InterSearch Announces First Quarter 2006 Results.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- InterSearch Group, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :IGPN IGPN International Green Purchasing Network ), a leading provider of Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the search services and operator of industry specific destination portals, today reported financial results for the first quarter ended March 31, 2006. First Quarter 2006 Consolidated Financial Results: --First quarter revenue was $8.0 million, a 99% increase relative to the $4.0 million reported in the first quarter of 2005; --Gross margins were 69% as compared to 48% in the first quarter a year ago; --Operating income was $3.5 million, up 400% compared to the same quarter of fiscal 2005; --GAAP(1) earnings available to common stockholders were $2.1 million or $0.08 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share as compared to net earnings of $0.2 million or $0.02 per diluted share in the first quarter of 2005; --Cash flows from operations were $1.8 million as compared to $0.3 million in the first quarter of fiscal 2005; --Earnings before interest, taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) was $3.8 million, representing an increase of approximately 400% as compared to the same quarter of fiscal 2005(2); --Operating income before amortization (OIBA) increased to $3.7 million, from $0.7 million in the first quarter of 2005(2). (1) Generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, . (2) EBITDA and OIBA are non-GAAP financial measures. These measures may be different from non-GAAP financial measures used by other companies. We encourage investors to review the section below entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Non-GAAP Financial Measures" and to review the reconciling adjustments between the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and non-GAAP measures attached to this press release. First Quarter Business Highlights --Generated 25 million paid clicks as compared to 13 million in the first quarter of 2005. --Increased revenue contribution from the proprietary traffic to 70%, up from 43% in the first quarter of 2005. --Generated $2.8 million in revenues from www.irs.com reflecting an increase in excess of 100%, on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, as compared to the first quarter of 2005. --Enhanced the revenue model of tax-related domains by converting the arrangements with direct advertisers to Pay-per-Click A marketing system on the Web in which the advertiser pays when the user clicks on its advertisement and goes to its site. This is a more interactive, results-oriented method compared to paying for just the placement of a banner ad on a Web page regardless if anyone clicks on it. (PPC See Pocket PC, PowerPC and pay-per-click. PPC - PowerPC ) from mainly revenue sharing revenue sharing Funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. . --Signed a major provider of online tax preparation services Tax preparation services Firm that prepare tax returns for a fee. as a new direct advertising client. In commenting on the results InterSearch President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Dan O'Donnell O'Donnell (Irish: Ó Dónaill or Ó Dómhnaill), which is derived from the forname Domhnaill (meaning "world ruler", Rex Mundi in Latin, Modern Irish spelling, Dónall) were an ancient and powerful Irish clan, kings, princes, and lords of Tyrconnel in early times, and , said, "First quarter performance was strong reflecting the significant growth potential that we believe is inherent in our business model. Our revenue nearly doubled year-over-year, driven by a combination of organic growth and contribution from irs.com, which we acquired in September September: see month. of 2005. Dramatically increasing irs.com revenues in the first full quarter after the acquisition reinforces our confidence in our ability to replicate rep·li·cate v. 1. To duplicate, copy, reproduce, or repeat. 2. To reproduce or make an exact copy or copies of genetic material, a cell, or an organism. n. A repetition of an experiment or a procedure. this success with other domains. The direct navigation industry is undergoing a large scale consolidation, and we believe that InterSearch is well positioned to be a major participant and beneficiary beneficiary Person or entity (e.g., a charity or estate) that receives a benefit from something (e.g., a trust, life-insurance policy, or contract). A primary beneficiary receives proceeds from a trust or insurance policy before any other. of this trend." Business Outlook and Financial Guidance Said InterSearch CFO See Chief Financial Officer. , Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. Bogatay, "As we discussed in our fiscal 2005 earnings release, this year our business will be characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by pronounced seasonality due to the large revenue contribution from the www.irs.com domain. First quarter was seasonally strong driven by the tax season, whereas its impact on the second quarter was limited to 17 days - from April 1st to April 17th. The second quarter guidance reflects this trend." InterSearch provides the following guidance for the second quarter of 2006, ending June 30:
Q2 2006 Revenue Range $5.5 - $6.0 Million
Q2 2006 EBITDA Range $1.2 - $1.5 Million
