UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): November
3, 2011
XO Group
Inc.
(Exact
Name of Registrant as Specified in its Charter)
Delaware |
0-28271 |
13-3895178 |
(State
or other Jurisdiction |
(Commission File Number) |
(I.R.S.
Employer |
462 Broadway, 6th Floor, New York, New York |
10013 |
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant's
telephone number, including area code: (212)
219-8555
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. |
Results of Operations and Financial Condition. |
On November 3, 2011, XO Group Inc. (“XO Group”) issued a press release announcing its financial results as of and for the quarter ended September 30, 2011. A copy of XO Group’s press release announcing these financial results is attached as Exhibit 99.1 hereto, and is incorporated by reference into this report. The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) that is furnished pursuant to this Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a) (2) of the Securities Act of 1933, as amended. The information contained in this Item and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any filing of XO Group, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits. The following documents are included as exhibits to this report:
99.1 Press Release dated November 3, 2011. |
SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
XO GROUP INC. |
||||
(Registrant) | ||||
Date: | November 3, 2011 | By: |
/s/ JOHN P. MUELLER |
|
John P. Mueller |
||||
Chief Financial Officer |
EXHIBIT INDEX
99.1 |
Press Release dated November 3, 2011. |
Exhibit 99.1
XO Group Reports Third Quarter 2011 Financial Results
—Local Online Advertising Accelerates, Up 24% Year over Year—
Conference Call Today at 4:30 p.m. ET, Dial-In (866) 430-3457 (ID# 21439890)
NEW YORK--(BUSINESS WIRE)--November 3, 2011--XO Group Inc. (NYSE: XOXO, www.xogroupinc.com), formerly The Knot, Inc., the premier media and technology company devoted to weddings, pregnancy, and everything in between, today reported financial results for the three and nine months ended September 30, 2011.
Third Quarter Summary Results
Total revenue for the quarter was $31.0 million, up 14% compared to the third quarter of 2010. The results were again led by local advertising as local online advertising grew 24% and local magazines drove growth in publishing and other of 28%. National online advertising increased 3% compared to the third quarter last year. Merchandise revenues showed marked improvement in the third quarter, up 8% after declines in the first half of this year compared to the prior year. Registry services revenues were down slightly in the third quarter compared to the same period last year.
For the quarter ended September 30, 2011, the Company’s operating profit was $1.9 million compared with an operating profit of $1.8 million in the third quarter of 2010. This $0.1 million increase in operating profit was due to revenue growth which was mostly offset by an increase in costs including compensation expense partially due to higher sales performance, investments in Ijie.com in China, rent, and intangible asset impairment charges. Net income for the quarter was $1.3 million and $0.04 per diluted share, compared to net income of $1.1 million and $0.03 per diluted share last year in the third quarter.
The Company’s balance sheet at September 30, 2011 reflects cash and cash equivalents of $84.0 million, down $10.7 million from $94.7 million at June 30, 2011, primarily due to the repurchase of an additional 1.6 million shares of common stock during the third quarter.
“Momentum in our local business continues to drive strong, profitable top line growth. The Knot continues to be the number one destination for US brides and our local advertisers are recognizing this valuable audience, spending more and staying longer with our directory and magazine advertising opportunities. Our baby site, The Bump, has seen strong increases in unique visitors and community activity over the last quarter. With ongoing strength in our publishing business and a recovery in our e-commerce business, the third quarter marked another period of execution across our businesses,” said David Liu, Chief Executive Officer.
Recent Developments
Third Quarter and Year-to-Date 2011 Financial Highlights
“We continue to be encouraged by the sustained acceleration in our local business and strong advertiser demand across our core wedding and baby brands. The strength in these high-margin businesses and continued accretive share repurchases continue to improve XO Group’s positioning for strong and profitable long term growth,” said Chief Financial Officer John Mueller.
