LogoMobile

NYSE: XOXO(common stock)

19.36 -0.03 -0.15% Volume: 54,136 Minimum 20 min delay November 22, 2017

Press Release Details

XO Group Reports Third Quarter 2017 Financial Results;

10/31/2017

- Total revenue grew 9.5% in the third quarter
- Local online revenue increased 18% in the third quarter
- Third quarter GAAP net income per diluted share was $0.13
- Conference Call Tuesday, October 31, 2017 at 8:00 a.m. ET, Dial-In (833) 236-5763 (ID# 99985038)

NEW YORK, Oct. 31, 2017 /PRNewswire/ -- XO Group Inc. (the "Company") (NYSE: XOXO), (xogroupinc.com), today reported financial results for the three months ended September 30, 2017.

Total revenue for the third quarter of 2017 was $40.2 million, up from $36.7 million during the same period in the prior year. Net income for the quarter was $3.3 million or $0.13 per diluted share compared to diluted earnings per share of $0.07 in the same period in the prior year. The Company's balance sheet at September 30, 2017 reflects cash and cash equivalents of $100.8 million compared to $105.7 million at December 31, 2016.

"Our products are performing. Our local sales are accelerating. And we are about to launch some of our most exciting marketplace features yet. I appreciate the team's good work in Q3," 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 September 30,


Nine Months Ended September 30,



2017


2016


2017


2016

Net revenue:









National online advertising


$

8,842


$

8,932


$

27,516


$

27,156

Local online advertising


20,130


17,040


57,555


51,871

Total online advertising


28,972


25,972


85,071


79,027

Transactions


7,950


7,105


21,102


17,740

Publishing and other


3,315


3,654


12,050


14,341

Total net revenue


40,237


36,731


118,223


111,108

Cost of revenue:









Online advertising


1,207


802


3,057


2,102

Publishing and other


1,107


986


3,952


4,168

Total cost of revenue


2,314


1,788


7,009


6,270

Gross profit


37,923


34,943


111,214


104,838

Operating expenses:









Product and content development


11,462


11,729


35,117


33,388

Sales and marketing


12,230


13,098


39,761


36,172

General and administrative


7,469


5,501


22,731


17,683

Depreciation and amortization


1,565


1,580


5,234


4,815

Total operating expenses


32,726


31,908


102,843


92,058

Income from operations


5,197


3,035


8,371


12,780

Loss in equity interests


(33)


(29)


(1,204)


(210)

Interest and other income / (expense), net


161


48


359


29

Income before income taxes


5,325


3,054


7,526


12,599

Income tax expense


1,984


1,146


2,432


3,901

Net income


$

3,341


$

1,908


$

5,094


$

8,698










Net income per share:









Basic


$

0.13


$

0.08


$

0.20


$

0.34

Diluted


$

0.13


$

0.07


$

0.20


$

0.34

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









Basic


24,858


25,368


25,054


25,341

Dilutive effect of:









Restricted stock


226


331


262


318

Employee Stock Purchase Plan




2


Options


40


28


35


16

Diluted


25,124


25,727


25,353


25,675

 

 

XO GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except for Per Share Data)

(Unaudited)




September 30, 2017


December 31, 2016

ASSETS




Current assets:




Cash and cash equivalents

$

100,796


$

105,703

Accounts receivable, net

15,912


20,182

Prepaid expenses and other current assets

6,312


5,247

Total current assets

123,020


131,132

Long-term restricted cash

1,181


1,181

Property and equipment, net

11,041


12,130

Intangibles assets, net

4,608


4,154

Goodwill

51,088


48,678

Deferred tax assets, net

9,429


9,918

Investments

1,481


2,685

Other assets

122


308

Total assets

$

201,970


$

210,186

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




     Accrued compensation and employee benefits

$

4,487


$

6,164

Accounts payable and accrued expenses

7,175


7,515

Deferred revenue

15,021


16,752

Total current liabilities

26,683


30,431

Deferred rent

3,246


3,720

Other liabilities

1,200


1,485

Total liabilities

31,129


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 September 30, 2017 and December
31, 2016, respectively


Common stock, $0.01 par value; 100,000,000 shares authorized and
25,706,079 and 26,304,925 shares issued and outstanding at September
30, 2017 and December 31, 2016, respectively

258


264

Additional paid-in-capital

178,977


178,959

Accumulated deficit

(8,394)


(4,673)

Total stockholders' equity

170,841


174,550

Total liabilities and stockholders' equity

$

201,970


$

210,186

 

 

XO GROUP INC.

