| To: Tom Caruthers who wrote (43) | 11/20/2003 12:48:06 PM | | From: Glenn Petersen | | | | | I think that the private placement is a very positive event. It will be interesting when they finally identify the "instititional" investors. Given the rather rich market valuation relative to their earnings, this is a very smart move on their part. Nice move so far today. |
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| To: Tom Caruthers who wrote (46) | 1/10/2004 5:51:06 PM | | From: Glenn Petersen | | | | Nice move today. The only news that I can find is that they filed a registration statement for the 2.8 million shares that were sold in the private placement in November.
sec.gov
Interesting to see that the shares were purchased by mutual funds run by T. Rowe Price and Capital Management. |
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| To: Tom Caruthers who wrote (48) | 2/28/2004 8:46:14 AM | | From: Glenn Petersen | | | | The Knot Reports Fourth Quarter and Fiscal 2003 Financial Results
Full Year 2003 Revenues Grow 24% and First Profitable Year Achieved
Wednesday February 18, 4:05 pm ET
NEW YORK--(BUSINESS WIRE)--Feb. 18, 2004--The Knot, Inc. (OTCBB: KNOT.OB, www.theknot.com), the nation's leading wedding resource, today reported financial results for its fourth quarter and fiscal year ended December 31, 2003.
FOURTH QUARTER AND FISCAL 2003 RESULTS
The Knot reported net revenues of $8.1 million for the fourth quarter of 2003, an increase of 16% from net revenues of $7.0 million for the comparable prior year quarter. For the fiscal year ended December 31, 2003, net revenues were $36.7 million, an increase of 24% over the $29.5 million reported for fiscal 2002. In fiscal year 2003, advertising revenue from national and local online programs and merchandise revenue increased by 81% and 13% over fiscal year 2002, respectively. The growth in these revenue sources substantially more than offset a slight decline in publishing and other revenue.
The Knot reported net income for the fourth quarter of 2003 of $284,000 or $0.01 per basic and diluted share as compared to a net loss of $551,000 or $0.03 per basic and diluted share, for the fourth quarter 2002. For the fiscal year ended December 31, 2003, The Knot reported net income of $1.1 million, or $0.06 per basic and $0.05 per diluted share compared to a net loss of $5.1 million or $0.28 per basic and diluted share for fiscal 2002. In fiscal 2003, total operating expenses were $24.0 million, which represented a small decrease from the prior year.
"It is a significant accomplishment to have achieved our first profitable year and a testament to our unique and sound business model," says David Liu, CEO of The Knot. "This has been a principal goal of our Company; and now, with a strong revenue base and the additional capital resources from our recent private placement, we move forward committed to sustaining long-term growth for The Knot and continuing to build shareholder value."
As of December 31, 2003, The Knot's cumulative membership totaled over 4.6 million, a 32% increase over the approximately 3.5 million members at the end of December 2002. The Knot also reported over 92 million average monthly page views on its Web site in the fourth quarter 2003, which is 80% greater than the 51 million average monthly page views recorded for the comparable 2002 period.
THE KNOT'S RECENT HIGHLIGHTS
In November 2003, The Knot announced a partnership with Comcast to offer The Knot's top-rated wedding content and planning tools on the 'Relationships Channel' on Comcast.net. The agreement extends The Knot brand and its trusted wedding-planning expertise to five million Comcast households, making it even easier for brides, grooms and wedding guests to find the wedding-related information they need. In Comcast.net's Relationships Channel, The Knot provides a wide range of wedding content including interactive tools, wedding gown galleries, real wedding stories and a community for engaged couples. Comcast.net also enables users to access The Knot Gift Store & Registry.
Also in November 2003, The Knot completed a private placement of 2,800,000 newly issued shares of common stock to institutional investors for gross proceeds of $10.5 million, before placement fees and other offering costs. The Knot intends to use the net proceeds from this private placement for general corporate purposes, including potential acquisitions of, or investments in, businesses, technologies or products that are complementary to its business.