Supplemental Data Tables
Gross Profit/Margin by Business |
||||||||
Three months ended September 30, | 2011 | 2011 | 2010 | 2010 | ||||
($000s) | Gross Profit | Gross Margin | Gross Profit | Gross Margin | ||||
Online sponsorship & advertising | $16,477 | 96.9% | $14,331 | 97.5% | ||||
Registry services | 2,166 | 100.0% | 2,195 | 100.0% | ||||
Merchandise | 3,100 | 40.5% | 3,346 | 47.2% | ||||
Publishing & other | 2,935 | 69.3% | 1,969 | 59.6% | ||||
Total gross profit | $24,678 | 79.5% | $21,841 | 80.1% |
Stock Based Compensation |
|||||||
Three Months ended Sept. 30 | Nine Months ended Sept. 30 | ||||||
($000s) | 2011 | 2010 | 2011 | 2010 | |||
Product & content development | $477 | $330 | $1,423 | $1,053 | |||
Sales & marketing | 375 | 297 | 1,368 | 886 | |||
General & administrative | 423 | 325 | 1,284 | 1,119 | |||
Total stock-based compensation | $1,275 | $952 | $4,075 | $3,058 |
Local Online Advertising Metrics |
||||||||||
3Q2010 | 4Q2010 | 1Q2011 | 2Q2011 | 3Q2011 | ||||||
Profile Count | 21,300 | 21,700 | 25,100 | 26,200 | 26,900 | |||||
Vendor Count | 17,300 | 17,700 | 19,100 | 20,000 | 20,500 | |||||
Churn Rate | 35.6% | 34.2% | 31.5% | 29.8% | 29.2% | |||||
Avg. Revenue/Vendor | $2,100 | $2,100 | $2,200 | $2,200 | $2,200 |
Stock Purchase Program Summary Year to Date |
||||||
($000s) Three Months Ended |
Total Cost |
Common Stock |
Percentage of |
|||
March 31, 2011 | $37,670 | 3,672 | 10.7% | |||
June 30, 2011 | 8,744 | 886 | 2.6% | |||
September 30, 2011 | 13,796 | 1,558 | 4.5% | |||
Nine months ended 9/30/11 | 60,210 | 6,116 | 17.8% | |||
Remaining authorization | $9,790 |
Conference Call and Replay Information
XO Group Inc., formerly The Knot, Inc., will host a conference call with investors at 4:30 p.m. ET on November 3, 2011, to discuss its third quarter 2011 financial results. Participants should dial (866) 430-3457 and use Conference ID# 21439890 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. A replay of the call will be available at (855) 859-2056 or (404) 537-3406, conference ID #21439890.
About XO Group Inc.
XO Group Inc. (NYSE: XOXO; http://www.xogroupinc.com), formerly The Knot, Inc., is the premier media and technology company devoted to weddings, pregnancy and everything in between, providing young women with the trusted information, products and advice they need to guide them through the most transformative events of their lives. Our family of premium brands began with the #1 wedding brand, The Knot, and has grown to include WeddingChannel.com, The Nest, The Bump and Ijie.com. XO Group is recognized by the industry for being innovative in all media - from the web to social media and mobile, magazines and books, and video - and our groundbreaking social platforms have ignited passionate communities across the world. XO Group has leveraged its customer loyalty into successful businesses in online sponsorship and advertising, registry services, ecommerce and publishing. The company is publicly listed on the New York Stock Exchange (XOXO) and is headquartered in New York City.
This release may contain projections or other forward-looking statements regarding future events or our future financial performance. These statements are only predictions and reflect our current beliefs and expectations. Actual events or results may differ materially from those contained in the 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 online wedding-related and other websites may fail to generate sufficient revenue to survive over the long term, (ii) our history of losses, (iii) inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our advertisers and sponsors, (v) the significant fluctuation to which our quarterly revenue and operating results are subject, (vi) the seasonality of the wedding industry, (vii) our expectation of a decline in WeddingChannel.com membership and traffic to the WeddingChannel.com online shop as a result of the termination of the old Macy’s registry services agreement, (viii) the dependence of the WeddingChannel.com registry services business on third parties, and (ix) 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.
XO GROUP INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(in thousands, except for share and per share amounts) | |||||||||
Three Months Ended September 30, | |||||||||
2011 (Unaudited) |
2010 (Unaudited) |
||||||||
Net revenue: | |||||||||
Online sponsorship and advertising | $ | 17,003 | $ | 14,701 | |||||
Registry services | 2,166 | 2,196 | |||||||
Merchandise | 7,647 | 7,083 | |||||||
Publishing and other | 4,233 | 3,302 | |||||||
Total net revenue | 31,049 | 27,282 | |||||||
Cost of revenue: | |||||||||