NON-GAAP RECONCILIATION TABLE

For the Three Months Ended September 30, 2017 and 2016

(In Thousands, Except for Per Share Data)

(Unaudited)





Adjusted EBITDA Reconciliation



Three Months Ended September 30,



2017



2016



Income from operations



$

5,197




$

3,035



Depreciation and amortization



1,565




1,580



Stock-based compensation



2,021




2,157



Bad debt expense (a)



$






Adjusted EBITDA



$

8,783




$

6,772















Free Cash Flow Reconciliation



Three Months Ended September 30,



2017



2016



Net cash provided by operating activities



$

7,409




$

7,455



Less: capital expenditures



(1,440)




(1,061)



Free cash flow



$

5,969




$

6,394





(a)

Adjusted loss in equity interests excludes the other-than-temporary impairment that reduced the carrying value of our equity investment in Jetaport, Inc. to zero. In addition, adjusted general and administrative operating expenses exclude bad debt expense associated with a loan previously made to Jetaport, Inc.

 

 

XO GROUP INC.

NON-GAAP RECONCILIATION TABLE

For the Nine Months Ended September 30, 2017 and 2016

(In Thousands, Except for Per Share Data)

(Unaudited)


There were no non-GAAP adjustments to Net Income for the three months ended September 30, 2017 or 2016.




Adjusted Net Income Reconciliation




Nine Months Ended September 30,




2017


2016




As Reported

Adjustments


Non GAAP


As Reported

Adjustments


Non GAAP














Net revenue


$

118,223


$



$

118,223



$

111,108


$



$

111,108



Cost of revenue


7,009




7,009



6,270




6,270



Operating expenses












Product and content development


35,117




35,117



33,388




33,388



Sales and marketing


39,761




39,761



36,172




36,172



General and administrative


22,731


200


(a)

22,531



17,683




17,683



Depreciation and amortization


5,234




5,234



4,815




4,815



Total operating expenses


102,843


200



102,643



92,058




92,058















Income from operations


8,371


200



8,571



12,780




12,780















Interest and other income /
(expense), net


359




359



29




29



Loss in equity interests


(1,204)


1,032


(a)

(172)



(210)




(210)



Income tax expense


2,432




2,432



3,901




3,901



Net income


$

5,094


$

1,232



$

6,326



$

8,698


$



$

8,698



Net income per share - diluted


$

0.20


$

0.05



$

0.25



$

0.34


$



$

0.34



Weighted average number of shares
outstanding - diluted


25,353




25,353



25,675




25,675

















Adjusted EBITDA Reconciliation




Nine Months Ended September 30,




2017


2016


Income from operations





$

8,371






$

12,780



Depreciation and amortization





5,234






4,815



Stock-based compensation





6,037






5,801



Bad debt expense (a)





200








Adjusted EBITDA





$

19,842






$

23,396

















Free Cash Flow Reconciliation




Nine Months Ended September 30,




2017


2016


Net cash provided by operating
activities





$

17,241






$

20,088



Less: capital expenditures





(3,563)






(3,047)



Free cash flow





$

13,678






$

17,041





(a)

Adjusted loss in equity interests excludes the other-than-temporary impairment that reduced the carrying value of our equity investment in Jetaport,
Inc. to zero. In addition, general and administrative operating expenses excludes bad debt expense associated with a loan previously made to
Jetaport, Inc.

 

 

XO GROUP INC.

SUPPLEMENTAL DATA TABLES (UNAUDITED)

(Unaudited)



TheKnot.com
Local Online
Advertising
Metrics

Q3 2017

Q2 2017

Q1 2017

Q4 2016

Q3 2016

Q2 2016

Q1 2016

Vendor
Count(a)

23,504

22,498

22,024

22,447

23,136

23,888

24,377

Retention
Rate(a)

78.6%

77.0%

69.7%

63.4%

62.6%

62.6%

67.8%

Avg.
Revenue/Ven
dor(a)

