Harris Interactive Inc. (NASDAQ: HPOL), a leading innovative
global market research firm, today announced its financial results
for the third quarter of fiscal 2010. Kimberly Till, President and
Chief Executive Officer of Harris Interactive, said, “While I
believe that we have made significant progress throughout this
fiscal year in executing on many of our key initiatives, as well as
improving our overall financial performance, we still have more
work to do to achieve greater revenue and profit growth. I believe
that we have maintained an appropriate cost structure, so our
primary focus right now is on building our revenue base, especially
in the U.S. I am working closely with our U.S. industry sector
heads to significantly increase our sales activity and pipeline to
help drive as much revenue as possible in Q4 and beyond. One of the
keys to increasing revenue will be the successful roll-out of
several cutting edge offerings that we have recently commercialized
and are now introducing to the market.”
Financial Highlights
For the Three
Months For the Nine Months Ended
Ended March 31, March 31, $ in millions –
unaudited
2010 2009 2010
2009
Revenue $ 41.2 $ 39.9
$ 124.8 $ 140.9 Operating loss $
(0.9 ) $ (7.3 ) $ (0.7 ) $ (56.4 ) Net loss
$ (1.6 ) $ (6.7 ) $ (0.9 ) $ (74.6 )
Fully diluted net loss per share $ (0.03 ) $ (0.12 )
$ (0.02 ) $ (1.39 )
Adjusted EBITDA* $ 1.3
$ (4.8 ) $ 6.0 $ (7.4 )
Adjusted EBITDA* with add-back of
restructuringand other charges
$ 1.4 $ 0.5 $ 6.7
$ 4.4
*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 third
quarter of fiscal 2010 was $41.2 million, as compared with
$39.9 million for the same prior year period. Revenue for the
third quarter of fiscal 2010 included a favorable foreign currency
impact of $1.7 million.
- Operating loss for the third
quarter of fiscal 2010 was $(0.9) million, as compared with an
operating loss of $(7.3) million for the same prior year
period.
- Net loss for the third quarter
of fiscal 2010 was $(1.6) million, or $(0.03) per fully diluted
share, as compared with a net loss of $(6.7) million, or $(0.12)
per fully diluted share for the same prior year period.
- Bookings for the third quarter
of fiscal 2010 were $44.7 million, as compared with $37.9
million for the same prior year period. Excluding a favorable
foreign currency impact of $4.5 million, bookings for the third
quarter were up 6% compared with the same prior year period.
- Secured revenue (formerly
referred to as backlog) for the third quarter of fiscal 2010 was
$54.6 million, as compared with $56.0 million for the
same prior year period.
- Non-GAAP Adjusted EBITDA* with
add-back of restructuring and other charges for the third quarter
of fiscal 2010 was $1.4 million, as compared with
$0.5 million for the same prior year period.
Ms. Till continued, “I previously laid out our three phase
roadmap for the next few years. The first phase is to turnaround
all the key parts of our business. I am very pleased with the
progress that we have made in our international operations. France
and Germany are having a very strong year with sales growth at both
new and existing clients. We have put a strong sales team and
process in place in the U.K., which should deliver stronger revenue
and profit performance over the coming quarters. The management and
operational changes we recently made in Asia are already having a
positive effect in the region. Additionally, our Canadian business
is showing positive sales growth. In the U.S., we are still making
improvements to the business that are not fully implemented but
should help improve our financial performance over time. These
improvements, which include putting in place stronger management
and sales resources and focusing on selling more differentiated
products and solutions with higher margins, have shown positive
early results but are unlikely to fully impact the numbers until a
few quarters from now.”
Ms. Till concluded, “The second phase of our roadmap involves
creating economies of scale to deliver faster turnaround of client
work with improved quality and reduced cost, and developing and
commercializing innovative products, solutions, and capabilities
that command premium pricing and enable us to be more competitive
in the market. We’ve made significant progress in these areas. We
are in the process of implementing many operational improvements
and have recently commercialized and are now introducing to the
market several cutting edge client offerings that we believe will
create sales opportunities at new clients and stimulate incremental
sales at existing clients over time. Once we’ve returned the
company to a leadership position in the market research industry,
we’ll focus on the final phase of our roadmap, expanding into new
and related market segments.”
Third Quarter Results Conference Call and Webcast
Access
Kimberly Till, President and CEO, will host a conference call to
discuss these results on Thursday, April 29, 2010, at 5:00 p.m. ET.
Formal remarks will be followed by a question and answer
session.
To access the conference call, please dial toll-free
877.303.9858 in the United States and Canada, or
408.337.0139 internationally.
