| To: Tom Caruthers who wrote (96) | 1/19/2006 10:40:23 PM | | From: Glenn Petersen | | | | The market liked the news. Based on the expectation of a settlement, an analyst upgraded the shares and put out a target price of $17.
Knot Shares Leap on Potential Settlement
Thursday January 19, 3:57 pm ET
Investors Take Leap on Knot Shares After Analyst Says WeddingChannel Settlement Likely
NEW YORK (AP) -- Investors took a leap on wedding media company Knot Inc. Thursday, sending its shares up 19 percent after an analyst said Knot is likely to settle a lawsuit filed by rival WeddingChannel.com Inc.
Knot shares, which more than doubled in price last year, gained $2.25, or 19 percent, to $14.06 in afternoon trading on the Nasdaq. Over the past 52 weeks, Knot's shares have traded between $4.98 and $14.39.
Parham Ghorban, an analyst at Roth Capital Partners, issued a research report earlier Thursday predicting that Knot will probably resolve a patent suit filed by WeddingChannel two years ago. Ghorban cited Knot's announcement late Wednesday that both companies have asked to postpone court proceedings in the case for at least 60 days.
WeddingChannel, whose site carries news, advice and other wedding-related services, filed a lawsuit in the U.S. District Court in Manhattan against Knot in September 2003. WeddingChannel claims that Knot is infringing on one of its patents and has said it would seek damages of up to more than $13 million.
Knot said in a regulatory filing late Wednesday that a stay was entered in the case, at the joint request of both companies.
"We believe the stopping of the judicial proceeding one month before the scheduled trial indicates that both parties have agreed to discuss settlement options," Ghorban said.
Ghorban raised his rating on Knot to "Strong Buy" from "Neutral" and increased his price target to $17 from $12. Ghorban also raised his profit expectations for Knot, saying he expects Knot's legal costs to be lower this year.
"A settlement would resolve a two-year feud that has hurt both companies, remove an earnings drag of roughly 10 percent of revenues and highlight the true earnings power of The Knot," Ghorban said.
The analyst now expects Knot to report 2006 earnings of 45 cents per share, up from 31 cents. Wall Street has pegged Knot's 2006 earnings at 34 cents per share, according to Thomson Financial.
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| From: Glenn Petersen | 3/7/2006 7:04:33 PM | | | | | | NBC purchases iVillage and Business Week speculates that KNOT may be next.
Medium-sized sites such as theknot.com (KNOT ), an online wedding planner, will be much in demand because they dominate niches on the Web.
MARCH 7, 2006
News Analysis
By Steve Rosenbush
NBC Universal Takes an iVillage
The GE unit's purchase shows growing acceptance of the Net to distribute mainstream information and entertainment. Who are the next targets?
General Electric's (GE ) NBC Universal unit joined the big media hunt for online assets on March 6, announcing that it would pay $600 million to acquire iVillage (IVIL ), the pioneering Internet company geared toward women.
Speculation about an acquisition of iVillage has been underway since last year, and NBC Universal was by no means alone in expressing an interest (see BW Online, 8/29/05, "Internet Mergers: Who's Next?"). Other suitors included The New York Times (NYT ), according to one person familiar with the matter. The Times advanced its Internet operations last year with the $410 million cash acquisition of About.com. News Corp.'s (NWS ) Fox Interactive Media unit also looked at iVillage, according to division President Ross Levinsohn.
"GAME OF SCALE." Launched in the mid-1990s, iVillage.com has aggregated a collection of Web sites including iVillage.com, Women.com, gURL.com, Astrology.com, Substance.com, Promotions.com, Healthology.com, and GardenWeb.com. It competes with Lifetime, which is owned by Disney (DIS ) and Hearst, in the market for Web sites aimed at women.
Investors liked the deal. At market close on March 6, shares of iVillage were up 38 cents, to $8.36, while GE stock rose 4 cents, to $33.10.
It's not hard to see why. With annual revenue of about $100 million, the company is one of the few Internet properties that can actually contribute to growth. That's why it commanded a 6.5% premium over its pre-deal valuation. "This is still a game of scale for most people, and iVillage is one of the few Internet companies that have scale," Levinsohn says.
