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NYSE: XOXO(common stock)

18.76 +0.41 +2.23% Volume: 102,351 Minimum 20 min delay December 11, 2017

Press Release Details

XO Group Reports First Quarter 2017 Financial Results

05/09/2017

NEW YORK, May 9, 2017 /PRNewswire/ -- 

XO Group Inc. (PRNewsFoto/XO Group Inc.) (PRNewsFoto/XO Group Inc.)

- Total revenue remained flat in the first quarter

- Transactions revenue increased 18.0% in the first quarter

- First quarter GAAP net income per diluted share was $0.01

- Conference Call Tuesday, May 9, 2017 at 4:30 p.m. ET, Dial-In (877) 201-0168 (ID# 6892945)

XO Group Inc. (the "Company") (NYSE: XOXO), (xogroupinc.com), today reported financial results for the three months ended March 31, 2017.

Total revenue for the first quarter of 2017 was $35.8 million, flat as compared to the same period in the prior year. Net income for the quarter was $0.3 million or $0.01 per diluted share compared to diluted earnings per share of $0.12 in the same period in the prior year. The Company's balance sheet at March 31, 2017 reflects cash and cash equivalents of $103.0 million compared to $105.7 million at December 31, 2016. The Company repurchased and retired shares of its common stock for an aggregate price of $5.1 million during the quarter as part of the Company's previously announced repurchase program.

"This quarter, we further improved the performance of our products, grew our transaction business, and began to strengthen our local sales and service operation to capitalize on the increased usage of our local vendor marketplace. We are excited for the significant opportunity ahead," said Mike Steib, Chief Executive Officer.

Long-Term Financial Targets

The Company's long-term financial targets are double digit revenue growth rates and gross margins of approximately 90-95%, yielding adjusted EBITDA margins of 20%.

 

XO GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)




Three Months Ended March 31,



2017


2016

Net revenue:





National online advertising


$

8,928


$

8,658

Local online advertising


18,435


18,179

   Total online advertising


27,363


26,837

Transactions


4,962


4,204

Publishing and other


3,435


4,628

Total net revenue


35,760


35,669

Cost of revenue:





Online advertising


931


616

Publishing and other


978


1,110

Total cost of revenue


1,909


1,726

Gross profit


33,851


33,943

Operating expenses:





Product and content development


11,741


10,845

Sales and marketing


13,501


11,561

General and administrative


7,301


6,349

Depreciation and amortization


1,658


1,594

Total operating expenses


34,201


30,349

(Loss) / Income from operations


(350)


3,594

Loss in equity interests


(117)


(144)

Interest and other income / (expense), net


93


(1)

(Loss) / Income before income taxes


(374)


3,449

Income tax (benefit) / expense


(686)


424

Net income


$

312


$

3,025






Net income per share:





Basic and Diluted


$

0.01


$

0.12

Weighted average number of shares
used in calculating net earnings per
share:





Basic


25,352


25,263

Dilutive effect of:





Restricted stock


370


322

Options


35


14

Diluted


25,757


25,599

 

 

XO GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)



March 31, 2017


December 31, 2016

ASSETS




Current assets:




Cash and cash equivalents

$

103,012


$

105,703

Accounts receivable, net

18,284


20,182

Prepaid expenses and other current assets

6,609


5,247

Total current assets

127,905


131,132

Long-term restricted cash

1,181


1,181

Property and equipment, net

11,828


12,130

Intangibles assets, net

3,946


4,154

Goodwill

48,678


48,678

Deferred tax assets, net

10,086


9,918

Investments

2,568


2,685

Other assets

415


308

Total assets

$

206,607


$

210,186

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




  Accrued compensation and employee benefits

$

3,944


$

6,164

Accounts payable and accrued expenses

7,763


7,515

Deferred revenue

19,091


16,752

Total current liabilities

30,798


30,431

Deferred rent

3,603


3,720

Other liabilities

1,488


1,485

Total liabilities

35,889


35,636

Commitments and contingencies




Stockholders' equity:




Preferred stock, $0.001 par value; 5,000,000 shares authorized and 0
shares issued and outstanding as of March 31, 2017 and December 31,
2016, respectively


Common stock, $0.01 par value; 100,000,000 shares authorized and
26,153,288 and 26,304,925 shares issued and outstanding at March 31,
2017 and December 31, 2016, respectively

262


264

Additional paid-in-capital

178,659


178,959

Accumulated deficit

(8,203)


(4,673)

Total stockholders' equity

170,718


174,550

Total liabilities and stockholders' equity

$

206,607


$

210,186

 

 

XO GROUP INC.

