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8-K - FORM 8-K - HARRIS INTERACTIVE INC | l41703e8vk.htm |
Exhibit 99.1
Press Contact: Michael T. Burns Investor Relations Harris Interactive Inc. 800-866-7655 x7328 mburns@harrisinteractive.com |
Harris Interactive®
Reports Second Quarter Fiscal 2011 Results
New York, N.Y. January 27, 2011 Harris Interactive Inc. (NASDAQ: HPOL), a leading
innovative global market research firm, today announced its second quarter fiscal 2011 financial
results, which show growth in revenue, bookings, and operating income compared with the same prior
year period. Excluding foreign exchange rate differences, revenue was up 2%, driven by growth in
the U.K., Canada, France, Germany, and Asia, and bookings grew 4% as a result of strong sales
performance in Canada, France, and Germany. Operating income improved by nearly 47%, making the
second quarter the companys most profitable quarter in three years.
Kimberly Till, President and Chief Executive Officer of Harris Interactive, said, As these
results indicate, we have made progress in stabilizing our overall business. Further,
consistent with one of our key strategic initiatives, we are
developing new products and solutions that
leverage technology and will provide us with new revenue streams. Our
new, social intelligence platform, Research Lifestreaming, and its
associated products and solutions, are generating both direct and
indirect sales. In addition, we are very focused on the mobile space
and are beginning to implement our strategy of exploiting mobile
devices for real-time data feeds, polling, and insights for our
clients.
Financial Highlights
For the Three Months | For the Six Months | |||||||||||||||
Ended December 31, | Ended December 31, | |||||||||||||||
$ in millions unaudited | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Revenue |
$ | 44.9 | $ | 44.6 | $ | 82.0 | $ | 83.6 | ||||||||
Operating income (loss) |
$ | 0.9 | $ | 0.6 | $ | (0.4 | ) | $ | 0.2 | |||||||
Net income (loss) |
$ | 0.3 | $ | 1.3 | $ | (1.0 | ) | $ | 0.7 | |||||||
Fully diluted net income (loss) per share |
$ | 0.01 | $ | 0.02 | $ | (0.02 | ) | $ | 0.01 | |||||||
Adjusted EBITDA* |
$ | 3.0 | $ | 2.8 | $ | 3.8 | $ | 4.8 | ||||||||
Adjusted EBITDA* with add-back of
restructuring and other charges |
$ | 3.7 | $ | 3.2 | $ | 4.5 | $ | 5.3 |
* | 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. |
©2011 Harris Interactive Inc. | All rights reserved. |
Key Financial Statistics
| Total revenue for the second quarter of fiscal 2011 was $44.9 million, as compared with $44.6 million for the same prior year period. Excluding foreign currency exchange rate differences, revenue for the second quarter was up 2% compared with the same prior year period. | ||
| Operating income for the second quarter of fiscal 2011 was $0.9 million, as compared with operating income of $0.6 million for the same prior year period. | ||
| Net income for the second quarter of fiscal 2011 was $0.3 million, or $0.01 per fully diluted share, as compared with net income of $1.3 million, or $0.02 per fully diluted share for the same prior year period. Net income for the second quarter of fiscal 2010 included the favorable impact of a tax law change that resulted in a $1.1 million tax benefit. | ||
| As of December 31, 2010, we had $13.5 million in cash and $13.2 million in outstanding debt. During the first six months of fiscal 2011, we have made $2.4 million in debt principal payments. | ||
| Cash provided by operations for the second quarter of fiscal 2011 was $3.3 million, as compared with $2.6 million provided by operations for the same prior year period. | ||
| Bookings for the second quarter of fiscal 2011 were $55.3 million, as compared with $53.2 million for the same prior year period. Excluding foreign currency exchange rate differences, bookings for the second quarter were up 4% compared with the same prior year period. | ||
| Secured revenue (formerly referred to as backlog) for the second quarter of fiscal 2011 was $55.4 million, as compared with $51.1 million for the same prior year period. Excluding foreign currency exchange rate differences, secured revenue for the second quarter was up 9% compared with the same prior year period. | ||
| Non-GAAP adjusted EBITDA* with add-back of restructuring and other charges for the second quarter of fiscal 2011 was $3.7 million, as compared with $3.2 million for the same prior year period. |
Ms. Till continued, On a country by country basis, we are making progress in fixing the U.S.
business, having rebuilt several industry verticals and applying a
proven approach to improve performance in the others. Regarding Canada, I
am pleased that our recent restructuring of the business has had a positive impact on
performance, as we achieved meaningful year over year bookings, revenue, and operating income
growth in the quarter for the first time since we acquired the business in August 2007.
Germany, France and Asia also performed well in the quarter. Although we have more work to do
in the U.K., having lost a large tracking study during the quarter, we are beginning to
execute on our plan to reposition the business and get it back on track over the next few
quarters.
Ms. Till concluded, Over the past two years, we have made substantial improvements in our
product offerings, pricing, work processes, global panel and survey platforms, financial
stability, and talent at all levels of the company. While these improvements take time to
impact the numbers, I believe that our business is in the strongest position since we began
the turnaround.