CONVERGENCE STRATEGY. The company didn't align that closely with the core audience of Fox Interactive Media, which acquired the edgy Internet upstart MySpace last year for $580 million, Levinsohn says.
But iVillage is key not just because of its near-term growth prospects. The deal reflects growing acceptance of the Web as a vehicle for the distribution of news, media, and entertainment, rivaling print and TV. That convergence already is underway at iVillage.
"iVillage has done a good job of incorporating video into its sites, creating a good environment for advertisers of packaged goods and beauty products," says Troy Young, executive vice-president and chief experience architect at Organic, an online advertising and consulting firm.
DEEP-POCKETED SUITORS. As share prices of Web giants such as Google (GOOG ) pushed the limits, smaller Internet companies with strong niches have seemed more attractive (see BW Online, 11/18/05, "Is Google Flying Too High?"). Analyst Richard Fetyko of JMP Securities upgraded the company last month to a strong buy, saying he expected earnings to be increasingly strong in the coming years, thanks to new services (see BW Online, 2/14/06, "JMP Securities Upgrades iVillage to Strong Buy").
Now that iVillage is snapped up, the question becomes: who's next? Medium-sized sites such as theknot.com (KNOT ), an online wedding planner, will be much in demand because they dominate niches on the Web. Other sites that are attracting attention include tech-news destination CNET (CNET ) and a host of social-networking sites such as www.facebook.com.
Valuations could continue to climb. As the MySpace and iVillage deals showed, big media companies are willing to spend significant amounts of money for sites that give them advantage in the increasingly important world of the Web.
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| From: Glenn Petersen | 4/3/2006 3:33:43 PM | | | | | | KNOT gets an upgrade:
For 2006, Morrison expects the Knot to post earnings of 39 cents per share, above the analyst consensus estimate of 37 cents per share. For 2007, Morrison expects the Knot to post earnings of 76 cents per share, well ahead of the consensus estimate of 61 cents per share.
Knot Shares Reach New 52-Week High
Monday April 3, 1:54 pm ET
Knot Shares Gain After Analyst Says Company Can Maintain Higher Growth Rates
NEW YORK (AP) -- Shares of wedding magazine and Web site publisher The Knot Inc. reached a 52-week high Monday, after an analyst recommended the stock, saying the company can sustain higher growth rates than expected.
Knot shares rose 95 cents, or 5.3 percent, to $19.05 in afternoon trading on the Nasdaq after trading as high as $19.25 earlier in the day. The stock had previously traded between $5.94 and $18.11 over the past 52 weeks. With the latest gains, Knot shares are up about 66 percent for the year so far.
"We now believe The Knot can sustain higher long term revenue and cash flow growth rates than we had been previously expecting," JMP Securities analyst William Morrison said in a client note.
Morrison upgraded Knot shares to "Market Outperform" from "Market Perform," and set a $22 price target.
The analyst cited the company's new initiatives, including launching a cobranded credit card with American Express and its expected launch of The Nest magazine for newlyweds in the third quarter.
Morrison now expects the Knot to post 2006 revenue of $66 million and 2007 revenue of $82 million, above consensus estimates of $63.3 million for 2006 and $76.7 million for 2007 from analysts polled by Thomson Financial.
"Our new financial outlook is buttressed by strong momentum in user and usage growth at The Knot's online properties," Morrison added.
Users are up 15 percent annually at the company's main site, theknot.com, while users were up 100 percent at the company's site for newlyweds, thenest.com, he said.
"The Knot's management appears to be doing an exceptional job at seeding the community activity on The Nest with little to no promotional activity," Morrison said.
For 2006, Morrison expects the Knot to post earnings of 39 cents per share, above the analyst consensus estimate of 37 cents per share. For 2007, Morrison expects the Knot to post earnings of 76 cents per share, well ahead of the consensus estimate of 61 cents per share.
