| To: Glenn Petersen who wrote (57) | 5/12/2004 10:23:59 AM | | From: Tom Caruthers | | | | Hi Glenn,
KNOT announced earnings today. Essentially a breakeven quarter with a $98k loss on significantly higher revenues (13%) due mainly to increased ad and sponsorship revenues.
They had some problem with their merchandise distribution network which is a near term negative and led to 15% decrease in merchandise sales. Also, they increased sales and marketing and G&A. However, if they can boost sales of merchandise, with solid growth in their other divisions, I think they can pull out at least $1M per quarter going forward.
Tom |
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| To: Tom Caruthers who wrote (60) | 5/12/2004 3:52:40 PM | | From: Glenn Petersen | | | | Tom,
I am also very encouraged by the report. Advertising revenues were up 39% and the number of average monthly page views increased from 73 million in the first quarter of 2003 to 160 million during the first quarter of 2004. I am in agreement with you; if they can get their logistics systems running smoothly, they should be able to start enjoying some solid profitability.
Glenn |
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| To: Glenn Petersen who wrote (61) | 5/12/2004 10:41:12 PM | | From: Tom Caruthers | | | | Hi Glenn,
I have to say that despite the small loss, I am MUCH more enthused about the company's prospects after listening to this call than I was after the last conference call. David gave a great overview of the business and gave a lot statistics on what is driving their growth.
In particular, the detail about improving merchandise revenue is very encouraging. In addition, their desire to leverage their existing membership into the early years of marriage is something I have wanted them to do for a long time. There are a host of expenditures such as new house (inspectors, remediators, roofers and other home improvements, landscapers, mortgage companies, insurance, etc), new car, etc that may lead to a lot of advertising opportunities. With 90+% margins on online advertising, this is a good strategy.
I am planning on buying more stock should the price get cheap enough. I will probably try to get some more in the next week or so.
I would recommend that you listen to the cc if you have time.
Take care,
Tom |
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| To: Tom Caruthers who wrote (62) | 5/15/2004 1:37:12 PM | | From: Glenn Petersen | | | | Tom,
I am going to try to find some time to listen to the conference call later this weekend.
Gay weddings commence Monday morning at 12:01 a.m. The Boston Globe has an article today on the opportunities that this development presents for the wedding industry.
boston.com
Gays have suitors in wedding industry
Firms hope to cash in as legal vows begin
By Sasha Talcott, Globe Correspondent
May 15, 2004
When gay couples book their honeymoons in Boston's trendy Nine Zero hotel, the staff promises them the night of their dreams: champagne, chocolate-dipped strawberries and, if they want, an ''anti-bacterial fiber pillow" from its extensive ''pillow menu."
The hotel's ''Freedom to Marry Honeymoon Package" is part of a blizzard of gay-themed packages and ad campaigns from florists, caterers, and photographers looking to tap into the legal start of gay marriage on Monday.
Boston jeweler Shreve, Crump & Low is running ads in gay newspapers with the headline ''This is love. It's not up for a vote." Several New England tuxedo stores posted their phone numbers in gay wedding directories. Spas are offering couples everything from a ''champagne facial" to a ''pina colada body wrap" on their wedding days.
In Cambridge, the Hyatt Regency is ordering up a middle-of-the-night, three-tiered wedding cake for 12:01 a.m. Monday, when the first gay marriage is scheduled at City Hall. The hotel is also instructing its staff not to assume that two men, or two women, would opt for two beds.
''We say, 'Would you like a room with one king-size bed, or two double beds?' " said Patrick Sorge, director of sales and marketing. ''It's just a question of what the preference is, and then booking them into the appropriate room."
For years, many companies around the country have quietly tailored their advertising to gays and lesbians, hoping to cash in on a market that tends to be more affluent and educated than the average. Community Marketing Inc. of San Francisco, which studies such demographics, estimates that three-quarters of gays and lesbians have household incomes above the national average, while more than 80 percent are college graduates.
Several national chains, including Macy's, use gender-neutral terms like ''spouse" and ''registrant" in their wedding registries to accommodate same-sex couples.
But with gay marriage legal for the first time, many major companies are adding wedding ads -- once a rarity even among the most gay-friendly companies -- to the mix.
