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To: Glenn Petersen who wrote (105)10/23/2006 2:28:13 AM
From: Tom Caruthers
   of 133
 
Hi Glenn,

Don't know if you are still holding or not. Motley Fool is predicting Google will buy out KNOT. Cramer is predicting Yahoo is going to do it. Certainly are seeing some nice premiums in the internet space with YouTube and rumors of a Facebook sale > $1B. Certainly the KNOT has a monopoly on a lucrative portion of the market.

At all-time highs and a crazy PE, the chart suggests that this is a time to sell. But given the speculation and so much attention being paid to these dot.coms and the fact consolidation is happening rapidly, I can't bring myself to do it.

What are you thinking?

Tom

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To: Tom Caruthers who wrote (106)10/27/2006 11:33:41 PM
From: Glenn Petersen
   of 133
 
Tom,

I have lightened up on my shares a bit but I am still holding an overweighted position. The PE is certainly crazy but KNOT does occupy a distinct niche. I am probably going to hold it until it gets bought out. I think that an offer from Yahoo is more likely than one from Google.

Just you and me here.

I wish that KNOT had a site in India.

Regards,

Glenn

businessweek.com

NOVEMBER 6, 2006

NEWS & INSIGHTS

Here Come The Bride Sites

U.S. Net heavies are wedding India's fast-growing matchmaking dot-coms


There's Yahoo! (YHOO ) Finance, Yahoo! Autos, and Yahoo! Jobs. So why not Yahoo! Weddings? In India, the Internet giant is playing online cupid to people looking for arranged marriages. In September, Yahoo! Inc. (YHOO ) and Silicon Valley venture capital firm Canaan Partners jointly paid $8.5 million for what industry insiders say is roughly 10% of BharatMatrimony.com, a nine-year-old marriage Web site that also has 50 offices across India to serve those without Net access. "BharatMatrimony will help us get a larger share of the Internet market" in India, says Yahoo India Managing Director George Zacharias.

One satisfied customer is Pradeep Nair. The 32-year-old packaging material exporter from Mumbai tried finding a bride the traditional way: by hiring a matchmaker. "There was something or the other missing" with each of the 50 or so candidates, he says. Either her horoscope didn't match his own -- a key consideration for conservative Hindus -- or she fell short of his ideal: a tall, attractive working woman. Frustrated, Nair paid $27 to sign up with BharatMatrimony. Three months later, he wed Vrinda, 28, an accountant working for Indian carrier Jet Airways. Nair plans to register his sister on the site next. "It's easy to access, and it throws up good choices," he says.

EASY TO SAY "NO"

Yahoo isn't the only foreign player getting hitched to an Indian marriage site. Microsoft Corp. (MSFT ) a year ago hooked up with Shaadi.com, though it didn't invest any money in the site. "Shaadi helps attract huge numbers of users," says MSN India country manager Jaspreet Bindra. Silicon Valley venture capital fund Kleiner Perkins Caufield & Byers has plowed some $4.6 million into Info Edge, which runs matrimonial site Jeevansathi.com. Google Inc. (GOOG ) also is said to be prospecting for a partner, though the company declines to comment.

There are plenty of potential mates for overseas Net companies. India has scores of sites dedicated to brokering marriages, while Net dating services are less popular. Some 7.5 million people use the marriage sites, up from 4 million in 2004, the Internet & Mobile Association of India estimates. Since registration is free, and users only pay when they want to contact a potential partner, the sites are likely to take in just $21 million or so this year. But there's plenty of room to grow. Indians lay out nearly $500 million a year for offline marriage services such as matchmaking, the biggest category of print classifieds. "Today the emphasis is on compatibility and being a professional, something the Internet lets you test, as opposed to the traditional contacts," says Anupam Mittal, Shaadi.com's founder.

The popularity of the sites reflects the changing face of India. Traditionally, Indian marriages have been brokered by family, friends, or professional matchmakers, a laborious process that involves matching candidates on the basis of religion, caste, community, and horoscopes. Busy professionals such as Charoo Kher prefer the speed of the Net. A customer-relations manager at India's commodity exchange, Kher, 31, had no time for dating so she registered on Shaadi.com. She and her Punjabi family reviewed 100 or so profiles -- with details such as hobbies, favorite foods, and salary -- and settled on Gurmeet Walia, a 35-year-old caterer. "The ease of finding many profiles online under one roof seemed practical," Kher says. The couple wed eight months ago.

Online matchmaking offers another advantage: In India there's a stigma attached to turning down a marriage proposal. The Internet allows users to disengage easily if they don't, well, click.

By Nandini Lakshman

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From: Glenn Petersen11/13/2006 9:44:09 AM
   of 133
 
The Knot Reports Third Quarter and Nine Month 2006 Financial Results

Monday November 13, 7:30 am ET

Net Income Increases to $3.3 Million on a 41% Revenue Gain

Reminder: Conference Call Today at 2:30 Dial-In 800-638-7172 (ID#8734121)

NEW YORK--(BUSINESS WIRE)--The Knot, Inc. (NASDAQ: KNOT - News, www.theknot.com - News), a leading lifestage media company targeting couples planning their weddings and future lives together, today reported financial results for its third quarter and nine months ended September 30, 2006.