$3,053

$3,052

$3,018

$2,955

$2,835

$2,747

$2,694

Vendor
Count at
Quarter End

25,646

24,681

23,108

22,058

21,326

21,404

23,910


(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 and nine months ended September 30, 2017 and 2016, as follows:



Three Months Ended September
30,


Nine Months Ended September
30,



2017


2016


2017


2016



(Amounts in Thousands)

Product and content development


$

666


$

708


$

1,819


$

1,669

Sales and marketing


423


339


1,288


1,227

General and administrative


932


1,110


2,930


2,905

Total stock-based compensation


$

2,021


$

2,157


$

6,037


$

5,801

 

Conference Call and Replay Information

XO Group Inc. will host a conference call with investors at 8:00 a.m. ET on Tuesday, October 31, 2017, to discuss its third quarter 2017 financial results. Participants should dial (833) 236-5763 and use Conference ID# 99985038 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, which may include: (1) asset impairment charges, (2) executive separation and other severance charges, (3) non-recurring foreign taxes, interest and penalties, (4) costs related to exit activities, and (5) other items affecting comparability during the period.
  • 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.
  • Adjusted EBITDA margin represents adjusted EBITDA (as defined above), divided by total GAAP revenue.
  • Free cash flow represents GAAP net cash provided by operations, less capital expenditures.

National online advertising programs include display advertisements. Revenue from display advertisements is largely generated by sold impressions (the number of views or displays of a customer's advertisement, banner, link or other form of content on our online properties for which we earn revenue). Display advertising revenue per one thousand sold impressions derives our effective CPM ("eCPM").

Through our transactions business, we earn fixed fees, a percentage of sales, per-unit activity fees, or some combination thereof with respect to these transactions, which we refer to collectively as our "take rate."

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.

 

View original content:http://www.prnewswire.com/news-releases/xo-group-reports-third-quarter-2017-financial-results-300546039.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

Email Alerts

Automatically receive XO Group financial information by email from XO Group Inc.

Email Address: *
Mailing Lists

 
Enter the code shown above.

Please note that you are now entering a website directly or indirectly maintained by a third party (the "External Site") and that you do so at your own risk.

Neither XO Group Inc. nor its affiliates, subsidiaries, officers, directors or agents (collectively, “XO Group” or the “Company”) have any control over (a) the External Site or any linked websites accessible through any External Site, or (b) any data or other content contained, or accessible, therein or in or through any such linked websites. The link to the External Site is provided for convenience purposes only. The information and other content on the External Site is not meant to modify, qualify, supplement or amend information disclosed by or on behalf of the Company under corporate, securities or other legislation in any jurisdiction, and should not be used to make investment decisions involving the Company’s securities.

By clicking “Accept” below you acknowledge and agree that neither XO Group nor the third party provider of the External Site, Virtua Research, Inc. (“Virtua”), is responsible, or accepts or assumes any responsibility or liability whatsoever for, the content, the data contained in or accessible on or through, or the technical operation of the External Site. XO Group and Virtua are not liable to you for, and take no responsibility for, third party pricing data provided for informational purposes and certain ratio results formulated from the provided third party pricing data. Further, by entering the External Site, you also acknowledge and agree that you completely and irrevocably forever waive, and release XO Group from, any and all rights and claims against XO Group and Virtua and further acknowledge and agree that in no event shall XO Group or Virtua, its officers, employees, directors and agents be liable for any (i) direct or indirect, consequential, incidental, special, compensatory, punitive or other damages, (ii) damages for loss of income, loss of business profits, business interruption, loss of data or business information, loss of or damage to property, (iii) claims of third parties, or (iv) other pecuniary loss, arising out of or related to this disclaimer or the External Site or any linked websites.

By entering the External Site, you further acknowledge and agree that the disclaimer of warranties and limitations of liability set out in this disclaimer shall apply regardless of the causes, circumstances or form of action giving rise to the loss, damage, claim or liability, even if such loss, damage, claim or liability is based upon breach of contract (including, without limitation, a claim of fundamental breach or breach of a fundamental term), tort (including, without limitation, negligence), strict liability or any other legal or equitable theory, and even if XO Groupr and Virtua are advised of the possibility of the loss, damage, claim or liability. The waiver and release specifically includes, without limitation, any and all rights and claims pertaining to the processing of personal data, including but not limited to any rights under any applicable data protection statute(s).

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.

Agree Decline