In January 2004, Oxygen aired the second season of "Real Weddings from The Knot", a weeklong miniseries that brings to viewers the real stories behind the weddings of five couples preparing for their trips down the aisle. Filmed in documentary style, each episode of "Real Weddings from The Knot" takes a look at the endlessly entertaining aspects of wedding planning, touching upon the issues that many couples face today. New this season, each episode is narrated by the bride-to-be, giving viewers a unique glimpse into the emotional roller coaster of the planning process.
CONFERENCE CALL AND WEBCAST
The Knot will host a conference call with investors at 4:30 p.m., ET Wednesday, February 18, 2004, to discuss its fourth quarter and year end 2003 financial results. The conference call will be broadcast live over the Internet on the Investor Relations section of The Knot Web site at theknot.com. To access the webcast, 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 Web site approximately 2 hours after the conference call ends for a period of eight days.
ABOUT THE KNOT, INC.
The Knot, Inc. (OTCBB: KNOT.OB; www.theknot.com) is one of the world's leading wedding media and services companies, providing today's to-be-weds with comprehensive wedding planning information, interactive tools, and resources. Its award-winning website, TheKnot.com, is the leading online wedding destination and wedding content provider to America Online, MSN and Yahoo!.
The Knot also offers a diverse collection of wedding-planning print publications. The Knot produces a national publication, The Knot Magazine, and, through its subsidiary Weddingpages, Inc., publishes The Knot WEDDINGPAGES, regional wedding magazines in 18 U.S. markets. In addition, the Company publishes a wedding-planning book trilogy with Random House's Broadway Books and a gift book series with Chronicle Books. 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, including its recent filings on Forms 10-K and 10-Q. 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 31, December 31,
2003 2002
-------------------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $22,511 $9,306
Restricted cash 252
Accounts receivable, net 2,883 4,791
Inventories 1,195 1,292
Deferred production and marketing costs 318 444
Other current assets 747 556
--------------------------
Total current assets 27,654 16,641
Property and equipment, net 2,006 1,948
Intangible assets, net 8,734 8,834
Other assets 313 352
--------------------------
Total assets $38,707 $27,775
==========================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $5,790 $5,113
Deferred revenue 4,891 5,827
Current portion of long-term debt 40 138
--------------------------
Total current liabilities 10,721 11,078
Long term debt 196 235
Other liabilities 490 445
--------------------------
Total liabilities 11,407 11,758
Stockholders' equity:
Common stock 217 184
Additional paid-in-capital 74,533 64,400
Deferred compensation - (55)
Accumulated deficit (47,450) (48,512)
--------------------------
Total stockholders' equity 27,300 16,017
--------------------------
Total liabilities and stockholders' equity $38,707 $27,775
==========================
-0-
The Knot, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Twelve months ended
December 31, December 31,
--------------------------------------------
2003 2002 2003 2002
--------------------------------------------
(Unaudited)(Unaudited)(Unaudited) (Audited)
Net revenues:
Sponsorship and
advertising $3,574 $2,292 $12,463 $6,888
Merchandise 2,191 2,233 15,510 13,674
Publishing and other 2,384 2,509 8,724 8,914
--------------------------------------------
Total net revenues 8,149 7,034 36,697 29,476
Cost of revenues 2,089 2,008 11,717 10,224
--------------------------------------------
Gross profit 6,060 5,026 24,980 19,252
Operating expenses:
Product and content
development 1,004 889 4,220 3,870
Sales and marketing 2,716 2,671 11,354 11,243
General and administrative 1,887 1,601 7,505 7,295
Non cash compensation 22 33 139
Non cash sales and
marketing - 163 - 653
Depreciation and
amortization 193 264 858 1,244
--------------------------------------------
Total operating expenses 5,800 5,610 23,970 24,444
Income (loss) from
operations 260 (584) $1,010 (5,192)
Interest and other income,
net 39 33 102 112
--------------------------------------------
Income (loss) before
income taxes $299 ($551) $1,112 ($5,080)
--------------------------------------------
Provision for income taxes 15 - 50 -
--------------------------------------------
Net income (loss) $284 ($551) $1,062 ($5,080)
============================================
Basic earnings (loss) per
share $0.01 ($0.03) $0.06 ($0.28)
============================================
Diluted earnings (loss)
per share $0.01 ($0.03) $0.05 ($0.28)
============================================
Weighted average number of
common shares outstanding
Basic 20,177,498 18,373,327 18,900,861 17,909,492
============================================
Diluted 22,016,629 18,373,327 20,308,658 17,909,492
============================================
--------------------------------------------------------------------------------
Contact:
The Knot, Inc.