WeddingChannel Acquisition

As previously announced, on September 8, 2006, The Knot completed its acquisition of WeddingChannel.com, Inc. The results of operations for WeddingChannel are included in the results of operations for The Knot since that date.

Third Quarter 2006 Results

For the third quarter of 2006, The Knot reported net revenues of $18.5 million, up 41% from net revenues of $13.1 million in the third quarter of 2005. The current period includes revenue contributed from the WeddingChannel operation of approximately $1.5 million. Each of the Knot's revenue streams contributed to the remaining gain of $3.9 million which represented growth of 30% over the prior year. National and local online advertising revenues led the increase, up 35% over the prior year. Merchandising revenue continued to rebound and was ahead by 25% while publishing and other revenue rose by 24%.

"As the clear market leader in the bridal category, we are moving quickly to maximize our platforms for our advertisers who want to directly reach the largest audience of brides and grooms," said Knot CEO David Liu. "We are pleased with the progress we are making in the integration of the WeddingChannel operations. We initially focused on the consolidation of the warehouse and fulfillment functions for the wedding supplies business at our facility in Redding, California. This was completed in September."

The Knot reported net income for the third quarter of 2006 of $3.3 million, or $0.12 per basic and $0.11 per diluted share, up sharply from net income of $722,000 or $0.03 per basic and diluted share in the third quarter of 2005. Total operating expenses in the third quarter of 2006 include approximately $295,000 of amortization of acquired intangibles recorded in connection with the acquisition of WeddingChannel. Total operating expenses in the third quarter of 2005 included approximately $1.5 million in professional fees related to the Company's prior litigation with WeddingChannel.

"During the quarter, we made a further investment to extend our reach in the newlywed space with the launch of the premier issue of The NEST magazine, which we have started publishing on a controlled circulation basis," Mr. Liu said. "The response so far has been enthusiastic, and the November holiday issue has new advertisers on board. Our brand strategy calls for cross platform product extensions, and we are following the same plan that has built a loyal audience for The Knot. The purchasing power of our audience from engagement to first time parents is beginning to attract a wide range of advertisers who want to influence our audience early in the buying cycle," Mr. Liu concluded.

Effective January 1, 2006, The Knot began recording expense associated with employee stock options including rights associated with its Employee Stock Purchase Plan, in accordance with Statement of Financial Accounting Standards No. 123®. The adoption of this standard resulted in a reduction in net income of $111,000 and $383,000 for the three and nine months ended September 30, 2006, respectively, or $0.02 and $0.01 per basic and diluted share. There was no impact on basic and diluted earnings per share for the three months ended September 30, 2006. Total stock-based compensation, including expenses associated with restricted common shares, was $388,000 and $1.1 million for the three and nine months ended September 30, 2006, respectively. Stock-based compensation expense was $24,000 for each of the three and nine months ended September 30, 2005.

For the nine months ended September 30, 2006, The Knot reported net revenues of $51.0 million and net income of $8.8 million, or $0.36 per basic and $0.33 per diluted share, compared to net revenues of $38.6 million and net income of $2.5 million or $0.11 per basic and $0.10 per diluted share in 2005. Professional fees related to the Company's prior litigation with WeddingChannel.com, Inc. were approximately $3.7 million for the nine months in 2005.

Recent Highlights

On September 8, 2006, The Knot completed its acquisition of WeddingChannel.com, Inc. The Knot issued approximately 1.15 million shares of its common stock and paid approximately $61.7 million in cash, which includes an estimated working capital adjustment of $3.8 million, in exchange for all of the capital stock and stock options of WeddingChannel. The Knot funded the cash portion of the purchase price with cash on hand and the net proceeds of its Follow-On Offering of common stock completed on August 15, 2006.

The Company also added three new members to its Board of Directors in September. The new directors are: Eileen Naughton, Regional Sales Director of Google, Ira Carlin, Chairman-International of MAGNA Global Worldwide, and Peter Sachse, Chairman and CEO of Macys.com. These new additions to the Board bring a unique blend of collective experience and leadership in growing media brands, expanding global operations, managing media and marketing initiatives and steering companies through important transitions.

The Nest brand celebrated the launch of the first book directed to its growing newlywed audience, The Nest Newlywed Handbook: An Owner's Manual to Modern Married Life. The first in a series of four with Clarkson Potter, The Nest Newlywed Handbook debuted on October 11th with a six-city media tour featuring editor in chief, Carley Roney. The tour was an overwhelming success producing broadcast publicity in each market with appearances on Good Day Atlanta, Fox 5 Morning News D.C. and PBS "To the Contrary" among others.

NOVEMBER 13 CONFERENCE CALL AND WEBCAST

The Knot will host a conference call with investors at 2:30 p.m. ET today to discuss its third quarter financial results. Participants should dial in at 800-638-7172 ((ID#8734121) 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.