Shreve, Crump & Low has been aggressively advertising gold, platinum, and white gold bands, hoping to boost sales among both gay and straight couples. Its first ad for a commitment ring in 2002 proclaimed that ''Not all the good ones are gay or taken. Some are both."
''I believe our mission is to sell beautiful products that celebrate life milestones," said Merritt Mayher, the jeweler's chief executive. ''It doesn't matter what your lifestyle is, everyone has milestones."
She said sales of the band have been strong, though the company does not track whether the buyers were gay or straight.
Not every store is eager to jump on the gay marriage bandwagon, however. Filene's plans to keep the ''bride" and ''groom" labels in its wedding registry, though it remains open to gay couples, said spokeswoman Regina Norfolk. ''There are no plans at this time to do anything different than we've always done," she said.
But other retail chains say the gay wedding market represents too big an opportunity to pass up.
Classic Tuxedo recently outfitted models in a gay fashion show with its tuxedos. It also is planning a direct-mail campaign with an offer of $40 off a tuxedo rental for hundreds of people who attended a recent gay-wedding expo, said spokeswoman Andrea DiFabio.
She said gay customers tend to go for the more expensive tuxes and accessories, making them good customers. ''It's a look that's perfect for a man or a woman," she said.
Same-sex marriage also may mean profits for another apparel company, Reason8 of Boston, which makes political T-shirts. Owner David Rosen is ordering more than 300 shirts that read ''I do, I do, I do" to distribute to gay bookstores, natural foods stores, and feminist shops across the country.
The shirts, which will sell for about $22, show the symbol of two women, two men, and a man and a woman.
''It has really resonated," Rosen said. ''It's so simple. It kind of snowballed on us."
Salons, florists, and invitation companies are also getting in on the act.
The Rainbow Wedding Network, a gay wedding website, lists more than 220 Boston-area stores competing for its customers. One of them, Spa Visage of Norwell, listed its services on the site about two months ago in an attempt to persuade gay clients to consider the spa's wedding packages when they tie the knot.
Though the spa has yet to book its first gay wedding, receptionist Kelly Raymond said the salon has been getting dozens of calls on the topic. She recommends couples on their wedding days get a ''salt glow body polish" and an aromatherapy massage. ''It's good to relax beforehand," Raymond said.
But with all the controversy surrounding gay marriage, even companies offering wedding packages insist the promotions are not at all political. Nine Zero hotel said it views its ''Freedom to Marry Honeymoon Package" as a good fit for gay and straight couples.
''We're probably the least controversial bunch of people you've ever met," said Jim Horsman, the hotel's general manager. ''All we want is to create a memorable experience for the guests who stay here."
Sasha Talcott can be reached at stalcott@globe.com. |
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| To: Tom Caruthers who wrote (62) | 10/4/2004 4:09:19 PM | | From: Glenn Petersen | | | | A bit of balance sheet cleanup:
biz.yahoo.com
Form 8-K for KNOT INC
15-Sep-2004
Entry Material Agreement
ITEM 1.01. Entry into a Material Definitive Agreement.
On September 13, 2004, The Knot, Inc. ("The Knot") entered into an Agreement of Settlement and Mutual Release with America Online, Inc. ("AOL"), a wholly owned subsidiary of Time Warner Inc. (the "Settlement"), pursuant to which The Knot will make a cash payment of $1.2 million to AOL constituting full and final settlement of amounts due with respect to the Amended and Restated Anchor Tenant Agreement effective July 23, 1999 between The Knot and AOL. As a result of the Settlement, The Knot will reverse a previously recorded liability of $2.4 million and reflect a non-cash benefit of $1.2 million in the quarter ended September 30, 2004.
The Knot believes that Time Warner Inc. and AOL beneficially owned 5.6% of The Knot's common stock as of September 13, 2004, based in part upon information set forth in a Schedule 13G/A filed with the Securities and Exchange Commission on February 12, 2004 by Time Warner, Inc. |
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| From: Glenn Petersen | 11/16/2004 9:40:57 AM | | | | | | The Knot Reports Third Quarter Results
biz.yahoo.com
Thursday November 11, 8:30 am ET
Online Advertising Revenue Rose 44%
Company Leverages Brand with Newlywed Site 'The Nest'
Reminder: Conference Call Today at 2:30 dial-in 800-638-7172, ID# 1694519
NEW YORK--(BUSINESS WIRE)--Nov. 11, 2004-- The Knot, Inc. (OTCBB: KNOT.OB, www.theknot.com), one of the world's leading wedding media and services companies, today reported financial results for its third quarter and nine months ended September 30, 2004.
