EX-99 2 ex99-1.htm EXHIBIT 99.1 - MARCH 16 PRESS RELEASE

                                                                                                

 

 

 

Exhibit 99.1

 

Contact:

 

Susan Hickey

 

 

NetRatings, Inc.

 

 

212-703-5909

 

 

shickey@netratings.com

 

 

NETRATINGS ANNOUNCES FOURTH QUARTER AND FULL YEAR 2006

FINANCIAL RESULTS

 

New York, March 16, 2007 – NetRatings, Inc. (NASDAQ: NTRT), a global leader in Internet media and market research, today announced financial results for the fourth quarter and year-ended Dec. 31, 2006.

 

Revenues for the fourth quarter of 2006 were $22 million, a 24 percent increase compared to revenues of $17.7 million for the fourth quarter of 2005. Revenues for the year-ended Dec. 31, 2006 were $81.8 million, an increase of 20 percent compared to revenues of $68 million in 2005.

 

Net income for the fourth quarter 2006 was $99,000, or $0.00 per share, on approximately 35.2 million shares. This compares with a net loss in the fourth quarter of 2005 of ($713,000), or ($0.02) per share, on approximately 36 million shares. During the fourth quarter of 2006, NetRatings recorded $778,000 in acquisition related expenses in connection with the October 2006 proposal from The Nielsen Company B.V. to acquire the outstanding publicly held minority interest in NetRatings. NetRatings’ results improved from a net loss of ($8.4 million), or ($0.23) per share, in 2005 to net income of $2.8 million, or $0.08 per share, in 2006.

 

For the fourth quarter of 2006, on a pro forma EBITDA basis (a non-GAAP measure that reflects net income/loss excluding interest income/expense, taxes, depreciation, amortization of intangibles and stock-based compensation, as well as acquisition related expenses), NetRatings earned $3.3 million, or $0.09 per share, compared to pro forma EBITDA income in the fourth quarter of 2005 of $779,000, or $0.02 per share. NetRatings significantly improved its full year pro forma EBITDA results during 2006, moving from a loss in 2005 of ($1.2 million), or ($0.03) per share, to earnings of $10.1 million, or $0.29 per share, in 2006. A complete reconciliation of GAAP results to pro forma EBITDA results may be found in the accompanying financial tables and footnote.

 

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Merger Agreement

On Feb. 5, 2007, NetRatings announced that it had signed a definitive merger agreement pursuant to which The Nielsen Company and its subsidiaries will acquire the outstanding publicly held minority interest in NetRatings for $21.00 in cash per share. Nielsen beneficially owns approximately 60 percent of the company’s currently outstanding shares. NetRatings’ board of directors unanimously adopted and approved the merger agreement following the unanimous recommendation of a special committee of NetRatings’ board of directors comprised solely of independent directors. The merger is expected to be completed in the second quarter of 2007, subject to customary conditions and approvals. The exact timing is dependent on the review and clearance of necessary filings with the Securities and Exchange Commission. Due to the proposed merger, NetRatings will not hold a conference call or webcast regarding its fourth quarter and full year results.

 

About NetRatings

NetRatings, Inc. (Nasdaq: NTRT) delivers leading Internet media and market research solutions, marketed globally under the Nielsen//NetRatings brand. With high quality, technology-driven products and services, Nielsen//NetRatings is the global standard for Internet audience measurement and premier source for online advertising intelligence, enabling clients to make informed business decisions regarding their Internet and digital strategies. The Nielsen//NetRatings portfolio includes panel-based and site-centric Internet audience measurement services, online advertising intelligence, user lifestyle and demographic data, e-commerce and transaction metrics, and custom data, research and analysis. For more information, please visit www.nielsen-netratings.com.

 

Safe Harbor Statement

 

This news release contains “forward-looking statements.” Such statements include, but are not limited to, statements relating to anticipated financial and operating results, the companies’ plans, objectives, expectations and intentions and other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of Nielsen’s and NetRatings’ management and involve a number of significant risks and uncertainties. Actual results may differ materially from the results anticipated in these forward-looking statements. The following factors, among others, could cause or contribute to such material differences: change in general economic conditions; the performance of financial markets and interest rates; the ability to obtain governmental approvals of the merger transaction or to satisfy other conditions to the merger transaction on the proposed terms and schedule; increased competition and NetRatings’ business and financial results. Information about potential factors that may affect NetRatings’ business and financial results is included in its annual report on Form 10-K for the fiscal year ended Dec. 31, 2005 and its quarterly reports on Form 10-Q, including, without limitation, under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Each of these documents is on file with the SEC and is available free of charge at the SEC’s Internet site (http://www.sec.gov). Readers of this press release are referred to such filings. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this news release or the date of the documents incorporated by reference in this news release.

