United Online Announces Preliminary Financial Results for Q1 2008
April 30 2008 - 8:10AM
Business Wire
United Online, Inc. (Nasdaq:UNTD), a leading provider of consumer
Internet and media services, today announced preliminary financial
results for its first quarter ended March 31, 2008 that exceed its
previous financial guidance. Summary of Preliminary Q1 2008
Financial Results: Based on preliminary unaudited financial data,
the company�s updated expectations for the first quarter ended
March 31, 2008 are presented in the following table and described
below. � (in millions) Preliminary Results � Previous Guidance for
Q1 2008 for Q1 2008 � Revenues $121.0 ? $121.8 $116.0 ? $120.0 GAAP
Operating Income $19.9 ? $20.5 $11.8 ? $15.8 Adjusted OIBDA(1)
$38.1 ? $38.7 $30.0 ? $34.0 The company expects to report revenues
in the range of $121.0 million to $121.8 million, versus previous
guidance of between $116.0 million to $120.0 million. GAAP
operating income is expected to be in the range of $19.9 million to
$20.5 million, versus previous guidance of between $11.8 million to
$15.8 million. Adjusted OIBDA(1) is expected to be in the range of
$38.1 million to $38.7 million, versus previous guidance of between
$30.0 million to $34.0 million. The company expects to report GAAP
diluted net income per share in the range of $0.18 to $0.19, and
adjusted diluted net income per share(2) in the range of $0.30 to
$0.31. The company had not previously provided guidance for diluted
net income per share and adjusted diluted net income per share.
These financial results are preliminary and are subject to
potential revision. As previously announced, United Online will
formally release its first quarter financial results on May 6, 2008
after the market close. The company�s decision to release
preliminary financial results reflects management�s desire to
address its recent financial performance during an investor
conference call and Webcast scheduled in connection with a
strategic announcement. As announced separately on April 30, 2008,
United Online and FTD Group, Inc. have entered into a definitive
agreement providing for the acquisition of FTD Group, Inc. by
United Online, Inc. Additional details regarding the announcement
and the investor Webcast are available within the �investors�
section of United Online�s Web site located at
www.unitedonline.com. Reconciliation of GAAP Operating Income to
Adjusted OIBDA(1): The table below reconciles the company's
preliminary financial results and prior guidance for operating
income, a GAAP measure, to adjusted OIBDA(1). First Quarter 2008 �
Q1 2008 � Prior Q1 2008 � Preliminary Results Guidance GAAP
Operating Income $19.9 ? $20.5 $11.8 ? $15.8 Depreciation 5.2 5.2
Amortization 2.8 2.6 Stock-based compensation 10.0 9.9
Restructuring and related charges 0.2 0.5 Adjusted OIBDA(1) $38.1 ?
$38.7 $30.0 ? $34.0 Reconciliation of GAAP Diluted Net Income Per
Share to Adjusted Diluted Net Income Per Share: First Quarter 2008
� Q1 2008 � Preliminary Results GAAP Net Income $12.7 ? $13.1
Stock-based compensation 10.0 Amortization of intangible assets 2.8
Restructuring and related charges 0.2 Income tax effect of
adjusting entries (3.8) Adjusted net income (2) $21.9 ? $22.3 � �
GAAP diluted net income per share $0.18 ? $0.19 Adjusted diluted
net income per share(2) $0.30 ? $0.31 � � Shares used to calculate
GAAP diluted net income per share 69.7 Shares used to calculate
adjusted diluted net income per share(a) 72.2 (a) Includes the
adjustment of shares used to calculate diluted net income per share
resulting from the elimination of stock-based compensation.
Definitions of Non-GAAP Measures: (1) Adjusted operating income
before depreciation and amortization (adjusted OIBDA) is defined by
the company as operating income before depreciation; amortization;
stock-based compensation; restructuring and related charges; and
impairment of goodwill, intangible assets and long-lived assets.
The company�s definition of adjusted OIBDA has been modified from
time to time. Management believes that because adjusted OIBDA
excludes (1) certain non-cash expenses (such as depreciation,
amortization, stock-based compensation, and impairment of goodwill,
intangible assets and long-lived assets); and (2) expenses that are
not reflective of the company's core operating results over time
(such as restructuring and related charges), this measure provides
investors with additional useful information to measure the
company's financial performance, particularly with respect to
changes in performance from period to period. Management uses
adjusted OIBDA to measure the company's performance. The company's
board of directors has used this measure in determining certain
compensation incentives for certain members of the company's
management. Adjusted OIBDA is not determined in accordance with
accounting principles generally accepted in the United States of
America (�GAAP�) and should be considered in addition to, not as a
substitute for or superior to, financial measures determined in
accordance with GAAP. A limitation associated with the use of
adjusted OIBDA is that it does not reflect the periodic costs of
certain tangible and intangible assets used in generating revenues
in the company's business. Management evaluates the costs of such
tangible and intangible assets through other financial activities
such as evaluations of capital expenditures and purchase
accounting. An additional limitation associated with this measure
is that it does not include stock-based compensation expenses
related to the company's workforce. Management compensates for this
limitation by providing a summary of stock-based compensation
expenses on the face of the consolidated statements of operations.
