Harris Interactive (NASDAQ:HPOL), a leading global custom market
research firm, today announced its financial results for the first
quarter of fiscal 2010.
“In what is historically the market research industry’s slowest
quarter of the year from a revenue standpoint, we achieved
operating income in our U.S. business for the second consecutive
quarter and showed a significant improvement in Adjusted EBITDA
compared with last year’s first quarter. This performance clearly
demonstrates the benefit of the cost reductions we implemented last
year,” commented Kimberly Till, President and Chief Executive
Officer of Harris Interactive. “We are heavily focused on
rebuilding revenues and controlling costs. Our cash position
remains strong, and I believe that we are on track to deliver on
our key strategic initiatives,” Till continued.
For the first quarter of fiscal 2010, the Company’s U.S.
business generated $0.8 million in operating income and the Company
achieved $2.1 million in Adjusted EBITDA, including the add-back of
$0.1 million in restructuring and other charges. At September 30,
2009, the Company held $14.4 million in cash and marketable
securities.
Financial Highlights
For the Three Months
EndedSeptember 30,
$ in millions – unaudited
2009 2008
Revenue $ 38.9 $ 50.3 Operating loss $
(0.4 ) $ (3.2 ) Net loss $ (0.6 ) $ (2.3 ) Fully diluted net loss
per share $ (0.01 ) $ (0.04 ) Adjusted EBITDA*
$ 1.9 $ 0.1 Adjusted EBITDA* with add-back of
restructuring and other charges $ 2.1 $ 0.7
*EBITDA is a non-GAAP measure.
Adjusted EBITDA, also a non-GAAP measure, is EBITDA less
stock-based compensation and non-cash goodwill impairment
charges.
Key Financial Statistics
- Total revenue for the first
quarter of fiscal 2010 was $38.9 million, as compared with
$50.3 million for the same period in the prior year,
representing a decline of $11.3 million or 23%. Included in
the decline was an unfavorable foreign exchange rate impact of $1.4
million or 13% of our overall revenue decline.
- Operating loss for the first
quarter of fiscal 2010 was $(0.4) million, as compared with an
operating loss of $(3.2) million for the same period in the prior
year. The operating loss for the first quarter of fiscal 2010
included $0.1 million in restructuring and other charges, compared
with $0.6 million for the same period in the prior year.
- Net loss for the first quarter
of fiscal 2010 was $(0.6) million, or $(0.01) per fully diluted
share, as compared with a net loss of $(2.3) million, or $(0.04)
per fully diluted share for the same period in the prior year.
- Non-GAAP Adjusted EBITDA* for
the first quarter of fiscal 2010 was $1.9 million, as compared with
$0.1 million for the same period in the prior year.
- Non-GAAP Adjusted EBITDA* with
add-back of restructuring and other charges for the first quarter
of fiscal 2010 was $2.1 million, as compared with
$0.7 million for the same period in the prior year.
- Bookings for the first quarter
of fiscal 2010 were $32.7 million, as compared with $43.5
million for the same period in the prior year.
- Secured revenue for the first
quarter of fiscal 2010 was $42.5 million, as compared with
$60.1 million for the same period in the prior year.
“I joined Harris about a year ago and am pleased with the
progress we have made thus far. We’ve recruited strong talent,
realigned our cost structure, and increased our financial stability
by successfully amending our credit agreement. We are now
implementing a comprehensive set of initiatives that should drive
revenue and cost efficiency in the months ahead. These include
developing a robust pipeline of innovative products, significantly
improving the efficiency of our workflow processes and systems, and
developing larger more strategic account relationships. Taken
together, these efforts should position us well in the coming
months,” concluded Till.
First Quarter Results Conference Call and Webcast
Access
Kimberly Till, President and CEO, will host a conference call to
discuss these results on Thursday, October 29, 2009, at 5:00 p.m.
EDT. Formal remarks will be followed by a question and answer
session.
To access the conference call, please dial toll-free
877.879.6209 in the United States and Canada, or
719.325.4771 internationally.
A live webcast of the conference call will also be accessible
via the Investor Relations section of our website at
www.harrisinteractive.com, where an archived replay of the webcast
will be available for 30 days following the call. No telephone
replay of the conference call will be provided. This media release
will be available under the Investor Relations section of our
website at www.harrisinteractive.com prior to the call.