IR:
Heidi Davis, 212-219-8555 x 1128
ir@theknot.com
or
Press:
Amy Shey Jacobs, 212-219-8555 x 1246
Cell: 516-509-0191
ashey@theknot.com |
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| To: Tom Caruthers who wrote (48) | 2/28/2004 9:02:42 AM | | From: Glenn Petersen | | | | While there is no mention of KNOT, this article will give you a good idea as to strategic importance of May's investment in KNOT:
chicagotribune.com
May sees bliss in tuxedo tie-ins
3 chains become 1 under retailer
By Bob Brown
Tribune staff reporter
February 27, 2004
As owner of the largest bridal store chain in the nation, May Department Stores Co. knows a bit about weddings.
So when the St. Louis-based retailer spied the fragmented men's formalwear market in the Chicago area, the company was smitten. May viewed it as a match made in heaven for its After Hours tuxedo unit, the industry's largest.
May walked down the aisle in June with Modern Tuxedo, a 26-store chain in Chicago with $12 million in annual sales, then followed that up with the acquisition in September of Desmonds Formalwear, a LaCrosse, Wis.-based firm with 66 outlets in the Midwest and $20 million in sales yearly.
Finally, in December, May purchased 125 Gingiss stores out of bankruptcy. Gingiss is the area's oldest and best-known name, founded by two brothers in Chicago 80 years ago.
May's winning bid didn't include another 111 Gingiss franchise stores; those owners have until September to drop the Gingiss name.
The swift rollup of Chicago's formalwear business has gone pretty much unnoticed, with few outward changes. But industry watchers are waiting to see if May can leverage the power of its sector-leading David's Bridal chain and After Hours unit to dominate the Chicago market.
"The synergy there is very obvious," said Jack Springer, executive director of the International Formalwear Association based in Chicago. "One could help the other."
Robert Huth, the former chairman of David's Bridal and now president and chief executive of May's bridal group, said the company set its sights on Chicago soon after acquiring After Hours, and the three deals gave it "an instant presence."
"We were very interested in expanding and were looking for ways to grow," Huth said. "It's a big market."
Springer said men's formalwear was an estimated $1 billion business in 2003. It is hard, though, to come up with a precise figure, he cautioned, because independent companies are famously close-mouthed about sales.
What is certain is the tuxedo industry survives off two events: proms and weddings.
The short but lucrative prom season runs for about six weeks from mid-April into June, Springer said, accounting for 20 percent to 25 percent of revenue.
The wedding season is the bread and butter of the industry, with tuxes rented in about 90 percent of the estimated 2.3 million weddings in the U.S. last year, Springer said. Costs range from $65 for generic brands to more than $125 for designer models, he added.
That's where the importance of the link between David's Bridal and After Hours comes in.
Brides typically exert a strong influence on where the tux is rented and what it looks like. So nearly all tuxedo stores try to partner with a bridal shop or buy bridal lists to use in direct advertisement mailings.
"What you want is the bridal leads," Springer said. "Certainly, it gives [May] an advantage. Once they've got the bride in there, that's their customer."
After Hours is a newer name in the formalwear universe. The franchise started when an Atlanta-based tuxedo shop, Mitchell's, began consolidating competitors in that region, then bought properties in Philadelphia and Michigan, Huth said.
The operation caught the eye of May, which in August 2000 had purchased David's Bridal for $420 million. May acquired the After Hours business in December 2001 for $121 million, which also included 10 Priscilla's of Boston bridal shops.
Big plans, plenty of sellers
Since then May has continued the expansion, with more than 330 stores in 30 states and Washington, D.C. The goal is to put After Hours stores in all 50 states within the next five to six years and "be a dominant player in the industry," Huth said.
He has found no shortage of willing sellers.
"I think the industry today is such that a lot of players are wondering what their future in the business will be," he said.
For the next two years, however, the company will concentrate on absorbing and integrating the businesses it has, Huth said.
Plans call for closing 8 to 10 of the 15 Desmonds stores in the Chicago area, Huth said, with the remaining outlets converted to Modern Tuxedo stores, a process already under way. That change won't last long, as the Modern Tuxedo brand will be scrapped within 18 months and the stores will be turned into After Hours outlets "so we have a national name," he said.
But the Gingiss brand, which includes 28 Chicago stores, will be kept, Huth said, with some different styles and lines to give the chain a separate identity.
Springer said the tuxedo business shakeout has captured everyone's attention.
"Consolidation is the big question the whole industry has," he said. "Certainly it has small independents thinking about joining up with other independents."
Rather than strike fear, that size and corporate structure give some Chicago-area independents confidence that they can successfully compete with After Hours.
"We couldn't be happier," said Sam Carlson, owner and president of Black Tie formalwear shops. "This is a huge opportunity. They've taken our three most formidable competitors and turned them into one."
Carlson, who operates three stores in the south suburbs, recently teamed with a former manager at Modern Tuxedo on three additional Black Tie stores. The pair have formed an affiliation with House of Brides, a leading Chicago-area competitor in the bridal industry that touts its 50,000-square-foot Schaumburg showroom as "the world's largest wedding store."
For the past 10 years, House of Brides had a tie-in with Modern Tuxedo, including stores-within-stores at several of its five locations. The takeover by After Hours ended that association, said Dale Buziecki, the company's general manager.
Further expansion, possibly with some former Gingiss franchisees, is in the planning stage, Carlson said.
Personal touch a priority
The situation is comparable to what happened when the banking industry was in the throes of consolidation: Customer service suffered, Carlson said.
In the formalwear business, competitors pretty much have the same products, he said, which leaves service and price to differentiate themselves.
"We're small enough to service them the way they want to be serviced. They're too big for the personal touch," Carlson said of May's venture.
Nevertheless, another giant competitor worries Carlson and fellow independents.
Men's Wearhouse Inc. entered the tuxedo rental market in 1999 and now offers rental tuxes in 494 of its 511 locations, said Jeffrey Fript, the firm's vice president of operations.
Tuxedo rental volume last year was $50 million, he said.
The tuxedo business complements Men's Wearhouse's regular apparel sales by getting new customers into the store three times: the first to select a tuxedo, the second to pick it up and the third to return it, Fript said. On those occasions, salespeople suggest other items that might be needed, such as clothes for the honeymoon.
Huth acknowledged that Men's Wearhouse has built a formidable operation but said it lacks a vital component.
"We have that one big advantage," Huth said. "We have the first shot on the bride because of David's."
Copyright © 2004, Chicago Tribune |
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| To: Glenn Petersen who wrote (50) | 3/6/2004 5:35:53 PM | | From: Tom Caruthers | | | | Hi Glenn,
From the conference call, it seems to me that KNOT is on the verge of becoming significantly profitable. I think their strategy to provide higher quality merchandise will pay off, though I think they still need to be conscious of the fact that couples are trying to save as much money as possible and KNOT needs to be cost competitive. Increases in local advertising also bodes well as I believe this is where the money really lies. The whole industry is so fragmented that KNOT, unlike any other business in the bridal industry, has the ability to really consolidate things under their roof. I think patience will be rewarded handsomely.
Tom |
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| To: Glenn Petersen who wrote (50) | 4/3/2004 9:33:19 PM | | From: Tom Caruthers | | | | Hi Glenn,
Although the stock has suffered a significant correction, I am encouraged that the company has the ability to make money on many fronts, including local advertising (which represents a huge upside) as well as increasing merchandising revenue.
These could substantially impact the bottom line and also the share price. Hope things are well.
Tom |
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