For the third quarter, The Knot reported net revenues rose to $10.7 million from net revenues of $9.7 million in the same period of 2003. The revenue gain reflects a 44% increase in online advertising in both local and national markets. Publishing and other revenues for the period were up 18% primarily reflecting growth in national advertising pages for the 2004 Fall/Winter issue of The Knot Weddings magazine as well as growth of advertising programs in The Knot's local wedding magazines, which are published in 18 major U.S. markets.
"We are experiencing a significant increase of national advertisers as well as growth within our local vendor base" said David Liu, CEO of The Knot. "This trend reflects rising recognition of The Knot's reach to its active membership of over one million couples, representing the largest aggregation of a prime audience that will be spending on their weddings in the coming 12-18 months."
Merchandising revenue continues to under-perform, declining 18% from the prior year. "During the quarter we instituted further cost cutting measures at our Redding, California distribution facility that will begin to take effect in the fourth quarter. Concurrently, we are preparing to test launch our new e-commerce technology platform. Together, we believe these steps will improve our e-commerce performance in 2005," Liu added.
The Knot reported net income for the third quarter of 2004 of $1.0 million, or $0.05 per basic and $0.04 per diluted share. Gross margins rose to 71% from 65% in the prior year's third quarter due to a higher mix of advertising revenues. Total operating expenses for the third quarter, which increased to $6.6 million from $6.2 in the prior year, reflected a non-cash gain of $1.2 million due to the settlement of a previously recorded liability with a distribution partner. In addition, operating expenses for the recent quarter included approximately $985,000 of professional fees related to The Knot's current litigation with WeddingChannel.com, Inc. The Knot reported net income of $202,000 or $0.01 per basic and diluted share in the third quarter of 2003.
Member activity on The Knot increased in the third quarter with 112 million average monthly page views versus 87 million average monthly page views in the year earlier quarter. Today, over 70% of traffic on TheKnot.com is direct without a referring URL, testament to the dominant brand and service offering. As of September 30, 2004, The Knot's cumulative membership was over 5.4 million compared to the approximately 4.4 million in 2003.
For the first nine months of 2004, The Knot reported net revenues of $31.3 million, and net income of $1.1 million or $0.05 per basic and diluted share compared to net revenues of $28.5 million and net income of $778,000 or $0.04 per basic and diluted share in 2003.
In October, the Company launched The Nest and transitioned the substantial base of couples who have wed in the last two years to a new site, www.thenest.com, which focuses exclusively on the needs of newlyweds. "Our focus is maximizing the lifetime value of our membership database," Mr. Liu said. "We have a very loyal and active audience which joins The Knot to prepare for a major event in their lives. Since a substantial proportion of 'Knotties' continue to remain active on our site after their weddings, we see a natural expansion of our business to the newlywed market. We are very encouraged by the early positive feedback from our audience base for this new business which further leverages our membership and operating infrastructure."
THE KNOT'S RECENT HIGHLIGHTS
During the third quarter, The Knot's recognized wedding expert, Editor in Chief Carley Roney, remained in the national broadcast spotlight with several high profile appearances, including a trio of appearances on NBC's TODAY Show annual wedding series. Carley also hosted a 30-city broadcast media tour in October. The media tour generated over 2.2 million viewers.
In August, consistent with the Company's strategy to deliver smart and stylish wedding content to engaged couples wherever and whenever they need it, The Knot entered into a partnership with Comcast Cable to launch the first-ever all-weddings Video-on-Demand service. "The Knot Weddings" service, now available to Comcast cable subscribers nationwide, provides viewers with 24/7 access to over 45 hours of wedding-related programming including real wedding stories from the critically-acclaimed TV series, Real Weddings From The Knot as well as more than 60 exclusive runway fashion shows and special program packages on hot wedding trends. New programs are added to "The Knot Weddings" service each month.