REPLAY INFORMATION

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 # 8734121

<snip>


The Knot Inc.
Consolidated Balance Sheets
(in thousands)

September 30, December 31,
2006 2005
(Unaudited) (Audited)
------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 70,652 $ 17,685
Short-term investments 7,000 11,550
Accounts receivable, net 8,901 4,805
Inventories 1,913 1,622
Deferred production and marketing costs 541 419
Other current assets 1,571 881
------------- ------------
Total current assets 90,578 36,962

Property and equipment, net 10,018 2,987

Intangible assets, net 45,522 205
Goodwill 38,786 8,905
Deferred tax assets 11,860 --
Other assets 506 326
------------- ------------
Total assets $ 197,270 $ 49,385
============= ============

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 11,162 $ 5,574
Deferred revenue 11,449 7,816
Current portion of long-term debt 47 47
------------- ------------
Total current liabilities 22,658 13,437
Deferred tax liabilities 18,401 --
Long term debt 106 106
Other liabilities 811 505
------------- ------------
Total liabilities 41,976 14,048

Stockholders' equity:
Common stock 310 230
Additional paid-in-capital 188,372 77,550
Deferred compensation -- (221)
Accumulated deficit (33,388) (42,222)
------------- ------------
Total stockholders' equity 155,294 35,337
------------- ------------
Total liabilities and stockholders' equity $ 197,270 $ 49,385
============= ============

Note: Certain amounts as of December 31, 2005 have been reclassified
to conform to the current presentation.

The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)

Three months ended Nine months ended
September 30, September 30,
---------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues:
Online sponsorship
and advertising $ 9,380 $ 6,687 $ 25,533 $ 18,516
Registry services 955 63 1,098 210
Merchandise 4,273 3,275 12,166 10,581
Publishing and
other 3,898 3,092 12,190 9,309
------------ ------------ ------------ ------------
Total net revenues 18,506 13,117 50,987 38,616

Cost of revenues 4,200 3,048 11,388 8,835
---------------------------------------------------

Gross profit 14,306 10,069 39,599 29,781

Operating
expenses:
Product and
content
development 2,170 1,743 5,784 5,197
Sales and
marketing 4,657 3,516 13,740 10,674
General and
administrative 4,233 3,917 10,820 10,891
Depreciation and
amortization 975 341 1,800 901
---------------------------------------------------
Total operating
expenses 12,035 9,517 32,144 27,663

Income from
operations 2,271 552 7,455 2,118

Interest and other
income, net 1,082 207 1,745 504
---------------------------------------------------

Income before
income taxes $ 3,353 759 $ 9,200 2,622
Provision for
income taxes 90 37 366 151

Net income $ 3,263 $ 722 $ 8,834 $ 2,471
===================================================

Basic earnings per
share $ 0.12 $ 0.03 $ 0.36 $ 0.11
===================================================
Diluted earnings
per share $ 0.11 $ 0.03 $ 0.33 $ 0.10
===================================================

Weighted average
number of common
shares
outstanding
Basic 27,472,080 22,802,123 24,592,760 22,623,619
===================================================
Diluted 29,766,300 25,085,676 27,059,012 24,701,236
===================================================


Note: Certain amounts for the three and nine months ended September
30, 2005 have been reclassified to conform to the current
presentation.

Contact:
VMW Corporate & Investor Relations
Vicki Weiner/Sylvia Dresner, 212-616-6161
info@vmwcom.com

--------------------------------------------------------------------------------

Source: The Knot, Inc.

biz.yahoo.com

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From: Glenn Petersen2/14/2007 1:36:02 PM
   of 133
 
KNOT got hammered yesterday, falling $3.74 after reporting their year end results. One report I read had them missing their fourth quarter revenue estimate by $100,000. Perhaps the big reason for the decline was the fact that the sales at the Wedding Channel were a bit lighter thane expected.

The Knot Reports Fourth Quarter and 2006 Year End Financial Results

Tuesday February 13, 8:30 am ET

--Gains in All Revenue Streams Drive Revenue Growth of 41% in 2006

Reminder: Conference Call Today at 2:30 ET Dial In 800-638-7172 (ID# 7177635)

NEW YORK--(BUSINESS WIRE)--The Knot, Inc. (NASDAQ: KNOT - News, www.theknot.com - News), 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, 2006.

2006 Financial Performance

For the year ended December 31, 2006, The Knot's net revenue rose to $72.7 million, an increase of 41% from $51.4 million in 2005. The WeddingChannel business, which was acquired on September 8, 2006, contributed $6.7 million in revenue for the year. Each of The Knot's revenue streams contributed to the remaining gain of 28% with national and local online advertising programs up 32% over the prior year, merchandise revenue up 20% and publishing and other revenue up 29%.

Net income for 2006 was $23.4 million, or $0.90 per basic and $0.82 per diluted share, as compared to $4.0 million, or $0.17 per basic and $0.16 per diluted share in 2005. The results for 2006 include 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 carryforwards as well as other income of $1.2 million resulting from the settlement of a legal action, both of which were recorded in the fourth quarter.

Total operating expenses for the year increased to $46.9 million. Operating expenses related to WeddingChannel were approximately $6.5 million of which $1.1 million represented the amortization of acquired intangible assets recorded in connection with the acquisition. Total operating expenses in 2005 were $36.9 million which included approximately $4.8 million in legal fees related to The Knot's prior litigation with WeddingChannel.