The company expects to be profitable and generate positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses in the second quarter of 2006 and for the rest of fiscal year 2006. Continued Gary Bogatay, "Despite a decline expected in the second quarter, we believe that our full-year revenue growth will be in the range of 40 to 50% as compared to fiscal year 2005. These expectations do not include any new acquisitions." Conference Call InterSearch Group will host a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time), during which Dan O'Donnell, President and Chief Executive Officer, and Gary Bogatay, Chief Financial Officer, will further discuss financial results, execution milestones and the company's strategy. To listen to the call and have the opportunity to ask questions, please dial 888-396-2369 (domestic) or 617-847-8710 (International) five to ten minutes before the call and reference the passcode (55265255). A simultaneous live Webcast of the call will be available at the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the InterSearch website at http://www.intersearch.com. An online playback Playback could mean:
Questions for the conference call will also be taken via email at stockwatch StockWatch A stock surveillance program offered by proxy solicitation firms, and selected transfer agents, to track and monitor sales and purchases of a corporation's shares and provide valuable information at the beneficial owner level. @intersearch.com and can be sent anytime prior to the conference call's starting time Noun 1. starting time - the time at which something is supposed to begin; "they got an early start"; "she knew from the get-go that he was the man for her" commencement, get-go, offset, outset, showtime, start, kickoff, beginning, first . About InterSearch Group, Inc. InterSearch is a leading provider of Internet search services through a combination of traffic aggregation and proprietary websites, such as www.irs.com. The company operates in the fastest growing segments of Internet commerce including paid search, direct navigation and online marketing driving high quality traffic to advertisers and providing users with quick access to pertinent PERTINENT, evidence. Those facts which tend to prove the allegations of the party offering them, are called pertinent; those which have no such tendency are called impertinent, 8 Toull. n. 22. By pertinent is also meant that which belongs. Willes, 319. products and services. Through its InterSearch Corporate Services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. division, the company also provides IT and Internet strategy consulting to large corporations, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. market. InterSearch is headquartered in San Francisco, California “San Francisco” redirects here. For other uses, see San Francisco (disambiguation). The City and County of San Francisco (EN IPA: [sænfrənˈsɪskoʊ] at 222 Kearny Street Kearny Street in San Francisco, California runs from Market Street on the south to The Embarcadero on the north. Along its southern end, the street serves as the border separating the Financial District from the city's Union Square and Chinatown districts. , Suite 550, and can be reached via telephone at 415-962-9700. More information about InterSearch Group, Inc. can be found at http://www.intersearch.com. Forward Looking Statements This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 that involve substantial risks and uncertainties. Forward-looking statements, which are based on management's current expectations, are generally identifiable by the use of terms, such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "possible," "potential," "predicts," "projects," "should," "would" and similar expressions. The forward-looking statements in this press release are contained principally in the section entitled "Business Outlook and Financial Guidance" The potential risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein include, among others, the Company's ability to raise additional debt or equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , the Company's relationships with its current and future advertising and distribution network partners, the Company's ability to achieve anticipated results from acquisitions, and market development of Internet advertising Delivering ads to Internet users via Web sites, e-mail, ad-supported software and Internet-enabled cellphones. Also called an "ad network," Internet advertising organizations act as a middleman between the advertiser and the Web sites and software publishers that display the ads. and paid search services. Further information on the factors that could affect the Company's financial results is included in the Company's SEC filings, including the most recent registration statement filed with the SEC under the heading "Risk Factors." Except as required by law, InterSearch Group assumes no obligation to update these forward-looking statements publicly, even if new information becomes available in the future. Non-GAAP Financial Measures This press release includes the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission: EBITDA (earnings before interest, tax, depreciation and amortization) and OIBA (operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before amortization). The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles. See "Reconciliation of GAAP Net Earnings to Earnings Before Interest, Taxes, Depreciation and Amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
InterSearch's management evaluates and monitors performance for InterSearch primarily through earnings before interest, income taxes, depreciation and amortization ("EBITDA") and operating income before amortization ("OIBA"). In addition, EBITDA is presented because management believes it is frequently used by securities analysts, investors and others in the evaluation of companies. EBITDA is calculated by adding income taxes, interest expense, depreciation and amortization. OIBA is calculated by adding income taxes, interest expense, amortization and loss on derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. to net earnings. EBITDA and OIBA are not defined under GAAP and should not be considered in isolation or as a substitute for net earnings and other consolidated earnings data prepared in accordance with GAAP or as a measure of InterSearch's profitability. A reconciliation of EBITDA and OIBA is provided in the tables below.