A live webcast of the conference call also will be accessible
via the Investor Relations section of our website at
http://ir.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 http://ir.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 http://ir.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 one of the world’s leading custom market
research firms, leveraging research, technology, and business
acumen to transform relevant insight into actionable foresight.
Known widely for the Harris Poll and for pioneering innovative
research methodologies, Harris offers expertise in a wide range of
industries including healthcare, technology, public affairs,
energy, telecommunications, financial services, insurance, media,
retail, restaurant, and consumer package goods. Serving clients in
over 215 countries and territories through our North American,
European, and Asian offices and a network of independent market
research firms, Harris specializes in delivering research solutions
that help us – and our clients – stay ahead of what’s next. For
more information, please visit www.harrisinteractive.com.
HPOL - E
HARRIS INTERACTIVE INC. CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited) March 31, June 30,
2010 2009 Assets Cash and cash
equivalents $ 12,697 $ 16,752 Marketable securities 501 1,010
Accounts receivable, net 23,274 23,163 Unbilled receivables 6,668
6,520 Prepaids and other current assets 6,146 7,244 Deferred tax
assets 785 632 Total current assets 50,071
55,321 Property, plant and equipment, net 5,570 8,015 Other
intangibles, net 17,587 18,540 Deferred tax assets 279 284 Other
assets 1,896 2,367 Total assets $ 75,403
$ 84,527
Liabilities and Stockholders'
Equity Accounts payable $ 7,111 $ 6,738 Accrued expenses 16,325
18,349 Current portion of long-term debt 6,925 6,925 Deferred
revenue 11,346 12,531 Total current
liabilities 41,707 44,543 Long-term debt 10,388 15,581
Deferred tax liabilities 2,864 3,163 Other long-term liabilities
2,225 3,117 Total stockholders' equity 18,219
18,123 Total liabilities and stockholders' equity $ 75,403
$ 84,527
HARRIS INTERACTIVE INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except share and per
share data) (Unaudited)
Three months ended Nine months ended March 31,
March 31, 2010 2009 2010
2009 Revenue from services $ 41,203 $ 39,917 $
124,767 $ 140,857 Operating expenses: Cost of services
26,569 24,912 79,083 87,474 Selling, general and administrative
13,829 15,159 40,641 51,884 Depreciation and amortization 1,656
1,832 5,130 5,827 Restructuring and other charges 92 5,341 623
11,813 Goodwill impairment charge - -
- 40,250 Total
operating expenses 42,146 47,244
125,477 197,248 Operating
loss (943 ) (7,327 ) (710 ) (56,391 ) Operating margin -2.3 % -18.4
% -0.6 % -40.0 % Interest and other income (30 ) (54 ) (57 )
(379 ) Interest expense 524 647
1,560 2,477 Loss
from operations before income taxes (1,437 ) (7,920 ) (2,213 )
(58,489 ) Provision (benefit) for income taxes 121
(1,209 ) (1,354 ) 16,105
Net loss $ (1,558 ) $ (6,711 ) $ (859 )
$ (74,594 ) Basic
net loss per share $ (0.03 ) $ (0.12 ) $ (0.02 ) $ (1.39 )
Diluted net loss per
share $ (0.03 ) $ (0.12 ) $ (0.02 ) $ (1.39 )
Weighted average shares outstanding - Basic
54,247,286 53,716,854
54,027,408 53,480,815 Diluted
54,247,286 53,716,854
54,027,408 53,480,815
Reconciliation
of GAAP Income to EBITDA and Adjusted EBITDA
Three months ended Nine months ended
March 31, March 31, 2010
2009 2010 2009 GAAP net loss $
(1,558 ) $ (6,711 ) $ (859 ) $ (74,594 ) Interest income (30 ) (54
) (57 ) (379 ) Interest expense 524 647 1,560 2,477 Provision for
income taxes 121 (1,209 ) (1,354 ) 16,105 Depreciation and
amortization 2,011 2,206
6,225 6,944 EBITDA $ 1,068 $
(5,121 ) $ 5,515 $ (49,447 ) Goodwill impairment charge - - 40,250
Stock-based compensation * 203 298
523 1,752 Adjusted
EBITDA $ 1,271 $ (4,823 ) $ 6,038
$ (7,445 ) Adjusted EBITDA $ 1,271 $ (4,823 ) $ 6,038
$ (7,445 ) Add-back of restructuring and other charges 92
5,341 623
11,813
Adjusted EBITDA with add-back of
restructuring and othercharges
$ 1,363 $ 518 $ 6,661 $
4,368
*Stock-based compensation expense
represents the cost of stock-based compensation awarded by
theCompany to its employees under FASB Statement 123(R),
"Share-Based Payments".
©2010 Harris Interactive Inc. All rights reserved.
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