A further limitation associated with the use of this measure is
that it does not reflect the costs of restructuring and related
charges and impairment of goodwill, intangible assets and
long-lived assets. Management compensates for this limitation by
providing supplemental information about restructuring and related
charges and impairment charges within its financial press releases
and SEC filings, when applicable. An additional limitation
associated with the use of this measure is that the term adjusted
OIBDA does not have a standardized meaning. Therefore, other
companies may use the same or a similarly named measure but exclude
different items or use different computations, which may not
provide investors a comparable view of the company's performance in
relation to other companies. Management compensates for this
limitation by presenting the most comparable GAAP measure,
operating income, directly ahead of adjusted OIBDA within its
financial press releases and by providing a reconciliation that
shows and describes the adjustments made. 2) Adjusted net income is
defined by the company as net income before the after-tax effect
of: stock-based compensation; amortization of intangible assets;
restructuring and related charges; impairment of goodwill,
intangible assets and long-lived assets; and the cumulative effect
of a change in accounting principle as a result of the adoption of
SFAS 123R, and the re-measurement of certain deferred tax assets.
Management believes that adjusted net income and adjusted diluted
net income per share provide investors with additional useful
information to measure the company's financial performance,
particularly with respect to changes in performance from period to
period, because these measures are exclusive of (1) certain
non-cash expenses (such as stock-based compensation, amortization,
the cumulative effect of change in accounting principle, and
impairment of goodwill, intangible assets and long-lived assets);
and (2) expenses that are not reflective of the company's core
results over time (such as restructuring and related charges).
Management also uses adjusted net income and adjusted diluted net
income per share for this purpose. Adjusted net income and adjusted
diluted net income per share are not determined in accordance with
GAAP and should be considered in addition to, not as a substitute
for or superior to, financial measures determined in accordance
with GAAP. The limitations of adjusted net income and adjusted
diluted net income per share are that, similar to adjusted OIBDA,
they do not include certain costs, and the terms adjusted net
income and adjusted diluted net income per share do not have
standardized meanings. Therefore, other companies may use the same
or similarly named measures but exclude different items or use
different computations, which may not provide investors a
comparable view of the company's performance in relation to other
companies. Management compensates for this limitation by presenting
the most comparable GAAP measures, net income and diluted net
income per share, directly ahead of adjusted net income and
adjusted diluted net income per share within its financial press
releases and by providing a reconciliation that shows and describes
the adjustments made. About United Online: United Online, Inc.
(Nasdaq:UNTD) is a leading provider of consumer Internet and media
services. The company's Classmates Media services include online
social networking (Classmates) and online loyalty marketing
(MyPoints). Its Communications services include Internet access
(NetZero, Juno) and email. United Online is headquartered in
Woodland Hills, CA, with offices in New York, NY; Fort Lee, NJ;
Renton, WA; San Francisco, CA; Schaumburg, IL; Erlangen, Germany;
and Hyderabad, India. For more information about United Online,
please visit www.unitedonline.com. Cautionary Information Regarding
Forward-Looking Statements: This release contains forward-looking
statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995, as amended,
based on current expectations, estimates and projections about the
company�s operations, industry, financial condition, performance
and results of operations. Statements containing words such as
"guidance," "may," "believe," "anticipate," "expect," "intend,"
"plan," "project," "projections," "business outlook," and
"estimate" or similar expressions constitute forward-looking
statements. In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking statements. These statements include, without
limitation, expectations regarding future: financial performance;
depreciation and amortization; stock-based compensation; and
restructuring and related charges. Any such forward-looking
statements are not guarantees of future performance or results and
involve risks and uncertainties that may cause actual performance
and results to differ materially from those predicted. Reported
results should not be considered an indication of future
performance. Potential risks and uncertainties include, among
others: the effect of competition; the company's inability to
retain its free and pay accounts and the rate at which free and pay
accounts sign up for or use the company's services; changes in pay
accounts and the mix of pay accounts; the company�s inability to
increase or maintain its advertising revenues; the effects of
changes in marketing expenditures or shifts in marketing
expenditures; the effects of seasonality; changes in stock-based
compensation; changes in amortization or depreciation due to a
variety of factors; potential write down, reserve against or
impairment of assets including receivables, goodwill, intangibles
or other assets including capitalized transaction-related costs
associated with the Classmates Media Corporation IPO; that the
company will incur additional restructuring and related charges or
currently anticipated restructuring and related charges will be
greater than anticipated; risks associated with the
commercialization of new services; changes in tax laws, the
company's business or other factors that would impact anticipated
tax benefits; the company's ability to successfully identify,
consummate and integrate acquisitions; problems associated with the
company's operations, systems or technologies; the company's
inability to retain key customers and key personnel; risks
associated with litigation; governmental regulation; and the
effects of discontinuing or discontinued business operations. In
addition, the payment of future dividends and any possible share
repurchases are discretionary and will be subject to determination
by the Board of Directors each quarter and from time to time
following its review of the company�s financial performance and
other factors. From time to time, the company considers
acquisitions or divestitures that, if consummated, could be
material. Forward-looking statements regarding financial metrics
are based upon the assumption that no such acquisition or
divestiture is consummated during the relevant periods. If an
acquisition or divestiture were consummated, actual results could
differ materially from any forward-looking statements. More
information about potential factors that could affect the company's
business and financial results is included in the company's annual
and quarterly reports filed with the Securities and Exchange
Commission (http://www.sec.gov), including, without limitation,
information under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Risk Factors."
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