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
----------------------
2006 2005
----------- ----------
Revenues:
Internet search services $7,199,472 3,433,336
Corporate services 824,344 609,145
----------- ----------
Total revenues 8,023,816 4,042,481
----------- ----------
Cost of revenues:
Traffic acquisition cost 1,939,871 1,628,218
Cost of consulting services 579,547 467,894
----------- ----------
Total cost of revenues 2,519,418 2,096,112
----------- ----------
Gross profit 5,504,398 1,946,369
----------- ----------
Operating expenses:
Sales and marketing expense 273,857 162,667
General and administrative expense 1,705,520 1,080,046
----------- ----------
Total operating expenses 1,979,377 1,242,713
----------- ----------
Earnings from operations 3,525,021 703,656
Interest expense 27,065 36,482
Loss on derivative instrument 19,321 -
----------- ----------
Earnings before income taxes 3,478,635 667,174
Income taxes 1,401,231 361,721
----------- ----------
Net earnings 2,077,404 305,453
Preferred stock dividends - 157,200
----------- ----------
Net earnings available to
common stockholders 2,077,404 148,253
----------- ----------
Basic earnings per share 0.08 0.04
----------- ----------
Diluted earnings per share 0.08 0.02
----------- ----------
Unaudited proforma tax and earnings
available to common stockholders and
per share information for S Corporation
periods
Net earnings available to common stockholders 148,253
Proforma income tax expense adjustment 31,454
----------
Proforma net earnings 116,799
----------
Proforma basic earnings per share 0.03
----------
Proforma diluted earnings per share 0.01
----------
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
---------------------------
2006 2005
------------ ------------
Assets
Current assets:
Cash $895,237 576,096
Accounts receivable 4,055,035 3,205,880
Prepaid expenses and other 351,141 227,168
Deferred income taxes 21,246 -
------------ ------------
Total current assets 5,322,659 4,009,144
Office equipment, net 271,983 257,565
Patents and trademarks, net 69,169 71,022
Domains, net 12,479,057 12,694,213
Goodwill 573,123 573,123
Deferred income taxes 483,665 553,638
------------ ------------
Total Assets $19,199,656 18,158,705
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Revolving line of credit - 726,000
Accrued liabilities 2,259,354 1,830,931
Accounts payable 1,415,858 1,226,053
Deferred revenue 103,088 300,000
Deferred income taxes - 89,525
Note payable 847,000 1,540,000
Common stock subject to
mandatory redemption 6,150,000 6,150,000
Common stock warrants - 3,263,814
------------ ------------
Total current liabilities 10,775,300 15,126,323
------------ ------------
Stockholders' equity:
Preferred Stock - -
Common Stock 25,226 25,220
Additional paid-in capital 7,368,972 4,054,408
Retained earnings (accumulated deficit) 1,095,014 (982,390)
Notes receivable for common stock issued (64,856) (64,856)
------------ ------------
Total stockholders' equity 8,424,356 3,032,382
------------ ------------
Total liabilities and
stockholders' equity $19,199,656 18,158,705
============ ============
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Earnings to Earnings Before
Interest, Taxes, Depreciation, and Amortization (EBITDA)
(Unaudited)
Three Months Ended
March 31,
2006 2005
----------------------------
Net earnings available to common
stockholders $2,077,404 148,253
Preferred Stock Dividends - 157,200
----------------------------
Net earnings 2,077,404 305,453
Income taxes 1,401,231 361,721
----------------------------
Earnings before income taxes 3,478,635 667,174
Interest expense 27,065 36,482
----------------------------
Earnings from operations 3,505,700 703,656
Depreciation 35,870 26,529
Amortization 217,009 -
----------------------------
Earnings before interest, taxes,
depreciation,
amortization (EBITDA) $3,758,579 $730,185
============================
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Earnings to Operating
Income Before Amortization (OIBA)
(Unaudited)
Three Months Ended
March 31,
2006 2005
--------------------------
Net earnings available to common
stockholders $2,077,404 148,253
Preferred Stock Dividends - 157,200
--------------------------
Net earnings 2,077,404 305,453
Income taxes 1,401,231 361,721
--------------------------
Earnings before income taxes 3,478,635 667,174
Loss on derivative instrument 19,321 -
Interest expense 27,065 36,482
--------------------------
Earnings from operations 3,525,021 703,656
Amortization 217,009 -
--------------------------
Operating income before
amortization (OIBA) $3,742,030 $703,656
==========================
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion