Reports $0.03 Per Share Net Income NEW YORK, Aug. 2
/PRNewswire-FirstCall/ -- NetRatings, Inc. (NASDAQ:NTRT), a global
leader in Internet media and market research, today announced
financial results for the second quarter ended June 30, 2006.
NetRatings' revenues for the second quarter of 2006 were $19.9
million, a 17 percent increase over revenues of $17.1 million in
the second quarter of 2005, and a 9 percent increase over revenues
of $18.3 million in the first quarter of 2006. Net income for the
second quarter of 2006 was $931,000, or $0.03 per share, on
approximately 34.8 million shares. This compares with a net loss of
($2.3 million), or ($0.06) per share, in the second quarter of
2005, on approximately 36 million shares. On an EBITDA basis (a
non-GAAP measure that reflects net income/loss excluding interest
income/expense, taxes, depreciation, and amortization of
intangibles and stock-based compensation), the company earned $2.2
million or $0.06 per share during the second quarter of 2006. This
compares with an EBITDA loss in the second quarter of 2005 of
($577,000), or ($0.02) per share. A complete reconciliation of GAAP
results to EBITDA results may be found in the accompanying
financial tables and footnote. "NetRatings had an extremely
productive quarter on all fronts, including financial results that
exceeded our forecasts and delivered our first quarter of net
income profitability" said William Pulver, president and CEO,
NetRatings. "Strong product sales, complemented by the contribution
from our patent licensing program, drove solid revenue growth.
Product rollouts, including AdRelevance in China and an expanded
NetView service in our key European markets, are progressing as
planned. Finally, the expansion of our services to include
measurement of all online digital and audio content is well
underway. Today we are working with leading media companies to
deliver streaming content metrics based on SiteCensus and metered
panel data, and later this year will implement our next generation
meter to capture and report all online streaming content - whether
consumed live or via replay. In addition, we are working jointly
with Nielsen Media Research to develop fused data sets and a single
source panel to help clients understand the convergence of TV and
Internet consumption." Managing Director Appointed in Europe
NetRatings also announced today the appointment of Louise Ainsworth
as managing director of its European business, effective Sept. 4,
2006. Ms. Ainsworth joins from OgilvyOne Worldwide in London where
she was managing partner, consulting and planning. Previously, she
was with OgilvyInteractive, most recently as managing director,
with overall responsibility for the agency's UK business. Prior to
this, Ms. Ainsworth held a leadership role with Organic Online (now
Agency.com), strategy roles with the BBC in London and worked as a
management consultant for Bain & Company. She has a BA in
Engineering & Economics from Oxford, an MSc in Management
Science & Operational Research from Warwick and an MBA from
INSEAD France. Mr. Pulver commented, "Louise brings extremely
relevant agency and media experience, and a foundation of
leadership and strategic planning skills, to NetRatings. I am
confident she will be a terrific addition to the organization and
we look forward to welcoming her in September and to working with
her to re-energize our European business." Guidance For the third
quarter ending Sept. 30, 2006, NetRatings is projecting the
following: -- Revenue is expected to be between $20.8 million and
$21.2 million -- EPS on a GAAP basis is expected to be between
$0.01 and $0.03 -- EBITDA per share is expected to be between $0.06
and $0.08 For the full year 2006, NetRatings is projecting the
following: -- Revenue is expected to be between $79 million and $81
million -- EPS on a GAAP basis is expected to be between $0.04 and
$0.06 -- EBITDA per share is expected to be between $0.20 and $0.22
Second Quarter 2006 Conference Call Today at 4:30 p.m. ET,
NetRatings management will host a conference call and Webcast to
discuss its second quarter 2006 results and outlook. The company
welcomes all members of the financial and media communities to
visit http://www.netratings.com/financial_results.htm to listen to
the conference call via live Webcast. About NetRatings NetRatings,
Inc. delivers leading Internet media and market research solutions,
marketed globally under the Nielsen//NetRatings brand. With high
quality, technology-driven products and services,
Nielsen//NetRatings is the global standard for Internet audience
measurement and premier source for online advertising intelligence,
enabling clients to make informed business decisions regarding
their Internet and digital strategies. The Nielsen//NetRatings
portfolio includes panel-based and site-centric Internet audience
measurement services, online advertising intelligence, user
lifestyle and demographic data, e-commerce and transaction metrics,
and custom data, research and analysis. For more information,
please visit http://www.nielsen-netratings.com/. Safe Harbor
Statement This press release contains statements that may
constitute forward-looking statements pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on current expectations
and assumptions and involve a number of uncertainties and risks
that could cause actual results to differ materially from those
currently expressed in any such forward-looking statements.
Information about potential factors that may affect NetRatings'
business and financial results is included in its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2005 and its quarterly
reports on Form 10-Q, including, without limitation, under the
captions "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors That May
Affect Our Performance." Each of these documents is on file with
the SEC and is available free of charge. Readers of this press
release are referred to such filings. The forward-looking
statements herein speak only as of the date of this press release.
NetRatings does not undertake to update any forward-looking
statement that may be made from time to time by it or on behalf of
NetRatings. CONTACT: Susan Hickey of NetRatings, Inc.,
+1-212-703-5909, or . NetRatings, Inc. Statements of Operations (in
thousands, except per share data) Three Months Ended Six Months
Ended June 30, June 30, 2006 2005 2006 2005 unaudited unaudited
Revenue $19,934 $17,105 $38,214 $33,538 Cost of revenue 5,659 6,018
11,225 11,586 Gross profit 14,275 11,087 26,989 21,952 Operating
expenses: Research and development 2,761 2,629 5,404 5,684 Sales
and marketing 6,244 6,664 12,591 13,050 General and administrative
3,660 3,023 7,110 6,021 Amortization of intangibles 595 710 1,189
1,533 Amortization of stock-based compensation 987 1,169 2,151
1,169 Total operating expenses 14,247 14,195 28,445 27,457
Income/(loss) from operations 28 (3,108) (1,456) (5,505) Interest
income, net 1,770 988 2,931 1,905 Minority interest in income of
consolidated subsidiaries (358) (201) (521) (406) Equity in
earnings of joint ventures - - - 56 Net income/(loss) before
provision for income taxes and cumulative effect of change in
accounting principle 1,440 (2,321) 954 (3,950) Provision for income
taxes (509) - (647) - Net income/(loss) before cumulative effect of
change in accounting principle 931 (2,321) 307 (3,950) Cumulative
effect of change in accounting principle - - 369 - Net
income/(loss) $931 $(2,321) $676 $(3,950) Basic net income/(loss)
per common share: Before cumulative effect of change in accounting
principle $0.03 $(0.06) $0.01 $(0.11) Cumulative effect of change
in accounting principle - - 0.01 - Net income/(loss) per common
share $0.03 $(0.06) $0.02 $(0.11) Diluted net income/(loss) per
common share: Before cumulative effect of change in accounting
principle $0.03 $(0.06) $0.01 $(0.11) Cumulative effect of change
in accounting principle - - 0.01 - Net income/(loss) per common
share $0.03 $(0.06) $0.02 $(0.11) Shares used to compute basic net
income/(loss) and EBITDA net income/(loss) per common share 34,833
36,014 34,772 35,893 Shares used to compute diluted net
income/(loss) and EBITDA net income/(loss) per common share 35,773
36,014 35,741 35,893 EBITDA (1) Net income/(loss) $931 $(2,321)
$676 $(3,950) Less: Interest income, net (1,770) (988) (2,931)
(1,905) Provision for income taxes 509 - 647 - Depreciation 918 853
1,814 1,671 Amortization of intangibles 595 710 1,189 1,533
Amortization of stock-based compensation 987 1,169 2,151 1,169
Cumulative effect of change in accounting principle - - (369) -
EBITDA $2,170 $(577) $ 3,177 $(1,482) Basic EBITDA income/ (loss)
per common share $0.06 $(0.02) $0.09 $(0.04) Diluted EBITDA income/
(loss) per common share $0.06 $(0.02) $0.09 $(0.04) (1) EBITDA
reflects net income/loss excluding interest income/expense, taxes,
depreciation, 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 is
excluded as it is not related to our operating
performance.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. 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. Reconciliation of net income per share to
EBITDA per share for third quarter and full year 2006 guidance.
Three months ending Full year ending Sept. 30, 2006 Dec. 31, 2006
Net income $0.01 $0.03 $0.04 $0.06 Adjustments Interest income, net
(0.05) (0.05) (0.19) (0.19) Provision for income taxes 0.02 0.02
0.04 0.04 Depreciation 0.03 0.03 0.11 0.11 Amortization of
intangibles 0.02 0.02 0.07 0.07 Amortization of stock-based
compensation 0.03 0.03 0.12 0.12 Cumulative effect of change in
accounting principle - - 0.01 0.01 Basic EBITDA per share guidance
range $0.06 $0.08 $0.20 $0.22 NetRatings, Inc. Balance Sheets (in
thousands) June 30, December 31, 2006 2005 ASSETS unaudited Current
assets Cash, cash equivalents & short-term marketable
securities $170,244 $151,671 Accounts receivable 17,843 16,537
Other current assets 4,057 3,867 Total current assets 192,144
172,075 Long-term marketable securities 7,973 28,581 Property and
equipment 9,320 7,827 Intangibles 12,089 13,278 Goodwill 76,438
76,856 Other assets 1,747 1,637 Total assets $299,711 $300,254
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts
payable & accrued expenses $20,519 $21,436 Deferred revenue
14,568 12,666 Restructuring liabilities 346 1,038 Total current
liabilities 35,433 35,140 Restructuring liabilities, less current
portion 243 418 Total liabilities 35,676 35,558 Minority interest
1,819 1,298 Stockholders' equity 262,216 263,398 Total liabilities
and stockholders' equity $299,711 $300,254 DATASOURCE: NetRatings,
Inc. CONTACT: Susan Hickey of NetRatings, Inc., +1-212-703-5909, or
Web site: http://www.netratings.com/
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