Netratings (NASDAQ:NTRT)
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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/