Market Leader, Inc. (NASDAQ: LEDR) today announced results for the
quarter ended June 30, 2010.
Financial Highlights
- Second quarter revenue of $5.8 million matched results posted
during the first quarter.
- Net loss of $3.1 million in the second quarter compared to a
net loss of $3.4 million in the first quarter.
- Adjusted EBITDA loss of $1.6 million in the second quarter
compared to $1.7 million in the first quarter.
- Cash, cash equivalents and short-term investments totaled $51.9
million at the end of the quarter, an increase of $2.9 million
compared to the end of the last quarter.
"We are very encouraged by the ringing endorsements we are
receiving from some of the industry's leading real estate franchise
networks," said Market Leader CEO Ian Morris. "Strong executive
support from partners representing thousands of sales opportunities
helped drive strong RealtyGenerator® adoption in the second quarter
and bodes well for deeper penetration in the second half."
Vision Growth and Business Transformation
Continues Second quarter revenue from Vision products of $3.4
million was $200,000 higher than the first quarter, and up more
than 60 percent over the level just a year ago. Vision revenue
growth in the second quarter was primarily driven by new agent
customers for Growth Leader™.
The positive impact of the company's Vision products -- which
now represent 58 percent of total revenue -- continues to be
evident in Market Leader's customer metrics. Average revenue per
customer rose for the fifth consecutive quarter to $367 per month
while customer retention was again among the highest levels
achieved in recent years. Vision was also the primary driver of new
customer additions which reached their highest level in seven
quarters.
Strong Traction with Brokerage Companies Via
Franchise Channel Market Leader signed more than 100 new
brokerage offices and teams to its Vision based RealtyGenerator
product via its franchise partners late in the second quarter. This
record level of quarterly additions from this channel had minimal
impact on the quarter but is expected to set the stage for top and
bottom line benefits in the coming quarters.
Business Outlook Market Leader reaffirmed
its expectation of revenue growth during the second half of this
year. Although the RealtyGenerator signings via franchise partners
had no material impact on second quarter, these new customers are
expected to drive higher revenue and advertising expenses in the
third quarter. Increased advertising costs and continued investment
in customer acquisition and support activities are expected to
contribute to a greater adjusted EBITDA loss in the third quarter
compared to the second.
Conference Call Market Leader will host a
conference call and live Webcast to discuss second quarter results
on Tuesday, August 3, 2010 at 4:30 p.m. Eastern time. To listen to
the live conference call, please dial (719) 457-2623. A live
Webcast of the call will be available from the Investor Relations
section of the company's Web site at http://www.marketleader.com.
An audio replay of the call will also be available to investors
beginning at 7:00 p.m. Eastern Time on August 3 until 7:00 p.m.
Eastern Time on August 8 by dialing (719) 457-0820 and entering the
passcode 4623936#.
Forward-Looking Statements This release
contains forward-looking statements relating to the company's
anticipated plans, products, services, and financial performance.
The words "believe," "expect," "anticipate," "intend" and similar
expressions identify forward-looking statements, but their absence
does not mean the statement is not forward-looking. These
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that could cause
actual results to differ materially from those anticipated in the
forward-looking statements. Factors that could affect the company's
actual results include its ability to retain and increase its
customer base, to continue to grow revenues from Vision products,
to continue to maintain current customer retention levels, to
respond to competitive threats and real estate market conditions,
to manage lead generation and other costs, to develop new products,
and to expand into new lines of business. Please refer to the
company's 2009 Form 10-K filed with the Securities and Exchange
Commission for a more detailed description of these and other risks
that could materially affect actual results. Given these risks and
uncertainties, you should not place undue reliance on these
forward-looking statements. The forward-looking statements are made
as of today's date and the company assumes no obligation to update
any such statements to reflect events or circumstances after the
date hereof.
Non-GAAP Measure Adjusted EBITDA is a
non-GAAP financial measure provided as a complement to results in
accordance with accounting principles generally accepted in the
United States of America ("GAAP"). Adjusted EBITDA is not a
substitute for measures determined in accordance with GAAP, and may
not be comparable to Adjusted EBITDA as reported by other
companies. Our use of the term "Adjusted EBITDA" refers to a
financial measure defined as earnings or loss before net interest,
income taxes, depreciation, amortization, equity in loss of an
unconsolidated subsidiary, and stock-based compensation. We believe
Adjusted EBITDA to be relevant and useful information to our
investors as this measure is an integral part of our internal
management reporting and planning process and is the primary
measure used by our management to evaluate operating performance.
See below for a reconciliation of net loss, the most comparable
GAAP measure, to Adjusted EBITDA.
Market Leader, Inc.
NON-GAAP FINANCIAL MEASURE AND RECONCILIATION
(In thousands)
(unaudited)
Three months ended
----------------------------------------------
June 30, 2010 March 31, 2010 June 30, 2009
-------------- -------------- --------------
Net loss $ (3,128) $ (3,449) $ (3,015)
Adjustments
Interest income and
expenses, net (90) (37) (59)
Equity in loss of
unconsolidated subsidiary 55 136 61
Depreciation and
amortization of property
and equipment 619 664 780
Amortization of acquired
intangible assets 479 479 480
Stock-based compensation 451 496 535
Income tax expense 1 3 2
-------------- -------------- --------------
Adjusted EBITDA $ (1,613) $ (1,708) $ (1,216)
-------------- -------------- --------------
About Market Leader, Inc. Market Leader
(NASDAQ: LEDR) provides real estate professionals with innovative
marketing and technology solutions that enable them to grow and
manage their business. Founded in 1999 by a second-generation real
estate agent, Market Leader provides real estate agents, agent
teams, and brokerage companies with subscription software and
advertising products that enable them to generate a steady stream
of prospects, as well as the tools and training they need to
convert these prospects into clients.
With a long history of innovation, Market Leader pioneered
online lead generation for real estate professionals a decade ago
and today is the leading marketing partner to the real estate
industry. The company also provides consumers with free access to
the information and tools they need throughout the home buying and
selling process through its national consumer real estate sites.
These websites enable Market Leader to provide its customers with
access to millions of future home buyers and sellers while
providing these consumers with free access to the information they
seek throughout the home buying and selling process.
For more information on Market Leader visit
www.MarketLeader.com.
LEDR: FINANCIAL
Market Leader, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three months Six months ended
ended June 30, June 30,
----------------- -----------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenues $ 5,815 $ 5,947 $ 11,611 $ 12,476
Expenses:
Sales and marketing (1) 5,219 4,676 10,141 9,418
Technology and product development (1) 1,303 1,278 2,668 2,685
General and administrative (1) 1,357 1,744 3,070 3,713
Depreciation and amortization of
property and equipment 619 780 1,283 1,583
Amortization of acquired intangible
assets 479 480 958 962
-------- -------- -------- --------
Total expenses 8,977 8,958 18,120 18,361
-------- -------- -------- --------
Loss from operations (3,162) (3,011) (6,509) (5,885)
Equity in loss of unconsolidated
subsidiary (55) (61) (191) (155)
Interest income and expenses, net 90 59 127 154
-------- -------- -------- --------
Loss before income tax expense (3,127) (3,013) (6,573) (5,886)
Income tax expense 1 2 4 4
-------- -------- -------- --------
Net loss $ (3,128)$ (3,015)$ (6,577)$ (5,890)
======== ======== ======== ========
Net loss per share - basic and diluted: $ (0.13)$ (0.13)$ (0.27)$ (0.24)
======== ======== ======== ========
Number of shares used in per share
calculations 24,597 24,112 24,569 24,085
======== ======== ======== ========
(1) Stock-based compensation is included in the expense
line items above in the following amounts:
-------- -------- -------- --------
2010 2009 2010 2009
-------- -------- -------- --------
Sales and marketing $ 111 $ 184 $ 243 $ 388
Technology and product development 47 (50) 101 33
General and administrative 293 401 603 825
-------- -------- -------- --------
$ 451 $ 535 $ 947 $ 1,246
======== ======== ======== ========
Market Leader, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(unaudited)
June 30, December 31,
2010 2009
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 12,835 $ 25,434
Short-term investments 39,090 25,999
Trade accounts receivable, net of allowance of
$11 and $29 17 39
Income tax receivable - 4,920
Prepaid expenses and other current assets 852 918
------------- -------------
Total current assets 52,794 57,310
Property and equipment, net of accumulated
depreciation of $15,716 and $14,433 4,194 4,472
Acquired intangible assets, net of accumulated
amortization of $7,385 and $6,427 1,306 2,265
Investment in unconsolidated subsidiary 149 340
------------- -------------
Total assets $ 58,443 $ 64,387
============= =============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,026 $ 916
Accrued compensation and benefits 1,590 1,494
Accrued expenses and other current liabilities 523 812
Deferred rent, current portion 214 214
Deferred revenue 389 405
------------- -------------
Total current liabilities 3,742 3,841
Deferred rent, less current portion 665 753
------------- -------------
Total liabilities 4,407 4,594
Shareholders' equity:
Preferred stock, par value $0.001 per share,
stated at amounts paid in; authorized
30,000,000 shares; none issued and
outstanding - -
Common stock, par value $0.001 per share,
stated at amounts paid in; authorized
120,000,000 shares; issued and outstanding
24,596,508 and 24,409,431 shares at June 30,
2010 and December 31, 2009, respectively 71,040 70,220
Accumulated deficit (17,004) (10,427)
------------- -------------
Total shareholders' equity 54,036 59,793
------------- -------------
Total liabilities and shareholders' equity $ 58,443 $ 64,387
============= =============
Market Leader, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six months ended
June 30,
------------------
2010 2009
-------- --------
Cash flows from operating activities:
Net loss $ (6,577) $ (5,890)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation and amortization of property and
equipment 1,283 1,583
Amortization of acquired intangible assets 958 962
Stock-based compensation 947 1,246
Equity in loss of unconsolidated subsidiary 191 155
Changes in certain assets and liabilities
Trade accounts receivable 22 23
Income tax receivable 4,914 (4)
Prepaid expenses and other current assets 61 284
Accounts payable 100 (172)
Accrued compensation and benefits 96 (654)
Accrued expenses and other current liabilities (170) (57)
Deferred rent (88) 463
Deferred revenue (16) 170
-------- --------
Net cash provided by (used in) operating activities 1,721 (1,891)
-------- --------
Cash flows from investing activities:
Purchases of short-term investments (27,868) (19,981)
Sales of short-term investments 14,800 10,000
Purchases of property and equipment (1,078) (1,425)
Payments related to the Realty Generator acquisition - (155)
-------- --------
Net cash used in investing activities (14,146) (11,561)
-------- --------
Cash flows from financing activities:
Payment of taxes due upon vesting of restricted stock (174) (41)
Proceeds from exercises of stock options - 45
-------- --------
Net cash (used in) provided by financing activities (174) 4
-------- --------
Net decrease in cash and cash equivalents (12,599) (13,448)
Cash and cash equivalents at beginning of period 25,434 47,668
-------- --------
Cash and cash equivalents at end of period $ 12,835 $ 34,220
======== ========
Investor Contact: Mark Lamb Director of Investor
Relations Market Leader, Inc. 425.952.5801 markl@marketleader.com
Press Contact: Matt Heinz Heinz Marketing for Market Leader,
Inc. 425.894.3387 matt@heinzmarketing.com
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