"The investment in our e-commerce platform and warehouse facility in 2005 resulted in a rebound in merchandise revenue in 2006 and enabled us to seamlessly consolidate WeddingChannel's merchandise operation into our facility," said David Liu, CEO of The Knot. "Through our acquisition of WeddingChannel in September, we secured our leadership position in the online bridal media space and facilitated a significant expansion into the lucrative registry business. Further, our reach to more than 80% of engaged couples planning a wedding makes us the most efficient and cost effective buy for local and national advertisers."

Fourth Quarter 2006 Results

For the fourth quarter of 2006, The Knot reported net revenues of $21.7 million, a 70% increase from the $12.8 million recorded in the comparable quarter of 2005. The WeddingChannel business contributed approximately $5.2 million in revenues for the fourth quarter. The Knot reported net income for the fourth quarter of 2006 of $14.6 million, or $0.48 per basic and $0.45 per diluted share, compared with $1.5 million or $0.06 per basic and diluted share in the comparable quarter of 2005. 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.

Total operating expenses for the fourth quarter of 2006 were $14.8 million. Operating expenses related to WeddingChannel were $5.0 million of which $800,000 represented the amortization of acquired intangible assets recorded in connection with the acquisition. Total operating expenses for the fourth quarter of 2005 were $9.2 million which included approximately $1.1 million in legal fees incurred in connection with The Knot's prior litigation with WeddingChannel.

"Last year, we made significant progress in extending our relationship with our loyal audience beyond the wedding," Mr. Liu continued. "With thenest.com, the NestMagazine, the expansion of our book program in 2006 and yesterday's launch of Lilaguide.com, we are rapidly becoming a vital network from proposal to pregnancy."

THE KNOT'S RECENT HIGHLIGHTS

On November 29th, The Knot announced an extensive marketing and programming partnership with Style Network. The partnership will feature multiple programming components, including specials, stunts and interstitials. The alliance began in early December and will continue with the debut of "My Celebrity Wedding by The Knot" in the first quarter of 2007. The new spin-off special will showcase a wedding inspired by a celebrity ceremony, planned by The Knot's editor in chief, Carley Roney and the wedding style experts at The Knot.

CONFERENCE CALL AND WEBCAST

The Knot will host a conference call with investors at 2:30 p.m., ET on Tuesday, February 13, 2007, to discuss its fourth quarter and year end 2006 financial results. Participants should dial in 800-638-7172 (ID# 7177635) 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 website at least 15 minutes prior to the conference call in order to download or install any necessary audio software.

REPLAY INFORMATION

A replay of the Web cast will also be archived on The Knot Web site approximately 2 hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 reference #7177635.

About The Knot, Inc.

The Knot (NASDAQ: KNOT; www.theknot.com) is a leading lifestage media and services company. The Company's flagship brand, The Knot, is the nation's leading wedding resource that reaches over 1 million engaged couples each year through the web, newsstands, bookstores, national television and more. Its wedding websites, TheKnot.com and WeddingChannel.com are the most-trafficked online wedding destinations for information and registry gifts. The Company also offers a diverse collection of print publications including national and regional wedding magazines, seven books, a video on demand (VOD) service for Comcast Cable and content distribution partnerships with MSN, Scripps Howard and The McClatchy Company. The Knot owns and operates several brands targeted before and beyond the wedding day, including newlywed resource The Nest (www.thenest.com), party-planning portal PartySpot.com, teen site PromSpot.com, online personals site GreatBoyfriends.com and a localized information resource for parents, "the lilaguide" (lilaguide.com). The Knot is based in New York and has several other offices across the country.

This release may contain projections or other forward-looking statements regarding future events or the future financial performance of The Knot. These statements are only predictions and reflect the current beliefs and expectations of The Knot. 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 The Knot bases its expectations may change prior to the end of the quarter. Although these expectations may change, The Knot will not necessarily inform you if they do. The Knot's policy is to provide its 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) The Knot's unproven business model and limited operating history, (ii) The Knot's history of losses, (iii) the significant fluctuation to which The Knot's quarterly revenues and operating results are subject, (iv) the seasonality of the wedding industry and (v) other factors detailed in documents The Knot files 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.

The Knot Inc.
Consolidated Balance Sheets
(in thousands)

December December
31, 31,
2006 2005
----------- ---------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $73,633 $17,685
Short-term investments 7,000 11,550
Accounts receivable, net 9,743 4,805
Inventories 1,345 1,622
Deferred production and marketing costs 584 419
Deferred tax assets, current portion 8,369 --
Other current assets 1,500 881
----------- ---------
Total current assets 102,174 36,962

Property and equipment, net 9,376 2,987

Intangible assets, net 34,015 205
Goodwill 33,854 8,905
Deferred tax assets 24,490 --
Other assets 342 326
----------- ---------
Total assets $204,251 $49,385
=========== =========

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $7,661 $5,574
Deferred revenue 10,498 7,816
Current portion of long-term debt 51 47
----------- ---------
Total current liabilities 18,210 13,437

Deferred tax liabilities 15,014 --
Long term debt 55 106
Other liabilities 548 505
----------- ---------
Total liabilities 33,827 14,048

Stockholders' equity:
Common stock 311 230
Additional paid-in-capital 188,909 77,550
Deferred compensation -- (221)
Accumulated deficit (18,796 ) (42,222)
----------- ---------
Total stockholders' equity 170,424 35,337
----------- ---------
Total liabilities and stockholders' equity $204,251 $49,385
=========== =========


Note: Certain prior year amounts have been reclassified to conform to the current year's presentation.