 

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In connection with the proposed merger, NetRatings has filed a preliminary proxy statement with the Securities and Exchange Commission. Stockholders of NetRatings are urged to read the definitive proxy statement regarding the proposed merger, because it will contain important information. Stockholders may obtain a free copy of the definitive proxy statement as well as other filings containing information about The Nielsen Company and NetRatings, when available, without charge, at the SEC Internet site (http://www.sec.gov). In addition, copies of the proxy statement can be obtained without charge, by directing a request to NetRatings, Inc., 120 West 45th Street, New York, NY 10036, Attention: Susan Hickey, 212-703-5900.

 

NetRatings, its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding NetRatings’ directors and executive officers is available in NetRatings’ proxy statement for its most recent annual meeting, which was filed with the Securities and Exchange Commission on April 28, 2006. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement, the Schedule 13E-3 transaction statement and other relevant materials to be filed with the Securities and Exchange Commission when they become available.

 

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NetRatings, Inc.

 

 

 

 

 

 

 

 

 

Statements of Operations

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

December 31,

 

 

December 31,

 

 

2006

 

2005

 

 

2006

 

2005

 

 

 

 

 

 

 

 

unaudited

 

unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$ 21,955

 

$ 17,683

 

 

$ 81,769

 

$ 68,017

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

5,879

 

5,547

 

 

22,726

 

22,651

 

 

 

 

 

 

 

Gross profit

16,076

 

12,136

 

 

59,043

 

45,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

3,263

 

2,732

 

 

11,721

 

11,580

 

Sales and marketing

6,312

 

6,391

 

 

25,073

 

25,718

 

General and administrative

4,159

 

3,027

 

 

15,315

 

12,130

 

Restructuring expenses

-

 

-

 

 

-

 

1,700

 

Acquisition-related expenses

778

 

-

 

 

778

 

-

 

Amortization of intangibles

594

 

594

 

 

2,377

 

2,761

 

Amortization of stock-based compensation

1,953

 

1,046

 

 

5,148

 

3,377

 

 

 

 

 

 

 

Total operating expenses

17,059

 

13,790

 

 

60,412

 

57,266

 

 

 

 

 

 

 

Income/(loss) from operations

(983)

 

(1,654)

 

 

(1,369)

 

(11,900)

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

1,880

 

1,453

 

 

6,395

 

4,519

 

Minority interest in gains of consolidated subsidiaries

(309)

 

(192)

 

 

(1,137)

 

(750)

 

Equity in earnings of joint ventures

-

 

-

 

 

-

 

56

 

 

 

 

 

 

 

Net income/(loss) before provision for income taxes and cumulative effect of change in accounting principle

588

 

(393)

 

 

3,889

 

(8,075)

 

Provision for income taxes

(489)

 

(320)

 

 

(1,429)

 

(320)

 

 

 

 

 

 

 

Net income/(loss) before cumulative effect of change in accounting principle

$ 99

 

$ (713)

 

 

$ 2,460

 

$ (8,395)

 

Cumulative effect of change in accounting principle

-

 

-

 

 

369

 

-

 

 

 

 

 

 

 

Net income/(loss)

$ 99

 

$ (713)

 

 

$ 2,829

 

$ (8,395)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income/(loss) per common share:

 

 

 

 

 

 

 

 

 

Before cumulative effect of change in accounting principle

$ 0.00

 

$ (0.02)

 

 

$ 0.07

 

$ (0.23)

 

Cumulative effect of change in accounting principle

-

 

-

 

 

0.01

 

-

 

 

 

 

 

 

 

Net income/(loss) per common share

$           0.00

 

$ (0.02)

 

 

$ 0.08

 

$ (0.23)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income/(loss) per common share:

 

 

 

 

 

 

 

 

 

Before cumulative effect of change in accounting principle

$ 0.00

 

$ (0.02)

 

 

$ 0.07

 

$ (0.23)

 

Cumulative effect of change in accounting principle

-

 

-

 

 

0.01

 

-

 

