KNOT has reported their fourth quarter and year end results. For the quarter, they beat the consensus EPS estimate by $.01, but fell short on the revenue side, coming in at $24.2 million versus the consensus estimate of $24.9 million.
The Knot Reports Fourth Quarter and 2007 Year End Financial Results
Wednesday February 13, 4:05 pm ET
-- Gains in All Revenue Streams Drive Revenue Growth of 36% in 2007
-- Conference Call Today at 4:30 p.m. ET Dial-In 800-638-7172 (ID#30519381)
NEW YORK--(BUSINESS WIRE)--The Knot, Inc. (NASDAQ: KNOT, www.theknot.com), a leading lifestage media company targeting couples planning their weddings and future lives together, today reported financial results for its fourth quarter and twelve months ended December 31, 2007.
2007 Financial Performance
For the year ended December 31, 2007, The Knot's net revenue rose to $98.7 million, an increase of 36% from $72.7 million in 2006. Revenue from national and local online advertising programs increased 34% over the prior year. Merchandise revenue from the sale of wedding supplies grew 29% while publishing and other revenue increased 8%. Registry services revenue, which is derived substantially through the WeddingChannel business that was acquired in September 2006, was $10.9 million in 2007.
Income before income taxes increased to $20.7 million for 2007 compared to $14.1 million in 2006. Net income for 2007 was $11.9 million, or $0.38 per basic and $0.36 per diluted share, as compared to $23.4 million, or $0.90 per basic and $0.82 per diluted share in 2006. The results for 2006 included a non-cash income tax benefit of approximately $9.4 million related to the recognition of a deferred tax asset with respect to certain of The Knot’s net operating loss carry-forwards as well as other income of $1.2 million resulting from the settlement of a legal action. 2007 results reflect a provision for income taxes of $8.8 million.
"Our multi platform media model, combined with our strong member base, continued to produce healthy revenue gains in 2007," said David Liu, CEO of the Knot. "Our progress in non-wedding related advertising categories demonstrates the growing recognition of the buying power of our audience during key lifestages from engagement through first pregnancy."
Fourth Quarter 2007 Results
For the fourth quarter of 2007, The Knot reported net revenue of $24.2 million and net income of $2.6 million, or $0.08 per basic and diluted shares compared to net revenue of $21.7 million and net income of $14.6 million, or $0.48 per basic and $0.45 per diluted share in the corresponding period in 2006. The results for the fourth quarter of 2006 include the non-cash income tax benefit and the gain from the settlement of a legal action noted previously.
"In 2008 we will continue to invest in our product and infrastructure to support our commitment to maintaining a leadership position in a rapidly changing media environment,” Mr. Liu said. “During this phase we expect that revenue growth will be in the mid teens. We believe that the management and technology infrastructure we are investing in today will provide important growth potential for many years to come."
Fourth Quarter and Full Year 2007 Financial Highlights:
-- National online revenues were $5.5 million and $18.4 million for the three and 12 months ended December 31, 2007, respectively, as compared to $4.3 million and $13.6 million for the corresponding periods in 2006.
-- Local online revenues were $7.9 million and $30.6 million for the three and 12 months ended December 31, 2007, respectively, as compared to $6.7 million and $23.0 million for the corresponding periods in 2006.
-- Gross profit margins for the 12 months ended December 31, 2007 were 82% as compared to 79% in 2006.
-- Stock-based compensation expense was $707,000 and $2.4 million for the three and twelve months ended December 31, 2007, respectively, as compared to $467,000 and $1.5 million for the corresponding periods in 2006.
-- Net cash provided by operating activities was $27.4 million for the 12 months ended December 31, 2007, while capital expenditures amounted to $3.9 million for the same period.
Recent Highlights:
The second branded segment of our strategic partnership with Style Network entitled, “My Destination Wedding with The Knot,” aired in December of 2007. This new spin-off showcased a multi-cultural destination wedding, planned by The Knot’s editor in chief, Carley Roney.
Conference Call and Replay Information
The Knot will host a conference call with investors at 4:30 p.m. ET on Wednesday, February 13, 2008 to discuss its fourth quarter and full year 2007 financial results. Participants should dial in 800-638-7172 Reference # 30519381 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 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 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 #30519381.
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The full financial statements can be found at:
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