The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)

Three months ended Twelve months ended
December 31, December 31,
----------------------- -----------------------
2006 2005 2006 2005
-----------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Net revenues:
Sponsorship and
advertising $11,044 $7,328 $36,577 $25,844
Registry Services 1,940 74 3,038 285
Merchandise 2,838 1,726 15,004 12,306
Publishing and other 5,870 3,665 18,060 12,973
----------- ----------- ----------- -----------
Total net revenues 21,692 12,793 72,679 51,408

Cost of revenues 4,129 2,267 15,517 11,101
----------- ----------- ----------- -----------

Gross profit 17,563 10,526 57,162 40,307

Operating expenses:
Product and content
development 3,229 1,682 9,013 6,879
Sales and marketing 5,141 3,538 18,881 14,212
General and
administrative 4,354 3,600 15,174 14,491
Depreciation and
amortization 2,049 370 3,849 1,271
----------- ----------- ----------- -----------
Total operating
expenses 14,773 9,190 46,917 36,853

Income from operations 2,790 1,336 10,245 3,454

Interest and other
income, net 2,115 259 3,860 763
----------- ----------- ----------- -----------

Income before income
taxes $4,905 $1,595 $14,105 $4,217
----------- ----------- ----------- -----------
Provision (benefit)
for income taxes (9,688) 114 (9,321) 265
----------- ----------- ----------- -----------

Net income $14,593 $1,481 $23,426 $3,952
=========== =========== =========== ===========

Basic earnings per
share $0.48 $0.06 $0.90 $0.17
=========== =========== =========== ===========
Diluted earnings per
share $0.45 $0.06 $0.82 $0.16
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding
Basic 30,671,906 22,989,034 26,125,038 22,715,724
=========== =========== =========== ===========
Diluted 32,758,619 25,407,705 28,496,405 24,878,652
=========== =========== =========== ===========


Note: Certain prior year amounts have been reclassified to conform to the current year's presentation.

Note: The results for the three and twelve months ended December 31, 2006 include a non-cash income tax benefit of approximately $9.4 million.

Contact:
VMW Corporate & Investor Relations
Vicki Weiner or Sylvia Dresner, 212-616-6161
info@vmwcom.com

--------------------------------------------------------------------------------
Source: The Knot, Inc.

biz.yahoo.com

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To: Glenn Petersen who wrote (109)2/14/2007 1:39:07 PM
From: Glenn Petersen
   of 133
 
The Motley Fool has a good take on the results:

All Knotted Up

By Rick Aristotle Munarriz

February 13, 2007

Looks can be deceiving on a wedding day. Matrimonial planning hub The Knot (Nasdaq: KNOT) posted spectacular fourth-quarter results this morning, on the surface. Revenues shot up 70% to hit $21.7 million. Profitability exploded, soaring to $0.45 per diluted share after a $0.06 per-share showing a year earlier.

Snap that picture. Now let's smear those good looks with some wedding cake in the face.

Like a budding bride, The Knot is still radiant under all of the makeup. However, as stock watchers we have to go beyond skin-deep investing. The top line soared, but a lot of that was due to the company's acquisition of The Wedding Channel back in September. Organic revenue shot up a more modest -- though clearly still respectable -- 29% for the quarter.

The bottom-line explosion also needs to be hacked away at to find the company's inner beauty. One has to back out favorable charges in the form of a $9.4 million accounting adjustment and a $1.2 million legal settlement. As it turns out, The Knot holds up reasonably well there, too. Without the charges, earnings per share would have doubled to $0.12, a penny ahead of Wall Street's expectations.

For all of 2006, The Knot showed healthy spurts across all of its business lines. Its merchandise, online advertising, and publishing units all grew their top lines by at least 20%.

That is a nicer sound than the clang of aluminum cans tied behind a newlywed couple's limo, yet the stock still opened 9% lower today on the news.

Did The Knot blow it? Not really. The stock soared 129% last year, and had tacked on another 15% advance so far this year. Marginally beating analyst profit targets sometimes isn't enough with all of that baked in helium.

However, this morning's dip offers the opportunity to study up on a company that should reap the benefits of its Wedding Channel purchase in the future. Online bridal registries are a logical fit for The Knot. It also now has another high-traffic site that it can use to lure even more wedding services providers.

Generating online leads hasn't been a universal road map to success. The Knot and financial rate provider Bankrate (Nasdaq: RATE) have been big winners over the past two years, yet others like Insweb (Nasdaq: INSW) and Autobytel (Nasdaq: ABTL) -- in insurance and car shopping, respectively -- have struggled.

