XO Group Reports Fourth Quarter and Full Year 2016 Financial Results

Dienstag, 28.02.2017 22:05 von

PR Newswire

NEW YORK, Feb. 28, 2017

NEW YORK, Feb. 28, 2017 /PRNewswire/ -- XO Group Inc. (the "Company") (NYSE: XOXO, xogroupinc.com),  today reported financial results for the three months and full year ended December 31, 2016.

Total revenue for the fourth quarter of 2016 was $41.0 million, up 8% compared to the same period in the prior year. Net income for the quarter was $3.4 million or $0.13 per diluted share compared to a loss per share of $0.09 in the prior year quarter. The Company's balance sheet at December 31, 2016 reflects cash and cash equivalents of $105.7 million compared to $88.5 million at December 31, 2015.

"During the year, we made significant improvements to our consumer-facing products and our local wedding vendor marketplace that improved engagement and drove more value to our couples and our wedding pros. In 2017, we look forward to continuing to capitalize on our market leading position in weddings by more deeply engaging the couples we serve, intensifying our local sales efforts, and expanding guest and registry services," said Mike Steib, Chief Executive Officer.

Long-Term Financial Targets

The Company's long-term financial targets are double digit revenue growth rates and gross margins of approximately 90-95%, yielding adjusted EBITDA margins of 20%.

 

XO GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)

 

Three months ended December 31,

Twelve months ended December 31,

2016

2015

2016

2015

Net revenue:













National online advertising

$

11,789



$

10,545



$

38,945



$

35,764

Local online advertising

18,368



17,481



70,239



65,941

  Online advertising

$

30,157



$

28,026



$

109,184



$

101,705

Transactions

5,079



3,434



22,819



14,700

Merchandise

—



—



—



878

Publishing and other

5,772



6,686



20,113



24,361

Total net revenue

41,008



38,146



152,116



141,644

Cost of revenue:













Online advertising

1,119



647



3,665



2,235

Merchandise

—



—



—



881

Publishing and other

1,920



2,189



6,089



7,271

Total cost of revenue

3,039



2,836



9,754



10,387

Gross profit

37,969



35,310



142,362



131,257

Operating expenses:













Product and content development

11,726



11,051



44,668



40,351

Sales and marketing

13,953



11,737



49,772



43,420

General and administrative

5,642



6,345



23,666



24,440

Asset impairment charges

5



245



18



266

Depreciation and amortization

1,557



1,517



6,372



5,544

Total operating expenses

32,883



30,895



124,496



114,021

Income from operations

5,086



4,415



17,866



17,236

Gain (loss) in equity interests

(118)



729



(328)



520

Interest and other income (expense), net

117



(3,972)



146



(4,023)

Income before income taxes

5,085



1,172



17,684



13,733

Income tax expense

1,663



3,330



5,564



8,269

Net income

$

3,422



$

(2,158)



$

12,120



$

5,464

















Net income per share:













Basic

$

0.14



$

(0.09)



$

0.48



$

0.22

Diluted

$

0.13



$

(0.09)



$

0.47



$

0.21

Weighted average number of shares used in calculating net earnings per share:













Basic

25,316



25,174



25,314



25,164

Diluted

25,698



25,174



25,640



25,530

 

 

XO GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)

 

December 31,

2016

2015

ASSETS

Current assets:







Cash and cash equivalents

$

105,703



$

88,509

Accounts receivable, net of allowance of $1,386 and $2,668 at December 31, 2016 and December 31, 2015, respectively

20,182



20,475

Prepaid expenses and other current assets

5,247



5,341

Total current assets

131,132



114,325

Long-term restricted cash

1,181



2,598

Property and equipment, net

12,130



13,251

Intangible assets, net

4,154



4,817

Goodwill

48,678



47,396

Deferred tax assets, net

9,918



11,578

Investments

2,685



2,719

Other assets

308



57

Total assets

$

210,186



$

196,741

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:







Accrued compensation and employee benefits

$

6,164



$

6,036

Accounts payable and accrued expenses

7,515



6,127

Deferred revenue

16,752



18,640

Total current liabilities

30,431



30,803

Deferred rent

3,720



4,486

Other liabilities

1,485



1,985

Total liabilities

35,636



37,274

Commitments and contingencies









Stockholders' equity:







Preferred stock, $0.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding as of December 31, 2016 and 2015, respectively

—



—

Common stock, $0.01 par value; 100,000,000 shares authorized and 26,304,925 and 26,235,824 shares issued and outstanding at December 31, 2016 and 2015, respectively

264



264

Additional paid-in-capital

178,959



173,564

Accumulated deficit

(4,673)



(14,361)

Total stockholders' equity

174,550



159,467

Total liabilities and stockholders' equity

$

210,186



$

196,741

 

 

XO GROUP INC.

NON-GAAP TABLE

For the Years Ended December 31, 2016 and 2015

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)



                              Years Ended December 31,

2016

2015



GAAP Actual

Adjustments

Non GAAP Results

GAAP Actual

Adjustments

Non GAAP Results

Adjusted Net Income and EPS Reconciliation



















Revenue

152,116

—



152,116



141,644

—



141,644



Cost of Revenues

9,754

—



9,754



10,387

—



10,387



Operating Expenses

—

















Product & Content Development

44,668

—



44,668



40,351

(11)

a

40,340



Sales & Marketing

49,772

—



49,772



43,420

(265)

a

43,155



General & Administrative

23,666

—



23,666



24,440

(158)

a

24,282



Depreciation & Amortization

6,372

—



6,372



5,544

—



5,544



Impairments

18

—



18



266

(266)

b

—



Total Operating Expenses

124,496

—



124,496



114,021

(700)



113,321

























Operating Income

17,866

—



17,866



17,236

700



17,936

























Interest & Other Income/(Loss), Net

146

—



146



(4,023)

4,000

c

(23)



Gain/(Loss) in Equity Interest

(328)

—



(328)



520

(765)

d

(245)



Provision for Taxes on Income

5,564

1,423

f

6,987



8,269

(1,202)

e

7,067



Net Profit/(Loss)

12,120

(1,423)



10,697



5,464

5,137



10,601



Amounts per Share - Diluted

0.47

(0.05)



0.42



0.21

0.21



0.42



Weighted Average Number of Shares Outstanding - Diluted

25,640





25,640



25,530





25,530

























Adjusted EBITDA Reconciliation









































Operating Income

17,866

—



17,866



17,236

700



17,936



Depreciation & Amortization (g)

6,372

—



6,372



5,544

—



5,544



Stock Based Compensation (h)

8,359

—



8,359



5,992

—



5,992



Adjusted EBITDA

32,597

—



32,597



28,772

700



29,472



 

a.             

To eliminate costs associated with the exit of our merchandising operations, including (i) severance of approximately $0.2 million recorded in general and administrative and (ii) rent acceleration and other closure costs of $0.2 million recorded in sales and marketing.

b.

To eliminate impairment charges included in Asset Impairment Charges.

c. 

To eliminate Touch Media impairment expense, included in Interest and other income (expense), net.

d. 

To eliminate a gain on our existing equity method investment in GigMasters, included in Gain (Loss) in Equity Interests.

e. 

To adjust income tax expense to our effective tax rate, excluding discrete items, of 40.0% for the year ended December 31, 2015,

f.   

To eliminate discrete items, including a one-time tax benefit associated with the resolution of an uncertain tax position for a former subsidiary in the 2016 period, as well as a one-time benefit associated with a foreign tax incentive deduction in the 2016 period.

g. 

To eliminate depreciation and amortization expense.

h.  

To eliminate stock-based compensation expense.

 

 

 

XO GROUP INC.

NON-GAAP TABLE

For the Quarters Ended December 31, 2016 and 2015

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)

Quarters Ended December 31,

2016

2015

GAAP Actual

Adjustments

Non GAAP Results

GAAP Actual

Adjustments

Non GAAP Results

Adjusted Net Income and EPS Reconciliation

















Revenue

41,008

—



41,008



38,146





38,146

Cost of Revenues

3,039

—



3,039



2,836





2,836

Operating Expenses

—















Product & Content Development

11,726

—



11,726



11,051





11,051

Sales & Marketing

13,953

—



13,953



11,737





11,737

General & Administrative

5,642

—



5,642



6,345





6,345

Depreciation & Amortization

1,557

—



1,557



1,517





1,517

Impairments

5

—



5



245

(245)

a

—

Total Operating Expenses

32,883

—



32,883



30,895

(245)



30,650





















Operating Income

5,086

—



5,086



4,415

245



4,660





















Interest & Other Income/(Loss), Net

117

—



117



(3,972)

4,000

b

28

Gain/(Loss) in Equity Interest

(118)

—



(118)



729

(765)

c

(36)

Provision for Taxes on Income

1,663

295

e

1,958



3,330

(1,469)

d

1,861

Net Profit/(Loss)

3,422

(295)



3,127



(2,158)

4,949



2,791

Amounts per Share - Diluted

0.13

(0.01)



0.12



(0.09)

0.20



0.11

Weighted Average Number of Shares Outstanding - Diluted

25,698





25,698



25,174





25,174





















Adjusted EBITDA Reconciliation





































Operating Income

5,086

—



5,086



4,415

245



4,660

Depreciation & Amortization (f)

1,557

—



1,557



1,517

—



1,517

Stock Based Compensation (g)

2,558

—



2,558



1,740

—



1,740

Adjusted EBITDA

9,201

—



9,201



7,672

245



7,917

 

a)

To eliminate impairment charges included in Asset Impairment Charges.

b)

To eliminate Touch Media impairment expense, included in Interest and other income (expense), net.

c)

To eliminate a gain on a pre-existing equity method investment in GigMasters, included in Gain(Loss) in Equity Interests.

d)

To adjust income tax expense to our 2015 effective tax rate, excluding discrete items, of 40.0%

e)

To eliminate a one time benefit associated with the resolution of an uncertain tax position.

f) 

To eliminate depreciation and amortization expense.

g)

To eliminate stock-based compensation expense.

 

 

 

XO GROUP INC.

SUPPLEMENTAL DATA TABLES (UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)

Three months ended December 31,

Twelve months ended December 31,

2016

2015

2016

2015

Net cash provided by operating activities

$

7,302



$

8,989



$

27,390



$

20,548

Less: capital expenditures

(1,250)



(772)



(4,297)



(3,549)

Free cash flow

$

6,052



$

8,217



$

23,093



$

16,999

 

TheKnot.com Local Online Advertising Metrics

Q4 2016

Q4 2015

Vendor Count(a)

23,662

24,340

Retention Rate(a);(b)

68.0%

73.8%

Avg. Revenue/Vendor(a)

$2,804

$2,628

 

(a)     

Calculated on a trailing twelve-month basis.

(b)    

Previously disclosed as churn rate. Retention rate calculated as one less churn rate.

 

Stock Based Compensation

The Company included total stock-based compensation expense related to all its stock awards in various operating expense categories for the three and twelve months ended December 31, 2016 and 2015, as follows:

Three months ended December 31,

Twelve months ended December 31,

2016

2015

2016

2015

(In Thousands)

Product and content development

$654

$546

$2,324

$1,817

Sales and marketing

831

372

2,057

1,384

General and administrative

1,073

822

3,978

2,791

Total stock-based compensation

$2,558

$1,740

$8,359

$5,992

 

Conference Call and Replay Information

XO Group Inc. will host a conference call with investors at 4:30 p.m. ET on Tuesday, February 28, 2017, to discuss its fourth quarter and full year 2016 financial results. Participants should dial (877) 201-0168 and use Conference ID# 57838274 at least 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 Company's website, accessible at http://ir.xogroupinc.com. To access the webcast, participants should visit XO Group's website at least 15 minutes prior to the conference call in order to download or install any necessary audio software.

