The Knot Reports Strong Revenue and Net Income Gains for the Second Quarter and First Half of 2005
Thursday August 11, 8:30 am ET
Revenue Growth of 25% in Second Quarter Includes 45% Online Advertising Gain
Reminder: Conference Call Today at 2:30 Dial-In 800-638-7172 (ID#7896103)
NEW YORK--(BUSINESS WIRE)--Aug. 11, 2005-- The Knot, Inc. (NASDAQ: KNOT - News, www.theknot.com - News), a life stage media company offering the premier wedding resource, today reported financial results for its second quarter and six months ended June 30, 2005.
Second Quarter 2005 Results
For the second quarter ended June 30, 2005, The Knot reported net revenues of $13.6 million, up 25% from net revenues of $10.9 million for the second quarter of 2004. The major contributor to the higher revenues was an increase in local and national online advertising, which rose 45% over the prior year. Publishing and other revenues rose over the prior year's quarter by 28%, and merchandise revenue also showed a gain.
"Local online advertising remains a very strong component of our growth, up 56% over the prior year, as we continue to expand our penetration into the local markets" said David Liu, CEO of the Knot. "Our national online advertisers are increasing their average spend with us and we are clearly benefiting from the combination of the power of our brand and the growth in online advertising in general.
The Knot reported net income for the second quarter of 2005 of $1.3 million or $0.06 per basic and $0.05 per diluted share as compared to $182,000, or $0.01 per basic and diluted share in 2004. Total operating expenses in the second quarter included approximately $1.6 million in professional fees related to the Company's current litigation with WeddingChannel.com, Inc. During the second quarter of 2004, these legal fees amounted to $625,000.
"Revenue from retail sales of wedding supplies has improved," Mr. Liu continued, "and we are realizing savings from operating efficiencies established at our distribution center in the past twelve months. We were also pleased with the growth in our local publishing programs in the second quarter."
Last year in the third quarter, the Knot launched TheNest.com, which extends the relationship with its members through the initial years of marriage. "We draw our audience by directing registered couples on TheKnot.com to TheNest.com when they return from their honeymoon," Mr. Liu said. "We are encouraged to see the steady growth in TheNest.com online community over the first half of 2005." According to recent industry statistics from Hitwise, in the month of July, TheNest.com ranked 24th in visits for women's interest sites.
Results for the Six Months Ended June 30, 2005
For the six months ended June 30, 2005, The Knot reported net revenues of $25.5 million and net income of $1.7 million or $0.08 per basic and $0.07 per diluted share compared to net revenues of $20.7 million and net income of $85,000 or $0.00 per basic and diluted share in 2004.
In June, The Knot relaunched its recently acquired referral-based online dating websites, GreatBoyfriends.com and GreatGirlfriends.com. The new sites feature the brand's trademark social-networking approach to online dating, a smart design, simple navigation, enhanced profiles and dating editorial from ELLE magazine relationship guru (and site cofounder) E. Jean Carroll. The sites extend The Knot's lifestage media brands and services to a wider audience on the Web.
Also, in June, The Knot announced the appointment to its Board of Directors of Lisa Gersh Hall, President and Chief Operating Officer of The Oxygen Network and Matthew Strauss, Vice President of Content and Development at Comcast. Their experience in media and the development of new media services will be a significant resource to The Knot as it continues to expand its existing business and launch new services for its members.
In May, The Knot teamed with Sony Classical to produce a compilation of ceremony music featuring twenty-nine tracks handpicked by The Knot's Editor in Chief Carley Roney including preludes, processionals, interludes and recessionals from the world's most renowned classical musicians. A one-stop ceremony music solution, the CD is sold exclusively at Target stores and online at TheKnot.com and was promoted through a radio media tour that generated over 655 airings and reached over 32 million listeners.
Also, in May, to leverage the height of the June wedding season, The Knot executed a multi-platform public relations campaign surrounding wedding gift shopping trends and etiquette. Over 15,000 brides and newly married couples participated in a wedding gift poll on TheKnot.com. Carley Roney revealed survey findings and showcased her top gift picks in a 20-city satellite media tour, a 20-city radio media tour, and interviews with the nation's top press outlets, generating over 41 million audience impressions.
AUGUST 11 CONFERENCE CALL AND WEBCAST
The Knot will host a conference call with investors at 2:30 p.m., ET on Thursday, August 11, 2005, to discuss its second quarter 2005 financial results. Participants should dial in 800-638-7172 (# 7896103) 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 Knot Web site, accessible at www.theknot.com/investor-relations.
To access the Web cast, participants should visit The Knot Web site 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 Knot website approximately two hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 reference # 7896103.