CONFERENCE CALL AND WEBCAST
The Knot will host a conference call with investors at 2:30 p.m., ET on Thursday, November 11, 2004, to discuss its third quarter 2004 financial results. Participants should dial in 800-638-7172 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 theknot.com. 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 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 passcode #1694519
<snip>
The Knot Inc.
Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2004 2003
----------------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $22,688 $22,511
Accounts receivable, net 2,917 2,883
Inventories 1,932 1,195
Deferred production and marketing costs 246 318
Other current assets 486 747
----------------------
Total current assets 28,269 27,654
Property and equipment, net 2,089 2,006
Intangible assets, net 8,659 8,734
Other assets 291 313
----------------------
Total assets $39,308 $38,707
======================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $3,702 $5,790
Deferred revenue 5,951 4,891
Current portion of long-term debt 40 40
----------------------
Total current liabilities 9,693 10,721
Long term debt 196 196
Other liabilities 502 490
----------------------
Total liabilities 10,391 11,407
Stockholders' equity:
Common stock 222 217
Additional paid-in-capital 75,055 74,533
Accumulated deficit (46,360) (47,450)
----------------------
Total stockholders' equity 28,917 27,300
----------------------
Total liabilities and stockholders' equity $39,308 $38,707
======================
The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
--------------------------------------------
2004 2003 2004 2003
--------------------------------------------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Net revenues:
Sponsorship and
advertising $4,478 $3,117 $12,613 $8,888
Merchandise 3,717 4,520 10,951 13,320
Publishing and other 2,476 2,102 7,769 6,340
--------------------------------------------
Total net revenues 10,671 9,739 31,333 28,548
Cost of revenues 3,081 3,394 9,009 9,628
--------------------------------------------
Gross profit 7,590 6,345 22,324 18,920
Operating expenses:
Product and content
development 1,283 1,112 3,744 3,216
Sales and marketing 2,099 3,020 9,150 8,639
General and administrative 3,074 1,852 7,866 5,618
Non-cash compensation - 1 - 32
Depreciation and
amortization 190 174 589 665
--------------------------------------------
Total operating expenses 6,646 6,159 21,349 18,170
Income from operations 944 186 975 750
Interest and other income,
net 82 21 193 63
--------------------------------------------
Income before income taxes 1,026 207 1,168 813
============================================
Provision for income taxes 21 5 78 35
Net income $1,005 $202 $1,090 $778
============================================
Basic earnings per share $0.05 $0.01 $0.05 $0.04
============================================
Diluted earnings per share $0.04 $0.01 $0.05 $0.04
============================================
Weighted average number of
common shares outstanding
Basic 22,189,580 18,605,468 22,013,776 18,470,638
============================================
Diluted 23,505,692 20,492,003 23,606,535 19,734,658
============================================
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| To: Glenn Petersen who wrote (65) | 12/7/2004 12:05:05 AM | | From: Tom Caruthers | | | | Hi Glenn,
I don't know if you watch the Apprentice or not, but they did a contest of creating a bridal salon and one of the teams used the KNOT to advertise with resounding success.
Their thenest.com site looks to be huge. Potentially advertisers galore.
I wound up buying some more.
Good luck!
Tom |
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| To: Tom Caruthers who wrote (66) | 12/7/2004 7:14:59 PM | | From: Glenn Petersen | | | | Tom,
I took a look at the new site. Very well done. A natural extension. The expense of rolling out the new site might hurt the fourth quarter numbers but it will add a lot of value in the long run.
I started a number of threads during the bubble. The Knot one was one of two Internet companies that had business plans that seemed perfectly suited for the Internet. The other was VarsityBooks.com (VSTY).
Subject 31880
VSTY sells books to college kids via the Internet. The stock bottomed out at $.06 per share. The company is solidly profitable and the stock is now at $6.00. Peter Lynch owns 7% of the company.
Regards,
Glenn |
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| From: brianmargolis | 1/4/2005 8:19:00 AM | | | | | | I am finding it very difficult to get any analysis of this company's current position/projections. Does anyone have a view at the beginning of 2005?
thx |
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