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Second Quarter Fiscal 2011 Results Conference Call and Webcast Access
Kimberly Till, President and Chief Executive Officer, will host a conference call to discuss
these results on Thursday, January 27, 2011, 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 Companys 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 Companys ability to sustain and grow its revenue base,
the Companys 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 Companys 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 worlds 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,
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Harris specializes in delivering research solutions that help us and our clients stay ahead
of whats next. For more information, please visit www.harrisinteractive.com.
HPOL E
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HARRIS INTERACTIVE INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
December 31, | June 30, | |||||||
2010 | 2010 | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 13,499 | $ | 14,158 | ||||
Accounts receivable, net |
28,463 | 23,735 | ||||||
Unbilled receivables |
7,400 | 7,566 | ||||||
Prepaids and other current assets |
4,235 | 3,722 | ||||||
Deferred tax assets |
430 | 375 | ||||||
Total current assets |
54,027 | 49,556 | ||||||
Property, plant and equipment, net |
4,392 | 5,626 | ||||||
Other intangibles, net |
15,644 | 16,382 | ||||||
Other assets |
1,435 | 1,566 | ||||||
Total assets |
$ | 75,498 | $ | 73,130 | ||||
Liabilities and Stockholders Equity |
||||||||
Accounts payable |
$ | 7,616 | $ | 8,952 | ||||
Accrued expenses |
16,841 | 16,768 | ||||||
Current portion of long-term debt |
4,794 | 4,794 | ||||||
Deferred revenue |
16,474 | 11,612 | ||||||
Total current liabilities |
45,725 | 42,126 | ||||||
Long-term debt |
8,390 | 10,787 | ||||||
Deferred tax liabilities |
2,238 | 2,391 | ||||||
Other long-term liabilities |
1,687 | 1,792 | ||||||
Total stockholders equity |
17,458 | 16,034 | ||||||
Total liabilities and
stockholders equity |
$ | 75,498 | $ | 73,130 | ||||
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HARRIS INTERACTIVE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three months ended | Six months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue from services |
$ | 44,940 | $ | 44,629 | $ | 81,954 | $ | 83,564 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of services |
29,560 | 28,085 | 53,753 | 52,514 | ||||||||||||
Selling, general and administrative |
12,312 | 13,849 | 24,876 | 26,811 | ||||||||||||
Depreciation and amortization |
1,515 | 1,718 | 3,043 | 3,474 | ||||||||||||
Restructuring and other charges |
679 | 383 | 679 | 531 | ||||||||||||
Total operating expenses |
44,066 | 44,035 | 82,351 | 83,330 | ||||||||||||
Operating income (loss) |
874 | 594 | (397 | ) | 234 | |||||||||||
Operating margin |
1.9 | % | 1.3 | % | -0.5 | % | 0.3 | % | ||||||||
Interest and other income |
(8 | ) | (12 | ) | (23 | ) | (27 | ) | ||||||||
Interest expense |
316 | 499 | 785 | 1,036 | ||||||||||||
Income (loss) from operations before income taxes |
566 | 107 | (1,159 | ) | (775 | ) | ||||||||||
Provision (benefit) for income taxes |
223 | (1,227 | ) | (165 | ) | (1,476 | ) | |||||||||
Net income (loss) |
$ | 343 | $ | 1,334 | $ | (994 | ) | $ | 701 | |||||||
Basic net income (loss) per share |
$ | 0.01 | $ | 0.02 | $ | (0.02 | ) | $ | 0.01 | |||||||
Diluted net income (loss) per share |
$ | 0.01 | $ | 0.02 | $ | (0.02 | ) | $ | 0.01 | |||||||
Weighted average shares outstanding - |
||||||||||||||||
Basic |
54,472,556 | 53,939,876 | 54,447,673 | 53,919,859 | ||||||||||||
Diluted |
54,542,596 | 54,060,635 | 54,447,673 | 54,050,397 | ||||||||||||
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Reconciliation of GAAP Income to EBITDA and Adjusted EBITDA
Three months ended | Six months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
GAAP net income (loss) |
$ | 343 | $ | 1,334 | $ | (994 | ) | $ | 701 | |||||||
Interest income |
(8 | ) | (12 | ) | (23 | ) | (27 | ) | ||||||||
Interest expense |
316 | 499 | 785 | 1,036 | ||||||||||||
Provision (benefit) for income taxes |
223 | (1,227 | ) | (165 | ) | (1,476 | ) | |||||||||
Depreciation and amortization |
1,937 | 2,077 | 3,895 | 4,214 | ||||||||||||
EBITDA |
$ | 2,811 | $ | 2,671 | $ | 3,498 | $ | 4,448 | ||||||||
Stock-based
compensation (1) |
171 | 162 | 350 | 321 | ||||||||||||
Adjusted EBITDA |
$ | 2,982 | $ | 2,833 | $ | 3,848 | $ | 4,769 | ||||||||
Adjusted EBITDA |
$ | 2,982 | $ | 2,833 | $ | 3,848 | $ | 4,769 | ||||||||
Add-back of restructuring and other charges |
679 | 383 | 679 | 531 | ||||||||||||
Adjusted EBITDA with add-back of restructuring and other charges |
$ | 3,661 | $ | 3,216 | $ | 4,527 | $ | 5,300 | ||||||||
(1) | Stock-based compensation expense represents the cost of stock-based compensation awarded by the Company to its employees under the FASB guidance for stock-based compensation. |