Online sponsorship and advertising | 526 | 370 | |||||||
Merchandise | 4,547 | 3,737 | |||||||
Publishing and other | 1,298 | 1,334 | |||||||
Total cost of revenue | 6,371 | 5,441 | |||||||
Gross profit | 24,678 | 21,841 | |||||||
Operating expenses: | |||||||||
Product and content development | 5,827 | 5,526 | |||||||
Sales and marketing | 9,468 | 8,483 | |||||||
General and administrative | 5,898 | 4,792 | |||||||
Long-lived asset impairment charges | 716 | - | |||||||
Depreciation and amortization | 892 | 1,207 | |||||||
Total operating expenses | 22,801 | 20,008 | |||||||
Income from operations | 1,877 | 1,833 | |||||||
Loss in equity interest | (29 | ) | (63 | ) | |||||
Interest and other income, net | 423 | 21 | |||||||
Income before income taxes | 2,271 | 1,791 | |||||||
Provision for income taxes | 1,010 | 692 | |||||||
Net income | 1,261 | 1,099 | |||||||
Plus: net loss attributable to non controlling interest | 22 | - | |||||||
Net income attributable to the controlling interest | $ | 1,283 | $ | 1,099 | |||||
Net income per share attributable to |
|||||||||
Basic | $ | 0.05 | $ | 0.03 | |||||
Diluted | $ | 0.04 | $ | 0.03 | |||||
Weighted average number of shares used in |
|||||||||
Basic | 28,259 | 32,934 | |||||||
Diluted | 28,822 | 33,642 |
XO GROUP INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(in thousands, except for share and per share amounts) | |||||||||
Nine Months Ended September 30, | |||||||||
2011 | 2010 | ||||||||
Net revenue: | |||||||||
Online sponsorship and advertising | $ | 51,425 | $ | 44,146 | |||||
Registry services | 5,395 | 5,851 | |||||||
Merchandise | 21,450 | 22,443 | |||||||
Publishing and other | 15,042 | 12,914 | |||||||
Total net revenue | 93,312 | 85,354 | |||||||
Cost of revenue: | |||||||||
Online sponsorship and advertising | 1,651 | 1,284 | |||||||
Merchandise | 12,817 | 12,239 | |||||||
Publishing and other | 4,923 | 4,881 | |||||||
Total cost of revenue | 19,391 | 18,404 | |||||||
Gross profit | 73,921 | 66,950 | |||||||
Operating expenses: | |||||||||
Product and content development | 18,662 | 16,778 | |||||||
Sales and marketing | 29,631 | 26,325 | |||||||
General and administrative | 15,713 | 15,976 | |||||||
Long-lived asset impairment charges | 716 | - | |||||||
Depreciation and amortization | 3,417 | 3,947 | |||||||
Total operating expenses | 68,139 | 63,026 | |||||||
Income from operations | 5,782 | 3,924 | |||||||
Loss in equity interest | (269 | ) | (275 | ) | |||||
Interest and other income, net | 516 | 106 | |||||||
Income before income taxes | 6,029 | 3,755 | |||||||
Provision for income taxes | 2,557 | 1,615 | |||||||
Net income | 3,472 | 2,140 | |||||||
Plus: net loss attributable to non controlling interest | 22 | - | |||||||
Net income attributable to the controlling interest | $ | 3,494 | $ | 2,140 | |||||
Net income per share attributable to XO Group |
|||||||||
Basic | $ | 0.12 | $ | 0.07 | |||||
Diluted | $ | 0.11 | $ | 0.06 | |||||
Weighted average number of shares used in |
|||||||||
Basic | 29,856 | 32,637 | |||||||
Diluted | 30,522 | 33,589 |
XO GROUP INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(amounts in thousands) | ||||||||
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 83,986 | $ | 139,586 | ||||
Accounts receivable, net | 14,448 | 11,219 | ||||||
Inventories | 4,368 | 3,735 | ||||||
Deferred production and marketing costs | 965 | 1,059 | ||||||
Deferred tax assets, current portion | 2,661 | 2,660 | ||||||
Other current assets | 4,220 | 5,268 | ||||||
Total current assets | 110,648 | 163,527 | ||||||
Long-term restricted cash | 2,598 | - | ||||||
Property and equipment, net | 6,544 | 5,642 | ||||||
Intangible assets, net | 6,957 | 8,609 | ||||||
Goodwill | 39,089 | 37,750 | ||||||
Deferred tax assets | 18,771 | 18,775 | ||||||
Other assets | 478 | 936 | ||||||
Total assets | $ | 185,085 | $ | 235,239 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 8,918 | $ | 10,389 | ||||
Deferred revenue | 13,682 | 11,291 | ||||||
Total current liabilities | 22,600 | 21,680 | ||||||
Deferred tax liabilities | 3,085 | 3,088 | ||||||
Other liabilities | 2,319 | 95 | ||||||
Total liabilities | 28,004 | 24,863 | ||||||
Common stock | 290 | 343 | ||||||
Additional paid-in-capital | 179,068 | 214,050 | ||||||
Accumulated deficit | (22,842 | ) | (4,017 | ) | ||||
Total stockholders’ equity | 156,516 | 210,376 | ||||||
Noncontrolling interest in subsidiary | 565 | - | ||||||
Total equity |
157,081 | 210,376 | ||||||
Total liabilities and equity | $ | 185,085 | $ | 235,239 |
CONTACT:
XO Group Inc.
Malindi Davies
Investor Relations Manager
212-219-8555
x 1322
IR@xogrp.com