InterSearch Announces Second 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 second quarter ended June June: see month. 30, 2006. Second Quarter 2006 Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Financial Results: --Second quarter revenue was $6.4 million, a 68% increase relative to the $3.8 million reported in the second quarter of 2005; --Gross margins were 63% as compared to 43% in the second quarter a year ago; --Operating income was $1.7 million, up almost 700% from $0.2 million for the same quarter of fiscal 2005; --GAAP(1) earnings available to common stockholders were $1.0 million or $0.04 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 loss of $(0.1) million or $(0.02) per diluted share in the second quarter of 2005; --Cash flows from operations were $0.9 million for the three months ended June 30, 2006; --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 $1.9 million, representing an increase of over 700% as compared to EBITDA of $0.2 million for the same quarter of fiscal 2005(2); --Operating income before amortization (OIBA) increased to $1.9 million, from $0.2 million in the second 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. Second Quarter Business Highlights --Generated approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 27 million paid clicks as compared to 14 million in the second quarter of 2005 and 25 million in the first quarter of 2006. --Completed an acquisition of travel-related domains, including www.camps.com and www.summercamp Alternative rock quartet Summercamp hail from the once thriving music scene of Santa Barbara, where, in 1987, vocalist/guitarists Tim Cullen and Sean McCue met in high school. .com. --Increased revenue contribution from our proprietary traffic to 68%, up from 41% in the second quarter of 2005. In commenting on the results, InterSearch Chairman 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, "We exceeded our second quarter guidance due to continued strength in Internet search services, especially in the proprietary traffic segment of our business. We anticipated a bigger drop-off in revenues generated by our tax domains, following the April 15th tax filing deadline. Instead, traffic and revenue remained strong throughout April and gradually grad·u·al adj. Advancing or progressing by regular or continuous degrees: gradual erosion; a gradual slope. n. Roman Catholic Church 1. tapered ta·per n. 1. A small or very slender candle. 2. A long wax-coated wick used to light candles or gas lamps. 3. A source of feeble light. 4. a. off in May and early June. Our search engine marketing efforts also performed better than expected due to strong traffic flow and improved traffic monetization Monetization The securitization of the gross revenues of a contract. ." 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've we've Contraction of we have. we've have previously discussed, our revenue is expected to be highly seasonal and that seasonality will be most pronounced in the third quarter." Continued Gary Bogatay, "The third quarter revenues from our tax-related properties will be minimal by comparison to the first and second quarters of this year, which were beneficially impacted by the US tax season. Also, the summer is seasonally the slowest period for Internet activity across most online properties, including ours. Our guidance reflects these considerations." InterSearch provides the following guidance for the third quarter of 2006, ending September September: see month. 30:
Q3 2006 Revenue Range $4.0 - $4.2 Million
Q3 2006 EBITDA Range $0.4 - $0.6 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 third quarter of 2006 and for the remainder of fiscal year 2006. 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, Chairman 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 866.203.3436 (domestic) or 617.213.8849 (International) five to ten minutes before the call and reference the passcode (74097531). 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 navigation, science and technology of finding the position and directing the course of vessels and aircraft. Early Navigational Techniques In ancient times, mariners navigated by the guidance of the sun and stars and landmarks along the coast. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. herein include, among others, 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
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended June 30,
---------------------------
2006 2005
------------- -------------
Revenues:
Internet search services $5,790 3,058
Corporate services 642 781
------------- -------------
Total revenues 6,432 3,839
------------- -------------
Cost of revenues:
Traffic acquisition cost 1,877 1,589
Cost of consulting services 488 581
------------- -------------
Total cost of revenues 2,365 2,170
------------- -------------
Gross profit 4,067 1,669
------------- -------------
Operating expenses:
Sales and marketing expense 227 203
General and administrative
expense 2,153 1,254
------------- -------------
Total operating expenses 2,380 1,457
------------- -------------
Earnings from operations 1,687 212
Interest expense 8 29
------------- -------------
Earnings before income taxes 1,679 183
Income taxes 696 75
------------- -------------
Net earnings 983 108
Preferred stock dividends - 171
------------- -------------
Net earnings (loss) available to
common stockholders 983 (63)
------------- -------------
Basic earnings (loss) per share 0.04 (0.02)
------------- -------------
Diluted earnings (loss) per share 0.04 (0.02)
------------- -------------
Unaudited proforma tax and loss available