Cautionary Note Regarding Forward Looking Statements
Certain statements in this press release and oral statements
made by the Company on its conference call in relation to this
release constitute forward-looking statements for purposes of the
safe harbor provisions under The Private Securities Litigation
Reform Act of 1995. These statements include, among others,
statements as to future economic performance, projections as to
financial items, estimates, and plans and objectives for future
operations, products and services. In some cases, you can identify
forward-looking statements by terminology such as, “may”, “should”,
“expects”, “plans”, “anticipates”, “feel”, “believes”, “estimates”,
“predicts”, “potential”, “continue”, “consider”, “possibility”, or
the negative of these terms or other comparable terminology. These
forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from those in the forward looking statements. Such risks and
uncertainties include, without limitation, risks detailed in the
“Risk Factors” section of the Company’s most recent Annual Report
on Form 10-K, as updated quarterly in our Quarterly Reports on Form
10-Q to reflect additional material risks. The Company has filed
its reports on Forms 10-K and 10-Q with the Securities and Exchange
Commission, and they are available under the Investor Relations
section of our website at www.harrisinteractive.com. Risks and
uncertainties also include the continued volatility of the global
macroeconomic environment and its impact on the Company and its
clients, the Company’s ability to sustain and grow its revenue
base, the Company’s ability to maintain and improve cost efficient
operations, the impact of reorganization and restructuring and
related charges, quarterly variations in financial results, actions
of competitors, the Company’s ability to develop and maintain
products and services attractive to the market and uncertainties
surrounding compliance with certain NASDAQ listing
requirements.
You are urged to consider these factors carefully in evaluating
such forward-looking statements and are cautioned not to place
undue reliance on them. The forward-looking statements are
qualified in their entirety by this cautionary statement.
About Harris Interactive
Harris Interactive is a global leader in custom market research.
With a long and rich history in multimodal research, powered by our
science and technology, we assist clients in achieving business
results. Harris Interactive serves clients globally through our
North American, European and Asian offices and a network of
independent market research firms. For more information, please
visit www.harrisinteractive.com.
HARRIS INTERACTIVE INC. CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited) September 30,2009
June 30,2009 Assets Cash and cash
equivalents
$
13,886
$
16,752
Marketable securities 507 1,010 Accounts receivable, net 22,737
23,163 Unbilled receivables 7,807 6,520 Prepaids and other current
assets 6,322 7,244 Deferred tax assets 685
632 Total current assets 51,944 55,321
Property, plant and equipment, net 7,156 8,015 Other intangibles,
net 18,646 18,540 Deferred tax assets 296 284 Other assets
2,097 2,367 Total assets $ 80,139
$ 84,527
Liabilities and
Stockholders' Equity Accounts payable $ 5,907 $ 6,738 Accrued
expenses 15,561 18,349 Current portion of long-term debt 6,925
6,925 Deferred revenue 13,362 12,531
Total current liabilities 41,755 44,543 Long-term
debt 13,850 15,581 Deferred tax liabilities 3,055 3,163 Other
long-term liabilities 2,809 3,117 Total stockholders' equity
18,670 18,123 Total liabilities
and stockholders' equity $ 80,139 $ 84,527
HARRIS INTERACTIVE INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except share and per
share data) (Unaudited) Three months
endedSeptember 30, 2009 2008
Revenue from services $ 38,935 $ 50,280 Operating expenses:
Cost of services 24,431 31,151 Selling, general and administrative
12,962 19,608 Depreciation and amortization 1,754 2,083
Restructuring and other charges 148 628
Total operating expenses 39,295
53,470 Operating loss (360 ) (3,190 ) Operating margin -0.9
% -6.3 % Interest and other income 15 190 Interest expense
(537 ) (455 ) Loss from operations
before income taxes (882 ) (3,455 ) Provision
(benefit) for income taxes (249 ) (1,194 ) Net
loss $ (633 ) $ (2,261 ) Basic and
diluted net loss per share: (0.01 ) (0.04 )
Weighted average shares outstanding - Basic and diluted
53,899,842 53,339,387
Reconciliation of GAAP Income to EBITDA and Adjusted
EBITDA Three months endedSeptember
30, 2009 2008 GAAP loss $ (633 ) $ (2,261
) Interest income (15 ) (190 ) Interest expense 537 455 Provision
(benefit) for income taxes (249 ) (1,194 ) Depreciation and
amortization 2,136 2,462 EBITDA
$ 1,776 $ (728 ) Stock-based compensation (1) 158
793 Adjusted EBITDA $ 1,934 $ 65
Adjusted EBITDA $ 1,934 $ 65 Add-back of
restructuring and other charges 148 628
Adjusted EBITDA with add-back of restructuring and other
charges $ 2,082 $ 693 (1) Stock-based
compensation expense represents the cost of stock-based
compensation awarded by the Company to its employees.
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