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| From: Glenn Petersen | 5/11/2006 8:16:37 PM | | | | | | Another good quarter from KNOT:
The Knot Reports First Quarter 2006 Financial Results
Thursday May 11, 8:30 am ET
Net Income Increases Fourfold to $1.7 Million on a 24% Revenue Gain
Online Advertising Rises 35%
Reminder: Conference Call Today at 2:30 ET Dial In 800-638-7172 (ID#7774984)
NEW YORK--(BUSINESS WIRE)--May 11, 2006--The Knot, Inc. (NASDAQ: KNOT - News, www.theknot.com - News), a leading national lifestage media company offering the premier wedding resource, today reported financial results for its first quarter ended March 31, 2006.
First Quarter 2006 Results
For the first three months of 2006, net revenues rose 24% to $14.8 million from $11.9 million in the first quarter of 2005. Revenue from national and local online advertising programs increased by 35% over the prior year's first quarter and publishing and other revenues recorded a 38% gain. Merchandising revenue declined 7%.
Net income increased to $1.7 million, or $0.07 per basic and diluted share, from $409,000, or $0.02 per basic and diluted share, in the first quarter of 2005.
Commenting on The Knot's first quarter results, Chief Executive Officer David Liu said: "Our online and offline media revenue streams produced a strong start to our 2006 financial performance. Our advertisers increasingly view our Knot and Nest brands as unique vehicles for directly reaching target customers who will be spending substantial sums on their weddings, honeymoons and early years of marriage, and they recognize the cost effectiveness of advertising on our sites and in our publications. Our multiplatform media model provides us many touch points with the consumer to build the value of our brand and fulfill consumer demand."
Operating expenses in the current quarter include approximately $180,000 in legal fees related to The Knot's current litigation with WeddingChannel.com, Inc. compared to $683,000 for the comparable period in 2005. On January 17, 2006, a stay was entered in connection with this litigation, for a period of not less than 60 days, upon the joint request of the parties. The stay currently remains in effect.
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 $128,000 or $0.01 per basic share for the three months ended March 31, 2006. There was no impact on diluted earnings per share. Total stock-based compensation recorded in the first quarter of 2006, including expense associated with restricted common shares, was $329,000. There was no stock-based compensation recorded in the first quarter of 2005.
THE KNOT'S RECENT HIGHLIGHTS
On April 18, the first issue of Travel + Romance, the new annual magazine from Travel + Leisure and The Knot, hit the newsstands nationwide, and its companion web site, www.travel-romance.com, went live. The new magazine features luxury honeymoons, destination wedding ideas and style and romantic trips for two.
In March, Four Seasons Hotels and Resorts, the world's leading luxury hotel company, began a collaboration with The Knot creating and hosting a series of exclusive, intimate and interactive bridal events at Four Seasons Hotels across the U.S. "The Wedding Event" will be hosted in six cites, including Atlanta, Boston, Houston, Miami, New York and Washington D.C. This marketing strategy combines The Knot's modern wedding style expertise and loyal audience of brides with the exceptional service, one-of-a-kind experiences and unparalleled destinations for which Four Seasons is renowned.
CONFERENCE CALL AND WEBCAST
The Knot will host a conference call with investors at 2:30 p.m., ET on Thursday, May 11, 2006, to discuss its first quarter financial results. Participants should dial-in (800) 638-7172, Conference ID# 7774984. 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.
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 #7774984.
About The Knot, Inc.
The Knot, Inc. (Nasdaq: KNOT - News) 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 one million engaged couples each year through the Web, newsstands, bookstores, national television and more. Its award-winning website, TheKnot.com, is the most-trafficked online wedding destination. The Company also publishes a diverse collection of print publications including national and regional editions of "THE KNOT Weddings" magazine and authors books on wedding and newlywed-related topics. The Company also produces a TV series on The Oxygen Network, a Video On Demand (VOD) service for Comcast Cable and has content distribution partnerships with MSN and Comcast. The Knot, Inc. has launched several brands targeted before and beyond the wedding day, including newlywed site TheNest.com, teen-oriented PromSpot.com and online personals sites, GreatBoyfriends.com and GreatGirlfriends.com. The Knot, Inc. is based in New York.
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 risks and related costs associated with ongoing litigation, (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,
2006 2005
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $18,128 $17,685
Short-term investments 13,050 11,550
Accounts receivable, net 5,774 4,805
Inventories 1,786 1,622
Deferred production and marketing costs 584 419
Other current assets 907 881
----------- ---------
Total current assets 40,229 36,962
Property and equipment, net 3,765 2,987
Intangible assets, net 9,080 9,110
Other assets 1,218 326
----------- ---------
Total assets $54,292 $49,385
=========== =========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $5,816 $5,574
Deferred revenue 9,929 7,816
Current portion of long-term debt 47 47
----------- ---------
Total current liabilities 15,792 13,437
Long term debt 106 106
Other liabilities 494 505
----------- ---------
Total liabilities 16,392 14,048
Stockholders' equity:
Common stock 233 230
Additional paid-in-capital 78,204 77,550
Deferred compensation -- (221 )
Accumulated deficit (40,537 ) (42,222 )
----------- ---------
Total stockholders' equity 37,900 35,337
----------- ---------
Total liabilities and stockholders' equity $54,292 $49,385
=========== =========
The Knot Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended
March 31,
-----------------------
2006 2005
----------- -----------
(Unaudited) (Unaudited)
Net revenues:
Sponsorship and advertising $7,799 $5,775
Merchandise 3,138 3,386
Publishing and other 3,814 2,772
----------- -----------
Total net revenues 14,751 11,933
Cost of revenues 3,129 2,912
----------- -----------
Gross profit 11,622 9,021
Operating expenses:
Product and content development 1,786 1,681
Sales and marketing 4,714 3,627
General and administrative 3,262 3,118
Depreciation and amortization 372 281
----------- -----------
Total operating expenses 10,134 8,707
Income from operations 1,488 314
Interest and other income, net 300 130
----------- -----------
Income before income taxes $1,788 $444
=========== ===========
Provision for income taxes 103 35
Net income $1,685 $409
=========== ===========
Basic earnings per share $0.07 $0.02
=========== ===========
Diluted earnings per share $0.07 $0.02
=========== ===========
Weighted average number of common shares
outstanding
Basic 23,084,772 22,410,542
=========== ===========
Diluted 25,578,559 24,296,093
=========== ===========
Contact:
VMW Corporate & Investor Relations
Vicki Weiner / Sylvia Dresner, 212-616-6161
info@vmwcom.com
--------------------------------------------------------------------------------
Source: The Knot, Inc.
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| To: Tom Caruthers who wrote (101) | 6/6/2006 9:27:58 AM | | From: Glenn Petersen | | | | KNOY signs an agreement to acquire WeddingChannel.com. I can't wait to see the WC's financial statements. I would expect KNOT to take a hit today, though I have been known to be wrong.
The Knot and WeddingChannel.com Enter into a Definitive Merger Agreement
Monday June 5, 4:05 pm ET
NEW YORK--(BUSINESS WIRE)--June 5, 2006--The Knot (Nasdaq: KNOT - News; www.theknot.com), a leading national lifestage media and services company offering the premier wedding resource, and WeddingChannel.com, Inc., a privately-held leader in wedding planning and gift buying services, today announced that they have entered into a definitive merger agreement. Under the terms of the agreement, The Knot will pay approximately $57.9 million in cash and issue 1,150,000 shares of its common stock in exchange for all of the capital stock and stock options of WeddingChannel. The Knot intends to finance the cash portion of the purchase price through a follow-on offering of its common stock pursuant to a registration statement The Knot expects to file in the next month. If The Knot elects not to complete the follow-on offering, The Knot will pay $28.0 million in cash and issue 3,200,000 shares of its common stock in exchange for all of the capital stock and stock options of WeddingChannel. An adjustment will be made to the cash portion of the purchase price if WeddingChannel's working capital is above or below $10 million at closing.
"We look forward to leveraging the complementary strengths of our two businesses to better serve the needs of our audience and, by doing so, we will become a more effective marketing resource for our advertisers," said David Liu, Chairman and CEO of The Knot. "Together, our unique businesses will enhance our offerings for the wedding market and further cement the relationships we establish with our members."
"Our two companies have taken different paths to satisfy different segments of the bridal market including engaged couples, their gift buying guests and advertisers," said Adam Berger, Chief Executive Officer of WeddingChannel. "By joining forces, we are better positioned to offer the best products and services to the broadest audience and create more lifestage opportunities."
The merger has been approved by the boards of directors of both companies. Stockholders representing approximately 30% of the outstanding capital stock of WeddingChannel have agreed to vote their shares in favor of the merger. The merger is subject to customary closing conditions, including stockholder and regulatory approvals, and is currently expected to close in the third quarter of 2006. The merger agreement also contains certain termination rights in favor of each of The Knot and WeddingChannel.
This release is neither an offer to sell nor a solicitation of offers to purchase common stock of The Knot.
About The Knot, Inc.
The Knot, Inc. (Nasdaq: KNOT - News) is a leading national lifestage media and services company. The company's flagship brand, The Knot, is the nation's premier wedding resource that reaches over one million engaged couples each year through the Web, newsstands, bookstores, national television and more. Its award-winning website, TheKnot.com, is the most-trafficked online wedding destination. The Company also publishes a diverse collection of print publications including national and regional editions of "THE KNOT Weddings" magazine and authors books on wedding and newlywed-related topics. The Company also produces a TV series on The Oxygen Network, a Video On Demand (VOD) service for Comcast Cable and has content distribution partnerships with MSN and Comcast. The Knot, Inc. has launched several brands targeted before and beyond the wedding day, including newlywed site TheNest.com, event planning site PartySpot, teen-oriented PromSpot.com and online personals sites, GreatBoyfriends.com and GreatGirlfriends.com. The Knot, Inc. is based in New York.
About WeddingChannel.com, Inc.
WeddingChannel offers comprehensive wedding-planning content, interactive tools and one place for couples to manage gift registries from the nation's largest retailers, pre-reserve hotel rooms from numerous properties worldwide and enable guests to find and purchase these gifts and hotel rooms. WeddingChannel's patented registry system searches registries from retailers and resort groups including Macy's, Bloomingdale's, Tiffany & Co., Crate and Barrel, Neiman Marcus, Williams-Sonoma, Pottery Barn, The Home Depot, JCPenney, Starwood Hotels, Sandals Resorts and others. WeddingChannel also operates the leading bridal fashion trade show, WeddingChannel's Couture Show. WeddingChannel.com, Inc. is based in Los Angeles.
<snip>
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| To: Tom Caruthers who wrote (104) | 9/16/2006 8:22:36 PM | | From: Glenn Petersen | | | | Another positive piece from Business Week's Gene Marcial:
SEPTEMBER 25, 2006
INSIDE WALL STREET
The Knot And WeddingChannel: Just Married
Weddings are a $72 billion-a-year business, and The Knot (KNOT ) (KNOT) is a major player. Already, its Web site is the biggest destination for bridal shopping and gift registry services, with 4 million monthly unique visitors. In August The Knot widened its online presence by acquiring WeddingChannel.com, the leading online bridal registry. The Knot also publishes several magazines devoted to weddings. Its stock has run up this year from 11 to 20. The Knot was featured in this column on Apr. 11, 2005, when it was at 7.20. Jeetil Patel of Deutsche Bank (DB ) rates The Knot a "buy" because it offers investors exposure to the rise in online ads, which last year captured 10% of the $1.5 billion spent on wedding ads. He figures the purchase will add $29 million to sales and $14 million to earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2007. On a pro forma basis, Patel sees earnings of 44 cents a share on sales of $71 million in 2006 and 77 cents on $108 million in 2007. Richard Fetyko of Merriman Curhan Ford, who also rates The Knot a "buy," has raised his 2007 forecast from 70 cents a share to 78 cents.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial
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| To: Glenn Petersen who wrote (105) | 10/23/2006 2:28:13 AM | | From: Tom Caruthers | | | | 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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