NON-GAAP RECONCILIATION TABLE

For the Three Months Ended March 31, 2017 and 2016

(In Thousands, Except for Per Share Data)

(Unaudited)




Three Months Ended March 31,



2017


2016



As Reported


Adjustments


Non GAAP


As Reported


Adjustments


Non GAAP














Net revenue


$

35,760


$


$

35,760


$

35,669


$


$

35,669

Cost of revenue


1,909



1,909


1,726



1,726

Operating expenses













Product and content development


11,741



11,741


10,845



10,845

Sales and marketing


13,501



13,501


11,561



11,561

General and administrative


7,301



7,301


6,349



6,349

Depreciation and amortization


1,658



1,658


1,594



1,594

Total operating expenses


34,201



34,201


30,349



30,349














(Loss) / Income from operations


(350)



(350)


3,594



3,594














Interest and other income /
(expense), net


93



93


(1)



(1)

Loss in equity interests


(117)



(117)


(144)



(144)

Income tax (benefit) / expense


(686)



(686)


424


956

(a)

1,380

Net income


$

312


$


$

312


$

3,025


$

(956)


$

2,069

Net income per share - diluted


$

0.01


$


$

0.01


$

0.12


$

(0.04)


$

0.08

Weighted average number of shares
outstanding - diluted


25,757




25,757


25,599




25,599



Three Months Ended March 31,



2017


2016



As Reported


Adjustments


Non GAAP


As Reported


Adjustments


Non GAAP

(Loss) / Income from operations


$

(350)


$


$

(350)


$

3,594


$


$

3,594

Depreciation and amortization


1,658



1,658


1,594



1,594

Stock-based compensation


1,874



1,874


1,656



1,656

Adjusted EBITDA


$

3,182


$


$

3,182


$

6,844


$


$

6,844
















Free Cash Flow Reconciliation






Three Months Ended March 31,



2017


2016

Net cash provided by operating
activities






$

5,036





$

5,543

Less: capital expenditures






(1,212)





(722)

Free cash flow






$

3,824





$

4,821





(a)    

Adjusted income tax expense was calculated using an effective tax rate of 40% for the three months ended March 31, 2016. The effective tax rate excludes discrete items, including a one-time benefit associated with the resolution of an uncertain tax position for a former subsidiary.

 

 

XO GROUP INC.

SUPPLEMENTAL DATA TABLES (UNAUDITED)

(Unaudited)



TheKnot.com Local Online
Advertising Metrics

Q1 2017

Q1 2016

Vendor Count(a)

23,458

24,356

Retention Rate(a)

72.0%

71.0%

Avg. Revenue/Vendor(a)

$2,832

$2,696

Vendor Count at Quarter End

24,168

24,326



(a)  

Calculated on a trailing twelve-month basis.

 

Stock Based Compensation
The Company included total stock-based compensation expense related to all its stock awards in various operating expense categories for the three months ended March 31, 2017 and 2016, as follows:



Three Months Ended March 31,



2017


2016



(Amounts in Thousands)

Product and content development


$

497


$

405

Sales and marketing


433


411

General and administrative


944


840

Total stock-based compensation


$

1,874


$

1,656

 

Conference Call and Replay Information

XO Group Inc. will host a conference call with investors at 4:30 p.m. ET on Tuesday, May 9, 2017, to discuss its first quarter 2017 financial results. Participants should dial (877) 201-0168 and use Conference ID# 6892945 at least 10 minutes before the call is scheduled to begin. Participants can also access the live broadcast over the internet on the Investor Relations section of the Company's website, accessible at http://ir.xogroupinc.com. To access the webcast, participants should visit XO Group's website at least 15 minutes prior to the conference call in order to download or install any necessary audio software.

A replay of the webcast will also be archived on the Company's website approximately two hours after the conference call ends.

About XO Group Inc.

XO Group Inc.'s (NYSE: XOXO; xogroupinc.com) mission is to help people navigate and truly enjoy life's biggest moments together. Our multi-platform brands guide couples through transformative life stages - from getting married with The Knot, to moving in together with The Nest, to having a baby with The Bump, and helping bring important celebrations to life with entertainment vendors from GigMasters. The Company is publicly listed on the New York Stock Exchange (NYSE: XOXO) and is headquartered in New York City.

Forward Looking Statements

This release may contain projections or other forward-looking statements regarding future events or our future financial performance or estimates regarding third parties. These statements are only estimates or predictions and reflect our current beliefs and expectations. Actual events or results may differ materially from those contained in the estimates, projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of the quarter. Although these expectations may change, we will not necessarily inform you if they do. Our policy is to provide expectations not more than once per quarter, and not to update that information until the next quarter. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation, (i) our operating results may fluctuate, are difficult to predict and could fall below expectations, (ii) our transactions business is dependent on third party participants, whose lack of performance could adversely affect our results of operations, (iii) our ongoing investment in new businesses and new products, services, and technologies is inherently risky, and could disrupt our ongoing business and/or fail to generate the results we are expecting, (iv) we may be unable to develop solutions that generate revenue from advertising and other services delivered to mobile phones and wireless devices, (v) our businesses could be negatively affected by changes in Internet search engine algorithms, (vi) intense competition in our markets may adversely affect revenue and results of operations, (vii) we may be subject to legal liability associated with providing online services or content, (viii) fraudulent or unlawful activities on our marketplace could harm our business and consumer confidence in our marketplace, (ix) we are subject to payments-related risks, (x) we cannot assure you that our publications will be profitable, and (xi) other factors detailed in documents we file from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Non-GAAP Financial Measures

This press release includes information about certain financial measures that are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP" or "U.S. GAAP"), including adjusted EBITDA, adjusted net income, adjusted net income per diluted share and free cash flow. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP.  Our use of these terms may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

Management defines its non-GAAP financial measures as follows:

  • Adjusted EBITDA represents GAAP income from operations adjusted to exclude, if applicable: (1) depreciation and amortization, (2) stock-based compensation expense, (3) asset impairment charges, and (4) other items affecting comparability during the period.
  • Adjusted net income represents GAAP net income, adjusted for items that impact comparability for incremental or unusual costs incurred in the current period, which may include: (1) asset impairment charges, (2) executive separation and other severance charges, (3) non-recurring foreign taxes, interest and penalties and (4) costs related to exit activities.
  • Adjusted net income per diluted share represents adjusted net income (as defined above), divided by the diluted weighted-average number of shares outstanding for the period.
  • Free cash flow represents GAAP net cash provided by operations, less capital expenditures.

Management believes that these non-GAAP financial measures, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provide useful information about our period-over-period growth and provide additional information that is useful for evaluating our operating performance. However, adjusted EBITDA, adjusted net income, adjusted net income per diluted share and free cash flow are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered substitutes for or superior to net income and net income per diluted share and net cash provided by operating activities as indicators of operating performance.

A reconciliation of GAAP to Non-GAAP financial measures is included in this press release.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/xo-group-reports-first-quarter-2017-financial-results-300454582.html

SOURCE XO Group Inc.

Ivan Marmolejos, Director, Investor Relations, (212) 219-8555 x1004, IR@xogrp.com

Questions?

If you have any investor relations questions you can contact us at:

IR@xogrp.com

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If in any jurisdiction, any part of this disclaimer is determined to be unenforceable by a court of competent jurisdiction, such part of this disclaimer shall be restricted or eliminated to the minimum extent necessary to comply with such determination and the remaining disclaimer shall otherwise remain in full force and effect.

Please note the information presented is given as at the date and the time of its original release. Changes in such historical information may occur due to adjustments in accounting and reporting standards & procedures.

Non-GAAP Information

XO Group Inc also uses certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), including adjusted EBITDA, adjusted net income, adjusted net income per diluted share and free cash flow. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP. Our use of these terms may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

Management defines its non-GAAP financial measures as follows:

  • Adjusted EBITDA represents U.S. GAAP net income (loss) adjusted to exclude, if applicable: (1) provision (benefit) for income taxes, (2) depreciation and amortization, (3) stock-based compensation expense, (4) impairment charges and asset write-offs, (5) loss in equity interests, (6) interest and other income, net (7) net loss attributable to non-controlling interest and (8) other items impacting comparability in the period.
  • Adjusted net income represents U.S. GAAP net income (loss), adjusted for incremental or unusual costs incurred in the current period, which may include: (1) impairment charges and asset write-offs, (2) executive severance and other restructuring charges and (3) the impact of certain foreign taxes, interest and penalties.
  • Adjusted net income per diluted share represents adjusted net income (as defined above), divided by the diluted weighted-average number of shares outstanding for the period.
  • Free cash flow represents U.S. GAAP net cash provided by operations, less capital expenditures.

Management believes that these non-GAAP financial measures, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provide useful information about our period-over-period growth and provide additional information that is useful for evaluating our operating performance. However, adjusted EBITDA, adjusted net income, adjusted net income per diluted share and free cash flow are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered substitutes for or superior to net income (loss) and net income (loss) per diluted share and net cash provided by operating activities as indicators of operating performance. A reconciliation of GAAP to Non-GAAP financial measures is included in the periodic reports and other documents filed from time-to-time by XO Group with the Securities and Exchange Commission.

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