 

 

 

 

 

 

Net income/(loss) per common share

$           0.00

 

$ (0.02)

 

 

$ 0.08

 

$ (0.23)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute basic net income/(loss) and

 

 

 

 

 

 

 

 

 

Pro Forma EBITDA net income/(loss) per common share

35,214

 

35,989

 

 

34,940

 

35,985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute diluted net income/(loss) and

 

 

 

 

 

 

 

 

 

Pro Forma EBITDA net income/(loss) per common share

36,442

 

35,989

 

 

35,732

 

35,985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Three Months Ended

 

 

Twelve Months Ended

 

December 31,

 

 

December 31,

 

2006

 

2005

 

 

2006

 

2005

 

 

 

 

 

 

unaudited

 

unaudited

 

 

unaudited

 

unaudited

 

 

 

 

 

 

 

 

 

Pro Forma EBITDA (1)

 

 

 

 

 

 

 

 

Net income/(loss)

$ 99

 

$ (713)

 

 

$ 2,829

 

$ (8,395)

Less:

 

 

 

 

 

 

 

 

Interest income, net

(1,880)

 

(1,453)

 

 

(6,395)

 

(4,519)

Provision for income taxes

489

 

320

 

 

1,429

 

320

Depreciation

1,277

 

985

 

 

4,348

 

3,565

Restructuring expenses

-

 

-

 

 

-

 

1,700

Acquisition-related expenses

778

 

-

 

 

778

 

-

Amortization of intangibles

594

 

594

 

 

2,377

 

2,761

Amortization of stock-based compensation

1,953

 

1,046

 

 

5,148

 

3,377

Cumulative effect of change in accounting principle

-

 

-

 

 

(369)

 

-

 

 

 

 

 

Pro Forma EBITDA

$ 3,310

 

$ 779

 

 

$ 10,145

 

$ (1,191)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Pro Forma EBITDA income/(loss) per common share

$ 0.09

 

$ 0.02

 

 

$ 0.29

 

$ (0.03)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Pro Forma EBITDA income/(loss) per common share

$ 0.09

 

$ 0.02

 

 

$ 0.28

 

$ (0.03)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Pro Forma EBITDA reflects net income/loss excluding interest income/expense, taxes, depreciation, restructuring expenses, acquisition-related expenses, amortization of intangibles and stock-based compensation, and cumulative effect of change in accounting principle. Management uses this measure internally to evaluate the company's performance. NetRatings provides results, guidance, and associated reconciliation of this non-GAAP measure to the investment community, as we believe it provides consistent and comparable measures to help investors understand our current and future operating cash flow performance. Interest income/expense and provision for income taxes are excluded as it is not related to our operating performance. Restructuring expenses and acquisition-related expenses are excluded as they are one-time items not directly related to operations. Depreciation expenses, amortization of stock-based compensation, and cumulative effect of change in accounting principle are excluded as they are non-cash charges. NetRatings excludes amortization of intangibles as it is a non-cash charge not directly related to operations. Pro Forma EBITDA data is provided as a complement to results provided in accordance with GAAP, and should be considered in addition to, and not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.

 

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NetRatings, Inc.

 

 

 

Balance Sheets

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

2006

 

2005

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

Cash, cash equivalents & short-term

 

 

 

marketable securities

$ 171,693

 

$ 151,671

Accounts receivable

26,329

 

16,537

Other current assets

3,544

 

3,867

 

 

Total current assets

201,566

 

172,075

 

 

 

 

Long-term marketable securities

15,320

 

28,581

Property and equipment

9,582

 

7,827

Intangibles

10,901

 

13,278

Goodwill

76,301

 

76,856

Other assets

1,803

 

1,637

 

 

Total assets

$ 315,473

 

$ 300,254

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current liabilities

 

 

 

Accounts payable & accrued expenses

$ 22,991

 

$ 21,436

Deferred revenue

17,632

 

12,666

Restructuring liabilities

354

 

1,038

 

 

Total current liabilities

40,977

 

35,140

 

 

 

 

Restructuring liabilities, less current portion

64

 

418

 

 

Total liabilities

41,041

 

35,558

 

 

 

 

Minority interest

2,221

 

1,298

 

 

 

 

Stockholders' equity

272,211

 

263,398

 

 

Total liabilities and stockholders' equity

$ 315,473

 

$ 300,254

 

 

 

 

 

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