InterSearch Reports Record First Quarter 2007 Financial Results

  
    
  
  
    
      InterSearch Group, Inc. (AMEX:IGO), a leading operator of industry 
      specific destination portals such as www.Banks.com, 
      www.IRS.com and www.Camps.com 
      and provider of Internet search services today reported financial 
      results for the first quarter ended March 31, 2007.
    
    
      First Quarter 2007 Financial Highlights
    
    
      
        First quarter revenue was $10.8 million, up 35% from the first quarter 
        a year ago;
      
      
        First quarter EBITDA1 was $5.1 million, a 34% 
        increase from $3.8 million in the first quarter of 2006;
      
      
        First quarter GAAP2 net earnings rose to $2.6 
        million, or $0.09 per fully diluted share.
      
    
    
      Gross margins increased sequentially to 69% from 53% in the fourth 
      quarter of 2006 and were consistent with our gross margins from the 
      first quarter of 2006.
    
    
      Sales, general and administrative expense increased by $0.8 million year 
      over year, attributable mainly to new software development hires and the 
      expensing of certain data warehouse related salaries and expenses which 
      had been capitalized in 2006, reflecting the launch of the Data 
      Warehouse into production.
    
    
      “We’re very pleased 
      with our record-setting first quarter, which features the highest 
      revenues and EBITDA in our Company's history and is indicative of our 
      continuing growth,” said Dan O’Donnell, 
      Chairman and Chief Executive Officer of InterSearch Group. “Growth 
      was driven by a combination of seasonally strong performance of our 
      tax-related domains and the continued improvement and refinement of our 
      aggressive internet and search engine marketing efforts which generated 
      significant traffic to InterSearch’s 
      proprietary websites.”
    
    
      First Quarter 2007 Business Highlights
    
    
      
        Generated over 34.4 million paid clicks as compared to 24.7 million in 
        the first quarter of 2006.
      
      
        Rolled out the enhanced edition of www.Banks.com, 
        an online consumer finance marketplace.
      
      
        Rolled out the enhanced, content-rich edition of www.Camps.com 
        which also reached the number #1 ranking in Google’s 
        algorithmic search results for the term “camps”.
      
      
        Successfully launched an automated Ad Center which allows advertisers 
        to sign up online and manage their listings on InterSearch Group’s 
        proprietary domains.
      
    
    
      Second Quarter 2007 Business Outlook
    
    
      InterSearch Group provided the following guidance for the second quarter 
      of 2007, ending June 30:
    
    
      
        Q2 2007 Revenue Range $8.0 - $8.4 Million
      
      
        Q2 2007 EBITDA Range  $2.2 - $2.4 Million
      
    
    
      InterSearch Group expects to be profitable on a GAAP basis and generate 
      positive cash flow from operations for the entire FY2007 period.
    
    
      Said Gary Bogatay, Chief Financial Officer of InterSearch Group, “With 
      a strong finish to the extended 2007 tax filing season, combined with 
      continued growth of other destination sites in our domain portfolio, we 
      expect to achieve a 25% to 31% year-over-year growth rate for the second 
      quarter of 2007.”
    
    
      Conference Call
    
    
      Chairman and Chief Executive Officer, Dan O’Donnell, 
      and Chief Financial Officer, Gary Bogatay, will discuss the first 
      quarter performance along with the outlook for the second quarter, 
      during a conference call today at 2:00 p.m. PDT (5:00 p.m. EDT).
    
    
      To listen to the call and have the opportunity to ask questions, please 
      dial 800.591.6942 (domestic) or 617.614.4909 (International) five to ten 
      minutes before the call and reference the passcode 81375000. A 
      simultaneous live Webcast of the call will be available at the Investor 
      Relations section of the InterSearch Group website at: www.InterSearch.com. 
      An online playback of the Webcast will be available on the InterSearch 
      Group website for at least 90 days following the call.
    
    
      Forward Looking Statements
    
    
      This press release contains forward-looking statements within the 
      meaning of the Private Securities Litigation Reform Act of 1995 that 
      involve substantial risks and uncertainties, including statements 
      regarding our expected financial results for the second quarter of 2007. 
      Forward-looking statements, which are based on management’s 
      current expectations, are generally identifiable by the use of terms, 
      such as “anticipates,” 
      “believes,” “could,” 
      “estimates,” “expects,” 
      “intends,” “may,” 
      “plans,” “possible,” 
      “potential,” “predicts,” 
      “projects,” “should,” 
      “would” and 
      similar expressions. The forward-looking statements in this press 
      release are contained principally in the section entitled “Second 
      Quarter 2007 Business Outlook,” including 
      statements regarding: guidance for 2007 with respect to revenue and 
      EBITDA; expectations for profitability on a GAAP basis and generation of 
      positive cash flow from operations; and expectations regarding growth 
      rate for second quarter 2007. The potential risks and uncertainties that 
      could cause actual results to differ materially from those expressed or 
      implied herein include, among others, unanticipated slowdown in the 
      travel and financial verticals; uncertainties related to the acceptance 
      by customers of our enhanced versions of www.Banks.com 
      and www.Camps.com; unexpected 
      diversion of advertising dollars away from the Internet; slower than 
      anticipated growth rate of InterSearch Group’s 
      advertising base; dependence on our search providers; and market 
      development of Internet advertising and paid search services. Further 
      information on the factors that could affect InterSearch Group’s 
      financial results is included in our filings with the Securities and 
      Exchange Commission, including our Annual Report on Form 10-KSB for the 
      fiscal year ended December 31, 2006 and our Current Reports on Form 8-K. 
      Except as required by law, we assume no obligation to update these 
      forward-looking statements publicly, even if new information becomes 
      available in the future.
    
    
      Non-GAAP Financial Measures
    
    
      This press release includes the following financial measure defined 
      as non-GAAP financial measure by the Securities and Exchange Commission: 
      EBITDA. The presentation of this financial information is not 
      intended to be considered in isolation or as a substitute for the 
      financial information prepared and presented in accordance with GAAP. 
      See “Reconciliation of GAAP Net Earnings 
      to Earnings Before Interest, Taxes, Depreciation and Amortization 
      (EBITDA)” table included in this press 
      release for further information regarding these non-GAAP financial 
      measures.
    
    
      InterSearch Group’s management evaluates 
      and monitors performance for InterSearch Group primarily through EBITDA. 
      In addition, EBITDA is presented because management believes it is 
      frequently used by securities analysts, investors and others in the 
      evaluation of companies. EBITDA is calculated by adding income 
      taxes, interest expense, depreciation and amortization to net earnings. 
      EBITDA is not defined under GAAP and should not be considered in 
      isolation or as a substitute for net earnings and other consolidated 
      earnings data prepared in accordance with GAAP or as a measure of 
      InterSearch Group’s profitability.
    
    
      About InterSearch Group, Inc.
    
    
      InterSearch Group is a leading operator of industry specific destination 
      portals and provider of Internet search services through a combination 
      of traffic aggregation and proprietary websites, such as www.Banks.com, 
      www.IRS.com and www.Camps.com. 
      InterSearch Group operates in the fastest growing segments of Internet 
      commerce including paid search, direct navigation and online marketing 
      driving high quality traffic to advertisers and providing users with 
      quick access to pertinent products and services. Through its corporate 
      services division, InterSearch Group also provides Internet technology 
      related professional services to large corporations, predominantly in 
      the Financial Services industry. InterSearch Group is headquartered in 
      San Francisco, California at 222 Kearny Street, Suite 550, and can be 
      reached via telephone at 415-962-9700. More information about 
      InterSearch Group can be found at: www.InterSearch.com.
    
    
      1 EBITDA is a non-GAAP financial measure. This 
      measure may be different from non-GAAP financial measures used by other 
      companies. We encourage investors to review the section below entitled “Non-GAAP 
      Financial Measures” and to review the 
      reconciling adjustments between the GAAP and non-GAAP measures attached 
      to this press release.
    
    
      2 Generally accepted accounting principles in 
      the United States of America.
    
    
      
        
          INTERSEARCH GROUP, INC. AND SUBSIDIARIES
        
      
      
        
          Consolidated Statements of Earnings
        
      
      
        
          (In thousands, except share and per share data)
        
      
      
        
          (Unaudited)
        
      
      
        
           
        
      
      
        
        
        
        
        
        
        
          Three Months Ended
        
      
      
        
        
        
        
        
        
        
          March 31,
        
      
      
        
        
        
        
        
        
        
          2007 
        
        
        
        
          2006 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Revenues
        
        
        
        
        
        
          $10,844 
        
        
        
        
          8,024 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cost of revenues
        
        
        
        
          3,371 
        
        
        
        
          2,520 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
          7,473 
        
        
        
        
          5,504 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses:
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Sales and marketing expense
        
        
        
        
          238 
        
        
        
        
          274 
        
      
      
        
        
        
          General and administrative expense
        
        
        
        
          2,537 
        
        
        
        
          1,706 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Total operating expenses
        
        
        
        
          2,775 
        
        
        
        
          1,980 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings from operations
        
        
        
        
          4,698 
        
        
        
        
          3,524 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest expense
        
        
        
        
          306 
        
        
        
        
          27 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss on derivative instrument
        
        
        
        
          - 
        
        
        
        
          19 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings before income taxes
        
        
        
        
          4,392 
        
        
        
        
          3,478 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income taxes
        
        
        
        
          1,753 
        
        
        
        
          1,401 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net earnings
        
        
        
        
          $2,639 
        
        
        
        
          2,077 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic earnings per share
        
        
        
        
          $ 0.10 
        
        
        
        
          0.08 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted earnings per share
        
        
        
        
          $ 0.09 
        
        
        
        
          0.08 
        
      
    
    
    
    
      
        
           
        
      
      
        
          INTERSEARCH GROUP, INC. AND SUBSIDIARIES
        
      
      
        
          Consolidated Balance Sheets
        
      
      
        
          (In thousands, except share and per share data)
        
      
      
        
          (Unaudited)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          March 31,
        
        
           
        
        
          December 31,
        
      
      
        
        
        
        
        
          2007 
        
        
        
        
          2006 
        
      
      
        
          Assets
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
      
      
        
          Cash
        
        
        
        
          $1,315 
        
        
        
        
          $347 
        
      
      
        
          Accounts receivable
        
        
        
        
          7,247 
        
        
        
        
          4,060 
        
      
      
        
          Prepaid expenses and other
        
        
        
        
          268 
        
        
        
        
          196 
        
      
      
        
          Deferred income taxes
        
        
        
        
          16 
        
        
        
        
          38 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total current assets
        
        
        
        
          8,846 
        
        
        
        
          4,641 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Office equipment, net
        
        
        
        
          1,404 
        
        
        
        
          1,416 
        
      
      
        
          Debt issuance costs, net
        
        
        
        
          702 
        
        
        
        
          743 
        
      
      
        
          Patents and trademarks, net
        
        
        
        
          80 
        
        
        
        
          83 
        
      
      
        
          Domains, net
        
        
        
        
          13,146 
        
        
        
        
          13,398 
        
      
      
        
          Goodwill
        
        
        
        
          573 
        
        
        
        
          573 
        
      
      
        
          Deferred income taxes
        
        
        
        
          261 
        
        
        
        
          253 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Assets
        
        
        
        
          $25,012 
        
        
        
        
          $21,107 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities and Stockholders' Equity
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
      
      
        
          Revolving line of credit
        
        
        
        
          - 
        
        
        
        
          518 
        
      
      
        
          Accrued liabilities
        
        
        
        
          2,203 
        
        
        
        
          1,002 
        
      
      
        
          Accounts payable
        
        
        
        
          1,787 
        
        
        
        
          1,793 
        
      
      
        
          Deferred revenue
        
        
        
        
          238 
        
        
        
        
          60 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total current liabilities
        
        
        
        
          4,228 
        
        
        
        
          3,373 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Notes payable, net of discount
        
        
        
        
          6,585 
        
        
        
        
          6,561 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Liabilities
        
        
        
        
          10,813 
        
        
        
        
          9,934 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders' equity:
        
        
        
        
        
        
        
        
        
      
      
        
          Preferred Stock
        
        
        
        
          - 
        
        
        
        
          - 
        
      
      
        
          Common Stock
        
        
        
        
          25 
        
        
        
        
          25 
        
      
      
        
          Additional paid-in capital
        
        
        
        
          9,100 
        
        
        
        
          8,713 
        
      
      
        
          Retained earnings
        
        
        
        
          5,074 
        
        
        
        
          2,435 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total stockholders' equity
        
        
        
        
          14,199 
        
        
        
        
          11,173 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total liabilities and stockholders' equity
        
        
        
        
          $25,012 
        
        
        
        
          $21,107 
        
      
    
    
      
        
           
        
      
      
        
          INTERSEARCH GROUP, INC. AND SUBSIDIARIES
        
      
      
        
          Reconciliation of GAAP Net Earnings to Earnings Before
        
      
      
        
          Interest, Taxes, Depreciation, and Amortization (EBITDA)
        
      
      
        
          (In thousands)
        
      
      
        
          (Unaudited)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Three Months Ended
        
      
      
        
        
        
        
        
          March 31,
        
      
      
        
        
        
        
        
          2007 
        
        
           
        
        
          2006 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net earnings
        
        
        
        
          $
        
        
          2,639 
        
        
        
        
          $
        
        
          2,077 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income taxes
        
        
        
        
           
        
        
          1,753 
        
        
           
        
        
           
        
        
          1,401 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings before income taxes
        
        
        
        
        
        
          4,392 
        
        
        
        
        
        
          3,478 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest expense
        
        
        
        
           
        
        
          306 
        
        
           
        
        
           
        
        
          27 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings from operations
        
        
        
        
        
        
          4,698 
        
        
        
        
        
        
          3,505 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Depreciation
        
        
        
        
        
        
          105 
        
        
        
        
        
        
          36 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Amortization
        
        
        
        
           
        
        
          255 
        
        
           
        
        
           
        
        
          217 
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Earnings before interest, taxes, depreciation, amortization 
            (EBITDA)
          
        
        
        
        
          $
        
        
          5,058 
        
        
           
        
        
          $
        
        
          3,758