NEW YORK, May 3 /PRNewswire-FirstCall/ -- NetRatings, Inc.
(NASDAQ:NTRT), a global leader in Internet media and market
research, today announced financial results for the first quarter
ended March 31, 2006. NetRatings reported revenues of $18.3 million
for the first quarter of 2006, an 11 percent increase over revenues
of $16.4 million in the first quarter of 2005. Net loss for the
first quarter of 2006 was ($255,000), or ($0.01) per share, on
approximately 34.7 million shares. This compares with a net loss of
($1.6) million, or ($0.05) per share, in the first quarter of 2005,
on approximately 35.8 million shares. Related to the company's
adoption of SFAS 123(R) on Jan. 1, 2006, NetRatings' first quarter
2006 results included stock option compensation expense of
$364,000, or $0.01 per share, which was offset by the one-time
benefit of the cumulative effect of a change in accounting
principle -- also related to the adoption of SFAS 123(R) on Jan 1,
2006. On an EBITDA basis (a non-GAAP measure that reflects net
income/loss excluding interest income/expense, taxes, depreciation,
amortization of intangibles and stock-based compensation and
cumulative effect of a change in accounting principle), the company
earned $1 million, or $0.03 per share, during the first quarter of
2006. This compares with an EBITDA loss in the first quarter of
2005 of ($905,000), or ($0.03) per share. A complete reconciliation
of GAAP results to EBITDA results may be found in the accompanying
financial tables and footnote. "NetRatings has made a strong start
in the first quarter and is now well positioned for a successful
2006," said William Pulver, president and CEO, NetRatings. "Our
product portfolio is in terrific shape to benefit from the growth
in Internet advertising and commerce, and we are pleased with the
progress of our ongoing patent licensing program. In addition, we
believe our innovative products and patented technologies -- in
concert with planned data collection enhancements -- will allow us
to exploit emerging opportunities created by the rapid transition
of traditional media -- including radio and television -- to the
Internet." NetRatings ended the first quarter with $170 million in
cash and marketable securities. The company completed a stock
repurchase plan during the first quarter and spent $11.5 million to
repurchase 900,000 shares of stock. Patent Enforcement Program
Update NetRatings announced today it has filed patent infringement
lawsuits against WhenU.com, Inc. and 180solutions, Inc. as part of
the company's patent enforcement program commenced in early 2005.
Under the program, designed to protect the company's investments in
its patented technologies related to the collection, analysis and
reporting of computer usage and activity, NetRatings has signed
licensing agreements with three companies: Visual Sciences LLC,
SageMetrics, Corp., and Omniture, Inc., and has complaints pending
against three additional companies: Coremetrics, Inc., Sane
Solutions, LLC, and WebSideStory, Inc. Guidance For the second
quarter ending June 30, 2006, NetRatings is projecting the
following: -- Revenue is expected to be between $18.6 million and
$19 million -- Net loss per share on a GAAP basis is expected to be
between ($0.01) and ($0.03) -- EBITDA per share is expected to be
between $0.02 and $0.04 NetRatings is updating full year 2006
guidance, and now projects the following: -- Revenue is expected to
be between $76 million and $79 million -- Net loss per share on a
GAAP basis is expected to be between ($0.05) and ($0.09) -- EBITDA
per share is expected to be between $0.12 and $0.16 First Quarter
2006 Conference Call Today at 4:30 p.m. ET, NetRatings management
will host a conference call and Webcast to discuss its first
quarter 2006 results and outlook. The company welcomes all members
of the financial and media communities to visit
http://www.netratings.com/financial_results.htm to listen to the
conference call via live Webcast. About NetRatings NetRatings, Inc.
delivers leading Internet media and market research solutions,
marketed globally under the Nielsen//NetRatings brand. With high
quality, technology-driven products and services,
Nielsen//NetRatings enables clients to make informed business
decisions regarding their online strategies. The
Nielsen//NetRatings product portfolio includes panel-based and
site- centric Internet audience measurement services, online
advertising intelligence, user lifestyle, demographic and product
brand preferences data, Internet reach and frequency planning
tools, and custom data, research and analysis. For more
information, visit http://www.nielsen-netratings.com/ Safe Harbor
Statement This press release contains statements that may
constitute forward-looking statements pursuant to the safe harbor
provisions of the Private Litigation Reform Act of 1995. These
forward-looking statements are based on current expectations and
assumptions and involve a number of uncertainties and risks that
could cause actual results to differ materially from those
currently expressed in any such forward-looking statements.
Information about potential factors that may affect NetRatings'
business and financial results is included in its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2005 and its quarterly
reports on Form 10-Q, including, without limitation, under the
captions "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors That May
Affect Our Performance." Each of these documents is on file with
the SEC and is available free of charge. Readers of this press
release are referred to such filings. The forward-looking
statements herein speak only as of the date of this press release.