A replay of the webcast will also be archived on the Company's website approximately two hours after the conference call ends.

About XO Group Inc.

XO Group Inc.'s (NYSE: XOXO; xogroupinc.com)  mission is to help people navigate and truly enjoy life's biggest moments together. Our multi-platform brands guide couples through transformative life stages - from getting married with The Knot, to moving in together with The Nest, to having a baby with The Bump, and helping bring important celebrations to life with entertainment vendors from GigMasters. The Company is publicly listed on the New York Stock Exchange (NYSE: XOXO) and is headquartered in New York City.

Forward Looking Statements

This release may contain projections or other forward-looking statements regarding future events or our future financial performance or estimates regarding third parties. These statements are only estimates or predictions and reflect our current beliefs and expectations. Actual events or results may differ materially from those contained in the estimates, 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 we base our expectations may change prior to the end of the quarter. Although these expectations may change, we will not necessarily inform you if they do. Our policy is to provide 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) our operating results may fluctuate, are difficult to predict and could fall below expectations, (ii) our transactions business is dependent on third party participants, whose lack of performance could adversely affect our results of operations, (iii) our ongoing investment in new businesses and new products, services, and technologies is inherently risky, and could disrupt our ongoing business and/or fail to generate the results we are expecting, (iv) we may be unable to develop solutions that generate revenue from advertising and other services delivered to mobile phones and wireless devices, (v) our businesses could be negatively affected by changes in Internet search engine algorithms, (vi) intense competition in our markets may adversely affect revenue and results of operations, (vii) we may be subject to legal liability associated with providing online services or content, (viii) fraudulent or unlawful activities on our marketplace could harm our business and consumer confidence in our marketplace, (ix) we are subject to payments-related risks, (x) we cannot assure you that our publications will be profitable, and (xi) other factors detailed in documents we file 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.

Non-GAAP Financial Measures

This press release includes information about certain financial measures that are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP" or "U.S. GAAP"), including adjusted EBITDA, adjusted net income, adjusted net income per diluted share and free cash flow. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP.  Our use of these terms may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

Management defines its non-GAAP financial measures as follows:

  • Adjusted EBITDA represents GAAP net income (loss) adjusted to exclude, if applicable: (1) income tax expense (benefit), (2) depreciation and amortization, (3) stock-based compensation expense, (4) asset impairment charges, (5) loss in equity interests, (6) interest and other income (expense), net and (7) other items affecting comparability during the period.
  • Adjusted net income represents GAAP net income (loss), adjusted for items that impact comparability for incremental or unusual costs incurred in the current period, which may include: (1) asset impairment charges, (2) executive separation and other severance charges, (3) non-recurring foreign taxes, interest and penalties, (4) costs related to exit activities and (5) discrete tax items.   
  • Adjusted net income per diluted share represents adjusted net income (as defined above), divided by the diluted weighted-average number of shares outstanding for the period.
  • Free cash flow represents GAAP net cash provided by operations, less capital expenditures.

Management believes that these non-GAAP financial measures, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provide useful information about our period-over-period growth and provide additional information that is useful for evaluating our operating performance. However, adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per diluted share and free cash flow are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered substitutes for or superior to net income (loss) and net income (loss) per diluted share and net cash provided by operating activities as indicators of operating performance.

A reconciliation of GAAP to Non-GAAP financial measures is included in this press release.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/xo-group-reports-fourth-quarter-and-full-year-2016-financial-results-300415231.html

SOURCE XO Group Inc.

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