to common stockholders and per
share information for S
Corporation periods
Net loss available to common stockholders (63)
Proforma income tax expense adjustment 32
-------------
Proforma net loss (95)
-------------
Proforma basic loss per share (0.03)
-------------
Proforma diluted loss per share (0.03)
-------------
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Six Months Ended June 30,
---------------------------
2006 2005
------------- -------------
Revenues:
Internet search services $12,990 6,492
Corporate services 1,466 1,390
------------- -------------
Total revenues 14,456 7,882
------------- -------------
Cost of revenues:
Traffic acquisition cost 3,817 3,217
Cost of consulting services 1,067 1,049
------------- -------------
Total cost of revenues 4,884 4,266
------------- -------------
Gross profit 9,572 3,616
------------- -------------
Operating expenses:
Sales and marketing expense 501 336
General and administrative
expense 3,858 2,364
------------- -------------
Total operating expenses 4,359 2,700
------------- -------------
Earnings from operations 5,213 916
Interest expense 36 66
Loss on derivative instrument 19 -
------------- -------------
Earnings before income taxes 5,158 850
Income taxes 2,097 435
------------- -------------
Net earnings 3,061 415
Preferred stock dividends - 328
------------- -------------
Net earnings available to
common stockholders 3,061 87
------------- -------------
Basic earnings per share 0.12 0.03
------------- -------------
Diluted earnings per share 0.11 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 87
Proforma income tax expense adjustment 32
-------------
Proforma net earnings 55
-------------
Proforma basic earnings per share 0.02
-------------
Proforma diluted earnings per share 0.02
-------------
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)
June 30, December 31,
---------------------------
2006 2005
------------- -------------
(Unaudited)
Assets
Current assets:
Cash $875 576
Accounts receivable 3,618 3,206
Prepaid expenses and other 452 227
Deferred income taxes 18 -
------------- -------------
Total current assets 4,963 4,009
Office equipment, net 645 257
Patents and trademarks, net 67 71
Domains, net 12,544 12,694
Goodwill 573 573
Deferred income taxes 522 554
------------- -------------
Total Assets $19,314 18,158
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Revolving line of credit - 726
Accrued liabilities 1,775 1,831
Accounts payable 1,261 1,226
Deferred revenue - 300
Deferred income taxes - 89
Note payable 847 1,540
Common stock subject to mandatory
redemption 6,150 6,150
Common stock warrants - 3,264
------------- -------------
Total current liabilities 10,033 15,126
------------- -------------
Stockholders' equity:
Preferred Stock - -
Common Stock 25 25
Additional paid-in capital 7,177 4,054
Retained earnings (accumulated deficit) 2,079 (982)
Notes receivable for common stock issued - (65)
------------- -------------
Total stockholders' equity 9,281 3,032
------------- -------------
Total liabilities and stockholders' equity $19,314 18,158
============= =============
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Earnings (Loss) to Earnings Before
Interest, Taxes, Depreciation, and Amortization (EBITDA)
(In thousands)
(Unaudited)
Three Months Ended
June 30,
2006 2005
---------------------------
Net earnings (loss) available to common
stockholders $983 (63)
Preferred Stock Dividends - 171
---------------------------
Net earnings 983 108
Income taxes 696 75
---------------------------
Earnings before income taxes 1,679 183
Interest expense 8 29
---------------------------
Earnings from operations 1,687 212
Depreciation 38 28
Amortization 221 -
---------------------------
Earnings before interest, taxes, depreciation,
amortization (EBITDA)
$1,946 $240
===========================
Six Months Ended
June 30,
2006 2005
---------------------------
Net earnings available to common
stockholders $3,061 87
Preferred Stock Dividends - 328
---------------------------
Net earnings 3,061 415
Income taxes 2,097 435
---------------------------
Earnings before income taxes 5,158 850
Interest expense 36 66
---------------------------
Earnings from operations 5,194 916
Depreciation 74 54
Amortization 438 -
---------------------------
Earnings before interest, taxes,
depreciation, amortization (EBITDA) $5,706 $970
===========================
INTERSEARCH GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Earnings (Loss) to Operating
Income Before Amortization (OIBA)
(In thousands)
(Unaudited)
Three Months Ended
June 30,
2006 2005
---------------------------
Net earnings (loss) available to common
stockholders $983 (63)
Preferred Stock Dividends - 171
---------------------------
Net earnings 983 108
Income taxes 696 75
---------------------------
Earnings before income taxes 1,679 183
Interest expense 8 29
---------------------------
Earnings from operations 1,687 212
Amortization 221 -
---------------------------
Operating income before amortization (OIBA) $1,908 $212
===========================
Six Months Ended
June 30,
2006 2005
---------------------------
Net earnings available to common
stockholders $3,061 87
Preferred Stock Dividends - 328
---------------------------
Net earnings 3,061 415
Income taxes 2,097 435
---------------------------
Earnings before income taxes 5,158 850
Loss on derivative instrument 19 -
Interest expense 36 66
---------------------------
Earnings from operations 5,213 916
Amortization 438 -
---------------------------
Operating income before amortization (OIBA) $5,651 $916
===========================
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