NetRatings Announces Fourth Quarter and Full Year 2006 Financial Results
Market Wire, March, 2007
NetRatings, Inc.
Statements of Operations
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
--------- --------- --------- ---------
unaudited unaudited
Revenue $ 21,955 $ 17,683 $ 81,769 $ 68,017
Cost of revenue 5,879 5,547 22,726 22,651
--------- --------- --------- ---------
Gross profit 16,076 12,136 59,043 45,366
--------- --------- --------- ---------
Operating expenses:
Research and development 3,263 2,732 11,721 11,580
Sales and marketing 6,312 6,391 25,073 25,718
General and administrative 4,159 3,027 15,315 12,130
Restructuring expenses - - - 1,700
Acquisition-related expenses 778 - 778 -
Amortization of intangibles 594 594 2,377 2,761
Amortization of stock-based
compensation 1,953 1,046 5,148 3,377
--------- --------- --------- ---------
Total operating expenses 17,059 13,790 60,412 57,266
--------- --------- --------- ---------
Income/(loss) from operations (983) (1,654) (1,369) (11,900)
Interest income, net 1,880 1,453 6,395 4,519
Minority interest in gains of
consolidated subsidiaries (309) (192) (1,137) (750)
Equity in earnings of joint
ventures - - - 56
--------- --------- --------- ---------
Net income/(loss) before
provision for income taxes and
cumulative effect of change in
accounting principle 588 (393) 3,889 (8,075)
Provision for income taxes (489) (320) (1,429) (320)
--------- --------- --------- ---------
Net income/(loss) before
cumulative effect of change
in accounting principle $ 99 $ (713) $ 2,460 $ (8,395)
Cumulative effect of change in
accounting principle - - 369 -
--------- --------- --------- ---------
Net income/(loss) $ 99 $ (713) $ 2,829 $ (8,395)
========= ========= ========= =========
Basic net income/(loss) per
common share:
Before cumulative effect of
change in accounting
principle $ 0.00 $ (0.02) $ 0.07 $ (0.23)
Cumulative effect of change
in accounting principle - - 0.01 -
--------- --------- --------- ---------
Net income/(loss) per
common share $ 0.00 $ (0.02) $ 0.08 $ (0.23)
========= ========= ========= =========
Diluted net income/(loss) per
common share:
Before cumulative effect of
change in accounting
principle $ 0.00 $ (0.02) $ 0.07 $ (0.23)
Cumulative effect of change
in accounting principle - - 0.01 -
--------- --------- --------- ---------
Net income/(loss) per
common share $ 0.00 $ (0.02) $ 0.08 $ (0.23)
========= ========= ========= =========
Shares used to compute basic
net income/(loss) and Pro
Forma EBITDA net income/(loss)
per common share 35,214 35,989 34,940 35,985
========= ========= ========= =========
Shares used to compute diluted
net income/(loss) and Pro
Forma EBITDA net
income/(loss) per common share 36,442 35,989 35,732 35,985
========= ========= ========= =========
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
--------- --------- --------- ---------
unaudited unaudited unaudited unaudited
Pro Forma EBITDA (1)
Net income/(loss) $ 99 $ (713) $ 2,829 $ (8,395)
Less:
Interest income, net (1,880) (1,453) (6,395) (4,519)
Provision for income taxes 489 320 1,429 320
Depreciation 1,277 985 4,348 3,565
Restructuring expenses - - - 1,700
Acquisition-related expenses 778 - 778 -
Amortization of intangibles 594 594 2,377 2,761
Amortization of stock-based
compensation 1,953 1,046 5,148 3,377
Cumulative effect of change in
accounting principle - - (369) -
--------- --------- --------- ---------
Pro Forma EBITDA $ 3,310 $ 779 $ 10,145 $ (1,191)
========= ========= ========= =========
Basic Pro Forma EBITDA
income/(loss) per common share $ 0.09 $ 0.02 $ 0.29 $ (0.03)
========= ========= ========= =========
Diluted Pro Forma EBITDA
income/(loss) per common share $ 0.09 $ 0.02 $ 0.28 $ (0.03)
========= ========= ========= =========
(1) Pro Forma EBITDA reflects net income/loss excluding interest
income/expense, taxes, depreciation, restructuring expenses,
acquisition-related expenses, amortization of intangibles and stock-based
compensation, and cumulative effect of change in accounting principle.
Management uses this measure internally to evaluate the company's
performance. NetRatings provides results, guidance, and associated
reconciliation of this non-GAAP measure to the investment community, as we
believe it provides consistent and comparable measures to help investors
understand our current and future operating cash flow performance. Interest
income/expense and provision for income taxes are excluded as it is not
related to our operating performance. Restructuring expenses and
acquisition-related expenses are excluded as they are one-time items not
directly related to operations. Depreciation expenses, amortization of
stock-based compensation, and cumulative effect of change in accounting
principle are excluded as they are non-cash charges. NetRatings excludes
amortization of intangibles as it is a non-cash charge not directly related
to operations. Pro Forma EBITDA data is provided as a complement to results
provided in accordance with GAAP, and should be considered in addition to,
and not as a substitute for or superior to, other measures of financial
performance prepared in accordance with GAAP.
NetRatings, Inc.
Balance Sheets
(in thousands)
December 31, December 31,
2006 2005
-------------- --------------
ASSETS
Current assets
Cash, cash equivalents & short-term
marketable securities $ 171,693 $ 151,671
Accounts receivable 26,329 16,537
Other current assets 3,544 3,867
-------------- --------------
Total current assets 201,566 172,075
Long-term marketable securities 15,320 28,581
Property and equipment 9,582 7,827
Intangibles 10,901 13,278
Goodwill 76,301 76,856
Other assets 1,803 1,637
-------------- --------------
Total assets $ 315,473 $ 300,254
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable & accrued expenses $ 22,991 $ 21,436
Deferred revenue 17,632 12,666
Restructuring liabilities 354 1,038
-------------- --------------
Total current liabilities 40,977 35,140
Restructuring liabilities, less current
portion 64 418
-------------- --------------
Total liabilities 41,041 35,558
Minority interest 2,221 1,298
Stockholders' equity 272,211 263,398
-------------- --------------
Total liabilities and stockholders'
equity $ 315,473 $ 300,254
============== ==============
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