength of our brands and audience to drive growth in registry and local advertising in the US."

First Quarter 2010 Results

For the quarter ended March 31, 2010, The Knot reported revenue of $27.5 million, up 16% from $23.7 million in the first quarter of 2009.Online advertising revenue grew 13% versus the prior yeara™s first quarter, as national online advertising grew 31% and local online advertising grew 4%. Wedding supplies revenue grew 34% while registry services revenue declined 1%. Publishing and other revenue increased 10% compared to the first quarter of 2009.

Wedding supplies revenue benefited from the acquisition completed in May of 2009. Revenue attributable to that acquisition was $1.6 million. Growth in publishing and other revenue was primarily due to a $1 million one-time fee the Company received from the early termination of its old registry agreement with Macya™s. Without these items, total revenue grew by 5% over the first quarter of 2009.

For the quarter ended March 31, 2010, the Companya™s net loss was $111,000 or $0.00 per basic and diluted share, compared to a net loss of $1.3 million or $0.04 per basic and diluted share in the first quarter of 2009.

The Companya™s balance sheet reflects cash and cash equivalents of $101.7 million and short-term investments of $30.7 million. The Company has no debt.

aWe are pleased to see growth return to national advertising as brand marketers increasingly recognize the value inherent in our targeted audience of brides, newlyweds and new parents,a said Co-founder and Chief Executive David Liu. aWe are focused on further leveraging the strength of our brands and audience to drive growth in registry and local advertising in the US.a

Recent Developments

• GiftRegistry360.com, the Companya™s universal gift registry platform, launched at the end of April. The new platform integrates products from multiple registries into one list to become the ultimate destination for online registry management and gifting.
• The Nest magazine will be available on newsstands for the first time this summer, expanding the branda™s distribution through top US retailers: Barnes & Noble, Borders, Target, Wal-Mart and more.
• The Companya™s board of directors authorized a $50 million stock repurchase program through which the Company may repurchase stock from time to time either in the open market or through privately negotiated transactions. No stock has been repurchased under this program to date.

First Quarter 2010 Financial Highlights

• National and local online revenue was $5.6 million and $8.9 million, respectively, for the three months ended March 31, 2010, as compared to $4.2 million and $8.6 million for the first quarter of 2009.
• Gross profit margin was 78.8% for the three months ended March 31, 2010, compared to 79.5% in the first quarter of 2009.
• Operating expense was $21.8 million for the three months ended March 31, 2010, as compared to $21.2 million for the corresponding period in 2009. The increase in operating expense is primarily related to additional personnel as a result of the acquisitions completed last year, higher marketing costs to address reduced website traffic to WeddingChannel.com caused by the change in the Macya™s relationship and the expansion in China. Depreciation and amortization expense declined to $1.5 million for the three months ended March 31, 2010, compared to $2.6 million for the corresponding period in 2009.
• Stock-based compensation expense was $1.1 million for the three months ended March 31, 2010, as compared to $1 million for the corresponding period in 2009.
• Net cash provided by operating activities was $2.1 million for the three months ended March 31, 2010, as compared to $2.3 million for the same period in 2009. Capital expenditures were $299,000 for the three months ended March 31, 2010, as compared to $575,000 for the same period in 2009.

Conference Call and Replay Information

The Knot will host a conference call with investors at 4:30 p.m. ET on Thursday, May 6, 2010, to discuss its first quarter 2010 financial results. Participants should dial in (866) 430-3457 Reference #72427791 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 Companya™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 Companya™s website approximately two hours after the conference call ends. A replay of the call will be available at (800) 642-1687, conference ID #72427791.

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 industrya™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 that we will generate a lower level of revenue from the Macya™s relationship in 2010 compared to 2009, (viii) 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 Macya™s registry services agreement, (ix) the dependence of WeddingChannel.coma™s registry services business on third parties, (x) the potential for losses on our investments in auction rate securities or our inability to liquidate these investments at desired times and in desired amounts, and (xi) 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.