The keys may be that The Knot is toiling away in a lucrative niche and that it is the leader in wedding planning. So feel free to wipe off the makeup. Oh, and that wedding cake too. The Knot is still a natural beauty. Go ahead. Snap that picture.

The Knot and Bankrate have been recommended to Motley Fool Rule Breakers subscribers. You can learn more about The Knot and the other newsletter market crushers with a free 30-day trial subscription.

Longtime Fool contributor Rick Munarriz got married years before TheKnot.com was around and he regrets that. He could have had a punctual person working the video camera that day. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


fool.com

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To: Glenn Petersen who wrote (110)2/21/2007 3:27:11 AM
From: Tom Caruthers
   of 133
 
Glenn,

I sold most of my shares above $28 in mid-Jan. Have been watching the stock falter here. Am looking for a good re-entry point. Stock looks oversold here, but I am looking for it to test its 200-day MA around $22. Hopefully it doesn't get there.

KNOT has been very good to me. I can't argue with a 10-bagger in 3.5 years. I have no complaints. Good luck!

BTW, what other stocks are you looking at these days?

Tom

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To: Tom Caruthers who wrote (111)3/9/2007 4:11:55 AM
From: Tom Caruthers
   of 133
 
Think we move to $25.5 from here ($23.5). But still looking for additional consolidation in KNOT. Would like to pick this up sub $20.

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To: Tom Caruthers who wrote (112)3/29/2007 12:04:20 PM
From: Glenn Petersen
   of 133
 
Would like to pick this up sub $20.

You may get your wish. If you do, I will be joining you.

The Knot Marries Fast Growth, Obscene Margins

By Jack Hough

March 21, 2007

KEEP A HANKY handy. This love-against-all-adds story has the makings of a miniseries on Oxygen, the women's channel. (Only it comes with a stock pick.) It starts in December 1999 with the marriage of Wall Street and The Knot (KNOT1). The company owns a wedding information web site, Knot.com, and makes most of its money by selling ads for honeymoon resorts and such. It wasn't profitable at the time. Its losses were mounting, in fact. But they were mounting less quickly than sales.

In its first year of operation in 1996 (via America Online; TheKnot.com didn't launch until 1997) The Knot generated $71,000 in sales, but it spent more than 10 times that amount in operating expenses. Two years later sales topped $1 million. Operating expenses ballooned, too, but were now less than three times sales. On Wall Street in 1999 that was enough good news for an Internet company to raise $35 million by issuing shares of itself to investors, as The Knot did, at $15 apiece on Dec. 2.

Things were stormy from the start. Shares gained 69 cents the following day. They lost $1.63 the next day and $1.18 the day after that. Investors gradually decided that profits were fashionable again and clever business plans without profits were not. Within two years of their debut, The Knot shares fetched 25 cents apiece, for a loss of more than 98%.

Today the stock goes for $24 and change. If you've held it since the initial offering you're up 60% over a time when the Nasdaq stock market through which The Knot trades has lost 28%. The company turned its first profit in 2003, and gradually improved over the next couple of years, but last year it produced a stunning increase. Sales jumped 41% to more than $71 million, while operating expenses rose only 27% to $47 million. Add some investment interest and take out for taxes and you're left with a $23 million profit — vs. just $4 million in 2005. Wall Street analysts were caught by surprise. The Knot surpassed their quarterly targets all year by an average of more than 20%.

The fast growth caught the attention of one of our stock screens, appropriately named the Fast Growth screen. It looks for rapid increases in sales and earnings and projections for more of the same, along with a dose of share-price momentum. (Run it anytime you like using our stock screener2 and screen recipe3, and check out some other companies4 that recently survived the screen.) Of course, finding fast-growing companies isn't the same as finding ones whose shares are poised to head higher. But there's reason to believe The Knot shares remain under-priced. More on that in a moment.

Last year The Knot made only half of its money from advertising. It has three other sources of income. It brought in 21% of sales by selling wedding-themed merchandise through its web site, mostly personalized or hard-to-find items, like disposable cameras for reception tables, only in plain white. The company also publishes wedding magazines and books and dabbles in co-producing television programs with Oxygen, for a quarter of last year's sales. Finally, just 4% of sales came from the company's registry business, whereby couples solicit gifts on the site from a selection of retailers, and those retailers pay The Knot a commission for the right to be included.

The Knot currently enjoys more than 80% of wedding-themed web site traffic. It owes part of that dominance, and much of its profit growth last year, to its purchase last June of its largest competitor, Wedding Channel, for $58 million in cash and $1.1 million in stock. A planning specialist, Wedding Channel has an active registry program that enjoys gross margins of 99%, say analysts.

Current trends bode well for at least two of the company's four businesses. Customers are shifting en masse from print publications to online ones and advertisers are following. Still, The Knot currently collects just 3% of the more than $1.4 billion spending on wedding-targeted ads, according to CIBC, an investment bank. Local vendors spend less than half as much with The Knot as with the yellow pages. Both suggest the company has room to grow. It also has pricing power. In July it raised rates 20%. The registry business may hold the biggest promise. In 2005 web sites attracted about 20% of registry spending and Wedding Channel (now The Knot) captured just 2%. CIBC analyst Jason Helfstein sees web sites collecting 30% of registry sales by 2009 and The Knot, 15%.

To those promising signs add that the wedding business is nearly recession-proof, as families tend to save up for years or borrow to spend big whether they can afford to or not, and that the industry carries obscene margins, judging by how $800 worth of photography suddenly costs $3,000 when it's for a wedding. Profits for the company are now projected to increase by a whopping 40% a year over the next five years. The stock now trades at a seemingly pricey 52 times Wall Street's 2007 earnings forecast. But that might be too cheap; divide the price/earnings ratio by the growth forecast and you get a PEG ratio of 1.3, suggesting a discount of more than 15% to the broad market.

One cautionary note: Fast-growing companies with rising share prices sometimes get carried away in issuing new shares to raise money. That hurts existing shareholders. The Knot issued several million shares last year. The number doesn't seem excessive and the use of the proceeds (Wedding Channel) seems justified. But watch for a string of new stock offerings if you own shares. Of course, the antidote for liberal stock issuance is a management team that owns shares. The company's three top bosses together hold close to a million shares, but they've been sellers of late. All told, the stock looks promising, but only if the bosses can keep the share count from expanding like a wedding invite list.

smartmoney.com

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To: Glenn Petersen who wrote (113)3/29/2007 1:03:46 PM
From: Tom Caruthers
   of 133
 
I just read that. Seems KNOT has further to fall. Haven't looked at the chart recently, but the downward momentum is pretty strong.

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From: Glenn Petersen5/9/2007 8:10:30 PM
   of 133
 
KNOT was down $3.42 in after hours trading:

The Knot Reports First Quarter 2007 Financial Results

Wednesday May 9, 4:05 pm ET

Revenue Rises 43% and Pre-Tax Income Increases 55%

Reminder: Conference Call Today at 4:30 ET Dial In (800) 638-7172, Conference ID# 6138776

NEW YORK--(BUSINESS WIRE)--The Knot, Inc. (NASDAQ: KNOT - News, www.theknot.com - News), a leading lifestage media company targeting couples planning their weddings and future lives together, today reported financial results for its first quarter ended March 31, 2007.

First Quarter 2007 Results

For the first three months of 2007, net revenues rose 43% to $21.0 million from $14.8 million in the first quarter of 2006. Revenue from national and local online advertising programs increased by 38% over the prior year's first quarter. Merchandise revenue from the sale of wedding supplies grew 50% while publishing and other revenues recorded a small gain. Registry services revenue, which is derived substantially through the WeddingChannel business that was acquired in September 2006, amounted to $1.8 million in the recent quarter.

Income before income taxes increased to $2.8 million in the first quarter of 2007 as compared to $1.8 million a year ago. The provision for income taxes was $1.1 million in the first quarter of 2007 and $103,000 in the corresponding period in 2006. The provision for income taxes for the first quarter 2006 was reduced by the utilization of net operating loss carryforwards. Net income for the first quarter of 2007 was $1.6 million or $0.05 per basic and diluted share as compared to $0.07 per basic and diluted share in the first quarter of 2006.

Commenting on The Knot's results, Chief Executive Officer David Liu said, "We are very pleased with the strong growth in our local online advertising and merchandise businesses and the performance of the registry services operation acquired through WeddingChannel. We are working to resolve the performance issues affecting our national online advertising programs so we can begin to more effectively sell consolidated marketing packages across The Knot and WeddingChannel websites. Meanwhile we see great potential for growth in several recent initiatives including the launch of lilaguide.com, thenestbaby.com and The Knot's lifestyle gift registry powered by Macy's."

First Quarter 2007 Financial Highlights

National and local online revenues were $3.5 million and $7.3 million, respectively, for the three months ended March 31, 2007, as compared to $2.7 million and $5.1 million for the corresponding period in 2006.

-- Gross profit margins for merchandise revenue were approximately 53% and 50% for the three months ended March 31, 2007 and 2006, respectively.

-- Gross profit margins for publishing and other revenue were approximately 61% and 67% for the three months ended March 31, 2007 and 2006, respectively.

-- Total operating expenses for the three months ended March 31, 2007 included approximately $1.0 million representing the amortization of acquired intangible assets recorded in connection with the acquisition of WeddingChannel.

-- Stock-based compensation expense was $472,000 and $329,000 for the three months ended March 31, 2007 and 2006, respectively.

-- Net cash provided by operating activities was $7.5 million in the first quarter of 2007 while capital expenditures amounted to $657,000.

Recent Developments

In February, the Company launched Lilaguide.com, the web's first hub for real parent reviews of local baby stores, gear, and services. Lilaguide.com has 32,000 listings and over 120,000 reviews from parents who want to share their advice on baby products, services and activities in 5,000 neighborhoods across the United States.

In March, The Knot signed a two-year agreement with Macy's Wedding & Gift Registry making Macy's the exclusive retail partner providing products on TheKnot.com registry. The Lifestyle Registry, a registry tool located on TheKnot.com, is designed to help couples jump-start the overwhelming process of registering for gifts and customize their registry to fit their lifestyle needs. This innovative tool is an example of The Knot's commitment to making planning a wedding and its surrounding events easier for its users.

Also, in March, The Knot Guide to Destination Weddings, The Knot's latest book, arrived on bookshelves in support of one of the biggest trends in weddings. Author Carley Roney debuted the book on NBC's TODAY Show as she talked ideas and fashion for far-flung nuptials.

Conference Call and Webcast

The Knot will host a conference call with investors at 4:30 p.m., ET on Wednesday, May 9, 2007, to discuss its first quarter financial results. Participants should dial-in (800) 638-7172, Conference ID# 6138776. Please dial-in 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 Web cast will also be archived on The Knot Web site approximately 2 hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 reference #6138776.

About The Knot, Inc.

The Knot (NASDAQ: KNOT; www.theknot.com) is a leading lifestage media and services company. The Company's flagship brand, The Knot, is the nation's leading wedding resource that reaches over 1 million engaged couples each year through the web, newsstands, bookstores, national television and more. Its wedding websites, TheKnot.com and WeddingChannel.com are the most-trafficked online wedding destinations for information and registry gifts. The Company also offers a diverse collection of print publications including national and regional wedding magazines, seven books, a video on demand (VOD) service for Comcast Cable, and content distribution partnerships with MSN, Scripps Howard and The McClatchy Company. The Knot owns and operates several brands targeted before and beyond the wedding day, including newlywed resource The Nest (www.thenest.com), party-planning portal PartySpot.com, teen site PromSpot.com, online personals site GreatBoyfriends.com and a localized information resource for parents, "the lilaguide" (lilaguide.com). The Knot is based in New York and has several other offices across the country.

This release may contain projections or other forward-looking statements regarding future events or the future financial performance of The Knot. These statements are only predictions and reflect the current beliefs and expectations of The Knot. 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 The Knot bases its expectations may change prior to the end of the quarter. Although these expectations may change, The Knot will not necessarily inform you if they do. The Knot's policy is to provide its 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) The Knot's unproven business model and limited operating history, (ii) The Knot's history of losses, (iii) risks related to The Knot's recent acquisition of WeddingChannel, (iv) the significant fluctuation to which The Knot's quarterly revenues and operating results are subject, (v) the seasonality of the wedding industry and (vi) other factors detailed in documents The Knot files 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.

The Knot Inc.
Consolidated Balance Sheets
(in thousands)

March 31, December 31,
2007 2006
----------- ------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $48,733 $73,633
Short-term investments 39,375 7,000
Accounts receivable, net 9,969 9,743
Inventories 1,653 1,345
Deferred production and marketing costs 535 584
Deferred tax assets, current portion 7,877 8,369
Other current assets 1,426 1,500
----------- ------------
Total current assets 109,568 102,174

Property and equipment, net 8,731 9,376

Intangible assets, net 33,774 34,015
Goodwill 33,392 33,854
Deferred tax assets 23,617 24,490
Other assets 320 342
----------- ------------
Total assets $209,402 $204,251
=========== ============

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $6,680 $7,661
Deferred revenue 14,036 10,498
Current portion of long-term debt 51 51
----------- ------------
Total current liabilities 20,767 18,210

Deferred tax liabilities 15,004 15,014
Long term debt 55 55
Other liabilities 530 548
----------- ------------
Total liabilities 36,356 33,827

Stockholders' equity:
Common stock 313 311
Additional paid-in-capital 189,894 188,909
Accumulated deficit (17,161) (18,796)
----------- ------------
Total stockholders' equity 173,046 170,424
----------- ------------
Total liabilities and stockholders' equity $209,402 $204,251
=========== ============


Note: Certain prior year amounts have been reclassified to conform to the current year's presentation.

The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)

Three months ended
March 31,
----------------------
2007 2006
----------------------
(Unaudited)(Unaudited)
Net revenues:
Online sponsorship and advertising $10,776 $7,799
Registry Services 1,760 59
Merchandise 4,631 3,079
Publishing and other 3,861 3,814
----------------------
Total net revenues 21,029 14,751

Cost of revenues 4,016 3,129
----------------------

Gross profit 17,012 11,622

Operating expenses:
Product and content development 3,144 1,786
Sales and marketing 5,890 4,714
General and administrative 4,085 3,262
Depreciation and amortization 2,108 372
----------------------
Total operating expenses 15,227 10,134

Income from operations 1,785 1,488

Interest and other income, net 987 300
----------------------

Income before income taxes $2,772 $1,788
----------------------
Provision for income taxes 1,138 103
----------------------

Net income $1,634 $1,685
======================

Basic earnings per share $0.05 $0.07
======================
Diluted earnings per share $0.05 $0.07
======================
Weighted average number of common shares
outstanding
Basic 30,811,815 23,084,722
======================
Diluted 32,832,516 25,578,559
======================


Note: Certain prior year amounts have been reclassified to conform to the current year's presentation.

Contact:
VMW Corporate & Investor Relations
Vicki Weiner/Sylvia Dresner, 212-616-6161
info@vmwcom.com

--------------------------------------------------------------------------------
Source: The Knot, Inc.

biz.yahoo.com

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