NetRatings does not undertake to update any forward-looking
statement that may be made from time to time by it or on behalf of
NetRatings. Contact: Susan Hickey NetRatings, Inc. 212-703-5909
NetRatings, Inc. Statements of Operations (in thousands, except per
share data) Three Months Ended March 31, 2006 2005 unaudited
unaudited Revenue $18,280 $16,433 Cost of revenue 5,566 5,568 Gross
profit 12,714 10,865 Operating expenses: Research and development
2,643 3,055 Sales and marketing 6,347 6,386 General and
administrative 3,450 2,998 Amortization of intangibles 594 823
Amortization of stock-based compensation 1,164 -- Total operating
expenses 14,198 13,262 Loss from operations (1,484) (2,397)
Interest income, net 1,161 917 Minority interest in gains of
consolidated subsidiaries (163) (205) Equity in earnings of joint
ventures -- 56 Net loss before provision for income taxes and
cumulative effect of change in accounting principle (486) (1,629)
Provision for income taxes (138) -- Net loss before cumulative
effect of change in accounting principle $(624) $(1,629) Cumulative
effect of change in accounting principle 369 -- Net loss $(255)
$(1,629) Basic and diluted net loss per common share: Before
cumulative effect of change in accounting principle $(0.02) $(0.05)
Cumulative effect of change in accounting principle 0.01 -- Net
loss per common share $(0.01) $(0.05) Shares used to compute basic
and diluted net loss and EBITDA net income/loss per common share
34,705 35,775 EBITDA (1) Net loss $(255) $(1,629) Less: Interest
income, net (1,161) (917) Provision for income taxes 138 --
Depreciation 896 818 Amortization of intangibles 594 823
Amortization of stock-based compensation 1,164 -- Cumulative effect
of change in accounting principle (369) -- EBITDA $1,007 $(905)
EBITDA income/(loss) per common share $0.03 $(0.03) (1) EBITDA
reflects net income/loss excluding interest income/expense, taxes,
depreciation, amortization of intangibles and stock-based
compensation, and cumulative effect of change in accounting
principle. Management uses this measure internally to evaluate the
company's performance. NetRatings provides results, guidance, and
associated reconciliation of this non-GAAP measure to the
investment community, as we believe it provides consistent and
comparable measures to help investors understand our current and
future operating cash flow performance. Interest income/expense is
excluded as it is not related to our operating performance.
Depreciation expenses, amortization of stock-based compensation,
and cumulative effect of change in accounting principle are
excluded as they are non-cash charges. NetRatings excludes
amortization of intangibles as it is a non-cash charge not directly
related to operations. EBITDA data is provided as a complement to
results provided in accordance with GAAP, and should be considered
in addition to, and not as a substitute for or superior to, other
measures of financial performance prepared in accordance with GAAP.
Reconciliation of net loss per share to EBITDA per share for second
quarter and full year 2006 guidance. Three months ending Year
ending June 30, 2006 December 31, 2006 Net loss $(0.03) $(0.01)
$(0.09) $(0.05) Adjustments Interest income, net (0.03) (0.03)
(0.14) (0.14) Provision for income taxes 0.01 0.01 0.03 0.03
Depreciation 0.02 0.02 0.11 0.11 Amortization of intangibles 0.02
0.02 0.07 0.07 Amortization of stock-based compensation 0.03 0.03
0.13 0.13 Cumulative effect of change in accounting principle -- --
0.01 0.01 EBITDA income per share guidance range $0.02 $0.04 $0.12
$0.16 NetRatings, Inc. Balance Sheets (in thousands) March 31,
December 31, 2006 2005 ASSETS unaudited Current assets Cash, cash
equivalents & short-term marketable securities $147,774
$151,671 Accounts receivable 18,404 16,537 Other current assets
4,033 3,867 Total current assets 170,211 172,075 Long-term
marketable securities 22,346 28,581 Property and equipment 8,776
7,827 Intangibles 12,684 13,278 Goodwill 76,684 76,856 Other assets
1,696 1,637 Total assets $292,397 $300,254 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Accounts payable &
accrued expenses $19,605 $21,436 Deferred revenue 14,410 12,666
Restructuring liabilities 388 1,038 Total current liabilities
34,403 35,140 Restructuring liabilities, less current portion 331
418 Total liabilities 34,734 35,558 Minority interest 1,461 1,298
Stockholders' equity 256,202 263,398 Total liabilities and
stockholders' equity $292,397 $300,254 DATASOURCE: NetRatings, Inc.
CONTACT: Susan Hickey of NetRatings, Inc., +1-212-703-5909 or Web
site: http://www.netratings.com/
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